FHA Small-Dollar Mortgages Act

Not later than 1 year after the date of the enactment of this section, the Secretary of Housing and Urban Development, acting through the Federal Housing Commissioner, may establish a pilot program to increase access to small-dollar mortgages for mortgagors which may include—

(1) authorizing direct payments to mortgagees to incentivize the origination of small-dollar mortgages;

(2) adjusting terms and costs imposed by the Federal Housing Administration with respect to small-dollar mortgages;

(3) providing direct grants for mortgagors who obtain small-dollar mortgages to cover costs associated with—

(A) down payments;

(B) closing costs;

(C) appraisals; and

(D) title insurance;

(4) conducting outreach to potential mortgagors about the availability of small-dollar mortgages; and

(5) providing technical assistance for mortgagees that originate small-dollar mortgages.

Beginning not later than 1 year after the establishment of the pilot program under subsection (a) and ending 1 year after the sunset of the pilot program, the Federal Housing Commissioner shall submit to the Congress an annual report that—

(1) tracks and evaluates the outcomes of small-dollar mortgages originated by mortgagees as a result of support provided under subsection (a);

(2) analyzes risks of the pilot program to the solvency of the Mutual Mortgage Insurance Fund;

(3) includes data with respect to—

(A) the number of small-dollar mortgages originated in the 10-year period preceding the date of the enactment of this section, including small-dollar mortgages insured or guaranteed by the Federal Government and small-dollar mortgages not insured by the Federal Government;

(B) the original principal balance of each small-dollar mortgage identified under subparagraph (A);

(C) demographic information about the mortgagors associated with each such small-dollar mortgage; and

(D) the number and type of mortgagees that offer small-dollar mortgages;

(4) provides a description of the fixed costs that are associated with mortgages and the impact of such costs on the ability of lenders to earn a market rate return on small-dollar mortgages; and

(5) includes analysis, by regions of the United States, including rural regions, that identifies regions with the greatest need for, and the highest likelihood of, the origination of small-dollar mortgages and regions that could benefit the most from increased availability of small-dollar mortgages.

The pilot program established under subsection (a) shall terminate on the date that is 4 years after the date on which the pilot program is established under subsection (a).

After the expiration of the 3-year period beginning on the date of enactment of this section, neither the Federal Housing Commissioner nor the Secretary of Housing and Urban Development may newly establish a pilot program to increase access to small-dollar mortgages for mortgagors.

The term small-dollar mortgage means a mortgage that—

(1) has an original principal balance of $100,000 or less; and

(2) is secured by a 1- to 4-unit property that is the principal residence of the mortgagor.