12 U.S.C. 1715n

12 US CODE 1715n.pdf

Comprehensive Listing of Transactional Documents for Mortgagors, Mortgagees and Contractors

12 U.S.C. 1715n

OMB: 2502-0605

Document [pdf]
Download: pdf | pdf
TITLE 12—BANKS AND BANKING
spect to insurance of mortgages to servicemen in the
United States National Oceanic and Atmospheric Administration, inserting references to such Administration and the Secretary of Commerce in subsecs. (a),
(b)(4), (c), (f), and (g) as the executive officer for effecting such benefits.
1969—Subsec. (b)(1). Pub. L. 91–152, § 105, inserted reference to section 1715y(c) of this title.
Subsec. (b)(2). Pub. L. 91–152, § 113(f), substituted
‘‘$33,000’’ for ‘‘$30,000’’.
Subsec. (b)(3). Pub. L. 91–152, § 102(c), substituted
‘‘$25,000’’ for ‘‘$20,000’’ wherever appearing.
1968—Subsecs. (a), (c). Pub. L. 90–448, § 301(1), substituted ‘‘Secretary of Transportation’’ for ‘‘Secretary
of the Treasury’’ wherever appearing.
Subsecs. (f), (g). Pub. L. 90–448, § 301(2), added subsecs.
(f) and (g). A prior subsec. (f) was repealed by Pub. L.
89–117.
1967—Subsecs. (b)(2), (c). Pub. L. 90–19 substituted
‘‘Secretary’’ for ‘‘Commissioner’’ wherever appearing.
1965—Subsec. (b)(2). Pub. L. 89–117, § 212(1), substituted
‘‘$30,000’’ for ‘‘$20,000’’.
Subsec. (b)(3). Pub. L. 89–117, § 212(2), substituted provisions prohibiting the mortgage to have a principal
obligation in excess of the sum of (i) 97 per centum of
$15,000 of the appraised value of the property as of the
date the mortgage is accepted for insurance, (ii) 90 per
centum of such value in excess of $15,000 but not in excess of $20,000, and (iii) 85 per centum of such value in
excess of $20,000 for provisions which prohibited the
mortgage to have a principal obligation in an amount
in excess of 95 per centum of the appraised value of the
property or such higher amount as may be derived by
applying the maximum ratio of loan to value prescribed in section 1709(b)(2) of this title.
Subsec. (e). Pub. L. 89–117, § 1108(j)(1), substituted
‘‘General Insurance Fund’’ for ‘‘Servicemen’s Mortgage
Insurance Fund’’.
Subsec. (f). Pub. L. 89–117, § 1108(j)(2), repealed subsec.
(f) which created the Servicemen’s Mortgage Insurance
Fund, provided for transfer of funds thereto, and authorized purchase and cancellation of debentures and
payment and credit of charges.
1964—Subsec. (b)(1). Pub. L. 88–560, § 115(1), inserted
reference to section 1715l(d)(2) of this title.
Subsec. (b)(2). Pub. L. 88–560, § 115(2), substituted ‘‘or
section 1715l(d)(2) of this title such principal obligation
shall not exceed the maximum limits prescribed for
such section’’ for ‘‘such principal obligation shall not
exceed $9,000’’.
1959—Subsec. (b)(1). Pub. L. 86–372, § 111(1), inserted
reference to section 1709(i) of this title.
Subsec. (b)(2). Pub. L. 86–372, § 111(2), substituted
‘‘$20,000, except that in the case of a mortgage meeting
the requirements of section 1709(i) of this title such
principal obligation shall not exceed $9,000’’ for
‘‘$17,100’’.
Subsec. (e). Pub. L. 86–372, § 116(b), inserted reference
to subsec. (k) of section 1710 of this title.
1957—Subsec. (b). Pub. L. 85–104, § 103, substituted cls.
(1), (2), and (3), for former provision which read: ‘‘In addition to mortgages insured under section 1709 of this
title, the Commissioner may, for the purpose of this
section, insure any mortgage under this section which
would be eligible for insurance under section 1709 of
this title, except that as to mortgages so insured the
maximum ratio of loan to value may, in the discretion
of the Commissioner, exceed the maximum ratio of
loan to value prescribed in said section but not to exceed in any event 95 per centum of the appraised value
of the property and not to exceed $17,100:’’, and which
designated former proviso as cl. (4).
Subsec. (e). Pub. L. 85–104, § 112, substituted ‘‘(h), and
(j) of section 1710 of this title’’ for ‘‘and (h) of section
1710 of this title’’.
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by Pub. L. 100–242 applicable only with
respect to mortgages insured pursuant to conditional
commitment issued on or after Feb. 5, 1988, or in ac-

§ 1715n

cordance with direct endorsement program (24 CFR
200.163), if approved underwriter of mortgagee signs appraisal report for property on or after Feb. 5, 1988, see
section 406(d) of Pub. L. 100–242, set out as a note under
section 1709 of this title.
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 1709, 1715q of
this title; title 10 sections 2831, 2833.

§ 1715n. Miscellaneous mortgage insurance
(a) Projects covered
Notwithstanding any of the provisions of this
chapter and without regard to limitations upon
eligibility contained in any section or subchapter of this chapter, other than the limitation in section 1709(g) of this title, the Secretary
is authorized, upon application by the mortgagee, to insure or make commitments to insure
under any section or subchapter of this chapter
any mortgage—
(1) executed in connection with the sale by
the Government, or any agency or official
thereof, of any housing acquired or constructed under Public Law 849, Seventy-sixth
Congress, as amended; Public Law 781, Seventy-sixth Congress, as amended; or Public
Laws 9, 73, or 353, Seventy-seventh Congress,
as amended (including any property acquired,
held, or constructed in connection with such
housing or to serve the inhabitants thereof);
or
(2) executed in connection with the sale by
the Secretary of Housing and Urban Development, or by any public housing agency with
the approval of the Secretary, of any housing
(including any property acquired, held, or constructed in connection with such housing or to
serve the inhabitants thereof) owned or financially assisted pursuant to the provisions of
Public Law 671, Seventy-sixth Congress; or
(3) executed in connection with the sale by
the Government, or any agency or official
thereof, of any of the so-called Greenbelt
towns, or parts thereof, including projects, or
parts thereof, known as Greenhills, Ohio;
Greenbelt, Maryland; and Greendale, Wisconsin, developed under the Emergency Relief Appropriation Act of 1935, or of any of the village
properties or employee’s housing under the jurisdiction of Tennessee Valley Authority, or of
any housing under the jurisdiction of the Department of the Interior located within the
town area of Coulee Dam, Washington, acquired by the United States for the construction, operation, and maintenance of Grand
Coulee Dam and its appurtenant works: Provided, That for the purpose of the application
of this subchapter to sales by the Secretary of
the Interior pursuant to subsections 3(b)(1)
and 3(b)(2) of the Coulee Dam Community Act
of 1957, the selling price of the property involved shall be deemed to be the appraised
value, of any permanent housing under the jurisdiction of the Department of the Interior
constructed under the Boulder Canyon Project
Act of December 21, 1928, as amended and supplemented [43 U.S.C. 617 et seq.] located within
the Boulder City municipal area: Provided,
That for purposes of the application of this
subchapter to sales by the Secretary of the In-

