109 1 multifamily housing project which is to be occupied pri2 marily by those who are qualified as lower income tenants at 3 the time of their initial occupancy and which is to be assisted 4 under this section or under part B of title I of the Housing 5 and Urban Development Act of 1973. 6 (2) If the mortgage is executed by a mortgagor which 7 is a cooperative, a private nonprofit corporation or associa8 tion, or a builder-seller, as defined by the Secretary, the prin9 cipal obligation of the mortgage shall not exceed— 10 11 12 13 14 15 16 17 18 19 20 21 22 2 2 2 2 2 2 (A) in the case of new construction, the Secretary's estimate of the replacement cost of the property or project when the proposed improvements are completed; (B) in the case of rehabilitation, the sum of the Secretary's estimate of the cost of rehabilitation plus the Secretary's estimate of the value of the property before rehabilitation; or (C) in the case of the purchase or refinancing of existing property without rehabilitation, the appraised value of the property as of the date the mortgage is accepted for insurance. (3) If the mortgage is executed by a limited distribu 23 tion corporation or other limited distribution entity, as de 24 fined by the Secretary, or by an investor-sponsor who agrees 25 to sell the project to a cooperative and who meets such re CHIGAN 110 1 2 quirements as the Secretary may prescribe to assure that the consumer interest is protected, the amount of the mort 3 gage shall not exceed 90 per centum of the amount other wise authorized under this section. (4) In the case of a project financed with a mortgage insured under this subsection or under section 236 of the National Housing Act which involves a mortgagor other than a cooperative or a private nonprofit corporation or association, and which is sold to a cooperative or a nonprofit corporation or association, the Secretary is further authorized to insure under this subsection a mortgage given by such pur chaser in an amount not exceeding the appraised value of the property at the time of purchase, which value shall be based upon a mortgage amount on which the debt service can be met from the income of the property when operated on a nonprofit basis, after payment of all operating expenses, taxes, and required reserves. (j) As used in this section (1) The term "tenant" includes a member of a cooperative and the terms "rental" and "rental charge” mean, with respect to members of a cooperative, the charges under the occupancy agreements between such members and the cooperative; and (2) The term "lower income tenants" means those tenants whose incomes do not exceed 80 per centum of 1 2 3 4 5 6 7 8 9 10 11 111 the median income for the area, as determined by the Secretary with adjustments for smaller and larger fami lies, except that the Secretary may establish income ceilings higher or lower than 80 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 family incomes, or other factors. MORTGAGE INSURANCE FOR HEALTH FACILITIES SEC. 503. (a) For the purposes of this section (1) The term "hospital" means a proprietary facility, or 12 facility of a private nonprofit corporation or association, 13 which provides community service for inpatient medical care 14 of the sick or injured (including obstetrical care). 15 (2) The term "nursing home" means a proprietary 16 facility, or facility of a private nonprofit corporation or asso17 ciation, for the accommodation of convalescents or other per18 sons who are not acutely ill and not in need of hospital care 19 but who require skilled nursing care and related medical serv20 ices, in which such nursing care and medical services are 21 prescribed by, or are performed under the general direction 22 of, persons licensed to provide such care or services in accordance with the laws of the State where the facility is located. (3) The term "intermediate care facility" means a 25 proprietary facility, or facility of a private nonprofit corpo 23 24 112 1 ration or association, for the accommodation of persons who 2 require minimum but continuous care but are not in need 3 of continuous medical or nursing services. 4 (4) The term "group practice facility" means a fa5 cility of a private nonprofit corporation or association for 6 the provision of preventive, diagnostic, and treatment serv7 ices to ambulatory patients in which patient care is under 8 the professional supervision of persons licensed to practice 9 medicine, optometry, dentistry, podiatry, or osteopathy in 10 the State. 11 (5) The term "replacement cost" means the Secre12 tary's estimate of the value of the land, the cost of the 13 proposed physical improvements, major equipment to be 14 installed and used in the operation of the health facility, 15 utilities within the boundaries of the property, architect's 16 and builder's fees, taxes and interest during construction, and 17 other miscellaneous charges incident to construction and the 18 initial operation of the project which are approved by the 19 Secretary. 20 (b) (1) The Secretary is authorized to insure a mort21 gage (including advances) which covers a new or rehabili22 tated project designed for use as a hospital, nursing home, 23 intermediate care facility, or group practice facility (or any 24 combination of the foregoing). The mortgage shall be ex25 ecuted by a mortgagor approved by the Secretary. The Secre 113 1 tary may require any such mortgagor to be regulated or 2 restricted as to capital structure, rate of return, and methods 3 of operation. 4 5 (2) The mortgage shall involve a principal obligation in an amount not to exceed, in the case of new construction, 6 90 per centum of the estimated replacement cost of the 7 property or project when the proposed improvements are 8 completed and the equipment installed; or, in the case of 9 rehabilitation, 90 per centum of the sum of the estimated 10 cost of rehabilitation (including the cost of any equipment to be installed or rehabilitated) and the Secretary's estimate 12 of the value of the property before rehabilitation. 11 13 (3) The mortgage shall provide for complete amortiza14 tion within such term as the Secretary shall prescribe. 15 (c) The Secretary shall not insure a mortgage under 16 this section unless 17 18 19 (1) with respect to a hospital (A) the hospital shall be planned and operated so that not more than 50 per centum of the total patient days during any year 20 shall customarily be assigned to the categories of chronic convalescent and rest, drug and alcoholic, epileptic, men 21 tally deficient, mental, nervous and mental, and tuberculosis; and (B) the Secretary shall have received from the State agency designated in accordance with section. |