mortgage insurance for condominiums

mortgage insurance for condominiums Sec. 119. (a) Section 234 of the National Housing Act is amended— (1) by striking out the heading and inserting in lieu thereof “mortgage insurance for condominiums”; (2) by striking out “structure” each place it appears and inserting in lieu thereof “project” (and by striking out “structures” in the last sentence of subsection (c) and inserting in lieu thereof “projects”); (3) by striking out “the term ‘mortgage’ for the purposes of this section” in subsection (b) and inserting in lieu thereof “the term ‘mortgage’ for the purposes of subsection (c)”; (4) (A) by striking out “this section” each time it appears in subsection (c) and inserting in lieu thereof “this subsection”; (B) by striking out “under another section’ in the first sentence of subsection (c) and inserting in lieu thereof “under any section”; (5) by striking out “section 213” each time it appears in subsection (c) and inserting in lieu thereof “section 213(a) (1) and (2)”; (6) by striking out the third sentence of subsection (c) and inserting in lieu thereof the following: “To be eligible for insurance pursuant to this subsection, a mortgage shall (A) involve a principal obligation in an amount not to exceed $30, 000, and not to exceed the sum of (i) 97 per centum of $15, 000 of the amount which the Commissioner estimates will be the appraised value of the family unit including common areas and facilities as of the date the mortgage is accepted for insurance, (ii) 90 per centum of such value in excess of $15, 000 but not in excess of $20, 000, and (iii) 75 per centum of such value in excess of $20, 000, and (B) have a maturity satisfactory to the Commissioner, but not to exceed, in any event, thirty-five years from the date of the beginning of amortization of the mortgage or three-fourths of the Commissioner’s estimate of the remaining economic life of the project, whichever is the lesser.”; (7) by redesignating subsection (d) as subsection (g), by redesignating subsections (e) and (f) as subsections (i) and (j), respectively, and by inserting after subsection (c) the following new subsections: “(d) In addition to individual mortgages insured under subsection (c), the Commissioner is authorized, in his discretion and under such terms and conditions as he may prescribe, to insure blanket mortgages (including advances on such mortgages during construction) which cover multifamily projects to be constructed or rehabilitated in cases where the mortgage is held by a mortgagor, approved by the Commissioner, which— 78 Stat. 781 “(1) has certified to the Commissioner, as a condition of obtaining the insurance of a blanket mortgage under this subsection, that upon completion of the multifamily project covered by such mortgage it intends to commit the ownership of the multi-family project to a plan of family unit ownership under which each family unit would be eligible for individual mortgage insurance under subsection (c) and will faithfully and diligently make and carry out all reasonable efforts to establish such plan of family unit ownership and to sell such family units to purchasers approved by the Commissioner; and “(2) shall be regulated or restricted by the Commissioner as to rents, charges, capital structure, rate of return, and methods of operation until the termination of all obligations of the Commissioner under the insurance and during such further period of time as the Commissioner shall be the owner, holder, or reinsurer of the mortgage. The Commissioner may make such contracts with and acquire for not to exceed $100 such stock or interest in such mortgagor as he may deem necessary to render effective the regulation and restriction of such mortgagor. The stock or interest acquired by the Commissioner shall be paid for out of the Apartment Unit Insurance Fund, and shall be redeemed by the mortgagor at par at any time upon the request of the Commissioner after the termination of all obligations of the Commissioner under the insurance. “(e) To be eligible for insurance, a blanket mortgage on any multi-family project of a mortgagor of the character described in subsection (d) shall involve a principal obligation in an amount— “(1) not to exceed $20, 000, 000, or not to exceed $25, 000, 000 if the mortgage is executed by a mortgagor regulated or supervised, under Federal or State law or by a political subdivision of a State or any agency thereof, as to rents, charges, and methods of operation; “(2) not to exceed 90 per centum of the amount which the Commissioner estimates will be the replacement cost of the project when the proposed physical improvements are completed; “(3) not to exceed, for such part of the project as may be attributable to dwelling use (excluding exterior land improvements as defined by the Commissioner), $9, 000 per family unit without a bedroom, $12, 500 per family unit with one bedroom, $15, 000 per family unit with two bedrooms, and $18, 500 per family unit with three or more bedrooms; except that as to projects to consist of elevator-type structures the Commissioner may, in his discretion, increase the dollar amount limitations per family unit to not to èxceed $10, 500 per family unit without a bedroom, $15, 000 per family unit with one bedroom, $18, 000 per family unit with two bedrooms, and $22, 500 per family unit with three or more bedrooms, as the case may be, to compensate for the higher costs incident to the construction of elevator-type structures of sound standards of construction and design; and except that the Commissioner may, by regulation, increase any of the foregoing dollar amount limitations contained in this paragraph by not to exceed 45 per centum in any geographical area where he finds that cost levels so require; and “(4) not to exceed an amount equal to the sum of the unit mortgage amounts determined under the provisions of subsection (c) assuming the mortgagor to be the owner and occupant of each family unit. “(f) Any blanket mortgage insured under subsection (d) shall provide for complete amortization by periodic payments within such 78 Stat. 782 term as the Commissioner may prescribe but not to exceed forty Sears from the beginning of amortization of the mortgage, and shall ear interest (exclusive of premium charges for insurance) at not to exceed 5¼ per centum per annum on the amount of the principal obligation outstanding at any time. The Commissioner may consent to the release of a part or parts of the mortgaged property from the lien of the blanket mortgage upon such terms and conditions as he may prescribe and the blanket mortgage may provide for such release. The project covered by the blanket mortgage may include five or more family units and such commercial and community facilities as the Commissioner deems adequate to serve the occupants.”; (8) by striking out “this section” each time it appears in the subsection redesignated as subsection (g) by paragraph (7) of this subsection and inserting in lieu thereof “subsection (c) of this section”; (9) by inserting after the subsection redesignated as subsection (g) by paragraph (7) of this subsection the following new subsection: “(h) The provisions of subsections (d), (e), (g), (h), (i), (j), (k), (l), (m), (n), and (p) of section 207 shall be applicable to mortgages insured under subsection (d) of this section, except that all references to the Housing Insurance Fund, or Housing Fund, shall be construed to refer to the Apartment Unit Insurance Fund.”; and (10) by amending the subsection redesignated as subsection (j) by paragraph (7) of this subsection to read as follows: “(j) The provisions of sections 225 and 230 shall be applicable to the mortgages insured under subsection (c) of this section.” (b) Section 212(a) of such Act is amended by adding at the end thereof the following new sentence: “The provisions of this section shall also apply to the insurance of any mortgage under section 234(d).” (c) Section227(a) of such Act is amended by striking out “or (vii)” and inserting in lieu thereof “(vii)”, and by inserting before the semi-colon at the end thereof “, or (viii) under section 234(d)”.