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604 (a) (1) of the Public Health Service Act for the

State in which the hospital would be located (i) a cer

tification that there is a need for such hospital, and there

are in force in such State or the political subdivision of the State in which the hospital would be located reasonable minimum standards of licensing and for methods of operation for hospitals and (ii) such assurance as he may deem satisfactory from the State agency that such standards will be applied and enforced with respect to any hospital located in the State for which mortgage insurance is provided under this section; and

(2) with respect to a nursing home or intermediate care facility (A) the Secretary shall have received from the State agency designated in accordance with section 604 (a) (1) of the Public Health Service Act for the State in which the nursing home or intermediate care

facility would be located, a certification that there is a

need for such nursing home, or facility, and there are

in force in such State or the political subdivision of the

State in which the nursing home or intermediate care

facility would be located reasonable minimum standards for licensing and for methods of operation for nursing or intermediate care facilities; and (B) the Secretary has received such assurance as he may deem satisfactory from the State agency that such standards will be ap

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plied and enforced with respect to any nursing home or

intermediate care facility located in the State for which mortgage insurance is provided under this section.

(d) The Secretary shall prescribe such regulations as 5 may be necessary to carry out this section, after consulting 6 with the Secretary of Health, Education, and Welfare with 7 respect to any health or medical aspects of the program 8 under this section which may be involved in such regula9 tions.

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(e) The activities and functions provided for in this 11 section with respect to the insurance of mortgages covering 12 hospitals shall be carried out by the agencies involved so 13 as to encourage programs that undertake responsibility to 14 provide comprehensive health care, including outpatient and 15 preventive care, as well as hospitalization, to a defined 16 population.

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SUPPLEMENTAL PROJECT LOANS

SEC. 504. (a) The Secretary is authorized to insure a 19 supplemental project loan (including advances) with respect

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to a multifamily project or health facility covered by a 21 mortgage insured under this title or under the National 22 Housing Act, or covered by a mortgage held by the Sec23 retary, or with respect to a cooperative housing project. 24 purchased from the Federal Government by a nonprofit cor25 poration or trust if the property is covered by an uninsured

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1 mortgage representing a part of the purchase price. Such 2 loan may be made

(1) to cover operating losses, where the Secretary determines that the taxes, interest on the original mortgage debt covering the project, mortgage insurance premiums, hazard insurance premiums, and the expense of maintenance and operation of the project during the first two years following completion of the project exceed the income of such project;

(2) to finance repairs, improvements, or additions to such project and, where a health facility is involved, to finance the purchase, installation, or repair of major equipment to be used in the operation of the facility; and

(3) to finance purchases and resales of cooperative memberships, but such loan shall be made on the condition and agreement of the mortgagor of the cooperative housing project that on resales of membership, the downpayments by the new members shall not be proportionately less than those made on the original sales of such memberships.

(b) A loan covering operating losses shall

(1) be limited to a term not exceeding the unex

pired term of the original mortgage; and

(2) be in an amount not exceeding the operating

loss, as determined by the Secretary.

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or equipment shall—

(1) be limited to 90 per centum (100 per centum in the case of a cooperative or nonprofit mortgagor) of the Secretary's estimate of the cost of such repairs, improvements, additions, and equipment; except that where the project is covered by an insured mortgage, such amount when added to the outstanding balance of the mortgage covering the project, shall not exceed the maximum mortgage amount prescribed under the section of this title providing mortgage insurance for the type of project involved; and

(2) have a maturity satisfactory to the Secretary but not to exceed (in the case of a project or facility covered by a mortgage) the remaining term of the mortgage, except that in the case of a cooperative housing project covered by an uninsured mortgage the loan may, in the discretion of the Secretary, have a maturity date up to ten years in excess of the remaining term of the uninsured mortgage.

(d) A loan to a cooperative to finance the purchase and

22 resale of memberships shall

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(1) be limited to an amount which when added to the outstanding balance of the mortgage covering

the project does not exceed the maximum mortgage

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1 amount prescribed under the section of this title pro

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viding mortgage insurance for the type of project involved; and

(2) have a maturity satisfactory to the Secretary,

but not to exceed the remaining term of the mortgage covering the project.

7 (e) The Secretary is further authorized to insure under 8 this section a loan made with respect to a health facility, 9 without regard to whether such facility is covered by a mort10 gage (insured or uninsured), in order to finance such 11 repairs, improvements, or additions, and the purchase, instal12 lation, or repair of such equipment to be used in its opera13 tion, as may be necessary for the facility to meet the appli14 cable requirements imposed by title XVIII of the Social 15 Security Act and thereby qualify for participation in, or 16 maintain certification under, the hospital insurance program 17 under such title.

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(f) A loan insured under this section shall

(1) be secured in such manner as the Secretary may require; and

(2) contain such other terms, conditions, and re

strictions as the Secretary may prescribe.

MORTGAGE INSURANCE FOR LAND DEVELOPMENT

SEC. 505. (a) For the purposes of this section

(1) The term "land development" means the process

26 of making, installing, or constructing improvements.