send the total mortgage payment directly to the 
mortgagee. 
(c) REVIEW UPON DELINQUENCY.—If the mortgagor 
fails to pay to the Secretary any amounts due directly 
from the mortgagor under this section not later than 15 
days after such due date, the Secretary or its designated 
agent shall review the mortgagor’s financial circumstances 
to determine whether a delinquency in payments due from 
the mortgagor under this section or section 6 is the result 
of a change in the mortgagor’s financial circumstances 
since the payment amount was last determined. If the de-
linquency is not the result of a change in the mortgagor’s 
financial circumstances, the Secretary shall terminate fu-
ture mortgage assistance payments and the mortgagee 
may, at any time thereafter, take any legal action to en-
force its mortgage without any further restriction or re-
quirement. If the delinquency is the result of such a 
change, the Secretary shall modify the mortgagor’s re-
quired payments to the Secretary as the Secretary shall 
determine. 
(d) PERIOD FOR ASSISTANCE.—Payments under this 
Act shall be provided for a period not to exceed 36 months, 
either consecutively or nonconsecutively. The Secretary 
shall establish procedures for periodic review of the mort-
gagor’s financial circumstances for the purpose of deter-
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mining the necessity for continuation, termination, or ad-
justment of the amount of the payments. 
SEC. 6. REPAYMENT OF ASSISTANCE. 
(a) ASSISTANCE LOAN.—The amount by which the 
assistance payments made by the Secretary to the mort-
gagee exceeds the amount of payments made by the mort-
gagor to the Secretary shall be a loan by the Secretary 
to the mortgagor. The loan shall be evidenced by such doc-
uments as the Secretary shall determine necessary to pro-
tect the interests of the United States. 
(b) REPAYMENT
OF ASSISTANCE LOAN.—Before 
making assistance payments under this Act on behalf of 
a mortgagor, the Secretary shall enter into an agreement 
with the mortgagor for repayment of all mortgage assist-
ance made by the Secretary under section 5, plus interest 
as provided in subsection (c). The agreement shall provide 
for monthly payments by the mortgagor to the Secretary 
which (1) shall begin once the Secretary has determined 
that continuation of mortgage assistance payments to the 
mortgagee is unnecessary, and (2) shall be in an amount 
determined as follows: 
(1) HOUSING
EXPENSE
LESS
THAN
PER-
CENT.—If the mortgagor’s total housing expense is 
less than 35 percent of the mortgagor’s net effective 
income, the mortgagor shall pay to the Secretary the 
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difference between 35 percent of the mortgagor’s net 
effective income and the mortgagor’s total housing 
expense unless otherwise determined by the Sec-
retary after examining the mortgagor’s financial cir-
cumstances and ability to contribute to repayment of 
the mortgage assistance. 
(2) HOUSING EXPENSE GREATER THAN 35 PER-
CENT.—If the mortgagor’s total housing expense is 
more than 35 percent of the mortgagor’s net effec-
tive income, repayment of the mortgage assistance 
shall be deferred until the mortgagor’s total housing 
expense is less than 35 percent of the mortgagor’s 
net effective income. 
(3) WHEN MORTGAGE PAID IN FULL.—Notwith-
standing paragraphs (1) and (2), if repayment of 
mortgage assistance is not made by the date that 
the mortgage is paid in full, the mortgagor shall 
make mortgage assistance repayments in an amount 
not less than the previous regular mortgage payment 
until the mortgage assistance is repaid. 
(c) INTEREST.—Interest shall accrue on all mortgage 
assistance made under this Act at the rate determined 
monthly by the Secretary of the Treasury to be equal to 
the then current average yield on outstanding 30-year 
bonds issued by the Secretary of the Treasury under sec-
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tion 3102 of title 31, United States Code, and shall accrue 
only during the period in which the mortgagor is required 
to make repayment under this section. 
(d) LIEN TO SECURE REPAYMENT
OF ASSIST-
ANCE.—Repayment of amounts owed to the Secretary 
from a mortgagor shall be secured by a mortgage lien on 
the property and by such other obligation as the Secretary 
may require. The lien or other security interest of the Sec-
retary shall not be deemed to take priority over any other 
secured lien or secured interest in effect against the mort-
gagor’s property on the date assistance payments begin. 
The Secretary may allow subordination of the mortgage 
assistance lien only if such subordination is necessary to 
permit the mortgagor to obtain a home improvement loan 
for repairs necessary to preserve the property. 
(e) TIME FOR REPAYMENT.—Payments under this 
section shall be made by the mortgagor to the Secretary 
not later than 14 days after each mortgage payment is 
due under the mortgage (or in the case of repayment after 
the mortgage has been paid in full, not later than the date 
the mortgage payments were due under the mortgage). 
SEC. 7. DEFINITIONS. 
For the purposes of this Act, the following definitions 
apply: 
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(1) APPROVED
COUNSELING
AGENCY.—The 
term ‘‘approved counseling agency’’ means a non-
profit housing counseling agency approved by the 
Secretary pursuant to section 2(e). 
(2) GROSS
HOUSEHOLD
INCOME.—The term 
‘‘gross household income’’ means the total income of 
a mortgagor, the mortgagor’s spouse, children resid-
ing in the same residence as the mortgagor, and any 
other person living in such residence that is declared 
by the mortgagor as a dependent for Federal income 
tax purposes. 
(3) 
HOUSEHOLD.—The 
term 
‘‘household’’ 
means a mortgagor, the mortgagor’s spouse, chil-
dren residing in the same residence as the mort-
gagor, and any other person living in such residence 
that is declared by the mortgagor as a dependent for 
Federal income tax purposes. 
(4) HOUSING
EXPENSE.—The term ‘‘housing 
expense’’ means the sum of the mortgagor’s monthly 
maintenance, utility, and hazard insurance expense, 
taxes, and required mortgage payments, including 
escrows. 
(5) MORTGAGEE; 
MORTGAGOR.—The terms 
‘‘mortgagee’’ and ‘‘mortgagor’’ have the meanings 
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given such terms in section 201 of the National 
Housing Act (12 U.S.C. 1707). 
(6) NET EFFECTIVE INCOME.—The term ‘‘net 
effective income’’ means the gross household income 
of the mortgagor, less city, State, and Federal in-
come and social security taxes. 
(7) SECRETARY.—The term ‘‘Secretary’’ means 
the Secretary of Housing and Urban Development. 
SEC. 8. AUTHORIZATION OF APPROPRIATIONS. 
There is authorized to be appropriated for each fiscal 
year such sums as may be necessary to provide assistance 
under this Act and for costs (as such term is defined in 
section 502 of the Federal Credit Reform Act of 1990 (2 
U.S.C. 661a)) of such assistance. 
Æ 
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