Chapter 649 - 2d Session AN ACT A11 68 Stat. 590. To aid in the provision and improvement of housing, the elimination and prevention of slums, and the conservation and development of urban communities. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be Housing Aot cited as the "Housing Act of 1954”. TITLE I-FEDERAL HOUSING ADMINISTRATION AMENDMENTS OF TITLE I OF NATIONAL HOUSING ACT of 1954. SEC. 101. (a) Section 2 (a) of the National Housing Act, as Insurance of amended, is hereby amended financial insti (1) by striking out the period at the end of the second sentence tutions. and by inserting a colon and the following: "Provided, That with 48 Stat. 1246. respect to any loan, advance of credit, or purchase made after the 12 USC 1703. effective date of the Housing Act of 1954, the amount of any claim Improvement and for loss on any such individual loan, advance of credit, or purchase paid by the Commissioner under the provisions of this section to a lending institution shall not exceed 90 per centum of such loss."; and (2) by inserting at the end thereof the following: repair loana. "After the effective date of the Housing Act of 1954, (i) the Com- Restriction. missioner shall not enter into contracts for insurance pursuant to this section except with lending institutions which are subject to the inspection and supervision of a governmental agency required by law to make periodic examinations of their books and accounts, and which the Commissioner finds to be qualified by experience or facilities to make and service such loans, advances or purchases, and with such other lending institutions which the Commissioner approves as eligible for insurance pursuant to this section on the basis of their credit and their experience or facilities to make and service such loans, advances or purchases; (ii) only such items as substantially protect or improve the basic livability or utility of properties shall be eligible for financing under this section, and therefore the Commissioner shall from time to time declare ineligible for financing under this section any item, product, alteration, repair, improvement, or class thereof which he determines would not substantially protect or improve the basic livability or utility of such properties, and he may also declare ineligible for financing under this section any item which he determines is especially subject to selling abuses; and (iii) the Commissioner is hereby authorized and directed, by such regulations or procedures as he shall deem advisable, to prevent the use of any financial assistance under this section (1) with respect to new residential structures that have not been completed and occupied for at least six months, or (2) which would, through multiple loans, result in an outstanding aggregate loan balance with respect to the same structure exceeding the dollar amount limitation prescribed in this subsection for the type of loan involved.” (b) As used in the amendments made by subsection (a) of this Effective date. section "effective date of the Housing Act of 1954" shall mean the first day after the first full calendar month following the date of approval of the Housing Act of 1954. SEC. 102. Section 2 (f) of said Act, as amended, is hereby amended 12 USC 1703. by adding the following at the end thereof: "The account heretofore Title I Glaims established in connection with insurance operations under this section Account, termina tion. All 68 Stat. 591. 64 Stat. 48. 12 USC 17060. Mortgage insuranoe. Termination, Sales housing Insurance eligibility. 12 USC 1709. Principal obligation. 12 USC 1709. Maturity. 12 USC 1709. Interest. SEC. 103. Section 8 of said Act, as amended, is hereby amended by striking the period at the end of subsection (a) and inserting a colon and the following: "And provided further, That no mortgage shall be insured under this section after the effective date of the Housing Act of 1954, except pursuant to a commitment to insure issued on or before such date.' AMENDMENTS OF TITLE II OF NATIONAL HOUSING ACT SEC. 104. Section 203 (b) (2) of said Act, as amended, is hereby amended to read as follows: "(2) Involve a principal obligation (including such initial service charges, appraisal, inspection, and other fees as the Commissioner shall approve) in an amount not to exceed $20,000 in the case of property upon which there is located a dwelling designed princípally (whether or not it may be intended to be rented temporarily for school purposes) for a one- or two-family residence; or $27,500 in the case of a three-family residence; or $35,000 in the case of a four-family residence; and not to exceed an amount equal to the sum of (i) 95 per centum (but, in any case where the dwelling is not approved for mortgage insurance prior to the beginning of construction, 90 per centum) of $9,000 of the appraised value (as of the date the mortgage is accepted for insurance), and (ii) 75 per centum of such value in excess of $9,000, except that the President may increase such dollar amounts up to not to exceed $10,000 if, after taking into consideration the general effect of such higher dollar amounts upon conditions in the building industry and upon the national economy, he determines such action to be in the public interest: Provided, That if the mortgagor is not the occupant of the property the principal obligation of the mortgage shall not exceed an amount equal to 85 per centum of the amount computed under the foregoing provisions of this paragraph (2): Provided further, That the mortgagor shall have paid on account of the property at least 5 per centum (or such larger amount as the Commissioner may determine) of the Commissioner's estimate of the cost of acquisition in cash or its equivalent." SEC. 105. Section 203 (b) (3) of said Act, as amended, is hereby amended to read as follows: "(3) Have a maturity satisfactory to the Commissioner, but not to exceed, in any event, thirty years from the date of the insurance of the mortgage or three-quarters of the Commissioner's estimate of the remaining