Sec. 1. Insurance with respect to the financing of the construction of accessory dwelling units
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Title II of the National Housing Act ( 12 U.S.C. 1707 et seq. ) is amended by adding at the end the following: Not later than 2 years after the date of the enactment of this section, the Secretary shall establish a program to insure, in the discretion of the Secretary and under such terms and conditions as the Secretary may prescribe, certain second liens that are secured against properties for the purpose of financing the construction of accessory dwelling units. Except as described in paragraph (2), the Secretary may only insure a second lien under this section that has a principal obligation in an amount that is the lesser of— 30 percent of the dollar amount determined under section 203(b)(2)(A) with respect to a one-unit residence; or when combined with any outstanding amounts owed on any other loans secured by a lien against the same property as the second lien, 100 percent of the projected value of the property after the construction of the accessory dwelling unit, as determined by the Secretary.
The Secretary may increase the amount described in paragraph
(1)based on 50 percent of any projected rental income expected annually from an accessory dwelling unit to be financed using the second lien to be insured under this section. The borrower seeking insurance for a second lien under this section shall submit an application for insurance at such time, in such manner, and containing such information as the Secretary may require, including a certification that the borrower is the owner of the property on which an accessory dwelling unit is to be constructed. The Secretary shall fix a premium charge for insurance provided under this section in an amount that may not exceed, for each year, 1 percent of the principal amount insured under this section. Beginning on the date that is 1 year after the date of the enactment of this section, and annually thereafter, the Secretary shall submit to the Congress a report that describes the activities carried out under this section. The Secretary may issue such rules as the Secretary determines appropriate to carry out this section. In this section, the term accessory dwelling unit means a dwelling unit which— is a— modular or prefabricated unit constructed to at least 1 of the 3 most recent editions of a consensus-based building code adopted by the State, local jurisdiction, territory, or tribal entity; manufactured unit (as such term is defined in section 102 of the Housing and Community Development Act of 1974 ( 42 U.S.C. 5402 )); or conversion of an existing structure on a property; includes kitchen, sleeping, and bathroom facilities; and is added to, created within, or detached from a single-family dwelling on a single property. .
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Sec. 1
Insurance with respect to the financing of the construction of accessory dwelling units
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