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vide for complete amortization by periodic payments within such terms as the Secretary may prescribe but not to exceed forty years from the beginning of amortization of the mortgage, and shall bear interest (exclusive of premium charges for insurance) at not to exceed 54 per centum per annum on the amount of the principal obligation outstand ing at any time or not to exceed such per centum per annum not in excess of 6 per centum as the Secretary finds necessary to meet the mortgage market. The Secretary may consent to the release of a part or parts of the mortgaged property from the lien of the blanket mortgage upon such terms and conditions as he may prescribe and the blanket mortgage may provide for such release. The project covered by the blanket mortgage may include four 2 or more family units and such commercial and community facilities as the Secretary deems ade quate to serve the occupants.

(g) Any mortgagee under a mortgage insured under subsection (c) of this section is entitled to receive the benefits of the insurance as provided in section 204 (a) of this Act with respect to mortgages in sured under section 203, and the provisions of subsections (b), (c), (d) (e), (f), (g), (h), (j), and (k) of section 204 shall be applicable to the mortgages insured under subsection (c) of this section, except that (1) all references in section 204 of the Mutual Mortgage Insurance Fund or the Fund shall be construed to refer to the General Insurance Fund, (2) all references therein to section 203 shall be construed to refer to subsection (c) of this section, and (3) the excess remaining, referred to in section 204 (f) (1), shall be retained by the Secretary and credited to the General Insurance Fund.

(h) The provisions of subsections (d), (e), (g), (h), (i), (j), (k); (1), and (n) of section 207 shall be applicable to mortgages insured under subsection (d) of this section.

(i) The provisions of sections 225 and 230 shall be applicable to the mortgages insured under subsection (c) of this section.

HOMEOWNERSHIP FOR LOWER INCOME FAMILIES

SEC. 235.3 (a) (1)* For the purpose of assisting lower-income fam ilies in acquiring homeownership or in acquiring membership in a co operative association operating a housing project, the Secretary is au thorized to make, and to contract to make, periodic assistance payments on behalf of such homeowners and cooperative members. The assist ance shall be accomplished through payments to mortgagees holding mortgages meeting the special requirements specified in this section of which mortgages are assisted under a State or local program provid ing assistance through loans, loan insurance or tax abatement.

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(2) (A) Notwithstanding any other provision of this section, the

1 Sec. 3(c), Public Law 90-301, approved May 7, 1968, 82 Stat. 113, 114, substituted the 6 percent maximum for the 54 percent maximum. See also, sec. 3(a), Public Law 90-301, immediately following the National Housing Act in this compilation, which permit the Secretary, until October 1, 1969, to set a higher interest rate.

2 Section 303 (c), Housing and Urban Development Act of 1968, Public Law 90-448 approved August 1, 1968, 82 Stat. 476, 507, substituted "four" for "five."

3 Sec. 101 (a), Housing and Urban Development Act of 1968, Public Law 90-448, ap proved August 1, 1968, 82 Stat. 476, 477, added sec. 235.

Sec. 3(f) (1) (A) of the Housing Authorization Act of 1976, Public Law 94-375, ap proved August 3, 1976, 90 Stat. 1067, amended section 235 (a) of the National Housing Act by inserting "(1)" immediately after "(a)"; sec. 3(f) (1) (B) of this Act also amended section 235 by adding new paragraphs “(2)(A) and (B)".

5 Sec. 211(b) of Housing and Community Development Act of 1974, Public Law 93-383, 88 Stat. 633, approved August 22, 1974, amended sec. 235 (a) by adding at the end thereof "or which mortgages are assisted under a State or local program providing assistance through loans, loan insurance or tax abatement".

Secretary is authorized to make periodic assistance payments under this section on behalf of families whose incomes do not exceed the maximum income limits prescribed pursuant to subsection (h) (2) of this section for the purpose of assisting such families in acquiring ownership of a mobile home consisting of two or more modules and a lot on which such mobile home is or will be situated, except that periodic assistance payments pursuant to this paragraph shall not be made with respect to more than 20 per centum of the total number of units with respect to which assistance is approved under this section after January 1, 1976. Assistance payments under this section pursuant to this paragraph shall be accomplished through payments on behalf of an owner of lower income of a mobile home as described in the preceding sentence to the financial institution which makes the loan, advance of credit, or purchase of an obligation representing the loan or advance of credit to finance the purchase of the mobile home and the lot on which such mobile home is or will be situated, but only if insurance under section 2 of this Act covering such loan, advance of credit, or obligation has been granted to such institution.

