To amend section 203 of the National Housing Act to provide for 1 percent downpayments for FHA mortgage loans for teachers and public safety officers to buy homes within the jurisdictions of their employing agencies.

November 11, 2003

Mr. SCHUMER introduced the following bill; which was read twice and referred to the Committee on Banking, Housing, and Urban Affairs

To amend section 203 of the National Housing Act to provide for 1 percent downpayments for FHA mortgage loans for teachers and public safety officers to buy homes within the jurisdictions of their employing agencies.

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 `Homeownership Opportunities for Uniformed Services and Educators Act'.

SEC. 2. REDUCED DOWNPAYMENT REQUIREMENTS FOR LOANS FOR TEACHERS AND PUBLIC SAFETY OFFICERS.

(a) IN GENERAL- Section 203(b) of the National Housing Act (12 U.S.C. 1709(b)) is amended by adding at the end the following:

`(10) REDUCED DOWNPAYMENT REQUIREMENTS FOR TEACHERS AND PUBLIC SAFETY OFFICERS-

`(A) IN GENERAL- Notwithstanding paragraph (2), in the case of a mortgage described in subparagraph (B)--

`(i) the mortgage shall involve a principal obligation in an amount that does not exceed the sum of 99 percent of the appraised value of the property and the total amount of initial service charges, appraisal, inspection, and other fees (as the Secretary shall approve) paid in connection with the mortgage;

`(ii) no other provision of this subsection limiting the principal obligation of the mortgage based upon a percentage of the appraised value of the property subject to the mortgage shall apply; and

`(iii) the matter in paragraph (9) that precedes the first proviso shall not apply and the mortgage shall be executed by a mortgagor who shall have paid on account of the property at least 1 percent of the cost of acquisition (as determined by the Secretary) in cash or its equivalent.

`(B) MORTGAGES COVERED- A mortgage described in this subparagraph is a mortgage--

`(i) under which the mortgagor is an individual who--

`(I) is employed on a part- or full-time basis as--

`(aa) a teacher or administrator in a public or private school that provides elementary or secondary education, as determined under State law, except that elementary education shall include pre-Kindergarten education, and except that secondary education shall not include any education beyond grade 12; or

`(bb) a public safety officer (as such term is defined in section 1204 of the Omnibus Crime Control and Safe Streets Act of 1968 (42 U.S.C. 3796b), except that such term shall not include any officer serving a public agency of the Federal Government); and

`(II) has not, during the 12-month period ending upon the insurance of the mortgage, had any present ownership interest in a principal residence located in the jurisdiction described in clause (ii); and

`(ii) made for a property that is located within the jurisdiction of--

`(I) in the case of a mortgage of a mortgagor described in clause (i)(I)(aa), the local educational agency (as such term is defined in section 14101 of the Elementary and Secondary Education Act of 1965 (20 U.S.C. 8801)) for the school in which the mortgagor is employed (or, in the case of a mortgagor employed in a private school, the local educational agency having jurisdiction for the area in which the private school is located); or

`(II) in the case of a mortgage of a mortgagor described in clause (i)(I)(bb), the jurisdiction served by the public law enforcement agency, firefighting agency, or rescue or ambulance agency that employs the mortgagor.'.

(b) DEFERRAL AND REDUCTION OF UP-FRONT PREMIUM- Section 203(c) of the National Housing Act (12 U.S.C. 1709(c)) is amended--

(1) in paragraph (2), in the matter preceding subparagraph (A), by striking `Notwithstanding' and inserting `Except as provided in paragraph (3) and notwithstanding'; and

(2) by adding at the end the following:

`(3) DEFERRAL AND REDUCTION OF UP-FRONT PREMIUM- In the case of any mortgage described in subsection (b)(10)(B)--

`(A) paragraph (2)(A) of this subsection (relating to collection of up-front premium payments) shall not apply; and

`(B) if, at any time during the 5-year period beginning on the date of the insurance of the mortgage, the mortgagor ceases to be employed as described in subsection (b)(11)(B)(i)(I) or pays the principal obligation of the mortgage in full, the Secretary shall, at such time, collect a single premium payment in an amount equal to the amount of the single premium payment that, but for this paragraph, would have been required under paragraph (2)(A) of this subsection with respect to the mortgage, as reduced by 20 percent of such amount for each successive 12-month period completed during such 5-year period before such cessation or prepayment occurs.'.

END