II

105TH CONGRESS

2D SESSION S. 1877

To remove barriers to the provision of affordable housing for all Americans.

IN THE SENATE OF THE UNITED STATES

MARCH 27, 1998

Mr. WYDEN (for himself and Mr. BENNETT) introduced the following bill;

which was read twice and referred to the Committee on Banking, Housing and Urban Affairs

A BILL

To remove barriers to the provision of affordable housing

for all Americans.

1 Be it enacted by the Senate and House of Representa2 tives of the United States of America in Congress assembled,

3 SECTION 1. SHORT TITLE.

4 This Act may be cited as the ‘‘Affordable Housing

5 Barrier Removal Act of 1998’’.

6 SEC. 2. CONGRESSIONAL FINDINGS.

7 Congress finds that—

8 (1) homeownership has become a challenge for

9 Americans of moderate and low income levels;
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1 (2) decent housing has become unaffordable for

2 many working families, and according to the Depart3 ment of Housing and Urban Development, the me4 dian family income nationwide is $43,500 and the

5 median price of a single family home is $124,000,

6 leading to an ‘‘affordability gap’’ that makes it vir7 tually impossible for many people, especially young

8 families, to obtain all the benefits of home owner9 ship;

10 (3) housing comprises 12 percent of the econ11 omy of the United States;

12 (4) housing construction and remodeling employ

13 approximately 2,000,000 people each year;

14 (5) new housing construction accounts for a

15 third of the growth of the Nation’s economy during

16 recovery periods;

17 (6) homeowners have more than

18 $4,500,000,000,000 in equity in their homes, and

19 this equity is the single largest source of savings and

20 wealth for most families;

21 (7) the lack of a broad, effective, local dialog

22 among interested parties about the possible tradeoffs

23 between housing costs and other valued priorities

24 and policies can be a significant factor in raising

25 housing costs;
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1 (8) in fact, an increase of $1,000 in the pur2 chase price of a median-priced home can force more

3 than 21,000 potential buyers out of the market; and

4 (9) removing barriers to affordable housing is

5 an important public policy goal.

6 SEC. 3. CONFERENCE ON BARRIERS TO AFFORDABLE

7 HOUSING.

8 (a) AUTHORITY TO CALL CONFERENCE.—Beginning

9 not later than 1 year after the date of enactment of this

10 Act, the Department of Housing and Urban Development

11 shall sponsor a conference on barriers to affordable hous12 ing (referred to in this section as the ‘‘Conference’’) to

13 be held biennially to discuss and develop strategies and

14 programs to eliminate barriers to affordable housing.

15 (b) PLANNING AND DIRECTION.—The Conference

16 shall be planned and conducted under the direction of the

17 Secretary of Housing and Urban Development (referred

18 to in this section as the ‘‘Secretary’’) in cooperation with

19 the heads of such other Federal departments and agencies

20 as are appropriate. The Secretary shall provide such as21 sistance from the Department of Housing and Urban De22 velopment as may be necessary to conduct the Conference,

23 which may include the assignment of personnel.

24 (c) PURPOSES.—The purposes of the Conference

25 shall be—
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1 (1) to increase public awareness of the existence

2 of barriers to affordable housing;

3 (2) to identify existing and potential barriers to

4 affordable housing;

5 (3) to develop such specific and comprehensive

6 recommendations for executive and legislative action

7 at all levels of government as may be appropriate to

8 achieving the removal of barriers to affordable hous9 ing;

10 (4) to develop and implement recommendations

11 for the coordination of Federal, State, and local poli12 cies on eliminating barriers to affordable housing;

13 and

14 (5) to review the status of the recommendations

15 of past Conferences, if any.

16 (d) PARTICIPANTS.—In order to carry out the pur17 poses of this title, the Conference shall bring together rep18 resentatives of—

19 (1) persons living or to be living in low-income

20 housing;

21 (2) the Federal Government;

22 (3) State and local governments;

23 (4) public interest groups;

24 (5) builders and other persons active in the

25 field of housing; and
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1 (6) the general public.

2 (e) COOPERATION WITH STATE AND LOCAL AGEN3 CIES.—The Secretary shall furnish all reasonable assist4 ance to State and local agencies to enable them to organize

5 and conduct conferences and other activities in conjunc6 tion with the Conference, including activities in advance

7 of the Conference, as part of the process of planning for

8 the Conference, and subsequent to the Conference in con9 nection with the dissemination, discussion, and implemen10 tation of the recommendations of the Conference.

