§ 1715n. — Miscellaneous mortgage insurance.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1715n]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER II--MORTGAGE INSURANCE
Sec. 1715n. Miscellaneous mortgage insurance
(a) Projects covered
Notwithstanding any of the provisions of this chapter and without
regard to limitations upon eligibility contained in any section or
subchapter of this chapter, other than the limitation in section 1709(g)
of this title, the Secretary is authorized, upon application by the
mortgagee, to insure or make commitments to insure under any section or
subchapter of this chapter any mortgage--
(1) executed in connection with the sale by the Government, or
any agency or official thereof, of any housing acquired or
constructed under Public Law 849, Seventy-sixth Congress, as
amended; Public Law 781, Seventy-sixth Congress, as amended; or
Public Laws 9, 73, or 353, Seventy-seventh Congress, as amended
(including any property acquired, held, or constructed in connection
with such housing or to serve the inhabitants thereof); or
(2) executed in connection with the sale by the Secretary of
Housing and Urban Development, or by any public housing agency with
the approval of the Secretary, of any housing (including any
property acquired, held, or constructed in connection with such
housing or to serve the inhabitants thereof) owned or financially
assisted pursuant to the provisions of Public Law 671, Seventy-sixth
Congress; or
(3) executed in connection with the sale by the Government, or
any agency or official thereof, of any of the so-called Greenbelt
towns, or parts thereof, including projects, or parts thereof, known
as Greenhills, Ohio; Greenbelt, Maryland; and Greendale, Wisconsin,
developed under the Emergency Relief Appropriation Act of 1935, or
of any of the village properties or employee's housing under the
jurisdiction of Tennessee Valley Authority, or of any housing under
the jurisdiction of the Department of the Interior located within
the town area of Coulee Dam, Washington, acquired by the United
States for the construction, operation, and maintenance of Grand
Coulee Dam and its appurtenant works: Provided, That for the purpose
of the application of this subchapter to sales by the Secretary of
the Interior pursuant to subsections 3(b)(1) and 3(b)(2) of the
Coulee Dam Community Act of 1957, the selling price of the property
involved shall be deemed to be the appraised value, of any permanent
housing under the jurisdiction of the Department of the Interior
constructed under the Boulder Canyon Project Act of December 21,
1928, as amended and supplemented [43 U.S.C. 617 et seq.] located
within the Boulder City municipal area: Provided, That for purposes
of the application of this subchapter to sales by the Secretary of
the Interior pursuant to subsections 3(b)(1) and 3(b)(2) of the
Boulder City Act of 1958, the selling price of the property involved
shall be deemed to be the appraised value; or
(4) executed in connection with the sale by the Government, or
any agency or official thereof, of any housing (including any
property acquired, held, or constructed in connection therewith or
to serve the inhabitants thereof) pursuant to the Atomic Energy
Community Act of 1955, as amended [42 U.S.C. 2301 et seq.]:
Provided, That such insurance shall be issued without regard to any
preferences or priorities except those prescribed by this chapter or
the Atomic Energy Community Act of 1955, as amended; or
(5) executed in connection with the sale by a State or
municipality, or an agency, instrumentality, or political
subdivision of either, of a project consisting of any permanent
housing (including any property acquired, held, or constructed in
connection therewith or to serve the inhabitants thereof),
constructed by or on behalf of such State, municipality, agency,
instrumentality, or political subdivision, for the occupancy of
veterans of World War II, or Korean veterans, their families, and
others; or
(6) executed in connection with the first resale, within two
years from the date of its acquisition from the Government, of any
portion of a project or property of the character described in
paragraphs (1), (2), (3), and (4) above; or
(7) given to refinance an existing mortgage insured under this
chapter, or an existing mortgage held by the Secretary that is
subject to a mortgage restructuring and rental assistance
sufficiency plan pursuant to the Multifamily Assisted Housing Reform
and Affordability Act of 1997 (42 U.S.C. 1437f note), provided
that--
(A) the principal amount of any such refinancing mortgage
shall not exceed the original principal amount or the unexpired
term of such existing mortgage and shall bear interest at such
rate as may be agreed upon by the mortgagor and the mortgagee,
except that (i) the principal amount of any such refinancing
mortgage may equal the outstanding balance of an existing
mortgage insured pursuant to section 1715z-10 of this title, if
the amount of the monthly payment due under the refinancing
mortgage is less than that due under the existing mortgage for
the month in which the refinancing mortgage is executed; (ii) a
mortgagee may not require a minimum principal amount to be
outstanding on the loan secured by the existing mortgage; (iii)
in any case involving the refinancing of a loan in which the
Secretary determines that the insurance of a mortgage for an
additional term will inure to the benefit of the applicable
insurance fund, taking into consideration the outstanding
insurance liability under the existing insured mortgage, such
refinancing mortgage may have a term not more than twelve years
in excess of the unexpired term of such existing insured
mortgage; and (iv) any multifamily mortgage that is refinanced
under this paragraph shall be documented through amendments to
the existing insurance contract and shall not be structured
through the provisions of a new insurance contract; and
(B) a mortgage of the character described in paragraphs (1)
through (6) of this subsection shall have a maturity and a
principal obligation not in excess of the maximums prescribed
under the applicable section or subchapter of this chapter,
except that in no case may the principal obligation of a
mortgage referred to in paragraph (5) of this subsection exceed
90 per centum of the appraised value of the mortgaged property,
and shall bear interest at such rate as may be agreed upon by
the mortgagor and the mortgagee;
(C) a mortgage that is subject to a mortgage restructuring
and rental assistance sufficiency plan pursuant to the
Multifamily Assisted Housing Reform and Affordability Act of
1997 (42 U.S.C. 1437f note) and is refinanced under this
paragraph may have a term of not more than 30 years; or
(8) executed in connection with the sale by the Government of
any housing acquired pursuant to section 1013 of the Demonstration
Cities and Metropolitan Act of 1966 [42 U.S.C. 3374].
