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[Congressional Bills 103th Congress]
[From the U.S. Government Publishing Office]
[H.R. 2605 Introduced in House (IH)]

103d CONGRESS
  1st Session
                                H. R. 2605

To amend the National Housing Act to provide that a person purchasing a 
   home with a mortgage insured under the FHA single family mortgage 
   insurance program may, under such program, borrow amounts for the 
                    downpayment from family members.

_______________________________________________________________________

                    IN THE HOUSE OF REPRESENTATIVES

                              July 1, 1993

    Mr. Orton (for himself, Mr. Frost, Mr. Gillmor, Mr. Peterson of 
 Minnesota, Mr. Solomon, and Mr. Walsh) introduced the following bill; 
   which was referred to the Committee on Banking, Finance and Urban 
                                Affairs

_______________________________________________________________________

                                 A BILL

 
To amend the National Housing Act to provide that a person purchasing a 
   home with a mortgage insured under the FHA single family mortgage 
   insurance program may, under such program, borrow amounts for the 
                    downpayment from family members.

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

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``FHA Parental Loan Act''.

SEC. 2. AUTHORITY TO USE AMOUNTS BORROWED FROM FAMILY MEMBERS FOR 
              DOWNPAYMENTS.

    (a) In General.--Section 203(b)(9) of the National Housing Act (12 
U.S.C. 1709(b)(9)) is amended by inserting before the period at the end 
the following: ``: Provided further, That for purposes of this 
paragraph, the Secretary shall consider as cash or its equivalent any 
amounts borrowed from a family member (as such term is defined in 
section 201), subject only to the requirements that, in any case in 
which the repayment of such borrowed amounts is secured by a lien 
against the property, such lien shall be subordinate to the mortgage 
and the sum of the principal obligation of the mortgage and the 
obligation secured by such lien may not exceed 100 percent of the 
appraised value of the property plus any initial service charges, 
appraisal, inspection, and other fees in connection with the 
mortgage''.
    (b) Definition of Family Member.--Section 201 of the National 
Housing Act (12 U.S.C. 1707) is amended by adding at the end the 
following new subsections:
    ``(e) The term `family member' means, with respect to a mortgagor 
under such section, a child, parent, or grandparent of the mortgagor 
(or the mortgagor's spouse). In determining whether any of the 
relationships referred to in the preceding sentence exist, a legally 
adopted son or daughter of an individual (and a child who is a member 
of an individual's household, if placed with such individual by an 
authorized placement agency for legal adoption by such individual), and 
a foster child of an individual, shall be treated as a child of such 
individual by blood.
    ``(f) The term `child' means, with respect to a mortgagor under 
such section, a son, stepson, daughter, or stepdaughter of such 
mortgagor.''.

                                 <all>
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