1 2 3 4 6 TITLE I-GENERAL AUTHORITY DEFINITIONS SECTION 1. As used in this Act (a) The term "first mortgage" means such classes of 5 first liens as are commonly given to secure advances on, 6 or the unpaid purchase price of, real estate, under the laws 7 of the State in which the real estate is located, together 8 with the credit instruments, if any, secured thereby. 9 (b) The term "mortgage" means a first mortgage on 10 real estate in fee simple, or on a leasehold (1) under a 11 lease for not less than ninety-nine years which is renewable or (2) under a lease having a period of not less than fifty years to run from the date the mortgage was executed. 12 13 17 18 19 (c) The term "mortgagee" includes the original lender under a mortgage, and its successors and assigns approved by the Secretary. (d) The term "mortgagor" includes the original borrower under a mortgage, and its successors and assigns. (e) The term "home mortgage" means a mortgage 20 involving a one- to four-family residence or a one-family 21 222 unit in a condominium. (f) The term "project mortgage" means a mortgage involving multifamily housing, a land development project, or a health facility. (g) The term "condominium" means a multiunit hous 79-555 O 722 7 1 ing project which is subject to a plan of family unit owner2 ship acceptable to the Secretary under which each dwelling 3 unit is individually owned and each such owner holds an 4 undivided interest in the common areas and facilities which 5 serve the project. 6 (h) The term "cooperative" means any nonprofit cor7 poration or nonprofit housing trust which has consumer8 oriented sponsorship with no identity of interest with the 9 builder, and which is organized for the purpose of con10 struction, rehabilitation, or acquisition of housing and related 11 facilities which meet one of the following requirements: 12 23 13 14 15 16 17 18 (1) The permanent occupancy of the dwelling units will be restricted to members of the cooperative; or (2) The individual dwelling units, upon completion of the construction or rehabilitation of the project, are to be sold to purchasers eligible for mortgage insurance under the provisions of section 401 or 402 of this Act, with the cooperative continuing to provide community 19 facilities for the owners of such dwelling units. (i) The term "experimental property" means property 21 which involves the utilization and testing of advanced tech22 nology in property design, materials, or construction, or 23 experimental property standards for neighborhood design, 24 which will provide data or experience which the Secretary 25 deems to be significant in reducing building costs or improv 8 1 ing building standards, quality, livability, or durability, or 2 improving neighborhood design. 3 (j) The term "advances" means insured mortgage pro4 ceeds advanced during construction or rehabilitation. In 5 addition to being made for the purpose of financing improve6 ments to the property and the purchase of materials and 7 building components delivered to the property, such insured 8 proceeds may, with the approval of the Secretary, be ad9 vanced for the purpose of providing funds to cover the cost 10 of building components which have been assembled and 11 specifically identified for incorporation into the mortgaged 12 property, but which are located at a site other than the 13 mortgaged property. 15 14 (k) The term "nonprofit", when used with respect to any organization, corporation, association, sponsor, or other 16 entity, means an entity which is organized for purposes 17 other than the making of a profit or gain for itself or for 18 persons identified with it, and which is in no way controlled 19 by or under the direction of any other person seeking to de20 rive any profit or gain therefrom. 21 (1) The term "State" includes the several States and 22 Puerto Rico, the District of Columbia, Guam, and the Virgin 23 Islands. Such term may also include American Samoa, the 24 Canal Zone, Midway Island, and the Trust Territory of the 25 Pacific Islands where the Secretary determines the use of 9 1 particular mortgage insurance programs are feasible and 2 desirable. 3 (m) The term "Secretary" means the Secretary of 4 Housing and Urban Development. 5 6 GENERAL INSURANCE AUTHORITY SEC. 2. (a) The Secretary is authorized, upon applica 7 tion by the mortgagee or lender, to insure mortgages and 8 loans, upon such terms and conditions as he may prescribe, 9 and to make commitments for the insuring of such mortgages 10 and loans prior to the date of their execution or disbursement thereon. At any time prior to final endorsement for in12 surance, the Secretary may increase the amount of, amend, 11 13 or extend any commitment, subject to the limitations on 14 the amount of the mortgage or loan in effect at the time 15 of such final endorsement. 16 20 (b) To be eligible for insurance under this Act a 17 mortgage or loan shall have been made by, and be held 18 by, a mortgagee or lender approved by the Secretary as re19 sponsible and able to service the mortgage or loan properly. (c) To be eligible for insurance under this Act, the mort21 gage transaction shall be determined by the Secretary to be an 22 insurable risk, except that the Secretary may accept for insurance as a special risk a mortgage transaction involving assistance payments, experimental property, property located in an 23 24 25 older and declining area in which the community is carrying " 10 1 out or is committed to carrying out a program satisfactory to 2 the Secretary for neighborhood preservation or rehabilitation, 3 or single-family housing for employees of research or devel4 opment installations where it is established to the satisfaction 5 of the Secretary that there is a special need for such housing. 6 7 FLEXIBLE MORTGAGE AMOUNTS SEC. 3. (a) (1) The Secretary shall not (subject to para8 graph (2)) insure a mortgage covering property in any area 9 which exceeds, for that part of the property attributable to 10 dwelling use, the appropriate prototype cost for the area (A) 11 by more than 10 per centum in the case of a mortgage insured 12 under section 402 or section 502 and (B) by more than 80 per 13 centum (or such lower per centum in any area as the Secre14 tary determines to be appropriate to prevent the diversion of 15 mortgage credit from moderate cost housing) in the case of a 16 mortgage insured under section 401 or section 501. 17 (2) The Secretary may increase the 10 per centum 18 figure in clause (A) of paragraph (1) to not more than 20 19 2 per centum, or may increase the 80 per centum figure in 20 clause (B) of such paragraph to not more than 100 per 21 centum, with respect to any property or project which is 22 found by the Secretary to meet exceptional design stand23 ards or to significantly contribute to the comprehensively 24 25 planned development of the area in which it is located. (b) Prototype costs shall be determined at least annually |