§ 1715e. — Cooperative housing insurance.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1715e]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER II--MORTGAGE INSURANCE
Sec. 1715e. Cooperative housing insurance
(a) Projects insurable
In addition to mortgages insured under section 1713 of this title,
the Secretary is authorized to insure mortgages as defined in section
1713(a) of this title (including advances on such mortgages during
construction), which cover property held by--
(1) a nonprofit cooperative ownership housing corporation or
nonprofit cooperative ownership housing trust, the permanent
occupancy of the dwellings of which is restricted to members of such
corporation or to beneficiaries of such trust;
(2) a nonprofit corporation or nonprofit trust organized for the
purpose of construction of homes for members of the corporation or
for beneficiaries of the trust; or
(3) a mortgagor, approved by the Secretary which (A) has
certified to the Secretary, as a condition of obtaining the
insurance of a mortgage under this section, that upon completion of
the property or project covered by such mortgage it intends to sell
such property or project to a nonprofit corporation or nonprofit
trust of the character described in paragraph (1) of this subsection
at the actual cost of such property or project as certified pursuant
to section 1715r of this title and will faithfully and diligently
make and carry out all reasonable efforts to consummate such sale,
and (B) shall be regulated or restricted by the Secretary as to
rents, charges, capital structure, rate of return, and methods of
operation during any period while it holds the mortgaged property or
project; and for such purpose the Secretary may make such contracts
with, and acquire for not to exceed $100 such stock or interest in,
any such mortgagor as the Secretary may deem necessary to render
effective such restriction or regulation, such stock or interest to
be paid for out of the Cooperative Management Housing Insurance Fund
and to be redeemed by such mortgagor at par upon the sale of such
property or project to such nonprofit corporation or nonprofit
trust;
which corporations or trusts referred to in paragraphs (1) and (2) of
this subsection are regulated or restricted for the purposes and in the
manner provided in paragraphs (1) and (2) of subsection (b) of section
1713 of this title: Provided, That as applied to mortgages the mortgage
insurance for which is the obligation of the Management Fund, the
reference to the General Insurance Fund in section 1713(b)(2) of this
title shall be construed to refer to the Management Fund. Nothing in
this section may be construed to prevent membership in a nonprofit
housing cooperative from being held in the name of a trust, the
beneficiary of which shall occupy the dwelling unit in accordance with
rules and regulations prescribed by the Secretary.
(b) Eligibility conditions for projects under subsection (a)(1) of this
section
To be eligible for insurance under this section a mortgage on any
property or project of a corporation or trust of the character described
in paragraph (1) of subsection (a) of this section shall involve a
principal obligation in an amount--
(1) Repealed. Pub. L. 93-383, title III, Sec. 304(b), Aug. 22,
1974, 88 Stat. 678.
(2)(A) not to exceed, for such part of the property or project
as may be attributable to dwelling use (excluding exterior land
improvements as defined by the Secretary), $38,025 per family unit
without a bedroom, $42,120 per family unit with one bedroom, $50,310
per family unit with two bedrooms, $62,010 per family unit with
three bedrooms, and $70,200 per family unit with four or more
bedrooms, and not to exceed 98 per centum of the amount which the
Secretary estimates will be the replacement cost of the property or
project when the proposed physical improvements are completed:
Provided, That as to projects to consist of elevator-type structures
the Secretary may, in his discretion, increase the dollar amount
limitations per family unit to not to exceed $43,875 per family unit
without a bedroom, $49,140 per family unit with one bedroom, $60,255
per family unit with two bedrooms, $75,465 per family unit with
three bedrooms, and $85,328 per family unit with four or more
bedrooms, as the case may be, to compensate for the higher costs
incident to the construction of elevator-type structures of sound
standards of construction and design; (B)(i) the Secretary may, by
regulation, increase any of the dollar amount limitations in
subparagraph (A) (as such limitations may have been adjusted in
accordance with section 1712a of this title) by not to exceed 110
percent in any geographical area where the Secretary finds that cost
levels so require and by not to exceed 140 percent where the
Secretary determines it necessary on a project-by-project basis, but
in no case may any such increase exceed 90 percent where the
Secretary determines that a mortgage purchased or to be purchased by
the Government National Mortgage Association in implementing its
special assistance functions under section 1720 \1\ of this title
(as such section existed immediately before November 30, 1983) is
involved; and (ii) in the case of a mortgagor of the character
described in paragraph (3) of subsection (a) of this section the
mortgage shall involve a principal obligation in an amount not to
exceed 90 per centum of the amount which the Secretary estimates
will be the replacement cost of the property or project when the
proposed physical improvements are completed; and (iii) upon the
sale of a property or project by a mortgagor of the character
described in paragraph (3) of subsection (a) of this section to a
nonprofit cooperative ownership housing corporation or trust within
two years after the completion of such property or project the
mortgage given to finance such sale shall involve a principal
obligation in an amount not to exceed the maximum amount computed in
accordance with this subparagraph (B)(i).. \2\
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\1\ See References in Text note below.
\2\ So in original.
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(c) Eligibility conditions for projects under subsection (a)(2) of this
section
To be eligible for insurance under this section a mortgage on any
property or project of a corporation or trust of the character described
in paragraph (2) of subsection (a) of this section shall involve a
principal obligation in an amount not to exceed a sum computed on the
basis of a separate mortgage for each single-family dwelling
(irrespective of whether such dwelling has a party wall or is otherwise
physically connected with another dwelling or dwellings) comprising the
property or project, equal to the total of each of the maximum principal
obligations of such mortgages which would meet the requirements of
section 1709(b)(2) of this title if the mortgagor were the owner and
occupant who had made any required payment on account of the property
prescribed in such paragraph.
