H. R. 4194—28
(1) the owner of the project may prepay, and the mortgagee
may accept prepayment of, the mortgage on the project, and
(2) the owner may request voluntary termination of a mort-
gage insurance contract with respect to such project and the
contract may be terminated notwithstanding any requirements
under sections 229 and 250 of the National Housing Act.
(b) CONDITIONS.—Any prepayment of a mortgage or termination
of an insurance contract authorized under subsection (a) may be
made—
(1) only to the extent that such prepayment or termination
is consistent with the terms and conditions of the mortgage
on or mortgage insurance contract for the project;
(2) only if the owner of the project involved agrees not
to increase the rent charges for any dwelling unit in the project
during the 60-day period beginning upon such prepayment
or termination; and
(3) only if the owner of the project provides notice of intent
to prepay or terminate, in such form as the Secretary of Housing
and Urban Development may prescribe, to each tenant of the
housing, the Secretary, and the chief executive officer of the
appropriate State or local government for the jurisdiction within
which the housing is located, not less than 150 days, but
not more than 270 days, before such prepayment or termi-
nation, except that such requirement shall not apply to a
prepayment or termination that—
(A) occurs during the 150-day period immediately fol-
lowing the date of the enactment of this Act;
(B) is necessary to effect conversion to ownership by
a priority purchaser (as defined in section 231(a) of the
Low-Income Housing Preservation and Resident Ownership
Act of 1990 (12 U.S.C. 4120(a)), or
(C) will otherwise ensure that the project will continue
to operate, at least until the maturity date of the loan
or mortgage, in a manner that will provide rental housing
on terms at least as advantageous to existing and future
tenants as the terms required by the program under which
the loan or mortgage was made or insured prior to the
proposed prepayment or termination.
PUBLIC AND ASSISTED HOUSING DRUG ELIMINATION ACT
SEC. 220. The Public and Assisted Housing Drug Elimination
Act of 1990 is amended—
(1) in section 5123, by inserting ‘‘Indian tribes’’ before
‘‘and private’’;
(2) in section 5124(a)(7), by inserting ‘‘, an Indian tribe,’’
before ‘‘or tribally designated’’;
(3) in section 5125, by inserting ‘‘an Indian tribe’’ before
‘‘a tribally designated’’; and
(4) in section 5126, by adding at the end the following
new paragraph:
‘‘(6) INDIAN TRIBE.—The term ‘‘Indian tribe’’ has the mean-
ing given the term in section 4(12) of the Native American
Housing Assistance and Self Determination Act of 1996, 25
U.S.C. 4103(12).’’.
H. R. 4194—29
MULTIFAMILY HOUSING INSTITUTE
SEC. 221. Notwithstanding any other provision of law, the
Secretary may, from time to time, as determined necessary to
assist the Department in managing its multifamily assets including
analyzing, tracking and evaluating its portfolio of FHA-insured
and other mortgages and properties and assisting the Department
in understanding and reducing the risk involved in its mortgage
restructuring, insuring and guaranteeing activities, provide data
to, and purchase data from, any nonprofit, industry supported,
on-line provider of nationwide, multifamily housing loan and prop-
erty data services.
MULTIFAMILY MORTGAGE AUCTIONS
SEC. 222. Section 221(g)(4)(C) of the National Housing Act
is amended—
(1) in the first sentence of clause (viii), by striking ‘‘Septem-
ber 30, 1996’’ and inserting ‘‘December 31, 2002’’; and
(2) by adding at the end the following:
‘‘(ix) The authority of the Secretary to conduct
multifamily auctions under this paragraph shall be
effective for any fiscal year only to the extent and
in such amounts as are approved in appropriations
Acts for the costs of loan guarantees (as defined in
section 502 of the Congressional Budget Act of 1974),
including the cost of modifying loans.’’.
FUNDING CORRECTION
SEC. 223. Notwithstanding any other provision of law, of the
$1,250,000 made available pursuant to Public Law 102–389 for
economic revitalization and infrastructure repair in Montpelier,
Vermont, $250,000 is available for the Central Vermont Revolving
Loan Fund administered by the Central Vermont Community Action
Council.
ANNUAL REPORT ON MANAGEMENT DEFICIENCIES
SEC. 224.(a) IN GENERAL.—Section 203 of the National Housing
Act (12 U.S.C. 1709) is amended by adding at the end the following:
‘‘(x) MANAGEMENT DEFICIENCIES REPORT.—
‘‘(1) IN GENERAL.—Not later than 60 days after the date
of the enactment of this subsection, and annually thereafter,
the Secretary shall submit to Congress a report on the plan
of the Secretary to address each material weakness, reportable
condition, and noncompliance with an applicable law or regula-
tion (as defined by the Director of the Office of Management
and Budget) identified in the most recent audited financial
statement of the Federal Housing Administration submitted
under section 3515 of title 31, United States Code.
‘‘(2) CONTENTS OF ANNUAL REPORT.—Each report submitted
under paragraph (1) shall include—
‘‘(A) an estimate of the resources, including staff,
information systems, and contract assistance, required to
address each material weakness, reportable condition, and
noncompliance with an applicable law or regulation
described in paragraph (1), and the costs associated with
those resources;
H. R. 4194—30
‘‘(B) an estimated timetable for addressing each mate-
rial weakness, reportable condition, and noncompliance
with an applicable law or regulation described in paragraph
(1); and
‘‘(C) the progress of the Secretary in implementing
the plan of the Secretary included in the report submitted
under paragraph (1) for the preceding year, except that
this subparagraph does not apply to the initial report
submitted under paragraph (1).’’.
