ALLOCATION OF FUNDS SEC. 4. For the purposes of carrying out the provisions of this title and titles II and III [the Reconstruction Finance Corporation shall make available to the Administrator such funds as he may deem necessary, and the amount of notes, debentures, bonds, or other such obligations which the Corporation is authorized and empowered to have outstanding at any one time under existing law is hereby increased by an amount sufficient to provide such funds:1 Provided, That] the President, in his discretion, is authorized to provide such funds or any portion thereof by allotment to the Secretary from any funds that are available, or may hereafter be made available, to the President for emergency purposes. SEC. 5. Repealed.2 TAXATION SEC. 7. Nothing in this title shall be construed to exempt any real property acquired and held by the Secretary in connection with the payment of insurance heretofore or hereafter granted under this title. from taxation by any State or political subdivision thereof, to the same extent, according to its value, as other real property is taxed. INSURANCE OF MORTGAGES SEC. 8. (a) To assist in providing adequate housing for families of low and moderate income, particularly in suburban and outlying areas, this section is designed to supplement systems of mortgage insurance under other provisions of the National Housing Act by making feasible the insurance of mortgages covering properties in areas where it is not practicable to obtain conformity with many of the requirements essential to the insurance of mortgages on housing in built-up urban areas. The Secretary is authorized upon application by the mortgagee, to insure, as hereinafter provided, any mortgage (as defined in section 201 of this Act) offered to him which is eligible for insurance as hereinafter provided, and, upon such terms as the Secretary may prescribe, to make commitments for the insuring of such mortgages prior to the date of their execution or disburserent thereon: Provided, That the aggregate amount of principal obligations of all mortgages insured under this section and outstanding at any one time shall not exceed $100,000,000, except that with the proval of the President such aggregate amount may be increased at any time or times by additional amounts aggregating not more than $150,000,000 upon a determination by the President, taking into acCount the general effect of any such increase upon conditions in the building industry and upon the national economy, that such increase is in the public interest: And provided further,5 That no mortgage :So much of sec. 4 as relates to the Reconstruction Finance Corporation (text in ckets repealed by sec. 206 of Public Law 132, 80th Congress, approved June 30, 1947, Stat. 202. Repealed by sec. 802(b) of the Housing Act of 1954, Public Law 560, 83d Congress, Proved August 2, 1954, 68 Stat. 590, 643. Repealed by Public Law 111, 76th Congress, approved June 3, 1939, 53 Stat. 804. This proviso added by sec. 103 of the Housing Act of 1954. Public Law 560, 83d ConCress, approved August 2, 1954, 68 Stat. 590, 591. See sec. 203 (h) and 203 (1) of the National Housing Act added by the Housing Act of 1954. shall be insured under this section after the effective date of the Hou ing Act of 1954, except pursuant to a commitment to insure issue on or before such date. (b) To be eligible for insurance under this section, a mortgag shall (1) have been made to, and be held by, a mortgagee approve by the Secretary as responsible and able to service the mortgag properly; (2) 1 involve a principal obligation (including such initi service charges, appraisal, inspection, and other fees as the Se retary shall approve) in an amount not to exceed $5,700, an not to exceed 95 per centum of the appraised value, as of the da the mortgage is accepted for insurance, of a property upon whic there is located a dwelling designed principally for a single-famil resident, and which is approved for mortgage insurance prior the beginning of construction: Provided, That the mortgage shall be the owner and occupant 2 of the property at the time o insurance and shall have paid on account of the property at leas 5 per centum of the Secretary's estimate of the cost of acqu sition in cash or its equivalent, or shall be the builder constructin the dwelling, in which case the principal obligation shall no exceed 85 per centum of the appraised value of the property o $5,100: Provided further, That the Secretary finds that the pro ect with respect to which the mortgage is executed is an a ceptable risk, giving consideration to the need for providin adequate housing for families of low and moderate income par ticularly in suburban and outlying areas: And provided further That, where the mortgagor is the owner and occupant of the prop erty and establishes (to the satisfaction of the Secretary) tha his home, which he occupied as an owner or as a tenant, was de stroyed or damaged to such an extent that reconstruction is re quired as a result of a flood, fire, hurricane, earthquake, stori or other catastrophe, which the President, pursuant to section 102 (2) and 301 of the Disaster Relief Act of 1974 has deter mined to be a major disaster, such maximum dollar limitation ma be increased by the Secretary from $5,700 to $7,000, and the per centage limitation may be increased by the Secretary from 9 per centum to 100 per centum of the appraised value; (3) have a maturity satisfactory to the Secretary but not t exceed thirty years from the date of insurance of the mortgage (4) contain complete amortization provisions satisfactory t the Secretary requiring periodic payments by the mortgago not in excess of his reasonable ability to pay as determined by the Secretary; (5) bear interest (exclusive of premium charges for insuranc and service charges, if any) at not to exceed 5 per centum pe 1 Par. (2) amended to read as set forth in the text by sec. 2 of the Housing Amend ments of 1953, Public Law 94, 83d Congress, approved June 30, 1953, 67 Stat. 121. 