12 U.S.C. § 1701x — Assistance with respect to housing for

Page 475 TITLE 12—BANKS AND BANKING § 1701x housing more attractive, but to make it better suited to the needs of occupants. The Congress declares that in the administra- tion of housing programs which assist in the provision of housing for low and moderate in- come families, emphasis should be given to en- couraging good design as an essential compo- nent of such housing and to developing housing which will be of such quality as to reflect its im- portant relationship to the architectural stand- ards of the neighborhood and community in which it is situated, consistent with prudent budgeting. (Pub. L. 90–448, § 4, Aug. 1, 1968, 82 Stat. 477.) Editorial Notes CODIFICATION Section was enacted as part of the Housing and Urban Development Act of 1968, and not as part of the Na- tional Housing Act which comprises this chapter. § 1701w. Budget, debt management, and related counseling services for mortgagors; author- ization of appropriations The Secretary of Housing and Urban Develop- ment is authorized to provide, or contract with public or private organizations to provide, such budget, debt management, and related coun- seling services to mortgagors whose mortgages are insured under section 1715z(i) or (j)(4) of this title as he determines to be necessary to assist such mortgagors in meeting the responsibilities of homeownership. There are authorized to be appropriated such sums as may be necessary to carry out the provisions of this section. (Pub. L. 90–448, title I, § 101(e), Aug. 1, 1968, 82 Stat. 484.) Editorial Notes CODIFICATION Section was enacted as part of the Housing and Urban Development Act of 1968, and not as part of the Na- tional Housing Act which comprises this chapter. § 1701x. Assistance with respect to housing for low- and moderate-income families (a) Authorization to provide information, advice, and technical assistance; scope of assistance; authorization of appropriations (1) The Secretary is authorized to provide, or contract with public or private organizations to provide, information, advice, and technical as- sistance, including but not limited to— (i) the assembly, correlation, publication, and dissemination of information with respect to the construction, rehabilitation, and oper- ation of low- and moderate-income housing; (ii) the provision of advice and technical as- sistance to public bodies or to nonprofit or co- operative organizations with respect to the construction, rehabilitation, and operation of low- and moderate-income housing, including assistance with respect to self-help and mu- tual self-help programs; (iii) counseling and advice to tenants and homeowners with respect to property mainte- nance, financial management, and such other matters as may be appropriate to assist them in improving their housing conditions and in meeting the responsibilities of tenancy or homeownership; and (iv) the provision of technical assistance to communities, particularly smaller commu- nities, to assist such communities in planning, developing, and administering Community De- velopment Programs pursuant to title I of the Housing and Community Development Act of 1974 [42 U.S.C. 5301 et seq.]. (2) The Secretary (A) shall provide the services described in clause (iii) of paragraph (1) for homeowners assisted under section 235 of the National Housing Act [12 U.S.C. 1715z]; (B) shall, in consultation with the Secretary of Agri- culture, provide such services for borrowers who are first-time homebuyers with guaranteed loans under section 502(h) of the Housing Act of 1949 [42 U.S.C. 1472(h)]; and (C) may provide such services for other owners of single family dwell- ing units insured under title II of the National Housing Act [12 U.S.C. 1707 et seq.] or guaran- teed or insured under chapter 37 of title 38. For purposes of this paragraph and clause (iii) of paragraph (1), the Secretary may provide the services described in such clause directly or may enter into contracts with, make grants to, and provide other types of assistance to private or public organizations with special competence and knowledge in counseling low- and moderate- income families to provide such services. (3) There is authorized to be appropriated for the purposes of this subsection, without fiscal year limitation, such sums as may be necessary; except that for such purposes there are author- ized to be appropriated $6,025,000 for fiscal year 1993 and $6,278,050 for fiscal year 1994. Of the amounts appropriated for each of fiscal years 1993 and 1994, up to $500,000 shall be available for use for counseling and other activities in con- nection with the demonstration program under section 152 of the Housing and Community De- velopment Act of 1992. Any amounts so appro- priated shall remain available until expended. (4) HOMEOWNERSHIP AND RENTAL COUNSELING ASSISTANCE.— (A) IN GENERAL.—The Secretary shall make financial assistance available under this para- graph to HUD-approved housing counseling agencies and State housing finance agencies. (B) QUALIFIED ENTITIES.—The Secretary shall establish standards and guidelines for eligi- bility of organizations (including govern- mental and nonprofit organizations) to receive assistance under this paragraph, in accordance with subparagraph (D). (C) DISTRIBUTION.—Assistance made avail- able under this paragraph shall be distributed in a manner that encourages efficient and suc- cessful counseling programs and that ensures adequate distribution of amounts for rural areas having traditionally low levels of access to such counseling services, including areas with insufficient access to the Internet. In dis- tributing such assistance, the Secretary may give priority consideration to entities serving areas with the highest home foreclosure rates. (D) LIMITATION ON DISTRIBUTION OF ASSIST- ANCE.— (i) IN GENERAL.—None of the amounts made available under this paragraph shall be distributed to— Page 476 TITLE 12—BANKS AND BANKING § 1701x (I) any organization which has been con- victed for a violation under Federal law re- lating to an election for Federal office; or (II) any organization which employs ap- plicable individuals. (ii) DEFINITION OF APPLICABLE INDIVID- UALS.—In this subparagraph, the term ‘‘ap- plicable individual’’ means an individual who— (I) is— (aa) employed by the organization in a permanent or temporary capacity; (bb) contracted or retained by the or- ganization; or (cc) acting on behalf of, or with the ex- press or apparent authority of, the orga- nization; and (II) has been convicted for a violation under Federal law relating to an election for Federal office. (E) GRANTMAKING PROCESS.—In making as- sistance available under this paragraph, the Secretary shall consider appropriate ways of streamlining and improving the processes for grant application, review, approval, and award. (F) AUTHORIZATION OF APPROPRIATIONS.— There are authorized to be appropriated $45,000,000 for each of fiscal years 2009 through 2012 for— (i) the operations of the Office of Housing Counseling of the Department of Housing and Urban Development; (ii) the responsibilities of the Director of Housing Counseling under paragraphs (2) through (5) of subsection (g); and (iii) assistance pursuant to this paragraph for entities providing homeownership and rental counseling. (b) Loans to nonprofit organizations or public housing agencies; purpose and terms; repay- ment; authorization of appropriations; de- posit of appropriations in Low and Moderate Income Sponsor Fund (1) The Secretary is authorized to make loans to nonprofit organizations or public housing agencies for the necessary expenses, prior to construction, in planning, and obtaining financ- ing for, the rehabilitation or construction of housing for low or moderate income families under section 235 of the National Housing Act [12 U.S.C. 1715z] or any other federally assisted program. Such loans shall be made without in- terest and shall not exceed 80 per centum of the reasonable costs expected to be incurred in plan- ning, and in obtaining financing for, such hous- ing prior to the availability of financing, includ- ing, but not limited to, preliminary surveys and analyses of market needs, preliminary site engi- neering and architectural fees, site acquisition, application and mortgage commitment fees, and construction loan fees and discounts. The Sec- retary shall require repayment of loans made under this subsection, under such terms and conditions as he may require, upon completion of the project or sooner, and may cancel any part or all of a loan if he determines that it can- not be recovered from the proceeds of any per- manent loan made to finance the rehabilitation or construction of the housing. (2) The Secretary shall determine prior to the making of any loan that the nonprofit organiza- tion or public housing agency meets such re- quirements with respect to financial responsi- bility and stability as he may prescribe. (3) There are authorized to be appropriated for the purposes of this subsection not to exceed $7,500,000 for the fiscal year ending June 30, 1969, and not to exceed $10,000,000 for the fiscal year ending June 30, 1970. Any amounts so appro- priated shall remain available until expended, and any amounts authorized for any fiscal year under this paragraph but not appropriated may be appropriated for any succeeding fiscal year. (4) All funds appropriated for the purposes of this subsection shall be deposited in a fund which shall be known as the Low and Moderate Income Sponsor Fund, and which shall be avail- able without fiscal year limitation and be ad- ministered by the Secretary as a revolving fund for carrying out the purposes of this subsection. Sums received in repayment of loans made under this subsection shall be deposited in such fund. (c) Grants for homeownership counseling organi- zations (1) In general The Secretary of Housing and Urban Devel- opment may make grants— (A) to nonprofit organizations experienced in the provision of homeownership coun- seling