§ 1709. — Insurance of mortgages.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1709]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER II--MORTGAGE INSURANCE
Sec. 1709. Insurance of mortgages
(a) Authorization
The Secretary is authorized, upon application by the mortgagee, to
insure as hereinafter provided any mortgage offered to him which is
eligible for insurance as hereinafter provided, and, upon such terms as
the Secretary may prescribe, to make commitments for the insuring of
such mortgages prior to the date of their execution or disbursement
thereon.
(b) Eligibility for insurance; mortgage limits
To be eligible for insurance under this section a mortgage shall
comply with the following:
(1) Have been made to, and be held by, a mortgagee approved by
the Secretary as responsible and able to service the mortgage
properly.
(2) Involve a principal obligation (including such initial
service charges, appraisal, inspection, and other fees as the
Secretary shall approve) in an amount--
(A) not to exceed the lesser of--
(i) in the case of a 1-family residence, 95 percent of
the median 1-family house price in the area, as determined
by the Secretary; in the case of a 2-family residence, 107
percent of such median price; in the case of a 3-family
residence, 130 percent of such median price; or in the case
of a 4-family residence, 150 percent of such median price;
or
(ii) 87 percent of the dollar amount limitation
determined under section 1454(a)(2) of this title for a
residence of the applicable size; except that the dollar
amount limitation in effect for any area under this
subparagraph may not be less than the greater of the dollar
amount limitation in effect under this section for the area
on October 21, 1998, or 48 percent of the dollar limitation
determined under section 1454(a)(2) of this title for a
residence of the applicable size; and
(B) not to exceed an amount equal to the sum of--
(i) the amount of the mortgage insurance premium paid at
the time the mortgage is insured; and
(ii) in the case of--
(I) a mortgage for a property with an appraised
value equal to or less than $50,000, 98.75 percent of
the appraised value of the property;
(II) a mortgage for a property with an appraised
value in excess of $50,000 but not in excess of
$125,000, 97.65 percent of the appraised value of the
property;
(III) a mortgage for a property with an appraised
value in excess of $125,000, 97.15 percent of the
appraised value of the property; or
(IV) notwithstanding subclauses (II) and (III), a
mortgage for a property with an appraised value in
excess of $50,000 that is located in an area of the
State for which the average closing cost exceeds 2.10
percent of the average, for the State, of the sale price
of properties located in the State for which mortgages
have been executed, 97.75 percent of the appraised value
of the property.
For purposes of the preceding sentence, the term ``area'' means a
metropolitan statistical area as established by the Office of
Management and Budget; and the median 1-family house price for an
area shall be equal to the median 1-family house price of the county
within the area that has the highest such median price. For purposes
of this paragraph, the term ``average closing cost'' means, with
respect to a State, the average, for mortgages executed for
properties that are located within the State, of the total amounts
(as determined by the Secretary) of initial service charges,
appraisal, inspection, and other fees (as the Secretary shall
approve) that are paid in connection with such mortgages.
Notwithstanding any other provision of this section, in any case
where the dwelling is not approved for mortgage insurance prior to
the beginning of construction, such mortgage shall not exceed 90 per
centum of the entire appraised value of the property as of the date
the mortgage is accepted for insurance, unless (i) the dwelling was
completed more than one year prior to the application for mortgage
insurance, or (ii) the dwelling was approved for guaranty,
insurance, or a direct loan under chapter 37 of title 38 prior to
the beginning of construction, or (iii) the dwelling is covered by a
consumer protection or warranty plan acceptable to the Secretary and
satisfies all requirements which would have been applicable if such
dwelling had been approved for mortgage insurance prior to the
beginning of construction. As used herein, the term ``veteran''
means any person who served on active duty in the armed forces of
the United States for a period of not less than ninety days (or is
certified by the Secretary of Defense as having performed extra-
hazardous service), and who was discharged or released therefrom
under conditions other than dishonorable, except that persons
enlisting in the armed forces after September 7, 1980, or entering
active duty after October 16, 1981, shall have their eligibility
determined in accordance with section 5303A(d) of title 38.
Notwithstanding any other provision of this paragraph, the amount
which may be insured under this section may be increased by up to 20
percent if such increase is necessary to account for the increased
cost of the residence due to the installation of a solar energy
system (as defined in subparagraph (3) of the last paragraph of
section 1703(a) of this title) therein.
Notwithstanding any other provision of this paragraph, the
Secretary may not insure, or enter into a commitment to insure, a
mortgage under this section that is executed by a first-time
homebuyer and that involves a principal obligation (including such
initial service charges, appraisal, inspection, and other fees as
the Secretary shall approve) in excess of 97 percent of the
appraised value of the property unless the mortgagor has completed a
program of counseling with respect to the responsibilities and
financial management involved in homeownership that is approved by
the Secretary; except that the Secretary may, in the discretion of
the Secretary, waive the applicability of this requirement.
(3) Have a maturity satisfactory to the Secretary, but not to
exceed, in any event, thirty-five years (or thirty years if such
mortgage is not approved for insurance prior to construction) from
the date of the beginning of amortization of the mortgage.
(4) Contain complete amortization provisions satisfactory to the
Secretary requiring periodic payments by the mortgagor not in excess
of his reasonable ability to pay as determined by the Secretary.
(5) Bear interest at such rate as may be agreed upon by the
mortgagor and the mortgagee.
(6) Provide, in a manner satisfactory to the Secretary, for the
application of the mortgagor's periodic payments (exclusive of the
amount allocated to interest and to the premium charge which is
required for mortgage insurance as hereinafter provided) to
amortization of the principal of the mortgage.
(7) Contain such terms and provisions with respect to insurance,
repairs, alterations, payment of taxes, default, reserves,
delinquency charges, foreclosure proceedings, anticipation of
maturity, additional and secondary liens, and other matters as the
Secretary may in his discretion prescribe.
(8) Repealed. Pub. L. 100-242, title IV, Sec. 406(b)(2), Feb. 5,
1988, 101 Stat. 1900.
(9) Be executed by a mortgagor who shall have paid on account of
the property (except with respect to a mortgage executed by a
mortgagor who is a veteran) at least 3 per centum, or such larger
amount as the Secretary may determine, of the Secretary's estimate
of the cost of acquisition (excluding the mortgage insurance premium
paid at the time the mortgage is insured) in cash or its equivalent:
Provided, That with respect to a mortgage executed by a mortgagor
who is sixty years of age or older as of the date the mortgage is
endorsed for insurance or with respect to a mortgage meeting the
requirements of subsection (i) of this section, or with respect to a
mortgage covering a single-family home being purchased under the
low-income housing demonstration project assisted pursuant to
section 1436 \1\ of title 42, or with respect to a mortgage covering
a housing unit in connection with a homeownership program under the
Homeownership and Opportunity Through HOPE Act, the mortgagor's
payment required by this subsection may be paid by a corporation or
person other than the mortgagor under such terms and conditions as
the Secretary may prescribe: Provided further, That for purposes of
this paragraph, the Secretary shall consider as cash or its
equivalent any amounts borrowed from a family member (as such term
is defined in section 1707 of this title), subject only to the
requirements that, in any case in which the repayment of such
borrowed amounts is secured by a lien against the property, such
lien shall be subordinate to the mortgage and the sum of the
principal obligation of the mortgage and the obligation secured by
such lien may not exceed 100 percent of the appraised value of the
property plus any initial service charges, appraisal, inspection,
and other fees in connection with the mortgage.
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\1\ See References in Text note below.
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(c) Premium charges
(1) The Secretary is authorized to fix premium charges for the
insurance of mortgages under the separate sections of this subchapter
but in the case of any mortgage such charge shall be not less than an
amount equivalent to one-fourth of 1 per centum per annum nor more than
an amount equivalent to 1 per centum per annum of the amount of the
principal obligation of the mortgage outstanding at any time, without
taking into account delinquent payments or prepayments: Provided, That
premium charges fixed for insurance (1) under section 1715z-10, 1715z-
12, 1715z-16, 1715z-17, or 1715z-18 of this title, or any other
financing mechanism providing alternative methods for repayment of a
mortgage that is determined by the Secretary to involve additional risk,
or (2) under subsections \2\ (n) or (k) of this section are not required
to be the same as the premium charges for mortgages insured under the
other provisions of this section, but in no case shall premium charges
under subsection (n) or (k) of this section exceed 1 per centum per
annum: Provided, That any reduced premium charge so fixed and computed
may, in the discretion of the Secretary, also be made applicable in such
manner as the Secretary shall prescribe to each insured mortgage
outstanding under the section or sections involved at the time the
reduced premium charge is fixed. Such premium charges shall be payable
by the mortgagee, either in cash, or in debentures issued by the
Secretary under this subchapter at par plus accrued interest, in such
manner as may be prescribed by the Secretary: Provided, That debentures
presented in payment of premium charges shall represent obligations of
the particular insurance fund or account to which such premium charges
are to be credited: Provided further, That the Secretary may require the
payment of one or more such premium charges at the time the mortgage is
insured, at such discount rate as he may prescribe not in excess of the
interest rate specified in the mortgage. If the Secretary finds upon the
presentation of a mortgage for insurance and the tender of the initial
premium charge or charges so required that the mortgage complies with
the provisions of this section, such mortgage may be accepted for
insurance by endorsement or otherwise as the Secretary may prescribe;
but no mortgage shall be accepted for insurance under this section
unless the Secretary finds that the project with respect to which the
mortgage is executed is economically sound. In the event that the
principal obligation of any mortgage accepted for insurance is paid in
full prior to the maturity date, the Secretary is further authorized in
his discretion to require the payment by the mortgagee of an adjusted
premium charge in such amount as the Secretary determines to be
equitable, but not in excess of the aggregate amount of the premium
charges that the mortgagee would otherwise have been required to pay if
the mortgage had continued to be insured under this section until such
maturity date; and in the event that the principal obligation is paid in
full as herein set forth the Secretary is authorized to refund to the
mortgagee for the account of the mortgagor all, or such portion as he
shall determine to be equitable, of the current unearned premium charges
theretofore paid: Provided, That with respect to mortgages (1) for which
the Secretary requires, at the time the mortgage is insured, the payment
of a single premium charge to cover the total premium obligation for the
insurance of the mortgage, and (2) on which the principal obligation is
paid before the number of years on which the premium with respect to a
particular mortgage was based, or the property is sold subject to the
mortgage or is sold and the mortgage is assumed prior to such time, the
Secretary shall provide for refunds, where appropriate, of a portion of
the premium paid and shall provide for appropriate allocation of the
premium cost among the mortgagors over the term of the mortgage, in
accordance with procedures established by the Secretary which take into
account sound financial and actuarial considerations.
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\2\ So in original. Probably should be ``subsection''.
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(2) Notwithstanding any other provision of this section, each
mortgage secured by a 1- to 4-family dwelling that is an obligation of
the Mutual Mortgage Insurance Fund or of the General Insurance Fund
pursuant to subsection (v) of this section and each mortgage that is
insured under subsection (k) of this section or section 1715y(c) of this
title,,\3\ shall be subject to the following requirements:
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\3\ So in original.
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(A) The Secretary shall establish and collect, at the time of
insurance, a single premium payment in an amount not exceeding 2.25
percent of the amount of the original insured principal obligation
of the mortgage. In the case of a mortgage for which the mortgagor
is a first-time homebuyer who completes a program of counseling with
respect to the responsibilities and financial management involved in
homeownership that is approved by the Secretary, the premium payment
under this subparagraph shall not exceed 2.0 percent of the amount
of the original insured principal obligation of the mortgage. Upon
payment in full of the principal obligation of a mortgage prior to
the maturity date of the mortgage, the Secretary shall refund all of
the unearned premium charges paid on the mortgage pursuant to this
subparagraph.
(B) In addition to the premium under subparagraph (A), the
Secretary shall establish and collect annual premium payments in an
amount not exceeding 0.50 percent of the remaining insured principal
balance (excluding the portion of the remaining balance attributable
to the premium collected under subparagraph (A) and without taking
into account delinquent payments or prepayments) for the following
periods:
(i) For any mortgage involving an original principal
obligation (excluding any premium collected under subparagraph
(A)) that is less than 90 percent of the appraised value of the
property (as of the date the mortgage is accepted for
insurance), for the first 11 years of the mortgage term.
(ii) For any mortgage involving an original principal
obligation (excluding any premium collected under subparagraph
(A)) that is greater than or equal to 90 percent of such value,
for the first 30 years of the mortgage term; except that
notwithstanding the matter preceding clause (i), for any
mortgage involving an original principal obligation (excluding
any premium collected under subparagraph (A)) that is greater
than 95 percent of such value, the annual premium collected
during the 30-year period under this clause shall be in an
amount not exceeding 0.55 percent of the remaining insured
principal balance (excluding the portion of the remaining
balance attributable to the premium collected under subparagraph
(A) and without taking into account delinquent payments or
prepayments).
(d) Increase in maximum amount of mortgage
Notwithstanding any provision of this subchapter governing maximum
mortgage amounts for insuring a mortgage secured by a one- to four-
family dwelling, the maximum amount of the mortgage determined under any
such provision may be increased by the amount of the mortgage insurance
premium paid at the time the mortgage is insured.
(e) Contract of insurance as evidence of eligibility
Any contract of insurance heretofore or hereafter executed by the
Secretary under this subchapter shall be conclusive evidence of the
eligibility of the loan or mortgage for insurance, and the validity of
any contract of insurance so executed shall be incontestable in the
hands of an approved financial institution or approved mortgagee from
the date of the execution of such contract, except for fraud or
misrepresentation on the part of such approved financial institution or
approved mortgagee.
(f) Disclosure of other mortgage products
(1) In general
In conjunction with any loan insured under this section, an
original lender shall provide to each prospective borrower a
disclosure notice that provides a 1-page analysis of mortgage
products offered by that lender and for which the borrower would
qualify.
(2) Notice
The notice required under paragraph (1) shall include--
(A) a generic analysis comparing the note rate (and
associated interest payments), insurance premiums, and other
costs and fees that would be due over the life of the loan for a
loan insured by the Secretary under subsection (b) of this
section with the note rates, insurance premiums (if applicable),
and other costs and fees that would be expected to be due if the
mortgagor obtained instead other mortgage products offered by
the lender and for which the borrower would qualify with a
similar loan-to-value ratio in connection with a conventional
mortgage (as that term is used in section 1454(a)(2) of this
title or section 1717(b)(2) of this title, as applicable),
assuming prevailing interest rates; and
(B) a statement regarding when the requirement of the
mortgagor to pay the mortgage insurance premiums for a mortgage
insured under this section would terminate, or a statement that
the requirement shall terminate only if the mortgage is
refinanced, paid off, or otherwise terminated.
