§1750g — Title 12 Banks and Banking | U.S. Code

Summary

The Secretary may insure mortgages (including money advanced during construction) if they meet set rules. The owner/borrower must be approved by the Secretary. The loan can be no more than $5,000,000, no more than 90 percent of the Secretary’s estimate of the finished property’s value, and not more than the Secretary’s estimate of the cost of the completed physical improvements (not counting off-site utilities, streets, or organization and legal costs). For the housing part, the loan cannot exceed $8,100 per family unit, or $7,200 per unit if a unit has fewer than four rooms. The Secretary can raise those per-unit limits by up to $900 in areas with higher costs. The borrower must sign a required agreement under another part of the law. The Secretary can require the borrower to follow limits on rents, sales, charges, finances, and operations. To enforce this, the Secretary may buy up to $100 of stock or interest in the borrower from the General Insurance Fund; the borrower must repay that at par when the Secretary’s obligations end. Lenders may receive government debentures and a certificate of claim under the law, dated from the default date and bearing interest from then, and other related legal rules apply to these mortgages and any property the Secretary acquires. If an application for insurance was filed on or before March 1, 1950, and not decided, fees paid on that earlier application can be credited on reapplication. The Secretary must give preference to mortgages for lower-rent housing.

Title 12, §1750g

Banks and Banking — Source: USLM XML via OLRC

(a)In addition to mortgages insured under section 1750b of this title, the Secretary is authorized to insure mortgages as defined in section 1750 of this title (including advances on such mortgages during construction) which are eligible for insurance as hereinafter provided.

(b)To be eligible for insurance under this section a mortgage shall meet the following conditions:

(1)The mortgaged property shall be held by a mortgagor approved by the Secretary. The Secretary may, in his discretion, require such mortgagor to be regulated or restricted as to rents or sales, charges, capital structure, rate of return, and methods of operation. The Secretary may make such contracts with, and acquire for not to exceed $100 stock or interest in any such mortgagor, as the Secretary may deem necessary to render effective such restriction or regulation. Such stock or interest shall be paid for out of the General Insurance Fund, and shall be redeemed by the mortgagor at par upon the termination of all obligations of the Secretary under the insurance.

(2)The mortgage shall involve a principal obligation in an amount—

(A)not to exceed $5,000,000; and

(B)not to exceed 90 per centum of the amount which the Secretary estimates will be the value of the property or project when the proposed improvements are completed: Provided, That such mortgage shall not in any event exceed the amount which the Secretary estimates will be the cost of the completed physical improvements on the property or project exclusive of off-site public utilities and streets and organization and legal expenses; and

(C)not to exceed $8,100 per family unit (or $7,200 per family unit if the number of rooms in such property or project does not equal or exceed four per family unit) for such part of such property or project as may be attributable to dwelling use: Provided, That the Secretary may by regulation increase such dollar amount limitations by not exceeding $900 in any geographical area where he finds that cost levels so require.

(3)The mortgagor shall enter into the agreement required by section 1715r of this title.

(c)The mortgagee shall be entitled to receive debentures in connection with mortgages insured under this section in the amount and under the conditions specified in subsection (g) of section 1713 of this title, and the references in said subsection (g) to the cash adjustment provided for in subsection (j) of section 1713 and to the certificate of claim provided for in subsection (h) of section 1713 shall be deemed to refer respectively to the cash adjustment provided for in subsection (c) of section 1750c of this title and to the certificate of claim provided for in subsection (d) of this section.

(d)The certificate of claim issued by the Secretary to any mortgagee under this section shall be for an amount determined in accordance with, and shall contain provisions and shall be paid in accordance with, the provisions of section 1713(h) of this title.

(e)Debentures issued under this section shall be issued in accordance with the provisions of section 1750c(c) and (d) of this title except that such debentures shall be dated as of the date of default as determined in subsection (c) of this section, and shall bear interest from such date.

(f)The provisions of section 1713(k) and (l) of this title shall be applicable to mortgages insured under this section and to property acquired by the Secretary hereunder, except that, as applied to such mortgages and property, the reference therein to subsection (g) shall be construed to refer to subsection (c) of this section.

(g)In any case where an application for insurance under section 1743 of this title was received by the Secretary of Housing and Urban Development on or before March 1, 1950, and has not been rejected or committed upon, the mortgagee upon reapplication for insurance of a mortgage under this section with respect to the same property shall receive credit for any application fees paid in connection with the prior application: Provided, That this subsection shall not constitute a waiver of any requirements otherwise applicable to the insurance of mortgages under this section.

(h)The Secretary shall grant preference to applications for insurance under this subchapter to mortgages covering housing of lower rents.

Notes & Related Subsidiaries

Editorial Notes

References in Text

The General Insurance Fund, referred to in text, was established by section 1735c of this title.

Amendments

1967—Pub. L. 90–19, § 1(a)(3), substituted “Secretary” for “Commissioner” wherever appearing in subsecs. (a), (b)(1), (2)(B), (C), last par. following (C), (d), (f), and (h). Subsec. (g). Pub. L. 90–19, § 1(a)(2), substituted “Secretary of Housing and Urban Development” for “Federal Housing Commissioner”. 1965—Subsec. (b)(1). Pub. L. 89–117, § 1108(z)(1), substituted “General Insurance Fund” for “National Defense Housing Insurance Fund”. Subsec. (d). Pub. L. 89–117, § 1108(z)(2), struck out provision that reference in section 1713(h) of this title to “the Housing Insurance Fund” shall be deemed for the purposes of this section to be a reference to the National Defense Housing Insurance Fund. Subsec. (f). Pub. L. 89–117, § 1108(z)(3), struck out provision that references in subsections (k) and (l) of section 1713 of this title “Housing Fund” shall be construed to refer to the “National Defense Housing Insurance Fund”. 1954—Subsec. (b)(3). Act Aug. 2, 1954, substituted requirement that mortgagor shall enter into the agreement required by section 1715r of this title for former provisions relating to certification of builders’ costs, such certifications now being prescribed in said section 1715r. 1953—Subsec. (b). Act June 30, 1953, in paragraph commencing “The mortgage shall provide”, substituted “4½ per centum” for “4 per centum”.

§1750g Insurance of Additional Mortgages