§1715z–2. Special mortgage insurance assistance

(a) Purpose

The purpose of this section is to help provide adequate housing for families of low and moderate income, including those who, for reasons of credit history, irregular income patterns caused by seasonal employment, or other factors, are unable to meet the credit requirements of the Secretary for the purchase of a single-family home financed by a mortgage insured under section 1709, 1715k, 1715l, 1715y, or 1715z(j)(4) of this title, but who, through the incentive of homeownership and counseling assistance, appear to be able to achieve homeownership.

(b) Authorization to insure mortgages meeting requirements of section

The Secretary is authorized upon application by the mortgagee to insure under this section any mortgage meeting the requirements of this section.

(c) Eligibility for insurance

To be eligible for insurance under this section, a mortgage shall-

(1) meet the requirements of section 1709 (except subsection (m)),¹ 1715k(d)(3)(A), 1715l(d)(2), (h)(5), (i), 1715y(c), or 1715z(j)(4) of this title, except as such requirements are modified by this section;

(2) involve a principal obligation (including such initial service charges, and such appraisal, inspection, and other fees, as the Secretary shall approve) in an amount not to exceed $18,000: Provided, That the Secretary may increase the amount to not exceed $21,000 in any geographical area where he finds that cost levels so require: Provided further, That no mortgage meeting the requirements of section 1709 (h) or (i) of this title shall be eligible for insurance under this section if its principal obligation is in excess of the maximum limits prescribed in such section;

(3) be executed by a mortgagor who the Secretary has determined, after a full and complete study of the case, would not be an acceptable credit risk for mortgage insurance purposes under sections 1709, 1715k, 1715l, 1715y, or 1715z(j)(4) of this title, because of his credit standing, debt obligations, total annual income, or income characteristics, but who the Secretary is satisfied would be a reasonably satisfactory credit risk, consistent with the objectives stated in subsection (a) of this section, if he were to receive budget, debt management, and related counseling: Provided, That, in determining whether the mortgagor is a reasonably satisfactory credit risk, the Secretary shall review the credit history of the applicant giving special consideration to those delinquent accounts which were ultimately paid by the applicant and to extenuating factors which may have caused credit accounts of the applicant to become delinquent; and the Secretary shall also give special consideration to income characteristics of applicants whose total income over the two years prior to their applications has remained at levels of eligibility (as required under paragraph (4) of this subsection), but who, because of the character of this seasonal employment or for other reasons, have not maintained continuous employment under one employer during that time; and

(4) require monthly payments which, in combination with local real estate taxes on the property involved, do not exceed 25 per centum of the applicant's income, based on his average monthly income during the year prior to his application or the average monthly income during the three years prior to his application, whichever is higher.

(d) Preferences in approving mortgage insurance applications and in providing counseling services; eligible families

The Secretary shall give preference in approving mortgage insurance applications and in providing counseling services under this section (1) to families which are eligible for assistance payments under section 1715z of this title, and (2) to families living in public housing units, especially those families required to leave public housing because their incomes have risen beyond the maximum prescribed income limits, and families eligible for residence in public housing who have been displaced from federally assisted urban renewal areas.

(e) Budget, debt management, and related counseling services

The Secretary is authorized to provide, or contract with public or private organizations to provide, such budget, debt management, and related counseling services to mortgagors whose mortgages are insured under this section as he determines to be necessary to meet the objectives of this section. The Secretary may also provide such counseling to otherwise eligible families who lack sufficient funds to supply a down payment to help them to save an amount necessary for that purpose.

(f) Aggregate principal balance of mortgages insured

The aggregate principal balance of all mortgages insured under this section and outstanding at one time shall not exceed $200,000,000.

(g) Authorization of appropriations

There are authorized to be appropriated such sums as may be necessary to carry out the provisions of subsection (e) of this section.

(June 27, 1934, ch. 847, title II, §237, as added Aug. 1, 1968, Pub. L. 90–448, title I, §102(a), 82 Stat. 485 ; amended Dec. 24, 1969, Pub. L. 91–152, title I, §§110, 113(j), 83 Stat. 382 , 385.)

References in Text

Section 1709(m) of this title, referred to in subsec. (c)(1), was repealed by Pub. L. 100–242, title IV, §406(c), Feb. 5, 1988, 101 Stat. 1902 .

Amendments

1969-Subsec. (c)(2). Pub. L. 91–152, §113(j), substituted "$21,000" for "$17,500" and "$18,000" for "$15,000".

Subsec. (d). Pub. L. 91–152, §110, inserted provision requiring the Secretary to give a preference in providing counseling services to the specified families, inserted text designated as cl. (1), and designated existing text as cl. (2).

Section Referred to in Other Sections

This section is referred to in sections 1715q, 1715z, 1715z–3, 1735c of this title.

¹ See References in Text note below.