(b) Insurance of mortgages given to refinance mortgages covering
existing property or projects in urban renewal areas
Notwithstanding any of the provisions of this subchapter and without
regard to limitations upon eligibility contained in section 1715l of
this title, the Secretary may in his discretion insure under section
1715l(d)(3) of this title any mortgage executed by a mortgagor of the
character described therein where such mortgage is given to refinance a
mortgage covering an existing property or project (other than a one- to
four-family structure) located in an urban renewal area, if the
Secretary finds that such insurance will facilitate the occupancy of
dwelling units in the property or project by families of low or moderate
income or families displaced from an urban renewal area or displaced as
a result of governmental action.
(c) Insurance of certain assigned mortgages
The Secretary shall also have authority to insure under this chapter
any mortgage assigned to the Secretary in connection with payment under
a contract of mortgage insurance or executed in connection with the sale
by the Secretary, including a sale through another entity acting under
authority of the fourth sentence of section 1710(g) of this title, of
any property acquired under any section or subchapter of this chapter
without regard to any limitations or requirements contained in this
chapter upon the eligibility of the mortgage, upon the payment of
insurance premiums, or upon the terms and conditions of insurance
settlement and the benefits of the insurance to be included in such
settlement.
(d) Insurance of loans made to cover operating losses of certain
projects having existing mortgages insured by Secretary
(1) Notwithstanding any other provision of this chapter, the
Secretary is authorized to insure loans made to cover the operating
losses of certain projects that have existing project mortgages insured
by the Secretary. Insurance under this subsection shall be in the
Secretary's discretion and upon such terms and conditions as the
Secretary may prescribe, and shall be provided in accordance with the
provisions of this subsection. For purposes of this subsection, the term
``operating loss'' means the amount by which the sum of the taxes,
interest on the mortgage debt, mortgage insurance premiums, hazard
insurance premiums, and the expense of maintenance and operation of the
project covered by the mortgage, exceeds the income of the project.
(2) To be eligible for insurance pursuant to this paragraph--
(A) the existing project mortgage (i) shall have been insured by
the Secretary at any time before or after February 5, 1988; and (ii)
shall cover any property, other than a property upon which there is
located a 1- to 4-family dwelling;
(B) the operating loss shall have occurred during the first 24
months after the date of completion of the project, as determined by
the Secretary; and
(C) the loan shall be in an amount not exceeding the operating
loss.
(3) To be eligible for insurance pursuant to this paragraph--
(A) the existing project mortgage (i) shall have been insured by
the Secretary at any time before or after February 5, 1988; (ii)
shall cover any property, other than a property upon which there is
located a 1- to 4-family dwelling; and (iii) shall not cover a
subsidized project, as defined by the Secretary;
(B) the loan shall be in an amount not exceeding 80 percent of
the unreimbursed cash contributions made on or after March 18, 1987,
by the project owner for the use of the project, during any period
of consecutive months (not exceeding 24 months) in the first 10
years after the date of completion of the project, as determined by
the Secretary, except that in no event may the amount of the loan
exceed the operating loss during such period;
(C) the loan shall be made within 10 years after the end of the
period of consecutive months referred to in the preceding
subparagraph; and
(D) the project shall meet all applicable underwriting and other
requirements of the Secretary at the time the loan is to be made.
(4) Any loan insured pursuant to this subsection shall (A) bear
interest at such rate as may be agreed upon by the mortgagor and
mortgagee; (B) be secured in such manner as the Secretary shall require;
(C) be limited to a term not exceeding the unexpired term of the
original mortgage; and (D) be insured under the same section as the
original mortgage. The Secretary may provide insurance pursuant to
paragraph (2) or (3), or pursuant to both such paragraphs, in connection
with an existing project mortgage, except that the Secretary may not
provide insurance pursuant to both such paragraphs in connection with
the same period of months referred to in paragraphs (2)(B) and (3)(B).
The Secretary is authorized to collect a premium charge for insurance of
loans pursuant to this subsection in any amount computed at the same
premium rate as is applicable to the original mortgage. This premium
shall be payable in cash or in debentures of the insurance fund under
which the loan is insured at par plus accrued interest. In the event of
a failure of the borrower to make any payment due under such loan or
under the original mortgage, both the loan and original mortgage shall
be considered in default, and if such default continues for a period of
thirty days, the lender shall be entitled to insurance benefits,
computed in the same manner as for the original mortgage, except that in
determining the interest rate under section 1715o of this title for the
debentures representing the portion of the claim applicable to the loan,
the date of the commitment to insure the loan and the insurance date of
the loan shall be taken into consideration rather than the commitment or
insurance date for the original mortgage.
(5) A loan involving a project covered by a mortgage insured under
section 1715e of this title that is the obligation of the Cooperative
Management Housing Insurance Fund shall be the obligation of such fund,
and loans involving projects covered by a mortgage insured under section
1715z-1 of this title or under any section of this subchapter pursuant
to subsection (e) of this section shall be the obligation of the Special
Risk Insurance Fund.
(6) In determining the amount of an operating loss loan to be
insured pursuant to this subsection, the Secretary shall not reduce such
amount solely to reflect any amounts placed in escrow (at the time the
existing project mortgage was insured) for initial operating deficits.
If an operating loss loan was insured by the Secretary pursuant to this
subsection before October 28, 1992, and was reduced solely to reflect
the amount placed in escrow for initial operating deficits, the
Secretary shall insure, to the extent of the availability of insurance
authority provided in appropriation Acts, an increase in the existing
loan or a separate loan, in an amount equal to the lesser of (A) the
maximum amount permitted under this subsection and the applicable
underwriting requirements established by the Secretary and in effect at
the time the loan is to be made, or (B) the amount of the escrow for
initial operating deficits.