(d) Amortization; release from mortgage lien; individual insurance;
commercial and community facilities
Any mortgage insured under this section shall provide for complete
amortization by periodic payments within such term as the Secretary may
prescribe but not to exceed 40 years from the beginning of amortization
of the mortgage, and shall bear interest at such rate as may be agreed
upon by the mortgagor and the mortgagee. The Secretary may consent to
the release of a part or parts of the mortgaged property from the lien
of the mortgage upon such terms and conditions as he may prescribe and
the mortgage may provide for such release, and a mortgage on any project
of a corporation or trust of the character described in paragraph (2) of
subsection (a) of this section may provide that, at any time after the
completion of the construction of the project, such mortgage may be
replaced, in whole or in part, by individual mortgages covering each
individual dwelling in the project in amounts not to exceed the unpaid
balance of the blanket mortgage allocable to the individual property.
Each such individual mortgage may be insured under this section.
Property covered by a mortgage, insured under this section, on a
property or project of a corporation or trust of the character described
in paragraph (1) of subsection (a) of this section may include five or
more family units and may include such commercial and community
facilities as the Secretary deems adequate to serve the occupants.
Property held by a corporation or trust of the character described in
paragraph numbered (2) of subsection (a) of this section which is
covered by a mortgage insured under this section may include such
community facilities, and property held by a mortgagor of the character
described in paragraph numbered (3) of subsection (a) of this section
which is covered by a mortgage insured under this section may include
such commercial and community facilities, as the Secretary deems
adequate to serve the occupants.
(e) Applicability of sections 1710 and 1713 of this title
The provisions of subsections (d), (e), (g), (h), (i), (j), (k),
(l), and (n) of section 1713 of this title shall be applicable to
mortgages insured under this section except individual mortgages insured
pursuant to subsection (d) of this section covering the individual
dwellings in the project, and as to such individual mortgages the
provisions of subsections (a), (c), (d), (e), (f), (g), (h),\1\ (j), and
(k) \1\ of section 1710 of this title shall be applicable: Provided,
That as applied to mortgages or loans the insurance for which is the
obligation of the Management Fund (1) all references to the General
Insurance Fund shall be construed to refer to the Management Fund, and
(2) all references to section 1713 of this title shall be construed to
refer to subsections (a)(1), (a)(3) (if the project involved is acquired
by a cooperative corporation), (i), and (j) of this section.
(f) Technical advice and assistance
The Secretary is authorized, with respect to mortgages insured or to
be insured under this section, to furnish technical advice and
assistance in the organization of corporations or trusts of the
character described in subsection (a) of this section and in the
planning, development, construction, and operation of their housing
projects.
(g) Housing projects designed for single person occupancy
Nothing in this chapter shall be construed to prevent the insurance
of a mortgage under this section covering a housing project designed for
occupancy by single persons, and dwelling units in such a project shall
constitute family units within the meaning of this section.
(h) Failure to sell to a nonprofit organization
In the event that a mortgagor of the character described in
paragraph (3) of subsection (a) of this section obtains an insured
mortgage loan pursuant to this section and fails to sell the property or
project covered by such mortgage to a nonprofit housing corporation or
nonprofit housing trust of the character described in paragraph (1) of
subsection (a) of this section, the Secretary is authorized to refuse,
for such period of time as he shall deem appropriate under the
circumstances, to insure under this section any additional investor-
sponsor type mortgage loans made to such mortgagor or to any other
investor-sponsor mortgagor where, in the determination of the Secretary,
any of its stockholders were identified with such mortgagor.
(i) Mortgages executed by consumer cooperatives covering existing
structures
Nothing in this chapter shall be construed to prevent the insurance
of a mortgage executed by a mortgagor of the character described in
paragraph (1) of subsection (a) of this section covering property upon
which dwelling units and related facilities have been constructed prior
to the filing of the application for mortgage insurance hereunder:
Provided, That the Secretary determines that the consumer interest is
protected and that the mortgagor will be a consumer cooperative. In the
case of properties other than new construction, the limitations in this
section upon the amount of the mortgage shall be based upon the
appraised value of the property for continued use as a cooperative
rather than upon the Secretary's estimate of the replacement cost. As to
any project on which construction was commenced after September 23,
1959, the mortgage on such project shall be eligible for insurance under
this section only in those cases where the construction was subject to
inspection by the Secretary and where there was compliance with the
provisions of section 1715c of this title. As to any project on which
construction was commenced prior to September 23, 1959, such inspection,
and compliance with the provisions of section 1715c of this title, shall
not be a prerequisite.
(j) Insurance of supplementary cooperative loans
(1) With respect to any property covered by a mortgage insured under
this section (or any cooperative housing project covered by a mortgage
insured under section 1713 of this title as in effect prior to April 20,
1950), the Secretary is authorized, upon such terms and conditions as he
may prescribe, to make commitments to insure and to insure supplementary
cooperative loans (including advances during construction or
improvement) made by financial institutions approved by the Secretary.
The Secretary is further authorized to make commitments to insure and to
insure supplementary cooperative loans (including advances during
construction or improvement) with respect to any property purchased from
the Federal Government by a nonprofit corporation or trust of the
character described in paragraph (1) of subsection (a) of this section,
if the property is covered by an uninsured mortgage representing a part
of the purchase price. As used in this subsection ``supplementary
cooperative loan'' means a loan, advance of credit, or purchase of an
obligation representing a loan or advance of credit made for the purpose
of financing any of the following:
(A) Improvements or repairs of the property covered by such
mortgage;
(B) Community facilities necessary to serve the occupants of the
property; or
(C) Cooperative purchases and resales of memberships in order to
provide necessary refinancing for resales of memberships which
involve increases in equity; but in such resales by the cooperative
the downpayments by the new members shall not be less than those
made on the original sales of such memberships.
