REFINANCING OF SECTION 235 MORTGAGES.

SEC. 125. REFINANCING OF SECTION 235 MORTGAGES. (a) In General.—Section 235(r) of the National Housing Act is amended to read as follows: 103 STAT. 2023 “(r) (1) The Secretary is authorized, upon application of a mortgagee, to insure under this subsection a mortgage the proceeds of which are used to refinance a mortgage insured under this section. “(2) To be eligible for insurance under this subsection, a mortgage must be executed by a mortgagor meeting the requirements of paragraph (3) and shall— “(A) be a first lien on real estate held in fee simple, or on a leasehold under a lease— “(i) for not less than 99 years which is renewable; or “(ii) having a period of not less than 10 years to run beyond the maturity date of the mortgage; “(B) nave been made to, and held by, a mortgagee approved by the Secretary; “(C) be in an amount not exceeding the outstanding principal balance, including any unpaid interest, due on the mortgage being refinanced; “(D) have a maturity not exceeding the unexpired term of the mortgage being refinanced; “(E) bear an interest rate not exceeding such percent per annum on the amount of the principal obligation outstanding at any time as the Secretary finds necessary to meet the mortgage market, taking into consideration the yields on mortgages in the primary and secondary markets; to the extent that the amounts described in paragraphs (4) (A) and (B) are not otherwise paid by the Secretary, the foregoing interest rate may be increased, in the discretion of the Secretary, to compensate the mortgagee for its payment to, or on behalf of, the mortgagor of such amounts; and “(F) meet the criteria for refinancing as determined by the Secretary. “(3) Notwithstanding the provisions of subsection (h)(2), assistance payments in connection with mortgages insured under paragraph (2) shall be made only with respect to a family who is eligible for, and receiving assistance payments with respect to, the insured mortgage being refinanced. “(4) The Secretary is authorized and, to the extent provided in appropriation Acts, may pay to the mortgagor (directly, through the mortgagee, or otherwise)— “(A) an amount, as approved by the Secretary, as an incentive to the mortgagor to refinance a mortgage insured under this section; and “(B) an amount as approved by the Secretary for costs incurred in connection with the refinancing, including but not limited to discounts, loan origination fees, and closing costs. “(5) Amounts of budget authority required for assistance payments contracts with respect to mortgages insured under this subsection shall be derived from amounts recaptured from assistance payments contracts relating to mortgages that are being refinanced. For purposes of subsection (c)(3)(A), the amount of recaptured budget authority that the Secretary commits for assistance payments contracts relating to mortgages insured under this subsection shall not be construed as ‘unused’. (6) The Secretary is authorized to take any actions to identify and communicate with any mortgagor of a mortgage insured under this section to implement the refinancing of such mortgages with insurance under this subsection. The Secretary may take such actions directly, or under contract. Notwithstanding the restriction 103 STAT. 2024 of section 552a(b) of title 5 of the United States Code, upon the request of an approved mortgagee, the Secretary may disclose to such mortgagee the name and address of any mortgagor of a mortgage insured under this section that meets the criteria for refinancing, pursuant to paragraph (2)(F), and the unpaid principal balance and interest rate on such mortgage. (7) The Secretary shall implement the provisions of this subsection by a notice published in the Federal Register.”. (b) Excess Recaptured Amounts.—Section 235(c)(3)(C) of the National Housing Act is amended by inserting after the period at the end the following new sentence: “Notwithstanding the preceding sentence, any amounts of budget authority or contract authority recaptured from assistance payments contracts relating to mortgages that are being refinanced that are not required for assistance payments contracts relating to mortgages insured under this subsection, shall be rescinded.”. (c) Conforming Amendments.—Section 235 of the National Housing Act is amended— (1) in subsection (c)(1), by inserting “, other than a contract in connection with a refinancing under subsection (r),” in the second sentence after “any new contract”; (2) in subsection (c)(3)(A), by inserting “(except to the extent provided in subsection (r) for mortgages insured under such subsection)” in the second sentence after “refinanced,”; (3) in subsection (e), by striking “or (j)(7),” and inserting “(j)(7), or (r),”; (4) in subsection (h)(1)— (A) by inserting “ (other than obligations in connection with mortgages insured under subsection (r))” in the third sentence after “October 1, 1983”; (B) by inserting “(except under subsection (r))” in the sixth sentence after “under this section” the first place it appears; and (C) by inserting “(other than a contract in connection with a mortgage insured under subsection (r))” in the seventh sentence after “under this section”; (5) in subsection (h)(3), by inserting after the period at the end the following: “The preceding sentence shall not apply to contracts in connection with mortgages insured under subsection (r).”; (6) in subsection (m), by inserting “(except a mortgage insured under subsection (r))” after “No mortgage”; and (7) in subsection (n), by inserting “or to a mortgage insured under subsection (r)” before the period at the end. (d) Savings Provision.—Notwithstanding the termination of the program under section 235 pursuant to section 401(d) of the Housing and Community Development Act of 1987, the Secretary of Housing and Urban Development shall have authority to insure mortgages under section 235(r), to make assistance payments with respect to such insured mortgages, and to make any other payment or take any other action related to the refinancing of mortgages insured under section 235.