SUBCHAPTER II—MORTGAGE INSURANCE
§1707. Definitions
As used in
(a) The term "mortgage" means (A) a first mortgage on real estate, in fee simple, (B) a first mortgage on a leasehold on real estate (i) under a lease for not less than ninety-nine years which is renewable, or (ii) under a lease having a period of not less than ten years to run beyond the maturity date of the mortgage, or (C) a first mortgage given to secure the unpaid purchase price of a fee interest in, or long-term leasehold interest in, real estate consisting of a one-family unit in a multifamily project, including a project in which the dwelling units are attached, or are manufactured housing units, semi-detached, or detached, and an undivided interest in the common areas and facilities which serve the project; and the term "first mortgage" means such classes of first liens as are commonly given to secure advances 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 instruments, if any, secured thereby.
(b) The term "mortgagee" includes the original lender under a mortgage, and his successors and assigns approved by the Secretary; and the term "mortgagor" includes the original borrower under a mortgage and his successors and assigns.
(c) The term "maturity date" means the date on which the mortgage indebtedness would be extinguished if paid in accordance with periodic payments provided for in the mortgage.
(d) The term "State" includes the several States, and Puerto Rico, the District of Columbia, Guam, the Commonwealth of the Northern Mariana Islands, American Samoa, and the Virgin Islands.
(e) The term "family member" means, with respect to a mortgagor under such section, a child, parent, or grandparent of the mortgagor (or the mortgagor's spouse). In determining whether any of the relationships referred to in the preceding sentence exist, a legally adopted son or daughter of an individual (and a child who is a member of an individual's household, if placed with such individual by an authorized placement agency for legal adoption by such individual), and a foster child of an individual, shall be treated as a child of such individual by blood.
(f) The term "child" means, with respect to a mortgagor under such section, a son, stepson, daughter, or stepdaughter of such mortgagor.
(g) The term "real estate" means land and all natural resources and structures permanently affixed to the land, including residential buildings and stationary manufactured housing. The Secretary may not require, for treatment of any land or other property as real estate for purposes of this subchapter, that such land or property be treated as real estate for purposes of State taxation.
(June 27, 1934, ch. 847, title II, §201,
Amendments
2008—Subsec. (a).
Subsec. (d).
Subsec. (g).
1996—Subsecs. (e), (f).
1983—Subsec. (d).
1980—Subsec. (a).
1969—Subsec. (d).
1967—Subsec. (b).
1960—Subsec. (d).
1959—Subsec. (d).
1952—Subsec. (d). Act July 14, 1952, inserted "Guam," after "District of Columbia".
1950—Act Apr. 20, 1950, substituted "Commissioner" for "Administrator".
1941—Subsec. (a). Act Mar. 28, 1941, §4(a)(1), struck out "district, or Territory".
Subsec. (d). Act Mar. 28, 1941, §4(a)(2), added subsec. (d).
1938—Subsec. (a)(2). Act Feb. 3, 1938, struck out "upon which there is located a dwelling for not more than four families which is used in whole or in part for residential purposes, irrespective of whether such dwelling has a party wall or is otherwise physically connected with another dwelling" after "executed".
Subsec. (c). Act Feb. 3, 1938, added subsec. (c).
Improvement of Financing for Multifamily Housing
Section 541 of
Section 542 of
Section 543 of
Section 544 of
§1708. Federal Housing Administration operations
(a) Mutual Mortgage Insurance Fund
(1) Establishment
Subject to the provisions of the Federal Credit Reform Act of 1990 [
(2) Limit on loan guarantees
The authority of the Secretary to enter into commitments to guarantee such insured mortgages shall be effective for any fiscal year only to the extent that the aggregate original principal loan amount under such mortgages, any part of which is guaranteed, does not exceed the amount specified in appropriations Acts for such fiscal year.
(3) Fiduciary responsibility
The Secretary has a responsibility to ensure that the Mutual Mortgage Insurance Fund remains financially sound.
(4) Annual independent actuarial study
The Secretary shall provide for an independent actuarial study of the Fund to be conducted annually, which shall analyze the financial position of the Fund. The Secretary shall submit a report annually to the Congress describing the results of such study and assessing the financial status of the Fund. The report shall recommend adjustments to underwriting standards, program participation, or premiums, if necessary, to ensure that the Fund remains financially sound. The report shall also include an evaluation of the quality control procedures and accuracy of information utilized in the process of underwriting loans guaranteed by the Fund. Such evaluation shall include a review of the risk characteristics of loans based not only on borrower information and performance, but on risks associated with loans originated or funded by various entities or financial institutions.
(5) Quarterly reports
During each fiscal year, the Secretary shall submit a report to the Congress for each calendar quarter, which shall specify for mortgages that are obligations of the Fund—
(A) the cumulative volume of loan guarantee commitments that have been made during such fiscal year through the end of the quarter for which the report is submitted;
(B) the types of loans insured, categorized by risk;
(C) any significant changes between actual and projected claim and prepayment activity;
(D) projected versus actual loss rates; and
(E) updated projections of the annual subsidy rates to ensure that increases in risk to the Fund are identified and mitigated by adjustments to underwriting standards, program participation, or premiums, and the financial soundness of the Fund is maintained.
The first quarterly report under this paragraph shall be submitted on the last day of the first quarter of fiscal year 2008, or on the last day of the first full calendar quarter following July 30, 2008, whichever is later.
(6) Adjustment of premiums
If, pursuant to the independent actuarial study of the Fund required under paragraph (4), the Secretary determines that the Fund is not meeting the operational goals established under paragraph (7) or there is a substantial probability that the Fund will not maintain its established target subsidy rate, the Secretary may either make programmatic adjustments under this subchapter as necessary to reduce the risk to the Fund, or make appropriate premium adjustments.
(7) Operational goals
The operational goals for the Fund are—
(A) to minimize the default risk to the Fund and to homeowners by among other actions instituting fraud prevention quality control screening not later than 18 months after July 30, 2008; and
(B) to meet the housing needs of the borrowers that the single family mortgage insurance program under this subchapter is designed to serve.
(b) Advisory Board
There is created a Federal Housing Administration Advisory Board ("Board") that shall review operation of the Federal Housing Administration, including the activities of the Mortgagee Review Board, and shall provide advice to the Federal Housing Commissioner with respect to the formulation of general policies of the Federal Housing Administration and such other matters as the Federal Housing Commissioner may deem appropriate. The Advisory Board shall, in all other respects, be subject to the provisions of the Federal Advisory Committee Act.
(1) The Advisory Board shall be composed of 15 members to be appointed from among individuals who have substantial expertise and broad experience in housing and mortgage lending of whom—
(A) 9 shall be appointed by the Secretary;
(B) 3 shall be appointed by the Chairman and Ranking Minority Member of the Subcommittee on Housing and Urban Affairs of the Committee on Banking, Housing, and Urban Affairs of the Senate; and
(C) 3 shall be appointed by the Chairman and Ranking Minority Member of the Subcommittee on Housing and Community Development of the Committee on Banking, Finance and Urban Affairs of the House of Representatives.
(2) Membership on the Advisory Board shall include—
(A) not less than 4 persons with distinguished private sector careers in housing finance, lending, management, development or insurance;
(B) not less than 4 persons with outstanding reputations as licensed actuaries, experts in actuarial science, or economics related to housing;
(C) not less than 4 persons with backgrounds of leadership in representing the interests of housing consumers;
(D) not less than 1 person with significant experience and a distinguished reputation for work in the enforcement, advocacy, or development of fair housing or civil rights legislation; and
(E) not less than 1 person with a background of leadership representing rural housing interests.
(3) Members of the Advisory Board shall be selected to ensure, to the greatest extent practicable, geographical representation or every region of the country.
(4) Not more than 8 members of the Advisory Board may be from any one political party.
(5) Membership of the Advisory Board shall not include any person who, during the previous 24-month period, was required to register with the Secretary under section 3537b(c) 1 of title 42 or employed a person for purposes that required such person to so register.
(6) Of the members of the Advisory Board first appointed, 5 shall have terms of l year, and 5 shall have terms of 2 years. Their successors and all other appointees shall have terms of 3 years.
(7) The Advisory Board is empowered to confer with, request information of, and make recommendations to the Federal Housing Commissioner. The Commissioner shall promptly provide the Advisory Board with such information as the Board determines to be necessary to carry out its review of the activities and policies of the Federal Housing Administration.
(8) The Board shall, not later than December 31 of each year, submit to the Secretary and the Congress a report of its assessment of the activities of the Federal Housing Administration, including the soundness of underwriting procedures, the adequacy of information systems, the appropriateness of staffing patterns, the effectiveness of the Mortgagee Review Board, and other matters related to the Federal Housing Administration's ability to serve the nation's homebuyers and renters. Such report shall contain the Board's recommendations for improvement and include any minority views.
(9) The Board shall meet in Washington, D.C., not less than twice annually, or more frequently if requested by the Federal Housing Commissioner or a majority of the members. The Board shall elect a chair, vice-chair and secretary and adopt methods of procedure. The Board may establish committees and subcommittees as needed.
(10) Subject to the provisions of Section 7 of the Federal Advisory Committee Act, all members of the Board may be compensated and shall be entitled to reimbursement from the Department for traveling expenses incurred in attendance at meetings of the Board.
(11) The Board shall terminate on January 1, 1995.
(c) Mortgagee Review Board
(1) Establishment
There is established within the Federal Housing Administration the Mortgagee Review Board ("Board"). The Board is empowered to initiate the issuance of a letter of reprimand, the probation, suspension or withdrawal of any mortgagee found to be engaging in activities in violation of Federal Housing Administration requirements or the nondiscrimination requirements of the Equal Credit Opportunity Act [
(2) Composition
The Board shall consist of—
(A) the Assistant Secretary of Housing/Federal Housing Commissioner;
(B) the General Counsel of the Department;
(C) the President of the Government National Mortgage Association;
(D) the Assistant Secretary for Administration;
(E) the Assistant Secretary for Fair Housing Enforcement (in cases involving violations of nondiscrimination requirements); and
(F) the Chief Financial Officer of the Department or their designees.
(3) Actions authorized
When any report, audit, investigation, or other information before the Board discloses that a basis for an administrative action against a mortgagee exists, the Board shall take one of the following administrative actions:
(A) Letter of reprimand
The Board may issue a letter of reprimand only once to a mortgagee without taking action under subparagraphs 2 (B), (C), or (D) of this section. A letter of reprimand shall explain the violation and describe actions the mortgagee should take to correct the violation.
(B) Probation
The Board may place a mortgagee on probation for a specified period of time not to exceed 6 months for the purpose of evaluating the mortgagee's compliance with Federal Housing Administration requirements, the Equal Credit Opportunity Act [
(C) Suspension
The Board may issue an order temporarily suspending a mortgagee's approval for doing business with the Federal Housing Administration if (i) there exists adequate evidence of a violation or violations and (ii) continuation of the mortgagee's approval, pending or at the completion of any audit, investigation, or other review, or such administrative or other legal proceedings as may ensue, would not be in the public interest or in the best interests of the Department. Notwithstanding paragraph (4)(A), a suspension shall be effective upon issuance by the Board if the Board determines that there exists adequate evidence that immediate action is required to protect the financial interests of the Department or the public. A suspension shall last for not less than 6 months, and for not longer than 1 year. The Board may extend the suspension for an additional 6 months if it determines the extension is in the public interest. If the Board and the mortgagee agree, these time limits may be extended. During the period of suspension, the Federal Housing Administration shall not commit to insure any mortgage originated by the suspended mortgagee.
(D) Withdrawal
The Board may issue an order withdrawing a mortgagee if the Board has made a determination of a serious violation or repeated violations by the mortgagee. The Board shall determine the terms of such withdrawal, but the term shall be not less than 1 year. Where the Board has determined that the violation is egregious or willful, the withdrawal shall be permanent.
(E) Settlements
The Board may at any time enter into a settlement agreement with a mortgagee to resolve any outstanding grounds for an action. Agreements may include provisions such as—
(i) cessation of any violation;
(ii) correction or mitigation of the effects of any violation;
(iii) repayment of any sums of money wrongfully or incorrectly paid to the mortgagee by a mortgagor, by a seller or by the Federal Housing Administration;
(iv) actions to collect sums of money wrongfully or incorrectly paid by the mortgagee to a third party;
(v) indemnification of the Federal Housing Administration for mortgage insurance claims on mortgages originated in violation of Federal Housing Administration requirements;
(vi) modification of the length of the penalty imposed; or
(vii) implementation of other corrective measures acceptable to the Secretary.
Material failure to comply with the provisions of a settlement agreement shall be sufficient cause for suspension or withdrawal.
(4) Notice and hearing
(A) The Board shall issue a written notice to the mortgagee at least 30 days prior to taking any action against the mortgagee under subparagraph (B), (C), or (D) of paragraph (3). The notice shall state the specific violations which have been alleged, and shall direct the mortgagee to reply in writing to the Board within 30 days. If the mortgagee fails to reply during such period, the Board may make a determination without considering any comments of the mortgagee.
(B) If the Board takes action against a mortgagee under subparagraph (B), (C), or (D) of paragraph (3), the Board shall promptly notify the mortgagee in writing of the nature, duration, and specific reasons for the action. If, within 30 days of receiving the notice, the mortgagee requests a hearing, the Board shall hold a hearing on the record regarding the violations within 30 days of receiving the request. If a mortgagee fails to request a hearing within such 30-day period, the right of the mortgagee to a hearing shall be considered waived.
(C) In any case in which the notification of the Board does not result in a hearing (including any settlement by the Board and a mortgagee), any information regarding the nature of the violation and the resolution of the action shall be available to the public.
(5) Publication
The Secretary shall establish and publish in the Federal Register a description of and the cause for administrative action against a mortgagee.
(6) Cease-and-desist orders
(A) Whenever the Secretary, upon request of the Mortgagee Review Board, determines that there is reasonable cause to believe that a mortgagee is violating, has violated, or is about to violate, a law, rule or regulation or any condition imposed in writing by the Secretary or the Board, and that such violation could result in significant cost to the Federal Government or the public, the Secretary may issue a temporary order requiring the mortgagee to cease and desist from any such violation and to take affirmative action to prevent such violation or a continuation of such violation pending completion of proceedings of the Board with respect to such violation. Such order shall include a notice of charges in respect thereof and shall become effective upon service to the mortgagee. Such order shall remain effective and enforceable for a period not to exceed 30 days pending the completion of proceedings of the Board with respect to such violation, unless such order is set aside, limited, or suspended by a court in proceedings authorized by subparagraph (B) of this paragraph. The Board shall provide the mortgagee an opportunity for a hearing on the record, as soon as practicable but not later than 20 days after the temporary cease-and-desist order has been served.
(B) Within 10 days after the mortgagee has been served with a temporary cease-and-desist order, the mortgagee may apply to the United States district court for the judicial district in which the home office of the mortgagee is located, or the United States District Court for the District of Columbia, for an injunction setting aside, limiting of suspending the enforcement, operation, or effectiveness of such order pending the completion of the administrative proceedings pursuant to the notice of charges served upon the mortgagee, and such court shall have jurisdiction to issue such injunction.
(C) In the case of violation or threatened violation of, or failure to obey, a temporary cease-and-desist order issued pursuant to this paragraph, the Secretary may apply to the United States district court, or the United States court of any territory, within the jurisdiction of which the home office of the mortgagee is located, for an injunction to enforce such order, and, if the court shall determine that there has been such violation or threatened violation or failure to obey, it shall be the duty of the court to issue such injunction.