(2) To be eligible for insurance under this subsection, a
supplementary cooperative loan shall--
(A) be limited to an amount which, when added to the outstanding
mortgage indebtedness on the property, creates a total outstanding
indebtedness which does not exceed the original principal obligation
of the mortgage; except that, in the case of improvements or
additional community facilities, the outstanding indebtedness may be
increased by an amount equal to 97 per centum of the amount which
the Secretary estimates will be the value of such improvements or
facilities, and the new outstanding indebtedness may exceed the
original principal obligation of the mortgage if such new
outstanding indebtedness does not exceed the limitations imposed by
subsection (b) of this section;
(B) have a maturity satisfactory to the Secretary but not to
exceed the remaining term of the mortgage; except that, in the case
of repairs or improvements to a property covered by an uninsured
mortgage dated more than twenty years prior to the date of the
commitment to insure, of such magnitude that the Secretary deems
them to be a major rehabilitation or modernization of such property,
the loan may have a maturity date up to ten years in excess of the
remaining term of the uninsured mortgage;
(C) be secured in such manner as the Secretary may require;
(D) contain such other terms, conditions, and restrictions as
the Secretary may prescribe; and
(E) represent the obligation of a borrower of the character
described in paragraph (1) of subsection (a) of this section.
(k) Cooperative Management Housing Insurance Fund
There is hereby created a Cooperative Management Housing Insurance
Fund (hereinafter referred to as the ``Management Fund''). The
Management Fund shall be used by the Secretary as a revolving fund for
carrying out the provisions of this section with respect to mortgages or
loans insured, on or after August 10, 1965, under subsections (a)(1),
(a)(3) (if the project is acquired by a cooperative corporation), (i),
and (j) of this section. The Management Fund shall also be used as a
revolving fund for mortgages, loans, and commitments transferred to it
pursuant to subsection (m) of this section. The Secretary is directed to
transfer to the Management Fund from the General Insurance Fund an
amount equal to the total of the premium payments theretofore made with
respect to the insurance of mortgages and loans transferred to the
Management Fund pursuant to subsection (m) of this section minus the
total of any administrative expenses theretofore incurred in connection
with such mortgages and loans, plus such other amounts as the Secretary
determines to be necessary and appropriate. General expenses of
operation of the Department of Housing and Urban Development relating to
mortgages or loans which are the obligation of the Management Fund may
be charged to the Management Fund.
(l) General Surplus Account; Participating Reserve Account
The Secretary shall establish in the Management Fund, as of August
10, 1965, a General Surplus Account and a Participating Reserve Account.
The aggregate net income thereafter received or any net loss thereafter
sustained by the Management Fund, in any semiannual period, shall be
credited or charged to the General Surplus Account or the Participating
Reserve Account or both in such manner and amounts as the Secretary may
determine to be in accord with sound actuarial and accounting practice.
Upon termination of the insurance obligation of the Management Fund by
payment of any mortgage or loan insured under this section, and at such
time or times prior to such termination as the Secretary may determine,
the Secretary is authorized to distribute to the mortgagor or borrower a
share of the Participating Reserve Account in such manner and amount as
the Secretary shall determine to be equitable and in accordance with
sound actuarial and accounting practice: Provided, That in no event
shall the amount of the distributable share exceed the aggregate
scheduled annual premiums of the mortgagor or borrower to the year of
payment of the share less the total amount of any share or shares
previously distributed by the Secretary to the mortgagor or borrower:
And provided further, That in no event may a distributable share be
distributed until any funds transferred from the General Insurance Fund
to the Management Fund pursuant to subsection (o) of this section have
been repaid in full to the General Insurance Fund. No mortgagor,
mortgagee, borrower, or lender shall have any vested right in a credit
balance in any such account or be subject to any liability arising out
of the mutuality of the Management Fund. The determination of the
Secretary as to the amount to be paid by him to any mortgagor or
borrower shall be final and conclusive.
(m) Transfer of insurance to Management Fund
The Secretary is authorized to transfer to the Management Fund
commitments for insurance issued under subsections (a)(1), (i), and (j)
of this section prior to August 10, 1965, and to transfer to the
Management Fund the insurance of any mortgage or loan insured prior to
August 10, 1965, under subsection (a)(1), (a)(3) (if the project is
acquired by a cooperative corporation), (i), or (j) of this section:
Provided, That the insurance of any mortgage or loan shall not be
transferred under the provisions of this subsection if on August 10,
1965, the mortgage or loan is in default and the mortgagee or lender has
notified the Secretary in writing of its intention to file an insurance
claim. Any insurance or commitment not so transferred shall continue to
be an obligation of the General Insurance Fund.
(n) Payment of premium charges in debentures
Notwithstanding the limitations contained in other provisions of
this chapter, premium charges for mortgages or loans the insurance of
which is the obligation of either the Management Fund or the General
Insurance Fund may be payable in debentures issued in connection with
mortgages or loans transferred to the Management Fund or in connection
with mortgages or loans insured pursuant to commitments transferred to
the Management Fund, as provided in subsection (m) of this section.
Premium charges on the insurance of mortgages or loans transferred to
the Management Fund or insured pursuant to commitments transferred to
the Management Fund may be payable in debentures which are the
obligation of either the Management Fund or the General Insurance Fund.
(o) Transfer of funds between Management Fund and General Insurance
Fund; investment of monies
Notwithstanding any other provision of this chapter the Secretary is
authorized to transfer funds between the Cooperative Management Housing
Insurance Fund and the General Insurance Fund in such amounts and at
such times as he may determine, taking into consideration the
requirements of each such Fund, to assist in carrying out effectively
the insurance programs for which such Funds were respectively
established. Moneys in the Cooperative Management Housing Insurance Fund
not needed for current operations of the fund shall be deposited with
the Treasurer of the United States to the credit of the Cooperative
Management Housing Insurance Fund or invested in bonds or other
obligations of, or in bonds or other obligations guaranteed as to
principal and interest by, the United States or any agency of the United
States: Provided, That such moneys shall to the maximum extent feasible
be invested in such bonds or other obligations the proceeds of which
will be used to directly support the residential mortgage market. The
Secretary may, with the approval of the Secretary of the Treasury,
purchase in the open market debentures which are the obligations of the
Cooperative Management Housing Insurance Fund. Such purchases shall be
made at a price which will provide an investment yield of not less than
the yield obtainable from other investments authorized by this
subsection. Debentures so purchased shall be canceled and not reissued.