to enable the organizations to provide homeownership counseling to eligible home- owners; and (B) to assist in the establishment of non- profit homeownership counseling organiza- tions. (2) Program requirements (A) Applications for grants under this sub- section shall be submitted in the form, and in accordance with the procedures, that the Sec- retary requires. (B) The homeownership counseling organiza- tions receiving assistance under this sub- section shall use the assistance only to pro- vide homeownership counseling to eligible homeowners. (C) The homeownership counseling provided by homeownership counseling organizations receiving assistance under this subsection shall include counseling with respect to— (i) financial management; (ii) available community resources, includ- ing public assistance programs, mortgage as- sistance programs, home repair assistance programs, utility assistance programs, food programs, and social services; and (iii) employment training and placement. (3) Availability of homeownership counseling The Secretary shall take any action that is necessary— (A) to ensure the availability throughout the United States of homeownership coun- seling from homeownership counseling orga- nizations receiving assistance under this subsection, with priority to areas that— (i) are experiencing high rates of home foreclosure and any other indicators of homeowner distress determined by the Secretary to be appropriate; Page 477 TITLE 12—BANKS AND BANKING § 1701x (ii) are not already adequately served by homeownership counseling organizations; and (iii) have a high incidence of mortgages involving principal obligations (including such initial service charges, appraisal, in- spection, and other fees as the Secretary shall approve) in excess of 97 percent of the appraised value of the properties that are insured pursuant to section 203 of the Na- tional Housing Act [12 U.S.C. 1709]; and (B) to inform the public of the availability of the homeownership counseling. (4) Eligibility for counseling A homeowner shall be eligible for home- ownership counseling under this subsection if— (A) the home loan is secured by property that is the principal residence (as defined by the Secretary) of the homeowner; (B) the home loan is not assisted under title V of the Housing Act of 1949 [42 U.S.C. 1471 et seq.]; and (C) the homeowner is, or is expected to be, unable to make payments, correct a home loan delinquency within a reasonable time, or resume full home loan payments due to a reduction in the income of the homeowner because of— (i) an involuntary loss of, or reduction in, the employment of the homeowner, the self-employment of the homeowner, or in- come from the pursuit of the occupation of the homeowner; (ii) any similar loss or reduction experi- enced by any person who contributes to the income of the homeowner; (iii) a significant reduction in the in- come of the household due to divorce or death; or (iv) a significant increase in basic ex- penses of the homeowner or an immediate family member of the homeowner (includ- ing the spouse, child, or parent for whom the homeowner provides substantial care or financial assistance) due to— (I) an unexpected or significant in- crease in medical expenses; (II) a divorce; (III) unexpected and significant dam- age to the property, the repair of which will not be covered by private or public insurance; or (IV) a large property-tax increase; or (D) the Secretary of Housing and Urban Development determines that the annual in- come of the homeowner is no greater than the annual income established by the Sec- retary as being of low- or moderate-income. (5) Notification of availability of homeowner- ship counseling (A) Notification of availability of homeowner- ship counseling (i) Requirement Except as provided in subparagraph (C), the creditor of a loan (or proposed cred- itor) shall provide notice under clause (ii) to (I) any eligible homeowner who fails to pay any amount by the date the amount is due under a home loan, and (II) any appli- cant for a mortgage described in paragraph (4). (ii) Content Notification under this subparagraph shall— (I) notify the homeowner or mortgage applicant of the availability of any homeownership counseling offered by the creditor (or proposed creditor); (II) if provided to an eligible mortgage applicant, state that completion of a counseling program is required for insur- ance pursuant to section 203 of the Na- tional Housing Act [12 U.S.C. 1709]; (III) notify the homeowner or mort- gage applicant of the availability of homeownership counseling provided by nonprofit organizations approved by the Secretary and experienced in the provi- sion of homeownership counseling, or provide the toll-free telephone number described in subparagraph (D)(i); (IV) notify the homeowner by a state- ment or notice, written in plain English by the Secretary of Housing and Urban Development, in consultation with the Secretary of Defense and the Secretary of the Treasury, explaining the mortgage and foreclosure rights of servicemembers, and the dependents of such servicemembers, under the Servicemembers Civil Relief Act (50 U.S.C. App. 501 et seq.) [now 50 U.S.C. 3901 et seq.], including the toll-free mili- tary one source number to call if servicemembers, or the dependents of such servicemembers, require further as- sistance; and (V) notify the housing or mortgage ap- plicant of the availability of mortgage software systems provided pursuant to subsection (g)(3). (B) Deadline for notification The notification required in subparagraph (A) shall be made— (i) in a manner approved by the Sec- retary; and (ii) before the expiration of the 45-day period beginning on the date on which the failure referred to in such subparagraph occurs. (C) Notification Notification under subparagraph (A) shall not be required with respect to any loan for which the eligible homeowner pays the amount overdue before the expiration of the 45-day period under subparagraph (B)(ii). (D) Administration and compliance The Secretary shall, to the extent of amounts approved in appropriation Acts, enter into an agreement with an appropriate private entity under which the entity will— (i) operate a toll-free telephone number through which any eligible homeowner can obtain a list of nonprofit organizations, which shall be updated annually, that— Page 478 TITLE 12—BANKS AND BANKING § 1701x (I) are approved by the Secretary and experienced in the provision of home- ownership counseling; and (II) serve the area in which the resi- dential property of the homeowner is lo- cated; (ii) monitor the compliance of creditors with the requirements of subparagraphs (A) and (B); and (iii) report to the Secretary not less than annually regarding the extent of compli- ance of creditors with the requirements of subparagraphs (A) and (B). (E) Report The Secretary shall submit a report to the Congress not less than annually regarding the extent of compliance of creditors with the requirements of subparagraphs (A) and (B) and the effectiveness of the entity moni- toring such compliance. The Secretary shall also include in the report any recommenda- tions for legislative action to increase the authority of the Secretary to penalize credi- tors who do not comply with such require- ments. (6) Definitions For purposes of this subsection: (A) The term ‘‘creditor’’ means a person or entity that is servicing a home loan on be- half of itself or another person or entity. (B) The term ‘‘eligible homeowner’’ means a homeowner eligible for counseling under paragraph (4). (C) The term ‘‘home loan’’ means a loan secured by a mortgage or lien on residential property. (D) The term ‘‘homeowner’’ means a per- son who is obligated under a home loan. (E) The term ‘‘residential property’’ means a 1-family residence, including a 1-family unit in a condominium project, a member- ship interest and occupancy agreement in a cooperative housing project, and a manufac- tured home and the lot on which the home is situated. (7) Regulations The Secretary shall issue any regulations that are necessary to carry out this sub- section. (8) Authorization of appropriations There are authorized to be appropriated to carry out this section $7,000,000 for fiscal year 1993 and $7,294,000 for fiscal year 1994, of which amounts $1,000,000 shall be available in each such fiscal year to carry out paragraph (5)(D). Any amount appropriated under this sub- section shall remain available until expended. (d) Prepurchase and foreclosure-prevention counseling demonstration (1) Purposes The purpose of this subsection is— (A) to reduce defaults and foreclosures on mortgage loans insured under the Federal Housing Administration single family mort- gage insurance program; (B) to encourage responsible and prudent use of such federally insured home mort- gages; (C) to assist homeowners with such feder- ally insured mortgages to retain the homes they have purchased pursuant to such mort- gages; and (D) to encourage the availability and ex- pansion of housing opportunities in connec- tion with such federally insured home mort- gages. (2) Authority The Secretary of Housing and Urban Devel- opment shall carry out a program to dem- onstrate the effectiveness of providing coordi- nated prepurchase counseling and foreclosure- prevention counseling to first-time home- buyers and homeowners in avoiding defaults and foreclosures on mortgages insured under the Federal Housing Administration single family home mortgage insurance program. (3) Grants Under the demonstration program under this subsection, the Secretary shall make grants to qualified nonprofit organizations under para- graph (4) to enable the organizations to pro- vide prepurchase counseling services to eligi- ble homebuyers and foreclosure-prevention counseling services to eligible homeowners, in counseling target areas. (4) Qualified nonprofit organizations The Secretary shall select nonprofit organi- zations to receive assistance under the dem- onstration program under this subsection based on the