FHA Fairness Act

I 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 in- surance under the National Housing Act for residences in eligible metropolitan cities and urban counties. Be it enacted by the Senate and House of Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘FHA Fairness Act’’. 4 SEC. 2. FHA PRINCIPAL OBLIGATION LIMITS FOR RESI- 5 DENCES IN ELIGIBLE CITIES AND COUNTIES. 6 Section 203(b) of the National Housing Act (12 7 U.S.C. 1709) is amended by adding at the end of para- 8 graph (2) the following undesignated paragraph: 9 VerDate Sep 11 2014 21:31 Dec 29, 2020 Jkt 019200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H8974.IH H8974 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 8974 IH ‘‘Notwithstanding any other provision of this 1 paragraph, in the case of a residence located in an 2 eligible city or county, clause (i) and (ii) of subpara- 3 graph (A) shall be considered to require that a mort- 4 gage shall involve a principal obligation in an 5 amount that does not exceed in the case of a 1-fam- 6 ily residence, 125 percent of the median 1-family 7 house price in the eligible city or county in which the 8 residence is located, as defined by the Secretary; in 9 the case of a 2-family residence, 125 percent of the 10 median 2-family house price in the eligible city or 11 county in which the residence is located, as defined 12 by the Secretary; in the case of a 3-family residence, 13 125 percent of the median 3-family house price in 14 the eligible city or county in which the residence is 15 located, as defined by the Secretary; and in the case 16 of a 4-family residence, 125 percent of the median 17 4-family house price in the eligible city or county in 18 which the residence is located, as defined by the Sec- 19 retary. For the purposes of the preceding sentence, 20 the term ‘eligible city or county’ means a metropoli- 21 tan city or urban county (as such terms are defined 22 in section 102 of the Housing and Community De- 23 velopment Act of 1974 (42 U.S.C. 5302)) that has 24 a median 1-family home price that exceeds the 25 VerDate Sep 11 2014 21:31 Dec 29, 2020 Jkt 019200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H8974.IH H8974 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 8974 IH amount determined under subparagraph (A)(ii) of 1 this paragraph for the area (as the term is defined 2 in the first sentence after subparagraph (B)) within 3 which such city or county is located and is located 4 in an area that, as determined by the Secretary, ex- 5 perienced a decrease in maximum principal obliga- 6 tion amount under this paragraph for 1-family resi- 7 dences equal to or in excess of 20 percent between 8 January 1, 2013, and January 1, 2014.’’. 9 SEC. 3. EFFECTIVE DATE. 10 The amendment made by this Act shall apply only 11 to mortgages for which the mortgagee has issued credit 12 approval for the borrower on or after January 1, 2021. 13 Æ VerDate Sep 11 2014 01:21 Dec 31, 2020 Jkt 019200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6301 E:\BILLS\H8974.IH H8974 pamtmann on DSKBC07HB2PROD with BILLS