| Home > 106th Congressional Bills > S. 1452 (es) To modernize the requirements under the National Manufactured Housing [Engrossed in Senate] ...
S. 1452 (es) To modernize the requirements under the National Manufactured Housing [Engrossed in Senate] ...
``There are authorized to be appropriated to the Department of Housing and Urban Development for grants under this title such sums as may be necessary for each of fiscal years 2001, 2002, 2003, 2004, and 2005.''. SEC. 514. LOAN GUARANTEES. Subtitle E of title I of the Housing and Community Development Act of 1992 is amended by inserting after section 184 (12 U.S.C. 1715z-13a) the following: ``SEC. 184A. LOAN GUARANTEES FOR NATIVE HAWAIIAN HOUSING. ``(a) Definitions.--In this section: ``(1) Department of hawaiian home lands.--The term `Department of Hawaiian Home Lands' means the agency or department of the government of the State of Hawaii that is responsible for the administration of the Hawaiian Homes Commission Act, 1920 (42 Stat. 108 et seq.). ``(2) Eligible entity.--The term `eligible entity' means a Native Hawaiian family, the Department of Hawaiian Home Lands, the Office of Hawaiian Affairs, and private nonprofit or private for-profit organizations experienced in the planning and development of affordable housing for Native Hawaiians. ``(3) Family.--The term `family' means one or more persons maintaining a household, as the Secretary shall by regulation provide. ``(4) Guarantee fund.--The term `Guarantee Fund' means the Native Hawaiian Housing Loan Guarantee Fund established under subsection (i). ``(5) Hawaiian home lands.--The term `Hawaiian Home Lands' means lands that-- ``(A) have the status of Hawaiian Home Lands under section 204 of the Hawaiian Homes Commission Act (42 Stat. 110); or ``(B) are acquired pursuant to that Act. ``(6) Native hawaiian.--The term `Native Hawaiian' means any individual who is-- ``(A) a citizen of the United States; and ``(B) a descendant of the aboriginal people, who, prior to 1778, occupied and exercised sovereignty in the area that currently constitutes the State of Hawaii, as evidenced by-- ``(i) genealogical records; ``(ii) verification by kupuna (elders) or kama'aina (long-term community residents); or ``(iii) birth records of the State of Hawaii. ``(7) Office of hawaiian affairs.--The term `Office of Hawaiian Affairs' means the entity of that name established under the constitution of the State of Hawaii. ``(b) Authority.--To provide access to sources of private financing to Native Hawaiian families who otherwise could not acquire housing financing because of the unique legal status of the Hawaiian Home Lands or as a result of a lack of access to private financial markets, the Secretary may guarantee an amount not to exceed 100 percent of the unpaid principal and interest that is due on an eligible loan under subsection (b). ``(c) Eligible Loans.--Under this section, a loan is an eligible loan if that loan meets the following requirements: ``(1) Eligible borrowers.--The loan is made only to a borrower who is-- ``(A) a Native Hawaiian family; ``(B) the Department of Hawaiian Home Lands; ``(C) the Office of Hawaiian Affairs; or ``(D) a private nonprofit organization experienced in the planning and development of affordable housing for Native Hawaiians. ``(2) Eligible housing.-- ``(A) In general.--The loan will be used to construct, acquire, or rehabilitate not more than 4- family dwellings that are standard housing and are located on Hawaiian Home Lands for which a housing plan described in subparagraph (B) applies. ``(B) Housing plan.--A housing plan described in this subparagraph is a housing plan that-- ``(i) has been submitted and approved by the Secretary under section 803 of the Native American Housing Assistance and Self- Determination Act of 1996; and ``(ii) provides for the use of loan guarantees under this section to provide affordable homeownership housing on Hawaiian Home Lands. ``(3) Security.--The loan may be secured by any collateral authorized under applicable Federal or State law. ``(4) Lenders.-- ``(A) In general.--The loan shall be made only by a lender approved by, and meeting qualifications established by, the Secretary, including any lender described in subparagraph (B), except that a loan otherwise insured or guaranteed by an agency of the Federal Government or made by the Department of Hawaiian Home Lands from amounts borrowed from the United States shall not be eligible for a guarantee under this section. ``(B) Approval.--The following lenders shall be considered to be lenders that have been approved by the Secretary: ``(i) Any mortgagee approved by the Secretary for participation in the single family mortgage insurance program under title II of the National Housing Act (12 U.S.C.A. 1707 et seq.). ``(ii) Any lender that makes housing loans under chapter 37 of title 38, United States Code, that are automatically guaranteed under section 3702(d) of title 38, United States Code. ``(iii) Any lender approved by the Secretary of Agriculture to make guaranteed loans for single family housing under the Housing Act of 1949 (42 U.S.C.A. 1441 et seq.). ``(iv) Any other lender that is supervised, approved, regulated, or insured by any agency of the Federal Government. ``(5) Terms.--The loan shall-- ``(A) be made for a term not exceeding 30 years; ``(B) bear interest (exclusive of the guarantee fee under subsection (d) and service charges, if any) at a rate agreed upon by the borrower and the lender and determined by the Secretary to be reasonable, but not to exceed the rate generally charged in the area (as determined by the Secretary) for home mortgage loans not guaranteed or insured by any agency or instrumentality of the Federal Government; ``(C) involve a principal obligation not exceeding-- ``(i) 97.75 percent of the appraised value of the property as of the date the loan is accepted for guarantee (or 98.75 percent if the value of the property is $50,000 or less); or ``(ii) the amount approved by the Secretary under this section; and ``(D) involve a payment on account of the property-- ``(i) in cash or its equivalent; or ``(ii) through the value of any improvements to the property made through the skilled or unskilled labor of the borrower, as the Secretary shall provide. ``(d) Certificate of Guarantee.-- ``(1) Approval process.-- ``(A) In general.