Eligibility requirements; release of part of property
To be eligible for insurance under this section a mortgage shall meet the following conditions:
The mortgaged property shall be held by a mortgagor approved by the Secretary. The Secretary may, in his discretion, require such mortgagor to be regulated or restricted as to rents or sales, charges, capital structure, rate of return, and methods of operation. The Secretary may make such contracts with, and acquire for not to exceed $100 stock or interest in any such mortgagor, as the Secretary may deem necessary to render effective such restriction or regulation. Such stock or interest shall be paid for out of the General Insurance Fund, and shall be redeemed by the mortgagor at par upon the termination of all obligations of the Secretary under the insurance.
The mortgage shall involve a principal obligation in an amount—
not to exceed $5,000,000; and
not to exceed 90 per centum of the amount which the Secretary estimates will be the value of the property or project when the proposed improvements are completed: Provided, That such mortgage shall not in any event exceed the amount which the Secretary estimates will be the cost of the completed physical improvements on the property or project exclusive of off-site public utilities and streets and organization and legal expenses; and
not to exceed $8,100 per family unit (or $7,200 per family unit if the number of rooms in such property or project does not equal or exceed four per family unit) for such part of such property or project as may be attributable to dwelling use: Provided, That the Secretary may by regulation increase such dollar amount limitations by not exceeding $900 in any geographical area where he finds that cost levels so require.
The mortgage shall provide for complete amortization by periodic payments within such term as the Secretary shall prescribe, and shall bear interest (exclusive of premium charges for insurance) at not to exceed 4½ per centum per annum on the amount of the principal obligation outstanding at any time. The Secretary may consent to the release of a part or parts of the mortgaged property from the lien of the mortgage upon such terms and conditions as he may prescribe and the mortgage may provide for such release.
Debentures; issuance and payment in accordance with section 1750c(c), (d) of this title
Debentures issued under this section shall be issued in accordance with the provisions of section 1750c(c) and (d) of this title except that such debentures shall be dated as of the date of default as determined in subsection (c) of this section, and shall bear interest from such date.
Applicability of section 1713(k), (l) of this title
The provisions of section 1713(k) and (l) of this title shall be applicable to mortgages insured under this section and to property acquired by the Secretary hereunder, except that, as applied to such mortgages and property, the reference therein to subsection (g) shall be construed to refer to subsection (c) of this section.
Applications under section 1743; credit for fees upon reapplication under this section
In any case where an application for insurance under section 1743 of this title was received by the Secretary of Housing and Urban Development on or before March 1, 1950, and has not been rejected or committed upon, the mortgagee upon reapplication for insurance of a mortgage under this section with respect to the same property shall receive credit for any application fees paid in connection with the prior application: Provided, That this subsection shall not constitute a waiver of any requirements otherwise applicable to the insurance of mortgages under this section.
[June 27, 1934, ch. 847], title IX, § 908, as added [Sept. 1, 1951, ch. 378], title II, § 201, [65 Stat. 301]; amended [June 30, 1953, ch. 170, § 10(c)], [67 Stat. 124]; [Aug. 2, 1954, ch. 649], title I, § 130, [68 Stat. 609]; [Pub. L. 89–117, title XI, § 1108(z)], Aug. 10, 1965, [79 Stat. 507]; [Pub. L. 90–19, § 1(a)(2)], (3), May 25, 1967, [81 Stat. 17].)