experience and ability of the or- ganizations in providing homeownership coun- seling and their ability to provide community- based prepurchase and foreclosure-prevention counseling under paragraphs (5) and (6) in a counseling target area. To be eligible for se- lection under this paragraph, a nonprofit orga- nization shall submit an application con- taining a proposal for providing counseling services in the form and manner required by the Secretary. (5) Prepurchase counseling (A) Mandatory participation Under the demonstration program, the Secretary shall require any eligible home- buyer who intends to purchase a home lo- cated in a counseling target area and who has applied for (as determined by the Sec- retary) a qualified mortgage (as such term is defined in paragraph (9)) on such home that involves a downpayment of less than 10 per- cent of the principal obligation of the mort- gage, to receive counseling prior to signing of a contract to purchase the home. The counseling shall include counseling with re- spect to— (i) financial management and the respon- sibilities involved in homeownership; (ii) fair housing laws and requirements; (iii) the maximum mortgage amount that the homebuyer can afford; and (iv) options, programs, and actions avail- able to the homebuyer in the event of ac- tual or potential delinquency or default. (B) Eligibility for counseling A homebuyer shall be eligible for prepurchase counseling under this paragraph if— Page 479 TITLE 12—BANKS AND BANKING § 1701x (i) the homebuyer has applied for a qualified mortgage; (ii) the homebuyer is a first-time home- buyer; and (iii) the home to be purchased under the qualified mortgage is located in a coun- seling target area. (6) Foreclosure-prevention counseling (A) Availability Under the demonstration program, the Secretary shall make counseling available for eligible homeowners who are 60 or more days delinquent with respect to a payment under a qualified mortgage on a home lo- cated within a counseling target area. The counseling shall include counseling with re- spect to options, programs, and actions available to the homeowner for resolving the delinquency or default. (B) Notification of delinquency Under the demonstration program, the Secretary shall require the creditor of any eligible homeowner who is delinquent (as de- scribed in subparagraph (A)) to send written notice by registered or certified mail within 5 days (excluding Saturdays, Sundays, and legal public holidays) after the occurrence of such delinquency— (i) notifying the homeowner of the delin- quency and the name, address, and phone number of the counseling organization for the counseling target area; and (ii) notifying any counseling organiza- tion for the counseling target area of the delinquency and the name, address, and phone number of the delinquent home- owner. (C) Coordination with emergency home- ownership counseling program The Secretary may coordinate the provi- sion of assistance under subsection (c) with the demonstration program under this sub- section. (D) Eligibility for counseling A homeowner shall be eligible for fore- closure-prevention counseling under this paragraph if— (i) the home owned by the homeowner is subject to a qualified mortgage; and (ii) such home is located in a counseling target area. (7) Scope of demonstration program (A) Designation of counseling target areas The Secretary shall designate 3 counseling target areas (as provided in subparagraph (B)), which shall be located in not less than 2 separate metropolitan areas. The Sec- retary shall provide for counseling under the demonstration program under this sub- section with respect to only such counseling target areas. (B) Counseling target areas Each counseling target area shall consist of a group of contiguous census tracts— (i) the population of which is greater than 50,000; (ii) which together constitute an identi- fiable neighborhood, area, borough, dis- trict, or region within a metropolitan area (except that this clause may not be con- strued to exclude a group of census tracts containing areas not wholly contained within a single town, city, or other polit- ical subdivision of a State); (iii) in which the average age of existing housing is greater than 20 years; and (iv) for which (I) the percentage of quali- fied mortgages on homes within the area that are foreclosed exceeds 5 percent for the calendar year preceding the year in which the area is selected as a counseling target area, or (II) the number of qualified mortgages originated on homes in such area in the calendar year preceding the calendar year in which the area is selected as a counseling target area exceeds 20 per- cent of the total number of mortgages originated on residences in the area during such year. (C) Mortgage characteristics In designating counseling target areas under subparagraph (A), the Secretary shall designate at least 1 such area that meets the requirements of subparagraph (B)(iv)(I) and at least 1 such area that meets the require- ments of subparagraph (B)(iv)(II). (D) Expansion of target areas The Secretary may expand any counseling target area during the term of the dem- onstration program, if the Secretary deter- mines that counseling can be adequately provided within such expanded area and the purposes of this subsection will be furthered by such expansion. Any such expansion shall include only groups of census tracts that are contiguous to the counseling target area ex- panded and such census tract groups shall not be subject to the provisions of subpara- graph (B). (E) Designation of control areas For purposes of determining the effective- ness of counseling under the demonstration program, the Secretary shall designate 3 control areas, each of which shall correspond to 1 of the counseling target areas des- ignated under subparagraph (A). Each con- trol area shall be located in the metropoli- tan area in which the corresponding coun- seling target area is located, shall meet the requirements of subparagraph (B), and shall be similar to such area with respect to size, age of housing stock, median income, and racial makeup of the population. Each con- trol area shall also comply with the require- ments of subclause (I) or (II) of subparagraph (B)(iv), according to the subclause with which the corresponding counseling target area complies. (8) Evaluation Each organization providing counseling under the demonstration program under this subsection shall maintain records with respect to each eligible homebuyer and eligible home- owner counseled and shall provide information Page 480 TITLE 12—BANKS AND BANKING § 1701x with respect to such counseling as the Sec- retary or the Comptroller General may re- quire. (9) Definitions For purposes of this subsection: (A) The term ‘‘control area’’ means an area designated by the Secretary under paragraph (7)(E). (B) The term ‘‘counseling target area’’ means an area designated by the Secretary under paragraph (7)(A). (C) The term ‘‘creditor’’ means a person or entity that is servicing a loan secured by a qualified mortgage on behalf of itself or an- other person or entity. (D) The term ‘‘displaced homemaker’’ means an individual who— (i) is an adult; (ii) has not worked full-time, full-year in the labor force for a number of years, but has during such years, worked primarily without remuneration to care for the home and family; and (iii) is unemployed or underemployed and is experiencing difficulty in obtaining or upgrading employment. (E) The term ‘‘downpayment’’ means the amount of purchase price of home required to be paid at or before the time of purchase. (F) The term ‘‘eligible homebuyer’’ means a homebuyer that meets the requirements under paragraph (5)(B). (G) The term ‘‘eligible homeowner’’ means a homeowner that meets the requirements under paragraph (6)(D). (H) The term ‘‘first-time homebuyer’’ means an individual who— (i) (and whose spouse) has had no owner- ship in a principal residence during the 3- year period ending on the date of purchase of the home pursuant to which counseling is provided under this subsection; (ii) is a displaced homemaker who, ex- cept for owning a residence with his or her spouse or residing in a residence owned by the spouse, meets the requirements of clause (i); or (iii) is a single parent who, except for owning a residence with his or her spouse or residing in a residence owned by the spouse while married, meets the require- ments of clause (i). (I) The term ‘‘home’’ includes any dwelling or dwelling unit eligible for a qualified mortgage, and includes a unit in a condo- minium project, a membership interest and occupancy agreement in a cooperative hous- ing project, and a manufactured home and the lot on which the home is situated. (J) The term ‘‘metropolitan area’’ means a standard metropolitan statistical area as designated by the Director of the Office of Management and Budget. (K) The term ‘‘qualified mortgage’’ means a mortgage on a 1- to 4-family home that is insured under title II of the National Hous- ing Act [12 U.S.C. 1707 et seq.]