I
106TH CONGRESS
2D SESSION
H. R. 4795
To amend the National Housing Act to require partial rebates of FHA
mortgage insurance premiums to certain mortgagors upon payment of
their FHA-insured mortgages.
IN THE HOUSE OF REPRESENTATIVES
JUNE 29, 2000
Mr. LAZIO introduced the following bill; which was referred to the Committee
on Banking and Financial Services
A BILL
To amend the National Housing Act to require partial re-
bates of FHA mortgage insurance premiums to certain
mortgagors upon payment of their FHA-insured mort-
gages.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ‘‘Homeowners Rebate
Act of 2000’’.
SEC. 2. PAYMENT OF DISTRIBUTIVE SHARES FROM MU-
TUAL 
MORTGAGE 
INSURANCE 
FUND 
RE-
SERVES.
(a) IN GENERAL.—Subsection (c) of section 205 of
the National Housing Act (12 U.S.C. 1711(c)) is amended
to read as follows:
‘‘(c) DISTRIBUTION
OF RESERVES.—Upon termi-
nation of an insurance obligation of the Mutual Mortgage
Insurance Fund by payment of the mortgage insured
thereunder, if the Secretary determines (in accordance
with subsection (e)) that there is a surplus for distribution
under this section to mortgagors, the Participating Re-
serve Account shall be subject to distribution as follows:
‘‘(1) REQUIRED DISTRIBUTION.—In the case of
a mortgage paid after November 5, 1990, and in-
sured for 7 years or more before such termination,
the Secretary shall distribute to the mortgagor a
share of such Account in such manner and amount
as the Secretary shall determine to be equitable and
in accordance with sound actuarial and accounting
practice, subject to paragraphs (3) and (4).
‘‘(2) DISCRETIONARY
DISTRIBUTION.—In the
case of a mortgage not described in paragraph (1),
the Secretary is authorized to distribute to the mort-
gagor a share of such Account in such manner and
amount as the Secretary shall determine to be equi-
table and in accordance with sound actuarial and ac-
counting practice, subject to paragraphs (3) and (4).
‘‘(3) LIMITATION
ON
AMOUNT.—In no event
shall the amount any such distributable share exceed
the aggregate scheduled annual premiums of the
mortgagor to the year of termination of the insur-
ance.
‘‘(4) APPLICATION
REQUIREMENT.—The Sec-
retary shall not distribute any share to an eligible
mortgagor under this subsection beginning on the
date which is 6 years after the date that the Sec-
retary first transmitted written notification of eligi-
bility to the last known address of the mortgagor,
unless the mortgagor has applied in accordance with
procedures prescribed by the Secretary for payment
of the share within the 6-year period. The Secretary
shall transfer from the Participating Reserve Ac-
count to the General Surplus Account any amounts
that, pursuant to the preceding sentence, are no
longer eligible for distribution.’’.
(b) DETERMINATION OF SURPLUS.—
(1) IN GENERAL.—Section 205(e) of the Na-
tional Housing Act (12 U.S.C. 1711(e)) is amended
by adding at the end the following new sentences:
‘‘Notwithstanding any other provision of this section,
if, at the time of such a determination, the capital
ratio (as such term is defined in subsection (f)) for
the Fund is 3.0 percent or greater, the Secretary
shall determine that there is a surplus for distribu-
tion under this section to mortgagors.’’.
(2) GAO REPORT.—Not later than 1 year after
the date of the enactment of this Act, the Comp-
troller General shall submit a report to the Congress
that evaluates the adequacy of the capital ratio re-
quirement under section 205(f)(2) of the National
Housing Act (12 U.S.C. 1711(f)(2)) for ensuring
the safety and soundness of the Mutual Mortgage
Insurance Fund. Such report shall also evaluate the
adequacy of the capital ratio level established under
section 205(e)(1) of the National Housing Act, as
amended by paragraph (1) of this section and shall
include a recommendation of a capital ratio level
that, if made effective under such section upon the
expiration of the 2-year period beginning on the date
of the enactment of this Act, would provide for dis-
tributions of shares under section 205(c) of such Act
in a manner adequate to ensure the safety and
soundness of such Fund.
(c) RETROACTIVE PAYMENTS.—
(1) TIMING.—Not later than 3 months after the
date of the enactment of this Act, the Secretary of
Housing and Urban Development shall determine
the amount of each distributable share for each
mortgage described in paragraph (2) to be paid and
shall make payment of such share.
(2) MORTGAGES
COVERED.—A mortgage de-
scribed in this paragraph is a mortgage for which—
(A) the insurance obligation of the Mutual
Mortgage Insurance Fund was terminated by
payment of the mortgage before the date of the
enactment of this Act;
(B) a distributable share is required to be
paid to the mortgagor under section 205(c)(1)
of the National Housing Act (12 U.S.C.
1711(c)(1)), as amended by subsection (a) of
this section; and
(C) no distributable share was paid pursu-
ant to section 205(c) of the National Housing
Act upon termination of the insurance obliga-
tion of such Fund.
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