Doorway to the American Dream Act

insurance of the mortgage; ``(G) contain complete amortization provisions satisfactory to the Secretary requiring periodic payments by the mortgagor not in excess of his reasonable ability to pay as determined by the Secretary; ``(H) bear interest (exclusive of premium charges for insurance and service charges, if any) as not to exceed 3.5 per centum per annum on the amount of the principal obligation outstanding at any time; ``(I) provide, in a manner satisfactory to the Secretary, for the application of the mortgagor's periodic payments (exclusive of the amount allocated to interest and to the premium charge which is required for mortgage insurance as hereinafter provided and to the service charge, if any) to amortization of the principal of the mortgage; and ``(J) contain such terms and provisions with respect to insurance, repairs, alterations, payment of taxes, service charges, default reserves, delinquency charges, foreclosure proceedings, anticipation of maturity, and other matters as the Secretary may in his discretion prescribe. ``(2) Area defined.--In this subsection, `area' means a metropolitan statistical area as established by the Office of Management and Budget; and the median 1-family house price for an area shall be equal to the median 1-family house price of the county within the area that has the highest such median price. ``(3) First-time homebuyer defined.--In this section, the term `first-time homebuyer' means a person who has not owned a residential property or had an ownership interest in a residential property in the 3-year period prior to seeking insurance under this section. ``(4) Solar energy systems.--Notwithstanding any other provision of this subsection, the amount which may be insured under this section may be increased by up to 20 percent if such increase is necessary to account for the increased cost of the residence due to the installation of a solar energy system (as defined in subparagraph (3) of the last paragraph of section 2(a) of this Act) therein. ``(c) Interest Rate Subsidy.-- ``(1) In general.--The Secretary shall, each month, provide to each mortgagee associated with a mortgage insured under this section, an interest rate subsidy that is equal to-- ``(A) if the mortgagor is part of a household with an annual income that is less than 80 percent of the area median income, the difference between-- ``(i) the interest rate charged by the mortgagee associated with such mortgage multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; and ``(ii) 1 percent multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; ``(B) if the mortgagor is part of a household with an annual income that is equal to or greater than 80 percent but less than 90 percent of the area median income, the difference between-- ``(i) the interest rate charged by the mortgagee associated with such mortgage multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; and ``(ii) 1.3125 percent multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; ``(C) if the mortgagor is part of a household with an annual income that is equal to or greater than 90 percent but less than 100 percent of the area median income, the difference between-- ``(i) the interest rate charged by the mortgagee associated with such mortgage multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; and ``(ii) 1.625 percent multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; ``(D) if the mortgagor is part of a household with an annual income that is equal to or greater than 100 percent but less than 110 percent of the area median income, the difference between-- ``(i) the interest rate charged by the mortgagee associated with such mortgage multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; and ``(ii) 1.9375 percent multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; ``(E) if the mortgagor is part of a household with an annual income that is equal to or greater than 110 percent but less than 120 percent of the area median income, the difference between-- ``(i) the interest rate charged by the mortgagee associated with such mortgage multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; and ``(ii) 2.25 percent multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; ``(F) if the mortgagor is part of a household with an annual income that is equal to or greater than 120 percent but less than 130 percent of the area median income, the difference between-- ``(i) the interest rate charged by the mortgagee associated with such mortgage multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; and ``(ii) 2.5625 percent multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; ``(G) if the mortgagor is part of a household with an annual income that is equal to or greater than 130 percent but less than 140 percent of the area median income, the difference between-- ``(i) the interest rate charged by the mortgagee associated with such mortgage multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; and ``(ii) 2.875 percent multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; ``(H) if the mortgagor is part of a household with an annual income that is equal to or greater than 140 percent but less than 150 percent of the area median income, the difference between-- ``(i) the interest rate charged by the mortgagee associated with such mortgage multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; and ``(ii) 3.1875 percent multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; and ``(I) if the mortgagor is part of a household with an annual income that is equal to or greater than 150 percent but less than 160 percent of the area median income, the difference between-- ``(i) the interest rate charged by the mortgagee associated with such mortgage multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12; and ``(ii) 3.5 percent multiplied by the amount of the outstanding principal obligation divided by 365 and then multiplied by 12. ``(2) Exception.-- ``(A) In general.--The Secretary shall not provide an interest rate subsidy to a mortgagee associated with a mortgage insured under this section if the none of the mortgagors associated with such mortgage are using property securing the mortgage as their primary residence. ``(B) Certification.