under a mortgage having a shorter amortization period, and (iii) 30 years in the case of any other family where the mortgage is not approved for insurance prior to construction: Provided, That no mortgage insured under subsection (d) (2) shall have a maturity exceeding three-quarters of the Secretary's estimate of the remaining economic life of the building improvements.

(e) (1) A mortgagor which may be approved by the Secretary as provided in subsection (d) (3) includes a mortgagor which, as a condition of obtaining insurance of the mortgage and prior to the submission of its application for such insurance, has entered into an agreement (in form and substance satisfactory to the Secretary) with a private nonprofit corporation eligible for an insured mortgage under the provisions of subsection (d) (3), that the mortgagor will sell the project when it is completed to the corporation at the actual cost of the project, as certified pursuant to section 227 of this Act. The mortgagor to whom the property is sold shall be regulated or supervised by the Secretary as provided in subsection (d)(3) to effectuate its purposes.

(2) The Secretary may at any time, under such terms and conditions as he may prescribe, consent to the release of the mortgagor from his liability under the mortgage or the credit instrument secured thereby, or consent to the release of parts of the mortgaged property from the lien of the mortgage.

(f) The property or project shall comply with such standards and conditions as the Secretary may prescribe to establish the acceptability of such property for mortgage insurance and may include such commercial and community facilities as the Secretary deems adequate to serve the occupants: Provided, That in the case of any such property or project located in an urban renewal area, the provisions of section 220(d) (3) (B) (iv) shall apply with respect to the nondwelling facilities which may be included in the mortgage 3: Provided further, That in the case of a mortgage which bears interest at the belowmarket interest rate prescribed in the proviso of subsection (d) (5), the provisions of section 220 (d) (3) (B) (iv) shall only apply if the mortgagor waives the right to receive dividends on its equity investment in the portion thereof devoted to commercial facilities.

A property or project covered by a mortage insured under the provisions of subsection (d) (3) or (d) (4) shall include five or more family units: Provided, That such units, in the case of a project designed primarily for occupancy by displaced, elderly, or handicapped families, need not, with the approval of the Secretary, contain kitchen facilities, and such projects may include central dining and other shared facilities. The Secretary is authorized to adopt such procedures and requirements as he determines are desirable to assure that the dwelling accommodations provided under this section are

1 Sec. 114(b), Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 769, 778, added paragraph (1).

Sec. 308, Demonstration Cities and Metropolitan Development Act of 1966, Public Law 89-754, approved November 3, 1966, 80 Stat. 1255, 1268, added this proviso.

Sec. 306, Housing and Urban Development Act of 1968, Public Law 90-448, approved Acz. 1, 1968, 82 Stat. 476, 508, deleted "if the mortgagor waives the right to receive dividends on its equity investment in the portion thereof devoted to community and shopping facilities".

Sec. 306. Housing and Urban Development Act of 1968, Public Law 90-448, approved Aug. 1, 1968, 82 Stat. 476, 508, inserted this proviso.

Sec. 101 (a) (12), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 152, inserted the remainder of this par. (f).

Sec. 115(a)(1). Housing and Urban Development Act of 1970, Public Law 91-609, approved December 31, 1970, 84 Stat. 1770, 1773, inserted this proviso.

available to displaced families.1 Notwithstanding any provision of this Act, the Secretary, in order to assist further the provision of housing for low and moderate income families, in his discretion and under such conditions as he may prescribe, may insure a mortgage which meets the requirements of subsection (d) (3) of this section as in effect after the date of enactment of the Housing Act of 1961, or 2 which meets the requirements of subsection (h), (i), or (j)3 with no premium charge, with a reduced premium charge, or with a premium charge for such period or periods during the time the insurance is in effect as the Secretary may determine, and there is hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, such amounts as may be necessary to reimburse the General Insurance Fund for any net losses in connection with such insurance. No mortgage shall be insured under this section after September 30, 1979, except pursuant to a commitment to insure before that date, or except a mortgage covering property which the Secretary finds will assist in the provision of housing for displaced families. Any person who is sixty-two years of age or over, or who is a handicapped person within the meaning of section 202 of the Housing Act of 1959, or who is a displaced person, shall be deemed to be a family. within the meaning of the terms "family" and "families" as those terms are used in this section. Low- and moderate-income persons who are less than 62 years of age shall be eligible for occupancy of dwelling units in a project financed with a mortgage insured under subsection (d) (3).7

In any case in which it is determined in accordance with regulations of the Secretary that facilities in existence or under construction on the date of enactment of the Housing and Urban Development Act of 1970 which could appropriately be used for classroom purposes

1 Sec. 4(a). Disaster Relief Act of 1966, Public Law 89-769, approved November 6, 1966, 80 Stat. 1316, 1317, substituted "displaced families" for "families displaced from urban renewal areas or as a result of governmental action".