11 (f) REPORT.—Not later than 90 days after the com12 pletion of the Conference, the Secretary shall submit a re13 port to the Congress describing the results of the Con14 ference and setting forth any recommendations of the

15 Conference for statutory or regulatory reform.

16 (g) DEFINITION.—For purposes of this section, the

17 term ‘‘barriers to affordable housing’’ means public poli18 cies (including policies of State and local governments and

19 policies embodied in statutes, ordinances, regulations, and

20 administrative procedures and processes) that increase the

21 cost of housing or adversely affect incentives to developing,

22 maintaining, or improving affordable housing.

23 SEC. 4. HOUSING IMPACT ANALYSIS.

24 (a) APPLICABILITY.—
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1 (1) IN GENERAL.—The requirements of this

2 section shall apply with respect to—

3 (A) any proposed rule, unless the head of

4 the agency promulgating the rule—

5 (i) has certified that the proposed rule

6 will not, if given force or effect as a final

7 rule, have a significant deleterious impact

8 on the availability of affordable housing;

9 and

10 (ii) has caused such certification to be

11 published in the Federal Register at the

12 time of publication of general notice of

13 proposed rulemaking for the rule, together

14 with a statement providing the factual

15 basis for the certification; and

16 (B) any final rule, unless the head of the

17 agency promulgating the rule—

18 (i) has certified that the rule will not,

19 if given force or effect, have a significant

20 deleterious impact on the availability of af21 fordable housing; and

22 (ii) has caused such certification to be

23 published in the Federal Register at the

24 time of publication of the final rule, to-
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1 gether with a statement providing the fac2 tual basis for the certification.

3 (2) COPY OF CERTIFICATION TO SECRETARY.—

4 Any agency making a certification under this sub5 section shall provide a copy of such certification and

6 the statement providing the factual basis for the cer7 tification to the Secretary of Housing and Urban

8 Development.

9 (b) STATEMENT OF PROPOSED RULEMAKING.—

10 Whenever an agency publishes general notice of proposed

11 rulemaking for any proposed rule, the agency shall—

12 (1) in the notice of proposed rulemaking—

13 (A) state with particularity the text of the

14 proposed rule; and

15 (B) request any interested persons to sub16 mit to the agency any written data, views, and

17 arguments, and any specific alternatives to the

18 proposed rule that—

19 (i) accomplish the stated objectives of

20 the applicable statutes;

21 (ii) result in costs to the Federal Gov22 ernment that are not more than 5 percent

23 higher than such costs resulting from the

24 proposed rule; and
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1 (iii) result in a quantity of affordable

2 housing that is 5 or more percent greater

3 than the quantity resulting from the pro4 posed rule;

5 (2) provide an opportunity for interested per6 sons to take the actions specified under paragraph

7 (1)(B) before promulgation of the final rule; and

8 (3) prepare and make available for public com9 ment an initial housing impact analysis in accord10 ance with the requirements of subsection (c).

11 (c) INITIAL HOUSING IMPACT ANALYSIS.—

12 (1) REQUIREMENTS.—Each initial housing im13 pact analysis shall describe the impact of the pro14 posed rule on the availability of affordable housing.

15 The initial housing impact analysis, or a summary

16 thereof, shall be published in the Federal Register at

17 the same time as, and together with, the publication

18 of the general notice of proposed rulemaking for the

19 rule. The agency shall transmit a copy of the initial

20 housing impact analysis to the Secretary of Housing

21 and Urban Development.

22 (2) CONTENTS.—Each initial housing impact

23 analysis required under this subsection shall con24 tain—
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1 (A) a description of the reasons why action

2 by the agency is being considered;

3 (B) a succinct statement of the objectives

4 of, and legal basis for, the proposed rule;

5 (C) a description of and, where feasible, an

6 estimate of the extent to which the proposed

7 rule would impact the cost or supply of housing

8 or land;

9 (D) an evaluation regarding whether the

10 proposed rule would eliminate or create barriers

11 to affordable housing; and

12 (E) an identification, to the extent prac13 ticable, of all relevant Federal rules which may

14 duplicate, overlap, or conflict with the proposed

15 rule.

16 (d) PROPOSAL OF LESS DELETERIOUS ALTERNATIVE

17 RULE.—

18 (1) ANALYSIS.—The agency publishing a gen19 eral notice of proposed rulemaking shall analyze any

20 specific alternatives to the proposed rule which have

21 been submitted to the agency pursuant to subsection

22 (b)(2) to determine whether any alternative to the

23 proposed rule—

24 (A) accomplishes the stated objectives of

25 the applicable statutes;
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1 (B) results in costs to the Federal Govern2 ment that are not more than 5 percent higher

3 than such costs resulting from the proposed

4 rule; and

5 (C) results in a quantity of affordable

6 housing that is 5 or more percent greater than

7 the quantity resulting from the proposed rule.