(g) Limitation on use of single family mortgage insurance by investors
(1) The Secretary may insure a mortgage under this subchapter that
is secured by a 1- to 4-family dwelling, or approve a substitute
mortgagor with respect to any such mortgage, only if the mortgagor is to
occupy the dwelling as his or her principal residence or as a secondary
residence, as determined by the Secretary. In making this determination
with respect to the occupancy of secondary residences, the Secretary may
not insure mortgages with respect to such residences unless the
Secretary determines that it is necessary to avoid undue hardship to the
mortgagor. In no event may a secondary residence under this subsection
include a vacation home, as determined by the Secretary.
(2) The occupancy requirement established in paragraph (1) shall not
apply to any mortgagor (or co-mortgagor, as appropriate) that is--
(A) a public entity, as provided in section 1715d or 1715z-12 of
this title, or any other State or local government or an agency
thereof;
(B) a private nonprofit or public entity, as provided in section
1715l(h) or 1715z(j) of this title, or other private nonprofit
organization that is exempt from taxation under section 501(c)(3) of
title 26 and intends to sell or lease the mortgaged property to low
or moderate-income persons, as determined by the Secretary;
(C) an Indian tribe, as provided in section 1715z-13 of this
title;
(D) a serviceperson who is unable to meet such requirement
because of his or her duty assignment, as provided in section 1715g
of this title or subsection (b)(4) or (f) of section 1715m of this
title;
(E) a mortgagor or co-mortgagor under subsection (k) of this
section; or
(F) a mortgagor that, pursuant to section 1715n(a)(7) of this
title, is refinancing an existing mortgage insured under this
chapter for not more than the outstanding balance of the existing
mortgage, if the amount of the monthly payment due under the
refinancing mortgage is less than the amount due under the existing
mortgage for the month in which the refinancing mortgage is
executed.
(3) For purposes of this subsection, the term ``substitute
mortgagor'' means a person who, upon the release by a mortgagee of a
previous mortgagor from personal liability on the mortgage note, assumes
such liability and agrees to pay the mortgage debt.
(h) Disaster housing
Notwithstanding any other provision of this section, the Secretary
is authorized to insure any mortgage which involves a principal
obligation not in excess of the applicable maximum dollar limit under
subsection (b) of this section and not in excess of 100 per centum of
the appraised value of a property upon which there is located a dwelling
designed principally for a single-family residence, where the mortgagor
establishes (to the satisfaction of the Secretary) that his home which
he occupied as an owner or as a tenant was destroyed or damaged to such
an extent that reconstruction is required as a result of a flood, fire,
hurricane, earthquake, storm, or other catastrophe which the President,
pursuant to sections 5122(2) and 5170 of title 42, has determined to be
a major disaster.
(i) Single-family housing in outlying areas
The Secretary is authorized to insure under this section any
mortgage meeting the requirements of subsection (b) of this section,
except as modified by this subsection, which involves a principal
obligation not in excess of 75 per centum of the limit on the principal
obligation applicable to a one-family residence under subsection (b) of
this section and not in excess of 97 per centum (or, in any case where
the dwelling is not approved for mortgage insurance prior to the
beginning of construction, unless the construction of the dwelling was
completed more than one year prior to the application for mortgage
insurance or the dwelling was approved for guaranty, insurance, or
direct loan under chapter 37 of title 38 prior to the beginning of
construction, 90 per centum) of the appraised value of a property
located in an area where the Secretary finds it is not practicable to
obtain conformity with many of the requirements essential to the
insurance of mortgages on housing in built-up urban areas, upon which
there is located a dwelling designed principally for a single-family
residence: Provided, That the Secretary finds that the property with
respect to which the mortgage is executed is an acceptable risk, giving
consideration to the need for providing adequate housing for families of
low and moderate income particularly in suburban and outlying areas or
small communities: Provided further, That under the foregoing provisions
of this subsection the Secretary is authorized to insure any mortgage
issued with respect to a farm home on a plot of land two and one-half or
more acres in size adjacent to an all-weather public road.
(j) Real estate loans by national banks
Loans secured by mortgages insured under this section shall not be
taken into account in determining the amount of real estate loans which
a national bank may make in relation to its capital and surplus or its
time and savings deposits.
(k) Rehabilitation of one- to four-family structures; definitions;
eligibility; refinancing and extension; General Insurance Fund
(1) The Secretary may, in order to assist in the rehabilitation of
one- to four-family structures used primarily for residential purposes,
insure and make commitments to insure rehabilitation loans (including
advances made during rehabilitation) made by financial institutions on
and after 180 days following October 31, 1978. Such commitments to
insure and such insurance shall be made upon such terms and conditions
which the Secretary may prescribe and which are consistent with the
provisions of subsections (b), (c), (e), (i), and (j) of this section,
except as modified by the provisions of this subsection.
(2) For the purpose of this subsection--
(A) the term ``rehabilitation loan'' means a loan, advance of
credit, or purchase of an obligation representing a loan or advance
of credit, made for the purpose of financing--
(i) the rehabilitation of an existing one- to four-unit
structure which will be used primarily for residential purposes;
(ii) the rehabilitation of such a structure and the
refinancing of the outstanding indebtedness on such structure
and the real property on which the structure is located; or
(iii) the rehabilitation of such a structure and the
purchase of the structure and the real property on which it is
located; and
(B) the term ``rehabilitation'' means the improvement (including
improvements designed to meet cost-effective energy conservation
standards prescribed by the Secretary) or repair of a structure, or
facilities in connection with a structure, and may include the
provision of such sanitary or other facilities as are required by
applicable codes, a community development plan, or a statewide
property insurance plan to be provided by the owner or tenant of the
project. The term ``rehabilitation'' may also include measures to
evaluate and reduce lead-based paint hazards, as such terms are
defined in section 4851b of title 42.
(3) To be eligible for insurance under this subsection, a
rehabilitation loan shall--
(A) involve a principal obligation (including such initial
service charges, appraisal, inspection, and other fees as the
Secretary shall approve) in an amount which does not exceed, when
added to any outstanding indebtedness of the borrower which is
secured by the structure and the property on which it is located,
the amount specified in subsection (b)(2) of this section; except
that, in determining the amount of the principal obligation for
purposes of this subsection, the Secretary shall establish as the
appraised value of the property an amount not to exceed the sum of
the estimated cost of rehabilitation and the Secretary's estimate of
the value of the property before rehabilitation;
(B) bear interest at such rate as may be agreed upon by the
borrower and the financial institution;
(C) be an acceptable risk, as determined by the Secretary; and
(D) comply with such other terms, conditions, and restrictions
as the Secretary may prescribe.
(4) Any rehabilitation loan insured under this subsection may be
refinanced and extended in accordance with such terms and conditions as
the Secretary may prescribe, but in no event for an additional amount or
term which exceeds the maximum provided for in this subsection.
(5) All funds received and all disbursements made pursuant to the
authority established by this subsection shall be credited or charged,
as appropriate, to the General Insurance Fund, and insurance benefits
shall be paid in cash out of such Fund or in debentures executed in the
name of such Fund. Insurance benefits paid with respect to loans secured
by a first mortgage and insured under this subsection shall be paid in
accordance with section 1710 of this title, except that all references
in section 1710 of this title to the Mutual Mortgage Insurance Fund
shall be construed as referring to the General Insurance Fund. Insurance
benefits paid with respect to loans secured by a mortgage other than a
first mortgage and insured under this subsection shall be paid in
accordance with paragraphs (6) and (7) of section 1715k(h) of this
title, except that reference to ``this subsection'' in such paragraphs
shall be construed as referring to this subsection.
(l) Repealed. Pub. L. 90-448, title I, Sec. 103(b), Aug. 1, 1968, 82
Stat. 486
(m) Repealed. Pub. L. 100-242, title IV, Sec. 406(c), Feb. 5, 1988, 101
Stat. 1902
(n) Cooperative housing projects; definitions
(1) The Secretary is authorized to insure under this section any
mortgage meeting the requirements of subsection (b) of this section,
except as modified by this subsection. To be eligible, the mortgage
shall involve a dwelling unit in a cooperative housing project which is
covered by a blanket mortgage insured under this chapter or the
construction of which was completed more than a year prior to the
application for the mortgage insurance. The mortgage amount as
determined under the other provisions of subsection (b) of this section
shall be reduced by an amount equal to the portion of the unpaid balance
of the blanket mortgage covering the project which is attributable (as
of the date the mortgage is accepted for insurance) to such unit.
(2) For the purposes of this subsection--
(A) The terms ``home mortgage'' and ``mortgage'' include a first
lien given (in accordance with the laws of the State where the
property is located and accompanied by such security and other
undertakings as may be required under regulations of the Secretary)
to secure a loan made to finance the purchase of stock or membership
in a cooperative ownership housing corporation the permanent
occupancy of the dwelling units of which is restricted to members of
such corporation, where the purchase of such stock or membership
will entitle the purchaser to the permanent occupancy of one of such
units.
(B) The terms ``appraised value of the property'', ``value of
the property'', and ``value'' include the appraised value of a
dwelling unit in a cooperative housing project of the type described
in subparagraph (A) where the purchase of the stock or membership
involved will entitle the purchaser to the permanent occupancy of
that unit; and the term ``property'' includes a dwelling unit in
such a cooperative project.
(C) The term ``mortgagor'' includes a person or persons giving a
first lien (of the type described in subparagraph (A)) to secure a
loan to finance the purchase of stock or membership in a cooperative
housing corporation.
(o) Insurance of mortgages on owner occupied homes in communities
subject to adverse economic conditions resulting from Indian
claims to ownership of land; obligation of Special Risk
Insurance Fund
(1) Notwithstanding any other provision of this section or any other
section of this subchapter, the Secretary is authorized to insure, and
to commit to insure, under subsection (b) of this section as modified by
this subsection a mortgage which meets both the requirements of this
subsection and such criteria as the Secretary by regulation may
prescribe to further the purpose of this subsection, in any community
where the Secretary determines that--
(A) temporary adverse economic conditions exist throughout the
community as a direct and primary result of outstanding claims to
ownership of land in the community by an American Indian tribe,
band, or Nation;
(B) such ownership claims are reasonably likely to be settled,
by court action or otherwise;
(C) as a direct result of the community's temporarily impaired
economic condition, owner occupants of homes in the community have
been involuntarily unemployed or underemployed and have thus
incurred substantial reductions in income which significantly impair
their ability to continue timely payment of their mortgages;
(D) as a result, widespread mortgage foreclosures and distress
sales of homes are likely in the community; and
(E) fifty or more individual homeowners were joined as parties
defendant or were members of a defendant class prior to December 31,
1976, in litigation involving claims to ownership of land in the
community by an American Indian tribe, band, or Nation.
(2) A mortgage shall be eligible for insurance under subsection (b)
of this section as modified by this subsection without regard to
limitations in this subchapter relating to a mortgagor's reasonable
ability to pay, economic soundness, marketability of title, or any other
statutory restriction which the Secretary determines is contrary to the
purpose of this subsection, but only if the mortgagor is an owner of a
home in a community specified in paragraph (1) who, as a direct result
of the community's temporarily impaired economic condition, has been
involuntarily unemployed or underemployed and has thus incurred a
substantial reduction in income which significantly impairs the owner's
ability to continue timely payment of the mortgage. The Secretary is
authorized to encourage or afford directly to or on behalf of mortgagors
whose mortgages are insured under subsection (b) of this section as
modified by this subsection forebearance, assignment of mortgages to the
Secretary, or such other relief as the Secretary deems appropriate and
consistent with the purpose of this subsection. The Secretary, in
connection with any mortgage insured under subsection (b) of this
section as modified by this subsection, shall have all statutory powers,
authority, and responsibilities which the Secretary has with respect to
other mortgages insured under subsection (b) of this section, except
that the Secretary may modify such powers, authority, or
responsibilities where the Secretary deems such action to be necessary
because of the special nature of the mortgage involved. Notwithstanding
section 1708 of this title, the insurance of a mortgage under subsection
(b) of this section as modified by this subsection shall be the
obligation of the Special Risk Insurance Fund created pursuant to
section 1715z-3 of this title.
(p) Insurance of mortgages in communities subject to temporary adverse
economic conditions as a result of claims to ownership of land
in the community by an American Indian Tribe, band, or nation;
eligibility, authorities, etc.
(1) Notwithstanding any other provision of this section or any other
section of this subchapter, the Secretary is authorized to insure, and
to commit to insure, under subsection (b) of this section as modified by
this subsection a mortgage which meets both the requirements of this
subsection and such criteria as the Secretary by regulation shall
prescribe to further the purpose of this subsection, in any community
where the Secretary determines that--
(A) temporary adverse economic conditions exist throughout the
community as a direct and primary result of outstanding claims to
ownership of land in the community by an American Indian tribe,
band, or nation;
(B) such ownership claims are reasonably likely to be settled,
by court action or otherwise; and
(C) fifty or more individual homeowners were joined as parties
defendant or were members of a defendant class prior to April 1,
1980, in litigation involving claims to ownership of land in the
community by an American Indian tribe, band, group, or nation
pursuant to a dispute involving the Articles of Confederation, Trade
and Intercourse Act of 1790, or any similar State or Federal law.
(2) A mortgage shall be eligible for insurance under subsection (b)
of this section as modified by this subsection without regard to
limitations in this subchapter relating to marketability of title, or
any other statutory restriction which the Secretary determines is
contrary to the purpose of this subsection, but only if the mortgagor is
an owner of a home in a community specified in paragraph (1). The
Secretary, in connection with any mortgage insured under subsection (b)
of this section as modified by this subsection, shall have all statutory
powers, authority, and responsibilities which the Secretary has with
respect to other mortgages insured under subsection (b) of this section,
except that the Secretary may modify such powers, authority, or
responsibilities where the Secretary deems such action to be necessary
because of the special nature of the mortgage involved. Notwithstanding
section 1708 of this title, the insurance of a mortgage under subsection
(b) of this section as modified by this subsection shall be the
obligation of the Special Risk Insurance Fund created pursuant to
section 1715z-3 of this title.
(q) Insurance of mortgages secured by property on certain lands leased
by Seneca Nation of New York Indians
(1) Notwithstanding any other provision of this section or any other
section of this subchapter, the Secretary shall insure and commit to
insure, under subsection (b) of this section as modified by this
subsection, any mortgage secured by property located on land that--
(A) is within the Allegany Reservation of the Seneca Nation of
New York Indians; and
(B) is subject to a lease entered into for a term of 99 years
pursuant to the Act of February 19, 1875 (Chapter 90; 18 Stat. 330)
and the Act of September 30, 1890 (Chapter 1132; 26 Stat. 558).
(2) A mortgage shall be eligible for insurance under subsection (b)
of this section as modified by this subsection without regard to
limitations in this subchapter relating to marketability of title or any
other statutory restriction that the Secretary determines is contrary to
the purpose of this subsection.