. (L) The term ‘‘Secretary’’ means the Sec- retary of Housing and Urban Development. (M) The term ‘‘single parent’’ means an in- dividual who— (i) is unmarried or legally separated from a spouse; and (ii)(I) has 1 or more minor children for whom the individual has custody or joint custody; or (II) is pregnant. (10) Regulations The Secretary may issue any regulations necessary to carry out this subsection. (11) Authorization of appropriations There are authorized to be appropriated to carry out this subsection $365,000 for fiscal year 1993 and $380,330 for fiscal year 1994. (12) Termination The demonstration program under this sub- section shall terminate at the end of fiscal year 1994. (e) Certification (1) Requirement for assistance An organization may not receive assistance for counseling activities under subsection (a)(1)(iii), (a)(2), (a)(4), (c), or (d) of this sec- tion, or under section 1701w of this title, un- less the organization, or the individuals through which the organization provides such counseling, has been certified by the Secretary under this subsection as competent to provide such counseling. (2) Standards and examination The Secretary shall, by regulation, establish standards and procedures for testing and certi- fying counselors and for certifying organiza- tions. Such standards and procedures shall re- quire, for certification of an organization, that each individual through which the organiza- tion provides counseling shall demonstrate, and, for certification of an individual, that the individual shall demonstrate, by written ex- amination (as provided under subsection (f)(4)), competence to provide counseling in each of the following areas: (A) Financial management. (B) Property maintenance. (C) Responsibilities of homeownership and tenancy. (D) Fair housing laws and requirements. (E) Housing affordability. (F) Avoidance of, and responses to, rental and mortgage delinquency and avoidance of eviction and mortgage default. (3) Requirement under HUD programs Any homeownership counseling or rental housing counseling (as such terms are defined in subsection (g)(1)) required under, or pro- vided in connection with, any program admin- istered by the Department of Housing and Urban Development shall be provided only by organizations or counselors certified by the Secretary under this subsection as competent to provide such counseling. (4) Outreach The Secretary shall take such actions as the Secretary considers appropriate to ensure that individuals and organizations providing home- Page 481 TITLE 12—BANKS AND BANKING § 1701x 1 See References in Text note below. ownership or rental housing counseling are aware of the certification requirements and standards of this subsection and of the train- ing and certification programs under sub- section (f). (5) Encouragement The Secretary shall encourage organizations engaged in providing homeownership and rent- al counseling that do not receive assistance under this section to employ organizations and individuals to provide such counseling who are certified under this subsection or meet the certification standards established under this subsection. (f) Homeownership and rental counselor training and certification programs (1) Establishment To the extent amounts are provided in ap- propriations Acts under paragraph (7), the Secretary shall contract with an appropriate entity (which may be a nonprofit organiza- tion) to carry out a program under this sub- section to train individuals to provide home- ownership and rental counseling and to admin- ister the examination under subsection (e)(2) and certify individuals under such subsection. (2) Eligibility and selection (A) Eligibility To be eligible to provide the training and certification program under this subsection, an entity shall have demonstrated experi- ence in training homeownership and rental counselors. (B) Selection The Secretary shall provide for entities meeting the requirements of subparagraph (A) to submit applications to provide the training and certification program under this subsection. The Secretary shall select an application based on the ability of the en- tity to— (i) establish the program as soon as pos- sible on a national basis, but not later than the date under paragraph (6); (ii) minimize the costs involved in estab- lishing the program; and (iii) effectively and efficiently carry out the program. (3) Training The Secretary shall require that training of counselors under the program under this sub- section be designed and coordinated to prepare individuals for successful completion of the examination for certification under subsection (e)(2). The Secretary, in consultation with the entity selected under paragraph (2)(B), shall establish the curriculum and standards for training counselors under the program. (4) Certification The entity selected under paragraph (2)(B) shall administer the examination under sub- section (e)(2) and, on behalf of the Secretary, certify individuals successfully completing the examination. The Secretary, in consultation with such entity, shall establish the content and format of the examination. (5) Fees Subject to the approval of the Secretary, the entity selected under paragraph (2)(B) may es- tablish and impose reasonable fees for partici- pation in the training provided under the pro- gram and for examination and certification under subsection (e)(2), in an amount suffi- cient to cover any costs of such activities not covered with amounts provided under para- graph (7). (6) Timing The entity selected under paragraph (2)(B) to carry out the training and certification pro- gram shall establish the program as soon as possible after such selection, and shall make training and certification available under the program on a national basis not later than the expiration of the 1-year period beginning upon such selection. (7) Authorization of appropriations There are authorized to be appropriated to carry out this subsection $2,000,000 for fiscal year 1993 and $2,084,000 for 1994. (g) Procedures and activities (1) Counseling procedures (A) In general The Secretary shall establish, coordinate, and monitor the administration by the De- partment of Housing and Urban Develop- ment of the counseling procedures for home- ownership counseling and rental housing counseling provided in connection with any program of the Department, including all re- quirements, standards, and performance measures that relate to homeownership and rental housing counseling. (B) Homeownership counseling For purposes of this subsection and as used in the provisions referred to in this subpara- graph, the term ‘‘homeownership coun- seling’’ means counseling related to home- ownership and residential mortgage loans. Such term includes counseling related to homeownership and residential mortgage loans that is provided pursuant to— (i) section 105(a)(20) of the Housing and Community Development Act of 1974 (42 U.S.C. 5305(a)(20)); (ii) in the United States Housing Act of 1937 [42 U.S.C. 1437 et seq.]— (I) section 9(e) (42 U.S.C. 1437g(e)); (II) section 8(y)(1)(D) (42 U.S.C. 1437f(y)(1)(D)); (III) section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D)); (IV) section 23(c)(4) 1 (42 U.S.C. 1437u(c)(4)); (V) section 32(e)(4) (42 U.S.C. 1437z–4(e)(4)); (VI) section 33(d)(2)(B) (42 U.S.C. 1437z–5(d)(2)(B)); (VII) sections 302(b)(6) and 303(b)(7) (42 U.S.C. 1437aaa–1(b)(6), 1437aaa–2(b)(7)); and (VIII) section 304(c)(4) (42 U.S.C. 1437aaa–3(c)(4)); Page 482 TITLE 12—BANKS AND BANKING § 1701x (iii) section 302(a)(4) of the American Homeownership and Economic Oppor- tunity Act of 2000 (42 U.S.C. 1437f note); (iv) sections 12773(b)(2) and 12808(b) of title 42; (v) this section and section 1701w of this title; (vi) section 4110(d)(2)(G) of this title; (vii) sections 12872(b)(6), 12873(b)(7), 12874(c)(4), 12892(b)(6), and 12893(b)(6) of title 42; (viii) section 11408(b)(1)(F)(iii) 1 of title 42; (ix) sections 202(3) 1 and 810(b)(2)(A) 1 of the Native American Housing and Self-De- termination Act of 1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); (x) in the National Housing Act [12 U.S.C. 1701 et seq.]— (I) in section 203 (12 U.S.C. 1709), the penultimate undesignated paragraph of paragraph (2) of subsection (b), sub- section (c)(2)(A), and subsection (r)(4); (II) subsections (a) and (c)(3) of section 237; 1 and (III) subsections (d)(2)(B) and (m)(1) of section 255 (12 U.S.C. 1715z–20); (xi) section 502(h)(4)(B) of the Housing Act of 1949 (42 U.S.C. 1472(h)(4)(B)); (xii) section 1701z–7 of this title; and (xiii) section 1701z–16 of this title. (C) Rental housing counseling For purposes of this subsection, the term ‘‘rental housing counseling’’ means coun- seling related to rental of residential prop- erty, which may include counseling regard- ing future homeownership opportunities and providing referrals for renters and prospec- tive renters to entities providing counseling and shall include counseling related to such topics that is provided pursuant to— (i) section 105(a)(20) of the Housing and Community Development Act of 1974 (42 U.S.C. 5305(a)(20)); (ii) in the United States Housing Act of 1937— (I) section 9(e) (42 U.S.C. 1437g(e)); (II) section 18(a)(4)(D) (42 U.S.C. 1437p(a)(4)(D)); (III) section 23(c)(4) 1 (42 U.S.C. 1437u(c)(4)); (IV) section 32(e)(4) (42 U.S.C. 1437z–4(e)(4)); (V) section 33(d)(2)(B) (42 U.S.C. 1437z–5(d)(2)(B)); and (VI) section 302(b)(6) (42 U.S.C. 1437aaa–1(b)(6)); (iii) section 12773(b)(2) of title 42; (iv) this section; (v) section 12872(b)(6) of title 42; (vi) section 11408(b)(1)(F)(iii) 1 of title 42; (vii) sections 202(3) 1 and 810(b)(2)(A) 1 of the Native American Housing and Self-De- termination Act of 1996 (25 U.S.C. 4132(3), 4229(b)(2)(A)); and (viii) the rental assistance program under section 8 of the United States Hous- ing Act of 1937 (42 U.S.C. 1437f). (2) Standards for materials The Secretary, in consultation with the ad- visory committee established under subsection (g)(4) 1 of the Department of Housing and Urban Development Act, shall establish stand- ards for materials and forms to be used, as ap- propriate, by organizations providing home- ownership counseling services, including any recipients of assistance pursuant to subsection (a)(4). (3) Mortgage software systems (A) Certification The Secretary shall provide for the certifi- cation of various computer software pro- grams for consumers to use in evaluating different residential mortgage loan pro- posals. The Secretary shall require, for such certification, that the mortgage software systems take into account— (i) the consumer’s financial situation and the cost of maintaining a home, in- cluding insurance, taxes, and utilities; (ii) the amount of time the consumer ex- pects to remain in the home or expected time to maturity of the loan; and (iii) such other factors as the Secretary considers appropriate to assist the con- sumer in evaluating whether to pay points, to lock in an interest rate, to select an ad- justable or fixed rate