§1750g Insurance of Additional Mortgages

Summary

The Secretary may insure certain additional mortgages, including construction advances, if they meet set rules. The borrower must be approved by the Secretary and may be required to follow limits on rents, sales, charges, capital, returns, and operations. The Secretary can take up to $100 of stock or interest in the borrower to make those limits work. Loans cannot exceed $5,000,000, cannot be more than 90% of the Secretary’s estimate of the finished value, and cannot be larger than the estimated cost of the finished physical improvements (excluding off-site utilities, streets, and organization or legal costs). For housing parts used as homes, limits are $8,100 per family unit, or $7,200 if rooms per unit are fewer than four; the Secretary may raise these per-unit amounts by up to $900 where costs require. The borrower must sign the agreement required by section 1715r. Loans must amortize by regular payments in a term the Secretary sets and carry interest no higher than 4½% per year. The Secretary may allow pieces of the property to be released from the mortgage lien under conditions he sets. If the borrower defaults, the lender can receive government debentures and a certificate of claim under the related rules in sections 1713 and 1750c; debentures are dated and bear interest from the default date. Other provisions of section 1713 (subsections (k) and (l)) apply to these mortgages and to any property the Secretary acquires, with a cross-reference change to this section. If an application under section 1743 was received on or before March 1, 1950 and was not rejected or committed, a reapplication for the same property gets credit for fees already paid, though other requirements still apply. The Secretary must give preference to mortgages for lower-rent housing.