§ 1715n

TITLE 12—BANKS AND BANKING

terior pursuant to subsections 3(b)(1) and
3(b)(2) of the Boulder City Act of 1958, the selling price of the property involved shall be
deemed to be the appraised value; or
(4) executed in connection with the sale by
the Government, or any agency or official
thereof, of any housing (including any property acquired, held, or constructed in connection therewith or to serve the inhabitants
thereof) pursuant to the Atomic Energy Community Act of 1955, as amended [42 U.S.C. 2301
et seq.]: Provided, That such insurance shall be
issued without regard to any preferences or
priorities except those prescribed by this chapter or the Atomic Energy Community Act of
1955, as amended; or
(5) executed in connection with the sale by a
State or municipality, or an agency, instrumentality, or political subdivision of either, of
a project consisting of any permanent housing
(including any property acquired, held, or constructed in connection therewith or to serve
the inhabitants thereof), constructed by or on
behalf of such State, municipality, agency, instrumentality, or political subdivision, for the
occupancy of veterans of World War II, or Korean veterans, their families, and others; or
(6) executed in connection with the first resale, within two years from the date of its acquisition from the Government, of any portion
of a project or property of the character described in paragraphs (1), (2), (3), and (4) above;
or
(7) given to refinance an existing mortgage
insured under this chapter: Provided, That the
principal amount of any such refinancing
mortgage shall not exceed the original principal amount or the unexpired term of such
existing mortgage and shall bear interest at
such rate as may be agreed upon by the mortgagor and the mortgagee, except that (A) the
principal amount of any such refinancing
mortgage may equal the outstanding balance
of an existing mortgage insured pursuant to
section 1715z–10 of this title, if the amount of
the monthly payment due under the refinancing mortgage is less than that due under the
existing mortgage for the month in which the
refinancing mortgage is executed; (B) a mortgagee may not require a minimum principal
amount to be outstanding on the loan secured
by the existing mortgage; (C) in any case involving the refinancing of a loan in which the
Secretary determines that the insurance of a
mortgage for an additional term will inure to
the benefit of the applicable insurance fund,
taking into consideration the outstanding insurance liability under the existing insured
mortgage, such refinancing mortgage may
have a term not more than twelve years in excess of the unexpired term of such existing insured mortgage; and (D) any multifamily
mortgage that is refinanced under this paragraph shall be documented through amendments to the existing insurance contract and
shall not be structured through the provisions
of a new insurance contract: Provided further,
That a mortgage of the character described in
paragraphs (1) through (6) of this subsection
shall have a maturity and a principal obligation not in excess of the maximums prescribed

under the applicable section or subchapter of
this chapter, except that in no case may the
principal obligation of a mortgage referred to
in paragraph (5) of this subsection exceed 90
per centum of the appraised value of the mortgaged property, and shall bear interest at such
rate as may be agreed upon by the mortgagor
and the mortgagee; or
(8) executed in connection with the sale by
the Government of any housing acquired pursuant to section 1013 of the Demonstration
Cities and Metropolitan Act of 1966 [42 U.S.C.
3374].
(b) Insurance of mortgages given to refinance
mortgages covering existing property or
projects in urban renewal areas
Notwithstanding any of the provisions of this
subchapter and without regard to limitations
upon eligibility contained in section 1715l of this
title, the Secretary may in his discretion insure
under section 1715l(d)(3) of this title any mortgage executed by a mortgagor of the character
described therein where such mortgage is given
to refinance a mortgage covering an existing
property or project (other than a one- to fourfamily structure) located in an urban renewal
area, if the Secretary finds that such insurance
will facilitate the occupancy of dwelling units in
the property or project by families of low or
moderate income or families displaced from an
urban renewal area or displaced as a result of
governmental action.
(c) Insurance of certain assigned mortgages
The Secretary shall also have authority to insure under this chapter any mortgage assigned
to him in connection with payment under a contract of mortgage insurance or executed in connection with the sale by him of any property acquired under any section or subchapter of this
chapter without regard to any limitations or requirements contained in this chapter upon the
eligibility of the mortgage, upon the payment of
insurance premiums, or upon the terms and conditions of insurance settlement and the benefits
of the insurance to be included in such settlement.
(d) Insurance of loans made to cover operating
losses of certain projects having existing
mortgages insured by Secretary
(1) Notwithstanding any other provision of
this chapter, the Secretary is authorized to insure loans made to cover the operating losses of
certain projects that have existing project mortgages insured by the Secretary. Insurance under
this subsection shall be in the Secretary’s discretion and upon such terms and conditions as
the Secretary may prescribe, and shall be provided in accordance with the provisions of this
subsection. For purposes of this subsection, the
term ‘‘operating loss’’ means the amount by
which the sum of the taxes, interest on the
mortgage debt, mortgage insurance premiums,
hazard insurance premiums, and the expense of
maintenance and operation of the project covered by the mortgage, exceeds the income of the
project.
(2) To be eligible for insurance pursuant to
this paragraph—
(A) the existing project mortgage (i) shall
have been insured by the Secretary at any

