Page:United States Statutes at Large Volume 104 Part 5.djvu/962

 104 STAT. 4284 PUBLIC LAW 101-625—NOV. 28, 1990 42 USC 1472 SEC. 706. RURAL HOUSING LOAN GUARANTEES. (a) FINDINGS AND PURPOSE.— (1) FINDINGS.— The Congress finds that— (A) the Federal Government should encourage support for homeownership through nonsubsidized mortgsige loans guaranteed by the Secretary of Agriculture for the purchase of modest homes located in rural areas and small communities of the country that are not adequately served by private conventional, federally insured, or guaranteed mortgage credit providers; and (B) many rural areas contain disproportionate amounts of substandard housing in need of repair, but lack the necessary funding and support to modernize such housing through preservation. (2) PURPOSE.— The purpose of this section is to expand homeownership opportunities to low- and moderate-income residents of rural areas of the country through the establishment of guaranteed rural housing loans to be made available in rural locations where there is an insufficient availability of mortgage financing from other sources. (b) GUARANTEED LOANS FOR HOUSING ACQUISITION.—Section 502 of the Housing Act of 1949 (42 U.S.C. 1472), as amended by the preceding provisions of this Act, is further amended by adding at the end the following new subsection: " (h) GUARANTEED LOANS.— "(1) AUTHORITY.— The Secretary shall, to the extent provided in appropriation Acts, provide guaranteed loans in accordance with this section, section 517(d), and the last sentence of section 521(a)(l)(A), except as modified by the provisions of this subsection. Loans shall be guaranteed under this subsection in an emiount equal to 90 percent of the loan. "(2) EuGiBLE BORROWERS. —Loans guaranteed pursuant to this subsection shall be made only to borrowers who are low or moderate income families or persons, whose incomes do not exceed the median income of the area, as determined by the Secretary. "(3) EuGiBLE HOUSING. —Loans may be guaranteed pursuant to this subsection only if the loan is used to acquire or construct a single-family residence that is— "(A) to be used as the principal residence of the borrower; "(B) eligible for assistance under this section, section 203(b) of the National Housing Act, or chapter 37 of title 38, United States Code; and "(C) located in a rural area that is more than 25 miles from an urban area or densely populated area. "(4) PRIORITY AND COUNSEUNG FOR FIRST-TIME HOMEBUYERS.— "(A) In providing guaranteed loans under this subsection, the Secretary shall give priority to first-time homebuyers (as defined in paragraph (12XA)). "(B) The Secretary may require that, as a condition of receiving a guaranteed loan pursuant to this subsection, a borrower who is a first-time homebuyer successfully complete a program of homeownership counseling under section 106(a)(l)(iii) of the Housing and Urban Development Act of 1968 and obtain certification from the provider of the

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