§ 1715l. — Housing for moderate income and displaced families.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1715l]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER II--MORTGAGE INSURANCE
Sec. 1715l. Housing for moderate income and displaced families
(a) Purpose
This section is designed to assist private industry in providing
housing for low and moderate income families and displaced families.
(b) Authorization
The Secretary is authorized, upon application by the mortgagee, to
insure under this section as hereinafter provided any mortgage
(including advances during construction on mortgages covering property
of the character described in paragraphs (3) and (4) of subsection (d)
of this section) which is eligible for insurance as provided herein and,
upon such terms and conditions as the Secretary may prescribe, to make
commitments for the insurance of such mortgages prior to the date of
their execution or disbursement thereon.
(c) Definitions
As used in this section, the terms ``mortgage'', ``first mortgage'',
``mortgagee'', ``mortgagor'', ``maturity date'' and ``State'' shall have
the same meaning as in section 1707 of this title.
(d) Eligibility for insurance; conditions; limits
To be eligible for insurance under this section, a mortgage shall--
(1) have been made to and be held by a mortgagee approved by the
Secretary as responsible and able to service the mortgage properly;
(2) be secured by property upon which there is located a
dwelling conforming to applicable standards prescribed by the
Secretary under subsection (f) of this section, and meeting the
requirements of all State laws, or local ordinances or regulations,
relating to the public health or safety, zoning, or otherwise, which
may be applicable thereto, and shall involve a principal obligation
(including such initial service charges, appraisal, inspection, and
other fees as the Secretary shall approve) in an amount (A) not to
exceed (i) $31,000 (or $36,000, if the mortgagor's family includes
five or more persons) in the case of a property upon which there is
located a dwelling designed principally for a single-family
residence, (ii) $35,000 in the case of a property upon which there
is located a dwelling designed principally for a two-family
residence, (iii) $48,600 in the case of a property upon which there
is located a dwelling designed principally for a three-family
residence, or (iv) $59,400 in the case of a property upon which
there is located a dwelling designed principally for a four-family
residence, except that the Secretary may increase the foregoing
amounts to not to exceed $36,000 (or $42,000 if the mortgagor's
family includes five or more persons), $45,000, $57,600, and
$68,400, respectively, in any geographical area where he finds that
cost levels so require; and (B) not to exceed the appraised value of
the property (as of the date the mortgage is accepted for
insurance): Provided, That (i)(1) in the case of a displaced family,
he shall have paid on account of the property at least $200 in the
case of a single-family dwelling, $400 in the case of a two-family
dwelling, $600 in the case of a three-family dwelling, and $800 in
the case of a four-family dwelling, or (2) in the case of any other
family, he shall have paid on account of the property at least 3 per
centum of the Secretary's estimate of its acquisition cost
(excluding the mortgage insurance premium paid at the time the
mortgage is insured), in cash or its equivalent; which amount in
either instance may include amounts to cover settlement costs and
initial payments for taxes, hazard insurance, and other prepaid
expenses; or (ii) in the case of repair and rehabilitation, the
amount of the mortgage shall not exceed the sum of the estimated
cost of repair and rehabilitation and the Secretary's estimate of
the value of the property before repair and rehabilitation, except
that in no case involving refinancing shall such mortgage exceed
such estimated cost of repair and rehabilitation and the amount (as
determined by the Secretary) required to refinance existing
indebtedness secured by the property: Provided further, That the
mortgagor shall to the maximum extent feasible be given the
opportunity to contribute the value of his labor as equity in such
dwelling; or
(3) if executed by a mortgagor which is a public body or agency
(and, except with respect to a project assisted or to be assisted
pursuant to section 8 of the United States Housing Act of 1937 [42
U.S.C. 1437f], which certifies that it is not receiving financial
assistance from the United States exclusively pursuant to such Act
[42 U.S.C. 1437 et seq.]) a cooperative (including an investor-
sponsor who meets such requirements as the Secretary may impose to
assure that the consumer interest is protected), or a limited
dividend corporation (as defined by the Secretary), or a private
nonprofit corporation or association, or other mortgagor approved by
the Secretary, and regulated or supervised under Federal or State
laws or by political subdivisions of States, or agencies thereof, or
by the Secretary under a regulatory agreement or otherwise, as to
rents, charges, and methods of operation, in such form and in such
manner as in the opinion of the Secretary will effectuate the
purposes of this section--
(i) Repealed. Pub. L. 93-383, title III, Sec. 304(e)(1),
Aug. 22, 1974, 88 Stat. 678.
(ii)(I) not 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) $42,048 per family
unit without a bedroom, $48,481 per family unit with one
bedroom, 58,469 \1\ per family unit with two bedrooms, $74,840
per family unit with three bedrooms, and $83,375 per family unit
with four or more bedrooms; except 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 $44,250 per family unit without a bedroom,
$50,724 per family unit with one bedroom, $61,680 per family
unit with two bedrooms, $79,793 per family unit with three
bedrooms, and $87,588 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; (II) the Secretary
may, by regulation, increase any of the dollar amount
limitations in subclause (I) (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 \2\ of this title (as such section existed
immediately before November 30, 1983) is involved; and
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\1\ So in original. Probably should be preceded by a dollar sign.
\2\ See References in Text note below.
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(iii) not exceed (1) in the case of new construction, the
amount which the Secretary estimates will be the replacement
cost of the property or project when the proposed improvements
are completed (the replacement cost may include the land, the
proposed physical improvements, utilities within the boundaries
of the land, architect's fees, taxes, interest during
construction, and other miscellaneous charges incident to
construction and approved by the Secretary), or (2) in the case
of repair and rehabilitation, the sum of the estimated cost of
repair and rehabilitation and the Secretary's estimate of the
value of the property before repair and rehabilitation:
Provided, That the mortgage may involve the financing of the
purchase or property which has been rehabilitated by a local
public agency with Federal assistance pursuant to section
110(c)(8) of the Housing Act of 1949 [42 U.S.C. 1460(c)(8)],
and, in such case, the amount of the mortgage shall not exceed
the appraised value of the property as of the date the mortgage
is accepted for insurance: Provided further, That in the case of
any mortgagor other than a nonprofit corporation or association,
cooperative (including an investor-sponsor), or public body, or
a mortgagor meeting the special requirements of subsection
(e)(1) of this section, the amount of the mortgage shall not
exceed 90 per centum of the amount otherwise authorized under
this section: Provided further, That such property or project,
when constructed, or repaired and rehabilitated, shall be for
use as a rental or cooperative project, and low and moderate
income families or displaced families shall be eligible for
occupancy in accordance with such regulations and procedures as
may be prescribed by the Secretary and the Secretary may adopt
such requirements as he determines to be desirable regarding
consultation with local public officials where such consultation
is appropriate by reason of the relationship of such project to
projects under other local programs; or
(4) if executed by a mortgagor and which is approved by the
Secretary--
(i) Repealed. Pub. L. 93-383, title III, Sec. 304(e)(2),
Aug. 22, 1974, 88 Stat. 678.
(ii)(I) not 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), $37,843 per family
unit without a bedroom, $42,954 per family unit with one
bedroom, $51,920 per family unit with two bedrooms, $65,169 per
family unit with three bedrooms, and $73,846 per family unit
with four or more bedrooms; except 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 $40,876 per family unit without a bedroom,
$46,859 per family unit with one bedroom, $56,979 per family
unit with two bedrooms, $73,710 per family unit with three
bedrooms, and $80,913 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; (II) the Secretary
may, by regulation, increase any of the dollar limitations in
subclause (I) (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 \2\ of this title (as such section existed
immediately before November 30, 1983) is involved;
(iii) not exceed (in the case of a property or project
approved for mortgage insurance prior to the beginning of
construction) 90 per centum of the amount which the Secretary
estimates will be the replacement cost of the property or
project when the proposed improvements are completed (the
replacement cost may include the land, the proposed physical
improvements, utilities within the boundaries of the land,
architect's fees, taxes, interest during construction, and other
miscellaneous charges incident to construction and approved by
the Secretary, and shall include an allowance for builder's and
sponsor's profit and risk of 10 per centum of all of the
foregoing items, except the land, unless the Secretary, after
certification that such allowance is unreasonable, shall by
regulation prescribe a lesser percentage); and
(iv) not exceed 90 per centum of the sum of the estimated
cost of repair and rehabilitation (including the cost of
evaluating and reducing lead-based paint hazards, as such terms
are defined in section 4851b of title 42) and the Secretary's
estimate of the value of the property before repair and
rehabilitation if the proceeds of the mortgage are to be used
for the repair and rehabilitation of a property or project:
Provided, That the Secretary may, in his discretion, require the
mortgagor to be regulated or restricted as to rents or sales,
charges, capital structure, rate of return, and methods of
operation, 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 restrictions or regulations,
with such stock or interest being paid for out of the General
Insurance Fund and being required to be redeemed by the
mortgagor at par upon the termination of all obligations of the
Secretary under the insurance;
(5) bear interest at such rate as may be agreed upon by the
mortgagor and the mortgagee; and contain such terms and provisions
with respect to the application of the mortgagor's periodic payment
to amortization of the principal of the mortgage, insurance,
repairs, alterations, payment of taxes, default reserves,
delinquency charges, foreclosure proceedings, anticipation of
maturity, additional and secondary liens, and other matters as the
Secretary may in his discretion prescribe: Provided, That a mortgage
insured under the provisions of subsection (d)(3) of this section
shall bear interest (exclusive of any premium charges for insurance
and service charge, if any) at not less than the lower of (A) 3 per
centum per annum, or (B) the annual rate of interest determined,
from time to time by the Secretary of the Treasury at the request of
the Secretary, by estimating the average market yield to maturity on
all outstanding marketable obligations of the United States, and by
adjusting such yield to the nearest one-eighth of 1 per centum, and
there shall be no differentiation in the rate of interest charged
under this proviso as between mortgagors under subsection (d)(3) of
this section on the basis of differences in the types or classes of
such mortgagors, and
(6) provide for complete amortization by periodic payments
(unless otherwise approved by the Secretary) within such terms as
the Secretary may prescribe, but as to mortgages coming within the
provisions of subsection (d)(2) of this section not to exceed from
the date of the beginning of amortization of the mortgage (i) 40
years in the case of a displaced family, (ii) 35 years in the case
of any other family if the mortgage is approved for insurance prior
to construction, except that the period in such case may be
increased to not more than 40 years where the mortgagor is not able,
as determined by the Secretary, to make the required payments under
a mortgage having a shorter amortization period, and (iii) 30 years
in the case of any other family where the mortgage is not approved
for insurance prior to construction.
(e) ``Mortgagor'' defined; release of mortgagor or part of property
(1) A mortgagor which may be approved by the Secretary as provided
in subsection (d)(3) of this section includes a mortgagor which, as a
condition of obtaining insurance of the mortgage and prior to the
submission of its application for such insurance, has entered into an
agreement (in form and substance satisfactory to the Secretary) with a
private nonprofit corporation eligible for an insured mortgage under the
provisions of subsection (d)(3) of this section, that the mortgagor will
sell the project when it is completed to the corporation at the actual
cost of the project, as certified pursuant to section 1715r of this
title. The mortgagor to whom the property is sold shall be regulated or
supervised by the Secretary as provided in subsection (d)(3) of this
section to effectuate its purposes.
(2) The Secretary may at any time, under such terms and conditions
as he may prescribe, consent to the release of the mortgagor from his
liability under the mortgage or the credit instrument secured thereby,
or consent to the release of parts of the mortgaged property from the
lien of the mortgage.
(f) Compliance with standards; nondwelling facilities in projects in
urban renewal areas; number of family units; premium charges;
housing for low-income purchasers; expiration of mortgage
insurance authority; ``family'' defined; single occupants in
subsection (d)(3) housing; use of certain housing facilities for
classroom purposes; return of advances for capital improvements
The property or project shall comply with such standards and
conditions as the Secretary may prescribe to establish the acceptability
of such property for mortgage insurance and may include such commercial
and community facilities as the Secretary deems adequate to serve the
occupants: Provided, That in the case of any such property or project
located in an urban renewal area, the provisions of section
1715k(d)(3)(B)(iv) of this title shall apply with respect to the
nondwelling facilities which may be included in the mortgage: Provided
further, That, in the case of a mortgage which bears interest at the
below-market interest rate prescribed in the proviso of subsection
(d)(5) of this section, the provisions of section 1715k(d)(3)(B)(iv) of
this title shall only apply if the mortgagor waives the right to receive
dividends on its equity investment in the portion thereof devoted to
commercial facilities.
A property or project covered by a mortgage insured under the
provisions of subsection (d)(3) or (d)(4) of this section shall include
five or more family units: Provided, That such units, in the case of a
project designed primarily for occupancy by displaced, elderly, or
handicapped families, need not, with the approval of the Secretary,
contain kitchen facilities, and such projects may include central dining
and other shared facilities. The Secretary is authorized to adopt such
procedures and requirements as he determines are desirable to assure
that the dwelling accommodations provided under this section are
available to displaced families. Notwithstanding any provision of this
chapter, the Secretary, in order to assist further the provision of
housing for low and moderate income families, in his discretion and
under such conditions as he may prescribe, may insure a mortgage which
meets the requirements of subsection (d)(3) of this section as in effect
after June 30, 1961, or which meets the requirements of subsection (h),
(i), or (j) of this section with no premium charge, with a reduced
premium charge, or with a premium charge for such period or periods
during the time the insurance is in effect as the Secretary may
determine, and there is authorized to be appropriated, out of any money
in the Treasury not otherwise appropriated, such amounts as may be
necessary to reimburse the General Insurance Fund for any net losses in
connection with such insurance. Any person who is sixty-two years of age
or over, or who is a handicapped person within the meaning of section
1701q \2\ of this title, or who is a displaced person, shall be deemed
to be a family within the meaning of the terms ``family'' and
``families'' as those terms are used in this section. Low- and moderate-
income persons who are less than 62 years of age shall be eligible for
occupancy of dwelling units in a project financed with a mortgage
insured under subsection (d)(3) of this section. In any case in which it
is determined in accordance with regulations of the Secretary that
facilities in existence or under construction on December 31, 1970,
which could appropriately be used for classroom purposes are available
in any such property or project and that public schools in the community
are overcrowded due in part to the attendance at such schools of
residents of the property or project, such facilities may be used for
such purposes to the extent permitted in such regulations (without being
subject to any of the requirements of the proviso in section
1715k(d)(3)(B)(iv) of this title except the requirement that the project
be predominantly residential).
As used in this section the terms ``displaced family'', ``displaced
families'', and ``displaced person'' shall mean a family or families, or
a person, displaced from an urban renewal area, or as a result of
governmental action, or as a result of a major disaster as determined by
the President pursuant to the Disaster Relief and Emergency Assistance
Act [42 U.S.C. 5121 et seq.].
In order to induce advances by owners for capital improvements
(excluding any owner contributions that may be required by the Secretary
as a condition for assistance under section 201 of the Housing and
Community Development Amendments of 1978) to benefit projects covered by
a mortgage under the provisions of subsection (d)(3) of this section
that bears a below market interest rate prescribed in the proviso to
subsection (d)(5) of this section, in establishing the rental charge for
the project the Secretary may include an amount that would permit a
return of such advances with interest to the owner out of project
income, on such terms and conditions as the Secretary may determine. Any
resulting increase in rent contributions shall be--
(A) to a level not exceeding the lower of 30 percent of the
adjusted income of the tenant or the published existing fair market
rent for comparable housing established under section 8(c) of the
United States Housing Act of 1937 [42 U.S.C. 1437f(c)];
(B) phased in equally over a period of not less than 3 years, if
such increase is 30 percent or more; and
(C) limited to not more than 10 percent per year if such
increase is more than 10 percent but less than 30 percent.
Assistance under section 8 of the United States Housing Act of 1937 [42
U.S.C. 1437f] shall be provided, to the extent available under
appropriations Acts, if necessary to mitigate any adverse effects on
income-eligible tenants.