2 Sec. 210(c). Demonstration Cities and Metropolitan Development Act of 1966, Publie Law 89-754, approved November 3, 1966, 80 Stat. 1255, 1270, added this clause.

3 Sec. 105(d). Housing and Urban Development Act of 1968, Public Law 90-448, approved Aug. 1, 1968, 82 Stat. 476, 490, inserted “(i) or (j)”.

Sec. 2(c) of Public Law 91-78, approved September 30, 1969, 83 Stat. 125, extended the expiration date for the insurance of mortgages under sec. 221 from October 1, 1969. to January 1, 1970, and sec. 101(c), Housing and Urban Development Act of 1969, Public Law 91-152, approved December 24, 1969, 83 Stat. 379, further extended such expiration date from January 1, 1970, to October 1, 1970. This expiration date was subsequently extended as follows: (1) To November 1, 1970, by sec. 1(e) of Public Law 91-132, approved October 2, 1970, 84 Stat. 886; (2) to December 1, 1970, by sec. 1(c) of Public Law 91-473, approved October 21, 1970, 84 Stat. 1064; (3) to January 1, 1971, by sec. 1(e) of Public Law 91-525, approved December 1, 1970, 84 Stat. 1384; (4) to October 1, 1972, by sec. 101 (c). Housing and Urban Development Act of 1970, Public Law 91-609. approved: (5) to June 30, 1973, by sec. 1(c) of Public Law 92-503, approved October 18, 1972, 86 Stat. 906; (6) to October 1, 1973, by sec. 1(c) of Public Law 93-85, approved August 10, 1973, 87 Stat. 220; (7) to October 1, 1974, by sec. 1(c) of Public Law 93-117, approved October 2, 1973. 87 Stat. 421; and (8) sec. 316(c) of Housing and Community Develop ment Act of 1974, 88 Stat. 633, approved August 22, 1974, substituted "June 30, 1977" for "October 1, 1974". Amended by Housing and Community Development Act of 1977, Public Law 95-128, approved October 12, 1977. (Public Law 95-60 approved June 30, 1977. had previously extended the date from June 30, 1977 to July 31, 1977, Public Law 95-80, approved July 31, 1977, had further extended the date from July 31, 1977 to September 30, 1977). This was further amended by section 301(c) of the Housing and Community Development Amendments of 1978, Public Law 95-557, 92 Stat. 2080, approved October 31. 1978.

5 Sec. 202. Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 769, 783, amended sec. 221(f) to include persons 62 years of age or over, and sec. 203(b), Housing Act of 1964, 78 Stat. 769. 784, further amended this section to include handicapped persons. Sec. 115(a) (2) (A), Housing and Urban Development Act of 1970. Public Law 91-609, approved December 31, 1970, 84 Stat. 1770, 1773, subsequently amended this section to include displaced persons.

Sec. 309. Demonstration Cities and Metropolitan Development Act of 1966, Public Law 89-754, approved November 3. 1966, 80 Stat. 1255, 1268, added this sentence.

7 Sec. 4 (a) of Public Law 94-173, 89 Stat. 1927, approved December 23, 1975, amended sec. 221(f) of the National Housing Act by deleting the words ", but not more than 10 per centum of the dwelling units in any such project shall be available for occupancy by such persons".

8 Sec. 114 (a), Housing and Urban Development Act of 1970, Public Law 91-609, approved December 31, 1970, 84 Stat. 1770, 1773, added this sentence.

are available in any such property or project and that public schools in the community are overcrowded due in part to the attendance at such schools of residents of the property or project, such facilities may be used for such purposes to the extent permitted in such regulations (without being subject to any of the requirements of the proviso in section 220 (d) (3) (B) (iv) except the requirement that the project be predominantly residential).