8 (2) NEW NOTICE OF PROPOSED RULE9 MAKING.—If the agency determines that an alter10 native to the proposed rule meets the requirements

11 under subparagraphs (A) through (C) of paragraph

12 (1), the agency shall publish a general notice of pro13 posed rulemaking for a proposed rule that accom14 plishes the stated objectives of the applicable stat15 utes, the text of which is based upon such alter16 native to the original proposed rule. In any case in

17 which the agency determines that more than 1 alter18 native to the proposed rule meet such requirements,

19 the new proposed rule contained in the general no20 tice of proposed rulemaking shall be based upon the

21 alternative that the agency determines is most ap22 propriate after considering the costs, effects on af23 fordable housing, and effectiveness in accomplishing

24 the objective of the rule of such alternatives. The
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1 rulemaking for the new proposed rule shall be sub2 ject to the requirements under subsection (b).

3 (e) FINAL HOUSING IMPACT ANALYSIS.—

4 (1) REQUIREMENT.—Whenever an agency pro5 mulgates a final rule after publication of a general

6 notice of proposed rulemaking, the agency shall pre7 pare a final housing impact analysis.

8 (2) CONTENTS.—Each final housing impact

9 analysis required by paragraph (1) shall contain—

10 (A) a succinct statement of the need for,

11 and objectives of, the rule;

12 (B) a summary of the significant issues

13 raised by the public comments in response to

14 the initial housing impact analysis, a summary

15 of the assessment of the agency of such issues,

16 and a statement of any changes made in the

17 proposed rule as a result of such comments;

18 and

19 (C) a description of and an estimate of the

20 extent to which the rule will impact the avail21 ability of affordable housing or an explanation

22 of why no such estimate is available.

23 (3) AVAILABILITY.—The agency shall make

24 copies of the final housing impact analysis required

25 by this subsection available to members of the pub-
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1 lic, and shall publish in the Federal Register such

2 analysis or a summary thereof.

3 (f) AVOIDANCE OF DUPLICATIVE OR UNNECESSARY

4 ANALYSES.—

5 (1) DUPLICATION.—Any Federal agency may

6 perform the analyses required by subsections (c) and

7 (e) in conjunction with or as a part of any other

8 agenda or analysis required by any other law if such

9 other analysis satisfies the provisions of such sub10 sections.

11 (2) JOINDER.—In order to avoid duplicative ac12 tion, an agency may consider a series of closely re13 lated rules as one rule for the purposes of sub14 sections (c) and (e).

15 (g) PREPARATION OF ANALYSES.—In complying with

16 the provisions of subsections (c) and (e), an agency may

17 provide either a quantifiable or numerical description of

18 the effects of a proposed rule or alternatives to the pro19 posed rule, or more general descriptive statements, if

20 quantification is not practicable or reliable.

21 (h) EFFECT ON OTHER LAW.—The requirements of

22 subsections (c) and (e) do not alter in any manner stand23 ards otherwise applicable by law to agency action.

24 (i) PROCEDURE FOR WAIVER OR DELAY OF COMPLE25 TION.—
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1 (1) INITIAL HOUSING IMPACT ANALYSIS.—An

2 agency head may waive or delay the completion of

3 some or all of the requirements of subsection (c) by

4 publishing in the Federal Register, not later than

5 the date of publication of the final rule at issue, a

6 written finding, with reasons therefor, that the final

7 rule is being promulgated in response to an emer8 gency that makes compliance or timely compliance

9 with the provisions of subsection (a) impracticable.

10 (2) FINAL HOUSING IMPACT ANALYSIS.—An

11 agency head may not waive the requirements of sub12 section (e). An agency head may delay the comple13 tion of the requirements of subsection (e) for a pe14 riod of not more than 180 days after the date of

15 publication in the Federal Register of a final rule by

16 publishing in the Federal Register, not later than

17 such date of publication, a written finding, with rea18 sons therefor, that the final rule is being promul19 gated in response to an emergency that makes time20 ly compliance with the provisions of subsection (e)

21 impracticable. If the agency has not prepared a final

22 housing impact analysis pursuant to subsection (e)

23 within 180 days after the date of publication of the

24 final rule, such rule shall lapse and have no force or

25 effect. Such rule shall not be repromulgated until a
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1 final housing impact analysis has been completed by

2 the agency.