TITLE 12—BANKS AND BANKING
time before or after February 5, 1988; and (ii)
shall cover any property, other than a property upon which there is located a 1- to 4-family dwelling;
(B) the operating loss shall have occurred
during the first 24 months after the date of
completion of the project, as determined by
the Secretary; and
(C) the loan shall be in an amount not exceeding the operating loss.
(3) To be eligible for insurance pursuant to
this paragraph—
(A) the existing project mortgage (i) shall
have been insured by the Secretary at any
time before or after February 5, 1988; (ii) shall
cover any property, other than a property
upon which there is located a 1- to 4-family
dwelling; and (iii) shall not cover a subsidized
project, as defined by the Secretary;
(B) the loan shall be in an amount not exceeding 80 percent of the unreimbursed cash
contributions made on or after March 18, 1987,
by the project owner for the use of the project,
during any period of consecutive months (not
exceeding 24 months) in the first 10 years after
the date of completion of the project, as determined by the Secretary, except that in no
event may the amount of the loan exceed the
operating loss during such period;
(C) the loan shall be made within 10 years
after the end of the period of consecutive
months referred to in the preceding subparagraph; and
(D) the project shall meet all applicable underwriting and other requirements of the Secretary at the time the loan is to be made.
(4) Any loan insured pursuant to this subsection shall (A) bear interest at such rate as
may be agreed upon by the mortgagor and mortgagee; (B) be secured in such manner as the Secretary shall require; (C) be limited to a term not
exceeding the unexpired term of the original
mortgage; and (D) be insured under the same
section as the original mortgage. The Secretary
may provide insurance pursuant to paragraph (2)
or (3), or pursuant to both such paragraphs, in
connection with an existing project mortgage,
except that the Secretary may not provide insurance pursuant to both such paragraphs in
connection with the same period of months referred to in paragraphs (2)(B) and (3)(B). The
Secretary is authorized to collect a premium
charge for insurance of loans pursuant to this
subsection in any amount computed at the same
premium rate as is applicable to the original
mortgage. This premium shall be payable in
cash or in debentures of the insurance fund
under which the loan is insured at par plus accrued interest. In the event of a failure of the
borrower to make any payment due under such
loan or under the original mortgage, both the
loan and original mortgage shall be considered
in default, and if such default continues for a period of thirty days, the lender shall be entitled
to insurance benefits, computed in the same
manner as for the original mortgage, except
that in determining the interest rate under section 1715o of this title for the debentures representing the portion of the claim applicable to
the loan, the date of the commitment to insure

§ 1715n

the loan and the insurance date of the loan shall
be taken into consideration rather than the
commitment or insurance date for the original
mortgage.
(5) A loan involving a project covered by a
mortgage insured under section 1715e of this
title that is the obligation of the Cooperative
Management Housing Insurance Fund shall be
the obligation of such fund, and loans involving
projects covered by a mortgage insured under
section 1715z–1 of this title or under any section
of this subchapter pursuant to subsection (e) of
this section shall be the obligation of the Special Risk Insurance Fund.
(6) In determining the amount of an operating
loss loan to be insured pursuant to this subsection, the Secretary shall not reduce such
amount solely to reflect any amounts placed in
escrow (at the time the existing project mortgage was insured) for initial operating deficits.
If an operating loss loan was insured by the Secretary pursuant to this subsection before October 28, 1992, and was reduced solely to reflect the
amount placed in escrow for initial operating
deficits, the Secretary shall insure, to the extent of the availability of insurance authority
provided in appropriation Acts, an increase in
the existing loan or a separate loan, in an
amount equal to the lesser of (A) the maximum
amount permitted under this subsection and the
applicable underwriting requirements established by the Secretary and in effect at the time
the loan is to be made, or (B) the amount of the
escrow for initial operating deficits.
(e) Insurance of mortgages executed in connection with repair, rehabilitation, construction,
or purchase of property in older, declining
urban areas
Notwithstanding any of the provisions of this
chapter except section 1715c of this title, and
without regard to limitations upon eligibility
contained in any section of this subchapter or
subchapter IX–B of this chapter, other than the
limitation in section 1709(g) of this title, the
Secretary is authorized, upon application by the
mortgagee, to insure under any section of this
subchapter or subchapter IX–B of this chapter a
mortgage executed in connection with the repair, rehabilitation, construction, or purchase of
property located in an older, declining urban
area in which the conditions are such that one
or more of the eligibility requirements applicable to the section or subchapter under which insurance is sought could not be met if the Secretary finds that (1) the area is reasonably viable, giving consideration to the need for providing adequate housing or group practice facilities
for families of low and moderate income in such
area, and (2) the property is an acceptable risk
in view of such consideration. The insurance of
a mortgage pursuant to this subsection shall be
the obligation of the Special Risk Insurance
Fund.
(f) Insurance of mortgages executed in connection with purchase or refinancing of existing
multifamily housing project; refinancing of
existing debt of existing hospital, or purchase or refinancing of rental rehabilitated
property; terms and conditions, etc.
(1) Notwithstanding any of the provisions of
this chapter, the Secretary is authorized, in his

§ 1715n

TITLE 12—BANKS AND BANKING

discretion, to insure under any section of this
subchapter a mortgage executed in connection
with the purchase of refinancing of an existing
multifamily housing project or the refinancing
of existing debt of an existing hospital (or existing nursing home, existing assisted living facility, existing intermediate care facility, existing
board and care home, or any combination thereof).
(2) In the case of the purchase or refinancing
under this subsection of a multifamily housing
project located in an older, declining urban area,
the Secretary shall make available an amount
not to exceed $30,000,000 of available purchase
authority pursuant to section 1720 of this title
to reduce interest rates on low- and moderateincome rental housing in projects having 100
units or less which otherwise could not support
refinancing and moderate rehabilitation without
causing excessive rent burdens on current tenants due to rent increases. The Secretary shall
prescribe such terms and conditions as he deems
necessary to assure that—
(A) the refinancing is used to lower the
monthly debt service only to the extent necessary to assure the continued economic viability of the project, taking into account any
rent reductions to be implemented by the
mortgagor; and
(B) during the mortgage term no rental increases shall be made except those which are
necessary to offset actual and reasonable operating expense increases or other necessary expense increases and maintain reasonable profit
levels approved by the Secretary.
(3) For all insurance authorized by this subsection and provided pursuant to a commitment
entered into after October 8, 1980, the Secretary
may not accept an offer to prepay or request refinancing of a mortgage secured by rental housing unless the Secretary takes appropriate action that will obligate the borrower (and successors in interest thereof) to utilize the property
as a rental property for a period of five years
from the date on which the insurance was provided (twenty years in the case of any such
mortgage purchased under section 1720 1 of this
title) unless the Secretary finds that—
(A) the conversion of the property to a cooperative, or condominium form of ownership is
sponsored by a bona fide tenants’ organization
representing a majority of the households in
the project;
(B) continuance of the property as rental
housing is clearly unnecessary to assure adequate rental housing opportunities for lowand moderate-income people in the community; or
(C) continuance of the property as rental
housing would have an undesirable and deleterious effect on the surrounding neighborhood.
(4) In the case of refinancing of an existing
hospital (or existing nursing home, existing assisted living facility, existing intermediate care
facility, existing board and care home, or any
combination thereof) the Secretary shall prescribe such terms and conditions as the Secretary deems necessary to assure that—
1 See

References in Text note below.