2 See sec. 216 of the National Housing Act. 8 Sec. 301(b), Disaster Relief Act of 1970, Public Law 91-606, approved December 31 1970, 84 Stat. 1744, 1758, deleted at this point the reference to Federal disaster assistan under Public Law 875, Eighty-first Congress, and substituted the reference to sec. 102(1) of the Disaster Relief Act of 1970. Sec. 602(b) of Disaster Relief Act of 1974, Public La 93-288, 88 Stat. 143, approved May 22, 1974, substituted "sections 102 (2) and 301 of th Disaster Relief Act of 1974" for "section 102 (1) of the Disaster Relief Act of 1970". 4 See sec. 203 (h) of the National Housing Act as added by the Housing Act of 1954 Public Law 560, 83d Congress, 68 Stat. 590, 592. annum on the amount of the principal obligation outstanding at any time; (6) provide, in a manner satisfactory to the Secretary, for the application of the mortgagor's periodic payments (exclusive of the amount allocated to interest and to the premium charge which is required for mortgage insurance as hereinafter provided and to the service charge, if any) to amortization of the principal of the mortgage; and (7) contain such terms and provisions with respect to insurance, repairs, alterations, payment of taxes, service charges, default reserves, delinquency charges, foreclosure proceedings, anticipation of maturity, and other matters as the Secretary may in his discretion prescribe. (c) The Secretary is authorized to fix a premium charge for the insurance of mortgages under this section, but in the case of any mortgage, such charge shall not be less than an amount equivalent to ne-half of 1 per centum per annum nor more than an amount equivalent to 1 per centum per annum of the amount of the principal obligation of the mortgage outstanding at any time, without taking into ecount delinquent payments or prepayments. Such premium charges hall be payable by the mortgagee, either in cash or in debentures ssued by the Secretary under this section at par plus accrued interest, in such manner as may be prescribed by the Secretary: Provided, That the Secretary may require the payment of one or more such premium charges at the time the mortgage is insured, at such discount rate as he may prescribe not in excess of the interest rate specified in the mortgage. If the Secretary finds, upon the presentation of a mortgage for insurance and the tender of the initial premium harge or charges so required, that the mortgage complies with the provisions of this section, such mortgage may be accepted for insurance y endorsement or otherwise as the Secretary may prescribe. In the went that the principal obligation of any mortgage accepted for surance under this section is paid in full prior to the maturity date, he Secretary is further authorized, in his discretion, to require the ayment by the mortgagee of an adjusted premium charge in such mount as the Secretary determines to be equitable, but not in exess of the aggregate amount of the premium charges that the mortragee would otherwise have been required to pay if the mortgage had ontinued to be insured until such maturity date; and in the event. hat the principal obligation is paid in full as herein set forth, the Secretary is authorized to refund to the mortgagee for the account of the mortgagor all, or such portion as he shall determine to be quitable, of the current unearned premium charges theretofore paid. (d) The Secretary may, at any time under such terms and condiions as he may prescribe, consent to the release of the mortgagor from us liability under the mortgage or the credit instrument secured hereby, or consent to the release of parts of the mortgaged property from the lien of the mortgage. (e) Any contract of insurance executed by the Secretary under his section shall be conclusive evidence of the eligibility of the mortrage for insurance, and the validity of any contract of insurance so xecuted shall be incontestable in the hands of an approved mortgagee From the date of the execution of such contract, except for fraud or misrepresentation on the part of such approved mortgagee. (f) In any case in which the mortgagee under a mortgage insure under this section shall have foreclosed and taken possession of the mortgaged property in accordance with the regulations of, and withi a period to be determined by, the Secretary, or shall, with the con sent of the Secretary, have otherwise acquired such property fro the mortgagor after default, the mortgagee shall be entitled to receiv the benefits of the insurance as provided in section 204 (a) of this A with respect to mortgages insured under section 203(b)(2) (D) ‹ this Act. 1 (g) Subsections (c), (d), (e), (f), (g), (h), (j), and (k) 1 of se tion 204 of this Act shall be applicable to mortgages insured under th section except that all references therein to the Mutual Mortgage I surance Fund or the Fund shall be construed to refer to the Gener Insurance Fund, and all references therein to section 203 shall be co strued to refer to this section: Provided, That debentures issued i connection with mortgages insured under this section 8 shall have th same tax exemption as debentures issued in connection with mortgag insured under section 203 of this Act. SEC. 9. The provisions of sections 2 and 8 shall be applicable in th several States and Puerto Rico, the District of Columbia, Guam, the Trust Territory of the Pacific Islands, and the Virgin Islands. TITLE II-MORTGAGE INSURANCE DEFINITIONS SEC. 201. As used in section 203 of this title (a) The term "mortgage" means a first mortgage on real estate, i fee simple, or on a leasehold (1) under a lease for not less than ninet nine years which is renewable or (2) under a lease having a peric of not less than fifty years to run from the date the mortgage w executed; and the term "first mortgage" means such classes of fir liens as are commonly given to secure advances on, or the unpaid pu chase price of, real estate, under the laws of the State in which tl real