(7) "Mortgagee" defined
For purposes of this subsection, the term "mortgagee" means—
(A) a mortgagee approved under this chapter;
(B) a lender or a loan correspondent approved under subchapter I of this chapter;
(C) a branch office or subsidiary of the mortgagee, lender, or loan correspondent; or
(D) a director, officer, employee, agent, or other person participating in the conduct of the affairs of the mortgagee, lender, or loan correspondent.
(8) Report required
The Board, in consultation with the Federal Housing Administration Advisory Board, shall annually recommend to the Secretary such amendments to statute or regulation as the Board determines to be appropriate to ensure the long term financial strength of the Federal Housing Administration fund and the adequate support for home mortgage credit.
(9) Prohibition against limitations on Mortgagee Review Board's power to take action against mortgagees
No State or local law, and no Federal law (except a Federal law enacted expressly in limitation of this subsection after the effective date of this sentence), shall preclude or limit the exercise by the Board of its power to take any action authorized under paragraphs (3) and (6) of this subsection against any mortgagee.
(d) Limitations on participation in origination and mortgagee approval
(1) Requirement
Any person or entity that is not approved by the Secretary to serve as a mortgagee, as such term is defined in subsection (c)(7), shall not participate in the origination of an FHA-insured loan except as authorized by the Secretary.
(2) Eligibility for approval
In order to be eligible for approval by the Secretary, an applicant mortgagee shall not be, and shall not have any officer, partner, director, principal, manager, supervisor, loan processor, loan underwriter, or loan originator of the applicant mortgagee who is—
(A) currently suspended, debarred, under a limited denial of participation (LDP), or otherwise restricted under part 25 of title 24 of the Code of Federal Regulations, 2 Code of Federal Regulations, part 180 as implemented by part 2424, or any successor regulations to such parts, or under similar provisions of any other Federal agency;
(B) under indictment for, or has been convicted of, an offense that reflects adversely upon the applicant's integrity, competence or fitness to meet the responsibilities of an approved mortgagee;
(C) subject to unresolved findings contained in a Department of Housing and Urban Development or other governmental audit, investigation, or review;
(D) engaged in business practices that do not conform to generally accepted practices of prudent mortgagees or that demonstrate irresponsibility;
(E) convicted of, or who has pled guilty or nolo contendre 3 to, a felony related to participation in the real estate or mortgage loan industry—
(i) during the 7-year period preceding the date of the application for licensing and registration; or
(ii) at any time preceding such date of application, if such felony involved an act of fraud, dishonesty, or a breach of trust, or money laundering;
(F) in violation of provisions of the S.A.F.E. Mortgage Licensing Act of 2008 (
(G) in violation of any other requirement as established by the Secretary.
(3) Rulemaking and implementation
The Secretary shall conduct a rulemaking to carry out this subsection. The Secretary shall implement this subsection not later than the expiration of the 60-day period beginning upon May 20, 2009, by notice, mortgagee letter, or interim final regulations, which shall take effect upon issuance.
(e) Coordination of GNMA and FHA withdrawal action
(1) Whenever the Federal Housing Administration or Government National Mortgage Association initiates proceedings that could lead to withdrawing the mortgagee from participating in the program, the initiating agency shall—
(A) within 24 hours notify the other agency in writing of the action taken;
(B) provide to the other agency the factual basis for the action taken; and
(C) if a mortgagee is withdrawn, publish its decision in the Federal Register.
(2) Within 60 days of receipt of a notification of action that could lead to withdrawal under subsection 4 (1), the Federal Housing Administration or the Government National Mortgage Association shall—
(A) conduct and complete its own investigation;
(B) provide written notification to the other agency of its decision, including the factual basis for its decision; and
(C) if a mortgagee is withdrawn, publish its decision in the Federal Register.
(f) Suspension or revocation of approval of mortgagee; notice and statement of reasons
Whenever the Secretary has taken any discretionary action to suspend or revoke the approval of any mortgagee to participate in any mortgage insurance program under this subchapter, the Secretary shall provide prompt notice of the action and a statement of the reasons for the action to—
(1) the Secretary of Veterans Affairs;
(2) the chief executive officer of the Federal National Mortgage Association;
(3) the chief executive officer of the Federal Home Loan Mortgage Corporation;
(4) the Secretary of Agriculture;
(5) if the mortgagee is a national bank, a subsidiary or affiliate of such bank, a Federal savings association or a subsidiary or affiliate of a savings association, the Comptroller of the Currency;
(6) if the mortgagee is a State bank that is a member of the Federal Reserve System or a subsidiary or affiliate of such a bank, or a bank holding company or a subsidiary or affiliate of such a company, the Board of Governors of the Federal Reserve System; and
(7) if the mortgagee is a State bank or State savings association that is not a member of the Federal Reserve System or is a subsidiary or affiliate of such a bank, the Board of Directors of the Federal Deposit Insurance Corporation.
(g) Appraisal standards
(1) The Secretary shall prescribe standards for the appraisal of all property to be insured by the Federal Housing Administration. Such appraisals shall be performed in accordance with uniform standards, by individuals who have demonstrated competence and whose professional conduct is subject to effective supervision. These standards shall require at a minimum—
(A) that the appraisals of properties to be insured by the Federal Housing Administration shall be performed in accordance with generally accepted appraisal standards, such as the appraisal standards promulgated by the Appraisal Foundation a not-for-profit corporation established on November 30, 1987 under the laws of Illinois; and
(B) that each appraisal be a written statement used in connection with a real estate transaction that is independently an 5 impartially prepared by a licensed or certified appraiser setting forth an opinion of defined value of an adequately described property as of a specific date, supported by presentation and analysis of relevant market information.
(2) The Appraisal Subcommittee of the Federal Financial Institutions Examination Council shall include the Secretary or his designee.
(3)
(A) Any mortgagee that is authorized by the Secretary to process mortgages as a direct endorsement mortgagee (pursuant to the single-family home mortgage direct endorsement program established by the Secretary) may contract with an appraiser chosen at the discretion of the mortgagee for the performance of appraisals in connection with such mortgages. Such appraisers may include appraisal companies organized as corporations, partnerships, or sole proprietorships.
(B) Any appraisal conducted pursuant to subparagraph (A) shall be conducted by an individual who complies with the qualifications or standards for appraisers established by the Secretary pursuant to this subsection.
(C) In conducting an appraisal, such individual may utilize the assistance of others, who shall be under the direct supervision of the individual responsible for the appraisal. The individual responsible for the appraisal shall personally approve and sign any appraisal report.
(4)
(A) Any individual who is an employee of an appraisal company (including any company organized as a corporation, partnership, or sole proprietorship) and who meets the qualifications or standards for appraisers and inclusion on appraiser fee panels established by the Secretary, shall be eligible for assignment to conduct appraisals for mortgages under this subchapter in the same manner and on the same basis as other approved appraisers.
(B) With respect to any employee of an appraisal company described in subparagraph (A) who is offered an appraisal assignment in connection with a mortgage under this subchapter, the person utilizing the appraiser may contract directly with the appraisal company employing the appraiser for the furnishing of the appraisal services.
(5)
(A) be certified—
(i) by the State in which the property to be appraised is located; or
(ii) by a nationally recognized professional appraisal organization; and
(B) have demonstrated verifiable education in the appraisal requirements established by the Federal Housing Administration under this subsection.
(h) Use of name
The Secretary shall, by regulation, require each mortgagee approved by the Secretary for participation in the FHA mortgage insurance programs of the Secretary—
(1) to use the business name of the mortgagee that is registered with the Secretary in connection with such approval in all advertisements and promotional materials, as such terms are defined by the Secretary, relating to the business of such mortgagee in such mortgage insurance programs; and
(2) to maintain copies of all such advertisements and promotional materials, in such form and for such period as the Secretary requires.
(June 27, 1934, ch. 847, title II, §202,
References in Text
The Federal Credit Reform Act of 1990, referred to in subsec. (a)(1), is title V of
The Federal Advisory Committee Act, referred to in subsec. (b), is
The Equal Credit Opportunity Act, referred to in subsec. (c)(1), (3)(B), is title VII of
The Fair Housing Act, referred to in subsec. (c)(1), (3)(B), is title VIII of
Executive Order 11063, referred to in subsec. (c)(1), (3)(B), is set out as a note under
This chapter, referred to in subsec. (c)(7)(A), was in the original "this Act", meaning act June 27, 1934, ch. 847,
The effective date of this sentence, referred to in subsec. (c)(9), is the date of enactment of
The S.A.F.E. Mortgage Licensing Act of 2008, referred to in subsec. (d)(2)(F), is title V of div. A of
Codification
Amendments
2010—Subsec. (f)(5).
Subsec. (f)(6).
Subsec. (f)(7).
Subsec. (f)(8).
2009—Subsec. (c)(2)(E).
Subsec. (c)(2)(F).
Subsec. (c)(2)(G).
Subsec. (c)(9).
Subsecs. (d) to (g).
Subsec. (h).
2008—Subsec. (a).
Subsec. (e).
Subsec. (e)(3)(B).
Subsec. (e)(5).
Subsec. (f).
2000—Subsec. (c)(2)(E).
Subsec. (c)(2)(F).
Subsec. (c)(2)(G).
1997—Subsec. (c)(3)(C).
1992—Subsec. (b)(11).
Subsec. (c)(3)(C).
Subsec. (c)(6)(D).
Subsec. (c)(7), (8).
1990—Subsec. (e)(3), (4).
1989—
1967—
1950—Act Apr. 20, 1950, substituted "Commissioner" for "Administrator" wherever appearing.
1939—Act June 3, 1939, substituted "created" for "create".
1938—Act Feb. 3, 1938, inserted "with respect to mortgages insured under
Change of Name
Committee on Banking, Finance and Urban Affairs of House of Representatives treated as referring to Committee on Banking and Financial Services of House of Representatives by section 1(a) of
Effective Date of 2010 Amendment
Amendment by
Expanded Review of FHA Mortgagee Applicants and Newly Approved Mortgagees
"(1) expand the existing process for reviewing new applicants for approval for participation in the mortgage insurance programs of the Secretary for mortgages on 1- to 4-family residences for the purpose of identifying applicants who represent a high risk to the Mutual Mortgage Insurance Fund; and
"(2) implement procedures that, for mortgagees approved during the 12-month period ending upon such date of enactment—
"(A) expand the number of mortgages originated by such mortgagees that are reviewed for compliance with applicable laws, regulations, and policies; and
"(B) include a process for random reviews of such mortgagees and a process for reviews that is based on volume of mortgages originated by such mortgagees."
1 See References in Text note below.
2 So in original. Probably should be "subparagraph".
3 So in original. Probably should be "contendere".
4 So in original. Probably should be "paragraph".
5 So in original. Probably should be "and".
§1709. Insurance of mortgages
(a) Authorization
The Secretary is authorized, upon application by the mortgagee, to insure as hereinafter provided any mortgage offered to him which is eligible for insurance as hereinafter provided, and, upon such terms as the Secretary may prescribe, to make commitments for the insuring of such mortgages prior to the date of their execution or disbursement thereon.
(b) Eligibility for insurance; mortgage limits
To be eligible for insurance under this section a mortgage shall comply with the following:
(1) Have been made to, and be held by, a mortgagee approved by the Secretary as responsible and able to service the mortgage properly.
(2) Involve a principal obligation (including such initial service charges, appraisal, inspection, and other fees as the Secretary shall approve) in an amount—
(A) not to exceed the lesser of—
(i) in the case of a 1-family residence, 115 percent of the median 1-family house price in the area, as determined by the Secretary; and in the case of a 2-, 3-, or 4-family residence, the percentage of such median price that bears the same ratio to such median price as the dollar amount limitation determined under the sixth sentence of
(ii) 150 percent of the dollar amount limitation determined under the sixth sentence of such section 1454(a)(2) for a residence of applicable size;
except that the dollar amount limitation in effect under this subparagraph for any size residence for any area may not be less than the greater of: (I) the dollar amount limitation in effect under this section for the area on October 21, 1998; or (II) 65 percent of the dollar amount limitation determined under the sixth sentence of such section 1454(a)(2) for a residence of the applicable size; and
(B) not to exceed 100 percent of the appraised value of the property.
For purposes of the preceding sentence, the term "area" means a metropolitan statistical area as established by the Office of Management and Budget; and the median 1-family house price for an area shall be equal to the median 1-family house price of the county within the area that has the highest such median price. Notwithstanding any other provision of this paragraph, the amount which may be insured under this section may be increased by up to 20 percent if such increase is necessary to account for the increased cost of the residence due to the installation of a solar energy system (as defined in subparagraph (3) of the last paragraph of
Notwithstanding any other provision of this paragraph, the Secretary may not insure, or enter into a commitment to insure, a mortgage under this section that is executed by a first-time homebuyer and that involves a principal obligation (including such initial service charges, appraisal, inspection, and other fees as the Secretary shall approve) in excess of 97 percent of the appraised value of the property unless the mortgagor has completed a program of counseling with respect to the responsibilities and financial management involved in homeownership that is approved by the Secretary; except that the Secretary may, in the discretion of the Secretary, waive the applicability of this requirement.
(3) Have a maturity satisfactory to the Secretary, but not to exceed, in any event, thirty-five years (or thirty years if such mortgage is not approved for insurance prior to construction) from the date of the beginning of amortization of the mortgage.
(4) Contain complete amortization provisions satisfactory to the Secretary requiring periodic payments by the mortgagor not in excess of his reasonable ability to pay as determined by the Secretary.
(5) Bear interest at such rate as may be agreed upon by the mortgagor and the mortgagee.
(6) Provide, in a manner satisfactory to the Secretary, for the application of the mortgagor's periodic payments (exclusive of the amount allocated to interest and to the premium charge which is required for mortgage insurance as hereinafter provided) to amortization of the principal of the mortgage.
(7) Contain such terms and provisions with respect to insurance, repairs, alterations, payment of taxes, default, reserves, delinquency charges, foreclosure proceedings, anticipation of maturity, additional and secondary liens, and other matters as the Secretary may in his discretion prescribe.
(8) Repealed.
(9)
(A)
(B)
(i) such lien shall be subordinate to the mortgage; and
(ii) the sum of the principal obligation of the mortgage and the obligation secured by such lien may not exceed 100 percent of the appraised value of the property plus any initial service charges, appraisal, inspection, and other fees in connection with the mortgage.
(C)
(i) The seller or any other person or entity that financially benefits from the transaction.
(ii) Any third party or entity that is reimbursed, directly or indirectly, by any of the parties described in clause (i).
This subparagraph shall apply only to mortgages for which the mortgagee has issued credit approval for the borrower on or after October 1, 2008.
