§ 1715z-11. — Sale to cooperatives of multifamily housing projects acquired by Secretary; acceptance of purchase money mortgage for sale or insurance of mortgage; principal amount of mortgage; expenditures for repairs, etc., prior to sale.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1715z-11]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER II--MORTGAGE INSURANCE
Sec. 1715z-11. Sale to cooperatives of multifamily housing
projects acquired by Secretary; acceptance of purchase money
mortgage for sale or insurance of mortgage; principal amount of
mortgage; expenditures for repairs, etc., prior to sale
In any case which the Secretary sells a multifamily housing project
acquired as the result of a default on a mortgage which was insured
under this chapter to a cooperative which will operate it on a nonprofit
basis and restrict permanent occupancy of its dwellings to members, or
to a nonprofit corporation which operates as a consumer cooperative as
defined by the Secretary, the Secretary may accept a purchase money
mortgage, or upon application of the mortgagee, insure a mortgage under
this section upon such terms and conditions as the Secretary determines
are reasonable and appropriate, in a principal amount equal to the value
of the property at the time of purchase, which value shall be based upon
a mortgage amount on which the debt service can be met from the income
of property when operated on a nonprofit basis after payment of all
operating expenses, taxes, and required reserves; except that the
Secretary may add to the mortgage amount an amount not greater than the
amount of prepaid expenses and costs involved in achieving cooperative
ownership, or make such other provisions for payment of such expenses
and costs as the Secretary deems reasonable and appropriate. Prior to
such disposition of a project, funds may be expended by the Secretary
for necessary repairs and improvements.
(June 27, 1934, ch. 847, title II, Sec. 246, as added Pub. L. 93-383,
title III, Sec. 315, Aug. 22, 1974, 88 Stat. 684; amended Pub. L. 95-
557, title III, Sec. 322, Oct. 31, 1978, 92 Stat. 2102.)
Amendments
1978--Pub. L. 95-557 inserted ``or to a nonprofit corporation which
operates as a consumer cooperative as defined by the Secretary'' after
``dwellings to members'' and ``or upon application of the mortgagee,
insure a mortgage under this section upon such terms and conditions as
the Secretary determines are reasonable and appropriate'' after
``purchase money mortgage'' and substituted ``the value of the property
at the time of purchase, which value shall be based upon a mortgage
amount on which the debt service can be met from the income of property
when operated on a nonprofit basis after payment of all operating
expenses, taxes, and required reserves; except that the Secretary may
add to the mortgage amount an amount not greater than the amount of
prepaid expenses and costs involved in achieving cooperative ownership,
or make such other provision for payment of such expenses and costs as
the Secretary deems reasonable and appropriate'' for ``the sum of (1)
the appraised value of the property at the time of purchase, 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
and after payment of all operating expenses, taxes and required
reserves, and (2) the amount of prepaid expenses and costs involved in
achieving cooperative ownership''.