(g) Entitlement of mortgagee to benefits; applicability of other
provisions; debentures; ``going Federal rate'' defined; transfer
of original credit instrument
The mortgagee shall be entitled to receive the benefits of the
insurance as hereinafter provided--
(1) as to mortgages meeting the requirements of paragraph (2) of
subsection (d) of this section, paragraph (5) of subsection (h) of
this section, or paragraph (2) of subsection (i) of this section, as
provided in section 1710(a) of this title with respect to mortgages
insured under section 1709 of this title, and the provisions of
subsections (b), (c), (d), (e), (f), (g), (h),\2\ (j), and (k) \2\
of section 1710 of this title shall be applicable to such mortgages
insured under this section, except that all references therein to
the Mutual Mortgage Insurance Fund or the Fund shall be construed to
refer to the General Insurance Fund and all references therein to
section 1709 of this title shall be construed to refer to this
section; or
(2) as to mortgages meeting the requirements of paragraph (3) or
(4) of subsection (d) of this section, paragraph (1) of subsection
(h) of this section, or paragraph (2) of subsection (j) of this
section as provided in section 1713(g) of this title with respect to
mortgages insured under said section 1713, and the provisions of
subsections (h), (i), (j), (k), and (l) of section 1713 of this
title shall be applicable to such mortgages insured under this
section; or
(3) as to mortgages meeting the requirements of this section
which are insured or initially endorsed for insurance on or after
June 30, 1961, notwithstanding the provisions of paragraphs (1) and
(2) of this subsection, the Secretary in his discretion, in
accordance with such regulations as he may prescribe, may make
payments pursuant to such paragraphs in cash or in debentures (as
provided in the mortgage insurance contract), or may acquire a
mortgage loan that is in default and the security therefor upon
payment to the mortgagee in cash or in debentures (as provided in
the mortgage insurance contract) of a total amount equal to the
unpaid principal balance of the loan plus any accrued interest and
any advances approved by the Secretary and made previously by the
mortgagee under the provisions of the mortgage, and after the
acquisition of any such mortgage by the Secretary the mortgagee
shall have no further rights, liabilities, or obligations with
respect to the loan or the security for the loan. The appropriate
provisions of sections 1710 and 1713 of this title relating to the
issuance of debentures shall apply with respect to debentures issued
under this paragraph, and the appropriate provisions of sections
1710 and 1713 of this title relating to the rights, liabilities, and
obligations of a mortgagee shall apply with respect to the Secretary
when he has acquired an insured mortgage under this paragraph, in
accordance with and subject to regulations (modifying such
provisions to the extent necessary to render their application for
such purposes appropriate and effective) which shall be prescribed
by the Secretary, except that as applied to mortgages so acquired
(A) all references in section 1710 of this title to the Mutual
Mortgage Insurance Fund or the Fund shall be construed to refer to
the General Insurance Fund, and (B) all references in section 1710
of this title to section 1709 of this title shall be construed to
refer to this section. If the insurance is paid in cash, there shall
be added to such payment an amount equivalent to the interest which
the debentures would have earned, computed to a date to be
established pursuant to regulations issued by the Secretary.
(4)(A) in the event any mortgage insured under this section
pursuant to a commitment to insure entered into before November 30,
1983, is not in default at the expiration of twenty years from the
date the mortgage was endorsed for insurance, the mortgagee shall,
within a period thereafter to be determined by the Secretary, have
the option to assign, transfer, and deliver to the Secretary the
original credit instrument and the mortgage securing the same and
receive the benefits of the insurance as hereinafter provided in
this paragraph, upon compliance with such requirements and
conditions as to the validity of the mortgage as a first lien and
such other matters as may be prescribed by the Secretary at the time
the loan is endorsed for insurance. Upon such assignment, transfer,
and delivery the obligation of the mortgagee to pay the premium
charges for insurance shall cease, and the Secretary shall issue to
the mortgagee debentures having a par value equal to the amount of
the original principal obligation of the mortgage which was unpaid
on the date of the assignment, plus accrued interest to such date.
Debentures issued pursuant to this paragraph shall be issued in the
same manner and subject to the same terms and conditions as
debentures issued under paragraph (1) of this subsection, except
that the debentures issued pursuant to this paragraph shall be dated
as of the date the mortgage is assigned to the Secretary, shall
mature ten years after such date, shall bear interest from such date
at the going Federal rate determined at the time of issuance. The
term ``going Federal rate'' as used herein means the annual rate of
interest which the Secretary of the Treasury shall specify as
applicable to the six-month period (consisting of January through
June or July through December) which includes the issuance date of
such debentures, which applicable rate for each such six-month
period shall be determined by the Secretary of the Treasury by
estimating the average yield to maturity, on the basis of daily
closing market bid quotations or prices during the month of May or
the month of November, as the case may be, next preceding such six-
month period, on all outstanding marketable obligations of the
United States having a maturity date of eight to twelve years from
the first day of such month of May or November (or, if no such
obligations are outstanding, the obligation next shorter than eight
years and the obligation next longer than twelve years,
respectively, shall be used), and by adjusting such estimated
average annual yield to the nearest one-eight of 1 per centum. The
Secretary shall have the same authority with respect to mortgages
assigned to him under this paragraph as contained in sections
1713(k) and 1713(l) of this title as to mortgages insured by the
Secretary and assigned to him under section 1713 of this title.
(B) In processing a claim for insurance benefits under this
paragraph, the Secretary may direct the mortgagee to assign,
transfer, and deliver the original credit instrument and the
mortgage securing it directly to the Government National Mortgage
Association in lieu of assigning, transferring, and delivering the
credit instrument and the mortgage to the Secretary. Upon the
assignment, transfer, and delivery of the credit instrument and the
mortgage to the Association, the mortgage insurance contract shall
terminate and the mortgagee shall receive insurance benefits as
provided in subparagraph (A). The Association is authorized to
accept such loan documents in its own name and to hold, service, and
sell such loans as agent for the Secretary. The mortgagor's
obligation to pay a service charge in lieu of a mortgage insurance
premium shall continue as long as the mortgage is held by the
Association or by the Secretary. The Secretary shall have the same
authority with respect to mortgages assigned to the Secretary or the
Association under this subparagraph as provided by section 1715n(c)
of this title.
(C)(i) In lieu of accepting assignment of the original credit
instrument and the mortgage securing the credit instrument under
subparagraph (A) in exchange for receipt of debentures, the
Secretary shall arrange for the sale of the beneficial interests in
the mortgage loan through an auction and sale of the (I) mortgage
loans, or (II) participation certificates, or other mortgage-backed
obligations in a form acceptable to the Secretary (in this
subparagraph referred to as ``participation certificates''). The
Secretary shall arrange the auction and sale at a price, to be paid
to the mortgagee, of par plus accrued interest to the date of sale.
The sale price shall also include the right to a subsidy payment
described in clause (iii).
(ii)(I) The Secretary shall conduct a public auction to
determine the lowest interest rate necessary to accomplish a sale of
the beneficial interests in the original credit instrument and
mortgage securing the credit instrument.
(II) A mortgagee who elects to assign a mortgage shall provide
the Secretary and persons bidding at the auction a description of
the characteristics of the original credit instrument and mortgage
securing the original credit instrument, which shall include the
principal mortgage balance, original stated interest rate, service
fees, real estate and tenant characteristics, the level and duration
of applicable Federal subsidies, and any other information
determined by the Secretary to be appropriate. The Secretary shall
also provide information regarding the status of the property with
respect to the provisions of the Emergency Low Income Housing
Preservation Act of 1987 or any subsequent Act with respect to
eligibility to prepay the mortgage, a statement of whether the owner
has filed a notice of intent to prepay or a plan of action under the
Emergency Low Income Housing Preservation Act of 1987 or any
subsequent Act, and the details with respect to incentives provided
under the Emergency Low Income Housing Preservation Act of 1987 or
any subsequent Act in lieu of exercising prepayment rights.
(III) The Secretary shall, upon receipt of the information in
subclause (II), promptly advertise for an auction and publish such
mortgage descriptions in advance of the auction. The Secretary may
conduct the auction at any time during the 6-month period beginning
upon receipt of the information in subclause (II) but under no
circumstances may the Secretary conduct an auction before 2 months
after receiving the mortgagee's written notice of intent to assign
its mortgage to the Secretary.
(IV) In any auction under this subparagraph, the Secretary shall
accept the lowest interest rate bid for purchase that the Secretary
determines to be acceptable. The Secretary shall cause the accepted
bid to be published in the Federal Register. Settlement for the sale
of the credit instrument and the mortgage securing the credit
instrument shall occur not later than 30 business days after the
date winning bidders are selected in the auction, unless the
Secretary determines that extraordinary circumstances require an
extension (not to exceed 60 days) of the period.
(V) If no bids are received, the bids that are received are not
acceptable to the Secretary, or settlement does not occur within the
period under subclause (IV), the mortgagee shall retain all rights
(including the right to interest, at a rate to be determined by the
Secretary, for the period covering any actions taken under this
subparagraph) under this section to assign the mortgage loan to the
Secretary.
(iii) As part of the auction process, the Secretary shall agree
to provide a monthly interest subsidy payment from the General
Insurance Fund to the purchaser under the auction of the original
credit instrument or the mortgage securing the credit instrument
(and any subsequent holders or assigns who are approved mortgagees).
The subsidy payment shall be paid on the first day of each month in
an amount equal to the difference between the stated interest due on
the mortgage loan and the lowest interest rate necessary to
accomplish a sale of the mortgage loan or participation certificates
(less the servicing fee, if appropriate) for the then unpaid
principal balance plus accrued interest at a rate determined by the
Secretary. Each interest subsidy payment shall be treated by the
holder of the mortgage as interest paid on the mortgage. The
interest subsidy payment shall be provided until the earlier of--
(I) the maturity date of the loan;
(II) prepayment of the mortgage loan in accordance with the
Emergency Low Income Housing Preservation Act of 1987 or any
subsequent Act, where applicable; or
(III) default and full payment of insurance benefits on the
mortgage loan by the Federal Housing Administration.
(iv) The Secretary shall require that the mortgage loans or
participation certificates presented for assignment are auctioned as
whole loans with servicing rights released and also are auctioned
with servicing rights retained by the current servicer.
(v) To the extent practicable, the Secretary shall encourage
State housing finance agencies, nonprofit organizations, and
organizations representing the tenants of the property securing the
mortgage, or a qualified mortgagee participating in a plan of action
under the Emergency Low Income Housing Preservation Act of 1987 or
subsequent Act to participate in the auction.
(vi) The Secretary shall implement the requirements imposed by
this subparagraph within 30 days from November 5, 1990, and not be
subject to the requirement of prior issuance of regulations in the
Federal Register. The Secretary shall issue regulations implementing
this section within 6 months of November 5, 1990.
(vii) Nothing in this subparagraph shall diminish or impair the
low income use restrictions applicable to the project under the
original regulatory agreement or the revised agreement entered into
pursuant to the Emergency Low Income Housing Preservation Act of
1987 or subsequent Act, if any, or other agreements for the
provision of Federal assistance to the housing or its tenants.
(viii) This subparagraph shall not apply after December 31,
2002, except that this subparagraph shall continue to apply if the
Secretary receives a mortgagee's written notice of intent to assign
its mortgage to the Secretary on or before such date. Not later than
January 31 of each year (beginning in 1992), the Secretary shall
submit to the Congress a report including statements of the number
of mortgages auctioned and sold and their value, the amount of
subsidies committed to the program under this subparagraph, the
ability of the Secretary to coordinate the program with the
incentives provided under the Emergency Low Income Housing
Preservation Act of 1987 or subsequent Act, and the costs and
benefits derived from the program for the Federal Government.
(ix) The authority of the Secretary to conduct multifamily
auctions under this paragraph shall be effective for any fiscal year
only to the extent and in such amounts as are approved in
appropriations Acts for the costs of loan guarantees (as defined in
section 661a of title 2), including the cost of modifying loans.
(h) Insurance of mortgages to finance purchase and rehabilitation by
nonprofit organizations of housing for resale to low-income
purchasers, and insurance of mortgages executed for the purpose
of financing rehabilitation or improvement of dwellings owned
and occupied by mortgagors who purchased from nonprofit
organizations
(1) In addition to mortgages insured under the other provisions of
this section, the Secretary is authorized, upon application by the
mortgagee, to insure under this subsection as hereinafter provided any
mortgage (including advances under such mortgage during rehabilitation)
which is executed by a nonprofit organization to finance the purchase
and rehabilitation of deteriorating or substandard housing for
subsequent resale to low-income home purchasers and, upon such terms and
conditions as the Secretary may prescribe, to make commitments for the
insurance of such mortgages prior to the date of their execution or
disbursement thereon.
(2) To be eligible for insurance under paragraph (1) of this
subsection, a mortgage shall--
(A) be executed by a private nonprofit corporation or
association, approved by the Secretary, for financing the purchase
and rehabilitation (with the intention of subsequent resale) of
property comprising one or more tracts or parcels, whether or not
contiguous, upon which there is located deteriorating or substandard
housing consisting of (i) four or more single-family dwellings of
detached, semidetached, or row construction, or (ii) four or more
one-family units in a structure or structures for which a plan of
family unit ownership approved by the Secretary is established;
(B) be secured by the property which is to be purchased and
rehabilitated with the proceeds thereof;
(C) be in a principal amount not exceeding the appraised value
of the property at the time of its purchase under the mortgage plus
the estimated cost of the rehabilitation;
(D) bear interest (exclusive of premium charges for insurance
and service charge, if any) at the rate in effect under the proviso
in subsection (d)(5) of this section at the time of execution;
(E) provide for complete amortization (subject to paragraph
(5)(E)) by periodic payments within such term as the Secretary may
prescribe; and
(F) provide for the release of individual single-family
dwellings from the lien of the mortgage upon the sale of the
rehabilitated dwellings in accordance with paragraph (5).
(3) No mortgage shall be insured under paragraph (1) unless the
mortgagor shall have demonstrated to the satisfaction of the Secretary
that (A) the property to be rehabilitated is located in a neighborhood
which is sufficiently stable and contains sufficient public facilities
and amenities to support long-term values, or (B) the rehabilitation to
be carried out by the mortgagor plus its related activities and the
activities of other owners of housing in the neighborhood, together with
actions to be taken by public authorities, will be of such scope and
quality as to give reasonable promise that a stable environment will be
created in the neighborhood.
(4) The aggregate principal balance of all mortgages insured under
paragraph (1) and outstanding at any one time shall not exceed
$50,000,000.
(5)(A) No mortgage shall be insured under paragraph (1) unless the
mortgagor enters into an agreement (in form and substance satisfactory
to the Secretary) that it will offer to sell the dwellings involved,
upon completion of their rehabilitation, to individuals or families
(hereinafter referred to as ``low-income purchasers'') determined by the
Secretary to have incomes below the maximum amount specified (with
respect to the area involved) in section 1701s(c)(1) of this title.
(B) The Secretary is authorized to insure under this paragraph
mortgages executed to finance the sale of individual dwellings to low-
income purchasers as provided in subparagraph (A). Any such mortgage
shall--
(i) be in a principal amount equal to that portion of the unpaid
balance of the principal mortgage covering the property (insured
under paragraph (1)) which is allocable to the individual dwelling
involved; and
(ii) bear interest at the same rate as the principal mortgage or
such lower rate, not less than 1 per centum, as the Secretary may
prescribe if in his judgment the purchaser's income is sufficiently
low to justify the lower rate, and provide for complete amortization
within a term equal to the remaining term (determined without regard
to subparagraph (E)) of such principal mortgage: Provided, That, if
the rate of interest initially prescribed is less than the rate
borne by the principal mortgage and the purchaser's income (as
determined on the basis of periodic review) subsequently rises, the
rate of interest so prescribed shall be increased (but not above the
rate borne by such principal mortgage), under regulations of the
Secretary, to the extent appropriate to reflect the increase in such
income, and the mortgage shall so provide.
(C) The price for which any individual dwelling is sold to a low-
income purchaser under this paragraph shall be the amount of the
mortgage covering the sale as determined under subparagraph (B), except
that the purchaser shall in addition thereto be required to pay on
account of the property at the time of purchase such amount (which shall
not be less than $200, but which may be applied in whole or in part
toward closing costs) as the Secretary may determine to be reasonable
and appropriate in the circumstances.
(D) Upon the sale under this paragraph of any individual dwelling,
such dwelling shall be released from the lien of the principal mortgage,
and such mortgage shall thereupon be replaced by an individual mortgage
insured under this paragraph to the extent of the portion of its unpaid
balance which is allocable to the dwelling covered by such individual
mortgage. Until all of the individual dwellings in the property covered
by the principal mortgage have been sold, the mortgagor shall hold and
operate the dwellings remaining unsold at any given time as though they
constituted rental units in a project covered by a mortgage which is
insured under subsection (d)(3) (and which receives the benefits of the
interest rate provided for in the proviso in subsection (d)(5) of this
section).
(E) Upon the sale under this paragraph of all of the individual
dwellings in the property covered by the principal mortgage, and the
release of all individual dwellings from the lien of the principal
mortgage, the insurance of the principal mortgage shall be terminated
and no adjusted premium charge shall be charged by the Secretary upon
such termination.