(c) Premium charges
(1) The Secretary is authorized to fix premium charges for the insurance of mortgages under the separate sections of this subchapter but in the case of any mortgage such charge shall be not less than an amount equivalent to one-fourth of 1 per centum per annum nor more than an amount equivalent to 1 per centum per annum of the amount of the principal obligation of the mortgage outstanding at any time, without taking into account delinquent payments or prepayments: Provided, That premium charges fixed for insurance (1) under section 1715z–10,1 1715z–12, 1715z–16, 1715z–17, or 1715z–18 of this title, or any other financing mechanism providing alternative methods for repayment of a mortgage that is determined by the Secretary to involve additional risk, or (2) under subsection (n) are not required to be the same as the premium charges for mortgages insured under the other provisions of this section, but in no case shall premium charges under subsection (n) exceed 1 per centum per annum: Provided, That any reduced premium charge so fixed and computed may, in the discretion of the Secretary, also be made applicable in such manner as the Secretary shall prescribe to each insured mortgage outstanding under the section or sections involved at the time the reduced premium charge is fixed. Such premium charges shall be payable by the mortgagee, either in cash, or in debentures issued by the Secretary under this subchapter at par plus accrued interest, in such manner as may be prescribed by the Secretary: Provided, That debentures presented in payment of premium charges shall represent obligations of the particular insurance fund or account to which such premium charges are to be credited: Provided further, That the Secretary may require the payment of one or more such premium charges at the time the mortgage is insured, at such discount rate as he may prescribe not in excess of the interest rate specified in the mortgage. If the Secretary finds upon the presentation of a mortgage for insurance and the tender of the initial premium charge or charges so required that the mortgage complies with the provisions of this section, such mortgage may be accepted for insurance by endorsement or otherwise as the Secretary may prescribe; but no mortgage shall be accepted for insurance under this section unless the Secretary finds that the project with respect to which the mortgage is executed is economically sound. In the event that the principal obligation of any mortgage accepted for insurance is paid in full prior to the maturity date, the Secretary is further authorized in his discretion to require the payment by the mortgagee of an adjusted premium charge in such amount as the Secretary determines to be equitable, but not in excess of the aggregate amount of the premium charges that the mortgagee would otherwise have been required to pay if the mortgage had continued to be insured under this section until such maturity date; and in the event that the principal obligation is paid in full as herein set forth the Secretary is authorized to refund to the mortgagee for the account of the mortgagor all, or such portion as he shall determine to be equitable, of the current unearned premium charges theretofore paid: Provided, That with respect to mortgages (1) for which the Secretary requires, at the time the mortgage is insured, the payment of a single premium charge to cover the total premium obligation for the insurance of the mortgage, and (2) on which the principal obligation is paid before the number of years on which the premium with respect to a particular mortgage was based, or the property is sold subject to the mortgage or is sold and the mortgage is assumed prior to such time, the Secretary shall provide for refunds, where appropriate, of a portion of the premium paid and shall provide for appropriate allocation of the premium cost among the mortgagors over the term of the mortgage, in accordance with procedures established by the Secretary which take into account sound financial and actuarial considerations.
(2) Notwithstanding any other provision of this section, each mortgage secured by a 1- to 4-family dwelling that is an obligation of the Mutual Mortgage Insurance Fund shall be subject to the following requirements:
(A) The Secretary shall establish and collect, at the time of insurance, a single premium payment in an amount not exceeding 3 percent of the amount of the original insured principal obligation of the mortgage. In the case of a mortgage for which the mortgagor is a first-time homebuyer who completes a program of counseling with respect to the responsibilities and financial management involved in homeownership that is approved by the Secretary, the premium payment under this subparagraph shall not exceed 2.75 percent of the amount of the original insured principal obligation of the mortgage. Upon payment in full of the principal obligation of a mortgage prior to the maturity date of the mortgage, the Secretary shall refund all of the unearned premium charges paid on the mortgage pursuant to this subparagraph, provided that the mortgagor refinances the unpaid principal obligation under this subchapter.
(B) In addition to the premium under subparagraph (A), the Secretary may establish and collect annual premium payments in an amount not exceeding 1.5 percent of the remaining insured principal balance (excluding the portion of the remaining balance attributable to the premium collected under subparagraph (A) and without taking into account delinquent payments or prepayments) for the following periods:
(i) For any mortgage involving an original principal obligation (excluding any premium collected under subparagraph (A)) that is less than 90 percent of the appraised value of the property (as of the date the mortgage is accepted for insurance), for the first 11 years of the mortgage term.
(ii) For any mortgage involving an original principal obligation (excluding any premium collected under subparagraph (A)) that is greater than or equal to 90 percent of such value, for the first 30 years of the mortgage term; except that notwithstanding the matter preceding clause (i), for any mortgage involving an original principal obligation (excluding any premium collected under subparagraph (A)) that is greater than 95 percent of such value, the annual premium collected during the 30-year period under this clause may be in an amount not exceeding 1.55 percent of the remaining insured principal balance (excluding the portion of the remaining balance attributable to the premium collected under subparagraph (A) and without taking into account delinquent payments or prepayments).
(C)(i) In addition to the premiums under subparagraphs (A) and (B), the Secretary shall establish and collect annual premium payments for any mortgage for which the Secretary collects an annual premium payment under subparagraph (B), in an amount described in clause (ii).
(ii)(I) Subject to subclause (II), with respect to a mortgage, the amount described in this clause is 10 basis points of the remaining insured principal balance (excluding the portion of the remaining balance attributable to the premium collected under subparagraph (A) and without taking into account delinquent payments or prepayments).
(II) During the 2-year period beginning on December 23, 2011, the Secretary shall increase the number of basis points of the annual premium payment collected under this subparagraph incrementally, as determined appropriate by the Secretary, until the number of basis points of the annual premium payment collected under this subparagraph is equal to the number described in subclause (I).
(d) Increase in maximum amount of mortgage
(1) Except as provided in paragraph (2) of this subsection, notwithstanding 2 provision of this subchapter governing maximum mortgage amounts for insuring a mortgage secured by a one- to four-family dwelling, the maximum amount of the mortgage determined under any such provision may be increased by the amount of the mortgage insurance premium paid at the time the mortgage is insured.
(2) The maximum amount of a mortgage determined under subsection (b)(2)(B) of this section may not be increased as provided in paragraph (1).
(e) Contract of insurance as evidence of eligibility
Any contract of insurance heretofore or hereafter executed by the Secretary under this subchapter shall be conclusive evidence of the eligibility of the loan or mortgage for insurance, and the validity of any contract of insurance so executed shall be incontestable in the hands of an approved financial institution or approved mortgagee from the date of the execution of such contract, except for fraud or misrepresentation on the part of such approved financial institution or approved mortgagee.
(f) Disclosure of other mortgage products
(1) In general
In conjunction with any loan insured under this section, an original lender shall provide to each prospective borrower a disclosure notice that provides a 1-page analysis of mortgage products offered by that lender and for which the borrower would qualify.
(2) Notice
The notice required under paragraph (1) shall include—
(A) a generic analysis comparing the note rate (and associated interest payments), insurance premiums, and other costs and fees that would be due over the life of the loan for a loan insured by the Secretary under subsection (b) with the note rates, insurance premiums (if applicable), and other costs and fees that would be expected to be due if the mortgagor obtained instead other mortgage products offered by the lender and for which the borrower would qualify with a similar loan-to-value ratio in connection with a conventional mortgage (as that term is used in
(B) a statement regarding when the requirement of the mortgagor to pay the mortgage insurance premiums for a mortgage insured under this section would terminate, or a statement that the requirement shall terminate only if the mortgage is refinanced, paid off, or otherwise terminated.
(g) Limitation on use of single family mortgage insurance by investors
(1) The Secretary may insure a mortgage under this subchapter that is secured by a 1- to 4-family dwelling, or approve a substitute mortgagor with respect to any such mortgage, only if the mortgagor is to occupy the dwelling as his or her principal residence or as a secondary residence, as determined by the Secretary. In making this determination with respect to the occupancy of secondary residences, the Secretary may not insure mortgages with respect to such residences unless the Secretary determines that it is necessary to avoid undue hardship to the mortgagor. In no event may a secondary residence under this subsection include a vacation home, as determined by the Secretary.
(2) The occupancy requirement established in paragraph (1) shall not apply to any mortgagor (or co-mortgagor, as appropriate) that is—
(A) a public entity, as provided in
(B) a private nonprofit or public entity, as provided in
(C) an Indian tribe, as provided in
(D) a serviceperson who is unable to meet such requirement because of his or her duty assignment, as provided in
(E) a mortgagor or co-mortgagor under subsection (k); or
(F) a mortgagor that, pursuant to
(3) For purposes of this subsection, the term "substitute mortgagor" means a person who, upon the release by a mortgagee of a previous mortgagor from personal liability on the mortgage note, assumes such liability and agrees to pay the mortgage debt.
(h) Disaster housing
Notwithstanding any other provision of this section, the Secretary is authorized to insure any mortgage which involves a principal obligation not in excess of the applicable maximum dollar limit under subsection (b) 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 establishes (to the satisfaction of the Secretary) 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
(i) Repealed. Pub. L. 110–289, div. B, title I, §2120(a)(1), July 30, 2008, 122 Stat. 2835
(j) Real estate loans by national banks
Loans secured by mortgages insured under this section shall not be taken into account in determining the amount of real estate loans which a national bank may make in relation to its capital and surplus or its time and savings deposits.
(k) Rehabilitation of one- to four-family structures; definitions; eligibility; refinancing and extension; General Insurance Fund
(1) The Secretary may, in order to assist in the rehabilitation of one- to four-family structures used primarily for residential purposes, insure and make commitments to insure rehabilitation loans (including advances made during rehabilitation) made by financial institutions. Such commitments to insure and such insurance shall be made upon such terms and conditions which the Secretary may prescribe and which are consistent with the provisions of subsections (b), (c), (e), (i),1 and (j) of this section, except as modified by the provisions of this subsection.
(2) For the purpose of this subsection—
(A) the term "rehabilitation loan" means a loan, advance of credit, or purchase of an obligation representing a loan or advance of credit, made for the purpose of financing—
(i) the rehabilitation of an existing one- to four-unit structure which will be used primarily for residential purposes;
(ii) the rehabilitation of such a structure and the refinancing of the outstanding indebtedness on such structure and the real property on which the structure is located; or
(iii) the rehabilitation of such a structure and the purchase of the structure and the real property on which it is located; and
(B) the term "rehabilitation" means the improvement (including improvements designed to meet cost-effective energy conservation standards prescribed by the Secretary) or repair of a structure, or facilities in connection with a structure, and may include the provision of such sanitary or other facilities as are required by applicable codes, a community development plan, or a statewide property insurance plan to be provided by the owner or tenant of the project. The term "rehabilitation" may also include measures to evaluate and reduce lead-based paint hazards, as such terms are defined in
(3) To be eligible for insurance under this subsection, a rehabilitation loan shall—
(A) involve a principal obligation (including such initial service charges, appraisal, inspection, and other fees as the Secretary shall approve) in an amount which does not exceed, when added to any outstanding indebtedness of the borrower which is secured by the structure and the property on which it is located, the amount specified in subsection (b)(2); except that, in determining the amount of the principal obligation for purposes of this subsection, the Secretary shall establish as the appraised value of the property an amount not to exceed the sum of the estimated cost of rehabilitation and the Secretary's estimate of the value of the property before rehabilitation;
(B) bear interest at such rate as may be agreed upon by the borrower and the financial institution;
(C) be an acceptable risk, as determined by the Secretary; and
(D) comply with such other terms, conditions, and restrictions as the Secretary may prescribe.
(4) Any rehabilitation loan insured under this subsection may be refinanced and extended in accordance with such terms and conditions as the Secretary may prescribe, but in no event for an additional amount or term which exceeds the maximum provided for in this subsection.
(5) All funds received and all disbursements made pursuant to the authority established by this subsection shall be credited or charged, as appropriate, to the Mutual Mortgage Insurance Fund, and insurance benefits shall be paid in cash out of such Fund or in debentures executed in the name of such Fund. Insurance benefits paid with respect to loans secured by a first mortgage and insured under this subsection shall be paid in accordance with
(l) Repealed. Pub. L. 90–448, title I, §103(b), Aug. 1, 1968, 82 Stat. 486
(m) Repealed. Pub. L. 100–242, title IV, §406(c), Feb. 5, 1988, 101 Stat. 1902
(n) Cooperative housing projects; definitions
(1) The Secretary is authorized to insure under this section any mortgage meeting the requirements of subsection (b) of this section, except as modified by this subsection. To be eligible, the mortgage shall involve a dwelling unit in a cooperative housing project which is covered by a blanket mortgage insured under this chapter or the construction of which was completed more than a year prior to the application for the mortgage insurance. The mortgage amount as determined under the other provisions of subsection (b) of this section shall be reduced by an amount equal to the portion of the unpaid balance of the blanket mortgage covering the project which is attributable (as of the date the mortgage is accepted for insurance) to such unit.
(2) For the purposes of this subsection—
(A) The terms "home mortgage" and "mortgage" include a first or subordinate mortgage or lien given (in accordance with the laws of the State where the property is located and accompanied by such security and other undertakings as may be required under regulations of the Secretary) to secure a loan made to finance the purchase of stock or membership in a cooperative ownership housing corporation the permanent occupancy of the dwelling units of which is restricted to members of such corporation, where the purchase of such stock or membership will entitle the purchaser to the permanent occupancy of one of such units.
(B) The terms "appraised value of the property", "value of the property", and "value" include the appraised value of a dwelling unit in a cooperative housing project of the type described in subparagraph (A) where the purchase of the stock or membership involved will entitle the purchaser to the permanent occupancy of that unit; and the term "property" includes a dwelling unit in such a cooperative project.
(C) The term "mortgagor" includes a person or persons giving a first or subordinate mortgage or lien (of the type described in subparagraph (A)) to secure a loan to finance the purchase of stock or membership in a cooperative housing corporation.
(o) Repealed. Pub. L. 110–289, div. B, title I, §2120(a)(2), July 30, 2008, 122 Stat. 2835
(p) Repealed. Pub. L. 110–289, div. B, title I, §2120(a)(3), July 30, 2008, 122 Stat. 2835
(q) Repealed. Pub. L. 110–289, div. B, title I, §2120(a)(4), July 30, 2008, 122 Stat. 2835
(r) Actions to reduce losses under single family mortgage insurance program
The Secretary shall take appropriate actions to reduce losses under the single-family mortgage insurance programs carried out under this subchapter. Such actions shall include—
(1) an annual review by the Secretary of the rate of early serious defaults and claims, in accordance with
(2) requiring that at least one person acquiring ownership of a one- to four-family residential property encumbered by a mortgage insured under this subchapter be determined to be creditworthy under standards prescribed by the Secretary, whether or not such person assumes personal liability under the mortgage (except that acquisitions by devise or descent shall not be subject to this requirement);
(3) in any case where personal liability under a mortgage is assumed, requiring that the original mortgagor be advised of the procedures by which he or she may be released from liability; and
(4) providing counseling, either directly or through third parties, to delinquent mortgagors whose mortgages are insured under this section, using the Fund to pay for such counseling.
In any case where the homeowner does not request a release from liability, the purchaser and the homeowner shall have joint and several liability for any default for a period of 5 years following the date of the assumption. After the close of such 5-year period, only the purchaser shall be liable for any default on the mortgage unless the mortgage is in default at the time of the expiration of the 5-year period.
(s) Transferred
(t) Disclosure regarding interest due upon mortgage prepayment
(1) Each mortgagee (or servicer) with respect to a mortgage under this section shall provide each mortgagor of such mortgagee (or servicer) written notice, not less than annually, containing a statement of the amount outstanding for prepayment of the principal amount of the mortgage and describing any requirements the mortgagor must fulfill to prevent the accrual of any interest on such principal amount after the date of any prepayment. This paragraph shall apply to any insured mortgage outstanding on or after the expiration of the 90-day period beginning on the date of effectiveness of final regulations implementing this paragraph.
(2) Each mortgagee (or servicer) with respect to a mortgage under this section shall, at or before closing with respect to any such mortgage, provide the mortgagor with written notice (in such form as the Secretary shall prescribe, by regulation, before the expiration of the 90-day period beginning upon November 28, 1990) describing any requirements the mortgagor must fulfill upon prepayment of the principal amount of the mortgage to prevent the accrual of any interest on the principal amount after the date of such prepayment. This paragraph shall apply to any mortgage executed after the expiration of the period under paragraph (1).
