A bill to amend the National Housing Act to simplify the downpayment requirements for FHA mortgage insurance for single family homebuyers.

SECTION 1. SHORT TITLE.

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

SEC. 2. DOWNPAYMENT SIMPLIFICATION.

    Section 203 of the National Housing Act (12 U.S.C. 1709) is 
amended--
        (1) in subsection (b)--
            (A) by striking ``shall--'' and inserting ``shall comply 
        with the following:'';
            (B) in paragraph (2)--
                (i) in subparagraph (A), in the matter that precedes 
            clause (ii), by moving the margin 2 ems to the right;
                (ii) in the undesignated matter immediately following 
            subparagraph (B)(iii)--

                    (I) by striking the second and third sentences of 
                such matter;
                    (II) by striking the seventh sentence (relating to 
                principal obligation) and all that follows through the 
                end of the ninth sentence (relating to charges and 
                fees); and
                    (III) by striking the eleventh sentence (relating 
                to disclosure notice) and all that follows through the 
                end of the last undesignated paragraph (relating to 
                disclosure notice requirements); and

                (iii) by striking subparagraph (B) and inserting the 
            following:
            ``(B) not to exceed an amount equal to the sum of--
                ``(i) the amount of the mortgage insurance premium paid 
            at the time the mortgage is insured; and
                ``(ii) in the case of--

                    ``(I) a mortgage for a property with an appraised 
                value equal to or less than $50,000, 98.75 percent of 
                the appraised value of the property;
                    ``(II) a mortgage for a property with an appraised 
                value in excess of $50,000 but not in excess of 
                $125,000, 97.65 percent of the appraised value of the 
                property;
                    ``(III) a mortgage for a property with an appraised 
                value in excess of $125,000, 97.15 percent of the 
                appraised value of the property; or
                    ``(IV) notwithstanding subclauses (II) and (III), a 
                mortgage for a property with an appraised value in 
                excess of $50,000 that is located in an area of the 
                State for which the average closing cost exceeds 2.10 
                percent of the average, for the State, of the sale 
                price of properties located in the State for which 
                mortgages have been executed, 97.75 percent of the 
                appraised value of the property.'';

            (C) by transferring and inserting the text of paragraph 
        (10)(B) after the period at the end of the first sentence of 
        the undesignated paragraph that immediately follows paragraph 
        (2)(B) (relating to the definition of ``area''); and
            (D) by striking paragraph (10); and
        (2) by inserting after subsection (e), the following:
    ``(f) Disclosure of Other Mortgage Products.--
        ``(1) In general.--In conjunction with any loan insured under 
    this section, an original lender shall provide to each prospective 
    borrower a disclosure notice that provides a 1-page analysis of 
    mortgage products offered by that lender and for which the borrower 
    would qualify.
        ``(2) Notice.--The notice required under paragraph (1) shall 
    include--
            ``(A) a generic analysis comparing the note rate (and 
        associated interest payments), insurance premiums, and other 
        costs and fees that would be due over the life of the loan for 
        a loan insured by the Secretary under subsection (b) with the 
        note rates, insurance premiums (if applicable), and other costs 
        and fees that would be expected to be due if the mortgagor 
        obtained instead other mortgage products offered by the lender 
        and for which the borrower would qualify with a similar loan-
        to-value ratio in connection with a conventional mortgage (as 
        that term is used in section 305(a)(2) of the Federal Home Loan 
        Mortgage Corporation Act (12 U.S.C. 1454(a)(2)) or section 
        302(b)(2) of the Federal National Mortgage Association Charter 
        Act (12 U.S.C. 1717(b)(2)), as applicable), assuming prevailing 
        interest rates; and
            ``(B) a statement regarding when the requirement of the 
        mortgagor to pay the mortgage insurance premiums for a mortgage 
        insured under this section would terminate, or a statement that 
        the requirement shall terminate only if the mortgage is 
        refinanced, paid off, or otherwise terminated.''.

SEC. 3. CONFORMING AMENDMENTS.

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

SEC. 4. REPEAL OF GNMA GUARANTEE FEE INCREASE.

    Section 972 of the Higher Education Amendments of 1998 (Public Law 
105-244; 112 Stat. 1837) is hereby repealed.

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

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

``SEC. 206A. INDEXING OF FHA MULTIFAMILY HOUSING LOAN LIMITS.