(F) Any mortgage insured under this paragraph shall contain a
provision that if the low-income mortgagor does not continue to occupy
the property the interest rate shall increase to the highest rate
permissible under this section and the regulations of the Secretary
effective at the time of commitment for insurance of the principal
mortgage; except that the increase in interest rate shall not be
applicable if the property is sold and the purchaser is (i) the
nonprofit organization which executed the principal mortgage, (ii) a
public housing agency having jurisdiction under the United States
Housing Act of 1937 [42 U.S.C. 1437 et seq.] over the area where the
dwelling is located, or (iii) a low-income purchaser approved for the
purposes of this paragraph by the Secretary.
(6) In addition to the mortgages that may be insured under
paragraphs (1) and (5), the Secretary is authorized to insure under this
subsection at any time within one year after August 1, 1968, upon such
terms and conditions as he may prescribe, mortgages which are executed
by individuals or families that meet the income criteria prescribed in
paragraph (5)(A) and are executed for the purpose of financing the
rehabilitation or improvement of single-family dwellings of detached,
semidetached, or row construction that are owned in each instance by a
mortgagor who has purchased the dwelling from a nonprofit organization
of the type described in this subsection. To be eligible for such
insurance, a mortgage shall--
(A) be in a principal amount not exceeding the lesser of $18,000
or the sum of the estimated cost of repair and rehabilitation and
the Secretary's estimate of the value of the property before repair
and rehabilitation, except that in no case involving refinancing
shall such mortgage exceed such estimated cost of repair and
rehabilitation and the amount (as determined by the Secretary)
required to refinance existing indebtedness secured by the property;
(B) bear interest (exclusive of premium charges for insurance
and service charge, if any) at 3 per centum per annum or such lower
rate, not less than 1 per centum, as the Secretary may prescribe if
in his judgment the mortgagor's income is sufficiently low to
justify the lower rate: Provided, That, if the rate of interest
initially prescribed is less than 3 per centum per annum and the
mortgagor's income (as determined on the basis of periodic review)
subsequently rises, the rate shall be increased (but not above 3 per
centum), under regulations of the Secretary, to the extent
appropriate to reflect the increase in such income, and the mortgage
shall so provide;
(C) involve a mortgagor that shall have paid on account of the
property at the time of the rehabilitation such amount (which shall
not be less than $200 in cash or its equivalent, but which may be
applied in whole or in part toward closing costs) as the Secretary
may determine to be reasonable and appropriate under the
circumstances; and
(D) contain a provision that, if the low-income mortgagor does
not continue to occupy the property, the interest rate shall
increase to the highest rate permissible under this section and the
regulations of the Secretary effective at the time the commitment
was issued for insurance of the mortgage; except that the increase
in interest rate shall not be applicable if the property is sold and
the purchaser is (i) a nonprofit organization which has been engaged
in purchasing and rehabilitating deteriorating and substandard
housing with financing under a mortgage insured under paragraph (1)
of this subsection, (ii) a public housing agency having jurisdiction
under the United States Housing Act of 1937 [42 U.S.C. 1437 et seq.]
over the area where the dwelling is located, or (iii) a low-income
purchaser approved for the purposes of this paragraph by the
Secretary.
(7) Where the Secretary has approved a plan of family unit
ownership, the terms ``single-family dwelling'', ``single-family
dwellings'', ``individual dwelling'', and ``individual dwellings'' shall
mean a family unit or family units, together with the undivided interest
(or interests) in the common areas and facilities.
(8) For purposes of this subsection, the terms ``single-family
dwelling'' and ``single-family dwellings'' (except for purposes of
paragraph (7)) shall include a two-family dwelling which has been
approved by the Secretary.
(i) Conversion of insured project to plan of family unit ownership; sale
of units; agreements for maintenance; release from lien of
project mortgage; insurance of mortgages financing purchase of
individual family units; eligibility for insurance; definitions
(1) The Secretary is authorized, with respect to any project
involving a mortgage insured under subsection (d)(3) of this section
which bears interest at the below-market interest rate prescribed in the
proviso of subsection (d)(5) of this section, to permit a conversion of
the ownership of such project to a plan of family unit ownership. Under
such plan, each family unit shall be eligible for individual ownership
and provision shall be included for the sale of the family units,
together with an undivided interest in the common areas and facilities
which serve the project, to low or moderate income purchasers. The
Secretary shall obtain such agreements as he determines to be necessary
to assure continued maintenance of the common areas and facilities. Upon
such sale, the family unit and the undivided interest in the common
areas shall be released from the lien of the project mortgage.
(2)(A) The Secretary is authorized, upon application by the
mortgagee, to insure under this subsection mortgages financing the
purchase of individual family units under the plan prescribed in
paragraph (1). Commitments may be issued by the Secretary for the
insurance of such mortgages prior to the date of their execution or
disbursement thereon, upon such terms and conditions as the Secretary
may prescribe. To be eligible for such insurance, the mortgage shall--
(i) be executed by a mortgagor having an income within the
limits prescribed by the Secretary for occupants of projects
financed with a mortgage insured under subsection (d)(3) of this
section which bears interest at the below-market rate prescribed in
the proviso of subsection (d)(5) of this section;
(ii) involve a principal obligation (including such initial
service charges, and such appraisal, inspection, and other fees, as
the Secretary shall approve) in an amount not to exceed the
Secretary's estimate of the appraised value of the family unit,
including the mortgagor's interest in the common areas and
facilities, as of the date the mortgage is accepted for insurance;
(iii) bear interest at a rate determined by the Secretary (which
may vary in accordance with the regulations of the Secretary
promulgated pursuant to the last sentence of paragraph (4) of this
subsection) but not less than the below-market rate in effect under
the proviso of subsection (d)(5) of this section at the date of the
commitment for insurance; and
(iv) provide for complete amortization by periodic payments
within such term as the Secretary may prescribe, but not to exceed
forty years from the beginning of amortization of the mortgage.
(B) The price for which the individual family unit is sold to the
low or moderate income purchaser shall not exceed the appraised value of
the property, as determined under subparagraph (A)(ii), except that the
purchaser shall be required to pay on account of the property at the
time of purchase at least such amount, in cash or its equivalent (which
shall be not less than 3 per centum of such price, but which may be
applied in whole or in part toward closing costs), as the Secretary may
determine to be reasonable and appropriate.
(3) Upon the sale of all of the family units covered by the project
mortgage, and the release of all of the family units (including the
undivided interest allocable to each unit in the common areas and
facilities) from the lien of the project mortgage, the insurance of the
project mortgage shall be terminated and no adjusted premium charge
shall be collected by the Secretary upon such termination.
(4) Any mortgage covering an individual family unit insured under
this subsection shall contain a provision that, if the original
mortgagor does not continue to occupy the property, the interest rate
shall increase to the highest rate permissible under this section and
the regulations of the Secretary effective at the time the commitment
was issued for the insurance of the project mortgage; except that the
requirement for an increase in interest rate shall not be applicable if
the property is sold and the purchaser is (i) a nonprofit purchaser
approved by the Secretary, or (ii) a low or moderate income purchaser
who has an income within the limits prescribed by the Secretary for
occupants of projects financed with a mortgage insured under subsection
(d)(3) of this section which bears interest at the below-market rate
prescribed in the proviso of subsection (d)(5) of this section. The
mortgage shall also contain a provision that, if the Secretary
determines that the annual income of the original mortgagor (or a
purchaser described in clause (ii) of the preceding sentence) has
increased to an amount enabling payment of a greater rate of interest,
the interest rate of the individual mortgage may be increased up to the
highest rate permissible under the regulations of the Secretary for
mortgages insured under this section, effective at the time the
commitment was issued for the insurance of the mortgage.
(5) For the purpose of this section--
(i) the term ``mortgage'', when used in relation to a mortgage
insured under paragraph (2) of this subsection, includes a first
mortgage given to secure the unpaid purchase price of a fee interest
in, or a long-term lease-hold interest in, a one-family unit in a
multifamily project and an undivided interest in the common areas
and facilities which serve the project; and
(ii) the term ``common areas and facilities'' includes the land
and such commercial, community, and other facilities as are approved
by the Secretary.
(j) Conversion of insured rental projects to cooperatives; eligibility
for membership; insurance of cooperative mortgages financing
purchase of projects; eligibility for insurance
(1) The Secretary is authorized, with respect to any rental project
involving a mortgage insured under subsection (d)(3) of this section
which bears interest at the below-market interest rate prescribed in the
proviso of subsection (d)(5) of this section, to permit a conversion of
the ownership of such project to a cooperative approved by the
Secretary. Membership in such cooperative shall be made available only
to those families having an income within the limits prescribed by the
Secretary for occupants of projects financed with a mortgage insured
under subsection (d)(3) of this section, which bears interest at such
below-market rate: Provided, That families residing in the rental
project at the time of its conversion to a cooperative who do not meet
such income limits may be permitted to become members in the cooperative
under such special terms and conditions as the Secretary may prescribe.
(2) The Secretary is authorized, upon application by the mortgagee,
to insure under this subsection cooperative mortgages financing the
purchase of projects meeting the requirements of paragraph (1).
Commitments may be issued by the Secretary for the insurance of such
mortgages prior to the date of their execution or disbursement thereon,
upon such terms and conditions as the Secretary may prescribe. To be
eligible for such insurance, the mortgage shall--
(i) involve a principal obligation (including such initial
service charges and appraisal, inspection, and other fees as the
Secretary shall approve) in an amount not exceeding the appraised
value of the property for continued use as a cooperative, which
value shall be based upon a mortgage amount on which the debt
service can be met from the income of the property when operated on
a nonprofit basis, after the payment of all operating expenses,
taxes, and required reserves;
(ii) bear interest at the below-market rate prescribed in the
proviso of subsection (d)(5) of this section; and
(iii) provide for complete amortization within such term as the
Secretary may prescribe.
(k) Increase in maximum insurance amounts for costs incurred from solar
energy systems and energy conservation measures
With respect to any project insured under subsection (d)(3) or
(d)(4) of this section, the Secretary may further increase the dollar
amount limitations which would otherwise apply for the purpose of those
subsections 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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(l) Rental charges; ``eligible multifamily housing'' defined
(1) Notwithstanding any other provision of law, tenants residing in
eligible multifamily housing whose incomes exceed 80 percent of area
median income shall pay as rent not more than the lower of the following
amounts: (A) 30 percent of the family's adjusted monthly income; or (B)
the relevant fair market rental established under section 8(b) of the
United States Housing Act of 1937 [42 U.S.C. 1437f(b)] for the
jurisdiction in which the housing is located. An owner shall phase in
any increase in rents for current tenants resulting from this
subsection.
(2) For purposes of this subsection, the term ``eligible multifamily
housing'' means any housing financed by a loan or mortgage that is (A)
insured or held by the Secretary under subsection (d)(3) of this section
and assisted under section 1701s of this title or section 8 of the
United States Housing Act of 1937 [42 U.S.C. 1437f]; or (B) insured or
held by the Secretary and bears interest at a rate determined under the
proviso of subsection (d)(5) of this section.
(June 27, 1934, ch. 847, title II, Sec. 221, as added Aug. 2, 1954, ch.
649, title I, Sec. 123, 68 Stat. 599; amended Aug. 11, 1955, ch. 783,
title I, Sec. 102(c), (j), 69 Stat. 635; Aug. 7, 1956, ch. 1029, title
I, Sec. 108, title III, Sec. 307(c), 70 Stat. 1094, 1102; Pub. L. 85-
104, title I, Sec. 112, July 12, 1957, 71 Stat. 297; Pub. L. 86-372,
title I, Secs. 110(a)(1), (2), (b)-(e), 116(b), Sept. 23, 1959, 73 Stat.
658-661, 664; Pub. L. 87-70, title I, Sec. 101(a), June 30, 1961, 75
Stat. 149; Pub. L. 88-54, June 29, 1963, 77 Stat. 73; Pub. L. 88-560,
title I, Secs. 105(c)(2), 107(d), 114, title II, Secs. 202, 203(b),
Sept. 2, 1964, 78 Stat. 772, 775, 778, 783, 784; Pub. L. 89-117, title
I, Sec. 102(a), (b), title II, Sec. 207(d), title XI, Sec. 1108(i), Aug.
10, 1965, 79 Stat. 454, 467, 505; Pub. L. 89-754, title III, Secs. 307-
310(c), Nov. 3, 1966, 80 Stat. 1268-1270; Pub. L. 89-769, Sec. 4, Nov.
6, 1966, 80 Stat. 1317; Pub. L. 90-19, Sec. 1(a)(3), (4), May 25, 1967,
81 Stat. 17; Pub. L. 90-448, title I, Secs. 101(b), (c), 105, title III,
Secs. 305, 306, 311(b), 316, Aug. 1, 1968, 82 Stat. 483, 488, 508, 510,
512; Pub. L. 91-78, Sec. 2(c), Sept. 30, 1969, 83 Stat. 125; Pub. L. 91-
152, title I, Secs. 101(c), 113(e), Dec. 24, 1969, 83 Stat. 379, 384;
Pub. L. 91-432, Sec. 1(c), Oct. 2, 1970, 84 Stat. 887; Pub. L. 91-473,
Sec. 1(c), Oct. 21, 1970, 84 Stat. 1064; Pub. L. 91-525, Sec. 1(c), Dec.
1, 1970, 84 Stat. 1384; Pub. L. 91-606, title III, Sec. 301(d), Dec. 31,
1970, 84 Stat. 1758; Pub. L. 91-609, title I, Secs. 101(c), 114(a),
114[115](a), Dec. 31, 1970, 84 Stat. 1770, 1773; Pub. L. 92-503,
Sec. 1(c), Oct. 18, 1972, 86 Stat. 906; Pub. L. 93-85, Sec. 1(c), Aug.
10, 1973, 87 Stat. 220; Pub. L. 93-117, Sec. 1(c), Oct. 2, 1973, 87
Stat. 421; Pub. L. 93-288, title VII, Sec. 702(d), formerly title VI,
Sec. 602(d), May 22, 1974, 88 Stat. 163, renumbered title VII,
Sec. 702(d), Pub. L. 103-337, div. C, title XXXIV, Sec. 3411(a)(1), (2),
Oct. 5, 1994, 108 Stat. 3100; Pub. L. 93-383, title III, Secs. 302(c),
303(d), (e), 304(e), 316(c), 319(a), Aug. 22, 1974, 88 Stat. 676-678,
685, 686; Pub. L. 94-173, Secs. 3, 4(a), Dec. 23, 1975, 89 Stat. 1027;
Pub. L. 94-375, Secs. 3(d), 8(a), (b)(4), (5), Aug. 3, 1976, 90 Stat.
1069, 1071, 1072; Pub. L. 95-24, title I, Sec. 106, Apr. 30, 1977, 91
Stat. 56; Pub. L. 95-60, Sec. 1(c), June 30, 1977, 91 Stat. 257; Pub. L.
95-80, Sec. 1(c), July 31, 1977, 91 Stat. 339; Pub. L. 95-128, title
III, Secs. 301(c), 303(c), Oct. 12, 1977, 91 Stat. 1131, 1132; Pub. L.
95-406, Sec. 1(c), Sept. 30, 1978, 92 Stat. 879; Pub. L. 95-557, title
III, Secs. 301(c), 325, Oct. 31, 1978, 92 Stat. 2096, 2104; Pub. L. 96-
71, Sec. 1(c), Sept. 28, 1979, 93 Stat. 501; Pub. L. 96-105, Sec. 1(c),
Nov. 8, 1979, 93 Stat. 794; Pub. L. 96-153, title III, Secs. 301(c),
314, Dec. 21, 1979, 93 Stat. 1111, 1117; Pub. L. 96-372, Sec. 1(c), Oct.
3, 1980, 94 Stat. 1363; Pub. L. 96-399, title III, Secs. 301(c), 310(d),
333(c), (d), Oct. 8, 1980, 94 Stat. 1638, 1642, 1653; Pub. L. 97-35,
title III, Secs. 331(c), 339B(a), Aug. 13, 1981, 95 Stat. 412, 417; Pub.
L. 97-253, title II, Sec. 201(d), Sept. 8, 1982, 96 Stat. 789; Pub. L.
97-289, Sec. 1(c), Oct. 6, 1982, 96 Stat. 1230; Pub. L. 97-377, title I,
Sec. 101(g), Dec. 21, 1982, 96 Stat. 1908; Pub. L. 98-35, Sec. 1(c), May
26, 1983, 97 Stat. 197; Pub. L. 98-109, Sec. 1(c), Oct. 1, 1983, 97
Stat. 745; Pub. L. 98-181, title IV, Secs. 401(c), 404(b)(8), 408, 409,
423(b)(3), 432(b), (c), 446(d), Nov. 30, 1983, 97 Stat. 1207, 1209,
1211, 1217, 1220, 1228; Pub. L. 98-479, title II, Sec. 204(a)(6), Oct.