(u) Accountability of mortgage lenders
(1) No mortgagee may make or hold mortgages insured under this section if the customary lending practices of the mortgagee, as determined by the Secretary pursuant to
(2) For purposes of this subsection—
(A) the term "area" means a metropolitan statistical area as established by the Office of Management and Budget;
(B) the term "mortgage charges" includes the interest rate, discount points, loan origination fee, and any other amount charged to a mortgagor with respect to an insured mortgage; and
(C) the term "mortgage charge rate" means the amount of mortgage charges for an insured mortgage expressed as a percentage of the initial principal amount of the mortgage.
(v) Use of FHA insurance with assistance under 42 U.S.C. 1437f
The insurance of a mortgage under this section in connection with the assistance provided under
(w) Annual report
The Secretary of Housing and Urban Development shall submit to the Congress an annual report on the single family mortgage insurance program under this section. Each report shall set forth—
(1) an analysis of the income groups served by the single family insurance program, including—
(A) the percentage of borrowers whose incomes do not exceed 100 percent of the median income for the area;
(B) the percentage of borrowers whose incomes do not exceed 80 percent of the median income for the area; and
(C) the percentage of borrowers whose incomes do not exceed 60 percent of the median income for the area;
(2) an analysis of the percentage of minority borrowers annually assisted by the program; the percentage of central city borrowers assisted and the percentage of rural borrowers assisted by the program;
(3) the extent to which the Secretary in carrying out the program has employed methods to ensure that needs of low and moderate income families, underserved areas, and historically disadvantaged groups are served by the program; and
(4) the current impediments to having the program serve low and moderate income borrowers; borrowers from central city areas; borrowers from rural areas; and minority borrowers.
The report required under this subsection shall include the report required under
(x) Management deficiencies report
(1) In general
Not later than 60 days after October 21, 1998, and annually thereafter, the Secretary shall submit to Congress a report on the plan of the Secretary to address each material weakness, reportable condition, and noncompliance with an applicable law or regulation (as defined by the Director of the Office of Management and Budget) identified in the most recent audited financial statement of the Federal Housing Administration submitted under
(2) Contents of annual report
Each report submitted under paragraph (1) shall include—
(A) an estimate of the resources, including staff, information systems, and contract assistance, required to address each material weakness, reportable condition, and noncompliance with an applicable law or regulation described in paragraph (1), and the costs associated with those resources;
(B) an estimated timetable for addressing each material weakness, reportable condition, and noncompliance with an applicable law or regulation described in paragraph (1); and
(C) the progress of the Secretary in implementing the plan of the Secretary included in the report submitted under paragraph (1) for the preceding year, except that this subparagraph does not apply to the initial report submitted under paragraph (1).
(y) Requirements for mortgages for condominiums
(1) Project recertification requirements
Notwithstanding any other law, regulation, or guideline of the Secretary, including
(2) Commercial space requirements
Notwithstanding any other law, regulation, or guideline of the Secretary, including
(A) any request for such an exception and the determination of the disposition of such request may be made, at the option of the requester, under the direct endorsement lender review and approval process or under the HUD review and approval process through the applicable field office of the Department; and
(B) in determining whether to allow such an exception for a condominium property, factors relating to the economy for the locality in which such project is located or specific to project,2 including the total number of family units in the project, shall be considered.
Not later than the expiration of the 90-day period beginning on July 29, 2016, the Secretary shall issue regulations to implement this paragraph, which shall include any standards, training requirements, and remedies and penalties that the Secretary considers appropriate.
(3) Transfer fees
Notwithstanding any other law, regulation, or guideline of the Secretary, including
(4) Owner-occupancy requirement
(A) Establishment of percentage requirement
Not later than the expiration of the 90-day period beginning on July 29, 2016, the Secretary shall, by rule, notice, or mortgagee letter, issue guidance regarding the percentage of units that must be occupied by the owners as a principal residence or a secondary residence (as such terms are defined by the Secretary), or must have been sold to owners who intend to meet such occupancy requirements, including justifications for the percentage requirements, in order for a condominium project to be acceptable to the Secretary for insurance under this section of a mortgage within such condominium property.
(B) Failure to act
If the Secretary fails to issue the guidance required under subparagraph (A) before the expiration of the 90-day period specified in such clause, the following provisions shall apply:
(i) 35 percent requirement
In order for a condominium project to be acceptable to the Secretary for insurance under this section, at least 35 percent of all family units (including units not covered by FHA-insured mortgages) must be occupied by the owners as a principal residence or a secondary residence (as such terms are defined by the Secretary), or must have been sold to owners who intend to meet such occupancy requirement.
(ii) Other considerations
The Secretary may increase the percentage applicable pursuant to clause (i) to a condominium project on a project-by-project or regional basis, and in determining such percentage for a project shall consider factors relating to the economy for the locality in which such project is located or specific to project,2 including the total number of family units in the project.
(June 27, 1934, ch. 847, title II, §203,
Amendment of Subsection (c)(2)
References in Text
This chapter, referred to in subsecs. (g)(2)(F) and (n)(1), was in the original "this Act", meaning act June 27, 1934, ch. 847,
Subsection (i) of this section, referred to in subsec. (k)(1), was repealed by
Amendments
2016—Subsec. (y).
2011—Subsec. (c)(2)(C).
2010—Subsec. (c)(2)(B).
Subsec. (c)(2)(B)(ii).
2008—Subsec. (b)(2).
Subsec. (b)(2)(A), (B).
Subsec. (b)(9).
Subsec. (c)(2).
Subsec. (c)(2)(A).
Subsec. (d).
Subsec. (i).
Subsec. (k)(1).
Subsec. (k)(5).
Subsec. (n)(2)(A), (C).
Subsec. (o).
Subsec. (p).
Subsec. (q).
Subsec. (s).
Subsec. (s)(4).
Subsec. (u)(2)(A).
Subsec. (v).
2005—Subsec. (c)(1).
2004–Subsec. (c)(1).
Subsec. (c)(2)(A).
Subsec. (s)(5).
2002—Subsec. (b).
Subsec. (b)(2).
Subsec. (b)(2)(A).
Subsec. (b)(2)(B).
"(i) 97 percent of $25,000 of the appraised value of the property, as of the date the mortgage is accepted for insurance;
"(ii) 95 percent of such value in excess of $25,000 but not in excess of $125,000; and
"(iii) 90 percent of such value in excess of $125,000."
Subsec. (b)(10).
Subsec. (f).
2001—Subsec. (c)(1).
Subsec. (c)(2).
2000—Subsec. (b)(10)(A).
Subsec. (s).
Subsec. (t).
Subsec. (u).
Subsec. (v).
Subsec. (w).
1999—Subsec. (b)(2)(A)(ii).
1998—Subsec. (b)(2).
Subsec. (b)(2)(A).
"(ii) 75 percent of the dollar amount limitation determined under
except that the applicable dollar amount limitation in effect for any area under this subparagraph may not be less than the greater of the dollar amount limitation in effect under this section for the area on September 28, 1994, or 38 percent of the dollar amount limitation determined under
Subsec. (b)(2)(B).
Subsec. (b)(10).
Subsec. (b)(10)(A).
Subsec. (x).
1997—Subsec. (b)(10)(A).
1996—Subsec. (b)(9).
Subsec. (b)(10).
Subsec. (c)(2)(A).
1994—Subsec. (b)(2)(A).
"(ii) 75 percent of the dollar amount limitation determined under
except that the applicable dollar amount limitation in effect for any area under this subparagraph (A) may not be less than the dollar amount limitation in effect under this section for the area on May 12, 1992;".
Subsec. (h).
Subsec. (k)(6).
1992—Subsec. (b)(2).
"(A) not to exceed the lesser of—
"(i) in the case of the 1-family residence, 95 percent of the median 1-family house price in the area (as determined by the Secretary); in the case of a 2-family residence, 107 percent of such median price; in the case of a 3-family residence, 130 percent of such median price; or in the case of a 4-family residence, 150 percent of such median price; or
"(ii) 75 percent of the dollar amount limitation determined under
except that the applicable dollar amount limitation in effect for any area under this subparagraph (A) may not be less than the dollar amount limitation in effect under this section for the area on May 12, 1992; and
"(B) except as otherwise provided in this paragraph (2), not to exceed an amount equal to the sum of—
"(i) 97 percent of $25,000 of the appraised value of the property, as of the date the mortgage is accepted for insurance;
"(ii) 95 percent of such value in excess of $25,000 but not in excess of $125,000; and
"(iii) 90 percent of such value in excess of $125,000."
Subsec. (b)(9).
Subsec. (c)(2).
Subsec. (c)(2)(A), (B).
Subsec. (c)(2)(B)(ii).
Subsec. (k)(2)(B).
Subsec. (v).
1991—Subsec. (b)(2).
1990—Subsec. (b)(2).
Subsec. (b)(9).
Subsec. (c).
Subsec. (g)(1).
Subsec. (r)(4).
Subsec. (s).
Subsec. (t).
1989—Subsec. (b)(2).
Subsec. (g)(2).
"(A) the appraised value of the dwelling;
"(B) the estimate of the Secretary of the replacement cost of the property;
"(C) the sum of the estimates of the Secretary of the cost of repair and rehabilitation and the value of the property before repair and rehabilitation; or
"(D) the sum of the estimates of the Secretary of the cost of repair and rehabilitation and the amount (as determined by the Secretary) required to refinance existing indebtedness secured by the property, and, in the case of a property refinanced under
Subsec. (g)(2)(A).
Subsec. (g)(2)(B).
Subsec. (g)(3), (4).
Subsec. (r).
Subsec. (r)(2), (3).
"(2) requiring reviews of the credit standing of each person seeking to assume a mortgage insured under this section (A) during the 12-month period following the date on which the mortgage is executed, or (B) during the 24-month period following the date on which the mortgage is executed in the case of an investor originated mortgage; and
"(3) in any case where a mortgage is assumed after the period specified in paragraph (2), requiring that the original mortgagor be advised of the procedures by which he or she may be released from liability."
Subsec. (s).
1988—Subsec. (b)(2).
Subsec. (b)(8).
Subsec. (c).
Subsec. (g).
Subsec. (g)(3)(F).
Subsec. (h).
Subsec. (i).
Subsec. (k)(3)(B).
Subsec. (m).
Subsec. (o)(2).
Subsec. (p)(2).
Subsec. (q)(1).
Subsec. (r).
Subsec. (r)(2)(A), (B).
1986—Subsec. (q).
1984—Subsec. (n)(2)(A).
1983—Subsec. (b)(2).
Subsec. (b)(5).
Subsec. (b)(8).
Subsec. (c).
Subsec. (d).
Subsec. (h).
Subsec. (k)(3)(B).
Subsec. (n)(1).
Subsec. (n)(2)(A).
1982—Subsec. (b)(2).
Subsec. (b)(9).
Subsec. (c).
1980—Subsec. (b)(2).
Subsec. (b)(3).
Subsec. (k)(5).
Subsec. (p).
1979—Subsec. (b)(2).
Subsec. (i).
1978—Subsec. (b)(2).
Subsec. (c).
Subsec. (k).
1977—Subsec. (b)(2).
Subsec. (c).
Subsec. (i).
Subsec. (o).
1974—Subsec. (b)(2).
Subsec. (b)(2)(i).
Subsec. (b)(2)(ii).
Subsec. (b)(2)(iii).
Subsec. (h).
Subsec. (n).
1970—Subsec. (h).
1969—Subsec. (b)(2).
Subsec. (h).
Subsec. (i).
Subsec. (m).
1968—Subsec. (h).
Subsec. (i).
Subsec. (l).
Subsec. (m).
1967—Pub. L. 90—19, §1(a)(3), substituted "Secretary" for "Commissioner" wherever appearing in subsecs. (a), (b)(1) to (9), (c), (e), (h), (i), and (k).
Subsec. (b)(3), (9). Pub. L. 90—19, §1(a)(4), substituted "Secretary's" for "Commissioner's".
1966—Subsec. (b)(2).
Subsec. (l).
1965—Subsec. (b)(2).
Subsec. (b)(9).
Subsec. (i).
Subsec. (k).
1964—Subsec. (b)(2).
Subsec. (i).
Subsec. (k).
1961—Subsec. (a).
Subsec. (b)(2).
Subsec. (b)(3).
Subsec. (c).
Subsec. (e).
Subsec. (k).
1959—Subsec. (b)(2).
Subsec. (b)(8).
Subsec. (i).
Subsec. (j).
1958—Subsec. (b)(2).
1957—Subsec. (b)(2).
Subsec. (b)(8), (9).
Subsec. (d).
Subsec. (i).
1956—Subsec. (b)(2). Act Aug. 7, 1956, §§102(a), 104(a), inserted "unless the construction of the dwelling was completed more than one year prior to the application for mortgage insurance" before "90 per centum" in parenthetical clause, and inserted provision that in cases where mortgagor is a person 60 years of age or older, the downpayment required could be paid by a person other than the mortgagor under conditions prescribed by the Commissioner.
Subsec. (h). Act Aug. 7, 1956, §102(b), substituted "$12,000" for "$7,000".
1954—Subsec. (b)(2). Act Aug. 2, 1954, §104, generally amended provisions to provide, among others, for an increase in, and equalization of, maximum mortgage amounts, with respect to new housing, substitution of a loan to value ratio of 95 per centum of the $9,000 of value plus 75 per centum of the balance in excess of $9,000, with Presidential authority to increase the $9,000 figure to $10,000 under certain conditions, and with respect to existing housing, substitution of a loan to value ratio of 90 per centum of the first $9,000 of value plus 75 per centum of the balance in excess of $9,000, with Presidential authority to increase the $9,000 figure to $10,000, and inserted a provision limiting the maximum loan to value ratio where the builder becomes the mortgagor, not to exceed 85 per centum of the mortgage loan which an owner-occupant could obtain.
Subsec. (b)(3). Act Aug. 2, 1954, §105, substituted a provision for a maximum maturity of 30 years or three-quarters of the Commissioner's estimate of the remaining economic life of the building improvements, whichever is the lesser, for former provision carrying varying limits ranging from twenty to thirty years.
Subsec. (b)(5). Act Aug. 2, 1954, §106, fixed maximum statutory interest rate on mortgages at 5 per centum with authority in the Commissioner to increase the rate to not to exceed 6 per centum as he finds it necessary to meet the mortgage market; and permitted the allowance of service charges.
Subsec. (c). Act Aug. 2, 1954, §107, 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.
Subsec. (d). Act Aug. 2, 1954, §108, prohibited insurance of mortgages pursuant to this subsection after Aug. 2, 1954, except pursuant to commitments to insure issued on or before such date.
Subsecs. (f), (g). Act Aug. 2, 1954, §109, repealed subsec. (f) which related to refinance mortgages and subsec. (g) which related to higher loan to value ratio and longer maturity for single-family residences. See subsecs. (b)(2) and (b)(3) of this section.
Subsecs. (h), (i). Act Aug. 2, 1954, §110, added subsecs. (h) and (i).
1953—Subsec. (g). Act June 30, 1953, added subsec. (g).
1950—Act Apr. 20, 1950, §122, substituted "Commissioner" for "Administrator" wherever appearing.
Subsec. (a). Act Apr. 20, 1950, §103, increased statutory amount of insurance authority from $6,750,000,000 to $7,500,000,000 and provided that an additional $1,250,000,000 in insurance authority could be made available with the authority of the President.
