TITLE 12 - BANKS AND BANKING
CHAPTER 13 - NATIONAL HOUSING
SUBCHAPTER II - MORTGAGE INSURANCE
HEAD
Sec. 1709. Insurance of mortgages
STATUTE
(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, 115 percent of the
median 1-family house price in the area, as determined by the
Secretary; and in the case of a 2-, 3-, or 4-family
residence, the percentage of such median price that bears the
same ratio to such median price as the dollar amount
limitation determined under the sixth sentence of section
1454(a)(2) of this title for a 2-, 3-, or 4-family residence,
respectively, bears to the dollar amount limitation
determined under such section for a 1-family residence; or
(ii) 150 percent of the dollar amount limitation determined
under the sixth sentence of such section 1454(a)(2) for a
residence of applicable size;
except that the dollar amount limitation in effect under this
subparagraph for any size residence for any area may not be
less than the greater of: (I) the dollar amount limitation in
effect under this section for the area on October 21, 1998; or
(II) 65 percent of the dollar amount limitation determined
under the sixth sentence of such section 1454(a)(2) for a
residence of the applicable size; and
(B) not to exceed 100 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.
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) Cash investment requirement. -
(A) In general. - A mortgage insured under this section shall
be executed by a mortgagor who shall have paid, in cash or its
equivalent, on account of the property an amount equal to not
less than 3.5 percent of the appraised value of the property or
such larger amount as the Secretary may determine.
(B) Family members. - 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, that -
(i) such lien shall be subordinate to the mortgage; and
(ii) 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.
(C) Prohibited sources. - In no case shall the funds required
by subparagraph (A) consist, in whole or in part, of funds
provided by any of the following parties before, during, or
after closing of the property sale:
(i) The seller or any other person or entity that
financially benefits from the transaction.
(ii) Any third party or entity that is reimbursed, directly
or indirectly, by any of the parties described in clause (i).
This subparagraph shall apply only to mortgages for which the
mortgagee has issued credit approval for the borrower on or
after October 1, 2008.
(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,(!1) 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 subsection (n) 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) 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.
(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 shall be subject to the
following requirements:
(A) The Secretary shall establish and collect, at the time of
insurance, a single premium payment in an amount not exceeding 3
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 2.75 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, provided that the mortgagor refinances the unpaid
principal obligation under this subchapter.
(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
(1) Except as provided in paragraph (2) of this subsection,
notwithstanding (!2) 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.
(2) The maximum amount of a mortgage determined under subsection
(b)(2)(B) of this section may not be increased as provided in
paragraph (1).
(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
(!1) 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) Repealed. Pub. L. 110-289, div. B, title I, Sec. 2120(a)(1),
July 30, 2008, 122 Stat. 2835
(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. 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),(!1) 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 Mutual Mortgage 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. 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 or
subordinate mortgage or 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 or subordinate mortgage or 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) Repealed. Pub. L. 110-289, div. B, title I, Sec. 2120(a)(2),
July 30, 2008, 122 Stat. 2835
(p) Repealed. Pub. L. 110-289, div. B, title I, Sec. 2120(a)(3),
July 30, 2008, 122 Stat. 2835
(q) Repealed. Pub. L. 110-289, div. B, title I, Sec. 2120(a)(4),
July 30, 2008, 122 Stat. 2835
(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) Transferred
(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" means a metropolitan statistical area as
established by the Office of Management and Budget;
(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
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 Mutual Mortgage Insurance Fund.
(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) (!1) 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).
SOURCE
(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; Pub. L. 108-386, Sec. 8(b), Oct. 30, 2004, 118 Stat. 2231;
Pub. L. 108-447, div. I, title II, Secs. 222, 223, Dec. 8, 2004,
118 Stat. 3321; Pub. L. 109-13, div. A, title VI, Sec. 6073, May
11, 2005, 119 Stat. 300; Pub. L. 110-289, div. B, title I, Secs.
2112(a), (b), 2113-2115, 2116(2), (3), 2118(b)(1), 2120(a)(1)-(4),
(b), 2121, July 30, 2008, 122 Stat. 2830-2832, 2834, 2835.)