17, 1984, 98 Stat. 2232; Pub. L. 99-120, Sec. 1(c), Oct. 8, 1985, 99
Stat. 502; Pub. L. 99-156, Sec. 1(c), Nov. 15, 1985, 99 Stat. 815; Pub.
L. 99-219, Sec. 1(c), Dec. 26, 1985, 99 Stat. 1730; Pub. L. 99-267,
Sec. 1(c), Mar. 27, 1986, 100 Stat. 73; Pub. L. 99-272, title III,
Sec. 3007(c), Apr. 7, 1986, 100 Stat. 104; Pub. L. 99-289, Sec. 1(b),
May 2, 1986, 100 Stat. 412; Pub. L. 99-345, Sec. 1, June 24, 1986, 100
Stat. 673; Pub. L. 99-430, Sept. 30, 1986, 100 Stat. 986; Pub. L. 100-
122, Sec. 1, Sept. 30, 1987, 101 Stat. 793; Pub. L. 100-154, Nov. 5,
1987, 101 Stat. 890; Pub. L. 100-170, Nov. 17, 1987, 101 Stat. 914; Pub.
L. 100-179, Dec. 3, 1987, 101 Stat. 1018; Pub. L. 100-200, Dec. 21,
1987, 101 Stat. 1327; Pub. L. 100-242, title IV, Secs. 401(a)(2),
406(b)(10)-(13), 426(d), (e), (h), Feb. 5, 1988, 101 Stat. 1898, 1901,
1916; Pub. L. 100-707, title I, Sec. 109(e)(3), Nov. 23, 1988, 102 Stat.
4708; Pub. L. 101-508, title II, Sec. 2201, Nov. 5, 1990, 104 Stat.
1388-21; Pub. L. 101-625, title VI, Secs. 611(b)(2), 612(b), Nov. 28,
1990, 104 Stat. 4278, 4279; Pub. L. 102-550, title V, Secs. 509(d), (e),
516(d), title X, Sec. 1012(l), Oct. 28, 1992, 106 Stat. 3783, 3791,
3907; Pub. L. 104-134, title I, Sec. 101(e) [title II, Sec. 219], Apr.
26, 1996, 110 Stat. 1321-257, 1321-290; renumbered title I, Pub. L. 104-
140, Sec. 1(a), May 2, 1996, 110 Stat. 1327; Pub. L. 105-276, title II,
Sec. 222, Oct. 21, 1998, 112 Stat. 2489; Pub. L. 106-377, Sec. 1(a)(1)
[title II, Sec. 209(b)], Oct. 27, 2000, 114 Stat. 1441, 1441A-25; Pub.
L. 107-73, title II, Sec. 213(d), (e), Nov. 26, 2001, 115 Stat. 676,
677; Pub. L. 107-326, Sec. 5(b)(4), (5), Dec. 4, 2002, 116 Stat. 2795.)
References in Text
The General Insurance Fund, referred to in text, was established by
section 1735c of this title.
Section 1720 of this title, referred to in subsec. (d)(3)(ii)(II),
(4)(ii)(II) was repealed by Pub. L. 98-181, title IV, Sec. 483(a), Nov.
30, 1983, 97 Stat. 1240.
The United States Housing Act of 1937, and ``such act'', referred to
in subsecs. (d)(3), (h)(5)(F), (6)(D), is act Sept. 1, 1937, ch. 896, as
revised generally by Pub. L. 93-383, title II, Sec. 201(a), Aug. 22,
1974, 88 Stat. 653, which is classified generally to chapter 8
(Sec. 1437 et seq.) of Title 42, The Public Health and Welfare. For
complete classification of this Act to the Code, see Short Title note
set out under section 1437 of Title 42 and Tables.
Section 110 of the Housing Act of 1949 [42 U.S.C. 1460], referred to
in subsec. (d)(3)(iii), was omitted from the Code pursuant to section
5316 of Title 42, which terminated authority to make grants or loans
under title I of that Act [42 U.S.C. 1450 et seq.] after Jan. 1, 1975.
Section 1701q of this title, referred to in subsec. (f), was amended
generally by Pub. L. 101-625, title VIII, Sec. 801(a), Nov. 28, 1990,
104 Stat. 4297, and, as so amended, no longer contains provisions
related to handicapped persons.
The Disaster Relief and Emergency Assistance Act, referred to in
subsec. (f), is Pub. L. 93-288, May 22, 1974, 88 Stat. 143, as amended,
known as the Robert T. Stafford Disaster Relief and Emergency Assistance
Act, which is classified principally to chapter 68 (Sec. 5121 et seq.)
of Title 42, The Public Health and Welfare. For complete classification
of this Act to the Code, see Short Title note set out under section 5121
of Title 42 and Tables.
Section 201 of the Housing and Community Development Amendments of
1978, referred to in subsec. (f), is section 201 of Pub. L. 95-557,
title II, Oct. 31, 1978, 92 Stat. 2084, as amended, which enacted
section 1715z-1a of this title and amended section 1715z-1 of this
title.
Subsection (h) of section 1710 of this title, referred to in subsec.
(g)(1), 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.
(g)(1), was repealed by Pub. L. 105-276, title VI, Sec. 601(c), Oct. 21,
1998, 112 Stat. 2673.
The Emergency Low Income Housing Preservation Act of 1987, referred
to in subsec. (g)(4)(C), is title II of Pub. L. 100-242, Feb. 5, 1988,
101 Stat. 1877, which, as amended by Pub. L. 101-625, is known as the
Low-Income Housing Preservation and Resident Homeownership Act of 1990.
Subtitles A and B of title II, which were formerly set out as a note
under this section and which amended section 1715z-6 of this title, were
amended generally by Pub. L. 101-625 and are classified to subchapter I
(Sec. 4101 et seq.) of chapter 42 of this title. Subtitles C and D of
title II amended section 1715z-15 of this title and sections 1437f,
1472, 1485, and 1487 of Title 42, The Public Health and Welfare. Another
subtitle C of title II of Pub. L. 100-242, as added by Pub. L. 102-550,
is classified generally to subchapter II (Sec. 4141 et seq.) of chapter
42 of this title. For complete classification of this Act to the Code,
see Short Title note set out under section 4101 of this title and
Tables.
Section 8211 of title 42, referred to in subsec. (k), was omitted
from the Code pursuant to section 8229 of Title 42, which terminated
authority under that section on June 30, 1989.
Codification
In subsec. (g)(4)(A), ``November 30, 1983,'' was substituted for
``the effective date of this clause'', meaning the date of enactment of
Pub. L. 98-181.
Amendments
2002--Subsec. (d)(3)(ii). Pub. L. 107-326, Sec. 5(b)(4), inserted
``(I)'' after ``(ii)'' and substituted ``; (II) the Secretary may, by
regulation, increase any of the dollar amount limitations in subclause
(I) (as such limitations may have been adjusted in accordance with
section 1712a of this title)'' for ``; and except that the Secretary
may, by regulation, increase any of the foregoing dollar amount
limitations contained in this clause''.
Subsec. (d)(4)(ii). Pub. L. 107-326, Sec. 5(b)(5), inserted ``(I)''
after ``(ii)'' and substituted ``; (II) the Secretary may, by
regulation, increase any of the dollar limitations in subclause (I) (as
such limitations may have been adjusted in accordance with section 1712a
of this title)'' for ``; and except that the Secretary may, by
regulation, increase any of the foregoing dollar amount limitations
contained in this clause''.
2001--Subsec. (d)(3)(ii). Pub. L. 107-73, Sec. 213(d), substituted
``$42,048'', ``$48,481'', ``58,469'', ``$74,840'', and ``$83,375'' for
``$33,638'', ``$38,785'', ``$46,775'', ``$59,872'', and ``$66,700'',
respectively, and ``$44,250'', ``$50,724'', ``$61,680'', ``$79,793'',
and ``$87,588'' for ``$35,400'', ``$40,579'', ``$49,344'', ``$63,834'',
and ``$70,070'', respectively.
Subsec. (d)(4)(ii). Pub. L. 107-73, Sec. 213(e), substituted
``$37,843'', ``$42,954'', ``$51,920'', ``$65,169'', and ``$73,846'' for
``$30,274'', ``$34,363'', ``$41,536'', ``$52,135'', and ``$59,077'',
respectively, and ``$40,876'', ``$46,859'', ``$56,979'', ``$73,710'',
and ``$80,913'' for ``$32,701'', ``$37,487'', ``$45,583'', ``$58,968'',
and ``$64,730'', respectively.
2000--Subsec. (g)(4)(C)(viii). Pub. L. 106-377 inserted ``, except
that this subparagraph shall continue to apply if the Secretary receives
a mortgagee's written notice of intent to assign its mortgage to the
Secretary on or before such date'' after ``December 31, 2002''.
1998--Subsec. (g)(4)(C)(viii). Pub. L. 105-276, Sec. 222(1),
substituted ``December 31, 2002'' for ``September 30, 1996'' in first
sentence.
Subsec. (g)(4)(C)(ix). Pub. L. 105-276, Sec. 222(2), added cl. (ix).
1996--Subsec. (g)(4)(C)(viii). Pub. L. 104-134 substituted ``1996''
for ``1995'' in first sentence.
1992--Subsec. (d)(3)(ii). Pub. L. 102-550, Sec. 509(d), substituted
``$33,638'', ``$38,785'', ``$46,775'', ``$59,872'', ``$66,700'',
``$35,400'', ``$40,579'', ``$49,344'', ``$63,834'', and ``$70,070'' for
``$28,032'', ``$32,321'', ``$38,979'', ``$49,893'', ``$55,583'',
``$29,500'', ``$33,816'', ``$41,120'', ``$53,195'', and ``$58,392'',
respectively.
Subsec. (d)(4)(ii). Pub. L. 102-550, Sec. 509(e), substituted
``$30,274'', ``$34,363'', ``$41,536'', ``$52,135'', ``$59,077'',
``$32,701'', ``$37,487'', ``$45,583'', ``$58,968'', and ``$64,730'' for
``$25,228'', ``$28,636'', ``$34,613'', ``$43,446'', ``$49,231'',
``$27,251'', ``$31,239'', ``$37,986'', ``$49,140'', and ``$53,942'',
respectively.
Subsec. (d)(4)(iv). Pub. L. 102-550, Sec. 1012(l), inserted
``(including the cost of evaluating and reducing lead-based paint
hazards, as such terms are defined in section 4851b of title 42)'' after
``cost of repair and rehabilitation''.
Subsec. (g)(4)(A). Pub. L. 102-550, Sec. 516(d), which directed
substitution of ``issue to the mortgagee debentures having a par value''
for ``, subject to the cash adjustment provided herein, issue to the
mortgagee debentures having total face value'', was executed to text
which read ``having a total face value'' instead of ``having total face
value'', to reflect the probable intent of Congress.
1990--Subsec. (f). Pub. L. 101-625, Sec. 611(b)(2), added fourth
undesignated paragraph relating to authority of Secretary in
establishing rental charges for project covered by mortgage bearing
below market interest rate prescribed in proviso to subsec. (d)(3) of
this section to include an amount that would permit return of advances
to owner.
Subsec. (g)(4)(C). Pub. L. 101-508 added subpar. (C).
Subsec. (l). Pub. L. 101-625, Sec. 612(b), added subsec. (l).
1988--Subsec. (d)(2). Pub. L. 100-242, Sec. 406(b)(10)(A),
substituted ``residence, except that the Secretary'' for ``residence:
Provided, That a mortgage secured by property upon which there is
located a dwelling designed principally for a two-, three-, or four-
family residence shall not be insured under this section except in the
case of a dwelling for occupancy by the mortgagor: Provided further,
That the Secretary''.
Pub. L. 100-242, Sec. 406(b)(10)(B), which directed that par. (2) be
amended by striking out ``Provided, That (i)'' and all that follows
through ``(1) in'' and inserting ``Provided, That (i)(1) in'', was
executed by substituting ``Provided, That (i)(1) in the case of a
displaced family'' for ``Provided further, That (i) if the mortgagor is
the owner and an occupant of the property at the time of insurance, (1)
in the case of a displaced family'', to reflect the probable intent of
Congress and the fact that the provision being struck out began with
``Provided further'' rather than ``Provided''.
Pub. L. 100-242, Sec. 406(b)(10)(C), struck out ``Provided further,
That nothing contained herein shall preclude the Secretary from issuing
a commitment to insure, and insuring a mortgage pursuant thereto, where
the mortgagor is not the owner and an occupant of the property, if the
property is to be built or acquired and repaired or rehabilitated for
sale, and the insured mortgage financing is required to facilitate the
construction, or the repair or rehabilitation, of the dwelling and to
provide financing pending the subsequent sale thereof to a qualified
owner who is also an occupant thereof, but in such instances the
mortgage shall not exceed 85 per centum of the appraised value:''.
Pub. L. 100-242, Sec. 406(b)(10)(D), which directed that par. (2) be
amended in last proviso by substituting ``That the mortgagor shall'' for
``That, if the mortgagor is the owner and an occupant of the property
such mortgagor shall'', was executed by substituting ``That the
mortgagor shall'' for ``That, if the mortgagor is the owner and an
occupant of the property, such mortgagor shall'', to reflect the
probable intent of Congress and the fact that a comma appears before
``such'' in provisions being struck out.
Subsec. (d)(3)(ii). Pub. L. 100-242, Sec. 426(d), substituted
``$28,032'', ``$38,979'', ``$49,893'', ``$55,583'', ``$29,500'',
``$33,816'', ``$41,120'', ``$53,195'', and ``$58,392'' for ``$21,563'',
``$29,984'', ``$38,379'', ``$42,756, ``$22,692'', ``$26,012'',
``$31,631'', ``$40,919'', and ``$44,917'', respectively.
Pub. L. 100-242, Sec. 426(d), which directed that cl. (ii) be
amended by substituting ``$32,321'' for ``$24,862'', was executed by
substituting ``$32,321'' for ``$24,662'' to reflect the probable intent
of Congress.
Pub. L. 100-242, Sec. 426(h), 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''.
Subsec. (d)(4)(ii). Pub. L. 100-242, Sec. 426(e), (h), substituted
``$25,228'', ``$28,636'', ``$34,613'', ``$43,446'', ``$49,231'',
``$27,251'', ``$31,239'', ``$37,986'', ``$49,140'', and ``$53,942'' for
``$19,406'', ``$22,028'', ``$26,625'', ``$33,420'', ``$37,870'',
``$20,962'', ``$24,030'', ``$29,220'', ``$37,800'', and ``$41,494'',
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''.
Subsec. (d)(6)(ii). Pub. L. 100-242, Sec. 406(b)(11), struck out
``is an owner-occupant of the property and'' after ``where the
mortgagor''.
Subsec. (f). Pub. L. 100-707 substituted ``and Emergency Assistance
Act'' for ``Act of 1974''.
Pub. L. 100-242, Sec. 401(a)(2), struck out ``No mortgage shall be
insured under this section after March 15, 1988, except pursuant to a
commitment to insure before that date, or except a mortgage covering
property which the Secretary finds will assist in the provision of
housing for displaced families.''
Pub. L. 100-200 substituted ``March 15, 1988'' for ``December 16,
1987''.
Pub. L. 100-179 substituted ``December 16, 1987'' for ``December 2,
1987''.
Pub. L. 100-170 substituted ``December 2, 1987'' for ``November 15,
1987''.
Pub. L. 100-154 substituted ``November 15, 1987'' for ``October 31,
1987''.
Pub. L. 100-122 substituted ``October 31, 1987'' for ``September 30,
1987''.
Subsec. (h)(6). Pub. L. 100-242, Sec. 406(b)(12), struck out ``and
occupied'' after ``or row construction that are owned'' in introductory
provisions.
Subsec. (h)(8). Pub. L. 100-242, Sec. 406(b)(13), struck out ``if
one of the units is to be occupied by the owner'' after ``approved by
the Secretary''.
1986--Subsec. (f). Pub. L. 99-430 substituted ``September 30, 1987''
for ``September 30, 1986''.
Pub. L. 99-345 substituted ``September 30, 1986'' for ``June 6,
1986''.
Pub. L. 99-289 substituted ``June 6, 1986'' for ``April 30, 1986''.
Pub. L. 99-272 made amendment identical to Pub. L. 99-219. See 1985
Amendment note below.
Pub. L. 99-267 substituted ``April 30, 1986'' for ``March 17,
1986''.
1985--Subsec. (f). Pub. L. 99-219 substituted ``March 17, 1986'' for
``December 15, 1985''.
Pub. L. 99-156 substituted ``December 15, 1985'' for ``November 14,
1985''.
Pub. L. 99-120 substituted ``November 14, 1985'' for ``September 30,
1985''.