(3) The Secretary, in connection with any mortgage insured under
subsection (b) of this section as modified by this subsection, shall
have all statutory powers, authority, and responsibilities that the
Secretary has with respect to other mortgages insured under subsection
(b) of this section, except that the Secretary may modify such powers,
authority, or responsibilities if the Secretary determines such action
to be necessary because of the special nature of the mortgage involved.
(4) Notwithstanding section 1708 of this title, the insurance of a
mortgage under subsection (b) of this section as modified by this
subsection shall be the obligation of the Special Risk Insurance Fund
created in section 1715z-3 of this title.
(r) Actions to reduce losses under single family mortgage insurance
program
The Secretary shall take appropriate actions to reduce losses under
the single-family mortgage insurance programs carried out under this
subchapter. Such actions shall include--
(1) an annual review by the Secretary of the rate of early
serious defaults and claims, in accordance with section 1735f-11 of
this title;
(2) requiring that at least one person acquiring ownership of a
one- to four-family residential property encumbered by a mortgage
insured under this subchapter be determined to be creditworthy under
standards prescribed by the Secretary, whether or not such person
assumes personal liability under the mortgage (except that
acquisitions by devise or descent shall not be subject to this
requirement);
(3) in any case where personal liability under a mortgage is
assumed, requiring that the original mortgagor be advised of the
procedures by which he or she may be released from liability; and
(4) providing counseling, either directly or through third
parties, to delinquent mortgagors whose mortgages are insured under
this section, using the Fund to pay for such counseling.
In any case where the homeowner does not request a release from
liability, the purchaser and the homeowner shall have joint and several
liability for any default for a period of 5 years following the date of
the assumption. After the close of such 5-year period, only the
purchaser shall be liable for any default on the mortgage unless the
mortgage is in default at the time of the expiration of the 5-year
period.
(s) Suspension or revocation of approval of mortgagee; notice and
statement of reasons
Whenever the Secretary has taken any discretionary action to suspend
or revoke the approval of any mortgagee to participate in any mortgage
insurance program under this subchapter, the Secretary shall provide
prompt notice of the action and a statement of the reasons for the
action to--
(1) the Secretary of Veterans Affairs;
(2) the chief executive officer of the Federal National Mortgage
Association;
(3) the chief executive officer of the Federal Home Loan
Mortgage Corporation;
(4) the Administrator of the Farmers Home Administration;
(5) if the mortgagee is a national bank or District bank, or a
subsidiary or affiliate of such a bank, the Comptroller of the
Currency;
(6) if the mortgagee is a State bank that is a member of the
Federal Reserve System or a subsidiary or affiliate of such a bank,
or a bank holding company or a subsidiary or affiliate of such a
company, the Board of Governors of the Federal Reserve System;
(7) if the mortgagee is a State bank that is not a member of the
Federal Reserve System or is a subsidiary or affiliate of such a
bank, the Board of Directors of the Federal Deposit Insurance
Corporation; and
(8) if the mortgagee is a Federal or State savings association
or a subsidiary or affiliate of a savings association, the Director
of the Office of Thrift Supervision.
(t) Disclosure regarding interest due upon mortgage prepayment
(1) Each mortgagee (or servicer) with respect to a mortgage under
this section shall provide each mortgagor of such mortgagee (or
servicer) written notice, not less than annually, containing a statement
of the amount outstanding for prepayment of the principal amount of the
mortgage and describing any requirements the mortgagor must fulfill to
prevent the accrual of any interest on such principal amount after the
date of any prepayment. This paragraph shall apply to any insured
mortgage outstanding on or after the expiration of the 90-day period
beginning on the date of effectiveness of final regulations implementing
this paragraph.
(2) Each mortgagee (or servicer) with respect to a mortgage under
this section shall, at or before closing with respect to any such
mortgage, provide the mortgagor with written notice (in such form as the
Secretary shall prescribe, by regulation, before the expiration of the
90-day period beginning upon November 28, 1990) describing any
requirements the mortgagor must fulfill upon prepayment of the principal
amount of the mortgage to prevent the accrual of any interest on the
principal amount after the date of such prepayment. This paragraph shall
apply to any mortgage executed after the expiration of the period under
paragraph (1).
(u) Accountability of mortgage lenders
(1) No mortgagee may make or hold mortgages insured under this
section if the customary lending practices of the mortgagee, as
determined by the Secretary pursuant to section 1735f-17 of this title,
provide for a variation in mortgage charge rates that exceeds 2 percent
for insured mortgages made by the mortgagee on dwellings located within
an area. The Secretary shall ensure that any permissible variations in
the mortgage charge rates of any mortgagee are based only on actual
variations in fees or costs to the mortgagee to make the loan.
(2) For purposes of this subsection--
(A) the term ``area'' shall have the meaning given the term
under subsection (b)(2) of this section;
(B) the term ``mortgage charges'' includes the interest rate,
discount points, loan origination fee, and any other amount charged
to a mortgagor with respect to an insured mortgage; and
(C) the term ``mortgage charge rate'' means the amount of
mortgage charges for an insured mortgage expressed as a percentage
of the initial principal amount of the mortgage.
(v) Use of FHA insurance with assistance under 42 U.S.C. 1437f
Notwithstanding section 1708 of this title, the insurance of a
mortgage under this section in connection with the assistance provided
under section 1437f(y) of title 42 shall be the obligation of the
General Insurance Fund created pursuant to section 1735c \4\ of this
title. The provisions of subsections (a) through (h),\4\ (j), and (k)
\4\ of section 1710 of this title shall apply to such mortgages, except
that (1) all references in section 1710 of this title to the Mutual
Mortgage Insurance Fund or the Fund shall be construed to refer to the
General Insurance Fund, and (2) any excess amounts described in section
1710(f)(1) of this title shall be retained by the Secretary and credited
to the General Insurance Fund.
---------------------------------------------------------------------------
\4\ See References in Text note below.
---------------------------------------------------------------------------
(w) Annual report
The Secretary of Housing and Urban Development shall submit to the
Congress an annual report on the single family mortgage insurance
program under this section. Each report shall set forth--
(1) an analysis of the income groups served by the single family
insurance program, including--
(A) the percentage of borrowers whose incomes do not exceed
100 percent of the median income for the area;
(B) the percentage of borrowers whose incomes do not exceed
80 percent of the median income for the area; and
(C) the percentage of borrowers whose incomes do not exceed
60 percent of the median income for the area;
(2) an analysis of the percentage of minority borrowers annually
assisted by the program; the percentage of central city borrowers
assisted and the percentage of rural borrowers assisted by the
program;
(3) the extent to which the Secretary in carrying out the
program has employed methods to ensure that needs of low and
moderate income families, underserved areas, and historically
disadvantaged groups are served by the program; and
(4) the current impediments to having the program serve low and
moderate income borrowers; borrowers from central city areas;
borrowers from rural areas; and minority borrowers.
The report required under this subsection shall include the report
required under section 1735f-18(c) of this title and the report required
under section 1711(g) of this title.
(x) Management deficiencies report
(1) In general
Not later than 60 days after October 21, 1998, and annually
thereafter, the Secretary shall submit to Congress a report on the
plan of the Secretary to address each material weakness, reportable
condition, and noncompliance with an applicable law or regulation
(as defined by the Director of the Office of Management and Budget)
identified in the most recent audited financial statement of the
Federal Housing Administration submitted under section 3515 of title
31.
(2) Contents of annual report
Each report submitted under paragraph (1) shall include--
(A) an estimate of the resources, including staff,
information systems, and contract assistance, required to
address each material weakness, reportable condition, and
noncompliance with an applicable law or regulation described in
paragraph (1), and the costs associated with those resources;
(B) an estimated timetable for addressing each material
weakness, reportable condition, and noncompliance with an
applicable law or regulation described in paragraph (1); and
(C) the progress of the Secretary in implementing the plan
of the Secretary included in the report submitted under
paragraph (1) for the preceding year, except that this
subparagraph does not apply to the initial report submitted
under paragraph (1).
(June 27, 1934, ch. 847, title II, Sec. 203, 48 Stat. 1248; May 28,
1935, ch. 150, Sec. 29(a), 49 Stat. 299; Aug. 23, 1935, ch. 614, title
III, Sec. 344(c), 49 Stat. 722; Feb. 3, 1938, ch. 13, Sec. 3, 52 Stat.
10; June 3, 1939, ch. 175, Secs. 6-8, 53 Stat. 805, 806; June 28, 1941,
ch. 261, Sec. 8, 55 Stat. 365; Oct. 15, 1943, ch. 259, Sec. 2, 57 Stat.
571; July 1, 1946, ch. 531, 60 Stat. 408; Aug. 10, 1948, ch. 832, title
I, Sec. 101(g)-(k), 62 Stat. 1272; July 15, 1949, ch. 338, title II,
Sec. 201(2), 63 Stat. 421; Aug. 30, 1949, ch. 524, 63 Stat. 681; Oct.
25, 1949, ch. 729, Sec. 1(2), 63 Stat. 905; Apr. 20, 1950, ch. 94, title
I, Secs. 103, 104(a), 122, 64 Stat. 51, 59; June 30, 1953, ch. 170,
Sec. 3, 67 Stat. 121; Aug. 2, 1954, ch. 649, title I, Secs. 104-110, 68
Stat. 591, 592; Aug. 7, 1956, ch. 1029, title I, Secs. 102, 104(a), 70
Stat. 1091, 1092; Pub. L. 85-104, title I, Secs. 101, 106, July 12,
1957, 71 Stat. 294, 297; Pub. L. 85-364, Sec. 1(a), Apr. 1, 1958, 72
Stat. 73; Pub. L. 86-372, title I, Secs. 102, 103, title VIII, Sec. 809,
Sept. 23, 1959, 73 Stat. 654, 688; Pub. L. 87-70, title I, Sec. 102(b),
title VI, Secs. 604(b), 605, 606, 612(a), June 30, 1961, 75 Stat. 157,
177, 178, 180; Pub. L. 88-560, title I, Secs. 102, 103, 105(c)(1), Sept.
2, 1964, 78 Stat. 769, 772; Pub. L. 89-117, title II, Secs. 203-206,
title XI, Sec. 1108(c), Aug. 10, 1965, 79 Stat. 466, 504; Pub. L. 89-
754, title III, Secs. 301, 302, Nov. 3, 1966, 80 Stat. 1266; Pub. L. 90-
19, Sec. 1(a)(3), (4), May 25, 1967, 81 Stat. 17; Pub. L. 90-448, title
I, Sec. 103(b), title III, Secs. 317, 318, title XI, Sec. 1106(d), Aug.
1, 1968, 82 Stat. 486, 512, 567; Pub. L. 91-152, title I, Secs. 102(a),
113(a), Dec. 24, 1969, 83 Stat. 379, 383; Pub. L. 91-606, title III,
Sec. 301(c), Dec. 31, 1970, 84 Stat. 1758; Pub. L. 93-288, title VII,
Sec. 702(c), formerly title VI, Sec. 602(c), May 22, 1974, 88 Stat. 163,
renumbered title VII, Sec. 702(c), Pub. L. 103-337, div. C, title XXXIV,
Sec. 3411(a)(1), (2), Oct. 5, 1994, 108 Stat. 3100; Pub. L. 93-383,
title III, Secs. 302(a), 310(a), Aug. 22, 1974, 88 Stat. 676, 682; Pub.
L. 93-449, Sec. 4(b), Oct. 18, 1974, 88 Stat. 1367; Pub. L. 95-128,
title III, Secs. 303(a), (g), 304(a), 305, 307, Oct. 12, 1977, 91 Stat.
1132, 1133, 1134; Pub. L. 95-557, title I, Sec. 101(c)(1), (2), Oct. 31,
1978, 92 Stat. 2082, 2083; Pub. L. 95-619, title II, Sec. 248(a), Nov.
9, 1978, 92 Stat. 3235; Pub. L. 96-153, title III, Secs. 310, 312(a),
318, Dec. 21, 1979, 93 Stat. 1114, 1116, 1119; Pub. L. 96-399, title
III, Secs. 321, 328, 333(a), 336(a), Oct. 8, 1980, 94 Stat. 1646, 1651,
1653, 1654; Pub. L. 97-253, title II, Sec. 201(a), (b), Sept. 8, 1982,
96 Stat. 789; Pub. L. 98-63, title I, Sec. 101, July 30, 1983, 97 Stat.
321; Pub. L. 98-181, title IV, Secs. 404(b)(2), (3), 419, 423(a),
(b)(1), 424(a), 425, 447, Nov. 30, 1983, 97 Stat. 1209, 1212, 1216-1218,
1228; Pub. L. 98-479, title II, Sec. 204(a)(2), Oct. 17, 1984, 98 Stat.
2232; Pub. L. 99-601, Nov. 5, 1986, 100 Stat. 3357; Pub. L. 100-242,
title IV, Secs. 403-405(1), 406(a)-(b)(6), (c), 407(a)(1), 422(b), 423,
429(c), Feb. 5, 1988, 101 Stat. 1899-1902, 1914, 1918; Pub. L. 100-628,
title X, Secs. 1061-1063(a), Nov. 7, 1988, 102 Stat. 3274; Pub. L. 100-
707, title I, Sec. 109(e)(2), Nov. 23, 1988, 102 Stat. 4708; Pub. L.
101-144, title II, Nov. 9, 1989, 103 Stat. 852; Pub. L. 101-235, title
I, Secs. 132(a), 135, 143(a), (b), Dec. 15, 1989, 103 Stat. 2026, 2028,
2036; Pub. L. 101-402, Sec. 3, Oct. 1, 1990, 104 Stat. 866; Pub. L. 101-
507, title II, Nov. 5, 1990, 104 Stat. 1369; Pub. L. 101-508, title II,
Secs. 2101-2103(a), Nov. 5, 1990, 104 Stat. 1388-17; Pub. L. 101-625,
title III, Secs. 326(a), 327, 329, 330(a), title IV, Sec. 429, Nov. 28,
1990, 104 Stat. 4137, 4138, 4171; Pub. L. 102-40, title IV,
Sec. 402(d)(2), May 7, 1991, 105 Stat. 239; Pub. L. 102-389, title II,
Oct. 6, 1992, 106 Stat. 1591, 1593; Pub. L. 102-550, title I,
Sec. 185(c)(1), title V, Secs. 503(a), 504-506(a), 507(a), title X,
Sec. 1012(k)(2), Oct. 28, 1992, 106 Stat. 3747, 3779-3782, 3907; Pub. L.
103-211, title I, Feb. 12, 1994, 108 Stat. 12; Pub. L. 103-327, title
II, Sept. 28, 1994, 108 Stat. 2314; Pub. L. 104-204, title IV,
Secs. 424, 425(a), 426, Sept. 26, 1996, 110 Stat. 2927, 2928; Pub. L.
