SEC-324 -- MORTGAGOR EQUITY.


 Section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2))
is amended by adding at the end the following new undesignated
paragraph:

 "Notwithstanding any other provision of this paragraph, a mortgage may
not involve a principal obligation (including such initial service
charges, appraisal, inspection, and other fees as the Secretary shall
approve) in excess of 98.75 percent of the appraised value of the
property (97.75 percent, in the case of a mortgage with an appraised
value in excess of $50,000), plus the amount of the mortgage insurance
premium paid at the time the mortgage is insured. For purposes of the
preceding sentence, the term `appraised value' means the amount set
forth in the written statement required under section 226, or a similar
amount determined by the Secretary if section 226 does not apply.".