--Each mortgagor associated with a mortgage insured under this section shall certify to the Secretary not less than once each year whether such mortgagor is using the using property securing the mortgage as their primary residence. ``(d) Premium Charges.-- ``(1) Initial premium charge.--The Secretary shall require a premium charge for the insurance of each mortgage under this section that is equal to 1 percent of the amount of the principal obligation of the mortgage outstanding at the time insurance is provided. ``(2) Annual premium charges.--The Secretary shall, each year, require an annual charge for the insurance of each mortgage under this section that is equal to 0.35 percent of the amount of the principal obligation of the mortgage outstanding, without taking into account delinquent payments or prepayments. ``(3) Payments.--Premium charges and annual charges under this subsection shall be payable by the mortgagee, either in cash or in debentures issued by the Secretary under this section at par plus accrued interest, in such manner as may be prescribed by the Secretary. ``(4) Accepting for insurance.--If the Secretary finds, upon the presentation of a mortgage for insurance and the tender of the initial premium charge or charges so require, that the mortgage complies with the provisions of this section, such mortgage may be accepted for insurance by endorsement or otherwise as the Secretary may prescribe. ``(e) Release of Mortgagor From Liability.--The Secretary may, at any time under such terms and conditions as he may prescribe, consent to the release of the mortgagor from his liability under the mortgage or the credit instrument secured thereby, or consent to the release of parts of the mortgaged property from the lien of the mortgage. ``(f) Incontestability.--Any contract of insurance executed by the Secretary under this section shall be conclusive evidence of the eligibility of the mortgage for insurance, and the validity of any contract of insurance so executed shall be incontestable in the hands of an approved mortgagee from the date of the execution of such contract, except for fraud or misrepresentation on the part of such approved mortgagee. ``(g) Entitlement to Benefits of Insurance.--In any case in which the mortgagee under a mortgage insured under this section shall have foreclosed and taken possession of the mortgaged property in accordance with the regulations of, and within a period to be determined by, the Secretary, or shall, with the consent of the Secretary, have otherwise acquired such property from the mortgagor after default, the mortgagee shall be entitled to receive the benefits of the insurance as provided in section 204(a) of this Act with respect to mortgages insured under this section. ``(h) Application of Section 204.--Subsections (c), (d), (e), (f), (g), (h), (j), and (k) of section 204 of this Act shall be applicable to mortgages insured under this section except that all references therein to the Mutual Mortgage Insurance Fund or the Fund shall be construed to refer to the General Insurance Fund, and all references therein to section 203 shall be construed to refer to this section: Provided, That debentures issued in connection with mortgages insured under this section shall have the same tax exemption as debentures issued in connection with mortgages insured under this section. ``(i) Authorization of Appropriations.-- ``(1) In general.--There is authorized to be appropriated not more than $5,000,000,000 each fiscal year to carry out this section. ``(2) Update of amount.--The amount in paragraph (1) shall be updated each year to reflect any changes in the consumer price index.''. (b) Approved Mortgagees.--The Secretary of Housing and Urban Development shall, not later than 180 days after the date of the enactment of this Act, publish a list of mortgagees approved by the Secretary pursuant to section 203A of the National Housing Act. (c) Conforming Amendments.--Title II of the National Housing Act (12 U.S.C. 1707 et seq.) is amended-- (1) in section 201, by striking ``As used in section 203'' and inserting ``As used in section 203 and section 203A''; (2) in section 202(a)(1), by striking ``insured under section 203'' and inserting ``insured under section 203 and section 203A''; (3) in section 203(r)(4), by striking ``insured under this section 203'' and inserting ``insured under this section 203 or section 203A''; (4) in section 204(a)(1) by striking ``under section 203'' and inserting ``under section 203 or section 203A''; (5) in section 204(d)-- (A) by striking ``insured under section 203 shall be'' and inserting ``insured under section 203 and section 203A shall be''; and (B) by striking ``insured under section 203 or section 207'' and inserting ``insured under section 203, section 203A, or section 207''; (6) in section 204(f), by striking ``insured under section 203'' and inserting ``insured under section 203 or section 203A''; (7) in section 204(j), by striking ``insured under section 203 (other than a mortgagee receiving insurance benefits under clause (1)(A) of the second sentence of subsection (a))'' and inserting ``insured under section 203 (other than a mortgagee receiving insurance benefits under clause (1)(A) of the second sentence of subsection (a)) or under section 203A''; (8) in section 205(d), by striking ``insured under section 203'' and inserting ``insured under section 203 or section 203A''; (9) in section 206, by striking ``insurance under section 203'' and inserting ``insurance under section 203 or section 203A''; (10) in section 207(b), by striking ``insured under section 203'' and inserting ``insured under section 203 and section 203A''; (11) in section 220(f), by striking ``insured under section 203'' and inserting ``insured under section 203 and section 203A''; (12) in section 222, by striking ``insured under section 203'' and inserting ``insured under section 203 and section 203A''; (13) in section 224, by striking ``insured under section 203 or 234'' and inserting ``insured under section 203, section 203A, or section 234''; (14) section 226 is amended by striking ``insurance under section 203'' and inserting ``insurance under section 203 or section 203A''; (15) in section 238, by striking ``insured under section 203'' and inserting ``insured under section 203 or section 203A''; and (16) section 248 is amended by striking ``premium under section 203 or under section 203A, as applicable''. <all>