(A) the refinancing is employed to lower the
monthly debt service costs (taking into account any fees or charges connected with such
refinancing) of such existing hospital (or existing nursing home, existing assisted living facility, existing intermediate care facility, existing board and care home, or any combination thereof);
(B) the proceeds of any refinancing will be
employed only to retire the existing indebtedness and pay the necessary cost of refinancing
on such existing hospital (or existing nursing
home, existing assisted living facility, existing
intermediate care facility, existing board and
care home, or any combination thereof);
(C) such existing hospital (or existing nursing home, existing assisted living facility, existing intermediate care facility, existing
board and care home, or any combination
thereof) is economically viable; and
(D) the applicable requirements for certificates, studies, and statements of section 1715w
of this title (for the existing nursing home, existing assisted living facility, intermediate
care facility, board and care home, or any
combination thereof, proposed to be refinanced) or of section 1715z–7 of this title (for
the existing hospital proposed to be refinanced) have been met.
(5) In the case of any purchase or refinancing
under this subsection involving property to be
rehabilitated or developed under section 1437o 1
of title 42, the Secretary may—
(A) include rehabilitation or development
costs of not to exceed $20,000 per unit, except
that the Secretary may increase such amount
by not to exceed 25 per centum for specific
properties where cost levels so require;
(B) permit subordinated liens securing up to
the full amount of mortgage financing provided by State or local governments or agencies thereof; and
(C) pay such benefits in cash unless the
mortgagee submits a written request for debenture payment.
(g) Insurance of mortgages covering multifamily
housing projects including units not self-contained
Notwithstanding any other provisions of this
chapter, the Secretary may, in his discretion,
insure a mortgage covering a multifamily housing project including units which are not selfcontained.
(June 27, 1934, ch. 847, title II, § 223, as added
Aug. 2, 1954, ch. 649, title I, § 125, 68 Stat. 605;
amended Aug. 4, 1955, ch. 543, ch. 11, § 201, 69
Stat. 484; Aug. 11, 1955, ch. 783, title I, § 102(k), 69
Stat. 636; July 12, 1957, Pub. L. 85–104, title I,
§ 114, 71 Stat. 298; Aug. 30, 1957, Pub. L. 85–240, § 4,
71 Stat. 528; Sept. 2, 1958, Pub. L. 85–900, § 12, 72
Stat. 1735; June 30, 1961, Pub. L. 87–70, title I,
§ 101(d), title VI, § 612(h), 75 Stat. 154, 182; Sept. 2,
1964, Pub. L. 88–560, title I, § 116, 78 Stat. 779;
Aug. 10, 1965, Pub. L. 89–117, title I, § 108(e), title
II, § 213, 79 Stat. 461, 471; Nov. 3, 1966, Pub. L.
89–754, title X, § 1013(h), 80 Stat. 1292; May 25,
1967, Pub. L. 90–19, § 1(a)(3), (h), 81 Stat. 17, 18;
Aug. 1, 1968, Pub. L. 90–448, title I, § 103(a), title
III, § 312, 82 Stat. 486, 510; Dec. 24, 1969, Pub. L.

TITLE 12—BANKS AND BANKING
91–152, title IV, § 418(c), (d), 83 Stat. 402; Aug. 22,
1974, Pub. L. 93–383, title III, § 311(a), 88 Stat. 683;
Oct. 31, 1978, Pub. L. 95–557, title III, § 326, 92
Stat. 2104; Oct. 8, 1980, Pub. L. 96–399, title III,
§ 327, 94 Stat. 1650; Aug. 13, 1981, Pub. L. 97–35,
title III, § 339B(b), 95 Stat. 417; Nov. 30, 1983, Pub.
L. 98–181, title III, § 303(b), 97 Stat. 1207; Oct. 17,
1984, Pub. L. 98–479, title II, § 204(a)(7), 98 Stat.
2232; Feb. 5, 1988, Pub. L. 100–242, title IV,
§§ 406(b)(15), (16), 408(a), 409(a), (b), 419(b), 427,
429(d), 101 Stat. 1901, 1903, 1913, 1916, 1918; Oct. 28,
1992, Pub. L. 102–550, title V, §§ 510, 511(f), 106
Stat. 3784, 3786; Sept. 28, 1994, Pub. L. 103–327,
title II, 108 Stat. 2316.)
AMENDMENT OF SECTION
For termination of amendment by title II of
Pub. L. 103–327, see Effective and Termination
Dates of 1994 Amendment note below.
REFERENCES IN TEXT
Public Law 849, Seventy-sixth Congress, as amended,
referred to in subsec. (a)(1), is act Oct. 14, 1940, ch. 862,
54 Stat. 1125, as amended, known as the ‘‘Lanham Public War Housing Act’’, which is classified generally to
subchapters II to VII (§§ 1521 et seq., 1531 et seq., 1541
et seq., 1561 et seq., 1571 et seq., and 1581 et seq.) of
chapter 9 of Title 42, The Public Health and Welfare.
For complete classification of this Act to the Code, see
Short Title note set out under section 1501 of Title 42
and Tables.
Public Laws 9, 73, and 353, Seventy-seventh Congress,
referred to in subsec. (a)(1), refer to the following acts,
respectively: Public Law 9, Urgent Deficiency Appropriation Act, 1941, act Mar. 1, 1941, ch. 9, 55 Stat. 14;
Public Law 73, Additional Urgent Deficiency Appropriation Act, 1941, act May 24, 1941, ch. 132, 55 Stat. 197;
and Public Law 353, Third Supplemental National Defense Appropriation Act, 1942, act Dec. 17, 1941, ch. 591,
55 Stat. 810. These three acts appropriated a total of
$320,000,000 to the President for the purpose of providing
housing necessary because of national defense activities and conditions arising out of World War II. These
provisions were not classified to the code, although all
three acts are cited in a ‘‘Prior Additional Appropriations’’ note under section 1523 of Title 42.
Public Law 671, Seventy-sixth Congress, referred to in
subsec. (a)(2), is act June 28, 1940, ch. 440, 54 Stat. 676,
as amended. Provisions of the Act relating to housing
are contained in title II, which is classified generally to
subchapter I (§ 1501 et seq.) of chapter 9 of Title 42. For
complete classification of this Act to the Code, see
Tables.
The Emergency Relief Appropriation Act of 1935, referred to in subsec. (a)(3), is Joint Res. Apr. 8, 1935, ch.
48, 49 Stat. 115. It was temporary legislation, and was
formerly set out in a note in former chapter 16 of Title
15, Commerce and Trade. See notes under former sections 721 to 728 of that title.
Subsections 3(b)(1) and 3(b)(2) of the Coulee Dam
Community Act of 1957 [Pub. L. 85–240, Aug. 30, 1957, 71
Stat. 524], referred to in subsec. (a)(3), are set out in a
note under section 835c of Title 16, Conservation.
The Boulder Canyon Project Act of December 21, 1928,
as amended and supplemented, referred to in subsec.
(a)(3), is act Dec. 21, 1928, ch. 42, 45 Stat. 1057, as amended, which is classified generally to subchapter I (§ 617 et
seq.) of chapter 12A of Title 43, Public Lands. For complete classification of this Act to the Code, see section
617t of Title 43 and Tables.
Subsections 3(b)(1) and 3(b)(2) of the Boulder City Act
of 1958 [Pub. L. 85–900, Sept. 2, 1958, 72 Stat. 1726], referred to in subsec. (a)(3), are not classified to the Code.
Subsections (a) to (d) of section 3 read as follows:
‘‘(a) The Secretary is authorized to sell such dwelling
houses, duplex houses or units thereof, and garages,
with furniture, fixtures, and appurtenances, as are

