Title: FHA Fairness Act
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.

[Congressional Bills 116th Congress]
[From the U.S. Government Publishing Office]
[H.R. 8974 Introduced in House (IH)]

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116th CONGRESS
  2d Session
                                H. R. 8974

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


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                           December 16, 2020

 Mr. Aguilar introduced the following bill; which was referred to the 
                    Committee on Financial Services

_______________________________________________________________________

                                 A BILL


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

    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.

    Section 203(b) of the National Housing Act (12 U.S.C. 1709) is 
amended by adding at the end of paragraph (2) the following 
undesignated paragraph:
            ``Notwithstanding any other provision of this paragraph, in 
        the case of a residence located in an eligible city or county, 
        clause (i) and (ii) of subparagraph (A) shall be considered to 
        require that a mortgage shall involve a principal obligation in 
        an amount that does not exceed in the case of a 1-family 
        residence, 125 percent of the median 1-family house price in 
        the eligible city or county in which the residence is located, 
        as defined by the Secretary; in the case of a 2-family 
        residence, 125 percent of the median 2-family house price in 
        the eligible city or county in which the residence is located, 
        as defined by the Secretary; in the case of a 3-family 
        residence, 125 percent of the median 3-family house price in 
        the eligible city or county in which the residence is located, 
        as defined by the Secretary; and in the case of a 4-family 
        residence, 125 percent of the median 4-family house price in 
        the eligible city or county in which the residence is located, 
        as defined by the Secretary. For the purposes of the preceding 
        sentence, 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 the amount determined under subparagraph (A)(ii) 
        of this paragraph for the area (as the term is defined in the 
        first sentence after subparagraph (B)) 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.''.

SEC. 3. EFFECTIVE DATE.

    The amendment made by this Act shall apply only to mortgages for 
which the mortgagee has issued credit approval for the borrower on or 
after January 1, 2021.
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