A bill to amend section 245 of the National Housing Act to revise the experimental mortgage insurance program.

Amends the National Housing Act to authorize the Secretary of Housing and Urban Development to insure mortgages and loans at variable interest rates on a permanent basis.

Permits allowable mortgage-to-value limits to be calculated on the basis of a principal obligation that may exceed the principal amount otherwise allowable, so long as the principal obligation does not exceed 97 percent of the appraised value of the property.

Authorizes a limited preemption for mortgages insured pursuant to the graduated mortgage payment program from State interest restrictions.