COOPERATIVE HOUSING INSURANCE

COOPERATIVE HOUSING INSURANCE Sec. 105. (a) Section 213 (a) of the National Housing Act is amended— (1) by striking out “or” at the end of paragraph (1); (2) by inserting “or” at the end of paragraph (2); (3) by adding after paragraph (2) the following new paragraph: “(3) a mortgagor, approved by the Commissioner, which (A) has certified to the Commissioner, as a condition of obtaining the insurance of a mortgage under this section, that upon completion of the property or project covered by such mortgage it intends to sell such property or project to a nonprofit corporation or nonprofit trust of the character described m paragraph (1) of this subsection at the actual cost of such property or project as certified pursuant to section 227 of this Act and will faithfully and diligently make and carry out all reasonable efforts to consummate such sale, and (B) shall be regulated or restricted by the Commissioner as to rents, charges, capital structure, rate of return, and methods of operation during any period while it holds the mortgaged property or project; and for such purpose the Commissioner may make such contracts with, and acquire for not to exceed $100 such stock or interest in, any such mortgagor as the Commissioner may deem necessary to render effective such restriction or regulation, such stock or interest to be paid for out of the Housing Fund and to be redeemed by such mortgagor at par upon the sale of such property or project to such nonprofit corporation or nonprofit trust;”; and (4) by adding “referred to in paragraphs (1) and (2) of this subsection” after “which corporations or trusts”. (b) Section 213 (b) (2) of such Act is amended— (1) by striking out “65 per centum” and inserting in lieu thereof “50 per centum”; (2) by amending the last proviso to read as follows: “: And provided further, That for the purposes of this section the word ‘veteran’ shall mean a person who has served in the active military or naval service of the United States at any time on, or after April 6, 1917, and prior to November 12, 1918, or on or after September 16, 1940, and prior to July 26, 1947, or on or after June 27, 1950, and prior to February 1, 1955”; and (3) by inserting immediately after “$8,900” a semicolon and the following: “except that the Commissioner may, by regulation, increase any of the foregoing dollar amount limitations per room contained in this paragraph by not to exceed $1,000 per room in any geographical area where he finds that cost levels so require: Provided further, That in the case of a mortgagor of the character described in paragraph (3) of subsection (a) the mortgage shall 70 Stat. 1094 involve a principal obligation in an amount not to exceed 85 per centum of the amount which the Commissioner estimates will be the replacement cost of the property or project when the proposed physical improvements are completed: Provided further, That upon the sale of a property or project by a mortgagor of the character described in paragraph (3) of subsection (a) to a nonprofit cooperative ownership housing corporation or trust within two years after the completion of such property or project, the mortgage given to finance such sale shall involve a principal obligation m an amount not to exceed the maximum amount computed in accordance with this subsection without regard to the preceding proviso”. (c) Section 213 of such Act is further amended by adding at the end thereof the following subsection: “(h) In the event that a mortgagor of the character described in paragraph (3) of subsection (a) obtains an insured mortgage loan pursuant to this section and fails to sell the property or project covered by such mortgage to a nonprofit housing corporation or nonprofit housing trust of the character described in paragraph (1) of subsection (a) hereof, such mortgagor shall not thereafter be eligible by reason of such paragraph (3) for insurance of any additional mortgage loans pursuant to this section.” (d) Paragraph (a) of section 227 of such Act is amended by inserting after “subsection (a) thereof” the following: “or with respect to any property or project of a mortgagor of the character described in paragraph (3) of subsection (a) thereof”.