economic life of the building improvements, whichever is the lesser." SEC. 106. Section 203 (b) (5) of said Act, as amended, is hereby amended to read as follows: "(5) Bear interest (exclusive of premium charges for insurance, and service charges if any) at not to exceed 5 per centum per annum on the amount of the principal obligation outstanding at any time, or not to exceed such per centum per annum not in excess of 6 per centum as the Commissioner finds necessary to meet the mortgage market.” All 68 Stat. 592, SEC. 107. Section 203 (c) of said Act, as amended, is amended by 12 USC 1709. striking out of the second sentence the word "Provided" and inserting: Debentures. "Provided, That debentures presented in payment of premium charges shall represent obligations of the particular insurance fund to which such premium charges are to be credited: Provided further". SEC. 108. Section 203 (d) of said Act, as amended, is hereby amended 12 USC 1709. by striking the period at the end thereof and inserting a colon and the Farm mortgages. following: "And provided further, That no mortgage shall be insured Termination. pursuant to this subsection after the effective date of the Housing Act of 1954, except pursuant to a commitment to insure issued on or before such date.' SEC. 109. Subsections (f) and (g) of section 203 of said Act, as Repeals. amended, are hereby repealed. SEC. 110. Section 203 of said Act, as amended, is hereby further 12 USC 1709. amended by adding the following new subsections at the end thereof: "(h) Notwithstanding any other provision of this section, the Disaster housing. Commissioner is authorized to insure any mortgage which involves a principal obligation not in excess of $7,000 and not in excess of 100 per centum of the appraised value of a property upon which there is located a dwelling designed principally for a single-family residence, where the mortgagor is the owner and occupant and establishes (to the satisfaction of the Commissioner) that his home which he occupied as an owner or as a tenant was destroyed or damaged to such an extent that reconstruction is required as a result of a flood, fire, hurricane, earthquake, storm, or other catastrophe which the President, pursuant to section 2 (a) of the Act entitled 'An Act to authorize Federal assistance to States and local governments in major disasters and for other purposes' (Public Law 875, Eighty-first Congress, approved 64 Stat. 1109. September 30, 1950), as amended, has determined to be a major 42 USC 1855. disaster. "(i) Notwithstanding any other provision of this section, the Com- Single family missioner is authorized to insure any mortgage which involves a residence. principal obligation not in excess of $6,650 and not in excess of 95 Outlying areas, per centum of the appraised value, as of the date the mortgage is accepted for insurance, of a property in an area where the Commissioner finds it is not practicable to obtain conformity with many of the requirements essential to the insurance of mortgages on housing in built-up urban areas, upon which there is located a dwelling designed principally for a single family residence, and which is approved for mortgage insurance prior to the beginning of construction: Provided, That (1) the mortgagor shall be the owner and occupant of the property at the time of insurance and shall have paid on account of the property at least 5 per centum of the Commissioner's estimate of the cost of acquisition in cash or its equivalent, or (2) the mortgagor shall be the owner and occupant of the property at the time of insurance, regardless of his credit standing, with whom a person or corporation having a credit standing satisfactory to the Commissioner, shall have entered into a written contract (a) to pay on behalf of the prospective owner and occupant all or part of the downpayment required by this paragraph agreeing to take as security a note from the latter bearing interest at the rate of not more than 4 per centum per annum, maturing after the last maturity date of principal due on the insured mortgage, with a right in the holder to accelerate maturity to a date following prepayment of the entire mortgage debt, under the terms of which note all rights of such person or corporation are subordinated to the rights of the mortgagee or assignees of the mortgagee, and (b) to guarantee payment of the insured mortgage-by the owner and occupant according to the terms of the mortgage, or (3) shall be the builder constructing the dwelling; in which case the All 68 Stat. 593. Farm home. Payment of in sranoe. 12 USC 1710. Debentures. principal obligation shall not exceed 85 per centum of the appraised value of the property or $5,950: Provided further, That the Commissioner finds that the project with respect to which the mortgage is executed is an acceptable risk, giving consideration to the need for providing adequate housing for families of low and moderate income particularly in suburban and outlying areas or small communities: Provided further, That under the foregoing provisions of this subsection the Commissioner is authorized to insure any mortgage issued with respect to the construction of a farm home on a plot of land five or more acres in size adjacent to a public highway, the total amount of insurance outstanding at any one time under this proviso not to exceed $100,000,000." SEC. 111. Section 204 (a) of said Act, as amended, is hereby amended (1) by striking out of the third sentence the words "any mortgage insurance premiums paid after either of such dates" and inserting "any mortgage insurance premiums paid after either of such dates, and any tax imposed by the United States upon any deed or other instrument by which said property was acquired by the mortgagee and transferred or conveyed to the Commissioner"; (2) by striking out of the second proviso the words "or under section 213 of this Act," and inserting the following: "or under section 213 of this Act, or with respect to any mortgage accepted 12 USC 17150, 1709. for insurance under section 203 on or after the effective date of the Housing Act of 1954,"; and Direct conveyance. Debenture terms. 