1984--Subsec. (d)(3)(iii). Pub. L. 98-479 substituted
``rehabilitated'' for ``rehabilited'' before ``by a local public
agency''.
1983--Subsec. (d)(2)(A). Pub. L. 98-181, Sec. 423(b)(3), 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'' before ``; and (B)''.
Subsec. (d)(3)(iii). Pub. L. 98-181, Sec. 432(b), struck out proviso
that in no case involving refinancing would the mortgage exceed the
estimated cost of repair and rehabilitation and the amount, as
determined by the Secretary, required to refinance existing indebtedness
secured by the property or project, and substituted ``Provided, That''
for ``Provided further, That''.
Subsec. (d)(4)(iv). Pub. L. 98-181, Sec. 432(c), struck out proviso
that in no case involving refinancing would the mortgage exceed the
estimated cost of repair and rehabilitation and the amount, as
determined by the Secretary, required to refinance existing indebtedness
secured by the property or project, and substituted ``Provided, That''
for ``Provided further, That''.
Subsec. (d)(5). Pub. L. 98-181, Sec. 404(b)(8), substituted ``at
such rate as may be agreed upon by the mortgagor and the mortgagee'' for
``(exclusive of premium charges for insurance and service charge, if
any) at not to exceed 5 per centum per annum on the amount of the
principal obligation outstanding at any time, or not to exceed such per
centum per annum not in excess of 6 per centum as the Secretary finds
necessary to meet the mortgage market''.
Subsec. (d)(6). Pub. L. 98-181, Sec. 446(d), inserted ``(unless
otherwise approved by the Secretary)'' after ``periodic payments''.
Subsec. (f). Pub. L. 98-181, Sec. 401(c), substituted ``September
30, 1985'' for ``November 30, 1983''.
Pub. L. 98-109 substituted ``November 30, 1983'' for ``September 30,
1983''.
Pub. L. 98-35 substituted ``September 30, 1983'' for ``May 20,
1983''.
Subsec. (g)(4)(A). Pub. L. 98-181, Secs. 408, 409, designated
existing provision as subpar. (A) and inserted ``pursuant to a
commitment to insure entered into before November 30, 1983,'' after
``this section''.
Subsec. (g)(4)(B). Pub. L. 98-181, Sec. 408, added subpar. (B).
1982--Subsec. (d)(2)(A). Pub. L. 97-253, Sec. 201(d)(1), 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.
Subsec. (d)(2)(B)(i)(2). Pub. L. 97-253, Sec. 201(d)(2), (3),
inserted ``(excluding the mortgage insurance premium paid at the time
the mortgage is insured)'' after ``of its acquisition cost'' and struck
out ``mortgage insurance premium,'' after ``hazard insurance,''.
Subsec. (d)(3)(ii). 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''.
Subsec. (d)(4)(ii). 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''.
Subsec. (f). Pub. L. 97-289 substituted ``May 20, 1983'' for
``September 30, 1982''.
1981--Subsec. (f). Pub. L. 97-35, Sec. 331(c), substituted ``1982''
for ``1981''.
Subsec. (k). Pub. L. 97-35, Sec. 339B(a), inserted ``therein'' after
``installation'' and struck out ``therein'' after ``measure''.
1980--Subsec. (d)(6). Pub. L. 96-399, Sec. 333(c), struck out
proviso relating to maturity of a mortgage insured under subsection
(d)(2) of this section.
Subsec. (f). Pub. L. 96-399, Sec. 301(c), substituted ``September
30, 1981'' for ``October 15, 1980''.
Pub. L. 96-372 substituted ``October 15, 1980'' for ``September 30,
1980''.
Subsec. (i)(2)(A)(iv). Pub. L. 96-399, Sec. 333(d), struck out
applicability to determinations of lesser amount, if so determined, of
three-quarters of the Secretary's estimate of the remaining economic
life of the building improvements.
Subsec. (k). Pub. L. 96-399, Sec. 310(d), added subsec. (k).
1979--Subsec. (d)(3)(ii). Pub. L. 96-153, Sec. 314, 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 to be necessary.
Subsec. (d)(4)(ii). Pub. L. 96-153, Sec. 314, substituted ``75 per
centum'' for ``50 per centum'' and inserted exception that the dollar
amount limitations may be exceeded by not to exceed 90 per centum where
the Secretary determines it to be necessary.
Subsec. (f). Pub. L. 96-153 substituted ``September 30, 1980'' for
``November 30, 1979''.
Pub. L. 96-105 substituted ``November 30, 1979'' for ``October 31,
1979''.
Pub. L. 96-71 substituted ``October 31, 1979'' for ``September 30,
1979''.
1978--Subsec. (d)(3)(ii). Pub. L. 95-557, Sec. 325(a), substituted
``$21,563'', ``$24,662'', ``$29,984'', ``$38,379'', and ``$42,756'' for
``$16,860'', ``$18,648'', ``$22,356'', ``$28,152'' and ``$31,884'',
respectively, and ``$22,692'', ``$26,012'', ``$31,631'', ``$40,919'',
and ``$44,917'' for ``$19,680'', ``$22,356'', ``$26,496'', ``$33,120'',
and ``$38,400'', respectively.
Subsec. (d)(4)(ii). Pub. L. 95-557, Sec. 325(b), substituted
``$19,406'', ``$22,028'', ``$26,625'', ``$33,420'', and ``$37,870'' for
``$18,450'', ``$20,625'', ``$24,630'', ``$29,640'' and ``$34,846'',
respectively.
Subsec. (f). Pub. L. 95-557, Sec. 301(c), substituted ``September
30, 1979'' for ``October 31, 1978''.
Pub. L. 95-406 substituted ``October 31, 1978'' for ``September 30,
1978''.
1977--Subsec. (d)(2)(A). Pub. L. 95-128, Sec. 303(c), substituted
``$31,000'' for ``$25,000'', ``$36,000'' for ``$29,000'' in two places,
``$42,000'' for ``$33,000'', ``$35,000'' for ``$28,000'', ``$48,600''
for ``$38,880'', ``$59,400'' for ``$47,520'', ``$45,000'' for
``$36,000'', ``$57,600'' for ``$46,080'' and ``$68,400'' for
``$54,720''.
Subsec. (d)(4). Pub. L. 95-24 struck out ``other than a mortgagor
referred to in subsection (d)(3) of this section,'' after ``if executed
by a mortgagor''.
Subsec. (f). Pub. L. 95-128, Sec. 301(c), substituted ``September
30, 1978'' for ``September 30, 1977''.
Pub. L. 95-80 substituted ``September 30, 1977'' for ``July 31,
1977''.
Pub. L. 95-60 substituted ``July 31, 1977'' for ``June 30, 1977''.
1976--Subsec. (d)(2)(A). Pub. L. 94-375, Sec. 3(d), substituted
``$25,000'' for ``$21,600'', ``$29,000'' for ``$25,200'' in two places,
and ``$33,000'' for ``$28,800''.
Subsec. (d)(3)(ii). Pub. L. 94-375, Sec. 8(b)(4), substituted ``50
per centum in any geographical area'' for ``75 per centum in any
geographical area'', ``$16,860'' for ``$11,240'', ``$18,648'' for
``$15,540'', ``$22,356'' for ``$18,630'', ``$28,152'' for ``$23,460'',
``$31,884'' for ``$26,570'', ``$19,680'' for ``$13,120'', ``$22,356''
for ``$18,630'', ``$26,496'' for ``$22,080'', ``$33,120'' for
``$27,600'', and ``$38,400'' for ``$32,000''.
Subsec. (d)(4)(ii). Pub. L. 94-375, Sec. 8(b)(5), substituted ``50
per centum in any geographical area'' for ``75 per centum in any
geographical area'', ``$18,450'' for ``$12,300'', ``$20,625'' for
``$17,188'', ``$24,630'' for ``$20,525'', ``$29,640'' for ``$24,700'',
``$34,846'' for ``$29,038'', ``$20,962'' for ``$13,975'', ``$24,030''
for ``$20,025'', ``$29,220'' for ``$24,350'', ``$37,800'' for
``$31,500'', and ``$41,494'' for ``$34,578''.
1975--Subsec. (d)(3)(ii). Pub. L. 94-173, Sec. 3, raised from 45 per
centum to 75 per centum the amount by which any dollar limitation may,
by regulation, be increased.
Subsec. (d)(4)(ii). Pub. L. 94-173, Sec. 3, raised from 45 per
centum to 75 per centum the amount by which any dollar limitation may,
by regulation, be increased.
Subsec. (f). Pub. L. 94-173, Sec. 4(a), struck out a provision
limiting to 10 per centum the number of dwelling units available to low
and moderate income persons under the age of 62 in a project financed
with a mortgage issued under subsection (d)(3) of this section.
1974--Subsec. (d)(2)(A). Pub. L. 93-383, Sec. 302(c), substituted
``$21,600'' for ``$18,000'', ``$25,200'' for ``$21,000'' wherever
appearing, ``$28,000'' for ``$24,000'', ``$28,800'' for ``$24,000'',
``$36,000'' for ``$30,000'', ``$38,880'' for ``$32,400'', ``$46,080''
for ``$38,400'', ``$47,520'' for ``$39,600'', and ``$54,720'' for
``$45,600''.
Subsec. (d)(3). Pub. L. 93-383, Sec. 319(a), inserted exception for
certification of projects assisted or to be assisted pursuant to section
8 of the United States Housing Act of 1937.
Subsec. (d)(3)(i). Pub. L. 93-383, Sec. 304(e)(1), struck out cl.
(i) which set forth mortgage ceiling of $12,500,000.
Subsec. (d)(3)(ii). Pub. L. 93-383, Sec. 303(d), substituted
``$11,240'' for ``$9,200'', ``$13,120'' for ``$10,925'', ``$15,540'' for
``$12,937.50'', ``$16,200'' for ``$13,500'', ``$18,630'' for
``$15,525'', ``$22,080'' for ``$18,400'', ``$23,460'' for ``$19,550''
``$26,570'' for ``$22,137.50'', ``$27,600'' for ``$23,000'', and
``$32,000'' for ``$26,162.50''.
Subsec. (d)(4)(i). Pub. L. 93-383, Sec. 304(e)(2), struck out cl.
(i) which set forth mortgage ceiling of $12,500,000.
Subsec. (d)(4)(ii). Pub. L. 93-383, Sec. 303(e), substituted
``$12,300'' for ``$9,200'', ``$13,975'' for ``$10,525'', ``$17,188'' for
``$12,937.50'', ``$20,025'' for ``$15,525'', ``$20,525'' for
``$15,525'', ``$24,350'' for ``$18,400'', ``$24,700'' for ``$19,550'',
``$29,038'' for ``$22,137.50'', ``$31,500'' for ``$23,000'', and
``$34,578'' for ``$26,162.50''.
Subsec. (f). Pub. L. 93-383, Sec. 316(c), substituted ``June 30,
1977'' for ``October 1, 1974''.
Pub. L. 93-288 substituted ``the Disaster Relief Act of 1974'' for
``the Disaster Relief Act of 1970''.
1973--Subsec. (f). Pub. L. 93-117 extended the mortgage insurance
authority under this section from Oct. 1, 1973, to Oct. 1, 1974.
Pub. L. 93-85 extended the mortgage insurance authority under this
section from June 30, 1973, to Oct. 1, 1973.
1972--Subsec. (f). Pub. L. 92-503 extended the mortgage insurance
authority under this section from October 1, 1972 to June 30, 1973.
1970--Subsec. (f). Pub. L. 91-609 in second par., substituted
``October 1, 1972'' for ``January 1, 1971''; provided for use of certain
housing facilities for classroom purposes where public schools in the
community are overcrowded due in part to attendance of residents of the
property or project; dispensed with need for kitchen facilities in
family units in projects for displaced, elderly, or handicapped
families, but permitted inclusion of central dining and other shared
facilities; provided that any person who is a displaced person shall be
deemed to be a family; and, in third par., substituted ``the terms
`displaced family', `displaced families', and `displaced person' shall
mean a family or families, or a person'' for ``the terms `displaced
family' and `displaced families' shall mean a family or families'',
respectively.
Pub. L. 91-606 substituted ``the Disaster Relief Act of 1970'' for
``the Act entitled `An Act to authorize Federal assistance to States and
local governments in major disasters, and for other purposes', approved
September 30, 1950, as amended''.
Pub. L. 91-525 substituted ``January 1, 1971'' for ``December 1,
1970''.
Pub. L. 91-473 substituted ``December 1, 1970'' for ``November 1,
1970''.
Pub. L. 91-432 substituted ``November 1, 1970'' for ``October 1,
1970''.
1969--Subsec. (d)(2). Pub. L. 91-152, Sec. 113(e)(1), (2),
substituted ``$18,000'' for ``$15,000'', ``$21,000'' for ``$17,500'',
wherever appearing, ``$24,000'' for ``$20,000'' wherever appearing,
``$30,000'' for ``$25,000'', ``$32,400'' for ``$27,000'', ``$38,400''
for ``$32,000'', ``$39,600'' for ``$33,000'', and ``$45,600'' for
``$38,000''.
Subsec. (d)(3)(ii). Pub. L. 91-152, Sec. 113(e)(3), (4), substituted
``$9,200'' for ``$8,000'', ``$10,925'' for ``$9,500'', ``$12,937.50''
for ``$11,250'', ``$15,525'' for ``$13,500'' wherever appearing,
``$18,400'' for ``$16,000'', ``$19,550'' for ``$17,000'', ``$22,137.50''
for ``$19,250'', ``$23,000'' for ``$20,000'', and ``$26,162.50'' for
``$22,750''.
Subsec. (d)(4)(ii). Pub. L. 91-152, Sec. 113(e)(5), (6), substituted
``$9,200'' for ``$8,000'', ``$10,925'' for ``$9,500'', ``$12,937.50''
for ``$11,250'', ``$15,525'' for ``$13,500'' wherever appearing,
``$18,400'' for ``$16,000'', ``$19,550'' for ``$17,000'', ``$22,137.50''
for ``$19,250'', ``$23,000'' for ``$20,000'', and ``$26,162.50'' for
``$22,750''.
Subsec. (f). Pub. L. 91-152, Sec. 101(c), substituted ``October 1,
1970'' for ``January 1, 1970''.
Pub. L. 91-78 substituted ``January 1, 1970'' for ``October 1,
1969''.
Subsec. (h)(6)(A). Pub. L. 91-152, Sec. 113(e)(7), substituted
``$18,000'' for ``$15,000''.
1968--Subsec. (d)(2)(A). Pub. L. 90-448, Secs. 101(b)(1), 305,
increased maximum amount of mortgages for single-family residences from
$12,500 to $15,000 (or $17,500 if mortgagor's family includes five or
more persons), and in geographical areas where costs levels so require
from $15,000 to $17,500 (or $20,000 if the mortgagor's family includes
five or more persons), and Sec. 305(d)(2)(A) substituted ``the
mortgagor'' for ``a displaced family'' in first proviso.
Subsec. (d)(2)(B). Pub. L. 90-448, Sec. 101(b)(2), inserted ``, in
cash or its equivalent'' in cl. (2), and inserted proviso directing that
a mortgagor who is the owner and an occupant of the property be given
the opportunity to contribute the value of his labor as equity in such
dwelling.
Subsec. (d)(3)(iii). Pub. L. 90-448, Sec. 311(b), inserted proviso
to permit the mortgage to involve the financing of the purchase of
property which has been rehabilitated by a local public agency with
Federal assistance pursuant to section 1460(c)(8) of title 42.
Subsec. (f). Pub. L. 90-448, Secs. 105(d), 306, authorized the
Secretary to insure mortgages meeting the requirements of subsec. (i) or
(j) of this section, struck out ``if the mortgagor waives the right to
receive dividends on its equity investment in the portion thereof
devoted to community and shopping facilities'' from first proviso, and
inserted proviso making provisions of section 1715k(d)(3)(B)(iv)
applicable, in the case of a mortgage which bears interest at the below-
market interest rate prescribed in subsec. (d)(5) of this section, only
if the mortgagor waives the right to receive dividends on its equity
investment in the portion thereof devoted to commercial facilities.
Subsec. (g)(1). Pub. L. 90-448, Sec. 105(b), included mortgages
meeting requirements of par. (2) of subsec. (i) of this section.
Subsec. (g)(2). Pub. L. 90-448, Sec. 105(c), included mortgages
meeting requirements of par. (2) of subsec. (j) of this section.
Subsec. (h)(2)(A). Pub. L. 90-448, Sec. 316(a), reduced number of
one-family dwellings from five or more to four or more, and permitted
the mortgage to cover four or more one-family units in a structure or
structures for which a plan of family unit ownership approved by the
Secretary is established.
