II

105TH CONGRESS

2D SESSION S. 2188

To amend section 203(b) of the National Housing Act relating to the

calculation of downpayments.

IN THE SENATE OF THE UNITED STATES

JUNE 18, 1998

Mr. MURKOWSKI (for himself, Mr. INOUYE, Mr. AKAKA, and Mr. STEVENS)

introduced the following bill; which was read twice and referred to the

Committee on Banking, Housing, and Urban Affairs

A BILL

To amend section 203(b) of the National Housing Act

relating to the calculation of downpayments.

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

3 SECTION 1. CALCULATION OF DOWNPAYMENT.

4 (a) IN GENERAL.—Section 203(b)(2) of the National

5 Housing Act (12 U.S.C. 1709(b)(2)) is amended—

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

7 the following:

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

9 paragraph, not to exceed the sum of—
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1 ‘‘(i) the amount of the mortgage in2 surance premium paid at the time the

3 mortgage is insured; and

4 ‘‘(ii)(I) in the case of a mortgage for

5 a property with an appraised value less

6 than or equal to $50,000, 98.75 percent of

7 the appraised value of the property;

8 ‘‘(II) in the case of a mortgage for a

9 property with an appraised value in excess

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

11 97.65 percent of the appraised value of the

12 property;

13 ‘‘(III) in the case of a mortgage for a

14 property with an appraised value in excess

15 of $125,000, 97.15 percent of the ap16 praised value of the property; or

17 ‘‘(IV) notwithstanding subclauses (II)

18 and (III), in the case of a mortgage for a

19 property with an appraised value in excess

20 of $50,000 that is located in a State for

21 which the average closing cost exceeds 2.10

22 percent of the average, for the State, of

23 the sale price of properties located in the

24 State for which mortgages have been exe-
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1 cuted, 97.75 percent of the appraised value

2 of the property;’’;

3 (2) in the first undesignated paragraph follow4 ing subparagraph (B)—

5 (A) in the first sentence, by inserting be6 fore the period at the end the following: ‘‘, and

7 the term ‘average closing cost’ means, with re8 spect to a State, the average, for mortgages ex9 ecuted for properties that are located within the

10 State, of the total amounts (as determined by

11 the Secretary) of initial service charges, ap12 praisal, inspection, and other fees (as the Sec13 retary shall approve) that are paid in connec14 tion with such mortgages’’; and

15 (B) by striking the second sentence; and

16 (3) in penultimate undesignated paragraph fol17 lowing subparagraph (B)—

18 (A) in the second sentence, by striking

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

20 subsection’’; and

21 (B) by striking the first sentence.

22 (b) CONFORMING AMENDMENT.—Section 203(b) of

23 the National Housing Act (12 U.S.C. 1709(b)) is amended

24 by striking paragraph (10).
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1 (c) APPLICABILITY.—The amendments made by this

2 section shall apply to a mortgage that is endorsed for in3 surance under the National Housing Act on or after the

4 date of enactment of this Act.

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