    ``(a) Method of Indexing.--The dollar amounts set forth in--
        ``(1) section 207(c)(3)(A) (12 U.S.C. 1713(c)(3)(A));
        ``(2) section 213(b)(2)(A) (12 U.S.C. 1715e(b)(2)(A));
        ``(3) section 220(d)(3)(B)(iii)(I) (12 U.S.C. 
    1715k(d)(3)(B)(iii)(I));
        ``(4) section 221(d)(3)(ii)(I) (12 U.S.C. 1715l(d)(3)(ii)(I));
        ``(5) section 221(d)(4)(ii)(I) (12 U.S.C. 1715l(d)(4)(ii)(I));
        ``(6) section 231(c)(2)(A) (12 U.S.C. 1715v(c)(2)(A)); and
        ``(7) section 234(e)(3)(A) (12 U.S.C. 1715y(e)(3)(A));
(collectively hereinafter referred to as the ``Dollar Amounts'') shall 
be adjusted annually (commencing in 2004) on the effective date of the 
Federal Reserve Board's adjustment of the $400 figure in the Home 
Ownership and Equity Protection Act of 1994 (HOEPA). The adjustment of 
the Dollar Amounts shall be calculated using the percentage change in 
the Consumer Price Index for All Urban Consumers (CPI-U) as applied by 
the Federal Reserve Board for purposes of the above-described HOEPA 
adjustment.
    ``(b) Notification.--The Federal Reserve Board on a timely basis 
shall notify the Secretary, or his designee, in writing of the 
adjustment described in subsection (a) and of the effective date of 
such adjustment in order to permit the Secretary to undertake 
publication in the Federal Register of corresponding adjustments to the 
Dollar Amounts. The dollar amount of any adjustment shall be rounded to 
the next lower dollar.''.
    (b) Technical and Conforming Changes.--(1) Section 207(c)(3) of the 
National Housing Act (12 U.S.C. 1713(c)(3)) is amended--
        (A) by inserting ``(A)'' after ``(3)'';
        (B) by striking ``and accept that the Secretary'' through and 
    including ``in this paragraph'' and inserting in lieu thereof:
            ``(B) the Secretary may, by regulation, increase any of the 
        dollar amount limitations in subparagraph (A) (as such 
        limitations may have been adjusted in accordance with section 
        206A of this Act)''.
    (2) Section 213(b)(2) of the National Housing Act (12 U.S.C. 
1715e(b)(2)) is amended--
        (A) by inserting ``(A)'' following ``(2)'';
        (B) by striking ``: Provided further, That'' the first time 
    that it occurs, through and including ``contained in this 
    paragraph'' and inserting in lieu thereof: ``; (B)(i) the Secretary 
    may, by regulation, increase any of the dollar amount limitations 
    in subparagraph (A) (as such limitations may have been adjusted in 
    accordance with section 206A of this Act)'';
        (C) by striking ``: Provided further, That'' the second time it 
    occurs and inserting in lieu thereof: ``; and (ii)'';
        (D) by striking ``: And provided further, That'' and inserting 
    in lieu thereof: ``; and (iii)'';
        (E) by striking ``with this subsection without regard to the 
    preceding proviso'' at the end of that subsection and inserting in 
    lieu thereof: ``with this subparagraph (B)(i).''.
    (3) Section 220(d)(3)(B)(iii) of the National Housing Act (12 
U.S.C. 1715k(d)(3)(B)(iii)) is amended--
        (A) by inserting ``(I)'' following ``(iii)'';
        (B) by striking ``design; and except that'' and inserting in 
    lieu thereof: ``design; and (II)'';
        (C) by striking ``any of the foregoing dollar amount 
    limitations contained in this clause'' and inserting in lieu 
    thereof: ``any of the dollar amount limitations in subparagraph 
    (B)(iii)(I) (as such limitations may have been adjusted in 
    accordance with section 206A of this Act)'';
        (D) by striking ``: Provided, That'' through and including 
    ``proviso'' and inserting in lieu thereof: ``with respect to dollar 
    amount limitations applicable to rehabilitation projects described 
    in subclause (II), the Secretary may, by regulation, increase the 
    dollar amount limitations contained in subparagraph (B)(iii)(I) (as 
    such limitations may have been adjusted in accordance with section 
    206A of this Act)'';
        (E) by striking ``: Provided further,'' and inserting in lieu 
    thereof: ``; (III)'';
        (F) by striking ``subparagraph'' in the second proviso and 