estate is located, together with the credit instrument, if an secured thereby. (b) The term "mortgagee" includes the original lender under mortgage, and his successors and assigns approved by the Secretary and the term "mortgagor" includes the original borrower under mortgage and his successors and assigns. (c) The term "maturity date" means the date on which the mor gage indebtedness would be extinguished if paid in accordance wit periodic payments provided for in the mortgage. (d) The term "State" includes the several States and Puerto Ric the District of Columbia, Guam, the Trust Territory of the Pacif Islands, and the Virgin Islands. MUTUAL MORTGAGE INSURANCE FUND SEC. 202. There is hereby created a Mutual Mortgage Insuran Fund (hereinafter referred to as the "Fund"), which shall be used t the Secretary as a revolving fund for carrying out the provision of this title with respect to mortgages insured under section 203 { hereinafter provided, and there shall be allocated immediately to suc 1 Sec. 116(a), Housing Act of 1959. Public Law 86-372, approved September 23, 193 78 Stat. 654. 664, inserted "(j)" and "(k)". 2 Sec. 403 (c). Housing and Urban Development Act of 1969, Public Law 91-152, andron December 24, 1969, 83 Stat. 379, 395, inserted "the Trust Territory of the Pacific Islands. Fund the sum of $10,000,000 out of funds made available to the Secretary for the purposes of this title. INSURANCE OF MORTGAGES SEC. 203. (a) The Secretary is authorized, upon application by the mortgagee, to insure as hereinafter provided any mortgage offered to him which is eligible for insurance as hereinafter provided, and, upon such terms as the Secretary may prescribe, to make commitments for the insuring of such mortgages prior to the date of their execution or disbursement thereon.1 (b) To be eligible for insurance under this section a mortgage shall (1) Have been made to, and be held by, a mortgagee approved by the Secretary as responsible and able to service the mortgage properly. (2) Involve a principal obligation (including such initial service charges, appraisal, inspection, and other fees as the Secretary shall approve) in an amount not to exceed $60,000 2 in the case of property upon which there is located a dwelling designed principally for a onefamily residence; or $65,000 in the case of a two-family residence (whether or not such one- or two-family residence may be intended to be rented temporarily for school purposes); or $65,000 2 in the case of a three-family residence; or $75,000 in the case of a four-family residence; and (except as provided in the next to the last sentence. of this paragraph) not to exceed an amount equal to the sum of (i) 97 per centum of $25,000 of the appraised value of the property, as of the date the mortgage is accepted for insurance, and (ii) 595 per centum of such value in excess of $25,000. If the mortgagor is a veteran and the mortgage to be insured under this section covers property upon 3 6 1 Sec. 604 (b), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 177, deleted the remainder of this sentence which read: "Provided, That the aggregate amount of principal obligations of all mortgages insured under this title and outstanding at any one time shall not exceed $7,750,000,000 except that with the approval of the President such aggregate amount may be increased at any time or times by additional amounts aggregating not more than $1.250,000,000 upon a determination by the President. taking into account the general effect of any such increase upon conditions in the building industry and upon the national economy, that such increase is in the public interest." Sec. 113(a)(1), Housing and Urban Development Act of 1969, Public Law 91-152, approved December 24, 1969, 83 Stat. 379, 383, increased the dollar limits on one-family bomes from "$30.000" to "$33,000". on two- and three-family homes from "$32.500" to $35.750", and on four-family homes from "$37.500" to "$41.250". Sec. 302(a) of the Housing and Community Development Act of 1974, Public Law 93-383, 88 Stat. 633, approved August 22. 1974. substituted "$45,000" for "$33,000". "$48.750" for "$35.750" and "$56.000" for "$41,250", each place it appears. Housing and Community Development Act of 1977. Public Law 95-128 approved October 12, 1977 substituted "$60,000" for $45,000", "$65,000" for "$48,750", and "$75,000" for "$56,000". Sec. 206(a)(1). Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965. 79 Stat. 451, 466, inserted this parenthetical phrase. Housing and Community Development Act of 1977, Public Law 95-128, approved October 12, 1977, deleted following "per centum" the following language "(but in any case where the dwelling is not approved for mortgage insurance prior to the beginning of construction unless the construction of the dwelling was completed more than 1 year prior to the application for mortgage insurance or the dwelling was approved for guaranty, insurance, or direct loan under chapter 37 of title 38, United States Code, prior to the beginning of construction, 90 per centum)". Housing and Community Development Act of 1977, Public Law 95-128, approved October 12. 1977, deleted clause (ii) and (iii) which read "ii) 90 per centum of such value in excess of $25,000 but not in excess of $35,000 and (iii) 80 per centum of such value in excess of $35,000", and inserted in lieu thereof the language as set forth in the text. Sec. 301, Demonstration Cities and Metropolitan Development Act of 1966, Public Law 89-754, approved November 3, 1966, 80 Stat. 1255, 1266, deleted at this point the words "who has not received any direct, guaranteed, or insured loan under laws administered by the Veterans' Administration for the purchase, construction, or repair of a dwelling (ineluding a farm dwelling) which was to be owned and occupied by him as his home, with the exception of this deletion, this sentence and the following sentence were added by Bec. 206(a) (2). Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 466. |