As1 used in this section the terms "displaced family", "displaced families", and "displaced person" shall mean a family or families, or a person, displaced from an urban renewal area, or as a result of governmental action, or as a result of a major disaster as determined by the President pursuant to the Disaster Relief Act of 1970.

(g) The mortgagee shall be entitled to receive the benefits of the insurance as hereinafter provided

(1) as to mortgages meeting the requirements of paragraph (2) of subsection (d) of this section, paragraph (5) of subsection (h) of this section, or paragraph (2) of subsection (i) of this section as provided in section 204 (a) of this Act with respect to mortgages insured under section 203, and the provisions of subsections (b), (c), (d), (e), (f), (g), (h), (j), and (k) of section 204 of this Act shall be applicable to such mortgages insured under this section, except that all references therein to the Mutual Mortgage Insurance Fund or the Fund shall be construed to refer to the General Insurance Fund and all references therein to section 203 shall be construed to refer to this section; or

(2) as to mortgages meeting the requirements of paragraph (3) or (4) of subsection (d) of this section, paragraph (1) of subsection (h) of this section, or paragraph (2) of subsection (j) of this section, as provided in section 207 (g) of this Act with respect to mortgages insured under said section 207, and the provisions of subsections (h), (i), (j), (k), and (1) of section 207 of this Act shall be applicable to such mortgages insured under this section;

or

(3) as to mortgages meeting the requirements of this section which are insured or initially endorsed for insurance on or after the date of enactment of the Housing Act of 1961, notwithstanding the provisions of paragraphs (1) and (2) of this subsection, the Secretary in his discretion, in accordance with such regulations as he may prescribe, may make payments pursuant to such paragraphs in cash or in debentures (as provided in the mortgage insurance contract), or may acquire a mortgage loan that is in default and the security therefor upon payment to the mortgagee in cash or in debentures (as provided in the mortgage insurance contract) of a total amount equal to the unpaid principal balance of the loan plus any accrued interest and any advances approved by the Secretary and made previously by the mortgagee under the provisions of the mortgage, and after the acquisition of any such mortgage by the Secretary the mortgagee shall have no

1 Sec. 115(a)(2) (B), Housing and Urban Development Act of 1970, Public Law 91-609, pproved December 31, 1970, 84 Stat. 1770, 1773, inserted the reference to displaced persons. The sentence was originally added by sec. 4(b), Disaster Relief Act of 1966, Public Law -769, approved November 6, 1966, 80 Stat. 1316, 1317. Sec. 602 (d) of Disaster Relief et of 1974. Public Law 93-288, 88 Stat. 143, approved May 22, 1974, substituted "the Disaster Relief Act of 1974" for "the Disaster Relief Act of 1970".

* Sec. 101 (a) (13), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 153, inserted par. (3).

June 30, 1961.

further rights, liabilities, or obligations with respect to the loan or the security for the loan. The appropriate provisions of sections 204 and 207 relating to the issuance of debentures shall apply with respect to debentures issued under this paragraph, and the appropriate provisions of sections 204 and 207 relating to the rights, liabilities, and obligations of a mortgagee shall apply with respect to the Secretary when he has acquired an insured mortgage under this paragraph, in accordance with and subject to regulations (modifying such provisions to the extent necessary to render their application for such purposes appropriate and effective) which shall be prescribed by the Secretary, except that as applied to mortgages so acquired (A) all references in section 204 to the Mutual Mortgage Insurance Fund or the fund shall be construed to refer to the General Insurance Fund, and (B) all references in section 204 to section 203 shall be construed to refer to this section. If1 the insurance is paid in cash, there shall be added to such payment an amount equivalent to the interest which the debentures would have earned, computed to a date to be established pursuant to regulations issued by the Secretary.