(e) Insurance of mortgages executed in connection with repair,
rehabilitation, construction, or purchase of property in older,
declining urban areas
Notwithstanding any of the provisions of this chapter except section
1715c of this title, and without regard to limitations upon eligibility
contained in any section of this subchapter or subchapter IX-B of this
chapter, other than the limitation in section 1709(g) of this title, the
Secretary is authorized, upon application by the mortgagee, to insure
under any section of this subchapter or subchapter IX-B of this chapter
a mortgage executed in connection with the repair, rehabilitation,
construction, or purchase of property located in an older, declining
urban area in which the conditions are such that one or more of the
eligibility requirements applicable to the section or subchapter under
which insurance is sought could not be met if the Secretary finds that
(1) the area is reasonably viable, giving consideration to the need for
providing adequate housing or group practice facilities for families of
low and moderate income in such area, and (2) the property is an
acceptable risk in view of such consideration. The insurance of a
mortgage pursuant to this subsection shall be the obligation of the
Special Risk Insurance Fund.
(f) Insurance of mortgages executed in connection with purchase or
refinancing of existing multifamily housing project; refinancing
of existing debt of existing hospital, or purchase or
refinancing of rental rehabilitated property; terms and
conditions, etc.
(1) Notwithstanding any of the provisions of this chapter, the
Secretary is authorized, in his discretion, to insure under any section
of this subchapter a mortgage executed in connection with the purchase
of refinancing of an existing multifamily housing project or the
refinancing of existing debt of an existing hospital (or existing
nursing home, existing assisted living facility, existing intermediate
care facility, existing board and care home, or any combination
thereof).
(2) In the case of the purchase or refinancing under this subsection
of a multifamily housing project located in an older, declining urban
area, the Secretary shall make available an amount not to exceed
$30,000,000 of available purchase authority pursuant to section 1720 \1\
of this title to reduce interest rates on low- and moderate-income
rental housing in projects having 100 units or less which otherwise
could not support refinancing and moderate rehabilitation without
causing excessive rent burdens on current tenants due to rent increases.
The Secretary shall prescribe such terms and conditions as he deems
necessary to assure that--
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\1\ See References in Text note below.
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(A) the refinancing is used to lower the monthly debt service
only to the extent necessary to assure the continued economic
viability of the project, taking into account any rent reductions to
be implemented by the mortgagor; and
(B) during the mortgage term no rental increases shall be made
except those which are necessary to offset actual and reasonable
operating expense increases or other necessary expense increases and
maintain reasonable profit levels approved by the Secretary.
(3) For all insurance authorized by this subsection and provided
pursuant to a commitment entered into after October 8, 1980, the
Secretary may not accept an offer to prepay or request refinancing of a
mortgage secured by rental housing unless the Secretary takes
appropriate action that will obligate the borrower (and successors in
interest thereof) to utilize the property as a rental property for a
period of five years from the date on which the insurance was provided
(twenty years in the case of any such mortgage purchased under section
1720 \1\ of this title) unless the Secretary finds that--
(A) the conversion of the property to a cooperative, or
condominium form of ownership is sponsored by a bona fide tenants'
organization representing a majority of the households in the
project;
(B) continuance of the property as rental housing is clearly
unnecessary to assure adequate rental housing opportunities for low-
and moderate-income people in the community; or
(C) continuance of the property as rental housing would have an
undesirable and deleterious effect on the surrounding neighborhood.
(4) In the case of refinancing of an existing hospital (or existing
nursing home, existing assisted living facility, existing intermediate
care facility, existing board and care home, or any combination thereof)
the Secretary shall prescribe such terms and conditions as the Secretary
deems necessary to assure that--
(A) the refinancing is employed to lower the monthly debt
service costs (taking into account any fees or charges connected
with such refinancing) of such existing hospital (or existing
nursing home, existing assisted living facility, existing
intermediate care facility, existing board and care home, or any
combination thereof);
(B) the proceeds of any refinancing will be employed only to
retire the existing indebtedness and pay the necessary cost of
refinancing on such existing hospital (or existing nursing home,
existing assisted living facility, existing intermediate care
facility, existing board and care home, or any combination thereof);
(C) such existing hospital (or existing nursing home, existing
assisted living facility, existing intermediate care facility,
existing board and care home, or any combination thereof) is
economically viable; and
(D) the applicable requirements for certificates, studies, and
statements of section 1715w of this title (for the existing nursing
home, existing assisted living facility, intermediate care facility,
board and care home, or any combination thereof, proposed to be
refinanced) or of section 1715z-7 of this title (for the existing
hospital proposed to be refinanced) have been met.
(5) In the case of any purchase or refinancing under this subsection
involving property to be rehabilitated or developed under section 1437o
\1\ of title 42, the Secretary may--
(A) include rehabilitation or development costs of not to exceed
$20,000 per unit, except that the Secretary may increase such amount
by not to exceed 25 per centum for specific properties where cost
levels so require;
(B) permit subordinated liens securing up to the full amount of
mortgage financing provided by State or local governments or
agencies thereof; and
(C) pay such benefits in cash unless the mortgagee submits a
written request for debenture payment.
(g) Insurance of mortgages covering multifamily housing projects
including units not self-contained
Notwithstanding any other provisions of this chapter, the Secretary
may, in his discretion, insure a mortgage covering a multifamily housing
project including units which are not self-contained.
(June 27, 1934, ch. 847, title II, Sec. 223, as added Aug. 2, 1954, ch.
