Section 1 Short title
This Act may be cited as the “Home Improvement Loan Modernization Act of 2014”.
Home Improvement Loan Modernization Act of 2014
A BILL
To amend title I of the National Housing Act to, for financing alterations, repairs, and improvements to, or conversion of, existing structures, modify premium charges and the dollar amount limitation on loans, including energy efficiency home improvements.
Sec. 2 Modification to premium charges on financing certain alterations, repairs, and improvements to, or conversions of, existing structures
Subsection (f) of section 2 of the National Housing Act (12 U.S.C. 1703(f)) is amended—
in paragraph (2), by striking “paragraph (1)” and inserting “paragraphs (1) and (3)”; and
by inserting at the end the following new paragraph:
“(3) Financing alterations, repairs, improvements, or conversions—Notwithstanding paragraphs (1) and (2), in the case of a loan, advance of credit, or purchase in connection with insurance granted under subparagraph (A)(i) or subparagraph (B) of paragraph (1), the premium charge for such insurance shall be paid by the financial institution providing the loan or advance of credit, as follows:
“(A) At the time of the making of the loan, advance of credit, or purchase, a single premium payment in an amount not to exceed 2.75 percent of the amount of the original insured principal obligation.
“(B) In addition to the premium under subparagraph (A), annual premium payments during the term of the loan, advance, or obligation purchased in an amount not exceeding 1.5 percent of the remaining insured principal balance (excluding the portion of the remaining balance attributable to the premium collected under subparagraph (A) and without taking into account delinquent payments or prepayments).
“(C) Premium charges under this paragraph shall be established in amounts that are sufficient, but do not exceed the minimum amounts necessary (as determined based upon risk to the Federal Government under existing underwriting requirements) to maintain a negative credit subsidy for the program under this section for insurance of loans, advances of credit, or purchases in connection with—
“(i) financing alterations, repairs, and improvements for single-family structures; and
“(ii) financing alterations, repairs, improvements, or conversions of an existing structure used or to be used as an apartment house or a dwelling for two or more families.
“(D) The Secretary may increase the limitations on premium payments to percentages above those set forth in subparagraphs (A) and (B), but only if necessary, and not in excess of the minimum increase necessary, to maintain a negative credit subsidy as described in subparagraph (C).”
Sec. 3 Modification to loan limitation for financing certain alterations, repairs, and improvements to, or conversions of, existing structures
Subsection (b) of section 2 of the National Housing Act (12 U.S.C. 1703(b)) is amended—
in paragraph (1)—
in subparagraph (A)(i), by striking “$25,000” and inserting “$42,000”;
in subparagraph (B)—
by striking “$60,000” and inserting “$101,888”; and
by striking “$12,000” and inserting “$20,378”; and
in the matter after and below subparagraph (G), by adding at the end the following: “The Secretary shall, by notice, annually increase the dollar amount limitation in subparagraph (A)(i) and subparagraph (B) (as such limitations may have been previously adjusted under this sentence) in accordance with the index established pursuant to paragraph (12).”; and
by adding at the end the following new paragraph:
“(12) Annual indexing of loans for financing alterations, repairs, and improvements to, or conversions of, existing structures—Not later than 1 year after the date of enactment of the Home Improvement Loan Modernization Act of 2014, the Secretary shall develop a method of indexing to annually increase the dollar amount limitations established in subparagraph (A)(i) and subparagraph (B) of paragraph (1). Such index shall be based on the Consumer Price Index for all urban consumers (CPI–U) computed by the Bureau of Labor Statistics.”
Sec. 4 Modification to loan limitation for energy efficiency home improvements
Subsection (b) of section 2 of the National Housing Act (12 U.S.C. 1703(b)), as amended by section 2 of this Act, is further amended by adding at the end the following new paragraph:
“(13) The dollar amount limitations otherwise applicable under subparagraph (A)(i) and subparagraph (B) of paragraph (1) (as adjusted by paragraph (12)) may be increased up to 150 percent of such limitation if at least half of the amount will be used for energy conserving improvements or the installation of solar energy systems (as defined in the last paragraph of section 2(a) of this Act).”