(p) Increase in maximum mortgage amounts for solar energy systems and
energy conservation measures
Notwithstanding any other provision of this section, the project
mortgage amounts which may be insured under this section may be
increased by up to 20 per centum if such increase is necessary to
account for the increased cost of the project due to the installation
therein of a solar energy system (as defined in subparagraph (3) of the
last paragraph of section 1703(a) of this title) or residential energy
conservation measures (as defined in section 8211(11)(A) through (G) and
(I) of title 42) \3\ in cases where the Secretary determines that such
measures are in addition to those required under the minimum property
standards and will be cost-effective over the life of the measure.
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\3\ See References in Text note below.
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(June 27, 1934, ch. 847, title II, Sec. 213, as added Apr. 20, 1950, ch.
94, title I, Sec. 114, 64 Stat. 54; amended Oct. 26, 1951, ch. 577,
Sec. 4, 65 Stat. 648; June 30, 1953, ch. 170, Sec. 6, 67 Stat. 123; Aug.
2, 1954, ch. 649, title I, Secs. 119, 120, 68 Stat. 595, 596; Aug. 11,
1955, ch. 783, title I, Sec. 102(c)-(e), 69 Stat. 635; Aug. 7, 1956, ch.
1029, title I, Sec. 105(a)-(c), 70 Stat. 1093, 1094; Pub. L. 85-104,
title I, Sec. 112, July 12, 1957, 71 Stat. 297; Pub. L. 86-372, title I,
Secs. 105, 116(b), Sept. 23, 1959, 73 Stat. 655, 664; Pub. L. 87-70,
title VI, Sec. 608, June 30, 1961, 75 Stat. 179; Pub. L. 88-560, title
I, Secs. 107(b), 109(a), Sept. 2, 1964, 78 Stat. 774, 777; Pub. L. 89-
117, title II, Secs. 207(b), 208, title XI, Sec. 1108(g), Aug. 10, 1965,
79 Stat. 467, 468, 505; Pub. L. 89-754, title III, Secs. 303, 304, Nov.
3, 1966, 80 Stat. 1266, 1267; Pub. L. 90-19, Sec. 1(a)(1), (3), (4), May
25, 1967, 81 Stat. 17; Pub. L. 90-301, Sec. 3(c), May 7, 1968, 82 Stat.
114; Pub. L. 90-488, title III, Sec. 313, title XVII, Sec. 1722(e), Aug.
1, 1968, 82 Stat. 511, 610; Pub. L. 91-152, title I, Sec. 113(c), Dec.
24, 1969, 83 Stat. 383; Pub. L. 91-609, title I, Sec. 117(b), Dec. 31,
1970, 84 Stat. 1774; Pub. L. 93-383, title III, Secs. 303(b), 304(b),
(c), 311(b), Aug. 22, 1974, 88 Stat. 677, 678, 683; Pub. L. 94-173,
Sec. 3, Dec. 23, 1975, 89 Stat. 1027; Pub. L. 94-375, Sec. 8(a), (b)(2),
Aug. 3, 1976, 90 Stat. 1071; Pub. L. 96-153, title III, Sec. 314, Dec.
21, 1979, 93 Stat. 1117; Pub. L. 96-399, title III, Sec. 310(b), Oct. 8,
1980, 94 Stat. 1642; Pub. L. 97-35, title III, Sec. 339B(a), Aug. 13,
1981, 95 Stat. 417; Pub. L. 97-253, title II, Sec. 201(c), Sept. 8,
1982, 96 Stat. 789; Pub. L. 97-377, title I, Sec. 101(g), Dec. 21, 1982,
96 Stat. 1908; Pub. L. 98-181, title IV, Secs. 404(b)(5), 423(b)(2),
Nov. 30, 1983, 97 Stat. 1209, 1216; Pub. L. 100-242, title IV,
Sec. 426(b), (h), Feb. 5, 1988, 101 Stat. 1915, 1916; Pub. L. 102-550,
title V, Sec. 509(b), Oct. 28, 1992, 106 Stat. 3783; Pub. L. 103-233,
title III, Sec. 306, Apr. 11, 1994, 108 Stat. 373; Pub. L. 106-74, title
II, Sec. 221, Oct. 20, 1999, 113 Stat. 1076; Pub. L. 107-73, title II,
Sec. 213(b), Nov. 26, 2001, 115 Stat. 676; Pub. L. 107-326,
Sec. 5(b)(2), Dec. 4, 2002, 116 Stat. 2794.)
References in Text
Section 1720 of this title, referred to in subsec. (b)(2)(B)(i), was
repealed by Pub. L. 98-181, title IV, Sec. 483(a), Nov. 30, 1983, 97
Stat. 1240.
Subsection (h) of section 1710 of this title, referred to in subsec.
(e), was redesignated subsec. (i) by Pub. L. 105-276, title VI,
Sec. 602(1), Oct. 21, 1998, 112 Stat. 2674.
Subsection (k) of section 1710 of this title, referred to in subsec.
(e), was repealed by Pub. L. 105-276, title VI, Sec. 601(c), Oct. 21,
1998, 112 Stat. 2673.
Section 8211 of title 42, referred to in subsec. (p), was omitted
from the Code pursuant to section 8229 of Title 42, The Public Health
and Welfare, which terminated authority under that section on June 30,
1989.
