Text: S.2239 — 107th Congress (2001-2002)All Information (Except Text)

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Public Law No: 107-326 (12/04/2002)

 
[107th Congress Public Law 326]
[From the U.S. Government Printing Office]


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[DOCID: f:publ326.107]


[[Page 2791]]

               FHA DOWNPAYMENT SIMPLIFICATION ACT OF 2002

[[Page 116 STAT. 2792]]

Public Law 107-326
107th Congress

                                 An Act


 
     To amend the National Housing Act to simplify the downpayment 
       requirements for FHA mortgage insurance for single family 
            homebuyers. <<NOTE: Dec. 4, 2002 -  [S. 2239]>> 

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled, <<NOTE: FHA Downpayment 
Simplification Act of 2002.>> 

SECTION 1. SHORT TITLE. <<NOTE: 12 USC 1701 note.>> 

    This Act may be cited as the ``FHA Downpayment Simplification Act of 
2002''.

SEC. 2. DOWNPAYMENT SIMPLIFICATION.

    Section 203 of the National Housing Act (12 U.S.C. 1709) is 
amended--
            (1) in subsection (b)--
                    (A) by striking ``shall--'' and inserting ``shall 
                comply with the following:'';
                    (B) in paragraph (2)--
                          (i) in subparagraph (A), in the matter that 
                      precedes clause (ii), by moving the margin 2 ems 
                      to the right;
                          (ii) in the undesignated matter immediately 
                      following subparagraph (B)(iii)--
                                    (I) by striking the second and third 
                                sentences of such matter;
                                    (II) by striking the seventh 
                                sentence (relating to principal 
                                obligation) and all that follows through 
                                the end of the ninth sentence (relating 
                                to charges and fees); and
                                    (III) by striking the eleventh 
                                sentence (relating to disclosure notice) 
                                and all that follows through the end of 
                                the last undesignated paragraph 
                                (relating to disclosure notice 
                                requirements); and
                          (iii) by striking subparagraph (B) and 
                      inserting the following:
                    ``(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;

[[Page 116 STAT. 2793]]

                                    ``(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.'';
                    (C) by transferring and inserting the text of 
                paragraph (10)(B) after the period at the end of the 
                first sentence of the undesignated paragraph that 
                immediately follows paragraph (2)(B) (relating to the 
                definition of ``area''); and
                    (D) by striking paragraph (10); and
            (2) by inserting after subsection (e), the following:

    ``(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) 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 305(a)(2) of the 
                Federal Home Loan Mortgage Corporation Act (12 U.S.C. 
                1454(a)(2)) or section 302(b)(2) of the Federal National 
                Mortgage Association Charter Act (12 U.S.C. 1717(b)(2)), 
                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.''.

SEC. 3. CONFORMING AMENDMENTS.

    Section 245 of the National Housing Act (12 U.S.C. 1715z-10) is 
amended--
            (1) in subsection (a), by striking ``, or if the mortgagor'' 
        and all that follows through ``case of veterans''; and
            (2) in subsection (b)(3), by striking ``, or, if the'' and 
        all that follows through ``for veterans,''.

SEC. 4. REPEAL OF GNMA GUARANTEE FEE INCREASE.

    Section 972 of the Higher Education Amendments of 1998 (Public Law 
105-244; 112 Stat. 1837) <<NOTE: 12 USC 1721 and note.>>  is hereby 
repealed.

[[Page 116 STAT. 2794]]

SEC. 5. INDEXING OF FHA MULTIFAMILY HOUSING LOAN LIMITS.

    (a) The National Housing Act (12 U.S.C. 1701 et seq.) is amended by 
inserting after section 206 the following new section 206A (12 U.S.C. 
1712A):

``SEC. 206A. <<NOTE: 12 USC 1712a.>>  INDEXING OF FHA MULTIFAMILY 
            HOUSING LOAN LIMITS.