3 (j) DEFINITIONS.—For purposes of this section, the

4 following definitions shall apply:

5 (1) AFFORDABLE HOUSING.—The term ‘‘afford6 able housing’’ means housing that is affordable to

7 any family having an income that does not exceed

8 150 percent of the median income of families in the

9 area in which the housing is located, with adjust10 ments for smaller and larger families. For purposes

11 of this paragraph, area, median family income for an

12 area, and adjustments for family size shall be deter13 mined in the same manner as such factors are deter14 mined for purposes of section 3(b)(2) of the United

15 States Housing Act of 1937.

16 (2) AGENCY.—The term ‘‘agency’’ means each

17 authority of the Government of the United States,

18 whether or not it is within or subject to review by

19 another agency, but does not include—

20 (A) the Congress;

21 (B) the courts of the United States;

22 (C) the governments of the territories or

23 possessions of the United States;

24 (D) the government of the District of Co25 lumbia;
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1 (E) agencies composed of representatives

2 of the parties or of representatives of organiza3 tions of the parties to the disputes determined

4 by them;

5 (F) courts-martial and military commis6 sions;

7 (G) military authority exercised in the field

8 in time of war or in occupied territory; or

9 (H) functions conferred by—

10 (i) sections 603, 604, 608, and 609 of

11 the National Housing Act;

12 (ii) the Contract Settlement Act of

13 1944; or

14 (iii) subchapter II of chapter 471 of

15 title 49, United States Code;

16 (3) FAMILIES.—The term ‘‘families’’ has the

17 meaning given such term in section 3 of the United

18 States Housing Act of 1937.

19 (4) RULE.—The term ‘‘rule’’—

20 (A) means any rule for which the agency

21 publishes a general notice of proposed rule22 making pursuant to section 553(b) of title 5,

23 United States Code, or any other law, including

24 any rule of general applicability governing

25 grants by an agency to State and local govern-
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1 ments for which the agency provides an oppor2 tunity for notice and public comment; and

3 (B) does not include a rule of particular

4 applicability relating to rates, wages, corporate

5 or financial structures or reorganizations there6 of, prices, facilities, appliances, services, or al7 lowances therefor or to valuations, costs or ac8 counting, or practices relating to such rates,

9 wages, structures, prices, appliances, services,

10 or allowances.

11 (5) SIGNIFICANT.—The term ‘‘significant’’

12 means, with respect to an impact on the availability

13 of affordable housing, a difference in quantity of 5

14 percent or more.

15 (k) DEVELOPMENT.—Not later than 120 days after

16 the date of enactment of this Act, the Secretary of Hous17 ing and Urban Development shall develop model initial

18 and final housing impact analyses under this section and

19 shall cause such model analyses to be published in the

20 Federal Register. The model analyses shall be designed

21 to provide examples to other agencies of how to carry out

22 and develop the analyses required under subsections (a)

23 and (c).
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1 SEC. 5. GRANTS FOR REGULATORY BARRIER REMOVAL

2 STRATEGIES.

3 (a) AUTHORIZATION OF APPROPRIATIONS.—Section

4 1204(a) of the Housing and Community Development Act

5 of 1992 (42 U.S.C. 12705c(a)) is amended to read as fol6 lows:

7 ‘‘(a) FUNDING.—There is authorized to be appro8 priated for grants under subsections (b) and (c)

9 $15,000,000 for fiscal year 1999, and each fiscal year

10 thereafter through fiscal year 2003.’’.

11 (b) APPLICATION AND SELECTION.—Section 1204(e)

12 of the Housing and Community Development Act of 1992

13 (42 U.S.C. 12705c(e)) is amended in the last sentence by

14 inserting before the period at the end the following: ‘‘, and

15 such criteria shall require that grant amounts be used in

16 a manner consistent with the strategy contained in the

17 comprehensive housing affordability strategy for the juris18 diction pursuant to section 105(b)(4) of the Cranston19 Gonzalez National Affordable Housing Act’’.

20 (c) TECHNICAL AMENDMENTS.—Section 107(a)(1) of

21 the Housing and Community Development Act of 1974

22 (42 U.S.C. 5307(a)(1)) is amended—

23 (1) in subparagraph (G), by inserting ‘‘and’’

24 after the semicolon at the end;

25 (2) by striking subparagraph (H); and
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1 (3) by redesignating subparagraph (I) as sub2 paragraph (H).