Amendments
2002--Subsec. (b)(2). Pub. L. 107-326 inserted subpar. (A)
designation after ``(2)'' and substituted ``; (B)(i) the Secretary may,
by regulation, increase any of the dollar amount limitations in
subparagraph (A) (as such limitations may have been adjusted in
accordance with section 1712a of this title)'' for ``: Provided further,
That the Secretary may, by regulation, increase any of the foregoing
dollar amount limitations contained in this paragraph'', ``; and (ii) in
the case of a mortgagor'' for ``: Provided further, That in the case of
a mortgagor'', ``; and (iii) upon the sale of a property'' for ``: And
provided further, That upon the sale of a property'', and ``with this
subparagraph (B)(i).'' for ``with this subsection without regard to the
preceding proviso''.
2001--Subsec. (b)(2). Pub. L. 107-73 substituted ``$38,025'',
``$42,120'', ``$50,310'', ``$62,010'', and ``$70,200'' for ``$30,420'',
``$33,696'', ``$40,248'', ``$49,608'', and ``$56,160'', respectively,
and ``$43,875'', ``$49,140'', ``$60,255'', ``$75,465'', and ``$85,328''
for ``$35,100'', ``$39,312'', ``$48,204'', ``$60,372'', and ``$68,262'',
respectively.
1999--Subsec. (a). Pub. L. 106-74 inserted at end ``Nothing in this
section may be construed to prevent membership in a nonprofit housing
cooperative from being held in the name of a trust, the beneficiary of
which shall occupy the dwelling unit in accordance with rules and
regulations prescribed by the Secretary.''.
1994--Subsec. (b)(2). Pub. L. 103-233 substituted ``$56,160'' for
``$59,160''.
1992--Subsec. (b)(2). Pub. L. 102-550 substituted ``$30,420'',
``$33,696'', ``$40,248'', ``$49,608'', and ``$59,160'' for ``$25,350'',
``$28,080'', ``$33,540'', ``$41,340'', and ``$46,800'', respectively,
and ``$35,100'', ``$39,312'', ``$48,204'', ``$60,372'', and ``$68,262''
for ``$29,250'', ``$32,760'', ``$40,170'', ``$50,310'', and ``$56,885'',
respectively.
1988--Subsec. (b)(2). Pub. L. 100-242 substituted ``$25,350'',
``$28,080'', ``$33,540'', ``$41,340'', and ``$46,800'' for ``$19,500'',
``$21,600'', ``$25,800'', ``$31,800'', and ``$36,000'', respectively,
and ``$29,250'', ``$32,760'', ``$40,170'', ``$50,310'', and ``$56,885''
for ``$22,500'', ``$25,200'', ``$30,900'', ``$38,700'', and ``$43,758'',
respectively, and substituted ``not to exceed 110 percent in any
geographical area where the Secretary finds that cost levels so require
and by not to exceed 140 percent where the Secretary determines it
necessary on a project-by-project basis, but in no case may any such
increase exceed 90 percent where the Secretary determines that a
mortgage purchased or to be purchased by the Government National
Mortgage Association in implementing its special assistance functions
under section 1720 of this title (as such section existed immediately
before November 30, 1983) is involved'' for ``not to exceed 75 per
centum in any geographical area where he finds that cost levels so
require, except that, where the Secretary determines it necessary on a
project by project basis, the foregoing dollar amount limitations
contained in this paragraph may be exceeded by not to exceed 90 per
centum (by not to exceed 140 per centum where the Secretary determines
that a mortgage other than one purchased or to be purchased under
section 1720 of this title by the Government National Mortgage
Association in implementing its special assistance functions is
involved) in such an area''.
1983--Subsec. (b)(2). Pub. L. 98-181, Sec. 423(b)(2), struck out ``:
Provided further, That the foregoing maximum mortgage amounts may be
increased by the amount of the mortgage insurance premium paid at the
time the mortgage is insured'' after ``involved) in such area''.
Subsec. (d). Pub. L. 98-181, Sec. 404(b)(5), substituted provision
that the interest rate for the mortgage be such a rate as agreed upon by
the mortgagor and mortgagee for provision that the rate of interest,
exclusive of premium charges for insurance, not exceed 5\1/4\ per centum
per annum on the amount of the principal obligation outstanding at any
time, or not exceed such per centum per annum not in excess of 6 per
centum per annum as the Secretary finds necessary to meet the mortgage
market.
1982--Subsec. (b)(2). Pub. L. 97-377 inserted ``(by not to exceed
140 per centum where the Secretary determines that a mortgage other than
one purchased or to be purchased under section 1720 of this title by the
Government National Mortgage Association in implementing its special
assistance functions is involved)'' after ``90 per centum''.
Pub. L. 97-253 inserted provision that the foregoing maximum
mortgage amounts may be increased by the amount of the mortgage
insurance premium paid at the time the mortgage is insured.
1981--Subsec. (p). Pub. L. 97-35 inserted ``therein'' after
``installation'' and struck out ``therein'' after ``measure''.
1980--Subsec. (p). Pub. L. 96-399 added subsec. (p).
1979--Subsec. (b)(2). Pub. L. 96-153 in second proviso substituted
``75 per centum'' for ``50 per centum'', and inserted exception that the
dollar amount limitations may be exceeded not to exceed 90 per centum
where the Secretary determines it necessary.
1976--Subsec. (b)(2). Pub. L. 94-375 substituted ``50 per centum in
any geographical area'' for ``75 per centum in any geographical area'',
``$19,500'' for ``$13,000'', ``$21,600'' for ``$18,000'', ``$25,800''
for ``$21,500'', ``$31,800'' for ``$26,500'', ``$36,000'' for
``$30,000'', ``$22,500'' for ``$15,000'', ``$25,200'' for ``$21,000'',
``$30,900'' for ``$25,750'', ``$38,700'' for ``$32,250'', and
``$43,758'' for ``$36,465''.
1975--Subsec. (b)(2). Pub. L. 94-173 raised from 45 per centum to 75
per centum the amount by which any dollar limitation may, by regulation,
be increased.
