sured under section 221(d)(3) and executed by a cooperative (including an investor-sponsor), a limited dividend corporation, a private non-profit corporation or association, or a mortgagor qualified under section 221(e), or (4) a mortgage insured under section 236, such commitment may provide for participation by the Association in the making of insured advances on the mortgage during construction. Such participation shall be limited to 95 per centum of the amount of each of the advances involved, and the mortgagee providing the balance of such amount shall perform all necessary servicing and processing of such advances until the final insurance endorsement of the mortgage. The Secretary of Housing and Urban Development shall approve the reasonableness of the fee to be paid a participating mortgagee, taking into account its services and the extent of its participation in the advances.

(j) Notwithstanding any other provision of this Act, the Association is authorized to purchase pursuant to commitments or otherwise mortgages otherwise eligible for purchase under this section at a price equal to the unpaid principal amount thereof at the time of purchase, with adjustments for interest and any comparable items, and to sell such mortgages at any time at a price within the range of market prices for the particular class of mortgages involved at the time of sale as determined by the Association. Mortgages insured under title V of the Housing Act of 1949, except mortgages for above moderate income families insured under section 517(a) of such Act, are eligible for purchase under this section. (k) During fiscal year 1982, the Association may not enter into commitments to purchase under this section mortgages with an aggregate principal amount in excess of $1,973,000,000, except that the Association may not enter into commitments to purchase mortgages secured by projects which do not contain units assisted under section 8 of the United States Housing Act of 1937 with an aggregate principal amount in excess of $580,000,000.

INTERIM AUTHORITY TO PURCHASE CERTAIN MORTGAGES

SEC. 313. (a)(1) Whenever the Secretary finds inflationary conditions and related governmental actions or other economic conditions are having a severely disproportionate effect on the housing industry and the resulting reduction in the volume of home construction or acquisition threatens seriously to affect the economy and to delay the orderly achievement of the national housing goals contained in title XVI of the Housing and Urban Development Act of 1968, and if the Secretary determines that the implementation of this section will not significantly worsen inflationary conditions, the Secretary shall direct the Association to begin making commitments to purchase and to purchase mortgages and securities in accordance with the provisions of this section. To the extent feasible and consistent with the primary purpose of this section to stablize housing production, the Secretary may direct the exercise of the authority conferred by this section to promote homeownership opportunities for moderate-income families.

(2) The Secretary may direct the Association to terminate its activities under this section whenever he determines that the condi

tions which gave rise to his determination under paragraph (1) are no longer present.

(3) In carrying out the authority conferred by this section, the Secretary may require the Association to utilize a part of the authority to purchase mortgages under this section for the purchase of mortgages executed to finance the rehabilitation or acquisition and rehabilitation of housing in older or declining neighborhoods to the extent such action is feasible and consistent with the primary purpose of this section, and for the purpose of this paragraph, the Secretary is authorized to prescribe such regulations as may be appropriate.

(b) Wherever the Secretary issues a directive under subsection (a)(1), the Association shall make commitments to purchase and purchase, and may service, sell (with or without resource), or otherwise deal in, (1) mortgages which cover more than four-family residences (including cooperatives and condominiums and the individual units therein) and which are insured under the National Housing Act and chapter 37 of title 38 of the United States Code, (2) securities guaranteed by the Association and backed by loans and advances of credit insured under title I of the National Housing Act, or guaranteed under chapter 37 of title 38, United States Code, and made for the purchase of a manufactured home and lot, or manufactured home, or (3) mortgages which cover one- to four-family residences and which are insured under the National Housing Act or guaranteed under chapter 37 of title 38 of the United States Code or guaranteed under title V of the Housing Act of 1949 or by qualified private insurers as determined by the Association or the outstanding principal balances of which do not exceed 80 per centum of the value of the property securing the mortgages. A mortgage may be purchased under this section only if

(A) such mortgage was executed to finance the acquisition of a one- to four-family residence which will be the principal residence of the mortgagor or to finance the purchase of a more than four-family residence and is subject to a mortgage insured under the National Housing Act;

(B) such mortgage involves an original principal obligation not to exceed, for that part of the property attributable to dwelling use in the case of a more than four-family residence, the per unit limitations under the section of the National Housing Act under which the project mortgage is insured or, in the case of a manufactured home loan or advance of credit, the limitation contained in section 2(b) of this Act;

(C) such mortgage involves an interest rate which the Secretary may prescribe which shall be as high as feasible consistent with meeting the objectives of this section at the lowest feasible cost, but if such mortgage is executed to finance the acquisition of a one-to-four family residence, it may not bear interest at a rate lower than 3 percentage points below the average contract commitment rate for single family, thirty-year conventional mortgages with loan-to-value ratios of 90 per centum in the monthly survey of all major lenders conducted by the Federal Home Loan Bank Board which is most recently available at the time that funds are released, and if such mortgage is executed to finance the acquisition of a more than four

family residence, it may not bear interest at a rate lower than 42 percentage points below such average contract commitment rate, and no State or local usury law or comparable law establishing interest rates or prohibiting or limiting the collection or amount of discount points or other charges in connection with mortgage transactions or any State law prohibiting the coverage of mortgage insurance required by the Association shall apply to transactions under this section; and

(D) such mortgage involves a principal residence the sale price of which does not exceed 92 per centum of the applicable maximum principal obligation which may be insured in the area under section 203(b).