105-65, title II, Sec. 211, Oct. 27, 1997, 111 Stat. 1366; Pub. L. 105-
276, title II, Secs. 212, 224, 225(a), 228, Oct. 21, 1998, 112 Stat.
2486, 2489-2491; Pub. L. 106-74, title II, Sec. 207, Oct. 20, 1999, 113
Stat. 1072; Pub. L. 106-281, Sec. 2, Oct. 6, 2000, 114 Stat. 865; Pub.
L. 106-377, Sec. 1(a)(1) [title II, Secs. 209(a), 225], Oct. 27, 2000,
114 Stat. 1441, 1441A-25, 1441A-30; Pub. L. 106-569, title XI,
Sec. 1103(f), Dec. 27, 2000, 114 Stat. 3031; Pub. L. 107-73, title II,
Sec. 207(a), Nov. 26, 2001, 115 Stat. 674; Pub. L. 107-326, Sec. 2, Dec.
4, 2002, 116 Stat. 2792.)
References in Text
Section 1436 of title 42, referred to in subsec. (b)(9), was
repealed by Pub. L. 91-609, title V, Sec. 503(4), Dec. 31, 1970, 84
Stat. 1786. See section 1701z-1 et seq. of this title.
The Homeownership and Opportunity Through HOPE Act, referred to in
subsec. (b)(9), is title IV of Pub. L. 101-625, Nov. 28, 1990, 104 Stat.
4148, which enacted subchapter II-A (Sec. 1437aaa et seq.) of chapter 8
of Title 42, The Public Health and Welfare, and parts A (Sec. 12871 et
seq.) and B (Sec. 12891 et seq.) of subchapter IV of chapter 130 of
Title 42, amended sections 1437c, 1437f, 1437l, 1437p, 1437r, and 1437s
of Title 42, and enacted provisions set out as notes under sections
1437c, 1437aa, and 1437aaa of Title 42. For complete classification of
this Act to the Code, see Short Title note set out under section 1437aaa
of Title 42 and Tables.
The Trade and Intercourse Act of 1790, referred to in subsec.
(p)(1)(C), is act July 22, 1790, ch. 33, 1 Stat. 137, which was not
classified to the Code. See sections 177, 179, 180, 193, 194, 201, 229,
230, 251, 263, and 264 of Title 25, Indians.
Acts of February 19, 1875 (Chapter 90; 18 Stat. 330), and September
30, 1890 (Chapter 1132; 26 Stat. 558), referred to in subsec. (q)(1)(B),
which related to leasing of lands by the Seneca Nation of New York
Indians, are not classified to the Code.
Section 1735c of this title, referred to in subsec. (v), was in the
original ``section 519 of this title'', and was translated as meaning
section 519 of title V of the National Housing Act, act June 27, 1934,
ch. 847, to reflect the probable intent of Congress.
Subsection (h) of section 1710 of this title, referred to in subsec.
(v), was redesignated subsec. (i) by Pub. L. 105-276, title VI,
Sec. 602(1), Oct. 21, 1998, 112 Stat. 2674.
Subsection (k) of section 1710 of this title, referred to in subsec.
(v), was repealed by Pub. L. 105-276, title VI, Sec. 601(c), Oct. 21,
1998, 112 Stat. 2673.
Amendments
2002--Subsec. (b). Pub. L. 107-326, Sec. 2(1)(A), substituted
``shall comply with the following:'' for ``shall--'' in introductory
provisions.
Subsec. (b)(2). Pub. L. 107-326, Sec. 2(1)(C), transferred text of
subsec. (b)(10)(B) so as to appear as second sentence of concluding
provisions in par. (2).
Pub. L. 107-326, Sec. 2(1)(B)(ii)(III), in concluding provisions,
struck out the eleventh sentence through the end which read as follows:
``In conjunction with any loan insured under this section, an original
lender shall provide to each prospective borrower a disclosure notice
that provides a one page analysis of mortgage products offered by that
lender and for which the borrower would qualify. This notice shall
include: (i) a generic analysis comparing the note rate (and associated
interest payments), insurance premiums, and other costs and fees that
would be due over the life of the loan for a loan insured by the
Secretary under this subsection with the note rates, insurance premiums
(if applicable), and other costs and fees that would be expected to be
due if the mortgagor obtained instead other mortgage products offered by
the lender and for which the borrower would qualify with a similar loan-
to-value ratio in connection with a conventional mortgage (as that term
is used in section 1454(a)(2) of this title or section 1717(b)(2) of
this title, as applicable), assuming prevailing interest rates; and (ii)
a statement regarding when the mortgagor's requirement to pay the
mortgage insurance premiums for a mortgage insured under this section
would terminate or a statement that the requirement will terminate only
if the mortgage is refinanced, paid off, or otherwise terminated.''
Pub. L. 107-326, Sec. 2(1)(B)(ii)(II), in concluding provisions,
struck out seventh through ninth sentences which read as follows:
``Except with respect to mortgages executed by mortgagors who are
veterans, a mortgage may not involve a principal obligation (including
such initial service charges, appraisal, inspection, and other fees as
the Secretary shall approve) in excess of 98.75 percent of the appraised
value of the property (97.75 percent, in the case of a mortgage with an
appraised value in excess of $50,000), plus the amount of the mortgage
insurance premium paid at the time the mortgage is insured. For purposes
of the preceding sentence, the term `appraised value' means the amount
set forth in the written statement required under section 1715q of this
title, or a similar amount determined by the Secretary if section 1715q
of this title does not apply. Notwithstanding the authority of the
Secretary to establish the terms of insurance under this section and
approve the initial service charges, appraisal, inspection, and other
fees (and subject to any other limitations under this section on the
amount of a principal obligation), the Secretary may not (by regulation
or otherwise) limit the percentage or amount of any such approved
charges and fees that may be included in the principal obligation of a
mortgage.''
Pub. L. 107-326, Sec. 2(1)(B)(ii)(I), in concluding provisions,
struck out second and third sentences which read as follows: ``If the
mortgage to be insured under this section covers property on which there
is located a one- to four-family residence, and the appraised value of
the property, as of the date the mortgage is accepted for insurance,
does not exceed $50,000, the principal obligation may be in an amount
not to exceed 97 percent of such appraised value. If the mortgagor is a
veteran, and the mortgage to be insured under this section covers
property upon which there is located a dwelling designed principally for
a one-family residence, the principal obligation may be in an amount
equal to the sum of (i) 100 per centum of $25,000 of the appraised value
of the property as of the date the mortgage is accepted for insurance,
and (ii) 95 per centum of such value in excess of $25,000.''
Subsec. (b)(2)(A). Pub. L. 107-326, Sec. 2(1)(B)(i), realigned
margins of matter that precedes cl. (ii).
Subsec. (b)(2)(B). Pub. L. 107-326, Sec. 2(1)(B)(iii), added subpar.
(B) and struck out former subpar. (B) which read as follows: ``except as
otherwise provided in this paragraph (2), not to exceed an amount equal
to the sum of--
``(i) 97 percent of $25,000 of the appraised value of the
property, as of the date the mortgage is accepted for insurance;
``(ii) 95 percent of such value in excess of $25,000 but not in
excess of $125,000; and
``(iii) 90 percent of such value in excess of $125,000.''
Subsec. (b)(10). Pub. L. 107-326, Sec. 2(1)(C), (D), transferred
text of subpar. (B) so as to appear as second sentence of concluding
provisions in subsec. (b)(2) and struck out headings and text of
remainder of par. (10) which related to calculation of downpayment.
Subsec. (f). Pub. L. 107-326, Sec. 2(2), added subsec. (f).
2001--Subsec. (c)(1). Pub. L. 107-73, Sec. 207(a)(1), substituted
``subsections (n) or (k) of this section'' for ``subsections (n) and (k)
of this section'' in cl. (2) of first proviso.
Subsec. (c)(2). Pub. L. 107-73, Sec. 207(a)(2), in introductory
provisions, struck out ``and executed on or after October 1, 1994,''
after ``1- to 4-family dwelling'' and inserted ``and each mortgage that
is insured under subsection (k) of this section or section 1715y(c) of
this title,'' after ``subsection (v) of this section''.
2000--Subsec. (b)(10)(A). Pub. L. 106-377, Sec. 1(a)(1) [title II,
Sec. 225], substituted ``mortgage closed on or before December 31, 2002,
involving'' for ``mortgage closed on or before October 30, 2000
involving'' in introductory provisions.
Pub. L. 106-281 substituted ``closed on or before October 30, 2000''
for ``executed for insurance in fiscal years 1998, 1999, and 2000'' in
introductory provisions.
Subsec. (s). Pub. L. 106-377, Sec. 1(a)(1) [title II,
Sec. 209(a)(2)], redesignated subsec. (s), relating to disclosure
regarding interest due upon mortgage prepayment, as (t).
Subsec. (t). Pub. L. 106-377, Sec. 1(a)(1) [title II,
Sec. 209(a)(2)], redesignated subsec. (s), relating to disclosure
regarding interest due upon mortgage prepayment, as (t).
Pub. L. 106-377, Sec. 1(a)(1) [title II, Sec. 209(a)(1)],
redesignated subsec. (t) as (u).
Subsec. (u). Pub. L. 106-377, Sec. 1(a)(1) [title II,
Sec. 209(a)(1)], redesignated subsec. (t) as (u).
Subsec. (v). Pub. L. 106-377, Sec. 1(a)(1) [title II,
Sec. 209(a)(3)], redesignated subsec. (v), relating to annual report, as
(w).
Subsec. (w). Pub. L. 106-569, which directed the amendment of
subsec. (v) relating to annual report by inserting concluding
provisions, was executed by making the insertion in subsec. (w) to
reflect the probable intent of Congress and the intervening
redesignation of that subsec. (v) as (w) by Pub. L. 106-377,
Sec. 1(a)(1) [title II, Sec. 209(a)(3)]. See below.
Pub. L. 106-377, Sec. 1(a)(1) [title II, Sec. 209(a)(3)],
redesignated subsec. (v), relating to annual report, as (w).
1999--Subsec. (b)(2)(A)(ii). Pub. L. 106-74 inserted ``the greater
of the dollar amount limitation in effect under this section for the
area on October 21, 1998, or'' before ``48 percent''.
1998--Subsec. (b)(2). Pub. L. 105-276, Sec. 225(a), inserted at end
undesignated par. relating to disclosure notice furnished by original
lender.
Subsec. (b)(2)(A). Pub. L. 105-276, Sec. 228(a), added cl. (ii) and
struck out former cl. (ii) and concluding provisions which read as
follows:
``(ii) 75 percent of the dollar amount limitation determined
under section 1454(a)(2) of this title for a residence of the
applicable size;
except that the applicable dollar amount limitation in effect for any
area under this subparagraph may not be less than the greater of the
dollar amount limitation in effect under this section for the area on
September 28, 1994, or 38 percent of the dollar amount limitation
determined under section 1454(a)(2) of this title for a residence of the
applicable size; and''.
Subsec. (b)(2)(B). Pub. L. 105-276, Sec. 228(b), amended first
sentence of concluding provisions generally. Prior to amendment,
sentence read as follows: ``For purposes of the preceding sentence, the
term `area' means a county, or a metropolitan statistical area as
established by the Office of Management and Budget, whichever results in
the higher dollar amount.''
Subsec. (b)(10). Pub. L. 105-276, Sec. 212(1), substituted
``Calculation of Downpayment'' for ``Alaska and hawaii'' in heading.
Subsec. (b)(10)(A). Pub. L. 105-276, Sec. 212(2), substituted
``executed for insurance in fiscal years 1998, 1999, and 2000'' for
``originated in the State of Alaska or the State of Hawaii and endorsed
for insurance in fiscal years 1997 and 1998,''.
Subsec. (x). Pub. L. 105-276, Sec. 224, added subsec. (x).
1997--Subsec. (b)(10)(A). Pub. L. 105-65 substituted ``fiscal years
1997 and 1998'' for ``fiscal year 1997''.
1996--Subsec. (b)(9). Pub. L. 104-204, Sec. 425(a), inserted before
period at end ``: Provided further, That for purposes of this paragraph,
the Secretary shall consider as cash or its equivalent any amounts
borrowed from a family member (as such term is defined in section 1707
of this title), subject only to the requirements that, in any case in
which the repayment of such borrowed amounts is secured by a lien
against the property, such lien shall be subordinate to the mortgage and
the sum of the principal obligation of the mortgage and the obligation
secured by such lien may not exceed 100 percent of the appraised value
of the property plus any initial service charges, appraisal, inspection,
and other fees in connection with the mortgage''.
Subsec. (b)(10). Pub. L. 104-204, Sec. 426, added par. (10).
Subsec. (c)(2)(A). Pub. L. 104-204, Sec. 424, inserted after first
sentence ``In the case of a mortgage for which the mortgagor is a first-
time homebuyer who completes a program of counseling with respect to the
responsibilities and financial management involved in homeownership that
is approved by the Secretary, the premium payment under this
subparagraph shall not exceed 2.0 percent of the amount of the original
insured principal obligation of the mortgage.''
1994--Subsec. (b)(2)(A). Pub. L. 103-327 substituted cl. (ii) and
concluding provisions for former cl. (ii) and concluding provisions
which read as follows:
``(ii) 75 percent of the dollar amount limitation determined
under section 1454(a)(2) of this title (as in effect on September
30, 1992) for a residence of the applicable size;
except that the applicable dollar amount limitation in effect for any
area under this subparagraph (A) may not be less than the dollar amount
limitation in effect under this section for the area on May 12, 1992;''.
Subsec. (h). Pub. L. 103-211, effective for 18-month period
following Feb. 12, 1994, for eligible persons, substituted ``Robert T.
Stafford Disaster Relief and Emergency Assistance Act'' for ``section
5122(2) and 5170 of title 42'' and inserted at end ``In any case in
which the single family residence to be insured under this subsection is
within a jurisdiction in which the President has declared a major
disaster to have occurred, the Secretary is authorized, for a temporary
period not to exceed 18 months from the date of such Presidential
declaration, to enter into agreements to insure a mortgage which
involves a principal obligation of up to 100 percent of the dollar
limitation determined under section 1454(a)(2) of this title for single
family residence, and not in excess of 100 percent of the appraised
value.'' See Applicability of 1994 Amendment note below.
Subsec. (k)(6). Pub. L. 103-211, effective for 18-month period
following Feb. 12, 1994, for eligible persons, added par. (6) which read
as follows: ``The Secretary is authorized, for a temporary period not to
exceed 18 months from the date on which the President has declared a
major disaster to have occurred, to enter into agreements to insure a
rehabilitation loan under this subsection which involves a principal
obligation of up to 100 percent of the dollar limitation determined
under section 1454(a)(2) of this title for a residence of the applicable
size, if such loan is secured by a structure and property that are
within a jurisdiction in which the President has declared such disaster,
pursuant to the Robert T. Stafford Disaster Relief and Emergency
Assistance Act [42 U.S.C. 5121 et seq.], and if such loan otherwise
conforms to the loan-to-value ratio and other requirements of this
subsection.'' See Applicability of 1994 Amendment note below.
