FHA Fairness Act
Bill: H.R.5915 | Sponsor: Rep. Aguilar, Pete (D-CA)
Policy area: Finance and Financial Sector

Summary:
FHA Fairness Act
This bill increases the mortgage limit for federal mortgage insurance eligibility for homes in certain cities and counties. Specifically, this increase applies to metropolitan cities and urban counties with higher housing costs that have experienced a decrease in home values over a specified time period.

To increase the principal obligation limits for mortgage insurance 
under the National Housing Act for residences in eligible metropolitan 
           cities and urban counties, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``FHA Fairness Act''.

SEC. 2. FHA PRINCIPAL OBLIGATION LIMITS FOR RESIDENCES IN ELIGIBLE 
              CITIES AND COUNTIES.

    (a) In General.--Section 203(b) of the National Housing Act (12 
U.S.C. 1709) is amended--
            (1) by striking paragraph (2) and inserting the following:
            ``(2) Involve a principal obligation (including such 
        initial service charges, appraisal, inspection, and other fees 
        as the Secretary shall approve) in an amount--
                    ``(A) not to exceed the lesser of--
                            ``(i) in the case of a 1-family residence, 
                        the greater of 115 percent of the median 1-
                        family house price in the area, as determined 
                        by the Secretary, or, in the case of a 
                        residence located in an eligible city or 
                        county, 125 percent of the median 1-family 
                        house price in the eligible city or county, as 
                        determined by the Secretary; and, in the case 
                        of a 2-, 3-, or 4-family residence, the greater 
                        of the percentage of such median price that 
                        bears the same ratio to such median price as 
                        the dollar amount limitation determined under 
                        the sixth sentence of section 1454(a)(2) of 
                        this title for a 2-, 3-, or 4-family residence, 
                        respectively, bears to the dollar amount 
                        limitation determined under such section for a 
                        1-family residence as determined by the 
                        Secretary, or, the 125 percent of the median 2-
                        , 3-, or 4-family house price, as applicable, 
                        in the eligible city or county in which the 
                        residence is located, as defined by the 
                        Secretary; or
                            ``(ii) 150 percent of the dollar amount 
                        limitation determined under the sixth sentence 
                        of such section 1454(a)(2) for a residence of 
                        applicable size; except that the dollar amount 
                        limitation in effect under this subparagraph 
                        for any size residence for any area may not be 
                        less than the greater of--
                                    ``(I) the dollar amount limitation 
                                in effect under this section for the 
                                area on October 21, 1998; or
                                    ``(II) 65 percent of the dollar 
                                amount limitation determined under the 
                                sixth sentence of such section 
                                1454(a)(2) for a residence of the 
                                applicable size; and
                    ``(B) not to exceed 100 percent of the appraised 
                value of the property.
        For purposes of the preceding sentence, the term `area' means a 
        metropolitan statistical 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.
        Notwithstanding any other provision of this paragraph, the 
        amount which may be insured under this section may be increased 
        by up to 20 percent if such increase is necessary to account 
        for the increased cost of the residence due to the installation 
        of a solar energy system (as defined in subparagraph (3) of the 
        last paragraph of section 2(a) of this Act) therein.
        Notwithstanding any other provision of this paragraph, the 
        Secretary may not insure, or enter into a commitment to insure, 
        a mortgage under this section that is executed by a first-time 
        homebuyer and that involves a principal obligation (including 
        such initial service charges, appraisal, inspection, and other 
        fees as the Secretary shall approve) in excess of 97 percent of 
        the appraised value of the property unless the mortgagor has 
        completed a program of counseling with respect to the 
        responsibilities and financial management involved in 
        homeownership that is approved by the Secretary; except that 
        the Secretary may, in the discretion of the Secretary, waive 
        the applicability of this requirement.''; and
            (2) by adding at the end the following:
            ``(10) Definitions.--For the purposes of this subsection:
                    ``(A) Eligible city or county.--The term `eligible 
                city or county' means a metropolitan city or urban 
                county (as such terms are defined in section 102 of the 
                Housing and Community Development Act of 1974 (42 
                U.S.C. 5302)) that has a median 1-family home price 
                that exceeds 115 percent of the median 1-family home 
                price for the area within which such city or county is 
                located and is located in an area that, as determined 
                by the Secretary, experienced a decrease in maximum 
                principal obligation amount under this paragraph for 1-
                family residences equal to or in excess of 20 percent 
                between January 1, 2013, and January 1, 2014.
                    ``(B) Area.--The term `area' means a metropolitan 
                statistical area as established by the Office of 
                Management and Budget.''.

SEC. 3. EFFECTIVE DATE.

    The amendment made by this Act shall apply only to mortgages with 
respect to which the Commissioner assigns a case number on or after 
January 1, 2023.
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