Subsec. (h)(4). Pub. L. 90-448, Sec. 101(c)(2), increased aggregate
principal balance of mortgages insured from $20,000,000 to $50,000,000.
Subsec. (h)(5)(B)(ii). Pub. L. 90-448, Sec. 101(c)(1), permitted
mortgage to bear interest at such lower rate, not less than 1 per
centum, as the Secretary may prescribe if in his judgment purchaser's
income is sufficiently low to justify the lower rate, and inserted
proviso requiring rate of interest to be increased if purchaser's income
subsequently rises.
Subsec. (h)(6). Pub. L. 90-448, Sec. 101(c)(3), added par. (6).
Subsec. (h)(7), (8). Pub. L. 90-448, Sec. 316(b), added pars. (7)
and (8).
Subsecs. (i), (j). Pub. L. 90-448, Sec. 105(a), added subsecs. (i)
and (j).
1967--Pub. L. 90-19, Sec. 1(a)(3), substituted ``Secretary'' for
``Commissioner'' wherever appearing in subsecs. (b), (d)(1) to (3),
(d)(3)(ii), (iii), (d)(4), (d)(4)(ii) to (iv), (d)(5), (6), (e)(1), (2),
(f), and (g)(3), (4).
Subsec. (d). Pub. L. 90-19, Sec. 1(a)(4), substituted
``Secretary's'' for ``Commissioner's'' wherever appearing in pars. (2),
(3)(iii), (4)(iv), and (6).
1966--Subsec. (a). Pub. L. 89-769, Sec. 4(a), substituted
``displaced families'' for ``families displaced from urban renewal areas
or as a result of governmental action''.
Subsec. (d)(2), (6). Pub. L. 89-769, Sec. 4(a), substituted
``displaced family'' for ``family displaced from an urban renewal area
or as a result of governmental action'' wherever appearing.
Subsec. (d)(2)(A). Pub. L. 89-754, Sec. 307, increased maximum
amount of mortgages for single-family and two-family residences from
$11,000 and $18,000 to $12,500 and $20,000, respectively.
Subsec. (d)(3)(iii). Pub. L. 89-769, Sec. 4(a), substituted
``displaced families'' for ``families displaced by urban renewal or
other governmental action''.
Subsec. (f). Pub. L. 89-769, Sec. 4(a), (b), substituted ``displaced
families'' for ``families displaced from urban renewal areas or as a
result of governmental action'', and inserted definition of ``displaced
family'' and ``displaced families''.
Pub. L. 89-754, Secs. 308, 309, 310(c), inserted in first sentence
provision for nondwelling facilities in projects in urban renewal areas,
inserted provision respecting single occupants in housing under subsec.
(d)(3) of this section, and inserted in fourth sentence ``or which meet
the requirements of subsection (h) of this section'', respectively.
Subsec. (g)(1). Pub. L. 89-754, Sec. 310(b)(1), inserted ``or
paragraph (5) of subsection (h) of this section''.
Subsec. (g)(2). Pub. L. 89-754, Sec. 310(b)(2), inserted ``or
paragraph (1) of subsection (h) of this section''.
Subsec. (h). Pub. L. 89-754, Sec. 310(a), added subsec. (h). A prior
subsec. (h) was repealed by Pub. L. 89-117, title XI, Sec. 1108(i)(4),
Aug. 10, 1965, 79 Stat. 505.
1965--Subsec. (d)(3)(ii). Pub. L. 89-117, Sec. 207(d), substituted
``$17,000 per family unit with three bedrooms, and $19,250 per family
unit with four or more bedrooms'' for ``and $17,000 per family unit with
three or more bedrooms'' and ``$20,000 per family unit with three
bedrooms, and $22,750 per family unit with four or more bedrooms'' for
``and $20,000 per family unit with three or more bedrooms''.
Subsec. (d)(4). Pub. L. 89-117, Secs. 207(d), 1108(i)(1),
substituted ``$17,000 per family unit with three bedrooms, and $19,250
per family unit with four or more bedrooms'' for ``and $17,000 per
family unit with three or more bedrooms'' and ``$20,000 per family unit
with three bedrooms, and $22,750 per family unit with four or more
bedrooms'' for ``and $20,000 per family unit with three or more
bedrooms'' in subpar. (ii) and substituted ``General Insurance Fund''
for ``section 221 Housing Insurance Fund'' wherever appearing.
Subsec. (d)(5). Pub. L. 89-117, Sec. 102(b), substituted ``not less
than the lower of (A) 3 per centum per annum, or (B) the annual rate of
interest determined'' for ``not less than the annual rate of interest
determined'' in proviso.
Subsec. (f). Pub. L. 89-117, Secs. 102(a), 1108(i)(1), substituted
``this section after October 1, 1969'' for ``subsection (d)(2) or (d)(4)
after September 30, 1965, or under subsection (d)(3) after September 30,
1965'' and substituted ``General Insurance Fund'' for ``section 221
Housing Insurance Fund''.
Subsec. (g)(1). Pub. L. 89-117, Sec. 1108(i)(1), substituted
``General Insurance Fund'' for ``section 221 Housing Insurance Fund''.
Subsec. (g)(2). Pub. L. 89-117, Sec. 1108(i)(2), struck out
provision that all references in section 1713 to the Housing Insurance
Fund or the Housing Fund shall be construed to refer to the section 221
Housing Insurance Fund.
Subsec. (g)(3). Pub. L. 89-117, Sec. 1108(i)(1), (3), substituted
``General Insurance Fund'' for ``section 221 Housing Insurance Fund''
and struck out provision that all references in section 1713 of this
title to the Housing Insurance Fund, the Housing Fund, or the Fund shall
be construed to refer to the section 221 Housing Insurance Fund.
Subsec. (h). Pub. L. 89-117, Sec. 1108(i)(4), repealed subsec. (h)
which created the section 221 Housing Insurance Fund, provided for the
transfer of funds thereto, authorized the purchase and cancellation of
debentures and the credit and payment of charges and fees.
1964--Subsec. (d)(3). Pub. L. 88-560, Sec. 114(a), inserted ``, or
other mortgagor approved by the Commissioner, and'' after ``or
association''.
Subsec. (d)(3)(ii), (4)(ii). Pub. L. 88-560, Sec. 107(d)(1), (2),
changed limits on mortgages for property or project attributable to
dwelling use from ``$2,250 per room (or $8,500 per family unit if the
number of rooms in such property or project is less than four per family
unit)'' to ``$8,000 per family unit without a bedroom, $11,250 per
family unit with one bedroom, $13,500 per family unit with two bedrooms,
and $17,000 per family unit with three or more bedrooms'', changed such
mortgage limits on project consisting of elevator-type structures from a
sum ``of $2,250 per room to not to exceed $2,750 per room, and the
dollar amount limitation of $8,500 per family unit to not to exceed
$9,000 per family unit'' to dollar amount limitations ``per family unit
to not to exceed $9,500 per family unit without a bedroom, $13,500 per
family unit with one bedroom, $16,000 per family unit with two bedrooms,
and $20,000 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 $1,000 per
room without regard to the number of rooms being less than four, or four
or more''.
Subsec. (d)(3)(iii). Pub. L. 88-560, Sec. 114(c), inserted
``Provided further, That in the case of any mortgagor other than a
nonprofit corporation or association, cooperative (including an
investor-sponsor), or public body, or a mortgagor meeting the special
requirements of subsection (e)(1) of this section, the amount of the
mortgage shall not exceed 90 per centum of the amount otherwise
authorized under this section''.
Subsec. (e). Pub. 88-560, Sec. 114(b), added par. (1) and designated
existing provisions as par. (2).
Subsec. (f). Pub. L. 88-560, Secs. 114(d), 202, 203(b), extended the
mortgage insurance authority under subsec. (d)(2) and (4) of this
section from July 1, 1965 to Sept. 30, 1965, inserted definition of
``family'', and substituted in such definition ``person who is sixty-two
years of age or over, or who is a handicapped person within the meaning
of section 1701q of this title,'' for ``person who is sixty-two years of
age or over''.
Subsec. (g)(3). Pub. L. 88-560, Sec. 105(c)(2), substituted a period
for ``; or'' and inserted ``If the insurance is paid in cash, there
shall be added to such payment an amount equivalent to the interest
which the debentures would have earned, computed to a date to be
established pursuant to regulations issued by the Commissioner.''
1963--Subsec. (f). Pub. L. 88-54 extended mortgage insurance
authority under subsec. (d)(2) and (4) of this section from July 1,
1963, to July 1, 1965.
1961--Pub. L. 87-70, Sec. 101(a)(1), added section catchline.
Subsec. (a). Pub. L. 87-70, Sec. 101(a)(2), redefined the purpose of
this section as one to assist private industry in providing housing for
low and moderate income families and families displaced from urban
renewal areas or as a result of governmental action, and eliminated
provisions which required localities, communities or environs of
communities to request the mortgage insurance, which limited the number
of dwelling units to not more than the aggregate number which the
Housing Administrator certified to the Commissioner, and which
authorized assistance for relocation of families to be displaced as the
result of governmental action in a community to those cases in which a
certification by the Housing Administrator pursuant to section 1451(c)
of title 42 has been made, or there is being carried out a project
covered by a Federal aid contract executed, or prior approval granted,
under subchapter II of chapter 8A of title 42, or there is being carried
out an urban renewal project assisted under section 1462 of title 42.
Subsec. (b). Pub. L. 87-70, Sec. 101(a)(3), empowered the
Commissioner to insure advances during construction on mortgages
covering property of the character described in pars. (3) and (4) of
subsec. (d) of this section.
Subsec. (d)(2). Pub. L. 87-70, Sec. 101(a)(4), (5), increased the
maximum amount of mortgages for single-family residences from $9,000 to
$11,000, three-family residences from $25,000 to $27,000 and for four-
family residences from $32,000 to $33,000, increased the maximum amount
of mortgages that the Commissioner may authorize in cases where he finds
the cost levels so require from $12,000 to $15,000 for single-family
residences, $20,000 to $25,000 for two-family residences, $27,500 to
$32,000 for three-family residences and $35,000 to $38,000 for four-
family residences, required families other than those displaced from an
urban renewal area or as a result of Government action to pay on account
of the property at least 3 per centum of the Commissioner's estimate of
its acquisition cost, prohibited insurance of mortgages for dwellings
designed principally for two-, three-, or four-family residences except
in the case of dwellings for occupancy by a family displaced from an
urban renewal area or as a result of governmental action, and eliminated
provisions which required the Commissioner to prescribe procedures
relating to priorities in occupancy of the remaining units of two-,
three-, and four-family dwellings after occupancy of one unit by the
owner.
Subsec. (d)(3). Pub. L. 87-70, Sec. 101(a)(6), included public
bodies and agencies which certify that they are not receiving financial
assistance exclusively pursuant to the United States Housing Act of 1937
cooperatives, and limited dividend corporations, increased the maximum
amount of mortgages from not more than $9,000 per family unit for such
part of such property or project as may be attributable to dwelling use
to not more than $2,250 per room (or $8,500 per family unit if the
number of rooms is less than four per family unit) for such part of such
property or project as may be attributable to dwelling use (excluding
exterior land improvements), empowered the Commissioner to increase the
maximum from $2,250 to $2,750 per room and from $8,500 to $9,000 per
family unit to compensate for higher costs incident to the construction
of elevator-type structures, and in geographical areas which the cost
levels so require from $2,250 to $3,250 per room, increased the maximum
amount of the mortgage in the case of repair and rehabilitation from not
more than the Commissioner's estimate of the value of the property when
the proposed repair and rehabilitation is completed to not more than the
sum of the estimated cost of repair and rehabilitation and the
Commissioner's estimate of the value of the property before repair and
rehabilitation, limited, in cases involving refinancing, the amount of
the mortgage to not more than the estimated cost of repair and
rehabilitation and the amount (as determined by the Commissioner)
required to refinance existing indebtedness secured by the property or
project, and eliminated provisions which required the property or
project to be for use as rental accommodations for ten or more families
eligible for occupancy.
Subsec. (d)(4). Pub. L. 87-70, Sec. 101(a)(7)-(10), substituted
``other than a mortgagor referred to in subsection (d)(3) of this
section'' for ``which is not a nonprofit organization'' in opening
provisions, increased the maximum amount of mortgages from not more than
$9,000 per family unit for such part of such property or project as may
be attributable to dwelling use to not more than $2,250 per room (or
$8,500 per family unit if the number of rooms is less than four per
family unit) for such part of such property or project as may be
attributable to dwelling use (excluding exterior land improvements),
empowered the Commissioner to increase the maximum from $2,250 to $2,750
per room and from $8,500 to $9,000 per family unit to compensate for
higher costs incident to the construction of elevator-type structures,
and in geographical areas which the cost levels so require from $2,250
to $3,250 per room, increased the maximum amount of the mortgage in the
case of repair and rehabilitation from not more than 90 per centum of
the Commissioner's estimate of the value of the property or project when
the proposed repair and rehabilitation is completed to not more than 90
per centum of the sum of the estimated cost of repair and rehabilitation
and the Commissioner's estimate of the value of the property before
repair and rehabilitation, limited, in cases involving refinancing, the
amount of the mortgage to not more than the estimated cost of repair and
rehabilitation and the amount (as determined by the Commissioner)
required to refinance existing indebtedness secured by the property of
project, and eliminated provisions which required the property or
project to be for use as rental accommodations for ten or more families
eligible for occupancy.
Subsec. (d)(5). Pub. L. 87-70, Sec. 101(a)(10), (11), struck out
provisions which required the mortgage to provide for complete
amortization by periodic payments within such terms as the Commissioner
may prescribe, but not to exceed 40 years from the date of insurance of
the mortgage or three-quarters of the Commissioner's estimate of the
remaining economic life of the building improvements, whichever is the
lesser, and inserted proviso requiring the mortgage to bear interest at
not less than the annual rate of interest determined by estimating the
average market yield to maturity on all outstanding marketable
obligations of the United States, and by adjusting such yield to the
nearest one-eighth of 1 per centum.
Subsec. (d)(6). Pub. L. 87-70, Sec. 101(a)(10), added par. (6).
Subsec. (f). Pub. L. 87-70, Sec. 101(a)(12), required a property or
project covered by a mortgage insured under subsec. (d)(3) or (d)(4) of
this section to include five or more family units, empowered the
Commissioner to adopt such procedures and requirements to assure that
the dwelling accommodations provided under this section are available to
families displaced from urban renewal areas or as a result of
governmental action, authorized the Commissioner to insure a mortgage
which meets subsec. (d)(3) of this section with no premium charge, with
a reduced premium charge, or with a premium charge for such period or
periods during the time the insurance is in effect as he may determine,
and prohibited insurance of mortgages under subsec. (d)(2) or (d)(4) of
this section after July 1, 1963, or under subsec. (d)(3) of this section
after July 1, 1965, except pursuant to a commitment to insure before
that date or except a mortgage covering property which will assist in
the provision of housing for families displaced from urban renewal areas
or as a result of governmental action.
Subsec. (g)(3), (4). Pub. L. 87-70, Sec. 101(a)(13), (14), added
par. (3), redesignated former par. (3) as (4), and substituted ``this
paragraph'' for ``this paragraph (3)''.
Subsec. (h). Pub. L. 87-70, Sec. 101(a)(15), inserted ``cash
payments,'' after ``cash adjustments,'' in last sentence.
1959--Subsec. (a). Pub. L. 86-372, Sec. 110(a)(1), (2), inserted
provisions in first par. to authorize assistance in relocating families
residing in the environs of a community described in cl. (2) which are
to be displaced as the result of governmental action, inserted
provisions in second par. making mortgage insurance available in
environs of communities and substituted ``in or near any such
community'' for ``in any such community'' in second proviso of second
par.
Subsec. (d)(2). Pub. L. 86-372, Sec. 110(b), required a mortgage to
be secured by property upon which there is located a dwelling conforming
to applicable standards prescribed by the Commissioner under subsec. (f)
of this section, and meeting the requirements of all State laws, or
local ordinances or regulations, relating to the public health or
safety, zoning, or otherwise, which may be applicable thereto, increased
the maximum amount of the mortgage on a single-family residence in a
high cost area from $10,000 to $12,000, authorized insurance of
mortgages for two-, three-, and four-family residences and required the
Commissioner to prescribe such procedures as are necessary to secure to
families, referred to in subsec. (a) of this section, priorities in
occupancy of the remaining units of two-, three-, and four-family
dwellings after occupancy of one unit by the owner.