loan, to select a con- ventional or government-insured or guar- anteed loan and to make other choices during the loan application process. If the Secretary determines that available existing software is inadequate to assist con- sumers during the residential mortgage loan application process, the Secretary shall ar- range for the development by private sector software companies of new mortgage soft- ware systems that meet the Secretary’s specifications. (B) Use and initial availability Such certified computer software pro- grams shall be used to supplement, not re- place, housing counseling. The Secretary shall provide that such programs are ini- tially used only in connection with the as- sistance of housing counselors certified pur- suant to subsection (e). (C) Availability After a period of initial availability under subparagraph (B) as the Secretary considers appropriate, the Secretary shall take rea- sonable steps to make mortgage software systems certified pursuant to this paragraph widely available through the Internet and at public locations, including public libraries, senior-citizen centers, public housing sites, offices of public housing agencies that ad- minister rental housing assistance vouchers, and housing counseling centers. (D) Budget compliance This paragraph shall be effective only to the extent that amounts to carry out this paragraph are made available in advance in appropriations Acts. (4) National public service multimedia cam- paigns to promote housing counseling (A) In general The Director of Housing Counseling shall develop, implement, and conduct national Page 483 TITLE 12—BANKS AND BANKING § 1701x 2 So in original. public service multimedia campaigns de- signed to make persons facing mortgage foreclosure, persons considering a subprime mortgage loan to purchase a home, elderly persons, persons who face language barriers, low-income persons, minorities, and other potentially vulnerable consumers aware that it is advisable, before seeking or maintain- ing a residential mortgage loan, to obtain homeownership counseling from an unbiased and reliable sources 2 and that such home- ownership counseling is available, including through programs sponsored by the Sec- retary of Housing and Urban Development. (B) Contact information Each segment of the multimedia campaign under subparagraph (A) shall publicize the toll-free telephone number and website of the Department of Housing and Urban Devel- opment through which persons seeking hous- ing counseling can locate a housing coun- seling agency in their State that is certified by the Secretary of Housing and Urban De- velopment and can provide advice on buying a home, renting, defaults, foreclosures, cred- it issues, and reverse mortgages. (C) Authorization of appropriations There are authorized to be appropriated to the Secretary, not to exceed $3,000,000 for fis- cal years 2009, 2010, and 2011, for the develop- ment, implementation, and conduct of na- tional public service multimedia campaigns under this paragraph. (D) Foreclosure rescue education programs (i) In general Ten percent of any funds appropriated pursuant to the authorization under sub- paragraph (C) shall be used by the Director of Housing Counseling to conduct an edu- cation program in areas that have a high density of foreclosure. Such program shall involve direct mailings to persons living in such areas describing— (I) tips on avoiding foreclosure rescue scams; (II) tips on avoiding predatory lending mortgage agreements; (III) tips on avoiding for-profit fore- closure counseling services; and (IV) local counseling resources that are approved by the Department of Hous- ing and Urban Development. (ii) Program emphasis In conducting the education program de- scribed under clause (i), the Director of Housing Counseling shall also place an em- phasis on serving communities that have a high percentage of retirement commu- nities or a high percentage of low-income minority communities. (iii) Terms defined For purposes of this subparagraph: (I) High density of foreclosures An area has a ‘‘high density of fore- closures’’ if such area is one of the met- ropolitan statistical areas (as that term is defined by the Director of the Office of Management and Budget) with the high- est home foreclosure rates. (II) High percentage of retirement com- munities An area has a ‘‘high percentage of re- tirement communities’’ if such area is one of the metropolitan statistical areas (as that term is defined by the Director of the Office of Management and Budget) with the highest percentage of residents aged 65 or older. (III) High percentage of low-income mi- nority communities An area has a ‘‘high percentage of low- income minority communities’’ if such area contains a higher-than-normal per- centage of residents who are both mi- norities and low-income, as defined by the Director of Housing Counseling. (5) Education programs The Secretary shall provide advice and tech- nical assistance to States, units of general local government, and nonprofit organizations regarding the establishment and operation of, including assistance with the development of content and materials for, educational pro- grams to inform and educate consumers, par- ticularly those most vulnerable with respect to residential mortgage loans (such as elderly persons, persons facing language barriers, low- income persons, minorities, and other poten- tially vulnerable consumers), regarding home mortgages, mortgage refinancing, home equity loans, home repair loans, and where appro- priate by region, any requirements and costs associated with obtaining flood or other dis- aster-specific insurance coverage. (h) Definitions For purposes of this section: (1) Nonprofit organization The term ‘‘nonprofit organization’’ has the meaning given such term in section 12704(5) of title 42, except that subparagraph (D) of such section shall not apply for purposes of this section. (2) State The term ‘‘State’’ means each of the several States, the Commonwealth of Puerto Rico, the District of Columbia, the Commonwealth of the Northern Mariana Islands, Guam, the Vir- gin Islands, American Samoa, the Trust Terri- tories of the Pacific, or any other possession of the United States. (3) Unit of general local government The term ‘‘unit of general local govern- ment’’ means any city, county, parish, town, township, borough, village, or other general purpose political subdivision of a State. (4) HUD-approved counseling agency The term ‘‘HUD-approved counseling agen- cy’’ means a private or public nonprofit orga- nization that is— (A) exempt from taxation under section 501(c) of title 26; and Page 484 TITLE 12—BANKS AND BANKING § 1701x (B) certified by the Secretary to provide housing counseling services. (5) State housing finance agency The term ‘‘State housing finance agency’’ means any public body, agency, or instrumen- tality specifically created under State statute that is authorised to finance activities de- signed to provide housing and related facilities throughout an entire State through land ac- quisition, construction, or rehabilitation. (i) Accountability for recipients of covered as- sistance (1) Tracking of funds The Secretary shall— (A) develop and maintain a system to en- sure that any organization or entity that re- ceives any covered assistance uses all amounts of covered assistance in accordance with this section, the regulations issued under this section, and any requirements or conditions under which such amounts were provided; and (B) require any organization or entity, as a condition of receipt of any covered assist- ance, to agree to comply with such require- ments regarding covered assistance as the Secretary shall establish, which shall in- clude— (i) appropriate periodic financial and grant activity reporting, record retention, and audit requirements for the duration of the covered assistance to the organization or entity to ensure compliance with the limitations and requirements of this sec- tion, the regulations under this section, and any requirements or conditions under which such amounts were provided; and (ii) any other requirements that the Sec- retary determines are necessary to ensure appropriate administration and compli- ance. (2) Misuse of funds If any organization or entity that receives any covered assistance is determined by the Secretary to have used any covered assistance in a manner that is materially in violation of this section, the regulations issued under this section, or any requirements or conditions under which such assistance was provided— (A) the Secretary shall require that, with- in 12 months after the determination of such misuse, the organization or entity shall re- imburse the Secretary for such misused amounts and return to the Secretary any such amounts that remain unused or uncom- mitted for use; and (B) such organization or entity shall be in- eligible, at any time after such determina- tion, to apply for or receive any further cov- ered assistance. The remedies under this paragraph are in addi- tion to any other remedies that may be avail- able under law. (3) Covered assistance For purposes of this subsection, the term ‘‘covered assistance’’ means any grant or other financial assistance provided under this section. (Pub. L. 90–448, title I, § 106, Aug. 1, 1968, 82 Stat. 490; Pub. L. 91–609, title IX, § 903(a), (b), Dec. 31, 1970, 84 Stat. 1808; Pub. L. 93–383, title VIII, § 811, Aug. 22, 1974, 88 Stat. 735; Pub. L. 95–128, title IX, § 903, Oct. 12, 1977, 91 Stat. 1149; Pub. L. 97–35, title III, § 339A, Aug. 13, 1981, 95 Stat. 417; Pub. L. 98–181, title I [title IV, § 465], Nov. 30, 1983, 97 Stat. 1236; Pub. L. 98–479, title II, § 204(f), Oct. 17, 1984, 98 Stat. 2233; Pub. L. 100–242, title I, § 169, Feb. 5, 1988, 101 Stat. 1865; Pub. L. 100–628, title X, § 1009, Nov. 7, 1988, 102 Stat. 3266; Pub. L. 101–137, § 8, Nov. 3, 1989, 103 Stat. 826; Pub. L. 101–625, title V, § 577, title VII, § 706(c), Nov. 28, 1990, 104 Stat. 4238, 4286; Pub. L. 102–550, title I, § 162(a)–(d), Oct. 28, 