1974--Subsec. (b)(1). Pub. L. 93-383, Sec. 304(b), struck out par.
(1) which set forth limits on principal obligation of not to exceed
$20,000,000, or not to exceed $25,000,000 if mortgage is executed by a
mortgagor regulated under Federal, State, local laws.
Subsec. (b)(2), Pub. L. 93-383, Secs. 303(b), 311(b), substituted
``$13,000'' for ``$9,900'', ``$15,000'' for ``$11,550'', ``$18,000'' for
``$13,750'', ``$21,000'' for ``$16,500'', ``$21,500'' for ``$16,500'',
``$25,750'' for ``$19,800'', ``$26,500'' for ``$20,350'', ``$30,000''
for ``$23,100'', ``$32,250'' for ``$24,750'', ``$36,465'' for
``$28,050'', and ``98 per centum'' for ``97 per centum''.
Subsec. (c). Pub. L. 93-383, Sec. 304(c), struck out ``not to exceed
$12,500,000 and'' after ``an amount''.
1970--Subsec. (o). Pub. L. 91-609 provided for guarantee as to
principal and interest by any agency of the United States and for
investment of monies in bonds or other obligations the proceeds of which
will be used to directly support the residential mortgage market.
1969--Subsec. (b)(2). Pub. L. 91-152 substituted ``$9,900'' for
``$9,000'', ``$11,550'' for ``$10,500'', ``$13,750'' for ``$12,500'',
``$16,500'' for ``$15,000'' wherever appearing, ``$19,800'' for
``$18,000'', ``$20,350'' for ``$18,500'', ``$23,100'' for ``$21,000'',
``$24,750'' for ``$22,500'', and ``$28,050'' for ``$25,500''.
1968--Subsec. (d). Pub. L. 90-301 substituted provisions limiting
interest rate on mortgages to such per centum per annum not in excess of
6 per centum as the Secretary finds necessary to meet the mortgage
market for former provisions limiting the rate to 5\3/4\ per centum per
annum on individual mortgages covering individual dwellings in the
project.
Subsec. (j)(1). Pub. L. 90-448, Sec. 313(1), authorized the
Secretary to make commitments to insure and to insure supplementary
cooperative loans with respect to any property purchased from the
Federal Government by a nonprofit corporation or trust of the character
described in subsec. (a) (1) of this section, if the property is covered
by an uninsured mortgage representing a part of the purchase price.
Subsec. (j)(2)(B). Pub. L. 90-448, Sec. 313(2), permitted the loan
to have a maturity date up to ten years in excess of the remaining term
of the uninsured mortgage in the case of repairs or improvements to a
property covered by an uninsured mortgage dated more than twenty years
prior to the date of the commitment to insure, of such magnitude that
the Secretary deems them to be a major rehabilitation or modernization
of such property.
Subsec. (o). Pub. L. 90-448, Sec. 1722(e), required deposit with the
Treasurer or investment in bonds or other obligations of, or in bonds or
obligations guaranteed as to principal and interest by, the United
States, of moneys in the Cooperative Management Housing Insurance Fund
not needed for current operations of the fund, authorized purchase in
the open market of debentures which are obligations of the fund, and
directed that debentures so purchased be canceled and not reissued.
1967--Pub. L. 90-19, Sec. 1(a)(3), substituted ``Secretary'' for
``Commissioner'' wherever appearing in subsecs. (a), (a)(3), (b)(2),
(d), (f), (h), (i), (j)(1), (2)(B), (C), (k) to (m), and (o).
Subsec. (i). Pub. L. 90-19, Sec. 1(a)(4), substituted
``Secretary's'' for ``Commissioner's''.
Subsec. (k). Pub. L. 90-19, Sec. 1(a)(1), substituted ``Department
of Housing and Urban Development'' for ``Federal Housing
Administration''.
1966--Subsec. (j)(2)(A). Pub. L. 89-754, Sec. 304, provided that, in
case of improvements or additional community facilities, the outstanding
indebtedness may be increased by an amount equal to 97 per centum of the
amount which the Secretary estimates will be the value of such
improvements or facilities, and the new outstanding indebtedness may
exceed the original principal obligation of the mortgage if such new
outstanding indebtedness does not exceed the limitations imposed by
subsec. (b) of this section.
Subsec. (k). Pub. L. 89-754, Sec. 303(c)(1), directed the Secretary
rather than the Commissioner to transfer to the Management Fund from the
General Insurance Fund an amount equal to the total of the premium
payments theretofore made with respect to the insurance of mortgages and
loans transferred to the Management Fund pursuant to subsec. (m) of this
section minus the total of any administrative expenses theretofore
incurred in connection with such mortgages and loans.
Subsec. (l). Pub. L. 89-754, Sec. 303(c)(2), struck out reference to
subsec. (k) in second proviso.
Subsec. (m). Pub. L. 89-754, Sec. 303(a), struck out before the
proviso ``, but only in cases where the consent of the mortgagee or
lender to the transfer is obtained or a request by the mortgagee or
lender for the transfer is received by the Commissioner within such
period of time after August 10, 1965, as the Commissioner shall
prescribe''.
Subsec. (n). Pub. L. 89-754, Sec. 303(b), substituted ``the
insurance of which is the obligation of either the Management Fund or
the General Insurance Fund'' for ``insured under this section and
sections 1713, 1715v and 1715w of this title'' and inserted provision
for payment of premium charges on the insurance of mortgages or loans
transferred to the Management Fund or insured pursuant to commitments
transferred to the Management Fund in debentures which are the
obligation of either the Management Fund or the General Insurance Fund.
1965--Subsec. (a). Pub. L. 89-117, Secs. 208(b)(1), 1108(g)(1),
inserted proviso construing reference to General Insurance Fund in
section 1713(b)(2) of this title as a reference to Management Fund and
substituted ``Cooperative Management Housing Insurance Fund'' for
``Housing Fund'' in par. (3).