Subsec. (b)(2). Act Apr. 20, 1950, §104(a), inserted proviso to clause (A) to allow the Commissioner to increase the dollar limitation by not exceeding $4,500 for each additional family dwelling unit, in excess of two located on such property, repealed clause (B), changed "$9,500" to read "$9,450", "90" to "95" in clause (C), and changed clause (D) to provide that an insured mortgage could not exceed $6,650 in amount and not exceed 95 per centum of the appraised value, except that the Commissioner is given discretionary authority to increase such dollar amount limitation by not exceeding $950 for each additional bedroom in excess of two, and also to give Commissioner authority to increase the insurance limitation in any geographical area where he finds that cost levels so require.
1949—Subsec. (a). Joint Res. Oct. 25, 1949, substituted "$6,000,000,000" for "$5,500,000,000", and "$6,750,000,000" for "$6,000,000,000".
Act Aug. 30, 1949 substituted "$5,500,000,000" for "$5,300,000,000" and "$6,000,000,000" for "$5,500,000,000".
Act July 15, 1949, substituted "$5,300,000,000" for "$4,000,000,000" and "$5,500,000,000" for "$5,000,000,000".
1948—Subsec. (b)(2). Act Aug. 10, 1948, §101(g), (h)(1)–(3), (j)(1), substituted "$6,300" for "$5,400" in subpar. (B), substituted "$9,500" for "$8,600", "$7,000" for "$6,000", and "$11,000" for "$10,000" in subpar. (C), and added subpar. (D).
Subsec. (b)(3). Act Aug. 10, 1948, §101(i), (j)(2), substituted "on property approved for insurance prior to the beginning of construction" for "of the character described in paragraph (2)(B) of this subsection" and inserted "or not to exceed thirty years in the case of a mortgage insured under paragraph (2)(D) of this subsection", at the end thereof.
Subsec. (b)(5). Act Aug. 10, 1948, §101(j)(3), inserted "or not to exceed 4 per centum per annum in the case of a mortgage insured under paragraph (2)(D) of this subsection, or not to exceed such percentum per annum, not in excess of 5 per centum, as the Administrator finds necessary to meet the mortgage market" at the end thereof.
Subsec. (c). Act Aug. 10, 1948, §101(k)(1), (2), struck out of last sentence "under this section or
1946—Subsec. (a). Act July 1, 1946, struck out second and third provisos providing for a limitation on the aggregate amount of mortgages outstanding, and limiting insuring of mortgages after July 1, 1946, respectively.
1943—Subsec. (a). Act Oct. 15, 1943, substituted "1946" for "1944" in third proviso.
1941—Subsec. (a). Act June 28, 1941, substituted "$4,000,000,000" for "$3,000,000,000", "$5,000,000,000" for "$4,000,000,000"; and affected second and third provisos.
1939—Subsec. (a). Act June 3, 1939, §6, substituted "$3,000,000" for "$2,000,000", "$4,000,000" for "$3,000,000", generally revised second proviso and inserted third proviso.
Subsec. (b)(3). Act June 3, 1939, §7, struck out "until July 1, 1939".
Subsecs. (e), (f). Act June 3, 1939, §8, added subsecs. (e) and (f).
1938—Subsecs. (a) to (d). Act Feb. 3, 1938, amended provisions generally.
1935—Subsec. (a)(1). Act Aug. 23, 1935, inserted "property and" before "project".
Subsec. (c). Act May 28, 1935, inserted part of last sentence before the semicolon.
Effective Date of 2011 Amendment
Effective Date of 2008 Amendment
Effective Date of 2004 Amendments
Amendment by
Effective Date of 2001 Amendment
"(1) apply only to mortgages that are executed on or after the date of enactment of this Act [Nov. 26, 2001]; and
"(2) be implemented in advance of any necessary conforming changes to regulations."
Applicability of 1994 Amendment
"(1) [Amended this section.]
"(2) [Amended this section.]
"(3) [Amended
"Eligibility for loans made under the authority granted by the preceding paragraph [amending this section and
Effective Date of 1992 Amendment
Effective Date of 1990 Amendments
"(1) mortgages insured—
"(A) pursuant to a conditional commitment issued after the expiration of the 60-day period beginning on the date of the enactment of this Act [Nov. 28, 1990]; or
"(B) in accordance with the direct endorsement program, if the approved underwriter of the mortgages signs the appraisal report for the property after the expiration of the 60-day period beginning on the date of the enactment of this Act; and
"(2) the approval of substitute mortgagors, if the original mortgagor was subject to such amendments."
Amendment by
Effective Date of 1989 Amendment
"(1) mortgages insured—
"(A) pursuant to a conditional commitment issued on or after the date of the enactment of this Act [Dec. 15, 1989]; or
"(B) in accordance with the direct endorsement program (24 C.F.R. 200.163), if the approved underwriter of the mortgage signs the appraisal report for the property on or after the date of the enactment of this Act; and
"(2) the approval of substitute mortgagors, if the original mortgagor was subject to such amendments."
"(1) mortgages insured—
"(A) pursuant to a conditional commitment issued on or after the date of the enactment of this Act [Dec. 15, 1989]; or
"(B) in accordance with the direct endorsement program, if the approved underwriter of the mortgagee signs the appraisal report for the property on or after the date of the enactment of this Act; and
"(2) the approval of substitute mortgagors, if the original mortgagor was subject to such amendments."
Effective Date of 1988 Amendment
"(1) mortgages insured—
"(A) pursuant to a conditional commitment issued on or after the date of the enactment of this Act [Feb. 5, 1988]; or
"(B) in accordance with the direct endorsement program (24 CFR 200.163), if the approved underwriter of the mortgagee signs the appraisal report for the property on or after the date of the enactment of this Act; and
"(2) the approval of substitute mortgagors, referred to in the amendment made by subsection (a) [amending this section], if the original mortgagor was subject to such amendment."
Effective Date of 1983 Amendment
Effective Date of 1978 Amendment
Effective Date of 1974 Amendment
Amendment by
Effective Date of 1970 Amendment
Amendment by
Effective Date of 1949 Amendment
Amendment by act July 15, 1949, effective June 30, 1949, see section 202 of that act, set out as a note under
Regulations
Implementation
Temporary Extension of FHA Mortgage Limit
"(a)
"(b)
Transition Provisions of 1990 Amendments
"(b)
"(1) 1991
"(A)
"(B)
"(i) less than 90 percent of the appraised value of the property (as of the date the mortgage is accepted for insurance), for the first 5 years of the mortgage term;
"(ii) greater than or equal to 90 percent of such value but equal to or less than 95 percent of such value, for the first 8 years of the mortgage term; and
"(iii) greater than 95 percent of such value, for the first 10 years of the mortgage term.
"(2) 1993
"(A)
"(B)
"(i) less than 90 percent of the appraised value of the property (as of the date the mortgage is accepted for insurance), for the first 7 years of the mortgage term;
"(ii) greater than or equal to 90 percent of such value but equal to or less than 95 percent of such value, for the first 12 years of the mortgage term; and
"(iii) greater than 95 percent of such value, for the first 30 years of the mortgage term.
"(3)
"(c)
Transition Provisions of 1989 Amendment
Transition Provisions of 1988 Amendment
Implementation of 1982 Amendment
Effect of Repeal of Subsec. (b)(2)(B) of This Section
Act Apr. 20, 1950, ch. 94, title I, §104(b),
Limitation on Mortgage Insurance Premium Increases
"(a)
"(1) for the period beginning on the date of the enactment of this title [July 30, 2008] and ending on October 1, 2009, the premiums charged for mortgage insurance under multifamily housing programs under the National Housing Act [
"(2) a premium increase pursuant to paragraph (1) may be made only if not less than 30 days prior to such increase taking effect, the Secretary of Housing and Urban Development—
"(A) notifies the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives of such increase; and
"(B) publishes notice of such increase in the Federal Register.
"(b)
Mutual Mortgage Insurance Fund Premiums
Report on Home Equity Conversion Mortgages for the Elderly
Studies of Mortgage Insurance Premiums and Alternatives to Statutory Mortgage Amounts
Insurance Program or Homeowners To Meet Mortgage Payments in Times of Personal Economic Adversity
1 See References in Text note below.
§1709–1. Repealed. Pub. L. 98–181, title I [title IV, §404(a)], Nov. 30, 1983, 97 Stat. 1208
Section,
Mortgage Credit Interest Rates
§1709–1a. State constitutional and legal limits upon interest chargeable on loans, mortgages, or other interim financing arrangements; applicability; covered arrangements
(a) The provisions of the constitution of any State expressly limiting the amount of interest which may be charged, taken, received, or reserved by certain classes of lenders and the provisions of any law of that State expressly limiting the amount of interest which may be charged, taken, received, or reserved shall not apply to—
(1) any loan or mortgage which is secured by a one- to four-family dwelling and which is (A) insured under title I or II [
(2) any temporary construction loan or other interim financing if at the time such loan is made or financing is arranged, the intention to obtain permanent financing substantially by means of loans or mortgages so insured, guaranteed, or made is declared.
(b) The provisions of this section shall apply to such loans, mortgages, or other interim financing made or executed in any State until the effective date (after June 30, 1976) of a provision of law of that State limiting the amount of interest which may be charged, taken, received, or reserved on such loans, mortgages, or financing.
(
References in Text
The National Housing Act, referred to in subsec. (a)(1), is act June 27, 1934, ch. 847,
Codification
Section was enacted as part of the Veterans Housing Amendments Act of 1976, and not as part of the National Housing Act which comprises this chapter.
Effective Date
Section effective June 30, 1976, see section 9(a) of
§1709–2. Equity skimming; penalty; persons liable; one dwelling exemption
Whoever, with intent to defraud, willfully engages in a pattern or practice of—
(1) purchasing one- to four-family dwellings (including condominiums and cooperatives) which are subject to a loan in default at time of purchase or in default within one year subsequent to the purchase and the loan is secured by a mortgage or deed of trust insured or held by the Secretary of Housing and Urban Development or guaranteed by the Department of Veterans Affairs, or the loan is made by the Department of Veterans Affairs,
(2) failing to make payments under the mortgage or deed of trust as the payments become due, regardless of whether the purchaser is obligated on the loan, and
(3) applying or authorizing the application of rents from such dwellings for his own use,
shall be fined not more than $250,000 or imprisoned not more than 5 years, or both. This section shall apply to a purchaser of such a dwelling, or a beneficial owner under any business organization or trust purchasing such dwelling, or to an officer, director, or agent of any such purchaser. Nothing in this section shall apply to the purchaser of only one such dwelling.
(
Codification
Section was enacted as part of the Housing and Urban Development Act of 1970, and not as part of the National Housing Act which comprises this chapter.
Amendments
1991—Par. (1).
1988—
§1709a. Determination of loan-to-value ratios
The Secretary of Housing and Urban Development, in establishing maximum loan-to-value ratios for mortgages insured by him under the National Housing Act [
(
References in Text
The National Housing Act, referred to in text, is act June 27, 1934, ch. 847,
Amendments by sections 101, 102, and 103 of this act, referred to in text, refers to amendment of
The Servicemen's Readjustment Act of 1944, as amended, referred to in text, is act June 22, 1944, ch. 268,
Codification
Section was enacted as part of the Housing Act of 1957, and not as part of the National Housing Act which comprises this chapter.
Amendments
1967—
§1709b. Repealed. Pub. L. 85–364, §6, Apr. 1, 1958, 72 Stat. 77
Section,
§1710. Payment of insurance
(a) In general
(1) Authorized claims procedures
The Secretary may, in accordance with this subsection and terms and conditions prescribed by the Secretary, pay insurance benefits to a mortgagee for any mortgage insured under
(A) Assignment of mortgage
The Secretary may pay insurance benefits whenever a mortgage has been in a monetary default for not less than 3 full monthly installments or whenever the mortgagee is entitled to foreclosure for a nonmonetary default. Insurance benefits shall be paid pursuant to this subparagraph only upon the assignment, transfer, and delivery to the Secretary of—
(i) all rights and interests arising under the mortgage;
(ii) all claims of the mortgagee against the mortgagor or others arising out of the mortgage transaction;
(iii) title evidence satisfactory to the Secretary; and
(iv) such records relating to the mortgage transaction as the Secretary may require.
(B) Conveyance of title to property
The Secretary may pay insurance benefits if the mortgagee has acquired title to the mortgaged property through foreclosure or has otherwise acquired such property from the mortgagor after a default upon—
(i) the prompt conveyance to the Secretary of title to the property which meets the standards of the Secretary in force at the time the mortgage was insured and which is evidenced in the manner provided by such standards; and
(ii) the assignment to the Secretary of all claims of the mortgagee against the mortgagor or others, arising out of mortgage transaction or foreclosure proceedings, except such claims as may have been released with the consent of the Secretary.
The Secretary may permit the mortgagee to tender to the Secretary a satisfactory conveyance of title and transfer of possession directly from the mortgagor or other appropriate grantor, and may pay to the mortgagee the insurance benefits to which it would otherwise be entitled if such conveyance had been made to the mortgagee and from the mortgagee to the Secretary.
(C) Claim without conveyance of title
The Secretary may pay insurance benefits upon sale of the mortgaged property at foreclosure where such sale is for at least the fair market value of the property (with appropriate adjustments), as determined by the Secretary, and upon assignment to the Secretary of all claims referred to in clause (ii) of subparagraph (B).
(D) Preforeclosure sale
The Secretary may pay insurance benefits upon the sale of the mortgaged property by the mortgagor after default and the assignment to the Secretary of all claims referred to in clause (ii) of subparagraph (B), if—
(i) the sale of the mortgaged property has been approved by the Secretary;
(ii) the mortgagee receives an amount at least equal to the fair market value of the property (with appropriate adjustments), as determined by the Secretary; and
(iii) the mortgagor has received an appropriate disclosure, as determined by the Secretary.
(2) Payment for loss mitigation
The Secretary may pay insurance benefits to the mortgagee to recompense the mortgagee for all or part of any costs of the mortgagee for taking loss mitigation actions that provide an alternative to foreclosure of a mortgage that is in default or faces imminent default, as defined by the Secretary (including but not limited to actions such as special forbearance, loan modification, support for borrower housing counseling, partial claims, borrower incentives, preforeclosure sale, and deeds in lieu of foreclosure, but not including assignment of mortgages to the Secretary under section subsection 1 (a)(1)(A) or
(3) Determination of claims procedure
The Secretary shall publish guidelines for determining which of the procedures for payment of insurance under paragraph (1) are available to a mortgagee when it claims insurance benefits. At least one of the procedures for payment of insurance benefits specified in paragraph (1)(A) or (1)(B) shall be available to a mortgagee with respect to a mortgage, but the same procedure shall not be required to be available for all of the mortgages held by a mortgagee.
(4) Servicing of assigned mortgages
If a mortgage is assigned to the Secretary under paragraph (1)(A), the Secretary may permit the assigning mortgagee or its servicer to continue to service the mortgage for reasonable compensation and on terms and conditions determined by the Secretary. Neither the Secretary nor any servicer of the mortgage shall be required to forbear from collection of amounts due under the mortgage or otherwise pursue loss mitigation measures.
(5) Calculation of insurance benefits
Insurance benefits shall be paid in accordance with
(A) assignment of the mortgage to the Secretary;
(B) the institution of foreclosure proceedings;
(C) the acquisition of the property after default other than by foreclosure; or
(D) sale of the mortgaged property by the mortgagor.