§ 1715n

owned by the United States within the Boulder City
municipal area and are not needed in connection with
the administration, operation, and maintenance of Federal activities located within or near the Boulder City
municipal area.
‘‘(b) Except in the case of property determined to be
substandard under subsection (c) of this section, the
following system of priority shall be established with
respect to property authorized to be sold under subsection (a) of this section:
‘‘(1) Persons employed by the Federal Government
within or near the Boulder City municipal area (and
surviving spouses of such persons who have not remarried) who are tenants in Federal housing in Boulder
City shall be offered the opportunity to purchase the
property in which they are tenants at the appraised
value as established under subsection (d) of this section. This right of priority shall expire unless notice of
intent to purchase has been received by the Secretary
before the expiration of sixty days after the date on
which the property has been offered for sale, and shall
be deemed abandoned unless before the expiration of
sixty days after the Secretary’s tender of the instrument of transfer the prospective purchaser concludes
the sale;
‘‘(2) Persons employed by the Federal Government
within or near the Boulder City municipal area may
apply to purchase housing not purchased under subsection (b)(1) of this section. Applicants to purchase
shall be placed in order of opportunity to choose pursuant to a public drawing, but spouses of such applicants
shall not be entitled to apply. Sales shall be made at
the appraised value as established under subsection (d)
of this section and selections and purchases by successful applicants shall be concluded within limits of time
to be established by the Secretary. A purchase under
subsection (b)(1) or (b)(2) of this section shall render
the purchaser and any spouse of such purchaser ineligible thereafter to purchase under subsection (b)(1) or
(b)(2); and
‘‘(3) Property subject to disposal under this section
and not sold pursuant to subsections (b)(1) and (b)(2) of
this section shall be opened to bids from the general
public, and shall be sold to the highest responsible bidder.
‘‘In the event that incorporation of the municipality
shall be effected within four years after the date of this
Act, persons purchasing housing under this subsection
or their successors, assigns, or legal representatives,
shall be entitled to a reduction in the purchase price
(or rebate as appropriate) of 10 per centum: Provided,
That no person who has purchased a house under the
Act of May 25, 1948 (62 Stat. 268), shall be eligible for
such reduction.
‘‘(c) Where the Secretary determines that property
authorized to be sold under subsection (a) of this section is substandard, he shall sell such property only for
off-site use, such property to be opened to bids from the
general public for sale to the highest responsible bidder.
‘‘(d) The appraised value of all property to be sold
under subsections (b)(1) and (b)(2) of this section, and of
all lots leased or to be leased by the United States for
the purpose of maintaining, locating, or erecting permanent structures thereon, shall be determined by an
appraiser or appraisers to be designated by the Administrator of Housing and Home Finance Agency at the
request of the Secretary. Said appraisals shall be made
promptly after the date of this Act, or immediately
prior to the granting of any lease of lands not previously appraised, as the case may be. The representatives of the Boulder City community, as determined by
the Secretary, shall be granted an opportunity to offer
advice in connection with [sic] such appraisals.’’
The Atomic Energy Community Act of 1955, as
amended, referred to in subsec. (a)(4), is act Aug. 4,
1955, ch. 543, 69 Stat. 472, as amended, which is classified
principally to chapter 24 (§ 2301 et seq.) of Title 42, The
Public Health and Welfare. For complete classification
of this Act to the Code, see Short Title note set out
under section 2301 of Title 42 and Tables.

§ 1715n

TITLE 12—BANKS AND BANKING

Section 1720 of this title, referred to in subsec. (f)(3),
was repealed by Pub. L. 98–181, title IV, § 483(a), Nov. 30,
1983, 97 Stat. 1240.
Section 1437o of title 42, referred to in subsec. (f)(5),
was repealed by Pub. L. 101–625, title II, § 289(b), Nov. 28,
1990, 104 Stat. 4128.
AMENDMENTS
1994—Subsec. (a)(7)(D). Pub. L. 103–327 temporarily
added cl. (D). See Effective and Termination Dates of
1994 Amendment note below.
1992—Subsec. (d)(6). Pub. L. 102–550, § 510, added par.
(6).
Subsec. (f)(1), (4). Pub. L. 102–550, § 511(f), inserted ‘‘existing assisted living facility,’’ after ‘‘existing nursing
home,’’ wherever appearing.
1988—Subsec. (a). Pub. L. 100–242, § 406(b)(15), inserted
‘‘other than the limitation in section 1709(g) of this
title,’’ after first reference to ‘‘this chapter,’’.
Subsec. (a)(7). Pub. L. 100–242, § 429(d)(1), substituted
in first proviso ‘‘such rate as may be agreed upon by
the mortgagor and the mortgagee’’ for ‘‘a rate not in
excess of the maximum rate prescribed under the applicable section or subchapter of this chapter’’, substituted in second proviso ‘‘maturity and a principal
obligation’’ for ‘‘maturity, a principal obligation, and
an interest rate’’, and inserted before semicolon at end
‘‘, and shall bear interest at such rate as may be agreed
upon by the mortgagor and the mortgagee’’.
Pub. L. 100–242, § 419(b), in first proviso, inserted cl.
(B) and designated former cl. (B) as (C).
Pub. L. 100–242, § 408(a), in first proviso, inserted cl.
(B) designation and added cl. (A).
Subsec. (d). Pub. L. 100–242, § 427, added pars. (1) to (3),
inserted par. (4) designation and ‘‘Any loan insured pursuant to this subsection shall (A) bear interest at such
rate as may be agreed upon by the mortgagor and
mortgagee; (B) be secured in such manner as the Secretary shall require; (C) be limited to a term not exceeding the unexpired term of the original mortgage;
and (D) be insured under the same section as the original mortgage. The Secretary may provide insurance
pursuant to paragraph (2) or (3), or pursuant to both
such paragraphs, in connection with an existing project
mortgage, except that the Secretary may not provide
insurance pursuant to both such paragraphs in connection with the same period of months referred to in
paragraphs (2)(B) and (3)(B).’’, inserted par. (5) designation, and struck out former first and second sentences
of subsec. (d) which read as follows: ‘‘With respect to
any mortgage, other than a mortgage covering a oneto four-family structure, heretofore or hereafter insured by the Secretary, and notwithstanding any other
provision of this chapter, when the taxes, interest on
the mortgage debt, mortgage insurance premiums, hazard insurance premiums, and the expense of maintenance and operation of the project covered by such
mortgage during the first two years following the date
of completion of the project, as determined by the Secretary, exceed the project income, the Secretary may,
in his discretion and upon such terms and conditions as
he may prescribe, insure under the same section as the
original mortgage a loan by the mortgagee in an
amount not exceeding the excess of the foregoing expenses over the project income. Such loan shall (1) bear
interest (exclusive of premium charges for insurance)
at not to exceed the per centum per annum currently
permitted for mortgages insured under the section
under which it is to be insured, (2) be secured in such
manner as the Secretary shall require, and (3) be limited to a term not exceeding the unexpired term of the
original mortgage.’’
Pub. L. 100–242, § 429(d)(2), which directed substitution
of ‘‘bear interest at such rate as may be agreed upon by
the mortgagor and the mortgagee’’ for ‘‘bear interest
(exclusive of premium charges for insurance) at not to
exceed the per centum per annum currently permitted
for mortgages insured under the section under which it
is to be insured’’ in cl. (1) of sentence beginning ‘‘Such
loan shall’’, could not be executed because of previous