649, title I, Sec. 125, 68 Stat. 605; amended Aug. 4, 1955, ch. 543, ch.
11, Sec. 201, 69 Stat. 484; Aug. 11, 1955, ch. 783, title I,
Sec. 102(k), 69 Stat. 636; Pub. L. 85-104, title I, Sec. 114, July 12,
1957, 71 Stat. 298; Pub. L. 85-240, Sec. 4, Aug. 30, 1957, 71 Stat. 528;
Pub. L. 85-900, Sec. 12, Sept. 2, 1958, 72 Stat. 1735; Pub. L. 87-70,
title I, Sec. 101(d), title VI, Sec. 612(h), June 30, 1961, 75 Stat.
154, 182; Pub. L. 88-560, title I, Sec. 116, Sept. 2, 1964, 78 Stat.
779; Pub. L. 89-117, title I, Sec. 108(e), title II, Sec. 213, Aug. 10,
1965, 79 Stat. 461, 471; Pub. L. 89-754, title X, Sec. 1013(h), Nov. 3,
1966, 80 Stat. 1292; Pub. L. 90-19, Sec. 1(a)(3), (h), May 25, 1967, 81
Stat. 17, 18; Pub. L. 90-448, title I, Sec. 103(a), title III, Sec. 312,
Aug. 1, 1968, 82 Stat. 486, 510; Pub. L. 91-152, title IV, Sec. 418(c),
(d), Dec. 24, 1969, 83 Stat. 402; Pub. L. 93-383, title III,
Sec. 311(a), Aug. 22, 1974, 88 Stat. 683; Pub. L. 95-557, title III,
Sec. 326, Oct. 31, 1978, 92 Stat. 2104; Pub. L. 96-399, title III,
Sec. 327, Oct. 8, 1980, 94 Stat. 1650; Pub. L. 97-35, title III,
Sec. 339B(b), Aug. 13, 1981, 95 Stat. 417; Pub. L. 98-181, title III,
Sec. 303(b), Nov. 30, 1983, 97 Stat. 1207; Pub. L. 98-479, title II,
Sec. 204(a)(7), Oct. 17, 1984, 98 Stat. 2232; Pub. L. 100-242, title IV,
Secs. 406(b)(15), (16), 408(a), 409(a), (b), 419(b), 427, 429(d), Feb.
5, 1988, 101 Stat. 1901, 1903, 1913, 1916, 1918; Pub. L. 102-550, title
V, Secs. 510, 511(f), Oct. 28, 1992, 106 Stat. 3784, 3786; Pub. L. 103-
327, title II, Sept. 28, 1994, 108 Stat. 2316; Pub. L. 105-276, title
VI, Sec. 601(e), Oct. 21, 1998, 112 Stat. 2674; Pub. L. 107-116, title
VI, Sec. 615, Jan. 10, 2002, 115 Stat. 2225.)
References in Text
Public Law 849, Seventy-sixth Congress, as amended, referred to in
subsec. (a)(1), is act Oct. 14, 1940, ch. 862, 54 Stat. 1125, as
amended, known as the ``Lanham Public War Housing Act'', which is
classified generally to subchapters II to VII (Secs. 1521 et seq., 1531
et seq., 1541 et seq., 1561 et seq., 1571 et seq., and 1581 et seq.) of
chapter 9 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 1501 of Title 42 and Tables.
Public Laws 9, 73, and 353, Seventy-seventh Congress, referred to in
subsec. (a)(1), refer to the following acts, respectively: Public Law 9,
Urgent Deficiency Appropriation Act, 1941, act Mar. 1, 1941, ch. 9, 55
Stat. 14; Public Law 73, Additional Urgent Deficiency Appropriation Act,
1941, act May 24, 1941, ch. 132, 55 Stat. 197; and Public Law 353, Third
Supplemental National Defense Appropriation Act, 1942, act Dec. 17,
1941, ch. 591, 55 Stat. 810. These three acts appropriated a total of
$320,000,000 to the President for the purpose of providing housing
necessary because of national defense activities and conditions arising
out of World War II. These provisions were not classified to the code,
although all three acts are cited in a ``Prior Additional
Appropriations'' note under section 1523 of Title 42.
Public Law 671, Seventy-sixth Congress, referred to in subsec.
(a)(2), is act June 28, 1940, ch. 440, 54 Stat. 676, as amended.
Provisions of the Act relating to housing are contained in title II,
which is classified generally to subchapter I (Sec. 1501 et seq.) of
chapter 9 of Title 42. For complete classification of this Act to the
Code, see Tables.
The Emergency Relief Appropriation Act of 1935, referred to in
subsec. (a)(3), is Joint Res. Apr. 8, 1935, ch. 48, 49 Stat. 115. It was
temporary legislation, and was formerly set out in a note in former
chapter 16 of Title 15, Commerce and Trade. See notes under former
sections 721 to 728 of that title.
Subsections 3(b)(1) and 3(b)(2) of the Coulee Dam Community Act of
1957 [Pub. L. 85-240, Aug. 30, 1957, 71 Stat. 524], referred to in
subsec. (a)(3), are set out in a note under section 835c of Title 16,
Conservation.
The Boulder Canyon Project Act of December 21, 1928, as amended and
supplemented, referred to in subsec. (a)(3), is act Dec. 21, 1928, ch.
42, 45 Stat. 1057, as amended, which is classified generally to
subchapter I (Sec. 617 et seq.) of chapter 12A of Title 43, Public
Lands. For complete classification of this Act to the Code, see section
617t of Title 43 and Tables.
Subsections 3(b)(1) and 3(b)(2) of the Boulder City Act of 1958
[Pub. L. 85-900, Sept. 2, 1958, 72 Stat. 1726], referred to in subsec.
