Sec. 232. Eligible single-family mortgages
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Notwithstanding section 203 of the National Housing Act ( 12 U.S.C. 1709 ) or any other provision of law, the FHA may insure, and make commitments to insure, a mortgage on a 1- to 4-family residential property only if the mortgage complies with the following requirements: The mortgage shall involve a principal obligation (including such initial service charges, appraisal, inspection, and other fees as the FHA shall approve) in an amount not to exceed the following amounts: 100 percent of the appraised value of the property.
The lesser of the following amounts: In the case of— a 1-family residence, 115 percent of the median 1-family house price in the area in which such residence is located, as determined by the FHA; 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 305(a)(2) of the Federal Home Loan Mortgage Corporation Act ( 12 U.S.C. 1454(a)(2) ) 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 150 percent of the dollar amount limitation determined under the sixth sentence of such section 305(a)(2) for a residence of the applicable size.
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 clause (i), the principal obligation limitation in effect for any area under this subparagraph may not be less than the greater of— 375 percent of the median income for the area, as determined by the FHA; or $200,000.
The mortgage shall be executed by a mortgagor who shall have paid on account of the property subject to the mortgage an amount, in cash or its equivalent, equal to or exceeding— 5 percent of the cost of acquisition of the property, as determined by the FHA; or in the case of a mortgage under which the mortgagor is a first-time homebuyer and for which such credit enhancement as the FHA shall determine has been provided, 3.5 percent of the cost of acquisition of the property, as determined by the FHA.
The mortgage shall meet the requirements of any one of the following subparagraphs: The mortgagor under the mortgage is a first-time homebuyer (as such term is defined in section 202) of the property subject to the mortgage and the property is used as the principal residence of the mortgagor. The mortgagor under the mortgage is a member of a family as follows: A family having an income that is less than 115 percent of the median income, as determined by the FHA, for the area in which the property subject to the mortgage is located, except that the FHA may establish income ceilings higher or lower than 115 percent of the median for the area to take into consideration various sizes of families.
A family that— resides in any area for which the median 1-family house price exceeds the maximum dollar amount limitation in effect for that year on the original principal obligation of a mortgage on a 1-family residence that may be purchased by the Federal Home Loan Mortgage Corporation, as determined under section 305(a)(2) of the Federal Home Loan Mortgage Corporation Act ( 12 U.S.C. 1454(a)(2) ); and has an income that is less than 150 percent of the median income, as determined by the FHA, for the area in which the property subject to the mortgage is located, except that the FHA may establish income ceilings higher or lower than 150 percent of the median for the area to take into consideration various sizes of families.
For purposes of this subparagraph, the term area has the meaning given such term in the last sentence of paragraph (1)(B)(i). The property subject to the mortgage is located in a county or counties for which a determination under this subparagraph has been made, as follows: A mortgage may be insured pursuant to this subparagraph only upon a joint determination by the Director and the Chief Risk Officer that— available credit for the purchase of 1- to 4-family homes located in such county or counties has contracted significantly, as measured by the credit availability measure of the Office of the Comptroller of the Currency; housing prices in such county or counties have declined significantly, as measured by the applicable housing price index of the Federal Housing Finance Agency; or available credit for the purchase of housing or such other economic conditions exist sufficient to evidence a significant contraction of capital in such county or counties, as measured by a metric identified by the Director and the Chief Risk Officer in a written notice made publicly available, and provided to the Congress, in advance of such determination.
Upon making a determination under clause (i), the Director and the Chief Risk Officer shall also identify measurable criteria for determining that the conditions determined under clause
(i)for such county or counties have ceased to exist. Upon making a determination under clause (i), the Director and the Chief Risk Officer shall provide written notice to the Congress of such determination and the specific measurable criteria identified pursuant to clause (ii). The authority to insure mortgages pursuant to this subparagraph on properties located in a county or counties shall terminate upon the earlier of— the expiration of the 18-month period beginning upon the date that notification under clause
(iii)is provided to the Congress of the determination under clause
(i)with respect to such county or counties; or the occurrence of the conditions identified pursuant to clause
(ii)with respect to such county or counties. Nothing in this subparagraph may be construed to prevent multiple or consecutive periods for a county or counties during which mortgages on properties located in such county or counties may be insured pursuant to this subparagraph. The Board of Directors exercises the authority to insure mortgages under this subparagraph, subject to the following requirements: The Board of Directors may implement authority to insure mortgages under this subparagraph only if the Board— by a vote of the majority of its members, approves such implementation for a specific disaster area under clause
(iii)and a specific disaster period under clause (iv); and notifies the Congress and the President in writing of such approval, such disaster period, and such disaster area not less than 30 days before the commencement of the disaster period. The FHA may insure, or make a commitment to insure, a mortgage under authority under this subparagraph only if— the mortgage is made for the purchase of a principal residence by a mortgagor whose home (that the mortgagor occupied as an owner or tenant) was located in a disaster area described under clause
(iii)and was destroyed or damaged to such an extent that reconstruction is required, as a result of a major disaster declared by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act; and the commitment for mortgage insurance is made during the disaster period established under clause
(iv)for such disaster area. A disaster area may be established for purposes of this subparagraph only for the area affected by a major disaster, as declared by the President under the Robert T. Stafford Disaster Relief and Emergency Assistance Act, or a portion of such area, as determined by the FHA. A disaster period established for purposes of this subparagraph shall— commence upon or after the declaration of the major disaster referred to in clause (iii); and terminate on the date certain approved by the Board of Directors under clause (i)(I) and contained in the notice under clause (i)(II), which shall not be later than 18 months after the commencement of the period. Section 203(b) of the National Housing Act (12 U.S.C. 1709(b)) is amended— by striking paragraph (2); and in paragraph (9)— by striking subparagraph (A); and in subparagraph (B), by striking this paragraph and inserting section 202(a)(2) of the . FHA Reform and Modernization Act of 2013
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