(4)2 In the event any mortgage insured under this section is not in default at the expiration of twenty years from the date the mortgage was endorsed for insurance, the mortgagee shall, with in a period thereafter to be determined by the Secretary: have the option to assign, transfer, and deliver to the Secre tary the original credit instrument and the mortgage secur ing the same and receive the benefits of the insurance as hereinafter provided in this paragraph, upon compliance with such requirements and conditions as to the validity of the mortgage as a first lien and such other matters as may be prescribed by the Secretary at the time the loan is endorsed for insurance. Upon such assignment, transfer, and delivery the obligation of the mortgagee to pay the premium charges for insurance shall cease and the Secretary shall, subject to the cash adjustment provided herein, issue to the mortgagee debentures having a total face value equal to the amount of the original principal obligation of the mortgage which was unpaid on the date of the assignment plus accrued interest to such date. Debentures issued pursuant to this paragraph shall be issued in the same manner and subject to the same terms and conditions as debentures issued under para graph (1) of this subsection, except that the debentures issued pursuant to this paragraph shall be dated as of the date the mort gage is assigned to the Secretary, shall mature ten years after such date, and shall bear interest from such date at the going Federal rate determined at the time of issuance. The term "go ing Federal rate" as used herein means the annual rate of interest which the Secretary of the Treasury shall specify as applicable to the six-month period (consisting of January through June of July through December) which includes the issuance date of such debentures, which applicable rate for each six-month period shall be determined by the Secretary of the Treasury by estimating the average yield to maturity, on the basis of daily closing market

1 This sentence added by sec. 105 (c) (2), Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 769, 772. Immediately prior to amendment by sec. 101 (a) (13), Housing Act of 1961, Public Law 87-70. approved June 30, 1961, 75 Stat. 149, 153, this paragraph was designated as

(3)".

bid quotations or prices during the month of May or the month of November, as the case may be, next preceding such six-month period, on all outstanding marketable obligations of the United States having a maturity date of eight to twelve years from the first day of such month of May or November (or, if no such obligations are outstanding, the obligation next shorter than eight years and the obligation next longer than twelve years, respectively, shall be used), and by adjusting such estimated average annual yield to the nearest one-eighth of 1 per centum. The Secretary shall have the same authority with respect to mortgages assigned to him under this paragraph as contained in section 207(k) and section 207 (1) as to mortgages insured by the Secretary and assigned to him under section 207 of this Act. (h) (1) In addition to mortgages insured under the other provisions of this section, the Secretary is authorized, upon application by the mortgagee, to insure under this subsection as hereinafter provided any mortgage (including advances under such mortgage during rehabilitation) which is executed by a nonprofit organization to finance the purchase and rehabilitation of deteriorating or substandard housing for subsequent resale to low-income home purchasers and, upon such terms and conditions as the Secretary may prescribe, to make commitments for the insurance of such mortgages prior to the date of their execution or disbursement thereon.

(2) To be eligible for insurance under paragraph (1) of this subsection, a mortgage shall

(A) be executed by a private nonprofit corporation or association, approved by the Secretary, for financing the purchase and rehabilitation (with the intention of subsequent resale) of property comprising one or more tracts or parcels, whether or not contiguous, upon which there is located deteriorating or substandard housing consisting of (i) four or more single-family dwellings of detached, semidetached, or row construction, or (ii) four or more one-family units in a structure or structures for which a plan of family unit ownership approved by the Secretary is established: (B) be secured by the property which is to be purchased and rehabilitated with the proceeds thereof;

(C) be in a principal amount not exceeding the appraised value of the property at the time of its purchase under the mortgage plus the estimated cost of the rehabilitation;

(D) bear interest (exclusive of premium charged for insurance and service charge, if any) at the rate in effect under the proviso in subsection (d) (5) at the time of execution;

(E) provide for complete amortization (subject to paragraph (5) (E)) by periodic payments within such term as the Secretary may prescribe; and

(F) provide for the release of individual single-family dwellings from the lien of the mortgage upon the sale of the rehabilitated dwellings in accordance with paragraph (5).

1 Sec. 310(a), Demonstration Citles and Metropolitan Development Act of 1966, Public Law 89-754, approved November 3, 1966, 80 Stat. 1255, 1268, added subsec. (h).

Sec. 316(a), Housing and Urban Development Act of 1968, Public Law 90-448, approved Angust 1, 1968, 82 Stat. 476, 512, amended paragraph (A) to decrease from 5 to 4 the minimum number of units in a project and to permit section 221 (h) insurance for housing consisting of units in a condominium structure.