SPECIAL MORTGAGE INSURANCE ASSISTANCE.

SEC. 599F. SPECIAL MORTGAGE INSURANCE ASSISTANCE. (a) In General.— Section 237 of the National Housing Act (12 U.S.C. 1715z-2) is amended— (1) in subsection (b), by inserting “not more than 26 percent of the total principal obligation (including such initial service charges, and such appraisal, inspection, and other fees as the Secretary shall approve) of” before “any mortgage”; (2) in paragraph (c)(2) by striking “$18,000:” and all that follows through the end of the paragraph and inserting “$70,000;”; (3) in paragraph (c)(3)— (A) by inserting “, prior to and during the 12 months immediately following the purchase of the property, from a community development financial institution under section 103(5) of the Community Development Banking and Financial Institutions Act of 1994” after “budget, debt management, and related counseling”; and (B) by striking “and” at the end; (4) in paragraph (c)(4)— (A) by striking “25” and inserting “36”; and (B) by striking the period and inserting “; and”; (5) in subsection (c), by adding at the end the following new paragraphs: “(5) require the mortgagor to be subject, if necessary, to a default mitigation effort undertaken by an intermediary community development financial institution under section 103(5) of the Community Development Banking and Financial Institutions Act of 1994, that is acting as a sponsor and pass- through of insurance under section 203 and is approved by the Secretary; “(6) involve a total principal obligation (including such initial service charges, and such appraisal, inspection, and other fees as the Secretary shall approve) that is not more than 90 percent of the value of the property for which the mortgage is provided; and “(7) involve a total principal obligation (including such initial service charges, and such appraisal, inspection, and other fees as the Secretary shall approve) in which the mortgagor has equity (as defined by the Secretary) of not less than 10 percent and such equity shall be subordinate to the interest of the Secretary in the mortgaged property.”; (6) in subsection (d), by striking “and (2)” and inserting “(2) to families living in empowerment zones and enterprise communities (as those terms are defined in section 1393(b) of the Internal Revenue Code of 1986 (26 U.S.C. 1393(b)) who are eligible for homeownership assistance, and (3)”; (7) in subsection (e), by striking “public or private organizations” and inserting “community development financial institutions under section 103(5) of the Community Development Banking and Financial Institutions Act of 1994”; (8) in subsection (f), by striking “all mortgages” and inserting “the portions of mortgages”; (9) by redesignating subsection (g) as subsection (j); and (10) by inserting after subsection (f), the following new subsections: “(g) Mortgages insured under this section shall be subject to an insurance premium fee of not more than 1.25 percent of the 112 STAT. 2666total mortgage principal obligation (including such initial service charges, and such appraisal, inspection, and other fees as the Secretary shall approve). “(h) Before insuring a mortgage under this section, the Secretary shall enter into such contracts or other agreements as may be necessary to ensure that the mortgagee or other holder of the mortgage shall assume not less than 10 percent and not more than 50 percent of any loss on the insured mortgage, subject to any reasonable limit on the liability of the mortgagee or holder of the mortgage that may be specified in the event of unusual or catastrophic losses that may be incurred by any one mortgagee or mortgage holder. “(i) No guarantees may be issued under section 306(g) for the timely payment of interest or principal on securities backed, in whole or in part, by mortgages insured under this section.”. (b) Effective Date.— The amendments under by this section are made on, and shall apply beginning upon, the date of the enactment of this Act.