(6) Forbearance and recasting after default
The mortgagee may, upon such terms and conditions as the Secretary may prescribe—
(A) extend the time for the curing of the default and the time for commencing foreclosure proceedings or for otherwise acquiring title to the mortgaged property, to such time as the mortgagee determines is necessary and desirable to enable the mortgagor to complete the mortgage payments, including an extension of time beyond the stated maturity of the mortgage, and in the event of a subsequent foreclosure or acquisition of the property by other means the Secretary may include in the amount of insurance benefits an amount equal to any unpaid mortgage interest; or
(B) provide for a modification of the terms of the mortgage for the purpose of recasting, over the remaining term of the mortgage or over such longer period pursuant to guidelines as may be prescribed by the Secretary, the total unpaid amount then due, with the modification to become effective currently or to become effective upon the termination of an agreed-upon extension of the period for curing the default; and the principal amount of the mortgage, as modified, shall be considered the "original principal obligation of the mortgage" for purposes of paragraph (5).
(7) Termination of premium obligation
The obligation of the mortgagee to pay the premium charges for insurance shall cease upon fulfillment of the appropriate requirements under which the Secretary may pay insurance benefits, as described in paragraph (1). The Secretary may also terminate the mortgagee's obligation to pay mortgage insurance premiums upon receipt of an application filed by the mortgagee for insurance benefits under paragraph (1), or in the event the contract of insurance is terminated pursuant to
(8) Effect on payment of insurance benefits under section 1715u
Nothing in this section shall limit the authority of the Secretary to pay insurance benefits under
(9) Treatment of mortgage assignment program
Notwithstanding any other provision of law, or the Amended Stipulation entered as a consent decree on November 8, 1979, in Ferrell v. Cuomo, No. 73 C 334 (N.D. Ill.), or any other order intended to require the Secretary to operate the program of mortgage assignment and forbearance that was operated by the Secretary pursuant to the Amended Stipulation and under the authority of
(b) Consent to release of mortgagor or property
The Secretary may at any time, under such terms and conditions as he may prescribe, consent to the release of the mortgagor from his liability under the mortgage or the credit instrument secured thereby, or consent to the release of parts of the mortgaged property from the lien of the mortgage.
(c) Debentures; form and amounts
Debentures issued under this section—
(1) shall be in such form and amounts;
(2) shall be subject to such terms and conditions;
(3) shall include such provisions for redemption, if any, as may be prescribed by the Secretary of Housing and Urban Development, with the approval of the Secretary of the Treasury; and
(4) may be in book entry or certificated registered form, or such other form as the Secretary of Housing and Urban Development may prescribe in regulations.
(d) Debentures; issuance; negotiability; terms; tax exemptions
The debentures issued under this section to any mortagee 2 with respect to mortgages insured under
(e) Certificate of claim
(1) Subject to paragraph (2), the certificate of claim issued by the Secretary to any mortgagee shall be for an amount which the Secretary determines to be sufficient, when added to the face value of the debentures issued and the cash adjustment paid to the mortgagee, to equal the amount which the mortgagee would have received if, at the time of the conveyance to the Secretary of the property covered by the mortgage, the mortgagor had redeemed the property and paid in full all obligations under the mortgage and a reasonable amount for necessary expenses incurred by the mortgagee in connection with the foreclosure proceedings, or the acquisition of the mortgaged property otherwise, and the conveyance thereof to the Secretary. Each such certificate of claim shall provide that there shall accrue to the holder of such certificate with respect to the face amount of such certificate, an increment at the rate of 3 per centum per annum which shall not be compounded. The amount to which the holder of any such certificate shall be entitled shall be determined as provided in subsection (f).
(2) A certificate of claim shall not be issued and the provisions of paragraph (1) of this subsection shall not be applicable in the case of a mortgage accepted for insurance pursuant to a commitment issued on or after September 2, 1964.
(f) Division of excess proceeds; settlement of certificates of claims and refunds to mortgagors
(1) If, after deducting (in such manner and amount as the Secretary shall determine to be equitable and in accordance with sound accounting practice) the expenses incurred by the Secretary, the net amount realized from any property conveyed to the Secretary under this section and the claims assigned therewith exceed the face value of the debentures issued and the cash paid in exchange for such property plus all interest paid on such debentures, such excess shall be divided as follows:
(i) If such excess is greater than the total amount payable under the certificate of claim issued in connection with such property, the Secretary shall pay to the holder of such certificate the full amount so payable, and any excess remaining thereafter shall be paid to the mortgagor of such property if the mortgage was insured under
(ii) If such excess is equal to or less than the total amount payable under such certificate of claim, the Secretary shall pay to the holder of such certificate the full amount of such excess.
(2) Notwithstanding any other provisions of this section, the Secretary is authorized, with respect to mortgages insured pursuant to commitments for insurance issued after August 11, 1955, and, with the consent of the mortgagee or mortgagor, as the case may be, with respect to mortgages insured pursuant to commitments issued prior to such date, to effect the settlement of certificates of claim and refunds to mortgagors at any time after the sale or transfer of title to the property conveyed to the Secretary under this section and without awaiting the final liquidation of such property for the purpose of determining the net amount to be realized therefrom: Provided, That the settlement authority created by the Housing Amendments of 1955 shall be terminated with respect to any certificates of claim outstanding as of September 2, 1964.
(3) With the consent of the holder thereof, the Secretary is authorized, without awaiting the final liquidation of the Secretary's interest in the property, to settle any certificate of claim issued pursuant to subsection (e), with respect to which settlement had not been effected prior to September 2, 1964, by making payment in cash to the holder thereof of such amount not exceeding the face amount of the certificate of claim, together with the accrued interest thereon, as the Secretary may consider appropriate: Provided, That in any case where the certificate of claim is settled in accordance with the provisions of this paragraph, any amounts realized after September 2, 1964, in the liquidation of the Secretary's interest in the property, shall be retained by the Secretary and credited to the applicable insurance fund.
(g) Handling and disposal of property; settlement of claims
Notwithstanding any other provision of law relating to the acquisition, handling, or disposal of real property by the United States, the Secretary shall have power to deal with, complete, rent, renovate, modernize, insure, 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 Secretary shall also have power to pursue to final collection, by way of compromise or otherwise, all claims against mortgagors assigned by mortgagees to the Secretary as provided in this section: Provided, That
(h) Disposition of assets in revitalization areas
(1) In general
The purpose of this subsection is to require the Secretary to carry out a program under which eligible assets (as such term is defined in paragraph (2)) shall be made available for sale in a manner that promotes the revitalization, through expanded homeownership opportunities, of revitalization areas. Notwithstanding the authority under the last sentence of subsection (g), the Secretary shall dispose of all eligible assets under the program and shall establish the program in accordance with the requirements under this subsection.
(2) Eligible assets
For purposes of this subsection, the term "eligible asset" means any of the following categories of assets of the Secretary, unless the Secretary determines at any time that the asset property is economically or otherwise infeasible to rehabilitate or that the best use of the asset property is as open space (including park land):
(A) Properties
Any property that—
(i) is designed as a dwelling for occupancy by 1 to 4 families;
(ii) is located in a revitalization area;
(iii) was previously subject to a mortgage insured under the provisions of this chapter; and
(iv) is owned by the Secretary pursuant to the payment of insurance benefits under this chapter.
(B) Mortgages
Any mortgage that—
(i) is an interest in a property that meets the requirements of clauses (i) and (ii) of subparagraph (A);
(ii) was previously insured under the provisions of this chapter except for mortgages insured under or made pursuant to
(iii) is held by the Secretary pursuant to the payment of insurance benefits under this chapter.
For purposes of this subsection, an asset under this subparagraph shall be considered to be located in a revitalization area, or in the asset control area of a preferred purchaser, if the property described in clause (i) is located in such area.
(3) Revitalization areas
The Secretary shall designate areas as revitalization areas for purposes of this subsection. Before designation of an area as a revitalization area, the Secretary shall consult with affected units of general local government, States, and Indian tribes and interested nonprofit organizations. The Secretary may designate as revitalization areas only areas that meet one of the following requirements:
(A) Very-low income area
The median household income for the area is less than 60 percent of the median household income for—
(i) in the case of any area located within a metropolitan area, such metropolitan area; or
(ii) in the case of any area not located within a metropolitan area, the State in which the area is located.
(B) High concentration of eligible assets
A high rate of default or foreclosure for single family mortgages insured under this chapter has resulted, or may result, in the area—
(i) having a disproportionately high concentration of eligible assets, in comparison with the concentration of such assets in surrounding areas; or
(ii) being detrimentally impacted by eligible assets in the vicinity of the area.
(C) Low home ownership rate
The rate for home ownership of single family homes in the area is substantially below the rate for homeownership in the metropolitan area.
(4) Preference for sale to preferred purchasers
The Secretary shall provide a preference, among prospective purchasers of eligible assets, for sale of such assets to any purchaser who—
(A) is—
(i) the unit of general local government, State, or Indian tribe having jurisdiction with respect to the area in which are located the eligible assets to be sold; or
(ii) a nonprofit organization;
(B) in making a purchase under the program under this subsection—
(i) establishes an asset control area, which shall be an area that consists of part or all of a revitalization area; and
(ii) purchases all assets of the Secretary in the category or categories of eligible assets set forth in the sale agreement required under paragraph (7) that, at any time during the period which shall be set forth in the sale agreement—
(I) are or become eligible for purchase under this subsection; and
(II) are located in the asset control area of the purchaser; and
(C) has the capacity to carry out the purchase of the category or categories of eligible assets set forth in the sale agreement under the program under this subsection and under the provisions of this paragraph.
(5) Agreements required for purchase
(A) Preferred purchasers
Under the program under this subsection, the Secretary may sell an eligible asset as provided in paragraph (4) to a preferred purchaser only pursuant to a binding agreement by the preferred purchaser that the eligible asset will be used in conjunction with a home ownership plan that provides as follows:
(i) The plan has as its primary purpose the expansion of home ownership in, and the revitalization of, the asset control area, established pursuant to paragraph (4)(B)(i) by the purchaser, in which the eligible asset is located.
(ii) Under the plan, the preferred purchaser has established, and agreed to meet, specific performance goals for increasing the rate of home ownership for eligible assets in the asset control area that are under the purchaser's control. The plan shall provide that the Secretary may waive or modify such goals or deadlines only upon a determination by the Secretary that a good faith effort has been made in complying with the goals through the homeownership plan and that exceptional neighborhood conditions prevented attainment of the goal.
(iii) Under the plan, the preferred purchaser has established rehabilitation standards that meet or exceed the standards for housing quality established under subparagraph (B)(iii) by the Secretary, and has agreed that each asset property for an eligible asset purchased will be rehabilitated in accordance with such standards.
(B) Non-preferred purchasers
Under the program under this subsection, the Secretary may sell an eligible asset to a purchaser who is not a preferred purchaser only pursuant to a binding agreement by the purchaser that complies with the following requirements:
(i) The purchaser has agreed to meet specific performance goals established by the Secretary for home ownership of the asset properties for the eligible assets purchased by the purchaser, except that the Secretary may, by including a provision in the sale agreement required under paragraph (7), provide for a lower rate of home ownership in sales involving exceptional circumstances.
(ii) The purchaser has agreed that each asset property for an eligible asset purchased will be rehabilitated to comply with minimum standards for housing quality established by the Secretary for purposes of the program under this subsection.
(6) Discount for preferred purchasers
(A) In general
For the purpose of providing a public purpose discount for the bulk sales of eligible assets made under the program under this subsection by preferred purchasers, each eligible asset sold through the program under this subsection to a preferred purchaser shall be sold at a price that is discounted from the value of the asset, as based on the appraised value of the asset property (as such term is defined in paragraph (8)).
(B) Appraisals
The Secretary shall require that each appraisal of an eligible asset under this paragraph is based upon—
(i) the market value of the asset property in its "as is" physical condition, which shall take into consideration age and condition of major mechanical and structural systems; and
(ii) the value of the property appraised for home ownership.
(C) Discounts
The Secretary, in the sole discretion of the Secretary, shall establish the discount under this paragraph for an eligible asset. In determining the discount, the Secretary may consider the condition of the asset property, the extent of resources available to the preferred purchaser, the comprehensive revitalization plan undertaken by such purchaser, the financial safety and soundness of the Mutual Mortgage Insurance Fund, and any other circumstances the Secretary considers appropriate 3
(7) Sale agreement
The Secretary may sell an eligible asset under this subsection only pursuant to a sale agreement entered into under this paragraph with the purchaser, which shall include the following provisions:
(A) Assets
The sale agreement shall identify the category or categories of eligible assets to be purchased and, based on the purchaser's capacity to manage and dispose of assets, the maximum number of assets owned by the Secretary at the time the sale agreement is executed that shall be sold to the purchaser.
(B) Revitalization area and asset control area
The sale agreement shall identify—
(i) the boundaries of the specific revitalization areas (or portions thereof) in which are located the eligible assets that are covered by the agreement; and
(ii) in the case of a preferred purchaser, the asset control area established pursuant to paragraph (4)(B)(i) that is covered by the agreement.
(C) Financing
The sale agreement shall identify the sources of financing for the purchase of the eligible assets.
(D) Binding agreements
The sale agreement shall contain binding agreements by the purchaser sufficient to comply with—
(i) in the case of a preferred purchaser, the requirements under paragraph (5)(A), which agreements shall provide that the eligible assets purchased will be used in conjunction with a home ownership plan meeting the requirements of such paragraph, and shall set forth the terms of the homeownership plan, including—
(I) the goals of the plan for the eligible assets purchased and for the asset control area subject to the plan;
(II) the revitalization areas (or portions thereof) in which the homeownership plan is operating or will operate;
(III) the specific use or disposition of the eligible assets under the plan; and
(IV) any activities to be conducted and services to be provided under the plan; or
(ii) in the case of a purchaser who is not a preferred purchaser, the requirements under paragraph (5)(B).
(E) Purchase price and discount
The sale agreement shall establish the purchase price of the eligible assets, which in the case of a preferred purchaser shall provide for a discount in accordance with paragraph (6).
(F) Housing quality
The sale agreement shall provide for compliance of the eligible assets purchased with the rehabilitation standards established under paragraph (5)(A)(iii) or the minimum standards for housing quality established under paragraph (5)(B)(ii), as applicable, and shall specify such standards.
(G) Performance goals and sanctions
The sale agreement shall set forth the specific performance goals applicable to the purchaser, in accordance with paragraph (5), shall set forth any sanctions for failure to meet such goals and deadlines, and shall require the purchaser to certify compliance with such goals.
(H) Period covered
The sale agreement shall establish—
(i) in the case of a preferred purchaser, the time period referred to in paragraph (4)(B)(ii); and
(ii) in the case of a purchaser who is not a preferred purchaser, the time period for purchase of eligible assets that may be covered by the purchase.
(I) Other terms
The agreement shall contain such other terms and conditions as may be necessary to require that eligible assets purchased under the agreement are used in accordance with the program under this subsection.
(8) Definitions
For purposes of this subsection, the following definitions shall apply:
(A) Asset control area
The term "asset control area" means the area established by a preferred purchaser pursuant to paragraph (4)(B)(i).
(B) Asset property
The term "asset property" means—
(i) with respect to an eligible asset that is a property, such property; and
(ii) with respect to an eligible asset that is a mortgage, the property that is subject to the mortgage.
(C) Eligible asset
The term "eligible asset" means an asset described in paragraph (2).