SEC. 225. (a) INFORMED CONSUMER CHOICE.—Section 203(b)(2)
of the National Housing Act (12 U.S.C. 1709(b)(2)) is amended
by adding at the end the following:
‘‘In conjunction with any loan insured under this section,
an original lender shall provide to each prospective borrower
a disclosure notice that provides a one page analysis of mort-
gage products offered by that lender and for which the borrower
would qualify. This notice shall include: (i) a generic analysis
comparing the note rate (and associated interest payments),
insurance premiums, and other costs and fees that would be
due over the life of the loan for a loan insured by the Secretary
under this subsection with the note rates, insurance premiums
(if applicable), and other costs and fees that would be expected
to be due if the mortgagor obtained instead other mortgage
products offered by the lender and for which the borrower
would qualify with a similar loan-to-value ratio in connection
with a conventional mortgage (as that term is used in section
305(a)(2) of the Federal Home Loan Mortgage Corporation Act
(12 U.S.C. 1454(a)(2)) or section 302(b)(2) of the Federal
National Mortgage Association Charter Act (12 U.S.C.
1717(b)(2)), as applicable), assuming prevailing interest rates;
and (ii) a statement regarding when the mortgagor’s require-
ment to pay the mortgage insurance premiums for a mortgage
insured under this section would terminate or a statement
that the requirement will terminate only if the mortgage is
refinanced, paid off, or otherwise terminated.’’.
(b) REGULATION.—The Secretary of Housing and Urban
Development shall develop the disclosure notice under subsection
(a) within 150 days of the enactment through notice and comment
rulemaking.
SEC. 226. FUNDING OF CERTAIN PUBLIC HOUSING.—Notwith-
standing any other provision of law, no funds in this Act or any
other Act may hereafter be used by the Secretary of Housing and
Urban Development to determine allocations or provide assistance
for operating subsidies or modernization for certain State and city
funded and locally developed public housing units, as defined for
purposes of a statutory paragraph, notwithstanding the deeming
by statute of such units to be public housing units developed under
the United States Housing Act of 1937, unless such unit was
so assisted before October 1, 1998.
SECTION 236 PROGRAM REFORM
SEC. 227. Section 236(g) of the National Housing Act, as amend-
ed by section 221(c) of the Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies Appro-
priations Act, 1997, is amended to read as follows:
‘‘(g) The project owner shall, as required by the Secretary,
accumulate, safeguard, and periodically pay the Secretary or such
H. R. 4194—31
other entity as determined by the Secretary and upon such terms
and conditions as the Secretary deems appropriate, all rental
charges collected on a unit-by-unit basis in excess of the basic
rental charges. Unless otherwise directed by the Secretary, such
excess charges shall be credited to a reserve used by the Secretary
to make additional assistance payments as provided in paragraph
(3) of subsection (f ). Notwithstanding any other requirements of
this subsection, an owner of a project with a mortgage insured
under this section, or a project previously assisted under subsection
(b) but without a mortgage insured under this section if the project
mortgage was insured under section 207 of this Act before July
30, 1998 pursuant to section 223(f ) of this Act and assisted under
subsection (b), may retain some or all of such excess charges for
project use if authorized by the Secretary and upon such terms
and conditions as established by the Secretary.’’.
FHA MORTGAGE INSURANCE INCREASE
SEC. 228. (a) Subparagraph (A) of section 203(b)(2) of the
National Housing Act (12 U.S.C. 1709(b)(2)(A)) is amended by strik-
ing clause (ii) and all that follows through the end of the subpara-
graph and inserting the following:
‘‘(ii) 87 percent of the dollar amount limitation
determined under section 305(a)(2) of the Federal
Home Loan Mortgage Corporation Act for a residence
of the applicable size; except that the dollar amount
limitation in effect for any area under this subpara-
graph may not be less than 48 percent of the dollar
limitation determined under section 305(a)(2) of the
Federal Home Loan Mortgage Corporation Act for a
residence of the applicable size; and’’.
(b) The first sentence in the matter following section
203(b)(2)(B)(iii) 
of 
the 
National 
Housing 
Act 
(12 
U.S.C.
1709(b)(2)(B)(iii) is amended to read as follows: ‘‘For purposes of
the preceding sentence, the term ‘area’ means a metropolitan statis-
tical area as established by the Office of Management and Budget;
and the median 1-family house price for an area shall be equal
to the median 1-family house price of the county within the area
that has the highest such median price.’’.
HOPE VI GRANT FOR HOLLANDER RIDGE
SEC. 229. If the Secretary rescinds the grant award of
$20,000,000 made to the Housing Authority of Baltimore City for
development efforts at Hollander Ridge in Baltimore, Maryland,
involving funds appropriated for fiscal year 1996 under the heading
‘‘Public Housing Demolition, Site Revitalization, and Replacement
Housing Grants’’, all of the rescinded grant amount shall be recap-
tured by the Secretary and added to the amounts otherwise avail-
able under this heading. If, after the date of any such recapture,
the Housing Authority of Baltimore City applies in response to
a Notice of Funding Availability issued by the Secretary for a
grant from funds available under this heading (not to exceed the
amount recaptured) for development efforts at Hollander Ridge,
then the Secretary shall grant priority status to such application
and approve the grant award if the application meets the terms
and criteria stated in the Notice of Funding Availability.