A security may be purchased under this section only if all of the loans or advances of credit backing such security (i) finance the purchase of manufactured homes and lots, or manufactured homes, which will be the principal residences of the borrowers, and (ii) involve an interest rate which the Secretary may prescribe which shall be as high as feasible consistent with meeting the objectives of this section at the lowest feasible cost, but in no event shall such rate be lower than 3 percentage points below the rate set by the Secretary and applicable to loans and advances of credit insured under title I of the National Housing Act.

(c) The Association may issue to the Secretary of the Treasury its obligations in an amount outstanding at any one time sufficient to enable the Association to carry out its functions under this section. Each such obligation shall mature at such time and be redeemable at the option of the Association in such manner as may be determined by the Association, and shall bear interest at a rate determined by the Secretary of the Treasury, taking into consideration the current average yield on outstanding marketable obligations of the United States of comparable maturities during the month preceding the issuance of the obligation of the Association. The Secretary of the Treasury is authorized and directed to purchase any obligations of the Association issued under this section, and for such purposes the Secretary of the Treasury is authorized to use as a public debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, as now or hereafter in force, and the purposes for which securities may be issued under the Second Liberty Bond Act, as now or hereafter in force, are extended to include any purchase of the Association's obligations hereunder.

(d)(1) The Association is authorized to guarantee securities based on pools or trusts of the mortgages eligible for purchase by the Association under this section as provided in section 306(g) of this Act with respect to federally insured or guaranteed mortgages and to act as issuer of such guaranteed securities. Such securities shall bear interest at a rate equal to the rate on the underlying mortgages less an allowance for servicing and other expenses as approved by the Association. The Association shall possess with respect to securities under this section all the powers it possesses with respect to securities guaranteed under such section 306(g), and the provisions of such section shall apply to guarantees under this section, except that such section shall not be deemed to prohibit the Secretary from guaranteeing payment of only a part of the

principal and interest on securities issued under the provisions of this section.

(2) The Association may offer and sell any mortgages or securities purchased or securities guaranteed under this section to the Federal Financing Bank, and such Bank is authorized and directed to purchase any such mortgages or securities offered by the Association. The Association may also offer and sell any securities guaranteed under this subsection to any Federal Reserve bank. The proceeds from the sale of such securities when issued by the Association shall be treated in the accounts in the same manner as if such proceeds were from the sale of the underlying mortgages.

(e) The Secretary may make available a portion of his authority under this section to purchase mortgages covering housing which has been constructed more than twelve months prior to the issuance of the commitment to purchase the mortgage in areas where he determines that there is a serious shortage of mortgage credit to purchase such housing.

(f) The Association is authorized to

(1) sell mortgages or securities purchased under this section of prices which it determines will help promote the objective of assuring that operations under this section are, to the extent feasible, fully self-supporting;

(2) pay for services performed in carrying out its functions under this section without regard to any limitation on administrative expenses heretofore enacted.

(g) The total amount of purchases and commitments authorized by the Secretary to made pursuant to this section shall not exceed $7,750,000,000 outstanding at any one time. Such total amount shall be increased on or after the date of enactment of the Emergency Housing Act of 1975, by such amount as is approved in an appropriation Act, but not to exceed $10,000,000,000, and the Association shall not issue obligations pursuant to this section utilizing authority which is conferred by this sentence or which is conferred by the first sentence of this subsection but uncommitted on October 18, 1975, except as approved in appropriation Act. The Association's purchases and commitments under this section during fiscal year 1978 may not exceed $7,500,000,000.

(h) Notwithstanding the provisions of subsection (b), the Association may make commitments to purchase and purchase, and may service, sell (with or without recourse), or otherwise deal in, a mortgage which covers more than four-family residences (including residences in a cooperative or condominium) or a single-family unit in a condominium, and which is not insured under the National Housing Act or guaranteed under chapter 37 of title 38, United States Code, if—

(1) in the case of a project mortgage, the principal obligation of the mortgage does not exceed, for that part of the property attributable to dwelling use, the lessor of (A) the per unit amount specified in subsection (b)(B), or (B) the per unit limitations specified in section 207 of this Act in the case of a rental project or section 213 of this Act in a case of a cooperative project, or section 234 in the case of a condominium project;

(2) in the case of a mortgage covering a housing project, the outstanding principal balance of the mortgage does not exceed

75 per centum of the value of the property securing such mortgage or is insured by a qualified private insurer or public benefit corporation created by the State which acts as an insurer as determined by the Association;

(3) in the case of a mortgage covering an individual condominium unit, the mortgage is insured by a qualified private insurer or public benefit corporation created by the State which acts as an insurer as determined by the Association or has an outstanding principal balance which does not exceed 80 per centum of the value of the property securing the mortgage; and

(4) the mortgage meets the requirements of subsection (b) except as modified by this subsection and by any additional requirements the Secretary may prescribe to protect the interest of the United States or to protect consumers.

(i) The Association may not purchase under this section any mortgage or loan which was executed or made (1) to finance the conversion of an existing rental housing project into a condominium or cooperative project, or (2) to finance the purchase of an individual unit in a condominium project or the purchase of a share in a cooperative project, in connection with such a conversion.

(j) In carrying out the provisions of this section, the Association shall, to the extent practicable, purchase mortgages secured by dwelling units which contribute to the conservation of land and energy resources.