(B) Notwithstanding the provisions of subsection (c) of this section, assistance payments provided pursuant to this paragraph shall be in an amount not exceeding the lesser of

(i) the balance of the monthly payment for principal, interest, real and personal property taxes, insurance, and insurance premium chargeable under section 2 of this Act due under the loan or advance of credit remaining unpaid after applying 20 per centum of the mobile homeowner's income; or

(ii) the difference between the amount of the monthly payment for principal, interest, and insurance premium chargeable under section 2 of this Act which the mobile homeowner is obligated to pay under the loan or advance of credit and the monthly payment of principal and interest which the owner would be obligated to pay if the loan or advance of credit were to bear interest at a rate derived by subtracting from the interest rate. applicable to such loan or advance of credit the interest rate differential between the maximum interest rate plus mortgage insurance premium applicable to mortgages insured under subsection (i) of this section at the time such loan or advance of credit is made and the interest rate which such mortgages are presumed under regulations prescribed by the Secretary, to bear for purposes of subsection (c) (2) of this section.

(b) To qualify for assistance payments, the homeowner or the cooperative member shall be of lower income and satisfy eligibility requirements prescribed by the Secretary, and—

(1) the homeowner shall be a mortgagor under a mortgage which meets the requirements of and is insured under subsection (i) or (j) (4) 1 of this section: Provided, That a mortgage meeting the requirements of subsection (i) (3) (A) of this section but insured under section 237 may qualify for assistance payments if such mortgage was executed by a mortgagor who is determined not to be an acceptable credit risk for mortgage insurance purposes (but otherwise eligible) under subsection (j) (4) of this

1 Sec. 101 (c) (4). Housing and Urban Development Act of 1968. Public Law 90-448. approved August 1, 1968, 82 Stat. 476, 484, provided that the purchase of any individual dwelling, sold by a nonprofit organization pursuant to the provisions of section 221 (h) (5) after the date of enactment of sec. 235, may be financed with a mortgage insured under the provisions of sec. 235 (j) (4), but the mortgage shall bear interest at the rate provided in sec. 235 (j) (2) (C).

section or under section 221 (d) (2) or 234 (c) and accepted as a reasonably satisfactory credit risk under section 237; or

(2) the cooperative association of which the family is a member shall operate (A) a housing project the construction or substantial rehabilitation of which has been financed with a mortgage insured under section 213 or section 221 (d) (3)1 and which has been completed within two years prior to the filing of the application for as sistance payments and the dwelling unit has had no previous occupant other than the family: Provided 2 That if any cooperative member who has received assistance payments transfers his mem bership and occupancy rights to another person who satisfies the eligibility requirements prescribed by the Secretary and under takes the obligation to pay occupancy charges, the new cooperative member may qualify for assistance payments upon the filing of an application with respect to the dwelling unit involved to be oc cupied by him; or (B) a housing project which is financed under a State or local program providing assistance through loans, loan insurance, or tax abatements, and which prior to completion of construction or rehabilitation is approved for receiving the benefits of this section: Provided further, That assistance payments may be made with respect to a dwelling unit in an existing cooperative project which meets such standards as the Secretary may prescribe. if the family qualifies as a displaced family as defined in section 221 (f), or a family which includes five or more minor persons, or a family occupying low-rent public housing: Provided further. That the amount of the mortgage attributable to the dwelling unit shall involve a principal obligation not in excess of $32,000 ($38,000 in any geographical area where the Secretary authorizes an increase on the basis of a finding that cost levels so require). except that with respect to any family with five or more persons the foregoing limits shall be $38,000 and $44,000, respectively.* (c) The assistance payments to a mortgagee by the Secretary on behalf of a mortgagor shall be made during such time as the mortgagor shall continue to occupy the property which secures the mortgage Provided, That assistance payments may be made on behalf of a homeowner who assumes a mortgage insured under subsection (i) or (j) (4) with respect to which assistance payments have been made on behalf of the previous owner, if the homeowner is approved by the

1 Housing and Community Development Act of 1977, Public Law 95-128, approved October 12, 1977, inserted "or section 221 (d) (3).

2 Sec. 106(b), Housing and Urban Development Act of 1969, Public Law 91-152, ap proved December 24, 1969, 83 Stat. 379. 381, amended this proviso to make all subsequent purchasers of cooperative units in sec. 235 projects eligible for homeownership assistance. payments, if otherwise qualified. Immediately prior to this amendment, payments were authorized only for the initial two purchasers of a sec. 235 cooperative unit.

3 Sec. 107, Housing and Urban Development Act of 1970, Public Law 91-609, approved December 31, 1970, 84 Stat. 1770, 1771, inserted clause (B).

