§ 1747l. — Definitions.
[Laws in effect as of January 24, 2002]
[Document not affected by Public Laws enacted between
January 24, 2002 and December 19, 2002]
[CITE: 12USC1747l]
TITLE 12--BANKS AND BANKING
CHAPTER 13--NATIONAL HOUSING
SUBCHAPTER VII--INSURANCE FOR INVESTMENTS IN RENTAL HOUSING FOR FAMILIES
OF MODERATE INCOME
Sec. 1747l. Definitions
The following terms shall have the meanings, respectively, ascribed
to them below, and, unless the context clearly indicates otherwise,
shall include the plural as well as the singular number:
(a) ``Investor'' shall mean (1) any natural person; (2) any group of
not more than ten natural persons; (3) any corporation, company,
association, trust, or other legal entity; or (4) any combination of two
or more corporations, companies, associations, trusts, or other legal
entities, having all the powers necessary to comply with the
requirements of this subchapter, which the Secretary (i) shall find to
be qualified by business experience and facilities, to afford assurance
of the necessary continuity of long-term investment, and to have
available the necessary capital required for long-term investment in the
project, and (ii) shall approve as eligible for insurance under this
subchapter.
(b) ``Project'' shall mean a project (including all property, real
and personal, contracts, rights, and choses in action acquired, owned,
or held by the investor in connection therewith) of an investor designed
and used primarily for the purpose of providing dwellings the occupancy
of which is permitted by the investor in consideration of agreed
charges: Provided, That nothing in this subchapter shall be construed as
prohibiting the inclusion in a project of such stores, offices, or other
commercial facilities, recreational or community facilities, or other
nondwelling facilities as the Secretary shall determine to be necessary
or desirable appurtenances to such project.
(c) ``Estimated investment'' shall mean the estimated cost of the
development of the project, as stated in the application submitted to
the Secretary for insurance under this subchapter.
(d) ``Established investment'' shall mean the amount of the
reasonable costs, as approved by the Secretary, incurred by the investor
in, and necessary for, carrying out all works and undertakings for the
development of a project and shall include the premium charge for the
first operating year and the cost of all necessary surveys, plans and
specifications, architectural, engineering, or other special services,
land acquisition, site preparation, construction, and equipment; a
reasonable return on the funds of the investor paid out in the course of
the development of the project, up to and including the initial
occupancy date; necessary expenses in connection with the initial
occupancy of the project; and the cost of such other items as the
Secretary shall determine to be necessary for the development of the
project, (1) less the amount by which the rents and revenues derived
from the project up to and including the initial occupancy date exceeded
the reasonable and proper expenses, as approved by the Secretary,
incurred by the investor in, and necessary for, operating and
maintaining said project up to and including the initial occupancy date,
or (2) plus the amount by which such expenses exceeded such rents and
revenues, as the case may be.
(e) ``Physical completion date'' shall mean the last day of the
calendar month in which the Secretary determines that the construction
of the project is substantially completed and substantially all of the
dwellings therein are available for occupancy.
(f) ``Initial occupancy date'' shall mean the last day of the
calendar month in which 90 per centum in number of the dwellings in the
project on the physical completion date shall have been occupied, but
shall in no event be later than the last day of the sixth calendar month
next following the physical completion date.
(g) ``Operating year'' shall mean the period of twelve consecutive
calendar months next following the initial occupancy date and each
succeeding period of twelve consecutive calendar months, and the period
of the first twelve consecutive calendar months next following the
initial occupancy date shall be the first operating year.
(h) ``Gross income'' for any operating year shall mean the total
rents and revenues and other income derived from, or in connection with,
the project during such operating year.
(i) ``Operating expenses'' for any operating year shall mean the
amounts, as approved by the Secretary, necessary to meet the reasonable
and proper costs of, and to provide for, operating and maintaining the
project, and to establish and maintain reasonable and proper reserves
for repairs, maintenance, and replacements, and other necessary reserves
during such operating year, and shall include necessary expenses for
real estate taxes, special assessments, premium charges made pursuant to
this subchapter, administrative expenses, the annual rental under any
lease pursuant to which the real property comprising the site of the
project is held by the investor, and insurance charges, together with
such other expenses as the Secretary shall determine to be necessary for
the proper operation and maintenance of the project, but shall not
include income taxes.
(j) ``Net income'' for any operating year shall mean gross income
remaining after the payment of the operating expenses.
(k) ``Minimum annual amortization charge'' shall mean an amount
equal to 2 per centum of the established investment, except that, in the
case of a project where the real property comprising the site thereof is
held by the investor under a lease, if (notwithstanding the proviso of
section 1747b(a) of this title) the gross income for any operating year
shall be less than the amount required to pay the operating expenses
(including the annual rental under such lease), the minimum annual
amortization charge for such operating year shall mean an amount equal
to 2 per centum of the established investment plus the amount of the
annual rental under such lease to the extent that the same is not paid
from the gross income.
(l) ``Annual return'' for any operating year shall mean the net
income remaining after the payment of the minimum annual amortization
charge.
(m) ``Insured annual return'' shall have the meaning ascribed to it
in section 1747 of this title.
(n) ``Minimum annual return'' for any operating year shall mean an
amount equal to 3\1/2\ per centum of the outstanding investment for such
operating year or such lesser amount as shall be agreed upon by the
investor and the Secretary.
(o) ``Excess earnings'' for any operating year shall mean the net
income derived from a project in excess of the minimum annual
amortization charge and the minimum annual return and income taxes.
(p) ``Outstanding investment'' for any operating year shall mean the
established investment, less an amount equal to (1) the aggregate of the
minimum annual amortization charge for each preceding operating year,
plus (2) the aggregate of the excess earnings, if any, during each
preceding operating year applied, in addition to the minimum annual
amortization charge, to amortization in accordance with the provisions
of section 1747d of this title.
(q) ``State'' shall include the several States and Puerto Rico, the
District of Columbia, Guam, and the Virgin Islands.
(June 27, 1934, ch. 847, title VII, Sec. 713, as added Aug. 10, 1948,
ch. 832, title IV, Sec. 401, 62 Stat. 1281; amended Apr. 20, 1950, ch.
94, title I, Sec. 122, 64 Stat. 59; Sept. 1, 1951, ch. 378, title VI,
Secs. 610, 612, 65 Stat. 316; July 14, 1952, ch. 723, Sec. 10(a)(4), 66
Stat. 603; Pub. L. 86-70, Sec. 10(a), June 25, 1959, 73 Stat. 142; Pub.
L. 86-624, Sec. 6, July 12, 1960, 74 Stat. 411; 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) to (e), (i), and (n).
1960--Subsec. (q). Pub. L. 86-624 struck out ``Hawaii,'' before
``Puerto Rico''.
1959--Subsec. (q). Pub. L. 86-70 struck out ``Alaska,'' before
``Hawaii''.
1952--Subsec. (q). Act July 14, 1952, added subsec. (q).
1951--Subsec. (n). Act Sept. 1, 1951, Sec. 610, inserted ``or such
lesser amount as shall be agreed upon by the investor and the
Commissioner''.
Subsec. (o). Act Sept. 1, 1951, Sec. 612, inserted ``and income
taxes''.
1950--Act Apr. 20, 1950, substituted ``Commissioner'' for
``Administrator'' wherever appearing.
