rehabilitation loans

rehabilitation loans Sec. 312. (a) To assist rehabilitation in an urban renewal area and thereby reduce the need for demolition and removal of structures, the Housing and Home Finance Administrator is hereby authorized, through the utilization of local public and private agencies where feasible, to make loans as herein provided to the owners or tenants of property in such area to finance rehabilitation required to make the property conform to applicable code requirements or to carry out the objectives of the urban renewal plan for the area. No loan shall be made under this section unless the Administrator finds (1) that the applicant, is unable to secure the necessary funds from other sources upon reasonable terms and conditions, and (2) the loan is an acceptable risk taking into consideration the need for the rehabilitation, the security available for the loan, and the ability of the applicant to repay the loan. (b) For the purposes of this section— (1) the term “rehabilitation” means the improvement or repair of a structure or facilities in connection with a structure, and may include the provision of such sanitary or other facilities as are required by applicable codes or the urban renewal plan to be provided by the owner or tenant of the property; 78 Stat. 791 (2) the term “urban renewal area” means a slum area or a blighted, deteriorated, or deteriorating area as defined in section 110(a) of the Housing Act of 1949; (3) the term “tenant” means a person or organization who is occupying a structure under a lease having a period to run at the time a rehabilitation loan is made under this section of not less than the term of the loan; and (4) the term “Administrator” means the Housing and Home Finance Administrator. (c) A rehabilitation loan made under this section shall be subject to the following limitations: (1) The loan shall be subject to such terms and conditions as may be prescribed by the Administrator. (2) The term of the loan may not exceed twenty years or three-fourths of the remaining economic life of the structure after rehabilitation, whichever is less. (3) The loan shall bear interest at such rate as the Administrator determines to be appropriate but not to exceed 3 per centum per annum of the amount of the principal outstanding at any time, and the Administrator may prescribe such other charges as he finds necessary, including service charges and appraisal, inspection, and other fees.’ (4) The amount of the loan may not exceed— (A) in the case of residential property, the amount of a loan which could be insured by the Federal Housing Commissioner under section 220(h) of the National Housing Act: Provided, That, within the. limitations otherwise applicable on the amount of a loan under such section, the loan may exceed the cost of rehabilitation in order to include an amount approved by the Administrator to refinance existing indebtedness secured by such property if such refinancing is necessary to enable the applicant to amortize, with a monthly payment of not more than 20 per centum of his average monthly income, such loan and any other indebtedness secured by his property; and (B) in the case of non residential property, whichever of the following is the least: $50,000, or the cost, of rehabilitation, or an amount which when added to any outstanding indebtedness related to the property securing the loan creates a total outstanding indebtedness that the Administrator determines could be reasonably secured by a first mortgage on the property. (5) A loan shall be secured as determined by the Administrator. (d) There is authorized to be appropriated not to exceed $50,000,000 which shall constitute a revolving fund to be used by the Administrator in carrying out this section. (e) In the performance of, and with respect to, the functions, powers, and duties vested in him by this section, the Administrator shall have (in addition to any authority otherwise vested in him) the functions, powers, and duties set forth in section 402 of the Housing Act of 1950 (except subsection (c)(2)). (f) The Administrator is authorized to delegate to or use as his agent any Federal or local public or private agency or organization to the extent he determines appropriate and desirable to carry out the objectives of this section in the area involved. (g) The Administrator is authorized to issue such rules and regulations and impose such requirements and conditions (in addition to those specified in this section) as he determines to be desirable to carry out the objectives of this section, including limitations on the amount of a loan and restrictions on the use of the property involved.