Subsec. (d)(3). Pub. L. 86-372, Sec. 110(c)(1), (2), substituted
``$12,000'' for ``$10,000'', and ``not in excess of (1) in the case of
new construction, the amount which the Commissioner estimates will be
the replacement cost of the property or project when the proposed
improvements are completed (the replacement cost may include the land,
the proposed physical improvements utilities within the boundaries of
the land, architect's fees, taxes, interest during construction, and
other miscellaneous charges incident to construction and approved by the
Commissioner), or (2) in the case of repair and rehabilitation, the
Commissioner's estimate of the value of the property when the proposed
repair and rehabilitation is completed: Provided, That such property or
project, when constructed, or repaired and rehabilitated, shall be for
use as rental accommodations for ten or more families eligible for
occupancy as provided in this section; or'' for ``not in excess of the
Commissioner's estimate of the value of the property or project when
constructed, or repaired and rehabilitated, for use as rental
accommodations for ten or more families eligible for occupancy as
provided in this section; and''.
Subsec. (d)(4), (5). Pub. L. 86-372, Sec. 110(c)(3), added par. (4)
and redesignated former par. (4) as (5).
Subsec. (f). Pub. L. 86-372, Sec. 110(d), authorized the property or
project to include such commercial and community facilities as the
Commissioner deems adequate to serve the occupants.
Subsec. (g)(1). Pub. L. 86-372, Sec. 116(b), inserted reference to
subsec. (k) of section 1710 of this title.
Subsec. (g)(2). Pub. L. 86-372, Sec. 110(e), substituted ``paragraph
(3) or (4)'' for ``paragraph (3)''.
1957--Subsec. (g)(1). 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. 307(c), inserted in first
sentence ``, or (3) there is being carried out an urban renewal project
assisted under section 1462 of title 42'' and substituted ``clause (2)
or (3)'' for ``clause (2)'' each place it appears in last proviso.
Subsec. (d). Act Aug. 7, 1956, Sec. 108, substituted ``$9,000'' for
``$7,600'' and ``$10,000'' for ``$8,600'' in pars. (2) and (3); amended
par. (2) to allow mortgage insurance for appraised value and to require
at least $200 initial payment, which amount could include prepaid
expenses, in lieu of former provisions which allowed mortgage to be
insured up to 95 percent of the appraised value and required at least a
5 percent initial payment; eliminated ``95 per centum of'' after ``not
in excess of'' and inserted ``or the Federal Housing Commissioner''
after ``agencies thereof'' in par. (3) and substituted ``forty'' for
``thirty'' in par. (4).
1955--Subsec. (a). Act Aug. 11, 1955, Sec. 102(j), authorized
assistance in relocating families from urban renewal areas even though
such families are not required to leave the area.
Subsec. (d)(3). Act Aug. 11, 1955, Sec. 102(c), increased from
$5,000,000 to $12,500,000 the limitation on the maximum amount of a
mortgage.
Effective Date of 1988 Amendment
Amendment by section 406(b)(10)-(13) of Pub. L. 100-242 applicable
only with respect to mortgages insured pursuant to conditional
commitment issued on or after Feb. 5, 1988, or in accordance with direct
endorsement program (24 CFR 200.163), if approved underwriter of
mortgagee signs appraisal report for property on or after Feb. 5, 1988,
see section 406(d) of Pub. L. 100-242, set out as a note under section
1709 of this title.
Effective Date of 1983 Amendment
For effective date of amendment by section 423(b)(3) 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.
Effective Date of 1974 Amendment
Amendment by Pub. L. 93-288 effective Apr. 1, 1974, see section 605
of Pub. L. 93-288, set out as an Effective Date note under section 5121
of Title 42, The Public Health and Welfare.
Effective Date of 1970 Amendment
Amendment by Pub. L. 91-606 effective Dec. 31, 1970, see section 304
of Pub. L. 91-606, set out as a note under section 165 of Title 26,
Internal Revenue Code.
Implementation of 1982 Amendment
Amendment by Pub. L. 97-253 to be implemented only if Secretary
determines that 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.
Delegation of Processing of Mortgage Insurance
Secretary of Housing and Urban Development to implement system of
mortgage insurance for mortgages insured under this section that
delegates processing functions to selected approved mortgagees, with
Secretary to retain authority to approve rents, expenses, property
appraisals, and mortgage amounts and to execute firm commitments, see
section 328 of Pub. L. 101-625, set out as a note under section 1713 of
this title.
Effective Date of Temporary Extension of Emergency Low Income Housing
Preservation Act of 1987 and Correction of Any Repeal
Pub. L. 101-494, Sec. 1, Oct. 31, 1990, 104 Stat. 1185, provided
that:
``(a) Effective Date of Extender.--Public Law 101-402 [amending
section 1709 of this title and section 11319 of Title 42, The Public
Health and Welfare, and amending provisions set out as a note below]
shall be deemed to have taken effect as if such law were enacted on
September 29, 1990.
``(b) Status of Act.--The Emergency Low Income Housing Preservation
Act of 1987 [title II of Pub. L. 100-242] (12 U.S.C. 1715l note) shall
be deemed to have been in effect on and after September 29, 1990, as if
Public Law 101-402 had been enacted on September 29, 1990.
``(c) Correction of Any Repeal.--The provisions of the Emergency Low
Income Housing Preservation Act of 1987 (12 U.S.C. 1715l note), other
than section 203, are amended to read as such provisions were in effect
on September 29, 1990. The amendment made by this subsection shall take
effect as if this Act were enacted on September 29, 1990.
``(d) Effective Date.--If the Cranston-Gonzalez National Affordable
Housing Act [Pub. L. 101-625, which was approved Nov. 28, 1990] is
enacted before the enactment of this Act [Oct. 31, 1990], this section
shall be deemed to have taken effect immediately before the enactment of
the Cranston-Gonzalez National Affordable Housing Act.''
Preservation of Low-Income Housing
The Emergency Low Income Housing Preservation Act of 1987,
consisting of title II of Pub. L. 100-242, Feb. 5, 1988, 101 Stat. 1877,
amended the National Housing Act, the United States Housing Act of 1937,
and the Housing Act of 1949, and enacted provisions formerly set out as
a note under this section. The provisions set out as a note under this
section consisted of subtitles A and B [Secs. 201-203, 221-230, and 231-
235] of title II of Pub. L. 100-242, as amended by Pub. L. 100-628,
title X, Secs. 1021-1027, Nov. 7, 1988, 102 Stat. 3270, 3271; Pub. L.
101-235, title II, Secs. 201, 202(a)-(c), 203(b), Dec. 15, 1989, 103
Stat. 2037, 2038; Pub. L. 101-402, Sec. 1, Oct. 1, 1990, 104 Stat. 866;
Pub. L. 101-494, Secs. 1(c), 2(a), Oct. 31, 1990, 104 Stat. 1185, which
set up a temporary program for the prepayment of mortgages on low income
housing insured under the National Housing Act that terminated on the
date of enactment of the Cranston-Gonzalez National Affordable Housing
Act (Nov. 28, 1990). The Cranston-Gonzalez National Affordable Housing
Act [Pub. L. 101-625] amended subtitles A and B of title II of Pub. L.
100-242 generally, changing the name of title II of Pub. L. 100-242 to
the ``Low-Income Housing Preservation and Resident Homeownership Act of
1990''. As amended, subtitles A and B of title II are classified
generally to subchapter I (Sec. 4101 et seq.) of chapter 42 of this
title. Prior to the general revision by Pub. L. 101-625, subtitles A and
B of title II read as follows:
``subtitle a--general provisions
``SEC. 201. SHORT TITLE.
``This title [amending sections 1715z-6 and 1715z-15 of this title
and sections 1437f, 1472, 1485, and 1487 of Title 42, The Public Health
and Welfare] may be cited as the `Emergency Low Income Housing
Preservation Act of 1987'.
``SEC. 202. FINDINGS AND PURPOSE.
``(a) Findings.--The Congress finds that--
``(1) in the next 15 years, more than 330,000 low income housing
units insured or assisted under sections 221(d)(3) and 236 of the
National Housing Act [12 U.S.C. 1715l(d)(3), 1715z-1] could be lost
as a result of the termination of low income affordability
restrictions;
``(2) in the next decade, more than 465,000 low income housing
units produced with assistance under section 8 of the United States
Housing Act of 1937 [42 U.S.C. 1437f] could be lost as a result of
the expiration of the rental assistance contracts;
``(3) some 150,000 units of rural low income housing financed
under section 515 of the Housing Act of 1949 [42 U.S.C. 1485] are
threatened with loss as a result of the prepayment of mortgages by
owners;
``(4) the loss of this privately owned and federally assisted
housing, which would occur in a period of sharply rising rents on
unassisted housing and extremely low production of additional low
rent housing, would inflict unacceptable harm on current tenants and
would precipitate a grave national crisis in the supply of low
income housing that was neither anticipated nor intended when
contracts for these units were entered into;
``(5) the loss of this affordable housing, to encourage the
production of which the public has provided substantial benefits
over past years, would irreparably damage hard-won progress toward
such important and long-established national objectives as--
``(A) providing a more adequate supply of decent, safe, and
sanitary housing that is affordable to low income Americans;
``(B) increasing the supply of housing affordable to low
income Americans that is accessible to employment opportunities;
and
``(C) expanding housing opportunities for all Americans,
particularly members of disadvantaged minorities;
``(6) the provision of an adequate supply of low income housing
has depended and will continue to depend upon a strong, long-term
partnership between the public and private sectors that accommodates
a fair return on investment;
``(7) recent reductions in Federal housing assistance and tax
benefits related to low income housing have increased the incentives
for private industry to withdraw from the production and management
of low income housing;
``(8) efforts to retain this housing must take account of
specific financial and market conditions that differ markedly from
project to project;
``(9) a major review of alternative responses to this threatened
loss of affordable housing is now being undertaken by numerous
private sector task forces as well as State and local organizations;
and
``(10) until the Congress can act on recommendations that will
emerge from this review, interim measures are needed to avoid the
irreplaceable loss of low income housing and irrevocable
displacement of current tenants.
``(b) Purpose.--It is the purpose of this title--
``(1) to preserve and retain to the maximum extent practicable
as housing affordable to low income families or persons those
privately owned dwelling units that were produced for such purpose
with Federal assistance;
``(2) to minimize the involuntary displacement of tenants
currently residing in such housing; and
``(3) to continue the partnership between all levels of
government and the private sector in the production and operation of
housing that is affordable to low income Americans.
``SEC. 203. TERMINATION OF CERTAIN PROVISIONS.
``(a) In General.--Effective on November 30, 1990, or the date of
enactment of the Cranston-Gonzalez National Affordable Housing Act [Nov.
28, 1990], whichever is earlier--
``(1) subtitles B and D [amending sections 1715z-6 and 1715z-15
of this title and sections 1437f and 1485 of Title 42, The Public
Health and Welfare and enacting provisions set out in this note] are
repealed; and
``(2) each provision of law amended by subtitle B or D is
amended to read as it would without such amendment.
``(b) Savings Provision.--The repeal or amendment of any provision
under subsection (a) shall have no effect on any action taken or
authorized under the provision prior to such repeal or amendment.
``subtitle b--prepayment of mortgages insured under national housing act
``SEC. 221. GENERAL PREPAYMENT LIMITATION.
``(a) Prior Approval of Plan of Action.--An owner of eligible low
income housing may prepay, and a mortgagee may accept prepayment of, a
mortgage on such housing only in accordance with a plan of action
approved by the Secretary of Housing and Urban Development under this
subtitle. An insurance contract with respect to eligible low-income
housing may be terminated pursuant to section 229 of the National
Housing Act [12 U.S.C. 1715t] only in accordance with a plan of action
approved by the Secretary under this subtitle.
``(b) Alternative Prepayment Moratorium.--In the event any court of
the United States or any State invalidates the requirements established
in this subtitle (1) an owner of eligible low income housing located in
the geographic area subject to the jurisdiction of such court may not
prepay, and a mortgagee may not accept prepayment of, a mortgage on such
housing during the 2-year period following the date of such
invalidation, and (2) an insurance contract with respect to eligible
low-income housing located in the geographic area subject to the
jurisdiction of such court may not be terminated pursuant to section 229
of the National Housing Act [12 U.S.C. 1715t] during the 2-year period
following the date of such invalidation.
``SEC. 222. NOTICE OF INTENT.
``An owner of eligible low income housing seeking to initiate
prepayment or other changes in the status or terms of the mortgage or
regulatory agreement (including a request to terminate the insurance
contract pursuant to section 229 of the National Housing Act [12 U.S.C.
1715t]) shall file with the Secretary a notice of the intent of the
owner in such form and manner as the Secretary shall prescribe. The
owner shall simultaneously file the notice of intent with any
appropriate State or local government agency for the jurisdiction within
which the housing is located.
``SEC. 223. PLAN OF ACTION.
``(a) Preparation and Submission.--Upon receipt of a notice of
intent, the Secretary shall provide the owner with such information as
the owner needs to prepare a plan of action, which information shall
include a description of the Federal incentives authorized under this
title, and any relevant market area and demographic information that the
Secretary has custody of and that the owner may use in preparing the
plan. The owner shall submit the plan of action to the Secretary in such
form and manner as the Secretary shall prescribe. The owner may
simultaneously submit the plan of action to any appropriate State or
local government agency for the jurisdiction within which the housing is
located, which agency shall, in reviewing the plan, consult with
representatives of the tenants of the housing.
``(b) Contents.--The plan of action shall include--
``(1) a description of any proposed changes in the status or
terms of the mortgage or regulatory agreement, which may include a
request for incentives to extend the low income use of the housing;
``(2) a description of any assistance that could be provided by
State or local government agencies, as determined by prior
consultation between the owner and any appropriate State or local
agencies;
``(3) a description of any proposed changes in the low income
affordability restrictions;
``(4) a description of any change in ownership that is related
to prepayment;
``(5) an assessment of the effect of the proposed changes on
existing tenants;
``(6) a statement of the effect of the proposed changes on the
supply of housing affordable to lower and very low income families
or persons in the community within which the housing is located and
in the area that the housing could reasonably be expected to serve;
and
``(7) any other information that the Secretary determines is
necessary to achieve the purposes of this title.
``(c) Revisions.--The owner may from time to time revise and amend
the plan of action as may be necessary to obtain approval of the plan
under this subtitle.
``(d) Authority To Limit Contents of Plan.--The Secretary shall
limit the amount of appraisal, market area, and demographic information
required under this section in the case of a plan of action requesting
incentives.
``SEC. 224. INCENTIVES TO EXTEND LOW INCOME USE.
``(a) Agreements by Secretary.--After receiving a plan of action
from an owner of eligible low income housing, the Secretary may enter
into such agreements as are necessary to satisfy the criteria for
approval under section 225.
``(b) Permissible Incentives.--Agreements entered into under
subsection (a) that by modifications to the existing regulatory
agreement or mortgage extend the low income affordability restrictions
through the term of the mortgage or, in the case of the prepayment of a
mortgage, by a recorded instrument impose low income affordability
restrictions (including the obligations specified in the regulatory
agreement) through a period equivalent to the term of the original
mortgage may include one or more of the following incentives that the
Secretary, after taking into account local market conditions, determines
to be necessary to achieve the purposes of this title:
``(1) An increase in the allowable distribution or other
measures to increase the rate of return on investment.
``(2) Revisions to the method of calculating equity.
``(3) Increased access to residual receipts accounts or excess
replacement reserves.
``(4) Provision of insurance for a second mortgage under section
241(f) of the National Housing Act [12 U.S.C. 1715z-6(f)].
``(5) An increase in the rents permitted under an existing
contract under section 8 of the United States Housing Act of 1937
[42 U.S.C. 1437f], or (subject to the availability of amounts
provided in appropriation Acts) additional assistance under such
section 8 or an extension of any project-based assistance attached
to the housing.
``(6) Financing of capital improvements under section 201 of the
Housing and Community Development Amendments of 1978 [12 U.S.C.
1715z-1a].
``(7) Other actions, authorized in other provisions of law, to
facilitate a transfer or sale of the project to a qualified
nonprofit organization, limited equity tenant cooperative, public
agency, or other entity acceptable to the Secretary.
``(8) Other incentives authorized in law.
``SEC. 225. CRITERIA FOR APPROVAL OF PLAN OF ACTION.
