Pub. L. 82-139, tit. VI, sec. 609

Sec. 609. (a) Section 702 of the National Housing Act, as amended, is hereby amended by adding the following new subsection at the end thereof: “(c) After completion of the project the investor must establish in a manner satisfactory to the Commissioner that the project is free and clear of liens and that there are no other outstanding unpaid obligations contracted in connection with the construction of the project, except taxes and such other liens and obligations as may be approved or prescribed by the Commissioner. debentures issued by the investor which are payable out of net income from the project and from the benefits of the insurance contract shall not be construed as ‘unpaid obligations’ as such term is used in this subsection.” (b) Section 707 of the National Housing Act, as amended, is hereby amended by adding the following new sentence at the end thereof: “Nothing contained in this title or any other provision of law shall be construed as preventing or restricting an investor from assigning, pledging, or otherwise transferring or disposing of, subject to rules and regulations of the Commissioner, any or all rights, claims, or other benefits under any insurance contract made pursuant to this title to an assignee, pledgee, or other transferee, including the holders (or the trustee for such holders) of any debentures issued by the investor in connection with the project to which such insurance contract relates, and the Commissioner is authorized to pay claims or issue debentures in accordance with the provisions of this section and section 708 of this title to any such assignee, pledgee, or other transferee.”