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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

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 périodic 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

24-038 74 pt. 18

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of 1968 to provide preoccupancy and postoccupancy coun

seling to lower income families.

(b) The assistance payments to a mortgagee by the

4 Secretary on behalf of a mortgagor shall be made during

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such time as the mortgagor shall continue to occupy the

6 property which secures the mortgage. Such payments may

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also be made on behalf of a homeowner who assumes a 8 mortgage insured under this section with respect to which

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assistance payments have been made on behalf of the previ

ous owner, if the new homeowner is approved by the Secre11 tary as eligible for receiving such assistance. The Secretary is also authorized to continue making assistance payments where the mortgage has been assigned to the Secretary.

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(c) The assistance payment shall be in an amount not 15 exceeding the lesser of

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(1) the balance of the monthly payment for principal, interest, taxes, insurance, and mortgage insurance premium due under the mortgage remaining unpaid after applying 20 per centum of the mortgagor's income as determined by the Secretary; or

(2) 50 per centum of the monthly payment for principal, interest, taxes, insurance, and mortgage insurance premiums due under the mortgage.

(d) The Secretary may include in the payment to the

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1 mortgagee such amount, in addition to the amount computed 2 under subsection (c), as he deems appropriate to reimburse 3 the mortgagee for its additional expenses in handling the

4 mortgage.

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(e) Procedures shall be adopted by the Secretary for 6 recertifications of the mortgagor's income at intervals of two 7 years (or at shorter intervals where the Secretary deems it 8 desirable) for the purpose of adjusting the amount of the 9 assistance payments within the limits of the formula described 10 in subsection (c).

11 (f) The Secretary shall take such steps as he deems 12 necessary to assure that the sales price of, or other considera13 tion paid in connection with, the property with respect to 14 which assistance payments are to be made is not inflated or 15 excessive.

16 (g) There are authorized to be appropriated such 17 sums as may be necessary to carry out the provisions of this 18 section, including such sums as may be necessary to make 19 the assistance payments under contracts entered into under 20 this section. The aggregate amount of outstanding contracts 21 to make such payments shall not exceed amounts approved 22 in appropriation Acts, and payments pursuant to such con23 tracts (and any contracts entered into under section 235 of 24 the National Housing Act) shall not exceed $75,000,000 25 per annum prior to July 1, 1969, which maximum dollar

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1 amount shall be increased by $125,000,000 on July 1, 2 1969, by $150,000,000 on July 1, 1970, by $200,000,000

3 on July 1, 1971, and by $150,000,000 on July 1, 1974.

4

(h) The Secretary is authorized to insure a home mort5 gage (including advances with respect to property con6 structed or rehabilitated pursuant to a self-help program) 7 which is to be assisted under this section or under part B of 8 title I of the Housing and Urban Development Act of 1973 9 and which meets the requirements of section 401, except as 10 such requirements are modified by this section. The mortgage 11 shall

(1) involve a single-family dwelling or a two- to three-family dwelling one of the units of which is to be occupied by the owner and the remaining unit or units rented to lower income families;

(2) have a principal obligation not to exceed the Secretary's appraised value of the property as of the

date the mortgage is accepted for insurance (or in the case of rehabilitation the sum of the estimated cost of rehabilitation and the Secretary's estimate of the value of the property before rehabilitation); and

(3) be executed by a mortgagor who shall have paid from his own funds or resources at least 3 per centum

of the Secretary's estimate of the cost of acquisition,