REFERENCES IN TEXT
Section 1715z-10 of this title, referred to in subsec. (c)(1),
was repealed by Pub. L. 110-289, div. B, title I, Sec. 2120(a)(7),
July 30, 2008, 122 Stat. 2835.
Section 1715m of this title, referred to in subsec. (g)(2)(D),
was repealed by Pub. L. 110-289, div. B, title I, Sec. 2120(a)(5),
July 30, 2008, 122 Stat. 2835.
Subsection (i) of this section, referred to in subsec. (l), was
repealed by Pub. L. 110-289, div. B, title I, Sec. 2120(a)(1), July
30, 2008, 122 Stat. 2835.
Section 1711(g) of this title, referred to in subsec. (w), was
repealed by Pub. L. 110-289, div. B, title I, Sec. 2118(c)(1), July
30, 2008, 122 Stat. 2835.
AMENDMENTS
2008 - Subsec. (b)(2). Pub. L. 110-289, Sec. 2112(a)(2), which
directed striking out second sentence in matter following subpar.
(B) and all that followed through "section 3103A(d) of title 38",
was executed in first undesignated par. after subpar. (B) by
striking out "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.", to reflect the probable intent of
Congress and amendment by Pub. L. 102-40. See 1991 Amendment note
below.
Subsec. (b)(2)(A), (B). Pub. L. 110-289, Sec. 2112(a)(1), added
subpars. (A) and (B) and struck out former subpars. (A) and (B)
which related to maximum limits for principal loan obligation.
Subsec. (b)(9). Pub. L. 110-289, Sec. 2113, amended par. (9)
generally. Prior to amendment, par. (9) related to requirement that
mortgagors other than veterans pay on account of the property 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.
Subsec. (c)(2). Pub. L. 110-289, Sec. 2114(1), in introductory
provisions, struck out "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,," after "Mutual Mortgage Insurance Fund".
Subsec. (c)(2)(A). Pub. L. 110-289, Sec. 2114(2), substituted "3
percent" for "2.25 percent" and "2.75 percent" for "2.0 percent".
Subsec. (d). Pub. L. 110-289, Sec. 2112(b), substituted "Except
as provided in paragraph (2) of this subsection, notwithstanding"
for "Notwithstanding any", designated existing provisions as par.
(1), and added par. (2).
Subsec. (i). Pub. L. 110-289, Sec. 2120(a)(1), struck out subsec.
(i) which related to Secretary's authority to insure mortgages for
single-family residences in suburban and outlying areas or small
communities and certain farm homes.
Subsec. (k)(1). Pub. L. 110-289, Sec. 2115(1), struck out "on and
after 180 days following October 31, 1978" after "financial
institutions".
Subsec. (k)(5). Pub. L. 110-289, Sec. 2115(2), substituted
"Mutual Mortgage Insurance Fund" for "General Insurance Fund" and
struck out ", 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" after "section 1710 of
this title".
Subsec. (n)(2)(A), (C). Pub. L. 110-289, Sec. 2121, inserted "or
subordinate mortgage or" before "lien".
Subsec. (o). Pub. L. 110-289, Sec. 2120(a)(2), struck out subsec.
(o) which related to insurance of mortgages on owner occupied homes
in communities subject to adverse economic conditions resulting
from Indian claims to ownership of land and obligation of Special
Risk Insurance Fund.
Subsec. (p). Pub. L. 110-289, Sec. 2120(a)(3), struck out subsec.
(p) which related to 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.
Subsec. (q). Pub. L. 110-289, Sec. 2120(a)(4), struck out subsec.
(q) which related to insurance of mortgages secured by property on
certain lands leased by Seneca Nation of New York Indians.
Subsec. (s). Pub. L. 110-289, Sec. 2116(3), redesignated and
transferred subsec. (s) of this section to subsec. (e) of section
1708 of this title.
Subsec. (s)(4). Pub. L. 110-289, Sec. 2116(2), added par. (4) and
struck out former par. (4) which read as follows: "the
Administrator of the Farmers Home Administration;".
Subsec. (u)(2)(A). Pub. L. 110-289, Sec. 2120(b), substituted
"means a metropolitan statistical area as established by the Office
of Management and Budget;" for "shall have the meaning given the
term under subsection (b)(2) of this section;".