3 SEC. 6. ELIGIBILITY FOR COMMUNITY DEVELOPMENT

4 BLOCK GRANTS; BARRIERS TO HOMEOWNER5 SHIP AND HOUSING AFFORDABILITY.

6 (a) ELIGIBILITY FOR CDBG.—Section 104(c)(1) of

7 the Housing and Community Development Act of 1974

8 (42 U.S.C. 5304(c)(1)) is amended by inserting after the

9 comma the following: ‘‘which shall include making a good

10 faith effort to carry out the strategy established under

11 subsection (b)(4) of that section (which may be shown by

12 the establishment of a Council of the type described in

13 section 6(b) of the Affordable Housing Barrier Removal

14 Act of 1998) by the unit of general local government to

15 remove barriers to affordable housing;’’.

16 (b) BARRIERS TO HOMEOWNERSHIP AND HOUSING

17 AFFORDABILITY COUNCILS.—

18 (1) SENSE OF CONGRESS ON ESTABLISHMENT

19 OF COUNCILS.—It is the sense of the Congress that

20 each recipient of a community development block

21 grant under the Housing and Community Develop22 ment Act of 1974, should establish a Barriers to

23 Homeownership and Housing Affordability Council

24 (hereafter in this section referred to as a ‘‘Council’’)

25 in accordance with this section.
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1 (2) MEMBERSHIP.—A Council should be com2 prised of 10 members, of whom—

3 (A) 1 member should be an individual who

4 is actively engaged in the residential single fam5 ily homebuilding industry;

6 (B) 1 member should be an individual who

7 is actively engaged in the residential multifam8 ily homebuilding industry;

9 (C) 1 member should be an individual who

10 is actively engaged in the lending industry;

11 (D) 1 member should be an individual who

12 is a representative of those areas of labor en13 gaged in homebuilding;

14 (E) 2 members should be individuals with

15 experience in housing issues who are designated

16 as advocates for underserved populations;

17 (F) 1 member should be an individual who

18 is a real estate professional; and

19 (G) 3 members should be appointed, as de20 termined by the local government.

21 (3) FUNCTIONS OF COUNCIL.—Each Council

22 should analyze the local housing situation and make

23 recommendations to the local government on incen24 tives for the production of affordable housing.
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1 SEC. 7. REGULATORY BARRIERS CLEARINGHOUSE.

2 Section 1205 of the Housing and Community Devel3 opment Act of 1992 (42 U.S.C. 12705d) is amended—

4 (1) in subsection (a)—

5 (A) in the matter preceding paragraph (1),

6 by striking ‘‘receive, collect, process, and assem7 ble’’ and inserting ‘‘serve as a national reposi8 tory to receive, collect, process, assemble, and

9 disseminate’’;

10 (B) in paragraph (1)—

11 (i) by striking ‘‘, including’’ and in12 serting ‘‘(including’’; and

13 (ii) by inserting before the semicolon

14 at the end the following: ‘‘), and the preva15 lence and effects on affordable housing of

16 such laws, regulations, and policies’’;

17 (C) in paragraph (2), by inserting before

18 the semicolon the following: ‘‘, including par19 ticularly innovative or successful activities,

20 strategies, and plans’’; and

21 (D) in paragraph (3), by inserting before

22 the period at the end the following: ‘‘, including

23 particularly innovative or successful strategies,

24 activities, and plans’’;

25 (2) in subsection (b)—
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1 (A) in paragraph (1), by striking ‘‘and’’ at

2 the end;

3 (B) in paragraph (2), by striking the pe4 riod at the end and inserting ‘‘; and’’; and

5 (C) by adding at the end the following new

6 paragraph:

7 ‘‘(3) provide, to each housing agency of a unit

8 of general local government that serves an area hav9 ing a population greater than 100,000, an index of

10 all State and local strategies and plans submitted

11 under subsection (a) to the clearinghouse (which

12 shall be updated to include any new strategy or plan

13 submitted not later than 30 days after such submis14 sion), which shall describe the types of barriers to

15 affordable housing that the strategy or plan was de16 signed to ameliorate or remove.’’; and

17 (3) by adding at the end the following new sub18 sections:

19 ‘‘(c) ORGANIZATION.—The clearinghouse under this

20 section shall be established within the Office of Policy De21 velopment of the Department of Housing and Urban De22 velopment, and shall be under the direction of the Assist23 ant Secretary for Policy Development and Research.