(D) Nonprofit organization
The term "nonprofit organization" means a private organization that—
(i) is organized under State or local laws;
(ii) has no part of its net earnings inuring to the benefit of any member, shareholder, founder, contributor, or individual; and
(iii) complies with standards of financial responsibility that the Secretary may require.
(E) Preferred purchaser
The term "preferred purchaser" means a purchaser described in paragraph (4).
(F) Unit of general local government
The term "unit of general local government" means any city, town, township, county, parish, village, or other general purpose political subdivision of a State, and any agency or instrumentality thereof that is established pursuant to legislation and designated by the chief executive officer to act on behalf of the jurisdiction with regard to the provisions of this subsection.
(G) State
The term "State" means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, Guam, American Samoa, the Virgin Islands, the Northern Mariana Islands, or any agency or instrumentality thereof that is established pursuant to legislation and designated by the chief executive officer to act on behalf of the State with regard to provisions of this subjection.4
(H) Indian tribe
The term "Indian tribe" has the same meaning as in section 1715z–13(i)(I) 5 of this title.
(9) Secretary's discretion
The Secretary shall have the authority to implement and administer the program under this subsection in such manner as the Secretary may determine. The Secretary may, in the sole discretion of the Secretary, enter into contracts to provide for the proper administration of the program with such public or nonprofit entities as the Secretary determines are qualified.
(10) Regulations
The Secretary shall issue regulations to implement the program under this subsection through rulemaking in accordance with the procedures established under
(i) Mortgagor's or mortgagee's interest in property or claim conveyed
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 Secretary or in any claim assigned to him; nor shall the Secretary 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.
(j) Foreclosure; payment and cessation of obligation
In the event that any mortgagee under a mortgage insured under
(k) Repealed. Pub. L. 105–276, title VI, §601(c), Oct. 21, 1998, 112 Stat. 2673
(l) Nullification of right of redemption of single family mortgagors
(1) Whenever the Secretary or a contract mortgagee (pursuant to its contract with the Secretary) forecloses on a Secretary-held single family mortgage in any Federal or State court or pursuant to a power of sale in a mortgage, the purchaser at the foreclosure sale shall be entitled to receive a conveyance of title to, and possession of, the property, subject to the interests senior to the interests of the Secretary or the contract mortgagee, as the case may be. Notwithstanding any State law to the contrary, there shall be no right of redemption (including in all instances any right to possession based upon any right of redemption) in the mortgagor or any other person subsequent to the foreclosure sale in connection with a Secretary-held single family mortgage. The appropriate State official or the trustee, as the case may be, shall execute and deliver a deed or other appropriate instrument conveying title to the purchaser at the foreclosure sale, consistent with applicable procedures in the jurisdiction and without regard to any such right of redemption.
(2) The following actions shall be taken in order to verify title in the purchaser at the foreclosure sale:
(A) In the case of a judicial foreclosure in any Federal or State court, there shall be included in the petition and in the judgment of foreclosure a statement that the foreclosure is in accordance with this subsection and that there is no right of redemption in the mortgagor or any other person.
(B) In the case of a foreclosure pursuant to a power of sale provision in the mortgage, the statement required in subparagraph (A) shall be included in the advertisement of the sale and either in the recitals of the deed or other appropriate instrument conveying title to the purchaser at the foreclosure sale or in an affidavit or addendum to the deed.
(3) For purposes of this subsection:
(A) The term "contract mortgagee" means a person or entity under a contract with the Secretary that provides for the assignment of a single-family mortgage from the Secretary to the person or entity for the purpose of pursuing foreclosure.
(B) the 6 term "mortgage" means a deed of trust, mortgage, deed to secure debt, security agreement, or any other form of instrument under which any interest in property, real, personal, or mixed, or any interest in property, including leaseholds, life estates, reversionary interests, and any other estates under applicable State law, is conveyed in trust, mortgaged, encumbered, pledged, or otherwise rendered subject to a lien, for the purpose of securing the payment of money or the performance of an obligation.
(C) The term "Secretary-held single family mortgage" means a single-family mortgage held by the Secretary or by a contract mortgagee at the time of initiation of foreclosure that—
(i) was formerly insured by the Secretary under any section of this subchapter; or
(ii) was taken by the Secretary as a purchase money mortgage in connection with the sale or other transfer of Secretary-owned property under any section of this subchapter.
(D) the term "single-family mortgage" means a mortgage that covers property on which is located a 1-to-4 family residence.
(June 27, 1934, ch. 847, title II, §204,
References in Text
The Housing Amendments of 1955, referred to in subsec. (f)(2), is act Aug. 11, 1955, ch. 783,
This chapter, referred to in subsecs. (g) and (h), was in the original "this Act", meaning act June 27, 1934, ch. 847,
Codification
In subsec. (g), "
Amendments
2009—Subsec. (a)(2).
2004—Subsec. (h)(2).
Subsec. (h)(2)(B)(ii).
Subsec. (h)(2)(C).
Subsec. (h)(3).
Subsec. (h)(4)(A)(i).
Subsec. (h)(4)(B)(ii).
"(I) are or become eligible assets; and
"(II) are located in the asset control area of the purchaser; and".
Subsec. (h)(4)(C).
Subsec. (h)(6)(C).
Subsec. (h)(6)(D).
Subsec. (h)(7)(A).
Subsec. (h)(8)(F).
Subsec. (h)(8)(G), (H).
1998—Subsec. (a).
Subsec. (g).
Subsecs. (h), (i).
Subsec. (k).
1996—Subsec. (a).
1992—Subsec. (a).
Subsec. (c).
Subsec. (d).
1989—Subsec. (a).
Subsec. (g).
1988—Subsec. (a).
Subsec. (j).
Subsec. (l).
1983—Subsec. (a).
Subsec. (j).
1967—
Subsec. (f)(3).
Subsec. (g).
1965—Subsec. (a).
Subsec. (c).
Subsec. (d).
Subsec. (f).
1964—Subsec. (a).
Subsec. (c).
Subsec. (d).
Subsec. (e).
Subsec. (f).
1961—Subsec. (d).
Subsec. (g).
1959—Subsec. (a).
Subsec. (k).
1957—Subsec. (d).
Subsec. (k).
1955—Subsec. (f). Act Aug. 11, 1955, authorized the Commissioner to effect the settlement of certificates of claim and refunds to mortgagors.
1954—Subsec. (a). Act Aug. 2, 1954, §111(l), permitted a mortgagee to receive in debentures amounts paid by it for Federal taxes imposed on a deed to it and on a deed to the Commissioner; (2) substituted, in second proviso, "or under
Subsec. (d). Act Aug. 2, 1954, §112(a), substituted provision for a straight 20-year maturity on debentures for former provision that the debentures should mature "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
Subsec. (j). Act Aug. 2, 1954, §113, added subsec. (j).
1951—Subsec. (d). Sept. 1, 1951, inserted in second sentence the provision that debentures issued with respect to mortgages insured under
1950—Act Apr. 20, 1950, §122, substituted "Commissioner" for "Administrator" wherever appearing.
Subsec. (a). Act Apr. 20, 1950, §105, inserted "or under
1948—Subsec. (a). Act Aug. 10, 1948, §101(l)(1), (2), struck out "prior to July 1, 1944" in first proviso and inserted second proviso.
Subsec. (f). Act Aug. 10, 1948, §101(q), inserted "if the mortgage was insured under
1943—Subsec. (a). Act Oct. 14, 1943, inserted proviso.
1941—Subsec. (a). Act June 28, 1941, substituted "July 1, 1944" for "July 1, 1941" in last sentence.
1939—Subsec. (a). Act June 3, 1939, §9, amended last sentence generally.
Subsec. (g). Act June 3, 1939, §10, inserted last sentence.
1938—Subsecs. (a) to (f). Act Feb. 3, 1938, amended provisions generally.
Subsecs. (g), (h). Act Feb. 3, 1938, added subsecs. (g) and (h).
1937—Subsec. (b). Act Joint Res. Feb. 19, 1937, substituted "July 1, 1939" for "July 1, 1937".
1935—Subsec. (a). Act May 28, 1935, amended last sentence generally.
Effective Date of 1998 Amendment
Effective Date of 1996 Amendment
Effective Date of 1954 Amendment
Act Aug. 2, 1954, ch. 649, title I, §112(e),
Regulations
Homeownership Preservation
"(1) develop and implement a plan to improve the Federal Housing Administration's loss mitigation process; and
"(2) report such plan to the Committee on Banking, Housing, and Urban Affairs of the Senate and the Committee on Financial Services of the House of Representatives."
Asset Control Area Demonstration Program Agreements, Contracts, and Regulations
Transfer of HUD Assets in Revitalization Areas
Settlement Costs in the Financing of Federal Housing Administration and Veterans' Administration Assisted Housing; Study and Recommendations to Congress on Reduction and Standardization of Costs
"(a) With respect to housing built, rehabilitated, or sold with assistance provided under the National Housing Act [this chapter] or under
"(1) be established after consultation between the Secretary and the Administrator;
"(2) be consistent in any area for housing assisted under the National Housing Act and housing assisted under
"(3) be based on the Secretary's and the Administrator's estimates of the reasonable charge for necessary services involved in settlements for particular classes of mortgages and loans.
"(b) The Secretary and the Administrator shall undertake a joint study and make recommendations to the Congress not later than one year after the date of enactment of this Act [July 24, 1970] with respect to legislative and administrative actions which should be taken to reduce mortgage settlement costs and to standardize these costs for all geographic areas."
2 So in original. Probably should be "mortgagee".
3 So in original. There probably should be a period.
4 So in original. Probably should be "subsection."
5 So in original. Probably should be section "1715z–13(i)(1)".
6 So in original. Probably should be capitalized.
§1711. General Surplus and Participating Reserve Accounts
(a) Establishment; abolishment of General Reinsurance Account
The Secretary shall establish as of July 1, 1954, in the Mutual Mortgage Insurance Fund a General Surplus Account and a Participating Reserve Account. All of the assets of the General 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 this section 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) Credits and charges
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 Secretary may determine to be in accord with sound actuarial and accounting practice.
(c) Distribution of funds to terminating mortgagors
Upon termination of the insurance obligation of the Mutual Mortgage Insurance Fund by payment of any mortgage insured thereunder, the Secretary is authorized to distribute to the mortgagor a share of the Participating Reserve Account in such manner and amount as the Secretary 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. The Secretary shall not distribute any share to an eligible mortgagor under this subsection beginning on the date which is 6 years after the date the Secretary first transmitted written notification of eligibility to the last known address of the mortgagor, unless the mortgagor has applied in accordance with procedures prescribed by the Secretary for payment of the share within the 6-year period. The Secretary shall transfer any amounts no longer eligible for distribution under the previous sentence from the Participating Reserve Account to the General Surplus Account.
(d) Rights and liabilities
No mortgagor or mortgagee of any mortgage insured under
(e) Actuarial status of entire Fund
In determining whether there is a surplus for distribution to mortgagors under this section, the Secretary shall take into account the actuarial status of the entire Fund.
(f) Capital ratio for Mutual Mortgage Insurance Fund
(1) The Secretary shall ensure that the Mutual Mortgage Insurance Fund attains a capital ratio of not less than 1.25 percent within 24 months after November 5, 1990, and maintains such ratio thereafter, subject to paragraph (2).
(2) The Secretary shall endeavor to ensure that the Mutual Mortgage Insurance Fund attains a capital ratio of not less than 2.0 percent within 10 years after November 5, 1990, and shall ensure that the Fund maintains at least such capital ratio at all times thereafter.
(3) Upon the expiration of the 24-month period beginning on November 5, 1990, the Secretary shall submit to the Congress a report describing the actions the Secretary will take to ensure that the Mutual Mortgage Insurance Fund attains the capital ratio required under paragraph (2).
(4) For purposes of this subsection:
(A) The term "capital" means the economic net worth of the Mutual Mortgage Insurance Fund, as determined by the Secretary under the annual audit required under
(B) The term "capital ratio" means the ratio of capital to unamortized insurance-in-force.
(C) The term "economic net worth" means the current cash available to the Fund, plus the net present value of all future cash inflows and outflows expected to result from the outstanding mortgages in the Fund.
(D) The term "unamortized insurance-in-force" means the remaining obligation on outstanding mortgages which are obligations of the Mutual Mortgage Insurance Fund, as estimated by the Secretary.
(June 27, 1934, ch. 847, title II, §205,
Amendments
2008—Subsecs. (g), (h).
1992—Subsec. (c).
1990—Subsec. (e).
Subsecs. (f) to (h).
1967—
1954—Act Aug. 2, 1954, amended section generally to eliminate the former group accounts and substitute therefor a general surplus account and participating reserve account.
1953—Subsec. (c). Act June 30, 1953, inserted sentence relating to semi-annual transfer of group accounts, and, in remainder of section, changed the provisions relating to settlement of accounts.
1950—Act Apr. 20, 1950, substituted "Commissioner" for "Administrator" wherever appearing.
1939—Subsec. (b). Act June 3, 1939, inserted "prior to July 1, 1939".
1938—Subsecs. (a) to (f). Act Feb. 3, 1938, amended provisions generally, and among other changes, struck out subsec. (f).
1935—Subsec. (f). Act May 28, 1935, substituted "annual premium charge" for "premium charge" in first sentence.
Exception to Statute of Limitations
§1712. Investment of funds
Moneys in the Fund not needed for the current operations of the Department of Housing and Urban Development related to insurance under
(June 27, 1934, ch. 847, title II, §206,
Amendments
1970—
1967—
1950—Act Apr. 20, 1950, substituted "Commissioner" for "Administrator".
1938—Act Feb. 3, 1938, among other changes, inserted "or in bonds or other obligations guaranteed as to principal and interest by" in first sentence, and inserted third sentence.
§1712a. Indexing of FHA multifamily housing loan limits
(a) Method of indexing
The dollar amounts set forth in—
(1)
(2)
(3)
(4)
(5)
(6)
(7)
(collectively hereinafter referred to as the "Dollar Amounts") shall be adjusted annually (commencing in 2004) on the effective date of the Federal Reserve Board's adjustment of the $400 figure in the Home Ownership and Equity Protection Act of 1994 (HOEPA). The adjustment of the Dollar Amounts shall be calculated using the percentage change in the Consumer Price Index for All Urban Consumers (CPI–U) as applied by the Federal Reserve Board for purposes of the above-described HOEPA adjustment.
(b) Notification
The Federal Reserve Board on a timely basis shall notify the Secretary, or his designee, in writing of the adjustment described in subsection (a) and of the effective date of such adjustment in order to permit the Secretary to undertake publication in the Federal Register of corresponding adjustments to the Dollar Amounts. The dollar amount of any adjustment shall be rounded to the next lower dollar.
(June 27, 1934, ch. 847, title II, §206A, as added
References in Text
The Home Ownership and Equity Protection Act of 1994, referred to in subsec. (a), is subtitle B (§§151–158) of title I of
§1713. Rental housing insurance
(a) Definitions
As used in this section—
(1) The term "mortgage" means a first mortgage on real estate in fee simple, or on the interest of either the lessor or lessee thereof (A) under a lease for not less than ninety-nine years which is renewable or (B) under a lease having a period of not less than fifty years to run from the date the mortgage was executed, upon which there is located or upon which there is to be constructed a building or buildings designed principally for residential use, or upon which there is located or to be constructed facilities for manufactured homes, and the term "first mortgage" means such classes of first liens as are commonly given to secure advances (including but not being 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 trust securing notes, bonds, or other credit instruments.