1992--Subsec. (b)(2). Pub. L. 102-550, Sec. 506(a), added
undesignated par. prohibiting Secretary from insuring mortgage executed
by first-time homebuyer involving principal obligation in excess of 97
percent of value of property, unless mortgagor completes approved
counseling program or Secretary waives requirement.
Pub. L. 102-550, Sec. 505(a), substituted ``Except with respect to
mortgages executed by mortgagors who are veterans'' for
``Notwithstanding any other provision of this paragraph'' in second
undesignated par.
Pub. L. 102-550, Sec. 503(a), amended first sentence generally.
Prior to amendment, first sentence read as follows: ``Involve a
principal obligation (including such initial service charges, appraisal,
inspection, and other fees as the Secretary shall approve) in an
amount--
``(A) not to exceed the lesser of--
``(i) in the case of the 1-family residence, 95 percent of
the median 1-family house price in the area (as determined by
the Secretary); in the case of a 2-family residence, 107 percent
of such median price; in the case of a 3-family residence, 130
percent of such median price; or in the case of a 4-family
residence, 150 percent of such median price; or
``(ii) 75 percent of the dollar amount limitation determined
under section 1454(a)(2) of this title (as adjusted annually
under such section) for a residence of the applicable size;
except that the applicable dollar amount limitation in effect for
any area under this subparagraph (A) may not be less than the dollar
amount limitation in effect under this section for the area on May
12, 1992; and
``(B) except as otherwise provided in this paragraph (2), not to
exceed an amount equal to the sum of--
``(i) 97 percent of $25,000 of the appraised value of the
property, as of the date the mortgage is accepted for insurance;
``(ii) 95 percent of such value in excess of $25,000 but not
in excess of $125,000; and
``(iii) 90 percent of such value in excess of $125,000.''
Pub. L. 102-389 amended first sentence generally. Prior to
amendment, first sentence read as follows: ``Involve a principal
obligation (including such initial service charges, appraisal,
inspection, and other fees as the Secretary shall approve) in an amount
not to exceed $67,500 in the case of property upon which there is
located a dwelling designed principally for a one-family residence; or
$76,000 in the case of a two-family residence; or $92,000 in the case of
a three-family residence, or $107,000 in the case of a four-family
residence; except that the Secretary may increase the preceding maximum
dollar amounts on an area-by-area basis to the extent the Secretary
deems necessary, after taking into consideration the extent to which
moderate and middle income persons have limited housing opportunities in
the area due to high prevailing housing sales prices, but in no case may
such limits, as so increased, exceed the lesser of (A) 185 percent of
the dollar amount specified, or (B) in the case of a one-family
residence, 95 per centum of the median one-family house price in the
area, as determined by the Secretary; in the case of a two-family
residence, 107 per centum of such median price; in the case of a three-
family residence, 130 per centum of such median price; or in the case of
a four-family residence, 150 per centum of such median price; and
(except as otherwise provided in this paragraph) not to exceed an amount
equal to the sum of (i) 97 per centum of $25,000 of the appraised value
of the property, as of the date the mortgage is accepted for insurance,
and (ii) 95 per centum of such value in excess of $25,000.''
Pub. L. 102-389 inserted at end of second undesignated par.
``Notwithstanding the authority of the Secretary to establish the terms
of insurance under this section and approve the initial service charges,
appraisal, inspection, and other fees (and subject to any other
limitations under this section on the amount of a principal obligation),
the Secretary may not (by regulation or otherwise) limit the percentage
or amount of any such approved charges and fees that may be included in
the principal obligation of a mortgage.''
Subsec. (b)(9). Pub. L. 102-550, Sec. 505(b), substituted ``(except
with respect to a mortgage executed by a mortgagor who is a veteran)''
for ``(except in a case to which the next to the last sentence of
paragraph (2) applies)''.
Subsec. (c)(2). Pub. L. 102-550, Sec. 185(c)(1)(A), inserted ``or of
the General Insurance Fund pursuant to subsection (v) of this section''
after ``Fund'' in introductory provisions.
Subsec. (c)(2)(A), (B). Pub. L. 102-550, Sec. 507(a)(1), (2)(A),
substituted ``not exceeding'' for ``equal to''.
Subsec. (c)(2)(B)(ii). Pub. L. 102-550, Sec. 507(a)(2)(B),
substituted ``not exceeding 0.55 percent'' for ``equal to 0.55
percent''.
Subsec. (k)(2)(B). Pub. L. 102-550, Sec. 1012(k)(2), inserted at end
``The term `rehabilitation' may also include measures to evaluate and
reduce lead-based paint hazards, as such terms are defined in section
4851b of title 42.''
Subsec. (v). Pub. L. 102-550, Sec. 504, added subsec. (v) relating
to annual reports.
Pub. L. 102-550, Sec. 185(c)(1)(B), added subsec. (v) relating to
use of FHA insurance with assistance under 42 U.S.C. 1437f.
1991--Subsec. (b)(2). Pub. L. 102-40 substituted ``section 5303A(d)
of title 38'' for ``section 3103A(d) of title 38''.
1990--Subsec. (b)(2). Pub. L. 101-508, Sec. 2102, inserted at end
``Notwithstanding any other provision of this paragraph, a mortgage may
not involve a principal obligation (including such initial service
charges, appraisal, inspection, and other fees as the Secretary shall
approve) in excess of 98.75 percent of the appraised value of the
property (97.75 percent, in the case of a mortgage with an appraised
value in excess of $50,000), plus the amount of the mortgage insurance
premium paid at the time the mortgage is insured. For purposes of the
preceding sentence, the term `appraised value' means the amount set
forth in the written statement required under section 1715q of this
title, or a similar amount determined by the Secretary if section 1715q
of this title does not apply.''
Pub. L. 101-508, Sec. 2101, substituted ``185 percent of the dollar
amount specified'' for ``150 percent (185 percent until October 31,
1990) of the dollar amount specified'' after ``exceed the lesser of
(A)''.
Pub. L. 101-507 which directed the substitution of ``(185 percent
during fiscal year 1991)'' for ``(185 percent during fiscal year 1990)''
could not be executed because ``during fiscal year 1990'' did not appear
in text after amendment by Pub. L. 101-402. See below.
Pub. L. 101-402 substituted ``until October 31, 1990'' for ``during
fiscal year 1990''.
Subsec. (b)(9). Pub. L. 101-625, Sec. 429, inserted ``or with
respect to a mortgage covering a housing unit in connection with a
homeownership program under the Homeownership and Opportunity Through
HOPE Act,'' before ``the mortgagor's payment''.
Subsec. (c). Pub. L. 101-508, Sec. 2103(a), designated existing
provisions as par. (1), added par. (2), and struck out at end of par.
(1) ``In the case of any mortgage secured by a 1- to 4-family dwelling,
the total premium charge shall not exceed an amount equal to 3.8 percent
of the original principal obligation of the mortgage if the Secretary
requires (1) a single premium charge to cover the total premium
obligation of the insurance of the mortgage; or (2) a periodic premium
charge over less than the term of the mortgage.''
Subsec. (g)(1). Pub. L. 101-625, Sec. 326(a), inserted at end ``In
making this determination with respect to the occupancy of secondary
residences, the Secretary may not insure mortgages with respect to such
residences unless the Secretary determines that it is necessary to avoid
undue hardship to the mortgagor. In no event may a secondary residence
under this subsection include a vacation home, as determined by the
Secretary.''
Subsec. (r)(4). Pub. L. 101-625, Sec. 327, added par. (4).
Subsec. (s). Pub. L. 101-625, Sec. 329, added subsec. (s) relating
to disclosure regarding interest due upon mortgage prepayment.
Subsec. (t). Pub. L. 101-625, Sec. 330, added subsec. (t).
1989--Subsec. (b)(2). Pub. L. 101-144 inserted ``(185 percent during
fiscal year 1990)'' after ``(A) 150 percent''.
Subsec. (g)(2). Pub. L. 101-235, Sec. 143(b), redesignated par. (3)
as (2) and struck out former par. (2) which read as follows: ``The
occupancy requirement established in paragraph (1) shall apply only if
the mortgage involves a principal obligation that exceeds, as
appropriate, 75 percent of--
``(A) the appraised value of the dwelling;
``(B) the estimate of the Secretary of the replacement cost of
the property;
``(C) the sum of the estimates of the Secretary of the cost of
repair and rehabilitation and the value of the property before
repair and rehabilitation; or
``(D) the sum of the estimates of the Secretary of the cost of
repair and rehabilitation and the amount (as determined by the
Secretary) required to refinance existing indebtedness secured by
the property, and, in the case of a property refinanced under
section 1715k(d)(3)(A) of this title, any existing indebtedness
incurred in connection with improving, repairing, or rehabilitating
the property.''
Subsec. (g)(2)(A). Pub. L. 101-235, Sec. 143(a)(1), inserted ``, or
any other State or local government or an agency thereof'' before
semicolon at end.
Subsec. (g)(2)(B). Pub. L. 101-235, Sec. 143(a)(2), inserted ``, or
other private nonprofit organization that is exempt from taxation under
section 501(c)(3) of title 26 and intends to sell or lease the mortgaged
property to low or moderate-income persons, as determined by the
Secretary'' before semicolon at end.
Subsec. (g)(3), (4). Pub. L. 101-235, Sec. 143(b)(2), redesignated
par. (4) as (3). Former par. (3) redesignated (2).
Subsec. (r). Pub. L. 101-235, Sec. 132(a)(1), amended first sentence
generally, substituting ``the single-family mortgage insurance programs
carried out under this subchapter'' for ``the mortgage insurance program
carried out under this section''.
Subsec. (r)(2), (3). Pub. L. 101-235, Sec. 132(a)(2), amended pars.
(2) and (3) generally. Prior to amendment, pars. (2) and (3) read as
follows:
``(2) requiring reviews of the credit standing of each person
seeking to assume a mortgage insured under this section (A) during the
12-month period following the date on which the mortgage is executed, or
(B) during the 24-month period following the date on which the mortgage
is executed in the case of an investor originated mortgage; and
``(3) in any case where a mortgage is assumed after the period
specified in paragraph (2), requiring that the original mortgagor be
advised of the procedures by which he or she may be released from
liability.''
Subsec. (s). Pub. L. 101-235, Sec. 135, added subsec. (s).
1988--Subsec. (b)(2). Pub. L. 100-628, Secs. 1061, 1062(b),
clarified amendments by Pub. L. 100-242, Secs. 405(1), 406(b)(1)(B).
Pub. L. 100-242, Sec. 406(b)(1)(A), struck out ``(whether or not
such one- or two-family residence may be intended to be rented
temporarily for school purposes)'' after ``in the case of a two-family
residence'' in first sentence.
Pub. L. 100-242, Sec. 404, substituted ``150 percent'' for ``133\1/
3\ per centum'' in cl. (A) of first sentence.
Pub. L. 100-242, Sec. 423, inserted definition of ``area''.
Pub. L. 100-242, Sec. 406(b)(1)(B), struck out ``to be occupied as
the principal residence of the owner'' after ``residence''.
Pub. L. 100-242, Sec. 405(1), which directed insertion of ``, except
that persons enlisting in the armed forces after September 7, 1980, or
entering active duty after October 16, 1981, shall have their
eligibility determined in accordance with section 3103A(d) of title 38''
before period at end of first undesignated paragraph, was executed by
making the insertion after ``other than dishonorable'' at end of
sentence defining ``veteran'', to reflect the probable intent of
Congress.
Subsec. (b)(8). Pub. L. 100-242, Sec. 406(b)(2), struck out par. (8)
which related to eligibility for insurance of a mortgage in the case of
a mortgagor who is not occupant of the property.
Subsec. (c). Pub. L. 100-242, Sec. 403, inserted provisions at end
relating to total premium charge to be fixed by Secretary in case of any
mortgage secured by 1- to 4-family dwelling.
Subsec. (g). Pub. L. 100-242, Sec. 406(a), added subsec. (g).
Subsec. (g)(3)(F). Pub. L. 100-628, Sec. 1062(a), added subpar. (F).
Subsec. (h). Pub. L. 100-707, Sec. 109(e)(2), struck out ``riot or
civil disorder'' after ``hurricane, earthquake, storm,'' and substituted
``5170'' for ``5141''.
Pub. L. 100-242, Sec. 406(b)(3), struck out ``is the owner and
occupant and'' after ``where the mortgagor''.
Subsec. (i). Pub. L. 100-242, Sec. 406(b)(4), struck out ``Provided,
That if the mortgagor is not the occupant of the property at the time of
insurance, the principal obligation of the mortgage shall not exceed 85
per centum of the appraised value of the property:'' after ``for a
single-family residence:'' and substituted ``Provided, That the
Secretary'' for ``Provided further, That the Secretary''.
Subsec. (k)(3)(B). Pub. L. 100-242, Sec. 429(c), substituted
``borrower and the financial institution'' for ``mortgagor and the
mortgagee''.
Subsec. (m). Pub. L. 100-242, Sec. 406(c), struck out subsec. (m)
which related to insurance of mortgages on dwellings that need not be
designed for year-round occupancy.
Subsec. (o)(2). Pub. L. 100-242, Sec. 406(b)(5), substituted
``owner'' for ``owner occupant'' in first sentence.
Subsec. (p)(2). Pub. L. 100-242, Sec. 406(b)(6), substituted
``owner'' for ``owner-occupant'' in first sentence.
Subsec. (q)(1). Pub. L. 100-242, Sec. 422(b), substituted
``Secretary shall'' for ``Secretary may''.
Subsec. (r). Pub. L. 100-242, Sec. 407(a)(1), added subsec. (r).
Subsec. (r)(2)(A), (B). Pub. L. 100-628, Sec. 1063(a), substituted
``date on which the mortgage is executed'' for ``date on which the
mortgage is endorsed for insurance''.
1986--Subsec. (q). Pub. L. 99-601 added subsec. (q).
1984--Subsec. (n)(2)(A). Pub. L. 98-479 substituted ``a'' for ``an''
before ``cooperative ownership''.
1983--Subsec. (b)(2). Pub. L. 98-181, Sec. 424(a), struck out
``(except as provided in the next to the last sentence of this
paragraph)'' and inserted ``(except as otherwise provided in this
paragraph)'' and inserted after first sentence ``If the mortgage to be
insured under this section covers property on which there is located a
one- to four-family residence to be occupied as the principal residence
of the owner, and the appraised value of the property, as of the date
the mortgage is accepted for insurance, does not exceed $50,000, the
principal obligation may be in an amount not to exceed 97 percent of
such appraised value.''