(a)(3), are not classified to the Code. Subsections (a) to (d) of
section 3 read as follows:
``(a) The Secretary is authorized to sell such dwelling houses,
duplex houses or units thereof, and garages, with furniture, fixtures,
and appurtenances, as are owned by the United States within the Boulder
City municipal area and are not needed in connection with the
administration, operation, and maintenance of Federal activities located
within or near the Boulder City municipal area.
``(b) Except in the case of property determined to be substandard
under subsection (c) of this section, the following system of priority
shall be established with respect to property authorized to be sold
under subsection (a) of this section:
``(1) Persons employed by the Federal Government within or near the
Boulder City municipal area (and surviving spouses of such persons who
have not remarried) who are tenants in Federal housing in Boulder City
shall be offered the opportunity to purchase the property in which they
are tenants at the appraised value as established under subsection (d)
of this section. This right of priority shall expire unless notice of
intent to purchase has been received by the Secretary before the
expiration of sixty days after the date on which the property has been
offered for sale, and shall be deemed abandoned unless before the
expiration of sixty days after the Secretary's tender of the instrument
of transfer the prospective purchaser concludes the sale;
``(2) Persons employed by the Federal Government within or near the
Boulder City municipal area may apply to purchase housing not purchased
under subsection (b)(1) of this section. Applicants to purchase shall be
placed in order of opportunity to choose pursuant to a public drawing,
but spouses of such applicants shall not be entitled to apply. Sales
shall be made at the appraised value as established under subsection (d)
of this section and selections and purchases by successful applicants
shall be concluded within limits of time to be established by the
Secretary. A purchase under subsection (b)(1) or (b)(2) of this section
shall render the purchaser and any spouse of such purchaser ineligible
thereafter to purchase under subsection (b)(1) or (b)(2); and
``(3) Property subject to disposal under this section and not sold
pursuant to subsections (b)(1) and (b)(2) of this section shall be
opened to bids from the general public, and shall be sold to the highest
responsible bidder.
``In the event that incorporation of the municipality shall be
effected within four years after the date of this Act, persons
purchasing housing under this subsection or their successors, assigns,
or legal representatives, shall be entitled to a reduction in the
purchase price (or rebate as appropriate) of 10 per centum: Provided,
That no person who has purchased a house under the Act of May 25, 1948
(62 Stat. 268), shall be eligible for such reduction.
``(c) Where the Secretary determines that property authorized to be
sold under subsection (a) of this section is substandard, he shall sell
such property only for off-site use, such property to be opened to bids
from the general public for sale to the highest responsible bidder.
``(d) The appraised value of all property to be sold under
subsections (b)(1) and (b)(2) of this section, and of all lots leased or
to be leased by the United States for the purpose of maintaining,
locating, or erecting permanent structures thereon, shall be determined
by an appraiser or appraisers to be designated by the Administrator of
Housing and Home Finance Agency at the request of the Secretary. Said
appraisals shall be made promptly after the date of this Act, or
immediately prior to the granting of any lease of lands not previously
appraised, as the case may be. The representatives of the Boulder City
community, as determined by the Secretary, shall be granted an
opportunity to offer advice in connection with [sic] such appraisals.''
The Atomic Energy Community Act of 1955, as amended, referred to in
subsec. (a)(4), is act Aug. 4, 1955, ch. 543, 69 Stat. 472, as amended,
which is classified principally to chapter 24 (Sec. 2301 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 2301 of
Title 42 and Tables.
The Multifamily Assisted Housing Reform and Affordability Act of
1997, referred to in subsec. (a)(7), is title V of Pub. L. 105-65, Oct.
27, 1997, 111 Stat. 1384. For complete classification of this Act to the
Code, see Short Title of 1997 Amendment note set out under section 1701
of this title and Tables.
Section 1720 of this title, referred to in subsec. (f)(2), (3), was
repealed by Pub. L. 98-181, title IV, Sec. 483(a), Nov. 30, 1983, 97
Stat. 1240.
Section 1437o of title 42, referred to in subsec. (f)(5), was
repealed by Pub. L. 101-625, title II, Sec. 289(b), Nov. 28, 1990, 104
Stat. 4128.
Amendments
2002--Subsec. (a)(7). Pub. L. 107-116, Sec. 615(1), substituted
``under this chapter, or an existing mortgage held by the Secretary that
is subject to a mortgage restructuring and rental assistance sufficiency
plan pursuant to the Multifamily Assisted Housing Reform and
Affordability Act of 1997 (42 U.S.C. 1437f note), provided that--'' for
``under this chapter: Provided, That''.
Subsec. (a)(7)(A). Pub. L. 107-116, Sec. 615(1)-(5), designated as
subpar. (A) existing provisions beginning ``the principal amount of any
such refinancing mortgage shall not exceed'' and ending ``a new
insurance contract'', redesignated former cls. (A) to (D) as (i) to
(iv), respectively, of subpar. (A), and inserted ``; and'' at end after
``a new insurance contract''.
Subsec. (a)(7)(B). Pub. L. 107-116, Sec. 615(6), (7), substituted
``(B) a mortgage'' for ``: Provided further, That a mortgage'' and
struck out ``or'' after ``and the mortgagee;''. Former cl. (B)
redesignated cl. (ii) of subpar. (A).
Subsec. (a)(7)(C). Pub. L. 107-116, Sec. 615(8), added subpar. (C).
Former cl. (C) redesignated cl. (iii) of subpar. (A).
Subsec. (a)(7)(D). Pub. L. 107-116, Sec. 615(5), redesignated cl.
(D) as cl. (iv) of subpar. (A).
