MORTGAGE INSURANCE FOR PUBLIC HOSPITALS.

SEC. 412. MORTGAGE INSURANCE FOR PUBLIC HOSPITALS. (a) Elimination of Additional Collateral Requirements for Public Hospitals.— Section 242(a) of the National Housing Act is amended by adding at the end the following: “Such assistance shall be provided regardless of the amount of public financial or other support a hospital may receive, and the Secretary shall neither require additional security or collateral to guarantee such support, nor impose more stringent eligibility or other requirements on publicly owned or supported hospitals.”. (b) Credit for Existing Equipment and Improvements.— Section 242(d)(2) of the National Housing Act is amended by striking the matter preceding subparagraph (A) and inserting the following: “(2) The mortgage shall involve a principal obligation in the amount requested by the mortgagor if such amount does not exceed 90 percent of the estimated replacement cost of the property or project including—. (c) Continued Use of Letters of Credit.— Section 242(d) of the National Housing Act is amended by adding at the end the following new paragraph: “(6) To the extent that a private nonprofit or public facility mortgagor is required by the Secretary to provide cash equity in excess of the amount of the mortgage to complete the project, the 101 STAT. 1906mortgagor shall be entitled, at the option of the mortgagee, to fund the excess with a letter of credit. In such event, mortgage proceeds may be advanced to the mortgagor prior to any demand being made on the letter of credit.”. (d) Immediate Processing of Applications for Public Hospitals.— Section 242(f) of the National Housing Act is amended by adding at the end the following: “The Secretary shall begin immediately to process applications of public facilities for mortgage insurance under this section in accordance with regulations, guidelines, and procedures applicable to facilities of private nonprofit corporations and associations.”. (e) Report on Insurance Under Section 242.— The Comptroller General of the United States shall conduct a study of the long-term financial exposure of the Federal Government under the mortgage insurance program pursuant to section 242 of the National Housing Act. Not later than October 1, 1988, the Comptroller General of the United States shall transmit to the Congress a report setting forth the results of such study, including documentation of the long-term financial exposure determined in the course of such study and recommendations for such legislation as the Comptroller General deems appropriate.