Subsec. (v). Pub. L. 110-289, Sec. 2118(b)(1), substituted "The"
for "Notwithstanding section 1708 of this title, the" and "Mutual
Mortgage Insurance Fund." for "General Insurance Fund created
pursuant to section 1735c of this title. The provisions of
subsections (a) through (h), (j), and (k) 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."
2005 - Subsec. (c)(1). Pub. L. 109-13, Sec. 6073(b)(2), struck
out "or (k)" after "(2) under subsection (n)" and "charges under
subsection (n)".
Pub. L. 109-13, Sec. 6073(b)(1), substituted "(2) under
subsection (n)" for "(2) under subsections (n)".
Pub. L. 109-13, Sec. 6073(a), repealed Pub. L. 108-447, Sec. 222.
See note below.
2004-Subsec. (c)(1). Pub. L. 108-447, Sec. 222, which directed
the substitution of "subsection (n)" for "subsections (n) and (k)"
and the striking out of "or (k)", was repealed by Pub. L. 109-13,
Sec. 6073(a).
Subsec. (c)(2)(A). Pub. L. 108-447, Sec. 223, inserted ",
provided that the mortgagor refinances the unpaid principal
obligation under this subchapter" before period at end.
Subsec. (s)(5). Pub. L. 108-386 struck out "or District bank"
after "national bank".
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 2008 AMENDMENT
Pub. L. 110-289, div. B, title I, Sec. 2112(c), July 30, 2008,
122 Stat. 2831, provided that: "The amendments made by subsection
(a) [amending this section] shall take effect upon the expiration
of the date described in section 202(a) of the Economic Stimulus
Act of 2008 (Public Law 110-185; 122 Stat. 620) [Dec. 31, 2008]."
EFFECTIVE DATE OF 2004 AMENDMENTS
Pub. L. 108-447, div. I, title II, Sec. 223, Dec. 8, 2004, 118
Stat. 3321, provided in part that: "This provision [amending this
section] shall apply to loans that become insured on or after date
of enactment of this Act [Dec. 8, 2004]."
Amendment by Pub. L. 108-386 effective Oct. 30, 2004, and, except
as otherwise provided, applicable with respect to fiscal year 2005
and each succeeding fiscal year, see sections 8(i) and 9 of Pub. L.
108-386, set out as notes under section 321 of this title.
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, formerly 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]."
LIMITATION ON MORTGAGE INSURANCE PREMIUM INCREASES
Pub. L. 110-289, div. B, title I, Sec. 2130, July 30, 2008, 122
Stat. 2842, provided that:
"(a) In General. - Notwithstanding any other provision of law,
including any provision of this title [see Short Title of 2008
Amendment note set out under section 1701 of this title] and any
amendment made by this title -
"(1) for the period beginning on the date of the enactment of
this title [July 30, 2008] and ending on October 1, 2009, the
premiums charged for mortgage insurance under multifamily housing
programs under the National Housing Act [12 U.S.C. 1701 et seq.]
may not be increased above the premium amounts in effect under
such program on October 1, 2006, unless the Secretary of Housing
and Urban Development determines that, absent such increase,
insurance of additional mortgages under such program would, under
the Federal Credit Reform Act of 1990 [2 U.S.C. 661 et seq.],
require the appropriation of new budget authority to cover the
costs (as such term is defined in section 502 of the Federal
Credit Reform Act of 1990 (2 U.S.C. 661a)[)] of such insurance;
and
"(2) a premium increase pursuant to paragraph (1) may be made
only if not less than 30 days prior to such increase taking
effect, the Secretary of Housing and Urban Development -
"(A) notifies the Committee on Banking, Housing, and Urban
Affairs of the Senate and the Committee on Financial Services
of the House of Representatives of such increase; and
"(B) publishes notice of such increase in the Federal
Register.
"(b) Waiver. - The Secretary of Housing and Urban Development may
waive the 30-day notice requirement under subsection (a)(2), if the
Secretary determines that waiting 30-days before increasing
premiums would cause substantial damage to the solvency of
multifamily housing programs under the National Housing Act [12
U.S.C. 1701 et seq.]."
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.
FOOTNOTE
(!1) See References in Text note below.
(!2) So in original.
Transactional Records Access
Clearinghouse, Syracuse University
Copyright 2010