Subsec. (b)(2). Pub. L. 89-117, Sec. 207(b)(1), substituted
``$18,500 per family unit with three bedrooms, and $21,000 per family
unit with four or more bedrooms'' for ``and $18,500 per family unit with
three or more bedrooms'' and ``$22,500 per family unit with three
bedrooms, and $25,500 per family unit with four or more bedrooms'' for
``and $22,500 per family unit with three or more bedrooms''.
Subsec. (c). Pub. L. 89-117, Sec. 207(b)(2), struck out limitation
which prohibited the principal obligation from exceeding a sum equal to
the maximum amount which does not exceed either of the limitations on
the amount of the principal obligations of the mortgage prescribed by
par. (2) of subsec. (b) of this section.
Subsec. (e). Pub. L. 89-177, Secs. 208(b)(2), 1108(g)(2), inserted
proviso construing all references to General Insurance Fund as
references to Management Fund and all references to section 1713 of this
title as references to subsecs. (a)(1), (a)(3), (i) and (j) of this
section and struck out reference to subsecs. (m) and (p) of section 1713
of this title.
Subsecs. (k) to (o). Pub. L. 89-117, Sec. 208(a), added subsecs. (k)
to (o).
1964--Subsec. (b)(2). Pub. L. 88-560, Sec. 107(b), changed limits on
mortgages for property or project attributable to dwelling use from
``$2,500 per room (or $9,000 per family unit if the number of rooms in
such property or project is less than four per family unit)'' to
``$9,000 per family unit without a bedroom, $12,500 per family unit with
one bedroom, $15,000 per family unit with two bedrooms, and $18,500 per
family unit with three or more bedrooms'', changed such mortgage limits
on project consisting of elevator-type structures from a sum ``of $2,500
per room to not exceed $3,000 per room and the dollar amount limitation
of $9,000 per family unit to not exceed $9,400 per family unit'' to
dollar amount limitations ``per family unit to not to exceed $10,500 per
family unit without a bedroom, $15,000 per family unit with one bedroom,
$18,000 per family unit with two bedrooms, and $22,500 per family unit
with three or more bedrooms'', and substituted provision authorizing an
increase ``by not to exceed 45 per centum'' of any of such limits
because of cost levels for former provision authorizing such an increase
``by not to exceed $1,250 per room without regard to the number of rooms
being less than four, or four or more''.
Subsec. (j)(1)(C). Pub. L. 88-560, Sec. 109(a), added cl. (C).
1961--Subsec. (b)(2). Pub. L. 87-70, Sec. 608(a)(1), inserted
``(excluding exterior land improvements as defined by the
Commissioner)''.
Subsec. (d). Pub. L. 87-70, Sec. 608(a)(2), substituted ``five or
more family units'' for ``eight or more family units''.
Subsec. (h). Pub. L. 87-70, Sec. 608(a)(3), substituted ``the
Commissioner is authorized to refuse, for such period of time as he
shall deem appropriate under the circumstances, to insure under this
section any additional investor-sponsor type mortgage loans made to such
mortgagor or to any other investor-sponsor mortgagor where, in the
determination of the Commissioner, any of its stockholders were
identified with such mortgagor'' for ``such mortgagor shall not
thereafter be eligible by reason of such paragraph (3) for insurance of
any additional mortgage loans pursuant to this section''.
Subsec. (j). Pub. L. 87-70, Sec. 608(b), added subsec. (j).
1959--Subsec. (b)(1). Pub. L. 86-372, Sec. 105(a), substituted
``$20,000,000'' for ``$12,500,000''.
Subsec. (b)(2). Pub. L. 86-372, Sec. 105(b), increased mortgage
limits per room from $2,250 to $2,500 and per family unit from $8,100 to
$9,000 for elevator type structures from $2,700 to $3,000 per room and
from $8,400 to $9,400 per family unit, maximum amount of loan from 90
per centum to 97 per centum of replacement cost and in case of a
mortgagor of character described in subsec. (a)(3) of this section from
85 per centum to 90 per centum of replacement cost, changed
authorization of Commissioner to increase dollar amount limitation per
room where cost levels so require by increasing room limit from $1,000
to $1,250, and struck out provisions which authorized a loan of 95 per
centum of replacement cost if 50 per centum of membership consisted of
veterans.
Subsec. (d). Pub. L. 86-372, Sec. 105(c), (d), substituted ``5\1/4\
per centum'' for ``4\1/2\ per centum'' and ``5\3/4\ per centum'', for
``5 per centum'', and inserted provisions permitting property held by a
corporation or trust of the character described in subsec. (a)(2) of
this section which is covered by a mortgage insured under this section
to include such community facilities, and property held by a mortgagor
of the character described in subsec. (a)(3) of this section which is
covered by a mortgage insured under this section to include such
commercial and community facilities, as the Commissioner deems adequate
to serve the occupants.
Subsec. (e). Pub. L. 86-372, Sec. 116(b), inserted reference to
subsec. (k) of section 1710 of this title.
Subsec. (i). Pub. L. 86-372, Sec. 105(e), added subsec. (i).
1957--Subsec. (e). Pub. L. 85-104 substituted ``(h), and (j) of
section 1710 of this title'' for ``and (h) of section 1710 of this
title''.
1956--Subsec. (a). Act Aug. 7, 1956, Sec. 105(a), struck out ``or''
at end of par. (1), inserted ``or'' at end of par. (2), added par. (3),
and inserted ``referred to in paragraphs (1) and (2) of this
subsection'' after ``which corporations or trusts'' in provisions
following par. (3).
Subsec. (b)(2). Act Aug. 7, 1956, Sec. 105(b), substituted ``50 per
centum'' for ``65 per centum'', inserted for purposes of defining
``veteran''; service from Apr. 6, 1917, to Nov. 12, 1918, substituted
service prior to Feb. 1, 1955, for former provision leaving
determination of date to President, and inserted provision authorizing
Commissioner to increase dollar limits per room by not to exceed $1,000
per room.
