Insurance for secondary mortgages

(a) Federal Housing Administration (1) In general Section 201(a) of the National Housing Act (12 U.S.C. 1707(a)) is amended— (A) by striking a first mortgage each place it occurs and inserting a first mortgage or second mortgage; and (B) by striking secured thereby. and inserting the following: secured thereby; and the term second mortgage means, with respect to real estate against which there is a first mortgage that has been insured under section 203, such classes of second liens as are commonly given to secure advances on, or the unpaid purchase price of, real estate, under the laws of the State in which the real estate is located, together with the credit instrument, if any, secured thereby. (2) Conforming amendments Section 203 of the National Housing Act (12 U.S.C. 1709) is amended by striking first mortgage each place it occurs and inserting first mortgage or second mortgage. (b) Department of Veterans Affairs Section 3703(d)(3) of title 38, United States Code, is amended— (1) in subparagraph (A), by striking first lien and inserting first lien or second lien; and (2) by adding at the end the following new subparagraph: (C) A real estate housing loan may only be secured by second lien if the Secretary insures or guarantees the first lien on such real estate..