§ 1747a. — Eligibility for 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: 12USC1747a]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER VII--INSURANCE FOR INVESTMENTS IN RENTAL HOUSING FOR FAMILIES
OF MODERATE INCOME
Sec. 1747a. Eligibility for insurance
(a) To be eligible for insurance under this subchapter, a project
shall meet the following conditions:
(1) The Secretary shall be satisfied that there is, in the
locality or metropolitan area of such project, a need for new rental
dwellings at rents comparable to the rents proposed to be charged
for the dwellings in such project.
(2) Such project shall be economically sound, and the dwellings
in such project shall be acceptable to the Secretary as to quality,
design, size, and type.
(b) Any insurance contract executed by the Secretary under this
subchapter shall be conclusive evidence of the eligibility of the
project and the investor for such insurance, and the validity of any
insurance contract so executed shall be incontestable in the hands of an
investor from the date of the execution of such contract, except for
fraud or misrepresentation on the part of such investor.
(c) After completion of the project the investor must establish in a
manner satisfactory to the Secretary that the project is free and clear
of liens and that there are no other outstanding unpaid obligations
contracted in connection with the construction of the project, except
taxes and such other liens and obligations as may be approved or
prescribed by the Secretary. Debentures issued by the investor which are
payable out of net income from the project and from the benefits of the
insurance contract shall not be construed as ``unpaid obligations'' as
such term is used in this subsection.
(June 27, 1934, ch. 847, title VII, Sec. 702, as added Aug. 10, 1948,
ch. 832, title IV, Sec. 401, 62 Stat. 1276; amended Apr. 20, 1950, ch.
94, title I, Sec. 122, 64 Stat. 59; Sept. 1, 1951, ch. 378, title VI,
Sec. 609(a), 65 Stat. 316; Pub. L. 90-19, Sec. 1(a)(3), May 25, 1967, 81
Stat. 17.)
Amendments
1967--Pub. L. 90-19 substituted ``Secretary'' for ``Commissioner''
wherever appearing in subsecs. (a)(1), (2), (b), and (c).
1951--Subsec. (c). Act Sept. 1, 1951, added subsec. (c).
1950--Act Apr. 20, 1950, substituted ``Commissioner'' for
``Administrator'' wherever appearing.
