mortgage insurance program

mortgage insurance program Sec. 201. (a) Title II of the National Housing Act is amended by adding after section 230 (as added by section 114) the following new section: “housing for elderly persons “Sec. 231. (a) The purpose of this section is to assist in relieving the shortage of housing for elderly persons and to increase the supply of rental housing for elderly persons. “For the purposes of this section— “(1) the term ‘housing’ means eight or more new or rehabilitated living units, not less than 50 per centum of which are specially designed for the use and occupancy of elderly persons; “(2) the term ‘elderly person’ means any person, married or single, who is sixty-two years of age or over; and “(3) the terms ‘mortgage’, ‘mortgagee’, ‘mortgagor’, and ‘maturity date’ shall have the meanings respectively set forth in section 207 of this Act. “(b) The Commissioner is authorized to insure any mortgage (including advances on mortgages during construction) in accordance with the provisions of this section upon such terms and conditions as he may prescribe and to make commitments for insurance of such mortgages prior to the date of their execution or disbursement thereon. “(c) To be eligible for insurance under this section, a mortgage to provide housing for elderly persons shall— “(1) involve a principal obligation in an amount not to exceed $12,500,000 or, if executed by Federal or State instrumentalities, municipal corporate instrumentalities of one or more States, or nonprofit development 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, not to exceed $50,000,000; “(2) not exceed, for such part of such property or project as may be attributable to dwelling use, $9,000 per dwelling unit: Provided, That the Commissioner may, in his discretion, increase the dollar amount limitation of $9,000 per unit to not to exceed $9,400 per unit to compensate for the higher costs incident to the construction of elevator-type structures and may increase each of the foregoing dollar amount limitations by not to exceed $1,250 per room in any geographical area where he finds that cost levels so require; “(3) if executed by a mortgagor which is a public instrumentality or a private nonprofit corporation or association or other acceptable private nonprofit organization regulated or supervised under Federal or State laws or by political subdivisions of States, or agencies thereof, or by the Commissioner under a regulatory agreement or otherwise, as to rents, charges, and methods of operation, in such form and in such manner as, in the opinion of the 73 Stat. 666Commissioner, will effectuate the purpose of this section involve a principal obligation not in excess of the amount which the Commissioner estimates will be the replacement cost of the property or project when the proposed improvements are completed (the replacement cost may include the land, the proposed physical improvements, utilities within the boundaries of the land, architect’s fees, taxes, interest during construction, and other miscellaneous charges incident to construction and approved by the Commissioner): Provided, That in the case of properties other than new construction, the principal obligation shall not exceed the appraised value rather than the Commissioner’s estimate of the replacement cost; “(4) if executed by a mortgagor which is approved by the Comissioner but is not a public instrumentality or a private non-profit organization, involve a principal obligation not in excess (in the case of a property or project approved for mortgage insurance prior to the beginning of construction) of 90 per centum of the amount which the Commissioner estimates will be the replacement cost of the property or project when the proposed improvements are completed (the replacement costs may include the land, the proposed physical improvements, utilities within the boundaries of the land, architect’s fees, taxes, interest during construction, and other miscellaneous charges incident to construction and approved by the Commissioner, and shall include an allowance for builder’s and sponsor’s profit and risk of 10 per centum of all of the foregoing items except the land unless the Commissioner, after certification that such allowance is unreasonable, shall by regulation prescribe a lesser percentage): Provided, That in the case of properties other than new construction the principal obligation shall not exceed 90 per centum of the Commissioner’s estimate of the value of the property or project: And provided further, That the Commissioner may in his discretion require such mortgagor to be regulated or restricted as to rents or sales, charges, capital structure, rate of return, and methods of operation, and for such purpose the Commissioner may make 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 restrictions or regulations; such stock or interest shall be paid for out of the Section 207 Housing Insurance Fund and shall be redeemed by the mortgagor at par upon the termination of all obligations of the Commissioner under the insurance; “(5) provide for a complete amortization by periodic payments within such terms as the Commissioner shall prescribe; “(6) bear interest (exclusive of premium charges for insurance) at not to exceed 5 per centum per annum on the amount of the principal obligation outstanding at any time, or not to exceed such per centum per annum not in excess of 5½ per centum as the Commissioner finds necessary to meet the mortgage market; and “(7) cover a property or project which is approved for mortgage insurance prior to the beginning of construction or rehabilitation, with 50 per centum or more of the units therein specially designed for the use and occupancy of elderly persons in accordance with standards established by the Commissioner, and which may include such commercial and special facilities as the Commissioner deems adequate to serve the occupants. “(d) The Commissioner may consent to the release of a part or parts of the mortgaged property or project from the lien of any 73 Stat. 667mortgage insured under this section upon such terms and conditions as he may prescribe, and shall prescribe such procedures as in his judgment are necessary to secure to elderly persons a preference or priority of opportunity to rent the dwellings included in such property or project. “(e) The provisions of subsections (d), (e), (f), (g), (h), (i), (j), (k), (i), (m), (n), and (p) of section 207 shall apply to mortgages insured under this section and all references therein to section 07 shall refer to this section.” (b) Section 212(a) of such Act is amended by adding at the end thereof (after the sentence added by section 110(f) of this Act) the following: “The provisions of this section shall also apply to the insurance of any mortgage under section 231 or 232 except that compliance with such provisions may be waived by the Commissioner in cases or classes of cases where laborers or mechanics, not otherwise employed at any time on the project, voluntarily donate their services without full compensation for the purpose of lowering the costs of construction and the Commissioner determines that any amounts thereby saved are fully credited to the nonprofit corporation, association, or other organization undertaking the construction.”