SEC-303 -- ASSISTANCE FOR FIRST-TIME HOMEBUYERS.


 (a) In General.-The Trust shall provide assistance payments for
first-time homebuyers (including homebuyers buying shares in limited
equity cooperatives) in the following manners:

 (1) Interest rate buydowns.-Assistance payments so that the rate of
interest payable on the mortgages by the homebuyers does not exceed 6
percent.

 (2) Downpayment assistance.-Assistance payments to provide amounts for
downpayments (including closing costs and other costs payable at the
time of closing) on mortgages for such homebuyers.

 (b) Eligibility Requirements.-Assistance payments under this subtitle
may be made only to homebuyers and for mortgages meeting the following
requirements:

 (1) First-time homebuyer.-The homebuyer is an individual who-

 (A) (and whose spouse) has had no ownership in a principal residence
during the 3-year period ending on the date of purchase of the property
with respect to which assistance payments are made under this subtitle;

 (B) is a displaced homemaker who, except for owning a home with his or
her spouse or residing in a home owned by the spouse, meets the
requirements of subparagraph (A); or

 (C) is a single parent who, except for owning a home with his or her
spouse or residing in a home owned by the spouse while married, meets
the requirements of subparagraph (A).

 (2) Maximum income of homebuyer.-The aggregate annual income of the
homebuyer and the members of the family of the homebuyer residing with
the homebuyer, for the 12-month period preceding the date of the
application of the homebuyer for assistance under this subtitle, does
not exceed-

 (A) 95 percent of the median income for a family of 4 persons (adjusted
by family size) in the applicable metropolitan statistical area (or such
other area that the Board of Directors determines for areas outside of
metropolitan statistical areas); or

 (B) 115 percent of such median income (adjusted by family size) in the
case of an area that is subject to a high cost area mortgage limit under
title II of the National Housing Act.
The Board of Directors shall provide for certification of such income
for purposes of initial eligibility for assistance payments under this
subtitle and shall provide for recertification of homebuyers (and
families of homebuyers) so assisted not less than every 2 years
thereafter.

 (3) Certification.-The homebuyer (and spouse, where applicable) shall
certify that the homebuyer has made a good faith effort to obtain a
market rate mortgage and has been denied because the annual income of
the homebuyer and the members of the family of the homebuyer residing
with the homebuyer is insufficient.

 (4) Principal residence.-The property securing the mortgage is a
single-family residence or unit in a cooperative and is the principal
residence of the homebuyer.

 (5) Maximum mortgage amount.-The principal obligation of the mortgage
does not exceed the principal amount that could be insured with respect
to the property under the National Housing Act.

 (6) Maximum interest rate.-The interest payable on the mortgage is
established at a fixed rate that does not exceed a maximum rate of
interest established by the Trust taking into consideration prevailing
interest rates on similar mortgages.

 (7) Responsible mortgagee.-The mortgage has been made to, and is held
by, a mortgagee that is federally insured or that is otherwise approved
by the Trust as responsible and able to service the mortgage properly.

 (8) Minimum downpayment.-For a first-time homebuyer to receive
downpayment assistance under subsection (a)(2), the homebuyer shall have
paid not less than 1 percent of the cost of acquisition of the property
(excluding any mortgage insurance premium paid at the time the mortgage
is insured), as such cost is estimated by the Board of Directors.

 (c) Terms of Assistance.-

 (1) Security.-Assistance payments under this subtitle shall be secured
by a lien on the property involved. The lien shall be subordinate to all
mortgages existing on the property on the date on which the first
assistance payment is made.

 (2) Repayment upon sale.-Assistance payments under this subtitle shall
be repayable from the net proceeds of the sale, without interest, upon
the sale of the property for which the assistance payments are made. If
the sale results in no net proceeds or the net proceeds are insufficient
to repay the amount of the assistance payments in full, the Board of
Directors shall release the lien to the extent that the debt secured by
the lien remains unpaid.

 (3) Repayment upon increased income.-If the aggregate annual income of
the homebuyer (and family of the homebuyer) assisted under this subtitle
exceeds the applicable maximum income allowable under subsection (b)(2)
for any 2-year period after such assistance is provided, the Board of
Directors may provide for the repayment, on a monthly basis, of all or
a portion of such assistance payments, based on the amount of assistance
provided and the income of the homebuyer (and family of the homebuyer).

 (4) Repayment if property ceases to be principal residence.-If the
property for which assistance payments are made ceases to be the
principal residence of the first-time homebuyer (or the family of the
homebuyer), the Board of Directors may provide for the repayment of all
or a portion of the assistance payments.

 (5) Available assistance.-The Trust may make assistance payments under
paragraphs (1) and (2) of subsection (a) with respect to a single
mortgage of an eligible homebuyer.

 (d) Allocation Formula.-Amounts available in any fiscal year for
assistance under this subtitle shall be allocated for homebuyers in each
State on the basis of the need of eligible first-time homebuyers in each
State for such assistance in comparison with the need of eligible
first-time homebuyers for such assistance among all States.