--Before the Secretary approves any loan for guarantee under this section, the lender shall submit the application for the loan to the Secretary for examination. ``(B) Approval.--If the Secretary approves the application submitted under subparagraph (A), the Secretary shall issue a certificate under this subsection as evidence of the loan guarantee approved. ``(2) Standard for approval.--The Secretary may approve a loan for guarantee under this section and issue a certificate under this subsection only if the Secretary determines that there is a reasonable prospect of repayment of the loan. ``(3) Effect.-- ``(A) In general.--A certificate of guarantee issued under this subsection by the Secretary shall be conclusive evidence of the eligibility of the loan for guarantee under this section and the amount of that guarantee. ``(B) Evidence.--The evidence referred to in subparagraph (A) shall be incontestable in the hands of the bearer. ``(C) Full faith and credit.--The full faith and credit of the United States is pledged to the payment of all amounts agreed to be paid by the Secretary as security for the obligations made by the Secretary under this section. ``(4) Fraud and misrepresentation.--This subsection may not be construed-- ``(A) to preclude the Secretary from establishing defenses against the original lender based on fraud or material misrepresentation; or ``(B) to bar the Secretary from establishing by regulations that are on the date of issuance or disbursement, whichever is earlier, partial defenses to the amount payable on the guarantee. ``(e) Guarantee Fee.-- ``(1) In general.--The Secretary shall fix and collect a guarantee fee for the guarantee of a loan under this section, which may not exceed the amount equal to 1 percent of the principal obligation of the loan. ``(2) Payment.--The fee under this subsection shall-- ``(A) be paid by the lender at time of issuance of the guarantee; and ``(B) be adequate, in the determination of the Secretary, to cover expenses and probable losses. ``(3) Deposit.--The Secretary shall deposit any fees collected under this subsection in the Native Hawaiian Housing Loan Guarantee Fund established under subsection (j). ``(f) Liability Under Guarantee.--The liability under a guarantee provided under this section shall decrease or increase on a pro rata basis according to any decrease or increase in the amount of the unpaid obligation under the provisions of the loan agreement involved. ``(g) Transfer and Assumption.--Notwithstanding any other provision of law, any loan guaranteed under this section, including the security given for the loan, may be sold or assigned by the lender to any financial institution subject to examination and supervision by an agency of the Federal Government or of any State or the District of Columbia. ``(h) Disqualification of Lenders and Civil Money Penalties.-- ``(1) In general.-- ``(A) Grounds for action.--The Secretary may take action under subparagraph (B) if the Secretary determines that any lender or holder of a guarantee certificate under subsection (c)-- ``(i) has failed-- ``(I) to maintain adequate accounting records; ``(II) to service adequately loans guaranteed under this section; or ``(III) to exercise proper credit or underwriting judgment; or ``(ii) has engaged in practices otherwise detrimental to the interest of a borrower or the United States. ``(B) Actions.--Upon a determination by the Secretary that a holder of a guarantee certificate under subsection (c) has failed to carry out an activity described in subparagraph (A)(i) or has engaged in practices described in subparagraph (A)(ii), the Secretary may-- ``(i) refuse, either temporarily or permanently, to guarantee any further loans made by such lender or holder; ``(ii) bar such lender or holder from acquiring additional loans guaranteed under this section; and ``(iii) require that such lender or holder assume not less than 10 percent of any loss on further loans made or held by the lender or holder that are guaranteed under this section. ``(2) Civil money penalties for intentional violations.-- ``(A) In general.--The Secretary may impose a civil monetary penalty on a lender or holder of a guarantee certificate under subsection (d) if the Secretary determines that the holder or lender has intentionally failed-- ``(i) to maintain adequate accounting records; ``(ii) to adequately service loans guaranteed under this section; or ``(iii) to exercise proper credit or underwriting judgment. ``(B) Penalties.--A civil monetary penalty imposed under this paragraph shall be imposed in the manner and be in an amount provided under section 536 of the National Housing Act (12 U.S.C.A. 1735f-1) with respect to mortgagees and lenders under that Act. ``(3) Payment on loans made in good faith.--Notwithstanding paragraphs (1) and (2), if a loan was made in good faith, the Secretary may not refuse to pay a lender or holder of a valid guarantee on that loan, without regard to whether the lender or holder is barred under this subsection. ``(i) Payment Under Guarantee.-- ``(1) Lender options.-- ``(A) In general.-- ``(i) Notification.--If a borrower on a loan guaranteed under this section defaults on the loan, the holder of the guarantee certificate shall provide written notice of the default to the Secretary. ``(ii) Payment.--Upon providing the notice required under clause (i), the holder of the guarantee certificate shall be entitled to payment under the guarantee (subject to the provisions of this section) and may proceed to obtain payment in one of the following manners: ``(I) Foreclosure.-- ``(aa) In general.--The holder of the certificate may initiate foreclosure proceedings (after providing written notice of that action to the Secretary). ``(bb) Payment.--Upon a final order by the court authorizing foreclosure and submission to the Secretary of a claim for payment under the guarantee, the Secretary shall pay to the holder of the certificate the pro rata portion of the amount guaranteed (as determined pursuant to subsection (f)) plus reasonable fees and expenses as approved by the Secretary. ``(cc) Subrogation.--The rights of the Secretary shall be subrogated to the rights of the holder of the guarantee. The holder shall assign the obligation and security to the Secretary. ``(II) No foreclosure.-- ``(aa) In general.--Without seeking foreclosure (or in any
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