    ``(a) Method of Indexing.--The dollar amounts set forth in--
            ``(1) section 207(c)(3)(A) (12 U.S.C. 1713(c)(3)(A));
            ``(2) section 213(b)(2)(A) (12 U.S.C. 1715e(b)(2)(A));
            ``(3) section 220(d)(3)(B)(iii)(I) (12 U.S.C. 
        1715k(d)(3)(B)(iii)(I));
            ``(4) section 221(d)(3)(ii)(I) (12 U.S.C. 
        1715l(d)(3)(ii)(I));
            ``(5) section 221(d)(4)(ii)(I) (12 U.S.C. 
        1715l(d)(4)(ii)(I));
            ``(6) section 231(c)(2)(A) (12 U.S.C. 1715v(c)(2)(A)); and
            ``(7) section 234(e)(3)(A) (12 U.S.C. 1715y(e)(3)(A));

(collectively hereinafter referred to as the ``Dollar Amounts'') shall 
be adjusted annually (commencing in 2004) on the effective date of the 
Federal Reserve Board's adjustment of the $400 figure in the Home 
Ownership and Equity Protection Act of 1994 (HOEPA). The adjustment of 
the Dollar Amounts shall be calculated using the percentage change in 
the Consumer Price Index for All Urban Consumers (CPI-U) as applied by 
the Federal Reserve Board for purposes of the above-described HOEPA 
adjustment.
    ``(b) <<NOTE: Federal Register, publication.>>  Notification.--The 
Federal Reserve Board on a timely basis shall notify the Secretary, or 
his designee, in writing of the adjustment described in subsection (a) 
and of the effective date of such adjustment in order to permit the 
Secretary to undertake publication in the Federal Register of 
corresponding adjustments to the Dollar Amounts. The dollar amount of 
any adjustment shall be rounded to the next lower dollar.''.

    (b) Technical and Conforming Changes.--(1) Section 207(c)(3) of the 
National Housing Act (12 U.S.C. 1713(c)(3)) is amended--
            (A) by inserting ``(A)'' after ``(3)'';
            (B) by striking ``and accept that the Secretary'' through 
        and including ``in this paragraph'' and inserting in lieu 
        thereof:
                    ``(B) the Secretary may, by regulation, increase any 
                of the dollar amount limitations in subparagraph (A) (as 
                such limitations may have been adjusted in accordance 
                with section 206A of this Act)''.

    (2) Section 213(b)(2) of the National Housing Act (12 U.S.C. 
1715e(b)(2)) is amended--
            (A) by inserting ``(A)'' following ``(2)'';
            (B) by striking ``: Provided further, That'' the first time 
        that it occurs, through and including ``contained in this 
        paragraph'' and inserting in lieu thereof: ``; (B)(i) the 
        Secretary may, by regulation, increase any of the dollar amount 
        limitations in subparagraph (A) (as such limitations may have 
        been adjusted in accordance with section 206A of this Act)'';
            (C) by striking ``: Provided further, That'' the second time 
        it occurs and inserting in lieu thereof: ``; and (ii)'';
            (D) by striking ``: And provided further, That'' and 
        inserting in lieu thereof: ``; and (iii)'';
            (E) by striking ``with this subsection without regard to the 
        preceding proviso'' at the end of that subsection and inserting 
        in lieu thereof: ``with this subparagraph (B)(i).''.

[[Page 116 STAT. 2795]]