1992, 106 Stat. 3719–3721; Pub. L. 104–316, title I, § 106(a), Oct. 19, 1996, 110 Stat. 3830; Pub. L. 105–276, title V, § 594(a), (b), Oct. 21, 1998, 112 Stat. 2655; Pub. L. 107–73, title II, § 205, Nov. 26, 2001, 115 Stat. 674; Pub. L. 109–163, div. A, title VI, § 688(a), Jan. 6, 2006, 119 Stat. 3336; Pub. L. 110–289, div. B, title I, § 2127, July 30, 2008, 122 Stat. 2841; Pub. L. 111–203, title XIV, §§ 1443–1445, 1448, 1449, July 21, 2010, 124 Stat. 2165–2171, 2173, 2174.) Editorial Notes REFERENCES IN TEXT The Housing and Community Development Act of 1974, referred to in subsec. (a)(1)(iv), is Pub. L. 93–383, Aug. 22, 1974, 88 Stat. 633. Title I of the Housing and Community Development Act of 1974 is classified prin- cipally to chapter 69 (§ 5301 et seq.) of Title 42, The Pub- lic Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under section 5301 of Title 42 and Tables. The National Housing Act, referred to in subsecs. (a)(2), (d)(9)(K), and (g)(1)(B)(x), is act June 27, 1934, ch. 847, 48 Stat. 1246. Title II of the Act is classified gen- erally to subchapter II (§ 1707 et seq.) of this chapter. Section 237 of the Act, which was formerly classified to section 1715z–2 of this title, was repealed by Pub. L. 110–289, div. B, title I, § 2120(a)(6), July 30, 2008, 122 Stat. 2835. For complete classification of this Act to the Code, see section 1701 of this title and Tables. Section 152 of the Housing and Community Develop- ment Act of 1992, referred to in subsec. (a)(3), is section 152 of Pub. L. 102–550, which was set out as a note under section 1437f of Title 42, The Public Health and Welfare, prior to repeal by Pub. L. 105–276, title V, § 550(f), Oct. 21, 1998, 112 Stat. 2610. The Housing Act of 1949, referred to in subsec. (c)(4)(B), is act July 15, 1949, ch. 338, 63 Stat. 413. Title V of the Housing Act of 1949 is classified generally to subchapter III (§ 1471 et seq.) of chapter 8A of Title 42, The Public Health and Welfare. For complete classi- fication of this Act to the Code, see Short Title note set out under section 1441 of Title 42, The Public Health and Welfare, and Tables. The Servicemembers Civil Relief Act, referred to in subsec. (c)(5)(A)(ii)(IV), is act Oct. 17, 1940, ch. 888, 54 Stat. 1178, which was classified to section 501 et seq. of the former Appendix to Title 50, War and National De- fense, prior to editorial reclassification and renum- bering as chapter 50 (§ 3901 et seq.) of Title 50. For com- plete classification of this Act to the Code, see Tables. The United States Housing Act of 1937, referred to in subsec. (g)(1)(B)(ii), (C)(ii), is act Sept. 1, 1937, ch. 896, as revised generally by Pub. L. 93–383, title II, § 201(a), Aug. 22, 1974, 88 Stat. 653, which is classified generally to chapter 8 (§ 1437 et seq.) of Title 42, The Public Health and Welfare. For complete classification of this Act to the Code, see Short Title note set out under sec- tion 1437 of Title 42 and Tables. Section 302(a)(4) of the American Homeownership and Economic Opportunity Act of 2000, referred to in sub- Page 485 TITLE 12—BANKS AND BANKING § 1701x sec. (g)(1)(B)(iii), is section 302(a)(4) of Pub. L. 106–569, title III, Dec. 27, 2000, 114 Stat. 2953, which was formerly set out as a note under section 1437f of Title 42, The Public Health and Welfare. Section 11408(b)(1)(F)(iii) of this title, referred to in subsec. (g)(1)(B)(viii), (C)(vi), was redesignated section 11408(b)(1)(J)(iii) of this title by Pub. L. 111–22, div. B., title IV, § 1401(2)(C)(i), May 20, 2009, 123 Stat. 1697. Sections 202(3) and 810(b)(2)(A) of the Native Amer- ican Housing and Self-Determination Act of 1996, re- ferred to in subsec. (g)(1)(B)(ix), (C)(vii), probably means sections 202(3) and 810(b)(2)(A) of Pub. L. 104–330, known as the Native American Housing Assistance and Self-Determination Act of 1996, which are classified to sections 4132(3) and 4229(b)(2)(A), respectively, of Title 25, Indians. Section 23(c)(4) of the United States Housing Act of 1937, referred to in subsec. (g)(1)(B)(ii)(IV), (C)(ii)(III), was classified to section 1437u(c)(4) of Title 42, The Pub- lic Health and Welfare, and was redesignated as section 23(d)(4) of that Act and then amended generally by Pub. L. 115–174, title III, § 306(a)(4), (6)(D), May 24, 2018, 132 Stat. 1340, 1341. As amended, section 1437u(d)(4) of Title 42 still relates to an employment requirement but no longer contains a provision for counseling. Subsection (g)(4) of the Department of Housing and Urban Development Act, referred to in subsec. (g)(2), probably means section 4(g)(4) of Pub. L. 89–174, known as the Department of Housing and Urban Development Act, which is classified to section 3533(g)(4) of Title 42, The Public Health and Welfare. CODIFICATION Section was enacted as part of the Housing and Urban Development Act of 1968, and not as part of the Na- tional Housing Act which comprises this chapter. AMENDMENTS 2010—Subsec. (a)(4). Pub. L. 111–203, § 1444, added par. (4). Subsec. (c)(5)(A)(ii)(V). Pub. L. 111–203, § 1443(b), added subcl. (V). Subsec. (e)(1). Pub. L. 111–203, § 1445(1), added par. (1) and struck out former subpar. (1). Prior to amendment, text read as follows: ‘‘An organization may not receive assistance for counseling activities under subsection (a)(1)(iii), (a)(2), (c), or (d) of this section, unless the or- ganization provides such counseling, to the extent practicable, by individuals who have been certified by the Secretary under this subsection as competent to provide such counseling.’’ Subsec. (e)(2). Pub. L. 111–203, § 1445(2), in introduc- tory provisions, inserted ‘‘and for certifying organiza- tions’’ before period at end of first sentence and sub- stituted ‘‘, for certification of an organization, that each individual through which the organization pro- vides counseling shall demonstrate, and, for certifi- cation of an individual,’’ for ‘‘for certification’’. Subsec. (e)(3). Pub. L. 111–203, § 1445(5), added par. (3). Former par. (3) redesignated (5). Pub. L. 111–203, § 1445(3), inserted ‘‘organizations and’’ before ‘‘individuals’’. Subsec. (e)(4), (5). Pub. L. 111–203, § 1445(4), (5), added par. (4) and redesignated former par. (3) as (5). Subsec. (g). Pub. L. 111–203, § 1443(a), added subsec. (g). Subsec. (h). Pub. L. 111–203, § 1448, added subsec. (h). Subsec. (i). Pub. L. 111–203, § 1449, added subsec. (i). 2008—Subsec. (c)(4). Pub. L. 110–289, § 2127(2), struck out concluding provisions which read as follows: ‘‘An applicant for a mortgage shall be eligible for home- ownership counseling under this subsection if the appli- cant is a first-time homebuyer who meets the require- ments of section 12852(b)(1) of title 42 and the mortgage 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 and is to be insured pursuant to section 203 of the National Housing Act.’’ Subsec. (c)(4)(C)(iii), (iv). Pub. L. 110–289, § 2127(1), added cls. (iii) and (iv). Subsec. (c)(4)(D). Pub. L. 110–289, § 2127(3), added sub- par. (D). 2006—Subsec. (c)(5)(A)(ii)(IV). Pub. L. 109–163 added subcl. (IV). 2001—Subsec. (c)(9). Pub. L. 107–73 struck out heading and text of par. (9). Text read as follows: ‘‘The provi- sions of this subsection shall not be effective after Sep- tember 30, 2000.’’ 1998—Subsec. (c)(5)(C). Pub. L. 105–276, § 594(b), amend- ed heading and text of subpar. (C) generally. Prior to amendment, text read as follows: ‘‘Notification under subparagraph (A) shall not be required with respect to any loan— ‘‘(i) insured or guaranteed under chapter 37 of title 38; or ‘‘(ii) for which the eligible homeowner pays the amount overdue before the expiration of the 45-day period under subparagraph (B)(ii).’’ Subsec. (c)(9). Pub. L. 105–276, § 594(a), substituted ‘‘2000’’ for ‘‘1994’’. 1996—Subsec. (d)(5)(A). Pub. L. 104–316, § 106(a)(2), sub- stituted ‘‘(9)’’ for ‘‘(10)(K)’’ in introductory provisions. Subsec. (d)(8). Pub. L. 104–316, § 106(a)(3), struck out ‘‘(for purposes of the study and report under paragraph (9))’’ before ‘‘may require’’. Subsec. (d)(9) to (13). Pub. L. 104–316, § 106(a)(1), (4), re- designated pars. (10) to (13) as (9) to (12), respectively, and struck out former par. (9) which related to GAO study and report on demonstration program. 1992—Subsec. (a)(3). Pub. L. 102–550, § 162(a), sub- stituted ‘‘except that for such purposes there are au- thorized to be appropriated $6,025,000 for fiscal year 1993 and $6,278,050 for fiscal year 1994. Of the amounts appro- priated for each of fiscal years 1993 and 1994, up to $500,000 shall be available for use for counseling and other activities in connection with the demonstration program under section 152 of the Housing and Commu- nity Development Act of 1992.’’ for ‘‘except that for such purposes there are authorized to be appropriated $3,600,000 for fiscal year 1991 and $3,700,000 for fiscal year 1992.’’ Subsec. (c)(3)(A)(iii). Pub. L. 102–550, § 162(b)(3), added cl. (iii). Subsec. (c)(4). Pub. L. 102–550, § 162(b)(4), inserted flush sentence at end. Subsec. (c)(5)(A). Pub. L. 102–550, § 162(b)(5), added sub- par. (A) and struck out former subpar. (A) which read as follows: ‘‘(A) IN GENERAL.—Except as provided in subparagraph (C), if any eligible homeowner fails to pay any amount by the date the amount is due under a home loan, the creditor of the loan shall notify the homeowner of the availability of any homeownership counseling offered by the creditor and, as a supplement to counseling provided by the creditor, shall notify the homeowner of 1 of the following: ‘‘(i) The availability of homeownership counseling provided by nonprofit organizations approved by the Secretary and experienced in the provision of home- ownership counseling. ‘‘(ii) The toll-free telephone number described in subparagraph (D)(i).’’ Subsec. (c)(5)(D)(i). Pub. L. 102–550, § 162(b)(6), inserted ‘‘, which shall be updated annually,’’ after ‘‘organiza- tions’’. Subsec. (c)(8). Pub. L. 102–550, § 162(b)(1), amended first sentence generally. Prior to amendment, first sen- tence read as follows: ‘‘There is authorized to be appro- priated to carry out this section $6,700,000 for fiscal year 1991 and $7,000,000 for fiscal year 1992, of which amounts $2,000,000 shall be available in each such fiscal year to carry out paragraph (5)(D).’’ Subsec. (c)(9). Pub. L. 102–550, § 162(b)(2), substituted ‘‘1994’’ for ‘‘1992’’. Subsec. (d)(12). Pub. L. 102–550, § 162(c), amended par. (12) generally. Prior to amendment, par. (12) read as follows: ‘‘There are authorized to be appropriated to carry out this subsection $350,000 for fiscal year 1991 and $365,000 for fiscal year 1992.’’ Subsecs. (e), (f). Pub. L. 102–550, § 162(d), added sub- secs. (e) and (f). Page 486 TITLE 12—BANKS AND BANKING § 1701x 1990—Subsec. (a)(2)(A) to (C). Pub. L. 101–625, § 706(c), designated portions of existing text as cls. (A) and (C), and added cl. (B). Subsec. (a)(3). Pub. L. 101–625, § 577(a), substituted provisions authorizing appropriations of $3,600,000 for fiscal year 1991 and $3,700,000 for fiscal year 1992, for provisions authorizing appropriations of $3,500,000 for each of the fiscal years 1988 and 1989. Subsec. (c)(5). Pub. L. 101–625, § 577(b)(3), amended par. (5) generally. Prior to amendment, par. (5) read as fol- lows: ‘‘The creditor of a delinquent home loan shall no- tify an eligible homeowner of the availability of any homeownership counseling offered by the creditor. As a supplement to the counseling provided by the creditor, the creditor shall notify the homeowner of the avail- ability of 1 of the following: ‘‘(A) Homeownership counseling provided by non- profit organizations approved by the Secretary and experienced in the provision of homeownership coun- seling. ‘‘(B) A list of the nonprofit organizations, approved by the Secretary and experienced in the provision of homeownership counseling, that can be obtained by calling a toll-free telephone number at the Depart- ment of Housing and Urban Development. ‘‘(C) Homeownership counseling provided by the Ad- ministrator of Veterans’ Affairs for loans insured or guaranteed under chapter 37 of title 38.’’ Subsec. (c)(8). Pub. L. 101–625, § 577(b)(1), amended first sentence generally. Prior to amendment, first sen- tence read as follows: ‘‘There are authorized to be ap- propriated to carry out this subsection $3,500,000 for each of the fiscal years 1988 and 1989.’’ Subsec. (c)(9). Pub. L. 101–625, § 577(b)(2), substituted ‘‘September 30, 1992’’ for ‘‘September 30, 1990’’. Subsec. (d). Pub. L. 101–625, § 577(c), added subsec. (d). 1989—Subsec. (c)(9). Pub. L. 101–137 substituted ‘‘Sep- tember 30, 1990’’ for ‘‘September 30, 1989’’. 1988—Subsec. (a)(2). Pub. L. 100–628 inserted before pe- riod at end of first sentence ‘‘or guaranteed or insured under chapter 37 of title 38’’. Subsec. (a)(3). Pub. L. 100–242, § 169(a), substituted ‘‘except that for each of the fiscal years 1988 and 1989 there are authorized to be appropriated $3,500,000 for such purposes’’ for ‘‘except that for the fiscal year 1984, there are authorized to be appropriated not to exceed $3,500,000 for such purposes’’. Subsec. (c). Pub. L. 100–242, § 169(b), added subsec. (c). 1984—Subsec. (b)(1). Pub. L. 98–479 substituted ‘‘archi- tectural’’ for ‘‘architechtual’’. 1983—Subsec. (a)(3). Pub. L. 98–181 substituted ‘‘1984’’ for ‘‘1982’’, and ‘‘$3,500,000’’ for ‘‘$4,000,000’’. 1981—Subsec. (a)(3). Pub. L. 97–35 inserted provisions authorizing appropriations for fiscal year 1982. 1977—Subsec. (a)(2). Pub. L. 95–128 authorized the Sec- retary to provide the services for other owners of single family dwelling units insured under subchapter II of this chapter. 1974—Subsec. (a)(1). Pub. L. 93–383, § 811(b)(1), (c), in cl. (iii) substituted provisions authorizing counseling and advice to tenants and homeowners with respect to property maintenance, etc., for provisions authorizing counseling on household management, self-help, etc., for families receiving assistance under this chapter or the United States Housing Act of 1937, and added cl. (iv). Subsec. (a)(2). Pub. L. 93–383, § 811(b)(2), added par. (2). Former par. (2) redesignated (3). Subsec. (a)(3). Pub. L. 93–383, § 811(b)(2), (d), redesig- nated former par. (2) as (3) and substituted ‘‘such sums as may be necessary’’ for ‘‘not to exceed $5,000,000’’. Subsec. (b)(1), (2). Pub. L. 93–383, § 811(e), (f), inserted reference to public housing agencies. 1970—Subsec. (a). Pub. L. 91–609, § 903(a), designated existing provisions as par. (1), inserted provision re- specting specific authorities without limitation to such authorities, redesignated former par. (1) as cl. (i), struck out introductory text relating to assistance with respect to construction, rehabilitation, and oper- ation by nonprofit organizations of housing for low or moderate income families now incorporated in cl. (i), redesignated former par. (2) as cl. (ii), inserting therein provision for assistance to public bodies or to nonprofit or cooperative organizations, including assistance with respect to self-help and mutual self-help programs, and added cl. (iii) and par. (2). Subsec. (b)(1). Pub. L. 91–609, § 903(b), substituted ‘‘section 1715z of this title or any other federally as- sisted program’’ for ‘‘any federally assisted program’’ in first sentence. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 2010 AMENDMENT Amendment by Pub. L. 111–203 effective on the date on which final regulations implementing that amend- ment take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as a note under section 1601 of Title 15, Commerce and Trade. EFFECTIVE DATE OF 2006 AMENDMENT Pub. L. 109–163, div. A, title VI, § 688(d), Jan. 6, 2006, 119 Stat. 3337, provided that: ‘‘The amendments made under subsection (a) [amending this section] shall take effect 150 days after the date of the enactment of this Act [Jan. 6, 2006].’’ EFFECTIVE DATE OF 1998 AMENDMENT Pub. L. 105–276, title V, § 594(c), Oct. 21, 1998, 112 Stat. 2656, provided that: ‘‘The amendments made by this section [amending this section] are made on, and shall apply beginning upon, the date of the enactment of this Act [Oct. 21, 1998].’’ EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97–35 effective Oct. 1, 1981, see section 371 of Pub. L. 97–35, set out as an Effective Date note under section 3701 of this title. REGULATIONS Pub. L. 102–550, title I, § 162(e), Oct. 28, 1992, 106 Stat. 3722, provided that: ‘‘The Secretary of Housing and Urban Development shall issue any regulations nec- essary to carry out the amendments made by sub- section (d) [amending this section], not later than the expiration of the 6-month period beginning on the date of the enactment of this Act [Oct. 28, 1992].’’ CONSTRUCTION OF AMENDMENTS BY PUB. L. 109–163 Pub. L. 109–163, div. A, title VI, § 688(b), Jan. 6, 2006, 119 Stat. 3337, provided that: ‘‘Nothing in this section [amending this section and enacting provisions set out as notes under this section] shall relieve any person of any obligation imposed by any other Federal, State, or local law.’’ FINANCIAL EDUCATION AND COUNSELING Pub. L. 110–289, div. A, title I, § 1132, July 30, 2008, 122 Stat. 2727, as amended by Pub. L. 111–203, title X, § 1072(a), July 21, 2010, 124 Stat. 2059, provided that: ‘‘(a) GOALS.—Financial education and counseling under this section shall have the goal of— ‘‘(1) increasing the financial knowledge and deci- sion making capabilities of prospective homebuyers or economically vulnerable individuals and families; ‘‘(2) assisting prospective homebuyers or economi- cally vulnerable individuals and families to develop monthly budgets, build personal savings, finance or plan for major purchases, reduce their debt, improve their financial stability, and set and reach their fi- nancial goals; ‘‘(3) helping prospective homebuyers or economi- cally vulnerable individuals and families to improve their credit scores by understanding the relationship between their credit histories and their credit scores; and Page 487 TITLE 12—BANKS AND BANKING § 1701x ‘‘(4) educating prospective homebuyers or economi- cally vulnerable individuals and families about the options available to build savings for short- and long- term goals. ‘‘(b) GRANTS.— ‘‘(1) IN GENERAL.—The Secretary of the Treasury (in this section referred to as the ‘Secretary’) shall make grants to eligible organizations to enable such orga- nizations to provide a range of financial education and counseling services to prospective homebuyers or economically vulnerable individuals and families. ‘‘(2) SELECTION.—The Secretary shall select eligible organizations to receive assistance under this section based on their experience and ability to provide fi- nancial education and counseling services that result in documented positive behavioral changes. ‘‘(c) ELIGIBLE ORGANIZATIONS.— ‘‘(1) IN GENERAL.—For purposes of this section, the term ‘eligible organization’ means an organization that is— ‘‘(A) certified in accordance with section 106(e)(1) of the Housing and Urban Development Act of 1968 (12 U.S.C. 1701x(e)[1]); ‘‘(B) certified by the Office of Financial Edu- cation of the Department of the Treasury for pur- poses of this section, in accordance with paragraph (2); or ‘‘(C) a nonprofit corporation that— ‘‘(i) is exempt from taxation under section 501(c)(3) of the Internal Revenue Code of 1986 [26 U.S.C. 501(c)(3)]; and ‘‘(ii) specializes or has expertise in working with economically vulnerable individuals and families, but whose primary purpose is not provi- sion of credit counseling services. ‘‘(2) OFE CERTIFICATION.—To be certified by the Of- fice of Financial Education for purposes of this sec- tion, an eligible organization shall be— ‘‘(A) a housing counseling agency certified by the Secretary of Housing and Urban Development under section 106(e) of the Housing and Urban Develop- ment Act of 1968 [12 U.S.C. 1701x(e)]; ‘‘(B) a State, local, or tribal government agency; ‘‘(C) a community development financial institu- tion (as defined in section 103(5) of the Community Development Banking and Financial Institutions Act of 1994 (12 U.S.C. 4702(5)) or a credit union; or ‘‘(D) any collaborative effort of entities described in any of subparagraphs (A) through (C). ‘‘(d) AUTHORITY FOR PILOT PROJECTS.