Sec. 211(e)(1) of Housing and Community Development Act of 1974, Public Law 93-383. 88 Stat. 633, approved August 22. 1974, substituted "$21,600" for "$18.000" "$25.200" for "$21.000", "$25,200" for "$21,000" and "$28.800" for "$24,000". Prior t enactment of Public Law 93-383, sec. 113(j), Housing and Urban Development Act of 1969. Public Law 91-152, approved December 24, 1969. 83 Stat. 379, 385, substituted "18.000" for "$15,000", $21.000" for "$17.500", and "$24.000" for "$20,000", Sec. 3(b) of the Housing Authorization Act of 1976, Public Law 94-375, approved August 3, 1976 90 Stat. 1067, amended the last proviso section 235 (b) (2) of the National Housing Act by striking out "$21.600", "$25,200”, “$25,200", and "$28.800" and inserted in lieu thereof $25.000", $29,000", $29,000", and $33.000", respectively. Housing and Com munity Development Act of 1977, Public Law 95-128, approved October 12, 1977, sub stituted "$32.000" for "$25,000", "$38.000" for "$29,000" and "$44,000" for "$33.000" 5 Sec. 106(a). Housing and Urban Development Act of 1969, Public Law 91-152 ap proved December 24, 1969, 83 Stat. 379, 381, amended this subsection (c) to authorize homeownership assistance payments for home purchasers, otherwise eligible for such assistance, who assume mortgages insured under section 235 (i) (one and two-family dwellings and condominium units for lower-income families).

Secretary as eligible for receiving such assistance: Provided further,1 That the Secretary is authorized to continue making such assistance payments where the mortgage has been assigned to the Secretary. The payments shall be in an amount not exceeding the lesser of(1) the balance of the monthly payment for principal, interest, taxes, insurance, and mortgage insurance premium due under the mortgage remaining unpaid after applying 20 per centum of the mortgagor's income; or

(2) the difference between the amount of the monthly payment for principal, interest, and mortgage insurance premium which the mortgagor is obligated to pay under the mortgage and the monthly payment for principal and interest which the mortgagor would be obligated to pay if the mortgage were to bear interest at the rate of 1 per centum per annum.

(d) Assistance payments to a mortgagee by the Secretary on behalf of a family holding membership in a cooperative association operating a housing project shall be made only during such time as the family is an occupant of such project and shall be in amounts computed on the basis of the formula set forth in subsection (c) applying the cooperative member's proportionate share of the obligations under the project mortgage to the items specified in the formula.

(e) The Secretary may include in the payment to the mortgagee such amount, in addition to the amount computed under subsection (a) (2) (B), (c), (d), or (j) (7), as he deems appropriate to reimburse the mortgagee for its expenses in handling the mortgage.

(f) Procedures shall be adopted by the Secretary for recertifications of the mortgagor's (or cooperative member's) income at intervals of two years (or at shorter intervals where the Secretary deems it desirable) for the purpose of adjusting the amount of such assistance payments within the limits of the formula described in subsection (c). (g) The Secretary shall prescribe such regulations as he deems necessary to assure that the sales price of, or other consideration paid in connection with, the purchase by a homeowner of the property with respect to which assistance payments are to be made is not increased above the appraised value on which the maximum mortgage which the Secretary will insure is computed.

(h) (1) There are authorized to be appropriated such sums as may be necessary to carry out the provisions of this section, including such sums as may be necessary to make the assistance payments under contracts entered into under this section. The aggregate amount of outstanding 3 contracts to make such payments shall not exceed amounts approved in appropriation Acts, and payments pursuant to such con

Sec. 418 (a), Housing and Urban Development Act of 1969. Public Law 91-152, approved December 24, 1969, 83 Stat. 379, 402, inserted this proviso. Sec. 3(f) (2) of the Housing Authorization Act of 1976, Public Law 94-375, approved August 3, 1976, 90 Stat. 1067, amended section 235 (d) of the National Housing Act by Inserting immediately before "(c)" the following: "(a) (2) (B)".

Sec. 102(a) (1), Housing and Urban Development Act of 1970, Public Law 91-609, approved December 31, 1970, 84 Stat. 1770, inserted "outstanding".

The Supplemental Appropriation Act, 1969, Public Law 90-608, approved October 21, 1969, 82 Stat. 1190, 1193, provided "That the total payments that may be required in any fiscal year by all contracts entered into under section 235 shall not exceed $25,000,000". The Second Supplemental Appropriation Act, 1969, Public Law 91-47, approved July 22, 1969, 83 Stat. 49, 53, provided that the limitation on total payments that may be required in any fiscal year by all contracts entered into under section 235 of the National Housing Act, as amended*** is increased by $45,000,000 ***.”