``(a) Plan of Action Involving Termination of Low Income
Affordability Restrictions.--The Secretary may approve a plan of action
that involves termination of the low income affordability restrictions
only upon a written finding that--
``(1) implementation of the plan of action will not materially
increase economic hardship for current tenants (and will not in any
event result in (A) a monthly rental payment by a current tenant
that exceeds 30 percent of the monthly adjusted income of the tenant
or an increase in the monthly rental payment in any year that
exceeds 10 percent (whichever is lower), or (B) in the case of a
current tenant who already pays more than such percentage, an
increase in the monthly rental payment in any year that exceeds the
increase in the Consumer Price Index or 10 percent (whichever is
lower)) or involuntarily displace current tenants (except for good
cause) where comparable and affordable housing is not readily
available, determined without regard to the availability of Federal
housing assistance that would address any such hardship or
involuntary displacement; and
``(2)(A) the supply of vacant, comparable housing is sufficient
to ensure that such prepayment will not materially affect--
``(i) the availability of decent, safe, and sanitary housing
affordable to lower income and very low-income families or
persons in the area that the housing could reasonably be
expected to serve;
``(ii) the ability of lower income and very low-income
families or persons to find affordable, decent, safe, and
sanitary housing near employment opportunities; or
``(iii) the housing opportunities of minorities in the
community within which the housing is located; or
``(B) the plan has been approved by the appropriate State agency
and any appropriate local government agency for the jurisdiction
within which the housing is located as being in accordance with a
State strategy approved by the Secretary under section 226.
``(b) Plan of Action Including Incentives.--The Secretary may
approve a plan of action that includes incentives only upon finding
that--
``(1) the package of incentives is necessary to provide a fair
return on the investment of the owner;
``(2) due diligence has been given to ensuring that the package
of incentives is, for the Federal Government, the least costly
alternative that is consistent with the full achievement of the
purposes of this title; and
``(3) binding commitments have been made to ensure that--
``(A) the housing will be retained as housing affordable for
very low-income families or persons, lower income families or
persons, and moderate income families or persons for the
remaining term of the mortgage;
``(B) throughout such period, adequate expenditures will be
made for maintenance and operation of the housing;
``(C) current tenants shall not be involuntarily displaced
(except for good cause);
``(D) any increase in rent contributions for current tenants
shall be to a level that does not exceed 30 percent of the
adjusted income of the tenant or the fair market rent for
comparable housing under section 8(b) of the United States
Housing Act of 1937 [42 U.S.C. 1437f(b)], whichever is lower;
``(E)(i) any resulting increase in rents for current tenants
(except for increases made necessary by increased operating
costs)--
``(I) shall be phased in equally over a period of not
less than 3 years, if such increase is 30 percent or more;
and
``(II) shall be limited to not more than 10 percent per
year if such increase is more than 10 percent but less than
30 percent; and
``(ii) assistance under section 8 of the United States
Housing Act of 1937 shall be provided if necessary to mitigate
any adverse affect on current income eligible tenants; and
``(F)(i) rents for units becoming available to new tenants
shall be at levels approved by the Secretary that will ensure,
to the extent practicable, that the units will be available and
affordable to the same proportions of very low-income families
or persons, lower income families or persons, and moderate
income families or persons (including families or persons whose
incomes are 95 percent or more of area median income) as resided
in the housing as of January 1, 1987 (based on the area median
income limits established by the Secretary in February, 1987),
or the date the plan of action is approved, whichever date
results in the highest proportion of very low-income families,
except that this limitation shall not prohibit a higher
proportion of very low-income families from occupying the
housing; and
``(ii) in approving rents under this paragraph, the
Secretary shall take into account any additional incentives
provided under this subtitle and shall make provision for such
annual rent adjustments as may be made necessary by future
reasonable increases in operating costs.
``(c) Section 8 Rental Assistance.--When providing rental assistance
under section 8 [of the United States Housing Act of 1937, 42 U.S.C.
1437f], the Secretary may enter into a contract with an owner,
contingent upon the future availability of appropriations for the
purpose of renewing expiring contracts for rental assistance as provided
in appropriations Acts, to extend the term of such rental assistance for
such additional period or periods as is necessary to carry out an
approved plan of action. The contract and the approved plan of action
shall provide that, if the Secretary is unable to extend the term of
such rental assistance or is unable to develop a revised package of
incentives providing benefits to the owner comparable to those received
under the original approved plan of action, the Secretary, upon the
request of the owner, shall take the following actions (subject to the
limitations under the following paragraphs):--
``(1) Modification of the binding commitments made pursuant to
subsection (b) that are dependent on such rental assistance.
``(2) If action under paragraph (1) is not feasible, release of
an owner from the binding commitments made pursuant to subsection
(b) that are dependent on such rental assistance.
``(3) If action under paragraphs (1) and (2) would, in the
determination of the Secretary, result in the default of the insured
loan, approval of the revised plan of action, notwithstanding
subsection (a), that involves the termination of low-income
affordability restrictions.
At least 30 days prior to making a request under the preceding sentence,
an owner shall notify the Secretary of the owner's intention to submit
the request. The Secretary shall have a period of 90 days following
receipt of such notice to take action to extend the rental assistance
contract and to continue the binding commitments under subsection (b).
``(d) Relocation of Displaced Tenants.--Any plan of action shall
specify actions that the Secretary and the owner shall take to ensure
that any tenants, displaced as a result of a plan of action approved
under subsection (a) or as a result of modifications taken pursuant to
subsection (c), are relocated to affordable housing.
``SEC. 226. ALTERNATIVE STATE STRATEGY.
``(a) Criteria for Approval.--The Secretary may approve a State
strategy for purposes of section 225(a) only upon finding that it is a
practicable statewide strategy that ensures at a minimum that--
``(1) current tenants will not be involuntarily displaced
(except for good cause);
``(2) housing opportunities for minorities will not be adversely
affected in the communities within which the housing is located;
``(3) any increase in rent for current tenants shall be to a
level that does not exceed 30 percent of the adjusted income of the
tenants or the fair market rent for comparable housing under section
8(b) of the United States Housing Act of 1937 [42 U.S.C. 1437f(b)],
whichever is lower, except that any increase not necessitated by
increased operating costs shall be phased in equally over not less
than 3 years if such increase exceeds 10 percent;
``(4) housing approved under the State strategy will remain
affordable to very low-income, lower income or moderate income
families and persons for not less than the remaining term of the
original mortgage, if the housing is to be made available for
rental, or for not less than 40 years, if the housing is to be made
available for homeownership;
``(5)(A) not less than 80 of all units in eligible low income
housing approved under the State strategy shall be retained as
affordable to families or persons meeting the income eligibility
standards for initial occupancy that applies to the housing on
January 1, 1987; and
``(B) not less than 60 percent of the units in any one project
shall remain available and affordable to such families or persons,
within which not less than 20 percent of the units shall remain
available and affordable to very low income families or persons as
determined by the Secretary with adjustments for smaller and larger
families;
``(6) expenditures for rehabilitation, maintenance and operation
shall be at a level necessary to maintain the housing as decent,
safe and sanitary for the period specified in paragraph (4);
``(7) not less than 25 percent of new assistance required to
maintain low income affordability in accordance with this section
shall be provided through State and local actions, such as tax
exempt financing, low-income tax credits, State or local tax
concessions, and other incentives provided by the State or local
governments; and
``(8) for each unit of eligible low income housing approved
under the State strategy that is not retained as affordable to
families or persons meeting the income eligibility standards for
initial occupancy on January 1, 1987, the State will provide with
State funds 1 additional unit of comparable housing in the same
market area that is available and affordable to such families or
persons, and such units or funds shall be made available before the
Secretary approves the State strategy.
``(b) Additional Requirements.--
``(1) The Secretary may not approve a State strategy until the
State has entered into all of the agreements necessary to carry out
the strategy.
``(2) Each State strategy shall include any other provision that
the Secretary determines to be necessary to implement an approved
State strategy.
``(c) Implementation Agreements.--The Secretary may enter into such
agreements as are necessary to implement an approved State strategy,
which agreements may include incentives that are authorized in other
provisions of this subtitle.
``SEC. 227. TIMETABLE FOR APPROVAL OF PLAN OF ACTION.
``(a) Notification of Deficiencies.--Not later than 60 days after
receipt of a plan of action, the Secretary shall notify the owner in
writing of any deficiencies that prevent the plan of action from being
approved. If deficiencies are found, such notice shall describe
alternative ways in which the plan could be revised to meet the criteria
for approval.
``(b) Notification of Approval.--
``(1) In general.--Not later than 180 days after receipt of a
plan of action, or such longer period as the owner requests, the
Secretary shall notify the owner in writing whether the plan of
action, including any revisions, is approved. If approval is
withheld, the notice shall describe--
``(A) the reasons for withholding approval; and
``(B) the actions that could be taken to meet the criteria
for approval.
``(2) Opportunity to revise.--The Secretary shall subsequently
give the owner a reasonable opportunity to revise the plan of action
and seek approval.
``SEC. 228. MODIFICATION OF EXISTING REGULATORY AGREEMENTS.
``(a) In General.--If a plan of action cannot be approved within 300
days after a plan of action is submitted, the Secretary may, upon the
request of the owner, modify existing regulatory agreements to--
``(1) prevent involuntary displacement of current tenants
(except for good cause);
``(2) ensure that adequate expenditures will be made for
maintenance and operation of the housing;
``(3) extend any expiring project-based assistance on the
housing for the term of the agreement;
``(4) permit an increase in the allowable distribution that
could be accommodated by a rise in rents on occupied units to rise
to a level no higher than 30 percent of the adjusted income of the
current tenants, as determined by the Secretary, except that rents
shall not exceed the fair market rent for comparable housing under
section 8(b) of the United States Housing Act of 1937 [42 U.S.C.
1437f(b)] and any resulting increase in rents for current tenants
shall be phased in equally over a period of no less than 3 years
unless such increase is less than 10 percent; and
``(5) ensure that units becoming vacant during the term of the
agreement are made available in accordance with section
225(b)(3)(F).
``(b) Expiration.--Agreements entered into under this section shall
expire upon the expiration of the 4-year period beginning on the date of
the enactment of this Act [Feb. 5, 1988]. Upon the expiration of the
agreements, the housing covered by the agreements shall be subject to
any law then affecting low income affordability restrictions.
``SEC. 229. CONSULTATIONS WITH OTHER INTERESTED PARTIES.
``The Secretary shall confer with any appropriate State or local
government agency to confirm any State or local assistance that is
available to achieve the purposes of this title and shall give
consideration to the views of any such agency when making determinations
under section 225. The Secretary shall also confer with appropriate
interested parties that the Secretary believes could assist in the
development of a plan of action that best achieves the purposes of this
title.
``SEC. 230. RIGHT OF CONVERSION TO ALTERNATIVE PREPAYMENT SYSTEM.
``Any agreement to extend low income affordability restrictions
under section 225(b) shall, for 4 years from the date of the enactment
of this Act [Feb. 5, 1988], provide the owner the right to convert to
any system of incentives and restrictions provided in law during such
period, with such adjustments as the Secretary determines are
appropriate to compensate for the value of any benefits the owner had
received under this title.
``SEC. 232. REPORT TO CONGRESS.
``Not later than 1 year after the date of the enactment of this Act
[Feb. 5, 1988], the Secretary shall submit to the Congress a report
setting forth the activities carried out under this subtitle. The report
shall include a description of the plans of action approved under
subsections (a) and (b) of section 225 and an analysis of the extent to
which the plans retain housing affordable for very low-income families
or persons, lower income families or persons, and moderate income
families or persons. The report shall also include a detailed
description of (1) the actions taken by the Secretary to ensure
meaningful participation by affected tenants; and (2) the incentives
developed by the Secretary under section 224 to ensure compliance with
this subtitle.
``SEC. 233. DEFINITIONS.
``For purposes of this subtitle:
``(1) The term `eligible low income housing' means any housing
financed by a loan or mortgage--
``(A) that is--
``(i) insured or held by the Secretary under section
221(d)(3) of the National Housing Act [12 U.S.C.
1715l(d)(3)] and assisted under section 101 of the Housing
and Urban Development Act of 1965 [12 U.S.C. 1701s] or
section 8 of the United States Housing Act of 1937 [42
U.S.C. 1437f];
``(ii) insured or held by the Secretary and bears
interest at a rate determined under the proviso of section
221(d)(5) of the National Housing Act;
``(iii) insured, assisted, or held by the Secretary or a
State or State agency under section 236 of the National
Housing Act [12 U.S.C. 1715z-1]; or
``(iv) held by the Secretary and formerly insured under
a program referred to in clause (i), (ii), or (iii); and
``(B) that, under regulation or contract in effect before
the date of the enactment of this Act [Feb. 5, 1988], is or will
within 1 year become eligible for prepayment without prior
approval of the Secretary.
``(2) The term `low income affordability restrictions' means
limits imposed by regulation or regulatory agreement on tenant
rents, rent contributions, or income eligibility in eligible low
income housing.
``(3) The terms `lower income families or persons' and `very
low-income families or persons' mean families or persons whose
incomes do not exceed the respective levels established for lower
income families and very low-income families under section 3(b)(2)
of the United States Housing Act of 1937 [42 U.S.C. 1437a(b)(2)].
``(4) The term `moderate income families or persons' means
families or persons whose incomes are between 80 percent and 95
percent of median income for the area, as determined by the
Secretary with adjustments for smaller and larger families.
``(5) The term `owner' means the current or subsequent owner or
owners of eligible low income housing.
``(6) The term `Secretary' means the Secretary of Housing and
Urban Development.
``(7) The term `termination of low income affordability
restrictions' means any elimination or relaxation of low income
affordability restrictions (other than those permitted under an
approved plan of action under section 225(b)).
``SEC. 234. REGULATIONS.
``The Secretary shall issue final regulations to carry out this
subtitle not later than 60 days after the date of the enactment of this
Act [Feb. 5, 1988]. The Secretary shall provide for the regulations to
take effect not later than 45 days after the date on which the
regulations are issued.
``SEC. 235. EFFECTIVE DATE.
``The requirements of this subtitle shall apply to any project that
is eligible low income housing on or after November 1, 1987.''
[Pub. L. 101-494, Sec. 2(b), Oct. 31, 1990, 104 Stat. 1185, provided
that: ``If the Cranston-Gonzalez National Affordable Housing Act [Pub.
L. 101-625, which was approved Nov. 28, 1990] is enacted on or after
October 31, 1990, this section [amending section 203(a) of Pub. L. 100-
242 set out above] shall be deemed to have taken effect on October 30,
1990.''
Nehemiah Housing Opportunity Grants
Title VI (Secs. 601-613) of Pub. L. 100-242, Feb. 5, 1988, 101 Stat.
1951, as amended by Pub. L. 102-139, title II, Oct. 28, 1991, 105 Stat.
759; Pub. L. 102-550, title I, Sec. 183, Oct. 28, 1992, 106 Stat. 3738,
established the Nehemiah Housing Opportunity Fund to provide assistance
in the form of grants to nonprofit organizations for the construction,
rehabilitation, and financing of housing for families not otherwise able
to afford homeownership. Pub. L. 101-625, title II, Sec. 289(a)(3), (b),
Nov. 28, 1990, 104 Stat. 4128, which is classified to section
12839(a)(3), (b) of Title 42, The Public Health and Welfare, provided
that, except with respect to projects and programs for which binding
commitments have been entered into prior to Oct. 1, 1991, no new grants
or loans be made after Oct. 1, 1991, under title VI of Pub. L. 100-242,
and effective Oct. 1, 1991, title VI of Pub. L. 100-242 is repealed.
Limitation on Number of Dwelling Units With Mortgages Not Providing for
Complete Amortization
For limitation on the number of dwelling units with mortgages not
providing for complete amortization pursuant to authority granted by
amendment to subsec. (d)(6) by section 446 of Pub. L. 98-181, see
section 446(f) of Pub. L. 98-181, set out as a note under section 1713
of this title.
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. (d)(3) (ii), (4)(ii)
of this section by section 107(d)(1), (2) 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.
Taxation of Interest Paid on Obligations Secured by Insured Mortgage and
Issued by Public Agency
Section 319(b) of Pub. L. 93-383, as amended by Pub. L. 99-514,
Sec. 2, Oct. 22, 1986, 100 Stat. 2095, provided that: ``With respect to
any obligation secured by a mortgage which is insured under section
221(d)(3) of the National Housing Acts [subsec. (d)(3) of this section]
and issued by a public agency as mortgagor in connection with the
financing of a project assisted under section 8 of the United States
Housing Act of 1937 [section 1437f of title 42], the interest paid on
such obligation shall be included in gross income for purposes of
chapter 1 of the Internal Revenue Code of 1986 [chapter 1 of title
26].''
Section Referred to in Other Sections
This section is referred to in sections 1701s, 1701u, 1701z-4,
1701z-11, 1709, 1712a, 1713, 1715c, 1715m, 1715n, 1715o, 1715r, 1715w,
1715z, 1715z-1, 1715z-1a, 1715z-2, 1715z-6, 1717, 1731b, 1735b, 1831q,
4119 of this title; title 26 sections 32, 42, 1250; title 40 section
14503; title 42 sections 1452b, 2982c, 4851b, 8011, 8231, 11905, 12742,
12785, 13641, 13664.