Subsec. (h). Act Aug. 7, 1956, Sec. 105(c), added subsec. (h).
1955--Subsec. (b)(1). Act Aug. 11, 1955, Sec. 102(c), increased from
$5,000,000 to $12,500,000 the limitation on maximum amount of a
mortgage.
Subsec. (b)(2). Act Aug. 11, 1955, Sec. 102(d), provided that
maximum amount of a mortgage to be insured may be determined on basis of
estimated replacement cost.
Subsec. (c). Act Aug. 11, 1955, Sec. 102(c), increased from
$5,000,000 to $12,500,000 the limitation on maximum amount of a
mortgage.
Subsec. (d). Act Aug. 11, 1955, Sec. 102(e), authorized mortgage
insurance for structures consisting of eight or more family units.
1954--Subsec. (b)(1). Act Aug. 2, 1954, Sec. 119(a), permitted
insured cooperative housing mortgages to be as high as $25,000,000 in
amount if the mortgagor cooperative is regulated or supervised by
Federal or State law as to rents, charges, and methods of operations.
Subsec. (b)(2). Act Aug. 2, 1954, amended par. (2) generally, to:
1. Change, with respect to nonveteran projects, the per family or
per room mortgage amount limitations from $8,100 per family unit or
$1,800 per room, to $2,250 per room and with a per family unit
limitation of $8,100 applicable only if the number of rooms is less than
four;
2. Provide for changing from a cost basis to a valuation basis;
3. Change the basis for allowing increases for veteran membership so
that in all cases such increases would be made only if 65 per cent of
members are veterans, instead of making such increases on the basis of
percentage allowances for percentage of veteran membership; and
4. Authorize an increase to the per room and per family mortgage
amount limitation for elevator-type structures.
Subsec. (c)(1). Act Aug. 2, 1954, Sec. 119(b), with respect to the
reference to section 1709(b)(2) of this title, struck out the reference
to ``paragraph (A), paragraph (C), or paragraph (D)'' of the section,
the paragraph designations having been struck out by another section of
the same act.
Subsec. (f). Act Aug. 2, 1954, Sec. 120, struck out sentence
providing for the appointment of an Assistant Commissioner.
1953--Subsec. (d). Act June 30, 1953, substituted, in first
sentence, ``4\1/2\ per centum per annum, except that individual
mortgages insured pursuant to this subsection covering the individual
dwellings in the project may bear interest at not to exceed 5 per centum
per annum,'' for ``4 per centum per annum''.
1951--Subsec. (b)(2). Act Oct. 26, 1951, struck out ``of World War
II'' wherever appearing and inserted proviso thus making section
applicable to veterans of Korean war.
Effective Date of 1983 Amendment
For effective date of amendment by section 423(b)(2) of Pub. L. 98-
181, see section 423(c) of Pub. L. 98-181, set out as a note under
section 1709 of this title.
Effective Date of 1981 Amendment
Amendment by Pub. L. 97-35 effective Oct. 1, 1981, see section 371
of Pub. L. 97-35, set out as an Effective Date note under section 3701
of this title.
Implementation of 1982 Amendment
Amendment by Pub. L. 97-253 to be implemented only if the Secretary
determines that the program of advance payment of insurance premiums,
considering the effect of said amendment, is actuarially sound, see
section 201(g) of Pub. L. 97-253, set out as a note under section 1709
of this title.
Repeals
The directory language of, but not the amendment made by, Pub. L.
90-301, Sec. 3(c), May 7, 1968, 82 Stat. 114, cited as a credit to this
section, was repealed by Pub. L. 98-181, title IV, Sec. 404(a), Nov. 30,
1983, 97 Stat. 1208.
Special Assistant for Cooperative Housing
Section 102(h) of act Aug. 11, 1955, as amended by Pub. L. 89-754,
title X Sec. 1020(h), Nov. 3, 1966, 80 Stat. 1296; Pub. L. 94-375,
Sec. 18, Aug. 3, 1976, 90 Stat. 1077, provided that: ``In the
performance of, and with respect to, the functions, powers, and duties
vested in him by section 213 of the National Housing Act [this section],
section 221(d)(3), section 235, section 236, section 241, section 243,
section 246, and section 203(n) of the National Housing Act [sections
1715l(d)(3), 1715z, 1715z-1, 1715z-6, 1715z-8, 1715z-11, and 1709(n) of
this title], and section 101 of the Housing and Urban Development Act of
1965 [section 1701s of this title] or section 8 of the United States
Housing Act of 1937 [section 1437f of Title 42, The Public Health and
Welfare] (insofar as the provisions of such sections relate to
cooperative housing), the Secretary of Housing and Urban Development,
notwithstanding the provisions of any other law, shall appoint a Special
Assistant for Cooperative Housing, and provide the Special Assistant
with adequate staff, whose sole responsibility will be to expedite
operations under such sections and to eliminate obstacles to the full
utilization of such sections under the direction and supervision of the
Commissioner and Assistant Secretary for Housing Management. The person
so appointed shall be fully sympathetic with the purposes of such
sections.''
Amendments to Provisions for Family Unit Limits on Rental Housing;
Equitable Application of Such Amendments or Pre-Amendment Provisions to
Projects Submitted for Consideration Prior to September 2, 1964
Equitable application of amendment to subsec. (b)(2) of this section
by section 107(b) of Pub. L. 88-560 or pre-amendment provisions to
projects submitted for consideration prior to Sept. 2, 1964, see section
107(g) of Pub. L. 88-560, set out as a note under section 1713 of this
title.
Section Referred to in Other Sections
This section is referred to in sections 1712a, 1715c, 1715n, 1715q,
1715r, 1715y, 1715z, 1715z-6, 1717, 1731b, 1735c of this title; title 42
section 3535.
