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1 purchases made by such financial institution shall not ex

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(1) 10 per centum of the total amount of such loans, advances of credit, and purchases made under and reported for insurance under this title and under section 2 of the National Housing Act after July 1, 1939; or

(2) 90 per centum of the amount of loss on any individual loan, advance of credit, or purchase.

(b) Any payment for loss made to an approved finan

cial institution under this title shall be final and incontestable 12 after two years from the date the claim was certified for 13 payment by the Secretary, in the absence of fraud or mis14 representation on the part of such institution, unless a 15 demand for repurchase of the obligation shall have been 16 made on behalf of the United States prior to the expiration 17 of such two-year period.

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WAIVER OF REQUIREMENTS

SEC. 307. The Secretary is authorized to waive compli20 ance with any regulations issued by him pursuant to this title. 21 if the enforcement of such regulations would impose an in22 justice upon an insured financial institution that has substan23 tially complied with the requirements of such regulations and 24 has acted in good faith. Such waiver shall only be exercised 25 where it does not involve an increase in the obligation of the

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1 Secretary beyond the obligation which would have been

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4 SEC. 308. The Secretary is authorized to transfer to any 5 approved financial institution the insurance in connection with 6 any loan which is sold to it by another approved financial 7 institution.

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TITLE IV-HOME MORTGAGE INSURANCE

BASIC INSURANCE PROGRAM

SEC. 401. (a) The Secretary is authorized to insure a

11 home mortgage (including open-end advances) meeting the

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(b) The mortgage shall

(1) involve a principal obligation not to exceed an amount equal to the sum of (i) 97 per centum of $25,000 of the Secretary's appraised value of the property as of the date the mortgage is accepted for insurance, (ii) 90 per centum of such value in excess of

$25,000 but not in excess of $35,000, and (iii) 80 per

centum of such value in excess of $35,000; except that in the case of rehabilitation, the foregoing limitations upon the amount of the mortgage may, in the discretion

of the Secretary, be based upon the sum of the estimated

cost of rehabilitation and the Secretary's estimate of the

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value of the property before rehabilitation, rather than upon the appraised value of the property;

(2) contain amortization provisions satisfactory to the Secretary requiring payments by the mortgagor not in excess of his reasonable ability to pay as determined by the Secretary and within such term not exceeding forty years as the Secretary shall prescribe; and

(3) be executed by a mortgagor who shall have paid in cash or its equivalent from his own funds or resources, on account of the property, at least 3 per

centum of the Secretary's estimate of the cost of acquisition.

(c) Where the mortgage involves a one-family unit in 14 a condominium, the Secretary shall establish such require15 ments as he deems appropriate for the protection of the con16 sumer. The mortgage covering the condominium unit shall 17 contain such provisions as the Secretary determines to be

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necessary for the maintenance of the common areas and 19 facilities and the condominium project.

20 (d) The mortgage shall have a principal obligation 21 not in excess of an amount equal to 85 per centum of the 22 amount computed under the provisions of subsection (b) 23 (1) if the mortgage involves

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(1) a newly constructed dwelling which the Secretary determines has been completed within twelve

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months of the sale being financed with a mortgage

insured under this section but which has not been

approved by the Secretary for mortgage insurance or approved by the Administrator of Veterans' Affairs for guaranty, insurance, or direct loan under chapter 37 of title 38, United States Code, prior to the beginning of construction; or

(2) a mortgagor who is not the occupant of the property, except that this requirement for a reduction in the principal obligation of the mortgage shall not be applicable where—

(A) the mortgagor is in the military service and his failure to occupy the property is by reason

of his service assignment;

(B) the mortgagor and mortgagee assume responsibility, in a manner satisfactory to the Secretary, for the reduction of the outstanding principal amount of the mortgage, in the event the mortgaged

property is not (prior to the date of the eighteenth amortization payment of the mortgage) sold to a purchaser acceptable to the Secretary who is the occupant of the property and who assumes and agrees to pay the mortgage indebtedness; or

(C) the mortgage covers experimental prop

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erty and the Secretary approves the waiver of such

requirement.

(e) The seller, builder, or such other person as the Sec4 retary may designate, shall deliver to the mortgagor (prior 5 to the completion of the sale) a written statement setting 6 forth the amount of the appraised value of the property, as 7 determined by the Secretary. Where the property is to be 8 rehabilitated by the owner thereof and the amount of the 9 mortgage is not based on the appraised value of the property, 10 the Secretary shall furnish such owner a statement of the 11 Secretary's estimate of the appraised value of the property 12 after the proposed improvements are completed.

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HOMEOWNERSHIP ASSISTANCE

14 SEC. 402. (a) For the purpose of assisting lower in15 come families in acquiring the ownership of a decent home, 16 the Secretary is authorized to make, and to contract to make, 17 periodic assistance payments on behalf of such families. The 18 assistance shall be accomplished through payments to mort19 gagees holding mortgages which are insured under this sec20 tion. The Secretary shall take steps to assure that families 21 approved for receiving assistance under this section are 22 capable of meeting the financial and other responsibilities of 23 homeownership and shall utilize the authority granted by 24 section 106 (a) of the Housing and Urban Development Act

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