I 

113TH CONGRESS 

2D SESSION H. R. 5506 

To amend title I of the National Housing Act to, for financing alterations, 

repairs, and improvements to, or conversion of, existing structures, modify premium charges and the dollar amount limitation on loans, including 

energy efficiency home improvements. 

IN THE HOUSE OF REPRESENTATIVES 

SEPTEMBER 17, 2014 

Mr. HUFFMAN (for himself and Mr. HECK of Washington) introduced the 

following bill; which was referred to the Committee on Financial Services 

A BILL 

To amend title I of the National Housing Act to, for financing alterations, repairs, and improvements to, or conversion of, existing structures, modify premium charges and 

the dollar amount limitation on loans, including energy 

efficiency home improvements. 

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 ‘‘Home Improvement 

5 Loan Modernization Act of 2014’’. 


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1 SEC. 2. MODIFICATION TO PREMIUM CHARGES ON FINANC2 ING CERTAIN ALTERATIONS, REPAIRS, AND 

3 IMPROVEMENTS TO, OR CONVERSIONS OF, 

4 EXISTING STRUCTURES. 

5 Subsection (f) of section 2 of the National Housing 

6 Act (12 U.S.C. 1703(f)) is amended— 

7 (1) in paragraph (2), by striking ‘‘paragraph 

8 (1)’’ and inserting ‘‘paragraphs (1) and (3)’’; and 

9 (2) by inserting at the end the following new 

10 paragraph: 

11 ‘‘(3) FINANCING ALTERATIONS, REPAIRS, IM12 PROVEMENTS, OR CONVERSIONS.—Notwithstanding 

13 paragraphs (1) and (2), in the case of a loan, ad14 vance of credit, or purchase in connection with in15 surance granted under subparagraph (A)(i) or sub16 paragraph (B) of paragraph (1), the premium 

17 charge for such insurance shall be paid by the finan18 cial institution providing the loan or advance of 

19 credit, as follows: 

20 ‘‘(A) At the time of the making of the 

21 loan, advance of credit, or purchase, a single 

22 premium payment in an amount not to exceed 

23 2.75 percent of the amount of the original in24 sured principal obligation. 

25 ‘‘(B) In addition to the premium under 

26 subparagraph (A), annual premium payments 


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1 during the term of the loan, advance, or obliga2 tion purchased in an amount not exceeding 1.5 

3 percent of the remaining insured principal bal4 ance (excluding the portion of the remaining 

5 balance attributable to the premium collected 

6 under subparagraph (A) and without taking 

7 into account delinquent payments or prepay8 ments). 

9 ‘‘(C) Premium charges under this para10 graph shall be established in amounts that are 

11 sufficient, but do not exceed the minimum 

12 amounts necessary (as determined based upon 

13 risk to the Federal Government under existing 

14 underwriting requirements) to maintain a nega15 tive credit subsidy for the program under this 

16 section for insurance of loans, advances of cred17 it, or purchases in connection with— 

18 ‘‘(i) financing alterations, repairs, and 

19 improvements for single-family structures; 

20 and 

21 ‘‘(ii) financing alterations, repairs, im22 provements, or conversions of an existing 

23 structure used or to be used as an apart24 ment house or a dwelling for two or more 

25 families. 


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1 ‘‘(D) The Secretary may increase the limi2 tations on premium payments to percentages 

3 above those set forth in subparagraphs (A) and 

4 (B), but only if necessary, and not in excess of 

5 the minimum increase necessary, to maintain a 

6 negative credit subsidy as described in subpara7 graph (C).’’. 

8 SEC. 3. MODIFICATION TO LOAN LIMITATION FOR FINANC9 ING CERTAIN ALTERATIONS, REPAIRS, AND 

10 IMPROVEMENTS TO, OR CONVERSIONS OF, 

11 EXISTING STRUCTURES. 

12 Subsection (b) of section 2 of the National Housing 

13 Act (12 U.S.C. 1703(b)) is amended— 

14 (1) in paragraph (1)— 

15 (A) in subparagraph (A)(i), by striking 

16 ‘‘$25,000’’ and inserting ‘‘$42,000’’; 

17 (B) in subparagraph (B)— 

18 (i) by striking ‘‘$60,000’’ and insert19 ing ‘‘$101,888’’; and 

20 (ii) by striking ‘‘$12,000’’ and insert21 ing ‘‘$20,378’’; and 

22 (C) in the matter after and below subpara23 graph (G), by adding at the end the following: 

24 ‘‘The Secretary shall, by notice, annually in25 crease the dollar amount limitation in subparaVerDate Sep 11 2014 20:22 Sep 24, 2014 Jkt 039200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H5506.IH H5506

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1 graph (A)(i) and subparagraph (B) (as such 

2 limitations may have been previously adjusted 

3 under this sentence) in accordance with the 

4 index established pursuant to paragraph (12).’’; 

5 and 

6 (2) by adding at the end the following new 

7 paragraph: 

8 ‘‘(12) ANNUAL INDEXING OF LOANS FOR FI9 NANCING ALTERATIONS, REPAIRS, AND IMPROVE10 MENTS TO, OR CONVERSIONS OF, EXISTING STRUC11 TURES.—Not later than 1 year after the date of en12 actment of the Home Improvement Loan Moderniza13 tion Act of 2014, the Secretary shall develop a meth14 od of indexing to annually increase the dollar 

15 amount limitations established in subparagraph 

16 (A)(i) and subparagraph (B) of paragraph (1). Such 

17 index shall be based on the Consumer Price Index 

18 for all urban consumers (CPI–U) computed by the 

19 Bureau of Labor Statistics.’’. 

20 SEC. 4. MODIFICATION TO LOAN LIMITATION FOR ENERGY 

21 EFFICIENCY HOME IMPROVEMENTS. 

22 Subsection (b) of section 2 of the National Housing 

23 Act (12 U.S.C. 1703(b)), as amended by section 2 of this 

24 Act, is further amended by adding at the end the following 

25 new paragraph: 


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1 ‘‘(13) The dollar amount limitations otherwise 

2 applicable under subparagraph (A)(i) and subpara3 graph (B) of paragraph (1) (as adjusted by para4 graph (12)) may be increased up to 150 percent of 

5 such limitation if at least half of the amount will be 

6 used for energy conserving improvements or the in7 stallation of solar energy systems (as defined in the 

8 last paragraph of section 2(a) of this Act).’’. 

Æ 


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