SEC-334 -- HOME EQUITY CONVERSION MORTGAGE INSURANCE DEMONSTRATION. 

 
 (a) Limitation on Insurance Authority and Maximum Amount Insured.-
 
 (1) Number of mortgages insured.-Section 255(g) of the National Housing
Act (12 U.S.C. 1715z-20(g)) is amended by striking the second sentence
and inserting the following: "The total number of mortgages insured
under this section may not exceed 25,000.".
 
 (2) Termination date.-The first sentence of section 255(g) of the
National Housing Act (12 U.S.C. 1715z-20(g)) is amended by striking
"September 30, 1991" and inserting "September 30, 1995".
 
 (b) Types of Loans.-Section 255(d) of the National Housing Act (12
U.S.C. 1715z-20(d)) is amended-
 
 (1) in paragraph (7), by striking "and" at the end;
 
 (2) in paragraph (8), by striking the period at the end and inserting
a semicolon; and
 
 (3) by adding at the end the following new paragraphs:
 
 "(9) provide for future payments to the mortgagor based on accumulated
equity (minus any applicable fees and charges), according to the method
that the mortgagor shall select from among the methods under this
paragraph, by payment of the amount-
 
 "(A) based upon a line of credit;
 
 "(B) on a monthly basis over a term specified by the mortgagor;
 
 "(C) on a monthly basis over a term specified by the mortgagor and
based upon a line of credit;
 
 "(D) on a monthly basis over the tenure of the mortgagor;
 
 "(E) on a monthly basis over the tenure of the mortgagor and based
upon a line of credit; or
 
 "(F) on any other basis that the Secretary considers appropriate; and
 
 "(10) provide that the mortgagor may convert the method of payment
under paragraph (9) to any other method during the term of the mortgage,
except that in the case of a fixed rate mortgage, the Secretary may, by
regulation, limit such convertibility.".
 
 (c) Limitation on Liability of Mortgagor.-Section 255(d)(7) of the
National Housing Act (12 U.S.C. 1715z-20(d)(7)) is amended by striking
subparagraph (A) and inserting the following new subparagraph:
 
 "(A) the net sales proceeds from the dwelling that are subject to the
mortgage (based upon the amount of the accumulated equity selected by
the mortgagor to be subject to the mortgage, as agreed upon by the
mortgagor and mortgagee); or".
 
 (d) Disclosures by Mortgagee Regarding Liability of Mortgagor.-Section
255(e) of the National Housing Act (12 U.S.C. 1715z-20(e)) is amended-
 
 (1) in paragraph (2)-
 
 (A) by inserting after "statement" the following: "informing the
homeowner that the liability of the homeowner under the mortgage is
limited and"; and
 
 (B) by striking "and" at the end;
 
 (2) in paragraph (3), by striking the period at the end and inserting
"; and"; and
 
 (3) by adding at the end the following new paragraph:
 
 "(4) prior to loan closing, a statement of the projected total cost
of the mortgage to the homeowner based on the projected total future
loan balance (such cost expressed as a single average annual interest
rate for at least 2 different appreciation rates for the term of the
mortgage) for not less than 2 projected loan terms, as the Secretary
shall determine, which shall include-
 
 "(A) the cost for a short-term mortgage; and
 
 "(B) the cost for a loan term equaling the actuarial life expectancy
of the mortgagor.".