§ 1715z-5. — Purchase of fee simple title from lessors.
[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-5]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER II--MORTGAGE INSURANCE
Sec. 1715z-5. Purchase of fee simple title from lessors
(a) Authorization to insure loans for purpose of financing purchases
The Secretary is authorized, upon such terms and conditions as he
may prescribe, to make commitments to insure and to insure loans made by
financial institutions for the purpose of financing purchases by
homeowners of the fee simple title to property on which their homes are
located.
(b) Definitions
As used in this section--
(1) the term ``financial institution'' means a lender approved
by the Secretary as eligible for insurance under section 1703 of
this title or a mortgagee approved under section 1709(b)(1) of this
title; and
(2) the term ``homeowner'' means a lessee under a long-term
ground lease.
(c) Eligibility for insurance
To be eligible for insurance under this section, a loan shall--
(1) relate to property on which there is located a dwelling
designed principally for a one-, two-, three-, or four-family
residence;
(2) not exceed the cost of purchasing the fee simple title, or
$10,000 ($30,000, if the property is located in Hawaii) per family
unit, whichever is the lesser;
(3) be limited to an amount which when added to any outstanding
indebtedness related to the property (as determined by the
Secretary) creates a total outstanding indebtedness which does not
exceed the applicable mortgage limit prescribed in section 1709(b)
of this title;
(4) bear interest at such rate as may be agreed upon by the
mortgagor and the mortgagee;
(5) have a maturity satisfactory to the Secretary, but not to
exceed twenty years from the beginning of amortization of the loan;
and
(6) comply with such other terms, conditions, and restrictions
as the Secretary may prescribe.
(d) Applicability of other provisions of law
The provisions of paragraphs (3), (5), (6), (7), (8), and (10) of
section 1715k(h) of this title shall be applicable to loans insured
under this section and, as applied to loans insured under this section,
references in those paragraphs to ``home improvement loans'' and ``this
subsection'' shall be construed to refer to loans under this section.
(June 27, 1934, ch. 847, title II, Sec. 240, as added Pub. L. 90-448,
title III, Sec. 304(a), Aug. 1, 1968, 82 Stat. 507; amended Pub. L. 95-
557, title III, Sec. 314, Oct. 31, 1978, 92 Stat. 2099; Pub. L. 96-399,
title III, Sec. 333(f), Oct. 8, 1980, 94 Stat. 1653; Pub. L. 98-181,
title IV, Sec. 404(b)(13), Nov. 30, 1983, 97 Stat. 1210; Pub. L. 98-479,
title II, Sec. 204(a)(10), Oct. 17, 1984, 98 Stat. 2232.)
Amendments
1984--Subsec. (a). Pub. L. 98-479 substituted ``purchases'' for
``purchasers''.
1983--Subsec. (c)(4). Pub. L. 98-181 substituted provision that the
interest rate be such rate as agreed upon by the mortgagor and the
mortgagee for provision that the interest rate not exceed such per
centum per annum, not in excess of 6 per centum, on the amount of the
principal obligation outstanding at any time, as the Secretary finds
necessary to meet market conditions, and such other charges as approved
by the Secretary.
1980--Subsec. (c)(5). Pub. L. 96-399 struck out ``or three-quarters
of the remaining economic life of the home, whichever is the lesser''
after ``loan''.
1978--Subsec. (c)(2). Pub. L. 95-557 inserted ``($30,000, if the
property is located in Hawaii)'' after ``$10,000''.
Section Referred to in Other Sections
This section is referred to in section 1464 of this title.