1998--Subsec. (c). Pub. L. 105-276 substituted ``the Secretary'' for
``him'' in two places and inserted ``, including a sale through another
entity acting under authority of the fourth sentence of section 1710(g)
of this title,'' before ``of any property acquired''.
1994--Subsec. (a)(7)(D). Pub. L. 103-327 added cl. (D).
1992--Subsec. (d)(6). Pub. L. 102-550, Sec. 510, added par. (6).
Subsec. (f)(1), (4). Pub. L. 102-550, Sec. 511(f), inserted
``existing assisted living facility,'' after ``existing nursing home,''
wherever appearing.
1988--Subsec. (a). Pub. L. 100-242, Sec. 406(b)(15), inserted
``other than the limitation in section 1709(g) of this title,'' after
first reference to ``this chapter,''.
Subsec. (a)(7). Pub. L. 100-242, Sec. 429(d)(1), substituted in
first proviso ``such rate as may be agreed upon by the mortgagor and the
mortgagee'' for ``a rate not in excess of the maximum rate prescribed
under the applicable section or subchapter of this chapter'',
substituted in second proviso ``maturity and a principal obligation''
for ``maturity, a principal obligation, and an interest rate'', and
inserted before semicolon at end ``, and shall bear interest at such
rate as may be agreed upon by the mortgagor and the mortgagee''.
Pub. L. 100-242, Sec. 419(b), in first proviso, inserted cl. (B) and
designated former cl. (B) as (C).
Pub. L. 100-242, Sec. 408(a), in first proviso, inserted cl. (B)
designation and added cl. (A).
Subsec. (d). Pub. L. 100-242, Sec. 427, added pars. (1) to (3),
inserted par. (4) designation and ``Any loan insured pursuant to this
subsection shall (A) bear interest at such rate as may be agreed upon by
the mortgagor and mortgagee; (B) be secured in such manner as the
Secretary shall require; (C) be limited to a term not exceeding the
unexpired term of the original mortgage; and (D) be insured under the
same section as the original mortgage. The Secretary may provide
insurance pursuant to paragraph (2) or (3), or pursuant to both such
paragraphs, in connection with an existing project mortgage, except that
the Secretary may not provide insurance pursuant to both such paragraphs
in connection with the same period of months referred to in paragraphs
(2)(B) and (3)(B).'', inserted par. (5) designation, and struck out
former first and second sentences of subsec. (d) which read as follows:
``With respect to any mortgage, other than a mortgage covering a one- to
four-family structure, heretofore or hereafter insured by the Secretary,
and notwithstanding any other provision of this chapter, when the taxes,
interest on the mortgage debt, mortgage insurance premiums, hazard
insurance premiums, and the expense of maintenance and operation of the
project covered by such mortgage during the first two years following
the date of completion of the project, as determined by the Secretary,
exceed the project income, the Secretary may, in his discretion and upon
such terms and conditions as he may prescribe, insure under the same
section as the original mortgage a loan by the mortgagee in an amount
not exceeding the excess of the foregoing expenses over the project
income. Such loan shall (1) bear interest (exclusive of premium charges
for insurance) at not to exceed the per centum per annum currently
permitted for mortgages insured under the section under which it is to
be insured, (2) be secured in such manner as the Secretary shall
require, and (3) be limited to a term not exceeding the unexpired term
of the original mortgage.''
Pub. L. 100-242, Sec. 429(d)(2), which directed substitution of
``bear interest at such rate as may be agreed upon by the mortgagor and
the mortgagee'' for ``bear interest (exclusive of premium charges for
insurance) at not to exceed the per centum per annum currently permitted
for mortgages insured under the section under which it is to be
insured'' in cl. (1) of sentence beginning ``Such loan shall'', could
not be executed because of previous amendment by Pub. L. 100-242,
Sec. 427, see above, which directed in part the striking out of second
sentence of subsec. (d)(1), which contained the language sought to be
amended.
Subsec. (e). Pub. L. 100-242, Sec. 406(b)(16), inserted reference to
limitation in section 1709(g) of this title.
Subsec. (f)(1). Pub. L. 100-242, Sec. 409(b)(1), inserted
parenthetical reference to existing nursing homes, intermediate care
facilities, board and care homes, or any combination thereof after
``existing hospital''.
Subsec. (f)(4)(A) to (C). Pub. L. 100-242, Sec. 409(b)(2), inserted
parenthetical reference to existing nursing homes, intermediate care
facilities, board and care homes, or any combination thereof after
``existing hospital'' wherever appearing.
Subsec. (f)(4)(D). Pub. L. 100-242, Sec. 409(a), amended subpar. (D)
generally. Prior to amendment, subpar. (D) read as follows: ``such
existing hospital has received such certifications from a State agency
designated in accordance with section 291d(a)(1) or section 300m of
title 42 for the State in which the hospital is located as the Secretary
deems necessary and appropriate and comparable to the certification
required for hospitals insured under section 1715z-7 of this title and
that such State agency additionally certify that the services being
provided by such existing hospital at the time of refinancing are
appropriate as determined pursuant to section 300m-2(a)(6) title 42.''
1984--Subsec. (f)(2). Pub. L. 98-479 in provisions preceding subpar.
(A) inserted ``a'' before ``multifamily''.
1983--Subsec. (f)(5). Pub. L. 98-181 added par. (5).
1981--Subsec. (f). Pub. L. 97-35 inserted ``and'' after the
semicolon at end of par. (2)(A), and redesignated par. (5) as (4).
1980--Subsec. (f)(1). Pub. L. 96-399, Sec. 327(1), redesignated
first sentence of subsec. (f) as par. (1).
