credit assistance

credit assistance Sec. 102. (a) Title II of the National Housing Act is amended by adding after section 236 (as added by section 201 of this Act) the following new section: “special mortgage insurance assistance “Sec. 237. (a) The purpose of this section is to help provide adequate housing for families of low and moderate income, including 1 hose 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 203, 220, 221, 234, or 235(i) (4), but who, through the incentive of homeownership and counseling assistance, appear to be aide to achieve homeownership. “(b) The Secretary is authorized upon application by the mortgagee to insure under this section any mortgage meeting the requirements of this section. “(c) To be eligible for insurance under this section, a mortgage shall— “(1) meet the requirements of section 203 (except subsection (m)) 220(d)(3)(A), 221(d) (2), 221(h)(5), 221(i), 234(e), or 235(j)(4), 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 $15,000: Provided, That the Secretary may increase the amount to not exceed $17,500 in any geographical area whore he finds that cost levels so require: Provided further, That no mortgage meeting the requirements of section 203(h) or 203 (i) shall lie 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 203, 220, 221, 234, or 235(j)(4), 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), 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, 82 Stat. 486because of the character of their 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) The Secretary shall give preference in approving mortgage insurance applications under this section 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 teen displaced from federally assisted urban renewal areas. “(e) 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) The aggregate principal balance of all mortgages insured under this section and outstanding at one time shall not exceed $200,000,000. “(g) There are authorized to be appropriated such sums as may be necessary to carry out the provisions of subsection (e) of this section.” (b) Section 220 of the National Housing Act is amended by inserting “235(i), 237,” after “234,”.