Pub. L. 98-181, Sec. 423(b)(1), struck out ``: Provided, That the
foregoing maximum mortgage amounts may be increased by the amount of the
mortgage insurance premium paid at the time the mortgage is insured''
after ``150 per centum of such median price''.
Subsec. (b)(5). Pub. L. 98-181, Sec. 404(b)(2), substituted
provision that the interest rate be at such rate as agreed upon by the
mortgagor and the mortgagee for provision that the interest rate,
exclusive of premium charges for insurance and service charges if any,
not exceed 5 per centum per annum on the amount of the principal
obligation outstanding at any time, or not exceed such per centum per
annum not in excess of 6 per centum as the Secretary finds necessary to
meet the mortgage market.
Subsec. (b)(8). Pub. L. 98-181, Sec. 425, substituted ``the lesser
of (A) the otherwise applicable maximum dollar amount prescribed under
paragraph (2), or (B) 85 percent of the appraised value of the property
as of the date the mortgage is accepted for insurance'' for ``85 per
centum of the amount computed under the provisions of paragraph (2) of
this subsection''.
Subsec. (c). Pub. L. 98-181, Sec. 447, inserted ``(1) under section
1715z-10, 1715z-12, 1715z-16, 1715z-17, or 1715z-18 of this title, or
any other financing mechanism providing alternative methods for
repayment of a mortgage that is determined by the Secretary to involve
additional risk, or (2)'' after ``fixed for insurance''.
Subsec. (d). Pub. L. 98-181, Sec. 423(a), added subsec. (d).
Subsec. (h). Pub. L. 98-63 substituted ``the applicable maximum
dollar limit under subsection (b) of this section'' for ``$14,400''.
Subsec. (k)(3)(B). Pub. L. 98-181, Sec. 404(b)(3), substituted
provision that interest be at such a rate as agreed upon by the
mortgagor and mortgagee for provision that interest be at a rate
permitted by the Secretary for mortgages insured under this section,
except that the Secretary could permit a higher rate with respect to the
period beginning with the making of the loan and ending with the
completion of the rehabilitation or such earlier time as determined by
the Secretary.
Subsec. (n)(1). Pub. L. 98-181, Sec. 419(1), inserted ``or the
construction of which was completed more than a year prior to the
application for the mortgage insurance'' after ``under this chapter''.
Subsec. (n)(2)(A). Pub. L. 98-181, Sec. 419(2), struck out
``nonprofit'' before ``cooperative''.
1982--Subsec. (b)(2). Pub. L. 97-253, Sec. 201(a)(1), inserted
provision that the foregoing maximum mortgage amounts may be increased
by the amount of the mortgage insurance premium paid at the time the
mortgage is insured.
Subsec. (b)(9). Pub. L. 97-253, Sec. 201(a)(2), inserted
``(excluding the mortgage insurance premium paid at the time the
mortgage is insured)'' after ``cost of acquisition''.
Subsec. (c). Pub. L. 97-253, Sec. 201(b), inserted provision that
with respect to mortgages for which the Secretary requires, at the time
the mortgage is insured, the payment of a single premium charge to cover
the total premium obligation for the insurance of the mortgage, and on
which the principal obligation is paid before the number of years on
which the premium with respect to a particular mortgage was based, or
the property is sold subject to the mortgage or is sold and the mortgage
is assumed prior to such time, the Secretary shall provide for refunds,
where appropriate, of a portion of the premium paid and shall provide
for appropriate allocation of the premium cost among the mortgagors over
the term of the mortgage, in accordance with procedures established by
the Secretary which take into account sound financial and actuarial
considerations.
1980--Subsec. (b)(2). Pub. L. 96-399, Sec. 336(a), inserted
provisions authorizing the Secretary to increase maximum dollar amounts
with respect to four-family residences.
Subsec. (b)(3). Pub. L. 96-399, Sec. 333(a), struck out provisions
relating to applicability to criteria of three-quarters of the
Secretary's estimate of the remaining economic life of the building
improvements.
Subsec. (k)(5). Pub. L. 96-399, Sec. 321, substituted provisions
relating to insurance benefits paid with respect to loans secured by a
first mortgage, and insured under this subsection, and those secured by
a mortgage other than a first mortgage, and insured under this
subsection, for provisions relating to insurance benefits paid with
respect to loans insured under this subsection.
Subsec. (p). Pub. L. 96-399, Sec. 328, added subsec. (p).
1979--Subsec. (b)(2). Pub. L. 96-153, Secs. 310, 312(a), excepted
dwellings covered by a consumer protection or warranty plan acceptable
to the Secretary and satisfying all requirements which would have been
applicable if such dwellings had been approved for mortgage insurance
prior to the beginning of construction from the limit on the maximum
amount of mortgage on dwellings not approved for mortgage insurance
prior to the beginning of construction, and substituted ``$67,500'' for
``$60,000'', ``$76,000'' for ``$65,000'' where it first appeared,
``$92,000'' for ``$65,000'' where it appeared the second time, and
``$107,000'' for ``$75,000''.
Subsec. (i). Pub. L. 96-153, Sec. 318, substituted ``two and one-
half or more acres in size adjacent to an all-weather public road'' for
``five or more acres in size adjacent to a public highway'' in last
proviso.
1978--Subsec. (b)(2). Pub. L. 95-619 inserted provision that the
amount insurable under this section could be increased by up to 20 per
centum if such increase were necessary to account for the increased cost
of a residence due to the installation of a solar energy system.
Subsec. (c). Pub. L. 95-557, Sec. 101(c)(2), substituted
``subsections (n) and (k) of this section are not required'' for
``subsection (n) of this section is not required'' and ``subsection (n)
or (k) of this section exceed 1 per centum'' for ``subsection (n) of
this section exceed 1 per centum''.
Subsec. (k). Pub. L. 95-557, Sec. 101(c)(1), generally revised
subsec. (k) to meet the credit needs of owners of from one-to-four
family properties who can afford market rate borrowing by insuring one
hundred percent of the loan amount and covering the cost of
rehabilitation, rehabilitation and refinancing existing debt, or the
purchase and rehabilitation of properties.
1977--Subsec. (b)(2). Pub. L. 95-128, Secs. 303(a), 304(a),
substituted ``$60,000'' for ``$45,000'', ``$65,000'' for ``$48,750''
wherever appearing, and ``$75,000'' for ``$56,000'' in provisions
preceding cl. (i); struck out in cl. (i) following ``97 per centum''
parenthetical text ``(but, in any case where the dwelling is not
approved for mortgage insurance prior to the beginning of construction,
unless the construction of the dwelling was completed more than one year
prior to the application for mortgage insurance, or the dwelling was
approved for guaranty, insurance, or direct loan under chapter 37 of
title 38 prior to the beginning of construction, 90 per centum)'';
substituted in first sentence ``and (ii) 95 per centum of such value in
excess of $25,000'' for ``(ii) 90 per centum of such value in excess of
$25,000 but not in excess of $35,000, and (iii) 80 per centum of such
value in excess of $35,000'' and in second sentence ``and (ii) 95 per
centum of such value in excess of $25,000'' for ``(ii) 90 per centum of
such value in excess of $25,000 but not in excess of $35,000, and (iii)
85 per centum of such value in excess of $35,000''; and inserted
following the second sentence provision limiting the mortgage to 90 per
centum of the entire appraised value of the property as of the date the
mortgage is accepted for insurance where the dwelling is not approved
for mortgage insurance prior to the beginning of construction.
Subsec. (c). Pub. L. 95-128, Sec. 305, inserted proviso respecting
premium charges for insurance under subsec. (n) of this section.
Subsec. (i). Pub. L. 95-128, Sec. 303(g), substituted provision
which authorizes the Secretary to insure a mortgage hereunder which
involves a principal obligation not in excess of 75 per centum of the
limit on the principal obligation applicable to a one-family residence
under subsec. (b) of this section for prior limitation of such insurance
on a mortgage which involved a principal obligation not in excess of
$16,200.
Subsec. (o). Pub. L. 95-128, Sec. 307, added subsec. (o).
1974--Subsec. (b)(2). Pub. L. 93-383, Sec. 302(a), substituted
``$45,000'' for ``$33,000'', ``$48,750'' for ``$35,750'' wherever
appearing therein, and ``$56,000'' for ``$41,250'' in provisions
preceding cl. (i).
Subsec. (b)(2)(i). Pub. L. 93-383, Sec. 310(a)(1), substituted
``$25,000'' for ``$15,000'' in first and second sentences.
Subsec. (b)(2)(ii). Pub. L. 93-383, Sec. 310(a)(2), substituted
``$25,000'' for ``$15,000'' and ``$35,000'' for ``$25,000'' in first and
second sentences.
Subsec. (b)(2)(iii). Pub. L. 93-383, Sec. 310(a)(3), substituted
``$35,000'' for ``$25,000'' in first and second sentences.
Subsec. (h). Pub. L. 93-288 substituted ``sections 5122(2) and 5141
of title 42'' for ``section 4402(1) of title 42''.
Subsec. (n). Pub. L. 93-449 added subsec. (n).
1970--Subsec. (h). Pub. L. 91-606 substituted reference to section
``4402(1)'' for ``1855a(a)'' of title 42.
1969--Subsec. (b)(2). Pub. L. 91-152, Secs. 102(a), 113(a)(1),
substituted ``$25,000'' for ``$20,000'' wherever appearing, ``$33,000''
for ``$30,000'', ``$35,750'' for ``$32,500'' wherever appearing, and
``$41,250'' for ``$37,500''.
Subsec. (h). Pub. L. 91-152, Sec. 113(a)(2), substituted ``$14,400''
for ``$12,000''.
Subsec. (i). Pub. L. 91-152, Sec. 113(a)(3), substituted ``$16,200''
for ``$13,500''.
Subsec. (m). Pub. L. 91-152, Sec. 113(a)(4), substituted ``$18,000''
for ``$15,000''.
1968--Subsec. (h). Pub. L. 90-448, Sec. 1106(d), authorized
insurance of mortgages for reconstruction of homes destroyed or damaged
as a result of riot or civil disorder.
Subsec. (i). Pub. L. 90-448, Sec. 317, substituted ``$13,500'' for
``$12,500''.
Subsec. (l). Pub. L. 90-448, Sec. 103(b), repealed subsec. (l) which
authorized insurance of mortgages in areas affected by civil disorders.
See section 1715n(e) of this title.
Subsec. (m). Pub. L. 90-448, Sec. 318, added subsec. (m).
1967--Pub. L. 90--19, Sec. 1(a)(3), substituted ``Secretary'' for
``Commissioner'' wherever appearing in subsecs. (a), (b)(1) to (9), (c),
(e), (h), (i), and (k).
Subsec. (b)(3), (9). Pub. L. 90--19, Sec. 1(a)(4), substituted
``Secretary's'' for ``Commissioner's''.
1966--Subsec. (b)(2). Pub. L. 89-754, Sec. 301, substituted ``If the
mortgagor is a veteran,'' for ``If the mortgagor is a veteran who has
not received any direct, guaranteed, or insured loan under laws
administered by the Veterans' Administration for the purchase,
construction, or repair of a dwelling (including a farm dwelling) which
was to be owned and occupied by him as his home,''.
Subsec. (l). Pub. L. 89-754, Sec. 302, added subsec. (l).
1965--Subsec. (b)(2). Pub. L. 89-117, Secs. 203, 206(a), substituted
``and (except as provided in the next to the last sentence of this
paragraph) not to exceed'' for ``and not to exceed'', and ``80 per
centum'' for ``75 per centum'', and inserted provisions prescribing the
amount of the principal obligation for veterans and defining
``veteran''.
Subsec. (b)(9). Pub. L. 89-117, Secs. 204, 206(b), inserted
``(except in a case to which the next to the last sentence of paragraph
(2) applies)'' and ``or with respect to a mortgage covering a single-
family home being purchased under the low-income housing demonstration
project assisted pursuant to section 1436 of title 42''.
Subsec. (i). Pub. L. 89-117, Sec. 205, substituted ``$12,500'' for
``$11,000''.
Subsec. (k). Pub. L. 89-117, Sec. 1108(c), substituted ``the General
Insurance Fund'' for ``a separate section 203 Home Improvement Account
to be maintained as hereinafter provided under the Mutual Mortgage
Insurance Fund'' in cl. (3) of the first sentence and ``the General
Insurance Fund or in debentures executed in the name of such Fund'' for
``the section 203 Home Improvement Account or in debentures executed in
the name of such Account'' in cl. (4), and removed references to section
220 Housing Insurance Fund and section 203 Home Improvement Account
elsewhere in the subsec., including provisions for the funding of a
special revolving fund for carrying out the provisions of the subsec.
1964--Subsec. (b)(2). Pub. L. 88-560, Sec. 102(a), increased maximum
amount of the principal obligation for one-family residences from
$25,000 to $30,000, for two-family residences from $27,500 to $32,500,
for three-family residences from $27,500 to $32,500, and for four-family
residences from $35,000 to $37,500.
Subsec. (i). Pub. L. 88-560, Sec. 102(b), increased maximum amount
of the principal obligation from $9,000 to $11,000.
Subsec. (k). Pub. L. 88-560, Secs. 103, 105(c)(1), substituted in
cl. (2) ``an acceptable risk'' for ``economically sound'', in cl. (4)
provision for payment of insurance benefits ``in cash out of the Section
203 Home Improvement Account or in debentures executed in the name of
such Account'' for provision for such payment ``in debentures executed
in the name of the Section 203 Home Improvement Account'', and in the
third sentence ``Insurance benefits paid with respect to loans insured
under this subsection shall be paid'' for ``Debentures issued with
respect to loans insured under this subsection shall be issued''; and
inserted the provision that ``If the insurance payment is made in cash,
there shall be added to such payment an amount equivalent to the
interest which the debentures would have earned, computed to a date to
be established pursuant to regulations issued by the Commissioner.'',
respectively.
1961--Subsec. (a). Pub. L. 87-70, Sec. 604(b), struck out proviso
which limited the aggregate amount of principal obligations of all
mortgages insured under this chapter to not more than $7,750,000,000,
and which permitted additional increases in such sum by not more than
$1,250,000,000 in the aggregate.
Subsec. (b)(2). Pub. L. 87-70, Sec. 605(a), (b), increased maximum
amount of the principal obligation for one-family residences from
$22,500 to $25,000, and for two-family residences from $25,000 to
$27,500, and substituted ``$15,000'' for ``$13,500'' in two places,
``$20,000'' for ``$18,000'' in two places, and ``75 per centum'' for
``70 per centum''.
