§ 1746. — Insurance on mortgages on largescale housing projects.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1746]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER VI--WAR HOUSING INSURANCE
Sec. 1746. Insurance on mortgages on large-scale housing
projects
(a) Additional authorization; encouragement of cost-reduction
techniques; advances
In addition to mortgages insured under other sections of this
subchapter, and in order to assist and encourage the application of
cost-reduction techniques through large-scale modernized site
construction of housing and the erection of houses produced by modern
industrial processes, the Secretary is authorized to insure mortgages
(including advances on such mortgages during construction) which are
eligible for insurance as hereinafter provided.
(b) Eligibility requirements
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) cover property, held by a mortgagor approved by the
Secretary, upon which there is to be constructed or erected dwelling
units for not less than twenty-five families consisting of a group
of single-family dwellings approved by the Secretary for mortgage
insurance prior to the beginning of construction: Provided, That
during the course of construction there may be located upon the
mortgaged property a plant for the fabrication or storage of such
dwellings or sections or parts thereof, and the Secretary may
consent to the removal or release of such plant from the lien of the
mortgage upon such terms and conditions as he may approve;
(3) involve a principal obligation in an amount--
(A) not to exceed 85 per centum of the amount which the
Secretary estimates will be the value of the completed property
or project, exclusive of any plant of the character described in
paragraph (2) of this subsection located thereon, and
(B) not to exceed a sum computed on the individual dwellings
comprising the total project as follows: $5,950 or 85 per centum
of the valuation, whichever is the lower amount, with respect to
each single-family dwelling: Provided, That if the Secretary
finds that it is not feasible, within the dollar amount
limitation in this clause on the principal obligation of the
mortgage, to construct dwellings containing three or four
bedrooms without sacrifice of sound standards of construction,
design, and livability, he may increase such dollar amount
limitation by not exceeding $850 for each additional bedroom (as
defined by the Secretary) in excess of two contained in each
such dwelling if he finds that such dwelling meets sound
standards of design and livability as a three-bedroom unit or a
four-bedroom unit, as the case may be, but the amount computed
under this clause for each such dwelling shall not exceed, in
any event, $7,650.
With respect to the insurance of advances during construction,
the Secretary is authorized to approve advances by the mortgagee to
cover the cost of materials delivered upon the mortgaged property
and labor performed in the fabrication or erection thereof;
(4) provide for complete amortization by periodic payments
within such term as the Secretary shall prescribe and shall bear
interest (exclusive of premium charges for insurance) as not to
exceed 4 per centum per annum on the amount of the principal
obligation outstanding at any time: Provided, That the Secretary
with the approval of the Secretary of the Treasury, may prescribe by
regulation a higher maximum rate of interest, not exceeding 4\1/2\
per centum per annum on the amount of the principal obligation
outstanding at any time, if he finds that the mortgage market
demands it. The Secretary may consent to the release of a part or
parts of the mortgaged property from the lien of the mortgage upon
such terms and conditions as he may prescribe and the mortgage may
provide for such release, and the mortgage may provide that, upon
the completion of the construction of the project, such mortgage may
be replaced by individual mortgages covering each individual
dwelling in the project. Each such individual mortgage may be
insured under this section with the mortgagor being either the
builder who constructed the dwellings or the owner and occupant of
the dwelling at the time, and where the mortgagor is the owner and
occupant, may involve a principal obligation in such amount and have
such maturity and interest rate as a mortgage eligible for insurance
under section 1709(b)(2)(D) of this title.
(c) Preferences in occupancy for veterans and hardship cases
Preference or priority of opportunity in the occupancy of the
mortgaged property for veterans of World War II and their immediate
families and for hardship cases as defined by the Secretary shall be
provided under such regulations and procedures as may be prescribed by
the Secretary.
(d) Applicability of other provisions
The provisions of subsections (c), (d), (e), and (f) of section 1743
of this title shall be applicable to mortgages insured under this
section covering a project described in subsection (b) of this section,
and the provisions of subsections (a) to (f), and (h) of section 1739 of
this title shall be applicable to the individual mortgages insured
pursuant to subsection (b)(4) of this section covering individual
dwellings in the project.
(June 27, 1934, ch. 847, title VI, Sec. 611, as added Aug. 10, 1948, ch.
832, title I, Sec. 101(f), 62 Stat. 1271; amended Apr. 20, 1950, ch. 94,
title I, Secs. 121, 122, 64 Stat. 58, 59; Pub. L. 90-19, Sec. 1(a)(3),
May 25, 1967, 81 Stat. 17.)
References in Text
Section 1709(b)(2)(D) of this title, referred to in subsec. (b)(4),
is a reference to subsec. (b)(2)(D) of section 1709 prior to amendment
by section 104 of act Aug. 2, 1954, ch. 649, 68 Stat. 590.
Amendments
1967--Pub. L. 90-19 substituted ``Secretary'' for ``Commissioner''
wherever appearing in subsecs. (a), (b), and (c).
1950--Act Apr. 20, 1950, Sec. 122, substituted ``Commissioner'' for
``Administrator'' wherever appearing.
Subsec. (b)(3). Act Apr. 20, 1950, Sec. 121(1), (2), substituted
``85'' for ``80'' in cl. (A), and inserted entirely new material in cl.
(B).
Subsec. (b)(4). Act Apr. 20, 1950, Sec. 121(2), inserted ``, and the
mortgage may provide that, upon the completion of the construction of
the project, such mortgage may be replaced by individual mortgages
covering each individual dwelling in the project. Each such individual
mortgage may be insured under this section with the mortgagor being
either the builder who constructed the dwellings or the owner and
occupant of the dwelling at the time, and where the mortgagor is the
owner and occupant, may involve a principal obligation in such amount
and have such maturity and interest rate as a mortgage eligible for
insurance under section 1709(b)(2)(D) of this title''.
Subsec. (d). Act Apr. 20, 1950, Sec. 121(3), inserted ``covering a
project described in subsection (b) of this section, and the provisions
of subsections (a) to (f), and (h) of section 1739 of this title shall
be applicable to the individual mortgages insured pursuant to subsection
(b)(4) of this section covering individual dwellings in the project''.
Section Referred to in Other Sections
This section is referred to in sections 1709, 1738, 1747h of this
title.