The Independent Offices and Department of Housing and Urban Development Appropriation Act, 1970, Public Law 91-126, approved November 26, 1969, 83 Stat. 221, 238, increased this limitation by $90.000.000.

The Second Supplemental Appropriation Act, 1970, Public Law 91-305, approved July 6.1970, 84 Stat. 376. 379, increased this limitation by $35,000,000, and the Independent Offices and Department of Housing and Urban Development Appropriation Act, 1971, Public Law 91-556, approved December 17, 1970, 84 Stat. 1442, 1458, further increased this limitation by $130,000,000.

tracts shall not exceed $75,000,000 per annum prior to July 1, 1969, which maximum dollar amount shall be increased by $125,000,0001 on July 1, 1969, by $150,000,000 on July 1, 1970, by $200,000,000 on July 1, 1971, and by such sums as may be approved in appropriation Acts after June 30, 1974, and prior to July 1, 1976.2 Upon the expiration of one year following the date of enactment of the Housing and Community Development Act of 1974, the Secretary shall not enter into new con tracts for assistance payments under this section utilizing authority ap proved in appropriation Acts prior to July 1, 1974.3

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(2) Assistance payments under this section may be made only with respect to a family whose income at the time of initial occupancy does not exceed 95 per centum of the median income for the area, as determined by the Secretary with adjustments for smaller and larger families, except that the Secretary may establish income ceilings higher or lower than 95 per centum of the median for the area on the basis of his findings that such variations are necessary because of prevailing levels of construction costs, unusually high or low median family incomes, or other factors."

(3) Notwithstanding the provisions of subsections (b) (2) and (i) (3) (A) with respect to the prior construction or rehabilitation of a dwelling, or of the project in which there is a dwelling unit, for which assistance payments may be made, and notwithstanding the provisions of subsection (j) (1) authorizing the purchase of housing which is neither deteriorating nor substandard, not more than

(A) 25 per centum of the total amount of contracts for assistance payments authorized by appropriation Acts to be made prior to July 1, 1969, and

(B) 30 per centum of the total additional amount of contracts for assistance payment authorized by appropriations Acts to be made on or after July 1, 1969."

may be made with respect to existing dwellings, or dwelling units in existing projects.

(4) At least 10 per centum of the total amount of contracts for assistance payments authorized by appropriation Acts to be made after June 30, 1971, shall be available for use only with respect to

1 Sec. 107(a), Housing and Urban Development Act of 1969. Public Law 91-152 approved December 24, 1969, 83 Stat. 379, 381, substituted "$125,000,000 on July 1. 1969". for "$100.000.000 on July 1, 1969," and sec. 102(a)(2). Housing and Urban Development Act of 1970. Public Law 91-609, approved December 31, 1970, 84 Stat. 1770, substituted "$150,000,000 on July 1, 1970, and by $200,000.000 on July 1, 1971" for "$125,000,000 on July 1, 1970, and by $170,000,000 on July 1, 1971".

2 Sec. 211(a)(1) of Housing and Community Development Act of 1974. Public Law 93383, 88 Stat. 633. approved August 22, 1974, added the words "by $200,000,000 on July 1, 1971, and by such sums as may be approved in appropriation Acts after June 30, 1974, and prior to July 1, 1976".

8 Sec. 211(a)(2) of Housing and Community Development Act of 1974, Public Law 93-383, 88 Stat. 633, approved August 22, 1974, added the last sentence of subsection (h) (1).

Sec. 3(e) of the Housing Authorization Act of 1976. Public Law 94-375, approved August 3, 1976, 90 Stat. 1067, amended section 235 (h) (2) of the National Housing Act by striking "80 per centum" wherever it appears and inserting in lieu thereof "95 per centum".

5 Sec. 211(a)(3) of Housing and Community Development Act of 1974, Public Law 93-383, 88 Stat. 633, approved August 22, 1974, inserted a new paragraph (2).

Immediately prior to amendment by sec. 109. Housing and Urban Development Act of 1969, Public Law 91-152, approved December 24, 1969, 83 Stat. 379, 381, only 15 per: cent of the total amount of contracts authorized by appropriation acts for fiscal year 1970 and only 10 percent of the total amount of contracts authorized by appropriation acts for fiscal year 1971 could be made with respect to existing housing.

7 Sec. 105. Housing and Urban Development Act of 1970. Public Law 91-609. approved December 31, 1970, 84 Stat. 1770, 1771, substituted "July 1, 1972" for "July 1, 1971" and added paragraph (4). Sec. 211(a)(4) of Housing and Community Development Act of 1974, Public Law 93-383, 88 Stat. 633, substituted "on or after July 1, 1969" for "prior to July 1, 1972".