HR 2475 IH1S 
nancing, deferred payment loans, and 
property tax deferral; and 
‘‘(iii) the financial implications of en-
tering into a home equity conversion mort-
gage; and 
‘‘(iv) any other information that the 
Secretary may require; 
‘‘(B) has received a disclosure that a home 
equity conversion mortgage may have tax con-
sequences, affect eligibility for assistance under 
Federal and State programs, and have an im-
pact on the heirs and estate of the homeowner; 
‘‘(C) has received the full disclosure de-
scribed in subsection (e)(1); and 
‘‘(D) meets any additional requirements 
prescribed by the Secretary; 
‘‘(3) provides that prepayment, in whole or in 
part, may be made at any time during the period of 
the mortgage, without penalty; 
‘‘(4) provides for a fixed or variable interest 
rate or future sharing between the veteran and the 
covered mortgagee of the appreciation in the value 
of the property, as agreed upon by the veteran and 
the mortgagee; 
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HR 2475 IH1S 
‘‘(5) provides for the satisfaction of the obliga-
tion in a manner satisfactory to the Secretary; 
‘‘(6) provides that the eligible elderly veteran 
homeowner is not liable for any difference between 
the net amount of remaining indebtedness under the 
mortgage and the amount recovered by the covered 
mortgagee from the net sales proceeds from the 
dwelling that is subject to the mortgage (based upon 
the amount of the accumulated equity selected by 
the veteran to be subject to the mortgage, as agreed 
upon by the veteran and the mortgagee); 
‘‘(7) contains such terms and provisions with 
respect to insurance, repairs, alterations, payment of 
taxes, default reserve, delinquency charges, fore-
closure proceedings, anticipation of maturity, addi-
tional and secondary liens, and other matters as the 
Secretary may prescribe; 
‘‘(8) provides for future payments to the vet-
eran, based on accumulated equity (minus any appli-
cable fees and charges), that are calculated accord-
ing one of the following methods chosen by the 
homeowner: 
‘‘(A) payment based upon a line of credit; 
‘‘(B) payment on a monthly basis over a 
term specified by the homeowner; 
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HR 2475 IH1S 
‘‘(C) payment on a monthly basis over a 
term specified by the homeowner and based 
upon a line of credit; 
‘‘(D) payment on a monthly basis over the 
tenure of the homeowner; 
‘‘(E) payment on a monthly basis over the 
tenure of the homeowner and based upon a line 
of credit; or 
‘‘(F) payment on any other basis that the 
Secretary considers appropriate; 
‘‘(9) provides that the homeowner may convert 
the method of payment chosen under paragraph (8) 
to any other method under such paragraph during 
the term of the loan, except that in the case of a 
fixed-rate home equity conversion mortgage, the Sec-
retary may, by regulation, limit such convertibility; 
‘‘(10) contains such restrictions as the Sec-
retary may determine are appropriate to ensure that 
the homeowner does not fund any unnecessary or ex-
cessive costs for obtaining the mortgage, including 
any costs of estate planning, financial advice, or 
other related services; and 
‘‘(11) satisfies any other requirements pre-
scribed by the Secretary. 
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HR 2475 IH1S 
‘‘(d) CONDITIONS OF GUARANTEE.—(1) The Sec-
retary shall require the covered mortgagee of a home eq-
uity conversion mortgage guaranteed under this section to 
make available to the elderly veteran homeowner— 
‘‘(A) at the time of the application for the loan 
in connection with the mortgage, a written list of the 
names and addresses of third-party information 
sources who are approved by the Secretary as re-
sponsible and able to provide the information re-
quired by subsection (e); 
‘‘(B) by not later than 10 days before closing 
on the loan, a statement informing the elderly vet-
eran homeowner of such homeowner’s limited liabil-
ity under the mortgage, as well as the homeowner’s 
rights, obligations, and remedies with respect to 
temporary absences from the home, late payments, 
and payment default by the lender, along with any 
conditions requiring satisfaction of the loan obliga-
tion and any other information that the Secretary 
may require; 
‘‘(C) by not later than January 31 of each year, 
an annual statement summarizing for the preceding 
calendar year the total principal amount paid to the 
homeowner under the loan secured by the home eq-
uity conversion mortgage, the total amount of de-
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ferred interest added to the principal, and the out-
standing loan balance at the end of that year; and 
‘‘(D) before closing on the loan, a statement of 
the projected total cost of the mortgage to the vet-
eran homeowner based upon the projected total fu-
ture loan balance (such cost expressed as a single 
average annual interest rate for at least two dif-
ferent appreciation rates for the term of the mort-
gage) for not less than two projected loan terms, as 
determined by the Secretary, which shall include— 
‘‘(i) the cost for a short-term home equity 
conversion mortgage; and 
‘‘(ii) the cost for a loan term equaling the 
actuarial life expectancy of the veteran. 
‘‘(2) The Secretary may not guarantee a home equity 
conversion mortgage under this section unless such mort-
gage provides that the elderly veteran homeowner’s re-
sponsibility to satisfy the loan obligation is deferred until 
the homeowners death, the sale of the home, or the occur-
rence of certain other events specified in regulations by 
the Secretary. 
‘‘(e) INFORMATION PROVIDED TO HOMEOWNER.— 
(1) The Secretary shall provide or arrange, before exe-
cuting on a home equity conversion mortgage under this 
section, for a third-party to provide to the elderly veteran 
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