    inserting in lieu thereof ``subparagraph (B)(iii)(I)'';
        (G) in the last proviso, by striking ``: And provided further, 
    That'' and all that follows through and including ``this clause'' 
    and inserting in lieu thereof: ``; (IV) with respect to 
    rehabilitation projects involving not more than five family units, 
    the Secretary may further increase any of the dollar limitations 
    which would otherwise apply to such projects''.
    (4) Section 221(d)(3)(ii) of the National Housing Act (12 U.S.C. 
1715l(d)(3)(ii)) is amended--
        (A) by inserting ``(I)'' following ``(ii)'';
        (B) by striking ``; and except that'' and all that follows 
    through and including ``in this clause'' and inserting in lieu 
    thereof: ``; (II) the Secretary may, by regulation, increase any of 
    the dollar amount limitations in subclause (I) (as such limitations 
    may have been adjusted in accordance with section 206A of this 
    Act)''.
    (5) Section 221(d)(4)(ii) of the National Housing Act (12 U.S.C. 
1715l(d)(4)(ii)) is amended--
        (A) by inserting ``(I)'' following ``(ii)'';
        (B) by striking ``; and except that'' and all that follows 
    through and including ``in this clause'' and inserting in lieu 
    thereof: ``; (II) the Secretary may, by regulation, increase any of 
    the dollar limitations in subclause (I) (as such limitations may 
    have been adjusted in accordance with section 206A of this Act)''.
    (6) Section 231(c)(2) of the National Housing Act (12 U.S.C. 
1715v(c)(2)) is amended--
        (A) by inserting ``(A)'' following ``(2)'';
        (B) by striking ``; and except that'' and all that follows 
    through and including ``in this paragraph'' and inserting in lieu 
    thereof: ``; (B) the Secretary may, by regulation, increase any of 
    the dollar limitations in subparagraph (A) (as such limitations may 
    have been adjusted in accordance with section 206A of this Act)'';
        (C) by striking ``: Provided, That'' and all that follows 
    through and including ``of this section'' and inserting in lieu 
    thereof: ``; (C) the Secretary may, by regulation, increase any of 
    the dollar limitations in subparagraph (A) (as such limitations may 
    have been adjusted in accordance with section 206A of this Act)''.
    (7) Section 234(e)(3) of the National Housing Act (12 U.S.C. 
1715y(e)(3)) is amended--
        (A) by inserting ``(A)'' following ``(3)'';
        (B) by replacing ``$38,025'' with ``$42,048''; ``$42,120'' with 
    ``$48,481''; ``$50,310'' with ``$58,469''; ``$62,010'' with 
    ``$74,840''; ``$70,200'' with ``$83,375''; ``$43,875'' with 
    ``$44,250''; ``$49,140'' with ``$50,724''; ``$60,255'' with 
    ``$61,680''; ``$75,465'' with ``$79,793''; and ``$85,328'' with 
    ``$87,588'';
        (C) by striking ``; except that each'' and all that follows 
    through and including ``contained in this paragraph'' and inserting 
    in lieu thereof: ``; (B) the Secretary may, by regulation, increase 
    any of the dollar limitations in subparagraph (A) (as such 
    limitations may have been adjusted in accordance with section 206A 
    of this Act)''.

                               Speaker of the House of Representatives.

                            Vice President of the United States and    
                                               President of the Senate.

Summary: FHA Downpayment Simplification Act of 2002 - Amends the National Housing Act to make the existing Federal Home Administration (FHA) single-family downpayment provisions permanent. Requires an original lender, in conjunction with a FDA insured loan, to provide a prospective borrower with a one-page analysis of other mortgage products for which he or she would qualify, including information about: (1) rates, insurance premiums, and other costs and fees. And (2) mortgage insurance premium termination. Amends the Higher Education Amendments of 1998 to repeal the Government National Mortgage Association (GNMA) three-percent guarantee fee increase scheduled to take effect in FY 2005. Amends the National Housing Act to provide for indexing of multi-family mortgage limits for FHA mortgage insurance programs.