Subsec. (b)(3). Pub. L. 87-70, Secs. 605(c), 612(a)(1), substituted
``thirty-five years (or thirty years if such mortgage is not approved
for insurance prior to construction) from the date of the beginning of
amortization of the mortgage'' for ``thirty years from the date of the
insurance of the mortgage''.
Subsec. (c). Pub. L. 87-70, Secs. 606, 612(a)(2), reduced minimum
premium charge from an amount equivalent to one-half of 1 per centum per
annum to an amount equivalent to one-fourth of 1 per centum per annum,
permitted the Commissioner to make the reduced premium charge applicable
to each insured mortgage outstanding under the section or sections
involved at the time the reduced charge is fixed, struck out provisos
which related to premium charges for mortgages insured prior to Feb. 3,
1938, and for mortgages described in section 203(b)(2)(B) of the
National Housing Act accepted for insurance prior to July 1, 1939, and
substituted ``particular insurance fund or account'' for ``particular
insurance fund'' in the first proviso of the second sentence.
Subsec. (e). Pub. L. 87-70, Sec. 102(b)(1), (2), substituted
``eligibility of the loan or mortgage'' for ``eligibility of the
mortgage'', and ``approved financial institution or approved mortgagee''
for ``approved mortgagee'' in two places.
Subsec. (k). Pub. L. 87-70 Sec. 102(b)(3), added subsec. (k).
1959--Subsec. (b)(2). Pub. L. 86-372, Sec. 102(a), increased maximum
amount of the principal obligation for one-family residences from
$20,000 to $22,500, and for two-family residences from $20,000 to
$25,000, increased the maximum amount of loans over $13,500 from 85 per
centum of the value in excess of $13,500 but not in excess of $16,000 to
90 per centum of the value in excess of $13,500 but not in excess of
$18,000, and inserted provisions relating to dwellings approved for
guaranty, insurance, or direct loan under chapter 37 of title 38 prior
to the beginning of construction.
Subsec. (b)(8). Pub. L. 86-372, Sec. 102(b), inserted proviso making
the 85 per centum limitation inapplicable if the mortgagor and mortgagee
assume responsibility for the reduction of the mortgage by an amount not
less than 15 per centum of the outstanding principal amount thereof in
the event the mortgaged property is not, prior to the due date of the
18th amortization payment of the mortgage, sold to a purchaser
acceptable to the Commissioner who is the occupant of the property and
who assumes and agrees to pay the mortgage indebtedness.
Subsec. (i). Pub. L. 86-372, Sec. 103, increased maximum amount of
the principal obligation from $8,000 to $9,000, inserted parenthetical
clause, and struck out provisions that limited the total amount of
insurance outstanding at any one time for farm homes to not more than
$100,000,000.
Subsec. (j). Pub. L. 86-372, Sec. 809, added subsec. (j).
1958--Subsec. (b)(2). Pub. L. 85-364 substituted ``$13,500'' for
``$10,000'' in two places.
1957--Subsec. (b)(2). Pub. L. 85-104, Sec. 101(a), increased maximum
amount of loan from 95 per centum of the first $9,000 plus 75 per centum
of excess above $9,000, to 97 per centum of the first $10,000 plus 85
per centum of the next $6,000 and 70 per centum of the remainder, and
struck out provisions authorizing President to increase former $9,000
figure to $10,000, eliminated provision that principal of mortgage shall
not exceed 85 per centum if mortgagor is not occupant of property, and
eliminated provision that mortgagor shall have paid at least 5 per
centum cash payment. See subsec. (b)(8), (9).
Subsec. (b)(8), (9). Pub. L. 85-104, Sec. 101(b), added pars. (8)
and (9).
Subsec. (d). Pub. L. 85-104, Sec. 106, repealed provisions which
related to insurance of mortgages on farm properties.
Subsec. (i). Pub. L. 85-104, Sec. 101(c), amended provisions
generally, and, among other changes, increased maximum loan from $6,650
to $8,000, and from 95 per centum to 97 per centum of value, and
substituted provisions that mortgage obligation shall not exceed 85 per
centum of value if mortgagor is not occupant, for provisions that (1)
mortgagor be the owner and occupant and had paid at least 5 per centum
cash, or (2) mortgagor be owner and occupant with whom a person or
corporation having satisfactory credit standing had contracted to pay on
his behalf all or part of downpayment, taking as security a note at not
more than 4 per centum interest, and to guarantee payment of insured
mortgage, or (3) to be the builder constructing the dwelling in which
case principal should not exceed 85 per centum of value or $5,950.
1956--Subsec. (b)(2). Act Aug. 7, 1956, Secs. 102(a), 104(a),
inserted ``unless the construction of the dwelling was completed more
than one year prior to the application for mortgage insurance'' before
``90 per centum'' in parenthetical clause, and inserted provision that
in cases where mortgagor is a person 60 years of age or older, the
downpayment required could be paid by a person other than the mortgagor
under conditions prescribed by the Commissioner.
Subsec. (h). Act Aug. 7, 1956, Sec. 102(b), substituted ``$12,000''
for ``$7,000''.
1954--Subsec. (b)(2). Act Aug. 2, 1954, Sec. 104, generally amended
provisions to provide, among others, for an increase in, and
equalization of, maximum mortgage amounts, with respect to new housing,
substitution of a loan to value ratio of 95 per centum of the $9,000 of
value plus 75 per centum of the balance in excess of $9,000, with
Presidential authority to increase the $9,000 figure to $10,000 under
certain conditions, and with respect to existing housing, substitution
of a loan to value ratio of 90 per centum of the first $9,000 of value
plus 75 per centum of the balance in excess of $9,000, with Presidential
authority to increase the $9,000 figure to $10,000, and inserted a
provision limiting the maximum loan to value ratio where the builder
becomes the mortgagor, not to exceed 85 per centum of the mortgage loan
which an owner-occupant could obtain.
Subsec. (b)(3). Act Aug. 2, 1954, Sec. 105, substituted a provision
for a maximum maturity of 30 years or three-quarters of the
Commissioner's estimate of the remaining economic life of the building
improvements, whichever is the lesser, for former provision carrying
varying limits ranging from twenty to thirty years.
Subsec. (b)(5). Act Aug. 2, 1954, Sec. 106, fixed maximum statutory
interest rate on mortgages at 5 per centum with authority in the
Commissioner to increase the rate to not to exceed 6 per centum as he
finds it necessary to meet the mortgage market; and permitted the
allowance of service charges.
Subsec. (c). Act Aug. 2, 1954, Sec. 107, provided that debentures
presented in payment of premium charges shall represent obligations of
the particular insurance fund to which such premium charges are to be
credited.
Subsec. (d). Act Aug. 2, 1954, Sec. 108, prohibited insurance of
mortgages pursuant to this subsection after Aug. 2, 1954, except
pursuant to commitments to insure issued on or before such date.
Subsecs. (f), (g). Act Aug. 2, 1954, Sec. 109, repealed subsec. (f)
which related to refinance mortgages and subsec. (g) which related to
higher loan to value ratio and longer maturity for single-family
residences. See subsecs. (b)(2) and (b)(3) of this section.
Subsecs. (h), (i). Act Aug. 2, 1954, Sec. 110, added subsecs. (h)
and (i).
1953--Subsec. (g). Act June 30, 1953, added subsec. (g).
1950--Act Apr. 20, 1950, Sec. 122, substituted ``Commissioner'' for
``Administrator'' wherever appearing.
Subsec. (a). Act Apr. 20, 1950, Sec. 103, increased statutory amount
of insurance authority from $6,750,000,000 to $7,500,000,000 and
provided that an additional $1,250,000,000 in insurance authority could
be made available with the authority of the President.
Subsec. (b)(2). Act Apr. 20, 1950, Sec. 104(a), inserted proviso to
clause (A) to allow the Commissioner to increase the dollar limitation
by not exceeding $4,500 for each additional family dwelling unit, in
excess of two located on such property, repealed clause (B), changed
``$9,500'' to read ``$9,450'', ``90'' to ``95'' in clause (C), and
changed clause (D) to provide that an insured mortgage could not exceed
$6,650 in amount and not exceed 95 per centum of the appraised value,
except that the Commissioner is given discretionary authority to
increase such dollar amount limitation by not exceeding $950 for each
additional bedroom in excess of two, and also to give Commissioner
authority to increase the insurance limitation in any geographical area
where he finds that cost levels so require.
1949--Subsec. (a). Joint Res. Oct. 25, 1949, substituted
``$6,000,000,000'' for ``$5,500,000,000'', and ``$6,750,000,000'' for
``$6,000,000,000''.
Act Aug. 30, 1949 substituted ``$5,500,000,000'' for
``$5,300,000,000'' and ``$6,000,000,000'' for ``$5,500,000,000''.
Act July 15, 1949, substituted ``$5,300,000,000'' for
``$4,000,000,000'' and ``$5,500,000,000'' for ``$5,000,000,000''.
1948--Subsec. (b)(2). Act Aug. 10, 1948, Sec. 101(g), (h)(1)-(3),
(j)(1), substituted ``$6,300'' for ``$5,400'' in subpar. (B),
substituted ``$9,500'' for ``$8,600'', ``$7,000'' for ``$6,000'', and
``$11,000'' for ``$10,000'' in subpar. (C), and added subpar. (D).
Subsec. (b)(3). Act Aug. 10, 1948, Sec. 101(i), (j)(2), substituted
``on property approved for insurance prior to the beginning of
construction'' for ``of the character described in paragraph (2)(B) of
this subsection'' and inserted ``or not to exceed thirty years in the
case of a mortgage insured under paragraph (2)(D) of this subsection'',
at the end thereof.
Subsec. (b)(5). Act Aug. 10, 1948, Sec. 101(j)(3), inserted ``or not
to exceed 4 per centum per annum in the case of a mortgage insured under
paragraph (2)(D) of this subsection, or not to exceed such percentum per
annum, not in excess of 5 per centum, as the Administrator finds
necessary to meet the mortgage market'' at the end thereof.
Subsec. (c). Act Aug. 10, 1948, Sec. 101(k)(1), (2), struck out of
last sentence ``under this section or section 1715a of this title''
after ``accepted for insurance'' and ``and a mortgage on the same
property is accepted for insurance at the time of such payment'' after
``herein set forth''.
1946--Subsec. (a). Act July 1, 1946, struck out second and third
provisos providing for a limitation on the aggregate amount of mortgages
outstanding, and limiting insuring of mortgages after July 1, 1946,
respectively.
1943--Subsec. (a). Act Oct. 15, 1943, substituted ``1946'' for
``1944'' in third proviso.
1941--Subsec. (a). Act June 28, 1941, substituted ``$4,000,000,000''
for ``$3,000,000,000'', ``$5,000,000,000'' for ``$4,000,000,000''; and
affected second and third provisos.
1939--Subsec. (a). Act June 3, 1939, Sec. 6, substituted
``$3,000,000'' for ``$2,000,000'', ``$4,000,000'' for ``$3,000,000'',
generally revised second proviso and inserted third proviso.
Subsec. (b)(3). Act June 3, 1939, Sec. 7, struck out ``until July 1,
1939''.
Subsecs. (e), (f). Act June 3, 1939, Sec. 8, added subsecs. (e) and
(f).
1938--Subsecs. (a) to (d). Act Feb. 3, 1938, amended provisions
generally.
1935--Subsec. (a)(1). Act Aug. 23, 1935, inserted ``property and''
before ``project''.
Subsec. (c). Act May 28, 1935, inserted part of last sentence before
the semicolon.
Effective Date of 2001 Amendment
Pub. L. 107-73, title II, Sec. 207(b), Nov. 26, 2001, 115 Stat. 675,
provided that: ``The amendments made by subsection (a) [amending this
section] shall--
``(1) apply only to mortgages that are executed on or after the
date of enactment of this Act [Nov. 26, 2001]; and
``(2) be implemented in advance of any necessary conforming
changes to regulations.''
Applicability of 1994 Amendment
Title I of Pub. L. 103-211, Feb. 12, 1994, 108 Stat. 12, provided in
part that: ``For higher mortgage limits and improved access to mortgage
insurance for victims of the January 1994 earthquake in Southern
California, title II of the National Housing Act, as amended [12 U.S.C.
1707 et seq.], is further amended, as follows:
``(1) [Amended this section.]
``(2) [Amended this section.]
``(3) [Amended section 1715y of this title.]
``Eligibility for loans made under the authority granted by the
preceding paragraph [amending this section and section 1715y of this
title] shall be limited to persons whose principal residence was damaged
or destroyed as a result of the January 1994 earthquake in Southern
California: Provided, That the provisions under this heading [amending
this section and section 1715y of this title] shall be effective only
for the 18-month period following the date of enactment of this Act
[Feb. 12, 1994].''
Effective Date of 1992 Amendment
Section 503(b) of Pub. L. 102-550 provided that: ``The amendment
made by subsection (a) [amending this section] shall apply only to
mortgages executed on or after January 1, 1993.''
Section 506(b) of Pub. L. 102-550 provided that: ``The amendment
made by subsection (a) [amending this section] shall apply to mortgages
for which commitments for insurance are issued after the expiration of
the 12-month period beginning on the date of the enactment of this Act
[Oct. 28, 1992].''
Effective Date of 1990 Amendments
Section 326(b) of Pub. L. 101-625 provided that: ``The amendments
made by subsection (a) [amending this section] shall apply only with
respect to--
``(1) mortgages insured--
``(A) pursuant to a conditional commitment issued after the
expiration of the 60-day period beginning on the date of the
enactment of this Act [Nov. 28, 1990]; or
``(B) in accordance with the direct endorsement program, if
the approved underwriter of the mortgages signs the appraisal
report for the property after the expiration of the 60-day
period beginning on the date of the enactment of this Act; and
``(2) the approval of substitute mortgagors, if the original
mortgagor was subject to such amendments.''
Amendment by Pub. L. 101-402 deemed to have taken effect as if
enacted September 29, 1990, see section 1(a) of Pub. L. 101-494, set out
as an Effective Date of Temporary Extension of Emergency Low Income
Housing Preservation Act of 1987 and Correction of Any Repeal note under
section 1715l of this title.
Effective Date of 1989 Amendment
Section 132(b) of Pub. L. 101-235 provided that: ``The amendments
made by subsection (a) [amending this section] shall apply only with
respect to--
``(1) mortgages insured--
``(A) pursuant to a conditional commitment issued on or
after the date of the enactment of this Act [Dec. 15, 1989]; or
``(B) in accordance with the direct endorsement program (24
C.F.R. 200.163), if the approved underwriter of the mortgage
signs the appraisal report for the property on or after the date
of the enactment of this Act; and
``(2) the approval of substitute mortgagors, if the original
mortgagor was subject to such amendments.''
