SEC. 6. MAXIMUM LOAN LIMITS. 
(a) DOLLAR AMOUNTS.—Paragraph (1) of section 
2(b) of the National Housing Act (12 U.S.C. 1703(b)(1)) 
is amended— 
(1) in clause (ii) of subparagraph (A), by strik-
ing ‘‘$17,500’’ and inserting ‘‘$24,500’’; 
(2) in subparagraph (C) by striking ‘‘$48,600’’ 
and inserting ‘‘$68,040’’; 
(3) in subparagraph (D) by striking ‘‘$64,800’’ 
and inserting ‘‘$90,720’’; 
(4) in subparagraph (E) by striking ‘‘$16,200’’ 
and inserting ‘‘$22,680’’; and 
(5) by realigning subparagraphs (C), (D), and 
(E) 2 ems to the left so that the left margins of 
such subparagraphs are aligned with the margins of 
subparagraphs (A) and (B). 
(b) ANNUAL INDEXING.— 
(1) METHOD OF INDEXING.—Section 206A of 
the National Housing Act (12 U.S.C. 1712a) is 
amended— 
(A) in subsection (a)— 
(i) by redesignating paragraphs (1) 
through (7) as paragraphs (2) through (8), 
respectively; and
(ii) by inserting before paragraph (2) 
(as so redesignated) the following new 
paragraph: 
‘‘(1) subparagraphs (A)(ii), (C), (D), and (E) 
of section 2(b)(1) (12 U.S.C. 1703(b)(1));’’. 
(2) 2004 AND 2005 ADJUSTMENTS.—Not later 
than 30 days after the date of the enactment of this 
Act, the Federal Reserve Board shall calculate the 
adjustments for 2004 and 2005 pursuant to para-
graph (1) of section 206A(a) of the National Hous-
ing Act (12 U.S.C. 1712a(a)(1)), as added by the 
amendment made by paragraph (1) of this sub-
section, and shall notify the Secretary of Housing 
and Urban Development pursuant to subsection (b) 
of such section 206A. Such adjustments shall take 
effect upon the date of such notification. 
(3) TECHNICAL AND CONFORMING CHANGES.— 
Paragraph (1) of section 2(b) of the National Hous-
ing Act (12 U.S.C. 1703(b)(1)) is amended— 
(A) by striking ‘‘No’’ and inserting ‘‘Ex-
cept as provided in the last sentence of this 
paragraph and in paragraph (8), no’’; and 
(B) by adding after and below subpara-
graph (G) the following:
‘‘The Secretary shall, by regulation, increase the dol-
lar amount limitations in subparagraphs (A)(ii), (C), 
(D), and (E) (as such limitations may have been ad-
justed in accordance with section 206A of this 
Act).’’. 
SEC. 7. INSURANCE PREMIUMS. 
Subsection (f) of section 2 of the National Housing 
Act (12 U.S.C. 1703(f)) is amended— 
(1) by inserting ‘‘(1)’’ after ‘‘(f)’’; 
(2) by adding at the end the following new 
paragraph: 
‘‘(2) MANUFACTURED HOME LOANS.—Notwith-
standing paragraph (1), in the case of a loan, ad-
vance of credit, or purchase in connection with a 
manufactured home or a lot on which to place such 
a home (or both), the premium charge for the insur-
ance granted under this section shall be paid by the 
borrower under the loan or advance of credit, as fol-
lows: 
‘‘(A) At the time of the making of the 
loan, advance of credit, or purchase, a single 
premium payment in an amount not to exceed 
2.25 percent of the amount of the original in-
sured principal obligation.
‘‘(B) In addition to the premium under 
subparagraph (A), annual premium payments 
during the term of the loan, advance, or obliga-
tion purchased in an amount not exceeding 1.0 
percent of the remaining insured principal bal-
ance (excluding the portion of the remaining 
balance attributable to the premium collected 
under subparagraph (A) and without taking 
into account delinquent payments or prepay-
ments). 
‘‘(C) Premium charges under this para-
graph shall be established in amounts that are 
sufficient, but do not exceed the minimum 
amounts necessary, to maintain a negative cred-
it subsidy for the program under this section 
for insurance of loans, advances of credit, or 
purchases in connection with a manufactured 
home or a lot on which to place such a home 
(or both), as determined based upon risk to the 
Federal Government under existing under-
writing requirements.’’. 
SEC. 8. REVISION OF UNDERWRITING CRITERIA. 
(a) IN GENERAL.—Subsection (b) of section 2 of the 
National Housing Act (12 U.S.C. 1703(b)), as amended
by the preceding provisions of this Act, is further amended 
by adding at the end the following new paragraph: 
‘‘(10) FINANCIAL SOUNDNESS OF MANUFACTURED 
HOUSING PROGRAM.—The Secretary shall establish such 
underwriting criteria for loans and advances of credit in 
connection with a manufactured home or a lot on which 
to place a manufactured home (or both), including such 
loans and advances represented by obligations purchased 
by financial institutions, as may be necessary to ensure 
that the program under this title for insurance for finan-
cial institutions against losses from such loans, advances 
of credit, and purchases is financially sound.’’. 
(b) TIMING.—Not later than the expiration of the 6- 
month period beginning on the date of the enactment of 
this Act, the Secretary of Housing and Urban Develop-
ment shall revise the existing underwriting criteria for the 
program referred to in paragraph (10) of section 2(b) of 
the National Housing Act (as added by subsection (a) of 
this section) in accordance with the requirements of such 
paragraph. 
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