12 USC 17150. 12 USC 1713. 12 USC 1748b. 12 USC 17500. (3) by striking the period at the end thereof and inserting a colon and the following: "And provided further, That, notwithstanding any requirement contained in this Act that debentures may be issued only upon acquisition of title and possession by the mortgagee and its subsequent conveyance and transfer to the Commissioner, and for the purpose of avoiding unnecessary conveyance expense in connection with payment of insurance benefits under the provisions of this Act, the Commissioner is authorized, subject to such rules and regulations as he may prescribe, to permit the mortgagee to tender to the Commissioner a satisfactory conveyance of title and transfer of possession direct from the mortgagor or other appropriate grantor and to pay the insurance benefits to the mortgagee which it would otherwise be entitled to if such conveyance had been made to the mortgagee and from the mortgagee to the Commissioner." SEC. 112. (a) Section 204 (d) of said Act, as amended, is hereby amended by striking out of the second sentence thereof the words "three years after the 1st day of July following the maturity date of the mortgage on the property in exchange for which the debentures were issued, except that debentures issued with respect to mortgages insured under section 213 shall mature twenty years after the date of such debentures" and inserting "twenty years after the date thereof". (b) Section 207 (i) of said Act, as amended, is hereby amended by striking out of the second sentence thereof "ten" and inserting "twenty". (c) Section 803 (f) of said Act, as amended, is hereby amended by striking out of the second sentence thereof "ten" and inserting "twenty". (d) Section 904 (d) of said Act, as amended, is hereby amended by striking out of the third sentence thereof the word "ten" and inserting "twenty". Nonapplicability. (e) This section shall not apply in any case where the mortgage involved was insured or the commitment for such insurance was issued prior to the effective date of the Housing Act of 1954. All 68 Stat. 594. SEC. 113. Section 204 of said Act, as amended, is hereby amended by 12 USC 1710: adding at the end thereof the following new subsection: "(j) In the event that any mortgagee under a mortgage insured Premium charge under section 203 forecloses on the mortgaged property but does not payment. convey such property to the Commissioner in accordance with this sec- Cessation of tion, and the Commissioner is given written notice thereof, or in the obligation. event that the mortgagor pays the obligation under the mortgage in 12 USC 1709. full prior to the maturity thereof, and the mortgagee pays any adjusted premium charge required under the provisions of section 203 (c), and the Commissioner is given written notice by the mortgagee of the payment of such obligation, the obligation to pay any subsequent premium charge for insurance shall cease, and all rights of the mortgagee and the mortgagor under this section shall terminate as of the date of such notice." SEC. 114. Section 205 of said Act, as amended, is hereby amended to 12 USC 1711. read as follows: "SEC. 205. (a) The Commissioner shall establish as of July 1, 1954, General Surplus in the Mutual Mortgage Insurance Fund a General Surplus Account and Participating and a Participating Reserve Account. All of the assets of the General Reserve Accounts. Reinsurance Account shall be transferred to the General Surplus Account whereupon the General Reinsurance Account shall be abolished. There shall be transferred from the various group accounts to the Participating Reserve Account as of July 1, 1954, an amount equal to the aggregate amount which would have been distributed under the provisions of section 205 in effect on June 30, 1954, if all outstanding mortgages in such group accounts had been paid in full on said date. All of the remaining balances of said group accounts shall as of said date be transferred to the General Surplus Account whereupon all of said group accounts shall be abolished. "(b) The aggregate net income thereafter received or any net loss thereafter sustained by the Mutual Mortgage Insurance Fund in any semiannual period shall be credited or charged to the General Surplus Account and/or the Participating Reserve Account in such manner and amounts as the Commissioner may determine to be in accord with sound actuarial and accounting practice. "(c) Upon termination of the insurance obligation of the Mutual Mortgage Insurance Fund by payment of any mortgage insured thereunder, the Commissioner is authorized to distribute to the mortgagor a share of the Participating Reserve Account in such manner and amount as the Commissioner shall determine to be equitable and in accordance with sound actuarial and accounting practice: Provided, That, in no event, shall any such distributable share exceed the aggregate scheduled annual premiums of the mortgagor to the year of termination of the insurance. "(d) No mortgagor or mortgagee of any mortgage insured under section 203 shall have any vested right in a credit balance in any such 12 USC 1709. account or be subject to any liability arising out of the mutuality of the Fund and the determination of the Commissioner as to the amount to be paid by him to any mortgagor shall be final and conclusive." SEC. 115. Section 207 (c) of said Act, as amended, is hereby Rental housing. amended 12 USC 1713. (1) by inserting before the semicolon at the end of paragraph Insurance numbered (2) a colon and the following: "And provided further, eligibility. That nothing contained in this section shall preclude the insurance of mortgages covering existing construction located in slum or blighted areas, as defined in paragraph numbered (5) of subsection (a) of this section, and the Commissioner may require such repair or rehabilitation work to be completed as is, in his discretion, 91167 0-6232 |