1

date of enactment of the Housing Act of 1964 1 shall be dated as of the date of default or as of such later date as the Commissioner, in his discretion, may establish by regulation. The debentures shall bear interest from such date at a rate determined by the Commissioner, with the approval of the Secretary of the Treasury, at the time the mortgage was accepted for insurance, but not to exceed 3 per centum per annum, payable semiannually on the 1st day of January and the 1st day of July of each year. Such debentures shall mature twenty 2 years after the date thereof. Such debentures shall be exempt, both as to principal and interest, from all taxation (except surtaxes, estate, inheritance, or gift taxes) now or hereafter imposed by any Territory, dependency, or possession of the United States, or by the District of Columbia, or by any State, county, municipality, or local taxing authority, and shall be paid out of the General Insurance Fund, which shall be primarily liable therefor, and they shall be fully and unconditionally guaranteed as to principal and interest by the United States, and such guaranty shall be expressed on the face of the debentures. In the event that the General Insurance Fund fails to pay upon demand, when due, the principal of or interest on any debentures issued under this title, the Secretary of the Treasury shall pay to the holders the amount thereof which is hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, and thereupon to the extent of the amounts so paid the Secretary of the Treasury shall succeed to all the rights of the holders of such debentures.

(e) The certificate of claim issued by the Commissioner to any mortgagee under this section shall be for an amount determined in accordance with, and shall contain provisions and shall be paid in accordance with, the provisions of section 204 (e) and section 204 (f) of this Act.

(f) Notwithstanding any other provision of law relating to the acquisition, handling, or disposal of real property by the United States, the Commissioner shall have power to deal with, complete, rent, renovate, modernize, insure, make contracts or establish suitable agencies for the management of, or sell for cash or credit, in his discretion, any properties conveyed to him in exchange for debentures and certificates of claim as provided in this section; and notwithstanding any other provision of law, the Commissioner shall also have power to pursue to final collection, by way of compromise or otherwise, all claims against mortgagors assigned by mortgagees to the Commissioner as provided in this title: Provided, That section 3709 of the Revised Statutes shall not be construed to apply to any purchase or contract for services or supplies on account of such property if the amount thereof does not exceed $1,000. The power to convey and to execute in the name of the Commissioner deeds of conveyances, deeds of release, assignments, and satisfactions of mortgages, and any other written instrument relating to real property or any interest therein heretofore or hereafter acquired by the Commissioner pursuant to the provisions of this Act, may be exercised by the Commissioner or

1 September 2, 1964.

2 Sec. 112(d) of the Housing Act of 1954, Public Law 560, 83d Congress, approved August 2, 1954, 68 Stat. 590, 593, substituted "twenty" for "ten". Sec. 112(e) of the Housing Act of 1954 provided, however, that the change in maturity would "not apply in any case where the mortgage involved insured or the commitment for such insurance was issued prior to the effective date of the Housing Act of 1954" (August 2, 1954).

by any Assistant Commissioner appointed by him, without_the execution of any express delegation or power of attorney: Provided, That nothing in this subsection shall be construed to prevent the Commissioner from delegating such power by order or by power of attorney in his discretion, to any officer, agent, or employee he may appoint.

(g) No mortgagee or mortgagor shall have, and no certificate of claim shall be construed to give to any mortgagee or mortgagor, any right or interest in any property conveyed to the Commissioner or in any claim assigned to him; nor shall the Commissioner owe any duty to any mortgagee or mortgagor with respect to the handling or disposal of any such property or the collection of any such claim. SEC. 905.1

SEC. 906. Nothing in this title shall be construed to exempt any real property acquired and held by the Commissioner under this title from taxation by any State or political subdivision thereof, to the same extent, according to its value, as other real property is taxed. SEC. 907. The Commissioner is authorized and directed to make such rules and regulations as may be necessary to carry out the provisions of this title.

SEC. 908. (a) In addition to mortgages insured under section 903 of this title, the Commissioner is authorized to insure mortgages as defined in section 901 of this title (including advances on such mortgages during construction) which are eligible for insurance as hereinafter provided.

(b) To be eligible for insurance under this section a mortgage shall meet the following conditions:

(1) The mortgaged property shall be held by a mortgagor approved by the Commissioner. The Commissioner 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 Commissioner may make such contracts with, and acquire for not to exceed $100 stock or interest in any such mortgagor, as the Commissioner 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 Commissioner under the insurance.

(2) The mortgage shall involve a principal obligation in an

amount

(A) not to exceed $5,000,000; and

(B) not to exceed 90 per centum of the amount which the Commissioner 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 Commissioner 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

(C) 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

1 Sec. 905 repealed by sec. 1108 (aa), Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 507.

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 Commissioner 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 mortgagor shall enter into the agreement required by section 227 of this Act, as amended.1

The mortgage shall provide for complete amortization by periodic payments within such term as the Commissioner shall prescribe, and shall bear interest (exclusive of premium charges for insurance) at not to exceed 412 per centum 2 per annum on the amount of the principal obligation outstanding at any time. The Commissioner 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.

(c) The mortgagee shall be entitled to receive debentures in connection with mortgages insured under this section in the amount and under the conditions specified in subsection (g) of section 207 of this Act, and the references in said subsection (g) to the cash adjustment provided for in subsection (j) of section 207 and to the certificate of claim provided for in subsection (h) of section 207 shall be deemed to refer respectively to the cash adjustment provided for in subsection (c) of section 904 of this Act and to the certificate of claim provided for in subsection (d) of this section.