    (3) Section 220(d)(3)(B)(iii) of the National Housing Act (12 U.S.C. 
1715k(d)(3)(B)(iii)) is amended--
            (A) by inserting ``(I)'' following ``(iii)'';
            (B) by striking ``design; and except that'' and inserting in 
        lieu thereof: ``design; and (II)'';
            (C) by striking ``any of the foregoing dollar amount 
        limitations contained in this clause'' and inserting in lieu 
        thereof: ``any of the dollar amount limitations in subparagraph 
        (B)(iii)(I) (as such limitations may have been adjusted in 
        accordance with section 206A of this Act)'';
            (D) by striking ``: Provided, That'' through and including 
        ``proviso'' and inserting in lieu thereof: ``with respect to 
        dollar amount limitations applicable to rehabilitation projects 
        described in subclause (II), the Secretary may, by regulation, 
        increase the dollar amount limitations contained in subparagraph 
        (B)(iii)(I) (as such limitations may have been adjusted in 
        accordance with section 206A of this Act)'';
            (E) by striking ``: Provided further,'' and inserting in 
        lieu thereof: ``; (III)'';
            (F) by striking ``subparagraph'' in the second proviso and 
        inserting in lieu thereof ``subparagraph (B)(iii)(I)'';
            (G) in the last proviso, by striking ``: And provided 
        further, That'' and all that follows through and including 
        ``this clause'' and inserting in lieu thereof: ``; (IV) with 
        respect to rehabilitation projects involving not more than five 
        family units, the Secretary may further increase any of the 
        dollar limitations which would otherwise apply to such 
        projects''.

    (4) Section 221(d)(3)(ii) of the National Housing Act (12 U.S.C. 
1715l(d)(3)(ii)) is amended--
            (A) by inserting ``(I)'' following ``(ii)'';
            (B) by striking ``; and except that'' and all that follows 
        through and including ``in this clause'' and inserting in lieu 
        thereof: ``; (II) the Secretary may, by regulation, increase any 
        of the dollar amount limitations in subclause (I) (as such 
        limitations may have been adjusted in accordance with section 
        206A of this Act)''.

    (5) Section 221(d)(4)(ii) of the National Housing Act (12 U.S.C. 
1715l(d)(4)(ii)) is amended--
            (A) by inserting ``(I)'' following ``(ii)'';
            (B) by striking ``; and except that'' and all that follows 
        through and including ``in this clause'' and inserting in lieu 
        thereof: ``; (II) the Secretary may, by regulation, increase any 
        of the dollar limitations in subclause (I) (as such limitations 
        may have been adjusted in accordance with section 206A of this 
        Act)''.

    (6) Section 231(c)(2) of the National Housing Act (12 U.S.C. 
1715v(c)(2)) is amended--
            (A) by inserting ``(A)'' following ``(2)'';
            (B) by striking ``; and except that'' and all that follows 
        through and including ``in this paragraph'' and inserting in 
        lieu thereof: ``; (B) the Secretary may, by regulation, increase 
        any of the dollar limitations in subparagraph (A) (as such 
        limitations may have been adjusted in accordance with section 
        206A of this Act)'';
            (C) by striking ``: Provided, That'' and all that follows 
        through and including ``of this section'' and inserting in lieu 
        thereof: ``; (C) the Secretary may, by regulation, increase any

[[Page 116 STAT. 2796]]

        of the dollar limitations in subparagraph (A) (as such 
        limitations may have been adjusted in accordance with section 
        206A of this Act)''.

    (7) Section 234(e)(3) of the National Housing Act (12 U.S.C. 
1715y(e)(3)) is amended--
            (A) by inserting ``(A)'' following ``(3)'';
            (B) by replacing ``$38,025'' with ``$42,048''; ``$42,120'' 
        with ``$48,481''; ``$50,310'' with ``$58,469''; ``$62,010'' with 
        ``$74,840''; ``$70,200'' with ``$83,375''; ``$43,875'' with 
        ``$44,250''; ``$49,140'' with ``$50,724''; ``$60,255'' with 
        ``$61,680''; ``$75,465'' with ``$79,793''; and ``$85,328'' with 
        ``$87,588'';
            (C) by striking ``; except that each'' and all that follows 
        through and including ``contained in this paragraph'' and 
        inserting in lieu thereof: ``; (B) the Secretary may, by 
        regulation, increase any of the dollar limitations in 
        subparagraph (A) (as such limitations may have been adjusted in 
        accordance with section 206A of this Act)''.

    Approved December 4, 2002.

LEGISLATIVE HISTORY--S. 2239:
---------------------------------------------------------------------------

CONGRESSIONAL RECORD, Vol. 148 (2002):
            Oct. 17, considered and passed Senate.
            Nov. 14, considered and passed House.

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