12 U.S.C. § 1701z–16 — Energy efficient mortgages pilot program
submitted 34 years ago by Pub. L. 102-486 to r/title-12-BANKS-AND-BANKING · 1,103 words · no verdicts yet
This section creates an energy-efficient mortgage pilot program in five States and sets its eligibility, loan, promotion, training, reporting, and expansion rules. It defines key terms and authorizes necessary appropriations.
(a)(1) Within six months after October 24, 1992, the Secretary must establish an energy-efficient mortgage pilot program in five States to promote buying existing energy-efficient residential buildings and installing cost-effective improvements in existing residential buildings. (2) Where applicable: (A) a lender must originate a title II National Housing Act-insured loan under applicable requirements; (B) the base application must be approved if income and credit* are satisfactory; (C) improvement costs may not exceed the greater of 5 percent of property value, capped at 5 percent of the section 203(b)(2)(A) limit, or 2 percent of the section 203(b)(2)(B) limit; and (D) mortgages insured under this section in a fiscal year may not exceed 5 percent of the preceding fiscal year’s title II mortgages for one- to four-family homes. (3) Mortgagees must be authorized to let the final loan exceed title II limits by up to 100 percent of improvement cost when requested before base-loan funding; hold improvement funds in escrow until installation; and transfer or sell the mortgage to the appropriate secondary-market agency after issuance but before installation. (4) The Secretary must promote participation by informing lending agencies and authorities, requiring written notice to applicants in participating States, and requiring each title II applicant there to sign that the requirements and benefits were explained. (5) Within nine months after October 24, 1992, the Secretary, consulting the Energy Secretary, must establish training for relevant lending, real-estate, and other personnel. (6) Within 18 months, the Secretary must report on implementation and effectiveness and assess nationwide expansion. (b) Within two years after implementation, the Secretary must expand the program nationwide and include new housing, unless the Secretary determines that either expansion would not be practicable. If the Secretary makes that determination, the Secretary must submit to Congress, before the period ends, a report explaining why either expansion would not be practicable. (c) “Base loan” means a qualifying title II or title 38 mortgage that excludes cost-effective energy improvements. “Cost-effective” means the present-value cost of improvements, including maintenance and repair, is less than the present value of energy saved over their useful life when all improvement cost is added to the base loan; a suitable home-energy-rating report or another technically accurate method must determine this. “Energy efficient mortgage” means a mortgage recognizing savings from cost-effective construction or improvements, including listed solar, insulation, and glazing improvements, so a borrower otherwise qualified for the base loan is not disqualified because of those expenditures. “Residential building” means an attached or unattached single-family residence. (d) This section does not affect or replace or terminate other HUD energy-efficient-mortgage programs. (e) Within 180 days after October 24, 1992, the Secretary must issue necessary regulations after notice and public comment under title 5 section 553, despite the specified exceptions. (f) Such sums as necessary are authorized to be appropriated.
Not later than 6 months after October 24, 1992, the Secretary of Housing and Urban Development (hereafter referred to as the “Secretary”) shall establish an energy efficient mortgage pilot program in 5 States, to promote the purchase of existing energy efficient residential buildings and the installation of cost-effective improvements in existing residential buildings.
The pilot program established under this subsection shall include the following criteria, where applicable:
The lender shall originate a housing loan that is insured under title II of the National Housing Act [12 U.S.C. 1707 et seq.] in accordance with the applicable requirements.
The mortgagor’s base loan application shall be approved if the mortgagor’s income and credit* record is found to be satisfactory.
The cost of cost-effective energy efficiency improvements shall not exceed the greater of—
5 percent of the property value (not to exceed 5 percent of the limit established under section 203(b)(2)(A)) of the National Housing Act (12 U.S.C. 1709(b)(2)(A); 1 or
2 percent of the limit established under section 203(b)(2)(B) of such Act [12 U.S.C. 1709(b)(2)(B)].
In any fiscal year, the aggregate number of mortgages insured pursuant to this section may not exceed 5 percent of the aggregate number of mortgages for 1- to 4-family residences insured by the Secretary of Housing and Urban Development under title II of the National Housing Act (12 U.S.C. 1707 et seq.) during the preceding fiscal year.