amendment by Pub. L. 100–242, § 427, see above, which
directed in part the striking out of second sentence of
subsec. (d)(1), which contained the language sought to
be amended.
Subsec. (e). Pub. L. 100–242, § 406(b)(16), inserted reference to limitation in section 1709(g) of this title.
Subsec. (f)(1). Pub. L. 100–242, § 409(b)(1), inserted parenthetical reference to existing nursing homes, intermediate care facilities, board and care homes, or any
combination thereof after ‘‘existing hospital’’.
Subsec. (f)(4)(A) to (C). Pub. L. 100–242, § 409(b)(2), inserted parenthetical reference to existing nursing
homes, intermediate care facilities, board and care
homes, or any combination thereof after ‘‘existing hospital’’ wherever appearing.
Subsec. (f)(4)(D). Pub. L. 100–242, § 409(a), amended
subpar. (D) generally. Prior to amendment, subpar. (D)
read as follows: ‘‘such existing hospital has received
such certifications from a State agency designated in
accordance with section 291d(a)(1) or section 300m of
title 42 for the State in which the hospital is located as
the Secretary deems necessary and appropriate and
comparable to the certification required for hospitals
insured under section 1715z–7 of this title and that such
State agency additionally certify that the services
being provided by such existing hospital at the time of
refinancing are appropriate as determined pursuant to
section 300m–2(a)(6) title 42.’’
1984—Subsec. (f)(2). Pub. L. 98–479 in provisions preceding subpar. (A) inserted ‘‘a’’ before ‘‘multifamily’’.
1983—Subsec. (f)(5). Pub. L. 98–181 added par. (5).
1981—Subsec. (f). Pub. L. 97–35 inserted ‘‘and’’ after
the semicolon at end of par. (2)(A), and redesignated
par. (5) as (4).
1980—Subsec. (f)(1). Pub. L. 96–399, § 327(1), redesignated first sentence of subsec. (f) as par. (1).
Subsec. (f)(2). Pub. L. 96–399, § 327(2)–(6), redesignated
second sentence of subsec. (f) as par. (2), inserted applicability to purchases, provisions authorizing the Secretary to make not to exceed $30,000,000 available for
purchase authority, and provisions authorizing rent increases to maintain reasonable profit levels, and substituted ‘‘(A)’’ and ‘‘(B)’’ for ‘‘(1)’’ and ‘‘(2)’’, respectively.
Subsec. (f)(3). Pub. L. 96–399, § 327(7), added par. (3).
Subsec. (f)(5). Pub. L. 96–399, § 327(8), redesignated
third sentence of subsec. (f) as par. (5).
1978—Subsec. (f). Pub. L. 95–557 inserted ‘‘or the refinancing of existing debt of an existing hospital’’ after
‘‘housing project’’, substituted ‘‘multifamily housing
project’’ for ‘‘housing project’’, and inserted provisions
relating to the prescription of terms and conditions in
the case of refinancing of an existing hospital.
1974—Subsecs. (f), (g). Pub. L. 93–383 added subsecs. (f)
and (g).
1969—Subsec. (d). Pub. L. 91–152, § 418(c), inserted provision that any loan involving a project covered by a
mortgage insured under section 1715e, 1715z–1, or any
section of this subchapter pursuant to subsec. (e) of
this section be the obligation of the specified Fund.
Subsec. (e). Pub. L. 91–152, § 418(d), substituted ‘‘this
chapter’’ for ‘‘this subchapter’’ and inserted references
to subchapter IX–B of this chapter.
1968—Subsec. (a). Pub. L. 90–448, § 312(a)(1), substituted ‘‘chapter’’ for ‘‘subchapter’’, ‘‘any section or
subchapter of this chapter’’ for ‘‘section 1709, 1713,
1715e, 1715k, 1715l, 1715m, 1715v, 1715w, or 1715x of this
title’’ and ‘‘under any section or subchapter of this
chapter’’ for ‘‘under either of said sections’’.
Subsec. (a)(7). Pub. L. 90–448, § 312(a)(2), substituted
‘‘prescribed under the applicable section or subchapter
of this chapter’’ for ‘‘applicable to loans insured under
section 1709, 1713, 1715e, 1715k, 1715l, 1715m, 1715v, 1715w,
or 1715x of this title’’ in two places.
Subsec. (c). Pub. L. 90–448, § 312(a)(3)–(5), substituted
‘‘this chapter’’ for ‘‘this subchapter’’ in two places, and
‘‘any section or subchapter of this chapter’’ for ‘‘subchapters I, II, VI, VII, VIII or X of this chapter’’, and
struck out phrase which required payment of insurance
to be in debentures.