(d) The certificate of claim issued by the Commissioner to any mortgagee under this section shall be for an amount determined in accordance with, and shall contain provisions and shall be paid in accordance with, the provisions of section 207 (h) of this Act.

(e) Debentures issued under this section shall be issued in accordance with the provisions of section 904 (c) and (d) 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. (f) The provisions of section 207(k) and section 207 (1) of this Act shall be applicable to mortgages insured under this section and to property acquired by the Commissioner 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.

(g) In any case where an application for insurance under section 608 of this Act was received by the Federal Housing Commissioner 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 908 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.

(h) The Commissioner shall grant preference to applications for insurance under this title to mortgages covering housing of lower rents.

1 This paragraph amended to read as set forth in the text by sec. 130 of the Housing Act of 1954, Public Law 560, 83d Congress, approved August 2, 1954, 68 Stat. 590, 609. 2 Section 10 (c) of the Housing Amendments of 1953, Public Law 94, 83d Congress, approved June 30, 1953, 67 Stat. 124, substituted "41⁄2 per centum" for "4 per centum".

TITLE X-MORTGAGE INSURANCE FOR LAND

DEVELOPMENT1

DEFINITIONS

SEC. 1001. As used in this title

(a) the term "mortgage" means a lien or liens on real estate in fee simple, or on a leasehold (1) under a 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;

(b) the term "first mortgage" includes such classes of first lien as are commonly given to secure advances (including but not limited to advances during construction) on, or the unpaid purchase price of, real estate under the laws of the State in which the real estate is located, together with the credit instrument or instruments, if any, secured thereby, and may be in the form of trust mortgages or mortgage indentures or deeds of trusts securing notes, bonds, or other credit instruments;

(c) the terms "mortgagor", and "State" have the same meaning as in section 207 of this Act;

(d) the term "improvements" means waterlines and water supply installations, sewerlines and sewage disposal installation, steam, gas, and electric lines and installations, roads, streets, curbs, gutters, sidewalks, storm drainage facilities, and other installations or work, whether on or off the site, which the Commissioner deems necessary or desirable to prepare land primarily for residential and related uses or to provide facilities for public or common use. Related uses may include industrial uses, with sites for such uses to be in proper proportion to the size and scope of the development. The term improvements shall not include any building unless it is (1) a building which is needed in connection with a water supply or sewage disposal installation or a steam, gas, or electric line or installation, or (2) a building, other than a school, which is to be owned and maintained jointly by the property owners; and

(e) the term "land development" means the process of making, installing, or constructing improvements.

BASIC CONDITIONS FOR INSURANCE

SEC. 1002. (a) The Commissioner is authorized (1) to insure upon such terms and conditions as he may prescribe, any first mortgage (including advances on such mortgage) in accordance with the provisions of this title, and (2) to make a commitment for the insurance of such mortgage prior to the date of execution of such mortgage or prior to the date of disbursement of the mortgage proceeds. No mortgage shall be insured under this title after October 1, 1969, except pursuant to a commitment to insure issued before such date.

1 Title X was added by sec. 201, Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 461.

Sec. 201 also made the insured land development mortgages eligible for purchase under FNMA's regular secondary market operations and for investment by national banks and Federal savings and loan associations.

(b) The mortgage shall

(1) be executed by a mortgagor, other than a public body, approved by the Commissioner;

(2) be made to and held by a mortgagee approved by the Commissioner; and

(3) cover the land to be developed and the improvements to be made with the assistance of the mortgage insurance under this title, except facilities intended for public use and in public ownership.

(c) The principal obligation of the mortgage shall (1) not exceed 75 per centum of the Commissioner's estimate of the value of the property upon completion of the land development, and (2) not exceed the sum of 50 per centum of the Commissioner's estimate of the value of the land before development and 90 per centum of his estimate of the cost of such development. The outstanding principal obligations of mortgages involving a single land development undertaking, as defined by the Commissioner, shall at no time exceed $25,000,000.1 (d) The mortgage shall

(1) contain repayment provisions satisfactory to the Secretary and have a maturity not to exceed seven years, or such longer maturity as the Secretary deems reasonable (A) in the case of a privately owned system for water or sewerage, and (B) in the case of a new community approved under section 1004;

(2) bear interest at a rate satisfactory to the Commissioner, and such interest shall be exclusive of premium charges for mortgage insurance and such service charges and fees as may be approved by the Commissioner; and

(3) contain such terms and provisions with respect to protection of the security, payment of taxes, delinquency charges, prepayment, additional and secondary liens, and other matters as the Commissioner may in his discretion prescribe.

(e) A property or project to be financed by a mortgage insured under this title shall

(1) represent a good mortgage insurance risk; and

(2) involve improvements that comply with all applicable State and local governmental requirements and with minimum standards approved by the Comissioner.

LAND PLANNING

SEC. 1003. (a) The land development covered by a mortgage insured under this title shall be undertaken pursuant to a schedule, conforming to such requirements and procedures as the Commissioner may prescribe, that will assure the use of the land for the purposes for which it is to be developed within the shortest reasonable period consistent with the objectives of sound and economic community growth or urban development.

1 Sec. 402 (a), Demonstration Cities and Metropolitan Development Act of 1966, Public Law 89-754, approved November 3, 1966, 80 Stat. 1255, 1272, substituted "$25,000,000" for "$10,000,000".

2 Sec. 402 (b), Demonstration Cities and Metropolitan Development Act of 1966, Public Law 89-754, approved November 3, 1966, 80 Stat. 1255, 1272, amended par. (1) to include mortgages insuring new communities approved under sec. 1004 of that Act.