(2) The term "mortgagee" means the original lender under a mortgage, and its successors and assigns, and includes the holders of credit instruments issued under a trust mortgage or deed of trust pursuant to which such holders act by and through a trustee therein named.
(3) The term "mortgagor" means the original borrower under a mortgage and its successors and assigns.
(4) The term "maturity date" means the date on which the mortgage indebtedness would be extinguished if paid in accordance with the periodic payments provided for in the mortgage.
(5) The term "slum or blighted area" means any area where dwellings predominate which, by reason of dilapidation, overcrowding, faulty arrangement or design, lack of ventilation, light or sanitation facilities, or any combination of these factors, are detrimental to safety, health, or morals.
(6) The term "rental housing" means housing, the occupancy of which is permitted by the owner thereof in consideration of the payment of agreed charges, whether or not, by the terms of the agreement, such payment over a period of time will entitle the occupant to the ownership of the premises or space in a manufactured home court or park properly arranged and equipped to accommodate manufactured homes.
(7) The term "State" includes the several States, and Puerto Rico, the District of Columbia, Guam, the Trust Territory of the Pacific Islands, American Samoa, and the Virgin Islands.
(b) Insurance of additional mortgages
In addition to mortgages insured under
(1) Federal or State instrumentalities, municipal corporate instrumentalities of one or more States, or limited dividend or redevelopment or housing corporations restricted by Federal or State laws or regulations of State banking or insurance departments as to rents, charges, capital structure, rate of return, or methods of operation; or
(2) any other mortgagor approved by the Secretary. The Secretary may, in the Secretary's discretion, require any such mortgagor to be regulated or restricted as to rents or sales, charges, capital structure, rate of return, and methods of operation so as to provide reasonable rentals to tenants and a reasonable return on the investment. Any such regulations or restrictions shall continue for such period or periods as the Secretary, in the Secretary's discretion, may require, including until the termination of all obligations of the Secretary under the insurance and during such further period of time as the Secretary shall be the owner, holder, or reinsurer of the mortgage. The Secretary may make such contracts with and acquire, for not to exceed $100, such stock or interest in the mortgagor as he may deem necessary to render effective any such regulations or restrictions. The stock or interest acquired by the Secretary 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 insurance of mortgages under this section is intended to facilitate particularly the production of rental accommodations, at reasonable rents, of design and size suitable for family living. The Secretary is, therefore, authorized in the administration of this section to take action, by regulation or otherwise, which will direct the benefits of mortgage insurance hereunder primarily to those projects which make adequate provision for families with children, and in which every effort has been made to achieve moderate rental charges.
Notwithstanding any other provisions of this section, the Secretary may not insure any mortgage under this section (except a mortgage with respect to a manufactured home park designed exclusively for occupancy by elderly persons) unless the mortgagor certifies under oath that in selecting tenants for the property covered by the mortgage he will not discriminate against any family by reason of the fact that there are children in the family, and that he will not sell the property while the insurance is in effect unless the purchaser so certifies, such certification to be filed with the Secretary. Violation of any such certification shall be a misdemeanor punishable by a fine of not to exceed $500.
(c) Eligibility for insurance; mortgage limits
To be eligible for insurance under this section a mortgage on any property or project shall involve a principal obligation in an amount—
(1) Repealed.
(2) Not to exceed 90 per centum of the estimated value of the property or project (when the proposed improvements are completed): Provided, That this limitation shall not apply to mortgages on housing in Alaska or in Guam, but such a mortgage may involve a principal obligation in an amount not to exceed 90 per centum of the amount which the Secretary estimates will be the replacement cost of the property or project when the proposed improvements are completed (the value of the property or project as such term is used in this paragraph may include the land, the proposed physical improvements, utilities within the boundaries of the property or project, architect's fees, taxes, and interest accruing during construction, and other miscellaneous charges incident to construction and approved by the Secretary): And provided further, 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 (5) of subsection (a) of this section, and the Secretary may require such repair or rehabilitation work to be completed as is, in his discretion, necessary to remove conditions detrimental to safety, health, or morals; and
(3)(A) Not to exceed, for such part of the property or project as may be attributable to dwelling use (excluding exterior land improvements as defined by the Secretary), $38,025 per family unit without a bedroom, $42,120 per family unit with one bedroom, $50,310 per family unit with two bedrooms, $62,010 per family unit with three bedrooms, and $70,200 per family unit with four or more bedrooms, or not to exceed $17,460 per space; except that as to projects to consist of elevator type structures the Secretary may in his discretion, increase the dollar amount limitations per family unit to not to exceed $43,875 per family unit without a bedroom, $49,140 per family unit with one bedroom, $60,255 per family unit with two bedrooms, $75,465 per family unit with three bedrooms, and $85,328 per family unit with four or more bedrooms, as the case may be, to compensate for the higher costs incident to the construction of elevator-type structures of sound standards of construction and design;
(B) the Secretary may, by regulation, increase any of the dollar amount limitations in subparagraph (A) (as such limitations may have been adjusted in accordance with
The mortgage shall provide for complete amortization by periodic payments (unless otherwise approved by the Secretary) within such term as the Secretary shall prescribe, and shall bear interest at such rate as may be agreed upon by the mortgagor and the mortgagee. 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. No mortgage shall be accepted for insurance under this section or section 1715a 1 of this title unless the Secretary finds that the property or project, with respect to which the mortgage is executed, is economically sound. Such property or project may include five or more family units and may include such commercial and community facilities as the Secretary deems adequate to serve the occupants.
(d) Premium, appraisal, and inspection charges
The Secretary shall collect a premium charge for the insurance of mortgages under this section which shall be payable annually in advance by the mortgagee, either in cash or in debentures issued by the Secretary under any subchapter and section of this chapter, except debentures of the Mutual Mortgage Insurance Fund, or of the Cooperative Management Housing Insurance Fund at par plus accrued interest. In addition to the premium charge herein provided for the Secretary is authorized to charge and collect such amounts as he may deem reasonable for the appraisal of a property or project offered for insurance and for the inspection of such property or project during construction: Provided, That such charges for appraisal and inspection shall not aggregate more than 1 per centum of the original principal face amount of the mortgage.
(e) Adjusted premium charge on payment of mortgage
In the event that the principal obligation of any mortgage accepted for insurance under this section is paid in full prior to the maturity date, the Secretary is authorized in his discretion to require the payment by the mortgagee of an adjusted premium charge in such amount as the Secretary determines to be equitable, but not in excess of the aggregate amount of the premium charges that the mortgagee would otherwise have been required to pay if the mortgage had continued to be insured until such maturity date.
(f) Repealed. Pub. L. 89–117, title XI, §1108(e)(3), Aug. 10, 1965, 79 Stat. 504
(g) Payment of insurance after default
The failure of the mortgagor to make any payment due under or provided to be paid by the terms of a mortgage insured under this section shall be considered a default under such mortgage and, if such default continues for a period of thirty days, the mortgagee shall be entitled to receive the benefits of the insurance as hereinafter provided, upon assignment, transfer, and delivery to the Secretary, within a period and in accordance with rules and regulations to be prescribed by the Secretary of (1) all rights and interests arising under the mortgage so in default; (2) all claims of the mortgagee against the mortgagor or others, arising out of the mortgage transactions; (3) all policies of title or other insurance or surety bonds or other guaranties and any and all claims thereunder; (4) any balance of the mortgage loans not advanced to the mortgagor; (5) any cash or property held by the mortgagee, or to which it is entitled, as deposits made for the account of the mortgagor and which have not been applied in reduction of the principal of the mortgage indebtedness; and (6) all records, documents, books, papers, and accounts relating to the mortgage transactions. Upon such assignment, transfer, and delivery the obligation of the mortgagee to pay the premium charges for mortgage insurance shall cease, and the Secretary shall issue to the mortgagee a certificate of claim as provided in subsection (h), and debentures having a par value equal to the original principal face amount of the mortgage plus such amount as the mortgagee may have paid for (A) taxes, special assessments, and water rates, which are liens prior to the mortgage; (B) insurance on the property; and (C) reasonable expenses for the completion and preservation of the property and any mortgage insurance premiums paid after default, less the sum of (i) that part of the amount of the principal obligation that has been repaid by the mortgagor, (ii) an amount equivalent to 1 per centum of the unpaid amount of such principal obligation, and (iii) any net income received by the mortgagee from the property: Provided, That the mortgagee in the event of a default under the mortgage may, at its option and in accordance with regulations of, and in a period to be determined by, the Secretary, proceed to foreclose on and obtain possession of or otherwise acquire such property from the mortgagor after default, and receive the benefits of the insurance as herein provided, upon (1) the prompt conveyance to the Secretary of title to the property which meets the requirements of the rules and regulations of the Secretary in force at the time the mortgage was insured and which is evidenced in the manner prescribed by such rules and regulations, and (2) the assignment to him of all claims of the mortgagee against the mortgagor or others, arising out of the mortgage transaction or foreclosure proceedings, except such claims that may have been released with the consent of the Secretary. Upon such conveyance and assignment, the obligation of the mortgagee to pay the premium charges for insurance shall cease and the mortgagee shall be entitled to receive the benefits of the insurance as provided in this subsection, except that in such event the 1 per centum deduction, set out in (ii) hereof, shall not apply. Notwithstanding any other provision of this chapter, upon receipt, after September 2, 1964, of an application for insurance benefits on a mortgage insured under this chapter, the Secretary may terminate the mortgagee's obligation to pay premium charges on the mortgage.
(h) Certificate of claim; division of excess proceeds
The certificate of claim issued under this section shall be for an amount which the Secretary determines to be sufficient, when added to the face value of the debentures issued and the cash adjustment paid to the mortgagee, to equal the amount which the mortgagee would have received if, on the date of the assignment, transfer and delivery to the Secretary provided for in subsection (g), the mortgagor had extinguished the mortgage indebtedness by payment in full of all obligations under the mortgage and a reasonable amount for necessary expenses incurred by the mortgagee in connection with the foreclosure proceedings, or the acquisition of the mortgaged property otherwise, and the conveyance thereof to the Secretary. Each such certificate of claim shall provide that there shall accrue to the holder of such certificate with respect to the face amount of such certificate, an increment at the rate of 3 per centum per annum which shall not be compounded. If the net amount realized from the mortgage, and all claims in connection therewith, so assigned, transferred, and delivered, and from the property covered by such mortgage and all claims in connection with such property, after deducting all expenses incurred by the Secretary in handling, dealing with, acquiring title to, and disposing of such mortgage and property and in collecting such claims, exceeds the face value of the debentures issued and the cash adjustment paid to the mortgagee plus all interest paid on such debentures, such excess shall be divided as follows:
(1) If such excess is greater than the total amount payable under the certificate of claim issued in connection with such property, the Secretary shall pay to the holder of such certificate the full amount so payable, and any excess remaining thereafter shall be retained by the Secretary and credited to the General Insurance Fund; and
(2) If such excess is equal to or less than the total amount payable under such certificate of claim, the Secretary shall pay to the holder of such certificate the full amount of such excess.
(i) Debentures; execution; negotiability; terms; tax exemptions
Debentures issued under this section shall be executed in the name of the General Insurance Fund as obligor, shall be negotiable, and, if in book entry form, transferable, in the manner described by the Secretary in regulations, and shall be dated as of the date of default as determined in subsection (g) of this section, except that debentures issued pursuant to the provisions of section 1715k(f), section 1715l(g), and
(j) Debentures; form and amounts
Debentures issued under this section—
(1) shall be in such form and amounts;
(2) shall be subject to such terms and conditions;
(3) shall include such provisions for redemption, if any, as may be prescribed by the Secretary of Housing and Urban Development, with the approval of the Secretary of the Treasury; and
(4) may be in book entry or certificated registered form, or such other form as the Secretary of Housing and Urban Development may prescribe in regulations.
(k) Acquisition of property by conveyance or foreclosure
The Secretary is authorized either to (1) acquire possession of and title to any property, covered by a mortgage insured under this section and assigned to him, by voluntary conveyance in extinguishment of the mortgage indebtedness, or (2) institute proceedings for foreclosure on the property covered by any such insured mortgage and prosecute such proceedings to conclusion. The Secretary at any sale under foreclosure may, in his discretion, for the protection of the General Insurance Fund, bid any sum up to but not in excess of the total unpaid indebtedness secured by the mortgage, plus taxes, insurance, foreclosure costs, fees, and other expenses, and may become the purchaser of the property at such sale. In determining the amount to be bid, the Secretary shall act consistently with the goal established in
(l) Handling and disposal of property; settlement of claims
Notwithstanding any other provisions of law relating to the acquisition, handling, or disposal of real and other property by the United States, the Secretary shall also have power, for the protection of the interests of the General Insurance Fund, to pay out of the General Insurance Fund all expenses or charges in connection with, and to deal with, complete, reconstruct, rent, renovate, modernize, insure, make contracts for the management of, or establish suitable agencies for the management of, or sell for cash or credit or lease in his discretion, any property acquired by him under this section, and notwithstanding any other provision of law, the Secretary shall also have power to pursue to final collection by way of compromise or otherwise all claims assigned and transferred to him in connection with the assignment, transfer, and delivery provided for in this section, and at any time, upon default, to foreclose on any property secured by any mortgage assigned and transferred to or held by him: Provided, That
(m) Repealed. Pub. L. 89–117, title XI, §1108(e)(3), Aug. 10, 1965, 79 Stat. 504
(n) Default or payment; rights of parties
In the event that a mortgage insured under this section becomes in default through failure of the mortgagor to make any payment due under or provided to be paid by the terms of the mortgage and such mortgage continues in default for a period of thirty days, but the mortgagee does not foreclose on or otherwise acquire the property, or does not assign and transfer such mortgage and the credit instrument secured thereby to the Secretary, in accordance with subsection (g), and the Secretary is given written notice thereof, or in the event that the mortgagor pays the obligation under the mortgage in full prior to the maturity thereof, and the mortgagee pays any adjusted premium charge required under the provisions of subsection (e), and the Secretary is given written notice by the mortgagee of the payment of such obligation, the obligation to pay the annual 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.
(o) Reissue of prior insurance
The Secretary, with the consent of the mortgagee and the mortgagor of a mortgage insured under this section prior to February 3, 1938, shall be empowered to reissue such mortgage insurance in accordance with the provisions of this section as amended by the National Housing Act Amendments of 1938, and any such insurance not so reissued shall not be affected by the enactment of such Act.
(p) Repealed. Pub. L. 89–117, title XI, §1108(e)(3), Aug. 10, 1965, 79 Stat. 504
(q) Repealed. Pub. L. 85–104, title I, §111, July 12, 1957, 71 Stat. 297
(r) Service charge for mortgages assigned to and held by the Secretary
Notwithstanding any other provision of this chapter, the Secretary is authorized to include in any mortgage insured under any subchapter of this chapter after September 23, 1959, a provision requiring the mortgagor to pay a service charge to the Secretary in the event such mortgage is assigned to and held by the Secretary. Such service charge shall not exceed the amount prescribed by the Secretary for mortgage insurance premiums applicable to such mortgage.
(June 27, 1934, ch. 847, title II, §207,
References in Text
This chapter, referred to in subsecs. (d), (g) and (r), was in the original "this Act", meaning act June 27, 1934, ch. 847,
The National Housing Act Amendments of 1938, referred to in subsec. (o), is act Feb. 3, 1938, ch. 13,
Codification
In subsec. (l), "
Amendments
2007—Subsec. (c)(3)(B).
2003—Subsec. (c)(3)(A).
Subsec. (c)(3)(B).
2002—Subsec. (c)(3).
2001—Subsec. (c)(3).