24 ‘‘(d) TIMING.—The clearinghouse under this section

25 shall be established and commence carrying out the func-
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1 tions of the clearinghouse under this section not later than

2 1 year after the date of enactment of the Affordable Hous3 ing Barrier Removal Act of 1998. The Secretary of Hous4 ing and Urban Development may comply with the require5 ments of this section by reestablishing the clearinghouse

6 that was established before the date of enactment of the

7 Affordable Housing Barrier Removal Act of 1998 to com8 ply with this section and updating and improving such

9 clearinghouse to the extent necessary to comply with the

10 requirements of this section as in effect pursuant to the

11 enactment of that Act.’’.

12 SEC. 8. REMOVING BARRIERS TO USE OF FHA SINGLE FAM13 ILY HOUSING MORTGAGE INSURANCE PRO14 GRAM.

15 (a) REPEAL OF OWNER-OCCUPANCY REQUIRE16 MENT.—Section 203(g) of the National Housing Act (12

17 U.S.C. 1709(g)) is amended to read as follows:

18 ‘‘(g) [Reserved.]

19 (b) REPEAL OF REQUIREMENTS FOR APPROVAL FOR

20 INSURANCE PRIOR TO START OF CONSTRUCTION.—The

21 National Housing Act is amended—

22 (1) in section 203 (12 U.S.C. 1709)—

23 (A) in subsection (b)(2), in the first undes24 ignated paragraph following subparagraph (B),

25 by striking the fourth sentence; and
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1 (B) in subsection (i), by striking ‘‘(or, in

2 any case’’ and all that follows through ‘‘90 per

3 centum)’’; and

4 (2) in section 220(d)(3)(A)(i) (12 U.S.C.

5 1715k(d)(3)(A)(i)), by striking ‘‘(but, in any case’’

6 and all that follows through ‘‘90 per centum)’’.

7 (c) DEFINITION OF AREA.—Section 203(b)(2) of the

8 National Housing Act (12 U.S.C. 1709(b)(2)) is amended

9 by striking the first sentence that follows subparagraph

10 (B) and inserting the following: ‘‘For purposes of the pre11 ceding sentence, the term ‘area’ means a geographical

12 area, as the Secretary considers appropriate to maximize

13 the availability of housing finance and carry out the pur14 poses of this title.’’.

15 (d) SIMPLIFICATION OF DOWNPAYMENT PROCE16 DURES.—Section 203(b)(2) of the National Housing Act

17 (12 U.S.C. 1709(b)(2)) is amended—

18 (1) by striking subparagraph (B) and inserting

19 the following new subparagraph:

20 ‘‘(B) except as otherwise provided in this

21 paragraph, not to exceed—

22 ‘‘(i) in the case of a mortgage for a

23 property with an appraised value equal to

24 or less than $50,000, 98.75 percent of the

25 appraised value of the property;
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1 ‘‘(ii) in the case of a mortgage for a

2 property with an appraised value in excess

3 of $50,000 but not in excess of $125,000,

4 97.65 percent of the appraised value of the

5 property;

6 ‘‘(iii) in the case of a mortgage for a

7 property with an appraised value in excess

8 of $125,000, 97.15 percent of the ap9 praised value of the property; or

10 ‘‘(iv) notwithstanding clauses (ii) and

11 (iii), in the case of a mortgage for a prop12 erty with an appraised value in excess of

13 $50,000 and which is located in a State for

14 which the average closing cost exceeds 2.10

15 percent of the average, for the State, of

16 the sale price of properties located in the

17 State for which mortgages have been exe18 cuted, 97.75 percent of the appraised value

19 of the property,

20 plus the amount of the mortgage insurance pre21 mium paid at the time the mortgage is in22 sured.’’;

23 (2) in the first sentence of the matter following

24 subparagraph (B), as amended by subsection (c) of

25 this section, by inserting before the period at the
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1 end the following: ‘‘, and the term ‘average closing

2 cost’ means, with respect to a State, the average, for

3 mortgages executed for properties that are located

4 within the State, of the total amounts (as deter5 mined by the Secretary) of initial service charges,

6 appraisal, inspection, and other fees (as the Sec7 retary shall approve) that are paid in connection

8 with such mortgages’’;

9 (3) by striking the second sentence of the mat10 ter following subparagraph (B); and

11 (4) in the penultimate undesignated para12 graph—

13 (A) in the second sentence, by striking

14 ‘‘the preceding sentence’’ and inserting ‘‘this

15 subsection’’; and

16 (B) by striking the first sentence.

Æ