— ‘‘(1) IN GENERAL.—The Secretary of the Treasury shall authorize pilot project grants to eligible organi- zations under subsection (c) in order to— ‘‘(A) carry out the services under this section; and ‘‘(B) provide such other services that will improve the financial stability and economic condition of low- and moderate-income and low-wealth individ- uals. ‘‘(2) GOAL.—The goal of the pilot project grants under this subsection is to— ‘‘(A) identify successful methods resulting in positive behavioral change for financial empower- ment; and ‘‘(B) establish program models for organizations to carry out effective counseling services. ‘‘(e) AUTHORIZATION OF APPROPRIATIONS.—There are authorized to be appropriated to the Secretary such sums as are necessary to carry out this section and for the provision of additional financial educational serv- ices. ‘‘(f) STUDY AND REPORT ON EFFECTIVENESS AND IM- PACT.— ‘‘(1) IN GENERAL.—The Comptroller General of the United States shall conduct a study on the effective- ness and impact of the grant program established under this section. Not later than 3 years after the date of enactment of this Act [July 30, 2008], the Comptroller General shall submit a report on the re- sults of such study to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives. ‘‘(2) CONTENT OF STUDY.—The study required under paragraph (1) shall include an evaluation of the fol- lowing: ‘‘(A) The effectiveness of the grant program es- tablished under this section in improving the finan- cial situation of homeowners and prospective home- buyers served by the grant program. ‘‘(B) The extent to which financial education and counseling services have resulted in positive behav- ioral changes. ‘‘(C) The effectiveness and quality of the eligible organizations providing financial education and counseling services under the grant program. ‘‘(g) REGULATIONS.—The Secretary is authorized to promulgate such regulations as may be necessary to implement and administer the grant program author- ized by this section.’’ [Pub. L. 111–203, title X, § 1072(b), July 21, 2010, 124 Stat. 2060, provided that: ‘‘Amendments made by sub- section (a) [amending section 1132 of Pub. L. 110–289, set out above] shall not apply to programs authorized by section 1132 of the Housing and Economic Recovery Act of 2008 [Pub. L. 110–289] (12 U.S.C. 1701x note) that are funded with appropriations prior to fiscal year 2011.’’] PRE-PURCHASE HOMEOWNERSHIP COUNSELING DEMONSTRATION Pub. L. 110–289, div. B, title I, § 2128, July 30, 2008, 122 Stat. 2841, provided that: ‘‘(a) ESTABLISHMENT OF PROGRAM.—For the period be- ginning on the date of enactment of this title [July 30, 2008] and ending on the date that is 3 years after such date of enactment, the Secretary of Housing and Urban Development shall establish and conduct a demonstra- tion program to test the effectiveness of alternative forms of pre-purchase homeownership counseling for el- igible homebuyers. ‘‘(b) FORMS OF COUNSELING.—The Secretary of Hous- ing and Urban Development shall provide to eligible homebuyers pre-purchase homeownership counseling under this section in the form of— ‘‘(1) telephone counseling; ‘‘(2) individualized in-person counseling; ‘‘(3) web-based counseling; ‘‘(4) counseling classes; or ‘‘(5) any other form or type of counseling that the Secretary may, in his discretion, determine appro- priate. ‘‘(c) SIZE OF PROGRAM.—The Secretary shall make available the pre-purchase homeownership counseling described in subsection (b) to not more than 3,000 eligi- ble homebuyers in any given year. ‘‘(d) INCENTIVE TO PARTICIPATE.—The Secretary of Housing and Urban Development may provide incen- tives to eligible homebuyers to participate in the dem- onstration program established under subsection (a). Such incentives may include the reduction of any in- surance premium charges owed by the eligible home- buyer to the Secretary. ‘‘(e) ELIGIBLE HOMEBUYER DEFINED.—For purposes of this section an ‘eligible homebuyer’ means a first-time homebuyer who has been approved for a home loan with a loan-to-value ratio between 97 percent and 98.5 per- cent. ‘‘(f) REPORT TO CONGRESS.—The Secretary of Housing and Urban Development shall report to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representative—[sic] ‘‘(1) on an annual basis, on the progress and results of the demonstration program established under sub- section (a); and ‘‘(2) for the period beginning on the date of enact- ment of this title [July 30, 2008] and ending on the date that is 5 years after such date of enactment, on the payment history and delinquency rates of eligible homebuyers who participated in the demonstration program.’’ Page 488 TITLE 12—BANKS AND BANKING § 1701x–1 1 So in original. DISCLOSURE FORM Pub. L. 109–163, div. A, title VI, § 688(c), Jan. 6, 2006, 119 Stat. 3337, provided that: ‘‘Not later than 150 days after the date of the enactment of this Act [Jan. 6, 2006], the Secretary of Housing and Urban Development shall issue a final disclosure form to fulfill the require- ment of subclause (IV) of section 106(c)(5)(A)(ii) of the Housing and Urban Development Act of 1968 [12 U.S.C. 1701x(c)(5)(A)(ii)(IV)], as added by subsection (a).’’ § 1701x–1. Home inspection counseling (a) Public outreach (1) In general The Secretary of Housing and Urban Devel- opment (in this section referred to as the ‘‘Secretary’’) shall take such actions as may be necessary to inform potential homebuyers of the availability and importance of obtain- ing an independent home inspection. Such ac- tions shall include— (A) publication of the HUD/FHA form HUD 92564–CN entitled ‘‘For Your Protection: Get a Home Inspection’’, in both English and Spanish languages; (B) publication of the HUD/FHA booklet entitled ‘‘For Your Protection: Get a Home Inspection’’, in both English and Spanish languages; (C) development and publication of a HUD booklet entitled ‘‘For Your Protection—Get a Home Inspection’’ that does not reference FHA-insured homes, in both English and Spanish languages; and (D) publication of the HUD document enti- tled ‘‘Ten Important Questions To Ask Your Home Inspector’’, in both English and Span- ish languages. (2) Availability The Secretary shall make the materials specified in paragraph (1) available for elec- tronic access and, where appropriate, inform potential homebuyers of such availability through home purchase counseling public service announcements and toll-free telephone hotlines of the Department of Housing and Urban Development. The Secretary shall give special emphasis to reaching first-time and low-income homebuyers with these materials and efforts. (3) Updating The Secretary may periodically update and revise such materials, as the Secretary deter- mines to be appropriate. (b) Requirement for FHA-approved lenders Each mortgagee approved for participation in the mortgage insurance programs under title II of the National Housing Act [12 U.S.C. 1707 et seq.] shall provide prospective homebuyers, at first contact, whether upon pre-qualification, pre-approval, or initial application, the mate- rials specified in subparagraphs (A), (B), and (D) of subsection (a)(1). (c) Requirements for HUD-approved counseling agencies Each counseling agency certified pursuant by 1 the Secretary to provide housing counseling services shall provide each of their clients, as part of the home purchase counseling process, the materials specified in subparagraphs (C) and (D) of subsection (a)(1). (d) Training Training provided the Department of Housing and Urban Development for housing counseling agencies, whether such training is provided di- rectly by the Department or otherwise, shall in- clude— (1) providing information on counseling po- tential homebuyers of the availability and im- portance of getting an independent home in- spection; (2) providing information about the home in- spection process, including the reasons for spe- cific inspections such as radon and lead-based paint testing; (3) providing information about advising po- tential homebuyers on how to locate and se- lect a qualified home inspector; and (4) review of home inspection public out- reach materials of the Department. (Pub. L. 111–203, title XIV, § 1451, July 21, 2010, 124 Stat. 2176.) Editorial Notes REFERENCES IN TEXT The National Housing Act, referred to in subsec. (b), is act June 27, 1934, ch. 847, 48 Stat. 1246. Title II of the Act is classified generally to subchapter II (§ 1707 et seq.) of this chapter. For complete classification of this Act to the Code, see section 1701 of this title and Ta- bles. CODIFICATION Section was enacted as part of the Expand and Pre- serve Home Ownership Through Counseling Act and also as part of the Mortgage Reform and Anti-Preda- tory Lending Act and as part of the Dodd-Frank Wall Street Reform and Consumer Protection Act, and not as part of the National Housing Act which comprises this chapter. Statutory Notes and Related Subsidiaries EFFECTIVE DATE Section effective on the date on which final regula- tions implementing such section take effect, or on the date that is 18 months after the designated transfer date if such regulations have not been issued by that date, see section 1400(c) of Pub. L. 111–203, set out as an Effective Date of 2010 Amendment note under section 1601 of Title 15, Commerce and Trade. § 1701x–2. Legal assistance for foreclosure-re- lated issues (a) Establishment The Secretary of Housing and Urban Develop- ment (hereafter in this section referred to as the ‘‘Secretary’’) shall establish a program for mak- ing grants for providing a full range of fore- closure legal assistance to low- and moderate-in- come homeowners and tenants related to home ownership preservation, home foreclosure pre- vention, and tenancy associated with home fore- closure. (b) Competitive allocation The Secretary shall allocate amounts made available for grants under this section to State