insurance of loans for purchase of fee simple title from lessors

insurance of loans for purchase of fee simple title from lessors Sec. 304. (a) Title II of the National Housing Act is amended by adding after section 239 (as added by section 302 of this Act) the following new section: “purchase of fee simple title from lessors “Sec. 240. (a) The Secretary is authorized, upon such terms and conditions as he may prescribe, to make commitments to insure and to insure loans made by financial institutions for the purpose of financing purchasers by homeowners of the fee simple title to property on which their homes are located. “(b) As used in this section— “(1) the term ‘financial institution’ means a lender approved by the Secretary as eligible for insurance under section 2 or a mortgagee approved under section 203(b) (1); and “(2) the term ‘homeowner’ means a lessee under a long-term ground lease. “(c) To be eligible for insurance under this section, a loan shall— “(1) relate to property on which there is located a dwelling designed principally for a one-, two-, three-, or four-family residence; “(2) not exceed the cost of purchasing the fee simple title, or $10,000 per family unit, whichever is the lesser; “(3) be limited to an amount which when added to any outstanding indebtedness related to the property (as determined by the Secretary) creates a total outstanding indebtedness which does not exceed the applicable mortgage limit prescribed in section 203(b); , “(4) bear interest at not to exceed such per centum per annum (not in excess of 6 per centum), on the amount of the principal obligation outstanding at any time, as the Secretary finds necessary to meet market conditions, and such other charges (including service charges and appraisal, inspection, and other fees) as may be approved by the Secretary; “(5) have a maturity satisfactory to the Secretary, but not to exceed twenty years from the beginning of amortization of the loan or three-quarters of the remaining economic life of the home, whichever is the lesser; and “(6) comply with such other terms, conditions, an d restrictions as the Secretary may prescribe. “(d) The provisions of paragraphs (3), (5), (6), (7), (8), and (10) of section 220(h) shall be applicable to loans insured under this section and, as applied to loans insured under this section, references 82 Stat. 508in those paragraphs to ‘home imporvement loans’ and ‘this subsection’ shall be construed to refer to loans under this section.” (b) Section 5(c) of the Home Owners’ Loan Act of 1933 (12 U.S.C. 1464(c)) is amended by adding immediately after the next to the last-paragraph the following new paragraph: “Notwithstanding any other provision of this subsection, an association may invest in loans or obligations, or interests therein, as to which the association has the benefit of insurance under section 240 of the National Housing Act, or of a commitment or agreement therefor, and such investments shall not lx? included in any percentage of assets or other percentage referred to in this subsection.”