Pub. L. 87-128, tit. III, subtit. A, sec. 308

Sec. 308. Loans under this subtitle may be insured by the Secretary, aggregating not more than $150,000,000 in any one year, whenever 75 Stat. 309 funds are advanced or a loan is purchased by a lender other than the United States. In connection with insurance of loans, the Secretary— (a) is authorized to make agreements with respect to the servicing of loans insured hereunder and to purchase such loans on such terms and conditions as he may prescribe, except that no agreement shall provide for purchase by the Secretary at a date sooner than three years from the date of the note; and (b) shall retain out of payments by the borrower a charge at a rate determined by the Secretary from time to time equivalent to not less than one-half of 1 per centum per annum on the principal unpaid balance of the loan. Any contract of insurance executed by the Secretary under this subtitle shall be an obligation supported by the full faith and credit of the United States and incontestable except for fraud or misrepresentation of which the holder has actual knowledge.