Subsec. (f)(2). Pub. L. 96-399, Sec. 327(2)-(6), redesignated second
sentence of subsec. (f) as par. (2), inserted applicability to
purchases, provisions authorizing the Secretary to make not to exceed
$30,000,000 available for purchase authority, and provisions authorizing
rent increases to maintain reasonable profit levels, and substituted
``(A)'' and ``(B)'' for ``(1)'' and ``(2)'', respectively.
Subsec. (f)(3). Pub. L. 96-399, Sec. 327(7), added par. (3).
Subsec. (f)(5). Pub. L. 96-399, Sec. 327(8), redesignated third
sentence of subsec. (f) as par. (5).
1978--Subsec. (f). Pub. L. 95-557 inserted ``or the refinancing of
existing debt of an existing hospital'' after ``housing project'',
substituted ``multifamily housing project'' for ``housing project'', and
inserted provisions relating to the prescription of terms and conditions
in the case of refinancing of an existing hospital.
1974--Subsecs. (f), (g). Pub. L. 93-383 added subsecs. (f) and (g).
1969--Subsec. (d). Pub. L. 91-152, Sec. 418(c), inserted provision
that any loan involving a project covered by a mortgage insured under
section 1715e, 1715z-1, or any section of this subchapter pursuant to
subsec. (e) of this section be the obligation of the specified Fund.
Subsec. (e). Pub. L. 91-152, Sec. 418(d), substituted ``this
chapter'' for ``this subchapter'' and inserted references to subchapter
IX-B of this chapter.
1968--Subsec. (a). Pub. L. 90-448, Sec. 312(a)(1), substituted
``chapter'' for ``subchapter'', ``any section or subchapter of this
chapter'' for ``section 1709, 1713, 1715e, 1715k, 1715l, 1715m, 1715v,
1715w, or 1715x of this title'' and ``under any section or subchapter of
this chapter'' for ``under either of said sections''.
Subsec. (a)(7). Pub. L. 90-448, Sec. 312(a)(2), substituted
``prescribed under the applicable section or subchapter of this
chapter'' for ``applicable to loans insured under section 1709, 1713,
1715e, 1715k, 1715l, 1715m, 1715v, 1715w, or 1715x of this title'' in
two places.
Subsec. (c). Pub. L. 90-448, Sec. 312(a)(3)-(5), substituted ``this
chapter'' for ``this subchapter'' in two places, and ``any section or
subchapter of this chapter'' for ``subchapters I, II, VI, VII, VIII or X
of this chapter'', and struck out phrase which required payment of
insurance to be in debentures.
Subsec. (d). Pub. L. 90-448, Sec. 312(b), substituted ``insure under
the same section as the original mortgage a loan by a mortgagee in an
amount not exceeding the excess of the foregoing expenses over the
project income'' for ``permit the excess of the foregoing expenses over
the project income to be added to the amount of such mortgage, and
extend the coverage of the mortgage insurance thereto, and such
additional amount shall be deemed to be part of the original face amount
of the mortgage'', and inserted sentences requiring the loan to bear
interest at not more than the per centum per annum currently permitted
for mortgages insured under the section under which it is to be insured,
to be secured, and to be limited to a term not more than the unexpired
term of the original mortgage, authorizing collection of a premium
charge for insurance of loans, directing the premium to be payable in
cash or in debentures of the fund, and making the lender entitled to
insurance benefits in the event of a failure of the borrower to make any
payment due under the loan or under the original mortgage and the
default continues for a period of thirty days.
Subsec. (e). Pub. L. 90-448, Sec. 103(a), added subsec. (e).
1967--Pub. L. 90-19, Sec. 1(a)(3), substituted ``Secretary'' for
``Commissioner'' wherever appearing in subsecs. (a) preceding par. (1),
(a)(7), and (b) to (d).
Subsec. (a)(2). Pub. L. 90-19, Sec. 1(h), substituted ``Secretary of
Housing and Urban Development'' and ``Secretary'' for ``Public Housing
Administration'' and ``said Administration'', respectively.
1966--Subsec. (a)(8). Pub. L. 89-754 substituted ``Government'' and
``section 3374 of title 42'' for ``Commissioner'' and ``section 1735h of
this title'', respectively.
1965--Subsec. (a)(7). Pub. L. 89-117, Sec. 213, substituted ``this
Act'' for ``section 608 of title VI prior to the effective date of the
Housing Act of 1954 or under section 220, 221, 903, or section 908'',
which for purposes of codification has been changed to ``this chapter''.
Subsec. (a)(8). Pub. L. 89-117, Sec. 108(e)(2), added par. (8).
1964--Subsec. (c). Pub. L. 88-560 substituted ``limitations or
requirements contained in this subchapter upon the eligibility of the
mortgage, upon the payment of insurance premiums, or upon the terms and
conditions of insurance settlement and the benefits of the insurance to
be included in such settlement (except that in any case the payment of
insurance shall be in debentures)'' for ``limitation upon eligibility
contained in this subchapter''.
1961--Subsec. (a). Pub. L. 87-70, Sec. 612(h)(1), (2), included
sections 1715k, 1715l, 1715v, 1715w and 1715x in the opening provisions,
and, in par. (7), substituted ``section 1715k, 1715l, 1750b, or 1750g of
this title'' for ``section 1750b or 1750g of this title,'' ``1715e,
1715k, 1715l, 1715m, 1715v, 1715w, or 1715x of this title'' for ``1715e
or 1715m of this title'' in two places, and struck out ``insured under
section 1743 of section 1750g of this title'' after ``refinancing of a
loan''.
Subsecs. (b), (c). Pub. L. 87-70, Sec. 101(d), added subsec. (b) and
redesignated former subsec. (b) as (c).
Subsec. (d). Pub. L. 87-70, Sec. 612(h)(3), added subsec. (d).