§ 1715n

TITLE 12—BANKS AND BANKING
Subsec. (d). Pub. L. 90–448, § 312(b), substituted ‘‘insure under the same section as the original mortgage a
loan by a mortgagee in an amount not exceeding the
excess of the foregoing expenses over the project income’’ for ‘‘permit the excess of the foregoing expenses
over the project income to be added to the amount of
such mortgage, and extend the coverage of the mortgage insurance thereto, and such additional amount
shall be deemed to be part of the original face amount
of the mortgage’’, and inserted sentences requiring the
loan to bear interest at not more than the per centum
per annum currently permitted for mortgages insured
under the section under which it is to be insured, to be
secured, and to be limited to a term not more than the
unexpired term of the original mortgage, authorizing
collection of a premium charge for insurance of loans,
directing the premium to be payable in cash or in debentures of the fund, and making the lender entitled to
insurance benefits in the event of a failure of the borrower to make any payment due under the loan or
under the original mortgage and the default continues
for a period of thirty days.
Subsec. (e). Pub. L. 90–448, § 103(a), added subsec. (e).
1967—Pub. L. 90–19, § 1(a)(3), substituted ‘‘Secretary’’
for ‘‘Commissioner’’ wherever appearing in subsecs. (a)
preceding par. (1), (a)(7), and (b) to (d).
Subsec. (a)(2). Pub. L. 90–19, § 1(h), substituted ‘‘Secretary of Housing and Urban Development’’ and ‘‘Secretary’’ for ‘‘Public Housing Administration’’ and ‘‘said
Administration’’, respectively.
1966—Subsec. (a)(8). Pub. L. 89–754 substituted ‘‘Government’’ and ‘‘section 3374 of title 42’’ for ‘‘Commissioner’’ and ‘‘section 1735h of this title’’, respectively.
1965—Subsec. (a)(7). Pub. L. 89–117, § 213, substituted
‘‘this Act’’ for ‘‘section 608 of title VI prior to the effective date of the Housing Act of 1954 or under section
220, 221, 903, or section 908’’, which for purposes of codification has been changed to ‘‘this chapter’’.
Subsec. (a)(8). Pub. L. 89–117, § 108(e)(2), added par. (8).
1964—Subsec. (c). Pub. L. 88–560 substituted ‘‘limitations or requirements contained in this subchapter
upon the eligibility of the mortgage, upon the payment
of insurance premiums, or upon the terms and conditions of insurance settlement and the benefits of the insurance to be included in such settlement (except that
in any case the payment of insurance shall be in debentures)’’ for ‘‘limitation upon eligibility contained in
this subchapter’’.
1961—Subsec. (a). Pub. L. 87–70, § 612(h)(1), (2), included sections 1715k, 1715l, 1715v, 1715w and 1715x in the
opening provisions, and, in par. (7), substituted ‘‘section 1715k, 1715l, 1750b, or 1750g of this title’’ for ‘‘section 1750b or 1750g of this title,’’ ‘‘1715e, 1715k, 1715l,
1715m, 1715v, 1715w, or 1715x of this title’’ for ‘‘1715e or
1715m of this title’’ in two places, and struck out ‘‘insured under section 1743 of section 1750g of this title’’
after ‘‘refinancing of a loan’’.
Subsecs. (b), (c). Pub. L. 87–70, § 101(d), added subsec.
(b) and redesignated former subsec. (b) as (c).
Subsec. (d). Pub. L. 87–70, § 612(h)(3), added subsec. (d).
1958—Subsec. (a)(3). Pub. L. 85–900 authorized insurance of mortgages executed in connection with the sale
of property constructed under the Boulder Canyon
Project Act and located in Boulder City.
1957—Subsec. (a). Pub. L. 85–104, § 114(1), substituted
‘‘1715e, or 1715m of this title’’ for ‘‘or 1715e of this
title’’.
Subsec. (a)(3). Pub. L. 85–240 authorized insurance of
mortgages executed in connection with the sale of Government housing at Coulee Dam.
Subsec. (a)(4). Pub. L. 85–104, § 114(2), inserted ‘‘this
chapter or’’ after ‘‘prescribed by’’.
Subsec. (a)(7). Pub. L. 85–104, § 114(3), substituted
‘‘1715e, or 1715m of this title’’ for ‘‘or 1715e of this title’’
in first proviso, and substituted provisions of second
proviso for former provisions which required mortgages
described in pars. (1), (2), (3), (4), (5), or (6) to have maturity satisfactory to Commissioner but forbade maturity of such mortgage to exceed maximum terms of
loans insured under sections 1709, 1713, or 1715e of this

title, forbade principal obligation to exceed 90 percent
of value of property, and forbade interest rate to exceed
rate of loans made under either of said sections, with
the exception that where such mortgage covered property held by certain nonprofit cooperatives, principal
obligation should not exceed 95 percent of appraised
value.
1955—Subsec. (a). Act Aug. 11, 1955, substituted ‘‘section 1709, 1713, or 1715e of this title’’ for ‘‘section 1709 or
1713 of this title’’ wherever appearing.
Act Aug. 4, 1955, added par. (4), and redesignated pars.
(4) to (6) as (5) to (7), respectively.
EFFECTIVE AND TERMINATION DATES OF 1994
AMENDMENT
Title II of Pub. L. 103–327, Sept. 28, 1994, 108 Stat. 2316,
provided in part that: ‘‘The amendments of the two immediately preceding paragraphs [amending this section
and section 1437f of Title 42, The Public Health and
Welfare] shall be effective only during fiscal year 1995.’’
EFFECTIVE DATE OF 1988 AMENDMENT
Amendment by section 406(b)(15), (16) of Pub. L.
100–242 applicable only with respect to mortgages insured pursuant to conditional commitment issued on or
after Feb. 5, 1988, or in accordance with direct endorsement program (24 CFR 200.163), if approved underwriter
of mortgagee signs appraisal report for property on or
after Feb. 5, 1988, see section 406(d) of Pub. L. 100–242,
set out as a note under section 1709 of this title.
EFFECTIVE DATE OF 1981 AMENDMENT
Amendment by Pub. L. 97–35 effective Oct. 1, 1981, see
section 371 of Pub. L. 97–35, set out as an Effective Date
note under section 3701 of this title.
REGULATIONS
Section 409(c) of Pub. L. 100–242 provided that: ‘‘The
Secretary of Housing and Urban Development shall
issue such regulations as may be necessary to carry out
the amendment made by this section [amending this
section] by not later than the expiration of the 90-day
period following the date of the enactment of this Act
[Feb. 5, 1988].’’
STREAMLINED REFINANCING
Pub. L. 103–233, title I, § 103(d), Apr. 11, 1994, 108 Stat.
361, provided that: ‘‘As soon as practicable, the Secretary shall implement a streamlined refinancing program under the authority provided in section 223 of the
National Housing Act [12 U.S.C. 1715n] to prevent the
default of mortgages insured by the FHA which cover
multifamily housing projects, as defined in section
203(b) of the Housing and Community Development
Amendments of 1978 [12 U.S.C. 1701z–11(b)].’’
DELEGATION OF PROCESSING OF MORTGAGE INSURANCE
Secretary of Housing and Urban Development to implement system of mortgage insurance for mortgages
insured under this section that delegates processing
functions to selected approved mortgagees, with Secretary to retain authority to approve rents, expenses,
property appraisals, and mortgage amounts and to execute firm commitments, see section 328 of Pub. L.
101–625, set out as a note under section 1713 of this title.
PURPOSE OF SECTION
Section 125 of act Aug. 2, 1954, as amended by Pub. L.
90–19, § 10(b), May 25, 1967, 81 Stat. 22, in enacting this
section, provided in part that the purpose thereof was
to transfer to title II of the National Housing Act [this
subchapter] ‘‘the mortgage insurance program in connection with the sale of certain publicly owned property as contained in section 610 of title VI [section 1745
of this title]; the insurance of mortgages to refinance
existing loans insured under section 608 of title VI and
sections 903 and 908 of title IX [sections 1743, 1750b and
1750g of this title]; and to authorize the insurance