In granting mortgages under the pilot program established pursuant to this subsection, the Secretary shall grant mortgagees the authority—
to permit the final loan amount to exceed the loan limits established under title II of the National Housing Act [12 U.S.C. 1707 et seq.] by an amount not to exceed 100 percent of the cost of the cost-effective energy efficiency improvements, if the mortgagor’s request to add the cost of such improvements is received by the mortgagee prior to funding of the base loan;
to hold in escrow all funds provided to the mortgagor to undertake the energy efficiency improvements until the efficiency improvements are actually installed; and
to transfer or sell the energy efficient mortgage to the appropriate secondary market agency, after the mortgage is issued, but before the energy efficiency improvements are actually installed.
The Secretary shall encourage participation in the energy efficient mortgage pilot program by—
making available information to lending agencies and other appropriate authorities regarding the availability and benefits of energy efficient mortgages;
requiring mortgagees and designated lending authorities to provide written notice of the availability and benefits of the pilot program to mortgagors applying for financing in those States designated by the Secretary as participating under the pilot program; and
requiring each applicant for a mortgage insured under title II of the National Housing Act [12 U.S.C. 1707 et seq.] in those States participating under the pilot program to sign a statement that such applicant has been informed of the program requirements and understands the benefits of energy efficient mortgages.
Not later than 9 months after October 24, 1992, the Secretary, in consultation with the Secretary of Energy, shall establish and implement a program for training personnel at relevant lending agencies, real estate companies, and other appropriate organizations regarding the benefits of energy efficient mortgages and the operation of the pilot program under this subsection.
Not later than 18 months after October 24, 1992, the Secretary shall prepare and submit a report to the Congress describing the effectiveness and implementation of the energy efficient mortgage pilot program as described under this subsection, and assessing the potential for expanding the pilot program nationwide.
Not later than the expiration of the 2-year period beginning on the date of the implementation of the energy efficient mortgage pilot program under this section, the Secretary of Housing and Urban Development shall expand the pilot program on a nationwide basis and shall expand the program to include new residential housing, unless the Secretary determines that either such expansion would not be practicable in which case the Secretary shall submit to the Congress, before the expiration of such period, a report explaining why either expansion would not be practicable.
For purposes of this section:
The term “base loan” means any mortgage loan for a residential building eligible for insurance under title II of the National Housing Act [12 U.S.C. 1707 et seq.] or title 38 that does not include the cost of cost-effective energy improvements.
The term “cost-effective” means, with respect to energy efficiency improvements to a residential building, improvements that result in the total present value cost of the improvements (including any maintenance and repair expenses) being less than the total present value of the energy saved over the useful life of the improvement, when 100 percent of the cost of improvements is added to the base loan. For purposes of this paragraph, savings and cost-effectiveness shall be determined pursuant to a home energy rating report sufficient for purposes of the Federal National Mortgage Association and the Federal Home Loan Mortgage Corporation, or by other technically accurate methods.
The term “energy efficient mortgage” means a mortgage on a residential building that recognizes the energy savings of a home that has cost-effective energy saving construction or improvements (including solar water heaters, solar-assisted air conditioners and ventilators, super-insulation, and insulating glass and film) and that has the effect of not disqualifying a borrower who, but for the expenditures on energy saving construction or improvements, would otherwise have qualified for a base loan.
The term “residential building” means any attached or unattached single family residence.
This section may not be construed to affect any other programs of the Secretary of Housing and Urban Development for energy-efficient mortgages. The pilot program carried out under this section shall not replace or result in the termination of such other programs.
The Secretary shall issue any regulations necessary to carry out this section not later than the expiration of the 180-day period beginning on October 24, 1992. The regulations shall be issued after notice and opportunity for public comment pursuant to the provisions of section 553 of title 5 (notwithstanding subsections (a)(2), (b)(B), and (d)(3) of such section).
There are authorized to be appropriated such sums as may be necessary to carry out this section.
Source credit: (Pub. L. 102–486, title I, § 106, Oct. 24, 1992, 106 Stat. 2792; Pub. L. 110–289, div. B, title I, § 2123, July 30, 2008, 122 Stat. 2839.)
- 1992Enacted · Pub. L. 102-486 · 106 Stat. 2792
- 2008Amended · Pub. L. 110-289 · 122 Stat. 2839
A history note hasn’t been published yet. The record shows enactment by Pub. L. 102-486 on 1992-10-24.
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