supplemental loan program for projects financed with federal housing administration insured mortgages

supplemental loan program for projects financed with federal housing administration insured mortgages Sec. 307. Title II of the National Housing Act is amended by adding after section 240 (as added by section 304 of this Act) the following new section: “supplemental loans for multifamily projects “Sec. 241. (a) With respect to a multifamily project or group practice facility covered by a mortgage insured under any section or title of this Act, the Secretary is authorized, upon such terms and conditions as he may prescribe, to made commitments to insure, and to insure, supplemental loans (including advances during construction or improvement) made by financial institutions approved by the Secretary. As used in this section, ‘supplemental loan’ means a loan, advance of credit, or purchase of an obligation representing a loan or advance of credit made for the purpose of financing improvements or additions to such project or facility: Provided, That a loan involving a nursing home covered by a mortgage insured under section 232 or a loan involving a group practice facility covered by a mortgage insured under title. XI may also be made for the purpose of financing equipment to be used in the operation of such nursing home or facility. “(b) To be eligible for insurance under this section, a supplemental loan shall— “(1) be limited to 90 per centum of the amount which the Secretary estimates will be the value of such improvements, additions, and equipment, except that such amount when added to the 82 Stat. 509outstanding balance of the mortgage covering the project or facility, shall not exceed the maximum mortgage amount insurable under the section or title pursuant to which the mortgage covering such project of facility is insured; “(2) have a maturity satisfactory to the Secretary but not to exceed the remaining term of the mortgage; “(3) bear interest (exclusive of premium charges for insurance and service charges, if any ) 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; “(4) be secured in such manner as the Secretary may require; “(5) be governed by the labor standards provisions of section 212 that are applicable to the section or title pursuant to which the mortgage covering the project or facility is insured; and “(6) contain such other terms, conditions, and restrictions as the Secretary may prescribe. “(c) The provisions of subsections (d), (e), (g), (h), (i), (i), (k), (1), and (n) of section 207 shall be applicable to loans insured under this section, except that (1) all references to the term ‘mortgage’ shall be construed to refer to the term ‘loan’ as used in this section, (2) loans involving projects covered by a mortgage insured under section 213 that is the obligation of the Cooperative Management Housing Insurance Fund shall be insured under and shall be the obligation of such fund, and (3) loans involving projects covered by a mortgage insured under section 236 shall be insured under and shall be the obligation of the Special Risk Insurance Fund.”