Us Code § 3709 - Refinancing of housing loans
Full text of Us Code United States Code § 3709 — Refinancing of housing loans, with citation guidance and answers to common questions.
§ 3709. Refinancing of housing loans
(a)
(1) the issuer of the refinanced loan provides the Secretary with a certification of the recoupment period for fees, closing costs, and any expenses (other than taxes, amounts held in escrow, and fees paid under this chapter) that would be incurred by the borrower in the refinancing of the loan;
(2) all of the fees and incurred costs are scheduled to be recouped on or before the date that is 36 months after the date of loan issuance; and
(3) the recoupment is calculated through lower regular monthly payments (other than taxes, amounts held in escrow, and fees paid under this chapter) as a result of the refinanced loan.
(b)
(1) the issuer of the refinanced loan provides the borrower with a net tangible benefit test;
(2) in a case in which the original loan had a fixed rate mortgage interest rate and the refinanced loan will have a fixed rate mortgage interest rate, the refinanced loan has a mortgage interest rate that is not less than 50 basis points less than the previous loan;
(3) in a case in which the original loan had a fixed rate mortgage interest rate and the refinanced loan will have an adjustable rate mortgage interest rate, the refinanced loan has a mortgage interest rate that is not less than 200 basis points less than the previous loan; and
(4) the lower interest rate is not produced solely from discount points, unless—
(A) such points are paid at closing; and
(B) such points are not added to the principal loan amount, unless—
(i) for discount point amounts that are less than or equal to one discount point, the resulting loan balance after any fees and expenses allows the property with respect to which the loan was issued to maintain a loan to value ratio of 100 percent or less; and
(ii) for discount point amounts that are greater than one discount point, the resulting loan balance after any fees and expenses allows the property with respect to which the loan was issued to maintain a loan to value ratio of 90 percent or less.
(c)
(1) the date on which the borrower has made at least six consecutive monthly payments on the loan being refinanced; and
(2) the date that is 210 days after the first payment due date of the loan being refinanced.
(d)
(2) Not later than 180 days after the date of the enactment of this section, the Secretary shall promulgate such rules as the Secretary considers appropriate with respect to refinancing described in paragraph (1) to ensure that such refinancing is in the financial interest of the borrower, including rules relating to recoupment, seasoning, and net tangible benefits.
(Added Pub. L. 115–174, title III, §309(a)(1), May 24, 2018, 132 Stat. 1348; amended Pub. L. 116–33, §2(b), July 25, 2019, 133 Stat. 1038.)
Editorial Notes
References in Text
The date of the enactment of this section, referred to in subsec. (d)(2), is the date of enactment of Pub. L. 115–174, which was approved May 24, 2018.
Amendments
2019—Subsec. (c). Pub. L. 116–33 substituted "is a refinance" for "is refinanced" in introductory provisions, added pars. (1) and (2), and struck out former pars. (1) and (2) which read as follows:
"(1) the date that is 210 days after the date on which the first monthly payment is made on the loan; and
"(2) the date on which the sixth monthly payment is made on the loan."
Statutory Notes and Related Subsidiaries
Regulations
Pub. L. 115–174, title III, §309(a)(2), May 24, 2018, 132 Stat. 1349, provided that:
"(A)
"(i) the Secretary determines that urgent or compelling circumstances make compliance with such requirements impracticable or contrary to the public interest;
"(ii) the Secretary submits to the Committee on Veterans' Affairs of the Senate and the Committee on Veterans' Affairs of the House of Representatives, and publishes in the Federal Register, notice of such waiver, including a description of the determination made under clause (i); and
"(iii) a period of 10 days elapses following the notification under clause (ii).
"(B)
"(C)
"(D)
Construction of 2019 Amendment
Amendment by Pub. L. 116–33 not to be construed to restrict or otherwise modify the authorities of the Government National Mortgage Association, see section 2(c) of Pub. L. 116–33, set out as a note under section 1721 of Title 12, Banks and Banking.
SUBCHAPTER II—LOANS
About This Section
38 U.S.C. § 3709 is part of Title 38 of the United States Code. The United States Code is the official codification of federal statutes maintained by the Office of the Law Revision Counsel of the U.S. House of Representatives. Congress amends the Code through new public laws, which are eventually incorporated into the relevant title.
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