APPROVAL OF COST CERTIFICATIONS

APPROVAL OF COST CERTIFICATIONS Sec. 109. Section 227 of the National Housing Act is amended— (1) by inserting after the first sentence the following new sentence: “Upon the Commissioner’s approval of the mortgagor’s certification as required hereunder, such certification shall be final and incontestable, except for fraud or material misrepresentation on the part of the mortgagor.”; (2) by inserting after “legal expenses,” each place it appears in paragraph (c) the following: “such allocations of general overhead items as are acceptable to the Commissioner,”; (3) by inserting after “maximum insurable mortgage amount” in paragraph (b) a semicolon and the following: “except that if the mortgage is to assist the financing of repair or rehabilitation and no part of the proceeds will be used to finance the purchase of the land or structure involved, the approved percentage shall be 100 per centum”; and by striking out “(without reduction by reason of the application of the approved percentage requirements of this section)” in clause (ii) (B) of paragraph (c); (4) by amending the proviso in paragraph (c) to read as follows: “: Provided, That such additional amount under (A) of this clause (ii) shall in no event exceed the Commissioner’s estimate of the fair market value of such land and improvements prior to such repair or rehabilitation, and such additional amount under (B) of this clause (ii) shall in no event exceed the approved percentage of the Commissioner’s estimate of the fair market value of such land and improvements prior to such repair or rehabilitation”; and (5) by adding at the end of paragraph (c) the following: “In the case of a mortgage insured under section 220 where the mortgagor is also the builder as defined by the Commissioner, 70 Stat. 1096 there shall be included in the actual cost, in lieu of the allowance for builder’s profit under clause (i) or (ii) of the preceding sentence, an allowance for builder’s and sponsor’s profit and risk of 10 per centum (unless the Commissioner, after finding that such allowance is unreasonable, shall by regulation prescribe a lesser percentage) of all other items entering into the term ‘actual cost’ except land or amounts paid for a leasehold and amounts included under either (A) or (B) of clause (ii) of the preceding sentence. In the case of a mortgage insured under section 220 where the mortgagor is not also the builder as defined by the Commissioner, there shall be included in the actual cost an allowance for sponsor’s profit and risk of the said 10 per centum or lesser percentage of all other items entering into the term ‘actual cost’ except land or amounts paid for a leasehold, amounts included under either (A) or (B) of the said clause (ii), and amounts paid by the mortgagor under a general construction contract.”