§1750g Insurance of additional mortgages

Summary

The Secretary can insure more mortgages like those already covered by law. The borrower (mortgagor) must be approved by the Secretary. The Secretary may require the borrower to follow rules about rents, sales, fees, capital, profit limits, and how the property is run. The Secretary may buy up to $100 of stock or interest in the borrower to make those rules work. That purchase is paid from the General Insurance Fund and must be redeemed at par when the Secretary’s obligations end. Loans must be no more than $5,000,000, no more than 90% of the Secretary’s estimate of the finished value, and not more than the estimated cost of the completed physical improvements (excluding off-site utilities, streets, and organization or legal costs). For parts used as homes, limits are $8,100 per family unit, or $7,200 if a unit has fewer than four rooms. The Secretary may raise those per-unit limits by up to $900 in areas that need it. The borrower must sign the required agreement under the law. The lender (mortgagee) can get debentures and a certificate of claim under the same rules used for similar insured mortgages. Debentures will be dated from the default date and bear interest from that date. Other related rules about claims and property apply the same way. If an application for insurance under the older law was filed on or before March 1, 1950, and was not rejected or committed, a new application for the same property can get credit for fees already paid. The Secretary must give preference to insuring housing with lower rents.