Zero Downpayment Act of 2004

Zero Downpayment Act of 2004 - Amends the National Housing Act to authorize the Secretary of Housing and Urban Development to insure first-time homeowner zero-downpayment mortgages for one-family residences, including one- to three-unit dwellings, condominiums, cooperatives, and manufactured housing.

Limits the principal obligation on an insured mortgage to not more than 100 percent of the property's appraised value plus any initial service charges, appraisal, inspection, and other related fees.

Requires: (1) independent mortgagor counseling prior to applying for a loan, including specific counseling regarding real estate property management for mortgagors purchasing dwellings with two to three units; and (2) the mortgagee to provide the mortgagor with an option for notice of foreclosure prevention counseling, which shall become effective 60 days after delinquency.

Requires: (1) the Secretary to monitor and make adjustments (mortgage premiums and availability and underwriting standards) to such program; (2) mortgagor credit evaluation by the Federal Housing Administration's (FHA) TOTAL Mortgage Scorecard or other standardized credit scoring system; (3) additional underwriting standards for borrowers purchasing two- to three-unit dwellings; and (4) written mortgagee disclosure to the mortgagor of incremental costs.

Limits the program to not more than ten percent of the aggregate number of FHA mortgages and loans insured in the preceding fiscal year. Suspends the program if claim rates exceed a certain FHA single-family claim rate.

Requires a Government Accountability Office (GAO) program report within two years of enactment of this Act and annually thereafter.

Sunsets the program after September 30, 2009.

[Congressional Bills 108th Congress]
[From the U.S. Government Publishing Office]
[H.R. 3755 Introduced in House (IH)]






108th CONGRESS
  2d Session
                                H. R. 3755

 To authorize the Secretary of Housing and Urban Development to insure 
          zero-downpayment mortgages for one-unit residences.


_______________________________________________________________________


                    IN THE HOUSE OF REPRESENTATIVES

                            February 3, 2004

Mr. Tiberi (for himself, Mr. Scott of Georgia, Mr. Oxley, Mr. Ney, Mr. 
   Turner of Ohio, Mr. Green of Wisconsin, Mr. King of New York, Mr. 
 Renzi, Mr. Lucas of Kentucky, and Mr. Clay) introduced the following 
    bill; which was referred to the Committee on Financial Services

_______________________________________________________________________

                                 A BILL


 
 To authorize the Secretary of Housing and Urban Development to insure 
          zero-downpayment mortgages for one-unit residences.

    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 ``Zero Downpayment Act of 2004''.

SEC. 2. INSURANCE FOR ZERO-DOWNPAYMENT MORTGAGES.

    The National Housing Act is amended as follows:
            (1) Mortgage insurance authority.--In Section 203 (12 
        U.S.C. 1709) by adding at the end the following new subsection:
    ``(y) Zero-Downpayment Mortgages.--Notwithstanding any other 
provision of this section or any other section of this title, the 
Secretary is authorized to insure, and to commit to insure, any 
mortgage involving a property upon which there is located a dwelling 
designed principally for a 1-family residence which (1) involves a 
principal obligation not in excess of 100 percent of the applicable 
maximum dollar amount limit under subsection (b)(2)(A) for a one-unit 
dwelling, and (2) is not in excess of 100 percent of the appraised 
value of the property plus any initial service charges, appraisal, 
inspection, and other fees in connection with the mortgage as approved 
by the Secretary. The Secretary is authorized to establish any 
additional requirements as may be necessary, or appropriate, including 
requirements regarding mortgagor and property eligibility.''.
            (2) General insurance fund.--In section 519(e) (12 U.S.C. 
        1735c(e)), by striking ``and 203(i)'' and inserting ``, 203(i), 
        and 203(y)''.
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