PREPURCHASE COUNSELING REQUIREMENT.

SEC. 506. PREPURCHASE COUNSELING REQUIREMENT. (a) In general.—Section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)) is amended by inserting at the end the following new undesignated paragraph: “Notwithstanding any other provision of this paragraph, the Secretary may not insure, or enter into a commitment to insure, a mortgage under this section that is executed by a first-time homebuyer and that involves a principal obligation (including such initial service charges, appraisal, inspection, and other fees as the Secretary shall approve) in excess of 97 percent of the appraised value of the property unless the mortgagor has completed a program of counseling with respect to the responsibilities and financial management involved in homeownership that is approved by the Secretary; except that the Secretary may, in the discretion of the Secretary, waive the applicability of this requirement”. (b) Effective Date.—The amendment made by subsection (a) shall apply to mortgages for which commitments for insurance 106 STAT. 3782are issued after the expiration of the 12-month period beginning on the date of the enactment of this Act.