§ 1715o

TITLE 12—BANKS AND BANKING

under title II [this subchapter] of mortgages assigned
to the Secretary of Housing and Urban Development
under insurance contracts and mortgages held by the
Secretary of Housing and Urban Development in connection with the sale of property acquired under insurance contracts’’.
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 1709, 1715z–3,
1715z–7, 1715z–9, 1715z–19, 1735c, 1735f–17 of this title; title
42 sections 1437f, 2331, 2362.

§ 1715o. Interest rate on debentures; method of
establishment
Notwithstanding any other provisions of this
chapter, debentures issued under any section of
this chapter with respect to a loan or mortgage
accepted for insurance on or after thirty days
following August 2, 1954 (except debentures issued pursuant to paragraph (4) of section 1715l(g)
of this title) shall bear interest at the rate in effect on the date the commitment to insure the
loan or mortgage was issued, or the date the
loan or mortgage was endorsed for insurance, or
(when there are two or more insurance endorsements) the date the loan or mortgage was initially endorsed for insurance, whichever rate is
the highest, except that debentures issued pursuant to section 1715k(f), 1715k(h)(7), 1715l(g),
1715x, or 1715z–3 of this title may, at the discretion of the Secretary, bear interest at the rate
in effect on the date they are issued. The Secretary shall from time to time, with the approval of the Secretary of the Treasury, establish such interest rate in an amount not in excess of the annual rate of interest determined by
the Secretary of the Treasury, at the request of
the Secretary, by estimating the average yield
to maturity, on the basis of daily closing market bid quotations or prices during the calendar
month next preceding the establishment of such
rate of interest, on all outstanding marketable
obligations of the United States having a maturity date of fifteen years or more from the first
day of such next preceding month, and by adjusting such estimated average annual yield to
the nearest one-eighth of 1 per centum.
(June 27, 1934, ch. 847, title II, § 224, as added
Aug. 2, 1954, ch. 649, title I, § 126, 68 Stat. 606;
amended June 30, 1961, Pub. L. 87–70, title VI,
§ 612(i), 75 Stat. 182; May 25, 1967, Pub. L. 90–19,
§ 1(a)(3), 81 Stat. 17; Aug. 1, 1968, Pub. L. 90–448,
title I, § 104(b), 82 Stat. 488.)
AMENDMENTS
1968—Pub. L. 90–448 included debentures issued pursuant to section 1715z–3 of this title.
1967—Pub. L. 90–19 substituted ‘‘Secretary’’ for ‘‘Commissioner’’ wherever appearing.
1961—Pub. L. 87–70 changed the date for determination of the rate of interest for debentures, other than
those issued pursuant to section 1715k(f), 1715k(h)(7),
1715l(g), 1715l(g)(4), or 1715x, from the rate in effect on
the date the debentures are issued to the rate in effect
on the date the commitment to insure the loan or
mortgage was issued, or the date the loan or mortgage
was endorsed for insurance, or (when there are two or
more insurance endorsements) the date the loan or
mortgage was initially endorsed for insurance, whichever rate is highest.
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in sections 1710, 1713, 1715n,
1748b of this title.

§ 1715p. Insurance of advances under open-end
mortgages; payment of charges; eligibility
and conditions
Notwithstanding any other provisions of this
chapter, in connection with any mortgage insured pursuant to any section of this chapter
which covers a property upon which there is located a dwelling designed principally for residential use for not more than four families in
the aggregate, the Secretary is authorized, upon
such terms and conditions as he may prescribe,
to insure under said section the amount of any
advance for the improvement or repair of such
property made to the mortgagor pursuant to an
‘‘open-end’’ provision in the mortgage, and to
add the amount of such advance to the original
principal obligation in determining the value of
the mortgage for the purpose of computing the
amounts of debentures and certificate of claim
to which the mortgagee may be entitled: Provided, That the Secretary may require the payment of such charges, including in lieu of insurance premiums, as he may consider appropriate
for the insurance of such ‘‘open-end’’ advances:
Provided, further, That only advances for such
improvements or repairs as substantially protect or improve the basic livability or utility of
the property involved shall be eligible for insurance under this section; Provided further, That
no such advance shall be insured under this section if the amount thereof plus the amount of
the unpaid balance of the original principal obligation of the mortgage would exceed the
amount of such original principal obligation unless the mortgagor certifies that the proceeds of
such advance will be used to finance the construction of additional rooms or other enclosed
space as a part of the dwelling: And provided further, That the insurance of ‘‘open-end’’ advances
shall not be taken into account in determining
the aggregate amount of principal obligations of
mortgages which may be insured under this
chapter.
(June 27, 1934, ch. 847, title II, § 225, as added
Aug. 2, 1954, ch. 649, title I, § 126, 68 Stat. 607;
amended May 25, 1967, Pub. L. 90–19, § 1(a) (3), 81
Stat. 17.)
AMENDMENTS
1967—Pub. L. 90–19 substituted ‘‘Secretary’’ for ‘‘Commissioner’’ wherever appearing.
SECTION REFERRED TO IN OTHER SECTIONS
This section is referred to in section 1715y of this
title.

§ 1715q. Delivery of statement of appraisal or estimates to home buyers
The Secretary is authorized and directed to require that in connection with any property upon
which there is located a dwelling designed principally for a single-family residence or a twofamily residence and which is approved for
mortgage insurance under section 1709 or 1715e
of this title with respect to any property or
project of a corporation or trust of the character
described in paragraph (2) of subsection (a) of
section 1715e of this title, or sections 1715k,
1715l, 1715m, 1715x, 1715y, 1715z(i), 1715z–2, or 1750b
of this title, the seller or builder or such other


File Typeapplication/pdf
File Modified2018-07-09
File Created2018-07-09

© 2021 OMB.report | Privacy Policy