1958--Subsec. (a)(3). Pub. L. 85-900 authorized insurance of
mortgages executed in connection with the sale of property constructed
under the Boulder Canyon Project Act and located in Boulder City.
1957--Subsec. (a). Pub. L. 85-104, Sec. 114(1), substituted ``1715e,
or 1715m of this title'' for ``or 1715e of this title''.
Subsec. (a)(3). Pub. L. 85-240 authorized insurance of mortgages
executed in connection with the sale of Government housing at Coulee
Dam.
Subsec. (a)(4). Pub. L. 85-104, Sec. 114(2), inserted ``this chapter
or'' after ``prescribed by''.
Subsec. (a)(7). Pub. L. 85-104, Sec. 114(3), substituted ``1715e, or
1715m of this title'' for ``or 1715e of this title'' in first proviso,
and substituted provisions of second proviso for former provisions which
required mortgages described in pars. (1), (2), (3), (4), (5), or (6) to
have maturity satisfactory to Commissioner but forbade maturity of such
mortgage to exceed maximum terms of loans insured under sections 1709,
1713, or 1715e of this title, forbade principal obligation to exceed 90
percent of value of property, and forbade interest rate to exceed rate
of loans made under either of said sections, with the exception that
where such mortgage covered property held by certain nonprofit
cooperatives, principal obligation should not exceed 95 percent of
appraised value.
1955--Subsec. (a). Act Aug. 11, 1955, substituted ``section 1709,
1713, or 1715e of this title'' for ``section 1709 or 1713 of this
title'' wherever appearing.
Act Aug. 4, 1955, added par. (4), and redesignated pars. (4) to (6)
as (5) to (7), respectively.
Effective Date of 2002 Amendment
Pub. L. 107-116, title VI, Sec. 603, Jan. 10, 2002, 115 Stat. 2222,
provided that: ``Except as provided in sections 616(a)(2), 633(b), and
634(b) [enacting provisions set out as notes under section 1701q of this
title and sections 1437f and 11301 of Title 42, The Public Health and
Welfare], this title [amending this section and sections 1437f and 5305
of Title 42, enacting provisions set out as notes under section 1701q of
this title and sections 1437, 1437f, and 11301 of Title 42, and amending
provisions set out as notes under section 1701q of this title and
sections 1437f and 11301 of Title 42] and the amendments made by this
title shall take effect or are deemed to have taken effect, as
appropriate, on the earlier of--
``(1) the date of the enactment of this title [Jan. 10, 2002];
or
``(2) September 30, 2001.''
Effective and Termination Dates of 1994 Amendments
Pub. L. 104-134, title I, Sec. 101(e) [title II, Sec. 209], Apr. 26,
1996, 110 Stat. 1321-257, 1321-285; renumbered title I, Pub. L. 104-140,
Sec. 1(a), May 2, 1996, 110 Stat. 1327, provided that: ``Notwithstanding
the 16th paragraph under the item relating to `administrative
provisions' in title II of the Departments of Veterans Affairs and
Housing and Urban Development, and Independent Agencies Appropriations
Act, 1995 (Public Law 103-327; 108 Stat. 2316) [set out below], the
amendments to section 223(a)(7) of the National Housing Act [12 U.S.C.
1715n(a)(7)] made by the 15th paragraph of such Act shall be effective
during fiscal year 1996 and thereafter.''
Title II of Pub. L. 103-327, Sept. 28, 1994, 108 Stat. 2316,
provided in part that: ``The amendments of the two immediately preceding
paragraphs [amending this section and section 1437f of Title 42, The
Public Health and Welfare] shall be effective only during fiscal year
1995.'' [For provision that amendment by Pub. L. 103-327 to subsec.
(a)(7) of this section be effective during fiscal year 1996 and
thereafter, see Pub. L. 104-134, title I, Sec. 101(e) [title II,
Sec. 209], set out above.]
Effective Date of 1988 Amendment
Amendment by section 406(b)(15), (16) 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 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.
Regulations
Section 409(c) of Pub. L. 100-242 provided that: ``The Secretary of
Housing and Urban Development shall issue such regulations as may be
necessary to carry out the amendment made by this section [amending this
section] by not later than the expiration of the 90-day period following
the date of the enactment of this Act [Feb. 5, 1988].''
Streamlined Refinancing
Pub. L. 103-233, title I, Sec. 103(d), Apr. 11, 1994, 108 Stat. 361,
provided that: ``As soon as practicable, the Secretary shall implement a
streamlined refinancing program under the authority provided in section
223 of the National Housing Act [12 U.S.C. 1715n] to prevent the default
of mortgages insured by the FHA which cover multifamily housing
projects, as defined in section 203(b) of the Housing and Community
Development Amendments of 1978 [12 U.S.C. 1701z-11(b)].''
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.
Purpose of Section
Section 125 of act Aug. 2, 1954, as amended by Pub. L. 90-19,
Sec. 10(b), May 25, 1967, 81 Stat. 22, in enacting this section,
provided in part that the purpose thereof was to transfer to title II of
the National Housing Act [this subchapter] ``the mortgage insurance
program in connection with the sale of certain publicly owned property
as contained in section 610 of title VI [section 1745 of this title];
the insurance of mortgages to refinance existing loans insured under
section 608 of title VI and sections 903 and 908 of title IX [sections
1743, 1750b and 1750g of this title]; and to authorize the insurance
under title II [this subchapter] of mortgages assigned to the Secretary
of Housing and Urban Development under insurance contracts and mortgages
held by the Secretary of Housing and Urban Development in connection
with the sale of property acquired under insurance contracts''.
Section Referred to in Other Sections
This section is referred to in sections 1709, 1715z-3, 1715z-7,
1715z-9, 1735c, 1735f-17 of this title; title 42 sections 1437f, 2331,
2362.