Section 143(c) of Pub. L. 101-235 provided that: ``The amendments
made by this section [amending this section] shall apply only with
respect to--
``(1) mortgages insured--
``(A) pursuant to a conditional commitment issued on or
after the date of the enactment of this Act [Dec. 15, 1989]; or
``(B) in accordance with the direct endorsement program, if
the approved underwriter of the mortgagee signs the appraisal
report for the property on or after the date of the enactment of
this Act; and
``(2) the approval of substitute mortgagors, if the original
mortgagor was subject to such amendments.''
Effective Date of 1988 Amendment
Section 406(d) of Pub. L. 100-242 provided that: ``The amendments
made by this section [amending this section and sections 1715d, 1715g,
1715k, 1715l, 1715m, 1715n, 1715y, and 1715z of this title] shall apply
only with respect to--
``(1) mortgages insured--
``(A) pursuant to a conditional commitment issued on or
after the date of the enactment of this Act [Feb. 5, 1988]; or
``(B) in accordance with the direct endorsement program (24
CFR 200.163), if the approved underwriter of the mortgagee signs
the appraisal report for the property on or after the date of
the enactment of this Act; and
``(2) the approval of substitute mortgagors, referred to in the
amendment made by subsection (a) [amending this section], if the
original mortgagor was subject to such amendment.''
Section 407(a)(2) of Pub. L. 100-242, as amended by Pub. L. 100-628,
title X, Sec. 1063(b), Nov. 7, 1988, 102 Stat. 3274, provided that:
``The amendment made by paragraph (1) [amending this section] shall
apply to each mortgage originated pursuant to an application for
commitment for insurance signed by the applicant on or after December 1,
1986.''
Effective Date of 1983 Amendment
Section 424(b) of Pub. L. 98-181 provided that: ``The amendment made
by subsection (a) [amending this section] shall take effect only if the
Secretary finds and reports to the Congress that such amendment, taking
into account the higher loan-to-value ratio resulting from the advance
payment of mortgage insurance premiums, will not adversely affect the
actuarial soundness of the Federal Housing Administration mortgage
insurance program.'' [For finding and report by Secretary and rule
implementing the amendments effective June 24, 1985, see 49 F.R. 39686
and 50 F.R. 19924.]
Section 423(c) of Pub. L. 98-181 provided that: ``The amendments
made by this section [amending this section and sections 1715e, 1715l,
1715y, and 1715z of this title] shall take effect only if the Secretary
of Housing and Urban Development determines that the program of advance
payment of insurance premiums, with specific regard to the effect of the
provisions authorized by the amendments made by such sections, is
actuarially sound.'' [For determination by Secretary and rule
implementing the amendments effective May 10, 1984, see 49 F.R. 12693.]
Effective Date of 1978 Amendment
Section 104 of Pub. L. 95-557 provided that: ``The amendments made
by this title [enacting section 5319 of Title 42, The Public Health and
Welfare, and amending this section, sections 1706e and 1717 of this
title, and sections 1452b, 5304, 5305, 5307, and 5318 of Title 42] shall
become effective October 1, 1978.''
Effective Date of 1974 Amendment
Amendment by Pub. L. 93-288 effective Apr. 1, 1974, see section 605
of Pub. L. 93-288, set out as an Effective Date note under section 5121
of Title 42, The Public Health and Welfare.
Effective Date of 1970 Amendment
Amendment by Pub. L. 91-606 effective Dec. 31, 1970, see section 304
of Pub. L. 91-606, set out as a note under section 165 of Title 26,
Internal Revenue Code.
Effective Date of 1949 Amendment
Amendment by act July 15, 1949, effective June 30, 1949, see section
202 of that act, set out as a note under section 1703 of this title.
Regulations
Pub. L. 105-276, title II, Sec. 225(b), Oct. 21, 1998, 112 Stat.
2490, provided that: ``The Secretary of Housing and Urban Development
shall develop the disclosure notice under subsection (a) [amending this
section] within 150 days of the enactment [Oct. 21, 1998] through notice
and comment rulemaking.''
Temporary Extension of FHA Mortgage Limit
Pub. L. 101-494, Sec. 4, Oct. 31, 1990, 104 Stat. 1185, provided
that:
``(a) Extension.--If upon enactment of this Act [see Effective Date
of 1990 Amendments note above], section 203(b)(2) of the National
Housing Act (12 U.S.C. 1709(b)(2)) provides for an increase in the
maximum dollar amount limitations on the principal obligations of
mortgages insured under such section until October 31, 1990, then
notwithstanding such section, such maximum dollar amount limitations may
be increased (to the percent specified in such section) until November
30, 1990.
``(b) Limitations.--If upon enactment of this Act such section
203(b)(2) [12 U.S.C. 1709(b)(2)] provides for an increase in the maximum
dollar amount limitations (referred to in subsection (a)) until a date
other than October 31, 1990, this section shall not apply. This section
shall not apply with respect to any amendment to section 203(b)(2) of
the National Housing Act made after the date of the enactment of this
Act [Oct. 31, 1990].''
Transition Provisions of 1990 Amendments
Section 326(c) of Pub. L. 101-625 provided that: ``Any mortgage
insurance provided under title II of the National Housing Act [this
subchapter] before the expiration of the 60-day period beginning on the
date of the enactment of this Act [Nov. 28, 1990], shall continue to be
governed (to the extent applicable) by the provisions of section
203(g)(1) of the National Housing Act [12 U.S.C. 1709(g)(1)], as such
provisions existed before the date of the enactment of this Act.''
Section 2103(b), (c) of Pub. L. 101-508, as amended by Pub. L. 102-
550, title I, Sec. 185(c)(3), title V, Sec. 507(b), Oct. 28, 1992, 106
Stat. 3748, 3782, provided that:
``(b) Transition Provisions.--Notwithstanding section 203(c) of the
National Housing Act [12 U.S.C. 1709(c)] (as amended by subsection (a)),
mortgage insurance premiums on mortgages executed during fiscal years
1991 through 1994 and that are obligations of the Mutual Mortgage
Insurance Fund or of the General Insurance Fund pursuant to section
203(v) of the National Housing Act shall be subject to the following
requirements:
``(1) 1991 and 1992.--For mortgages executed during fiscal years
1991 and 1992 (but after the date of the effectiveness of
regulations issued under subsection (c)), the Secretary shall
establish and collect the following premiums:
``(A) Up-front.--At the time of insurance, a single premium
payment in an amount not exceeding 3.80 percent of the amount of
the original insured principal obligation of the mortgage.
``(B) Annual.--In addition to the premium under subparagraph
(A), annual premium payments in an amount not exceeding 0.50
percent of the remaining insured principal balance (excluding
the portion of the remaining balance attributable to the premium
collected under subparagraph (A) and without taking into account
delinquent payments or prepayments), for any mortgage involving
an original principal obligation (excluding any premium
collected under subparagraph (A)) that is--
``(i) less than 90 percent of the appraised value of the
property (as of the date the mortgage is accepted for
insurance), for the first 5 years of the mortgage term;
``(ii) greater than or equal to 90 percent of such value
but equal to or less than 95 percent of such value, for the
first 8 years of the mortgage term; and
``(iii) greater than 95 percent of such value, for the
first 10 years of the mortgage term.
``(2) 1993 and 1994.--For mortgages executed during fiscal years
1993 and 1994, the Secretary shall establish and collect the
following premiums:
``(A) Up-front.--At the time of insurance, a single premium
payment in an amount not exceeding 3.00 percent of the amount of
the original insured principal obligation of the mortgage.
``(B) Annual.--In addition to the premium under subparagraph
(A), annual premium payments in an amount not exceeding 0.50
percent of the remaining insured principal balance (excluding
the portion of the remaining balance attributable to the premium
collected under subparagraph (A) and without taking into account
delinquent payments or prepayments), for any mortgage involving
an original principal obligation (excluding any premium
collected under subparagraph (A)) that is--
``(i) less than 90 percent of the appraised value of the
property (as of the date the mortgage is accepted for
insurance), for the first 7 years of the mortgage term;
``(ii) greater than or equal to 90 percent of such value
but equal to or less than 95 percent of such value, for the
first 12 years of the mortgage term; and
``(iii) greater than 95 percent of such value, for the
first 30 years of the mortgage term.
``(3) Refunds.--With respect to any mortgage subject to premiums
under this subsection, the Secretary shall refund all of the
unearned premium charges paid on a mortgage pursuant to paragraph
(1)(A) or (2)(A) upon payment in full of the principal obligation of
the mortgage prior to the maturity date.
``(c) Regulations.--The Secretary shall issue regulations to carry
out this section and the amendments made by this section [amending this
section] not later than the expiration of the 90-day period beginning on
the date of the enactment of this Act [Nov. 5, 1990].''
Transition Provisions of 1989 Amendment
Section 132(c) of Pub. L. 101-235 provided that: ``Any mortgage
insurance provided under title II of the National Housing Act [this
subchapter] as it existed immediately before the date of the enactment
of this Act [Dec. 15, 1989], shall continue to be governed (to the
extent applicable) by the provisions of section 203(r) of the National
Housing Act [12 U.S.C. 1709(r)], as such section existed immediately
before such date.''
Section 143(d) of Pub. L. 101-235 provided that: ``Any mortgage
insurance provided under title II of the National Housing Act [this
subchapter], as it existed immediately before the date of the enactment
of this Act [Dec. 15, 1989], shall continue to be governed (to the
extent applicable) by the provisions amended by subsections (a) and (b)
[amending this section] as such provisions existed immediately before
such date.''
Transition Provisions of 1988 Amendment
Section 406(e) of Pub. L. 100-242 provided that: ``Any mortgage
insurance provided under title II of the National Housing Act [this
subchapter], as it existed immediately before the date of the enactment
of this Act [Feb. 5, 1988], shall continue to be governed (to the extent
applicable) by the provisions specified in subsections (a) through (c)
[this section and sections 1715d, 1715g, 1715k, 1715l, 1715m, 1715n,
1715y, 1715z of this title], as such provisions existed immediately
before such date.''
Implementation of 1982 Amendment
Section 201(g) of Pub. L. 97-253 provided that: ``The amendments
made by this section [amending this section and sections 1715e, 1715l,
1715y, and 1715z of this title], other than by subsection (b) [amending
subsec. (c) of this section], may be implemented only if the Secretary
determines that the program of advance payment of insurance premiums,
with specific regard to the effect of the provisions authorized by the
amendments made by this section, is actuarially sound.''
Effect of Repeal of Subsec. (b)(2)(B) of This Section
Section 104(b) of act Apr. 20, 1950, provided that: ``The repeal of
section 203(b)(2)(B) of said Act [former subsection (b)(2)(B) of this
section], as provided by subsection (a) of this section, shall not
affect the right of the Commissioner to insure under said section any
mortgage (1) for the insurance of which application has been filed prior
to the effective date of this Act [Apr. 20, 1950], or (2) with respect
to a property covered by a mortgage insured under any section of the
National Housing Act, as amended [this chapter].''
Mutual Mortgage Insurance Fund Premiums
Pub. L. 103-66, title III, Sec. 3005, Aug. 10, 1993, 107 Stat. 340,
provided that: ``To improve the actuarial soundness of the Mutual
Mortgage Insurance Fund under the National Housing Act [12 U.S.C. 1701
et seq.], the Secretary of Housing and Urban Development shall increase
the rate at which the Secretary earns the single premium payment
collected at the time of insurance of a mortgage that is an obligation
of such Fund (with respect to the rate in effect on the date of the
enactment of this Act [Aug. 10, 1993]). In establishing such increased
rate, the Secretary shall consider any current audit findings and
reserve analyses and information regarding the expected average duration
of mortgages that are obligations of such Fund and may consider any
other information that the Secretary determines to be appropriate.''
Report on Home Equity Conversion Mortgages for the Elderly
Section 448 of Pub. L. 98-181 directed Secretary of Housing and
Urban Development to evaluate existing use of home equity conversion
mortgages for the elderly and, not later than the expiration of the 1-
year period following Nov. 30, 1983, submit to Congress a report setting
forth the results of such evaluation. Such report to include an
evaluation of whether use of such mortgages improves financial
situation, or otherwise meets special needs, of elderly homeowners; an
evaluation of any risks incurred by mortgagors as a result of use of
such mortgages, and any recommendations of Secretary for appropriate
safeguards to be included in such mortgages to minimize such risks; an
evaluation of the potential for acceptance of such mortgages in the
private market; and any recommendations of Secretary for establishment
of a Federal program of insuring such mortgages.
Studies of Mortgage Insurance Premiums and Alternatives to Statutory
Mortgage Amounts
Section 309 of Pub. L. 96-153 directed Secretary of Housing and
Urban Development to (a) conduct a study of the relative risks of loss
for various classes of mortgages which may be insured under sections
1709(b) and 213 of this title, for the purpose of making recommendations
on the advisability of reducing mortgage insurance premiums, and
transmit the recommendations to Congress within 18 months from Dec. 21,
1979, and (b) conduct a study of alternatives to the present system of
fixed statutory maximum amounts for mortgages insured under subchapters
I and II of this chapter and report to Congress on the results of the
study together with recommendations for legislative, by Mar. 1, 1980.
Insurance Program or Homeowners To Meet Mortgage Payments in Times of
Personal Economic Adversity
Pub. L. 90-448, Sec. 109, authorized Secretary of Housing and Urban
Development to develop a plan of insurance to help homeowners meet
mortgage payments in times of personal economic adversity, i.e., death,
disability, illness, and unemployment; required the program to be
actuarially sound through the use of premiums, fees, extended or
increased payment schedules, or other similar methods in conjunction
with federal participation as necessary; directed the Secretary to
report to Congress within 6 months of Aug. 1, 1968 and to recommend
legislation, authorizing him to contract with companies, corporations,
or joint enterprises formed to provide home mortgage insurance
protection for the purpose of reinsuring insurance reserve funds,
subsidizing premium payments for lower income mortgagors, or otherwise
making possible insurance protection of homeowners; and authorized the
Secretary, in preparing his recommendations, to consult with other
agencies or instrumentalities of the United States which insure or
guarantee home mortgages in order that any recommended legislation
afford equal benefits to mortgagors participating in their programs.
Section Referred to in Other Sections
This section is referred to in sections 1441a, 1701x, 1706c, 1707,
1708, 1710, 1711, 1712, 1713, 1715e, 1715k, 1715l, 1715m, 1715n, 1715q,
1715w, 1715x, 1715y, 1715z, 1715z-2, 1715z-3, 1715z-5, 1715z-10, 1715z-
12, 1715z-13, 1715z-14, 1715z-20, 1717, 1735, 1735b, 1735c, 1735f-17,
1735f-18, 1746, 1748h-1, 1748h-2, 1750b, 1831q, 2703 of this title;
title 15 sections 77d, 78c; title 38 section 3703; title 42 sections
1472, 1490k.
