RIGHT OF REDEMPTION IN CASE OF SUBORDINATE LIENS OF FHA-RESALES OF FHA FINANCED HOUSING EXCERPTS FROM THE HOUSING ACT OF 1950 [Public Law 475, 81st Congress; 64 Stat. 48; 12 U.S.C. 1701k and 17017] TITLE V-MISCELLANEOUS PROVISIONS * SEC. 505. The right to redeem provided for by title 28, United States Code, section 2410 (c), shall not arise in any case in which the subordinate lien or interest of the United States derives from the issuance of insurance under the National Housing Act, as amended. SEC. 508. It is the intent of Congress that no sale of a dwelling on which a mortgage is insured under the National Housing Act, as amended, shall be financed, while such mortgage is so insured, at an interest rate higher than that prescribed by the Secretary of Housing and Urban Development. It is the further intent of Congress that no such sale shall be made, while such mortgage is so insured, on terms less favorable to the purchaser as to amortization, retirement, foreclosure, or forfeiture than those contained in such mortgage. Approved April 20, 1950. BUILDERS WARRANTY-FHA HOUSING EXCERPTS FROM HOUSING ACT OF 1954 [Public Law 560, 83d Congress; 68 Stat. 590, 642; 12 U.S.C. 1701j] SEC. 801. (a) The Secretary of Housing and Urban Development is hereby authorized and directed to require that, in connection with any property upon which there is located a dwelling designed principally for not more than a four-family residence and which is approved for mortgage insurance prior to the beginning of construction, the seller or builder, and such other person as may be required by the said Secretary to become warrantor, shall deliver to the purchaser or owner of such property a warranty that the dwelling is constructed in substantial conformity with the plans and specifications (including any amendments thereof, or changes and variations therein, which have been approved in writing by the Secretary of Housing and Urban Development) on which the Secretary of Housing and Urban Development based his valuation of the dwelling: Provided, That the Secretary of Housing and Urban Development shall deliver to the builder, seller, or other warrantor his written approval (which shall be conclusive evidence of such approval) of any amendment of, or change or variation in, such plans and specifications which the Secretary deems to be a substantial amendment thereof, or change or variation therein, and shall file a copy of such written approval with such plans and specifications: Provided further, That such warranty shall apply only with respect to such instances of substantial nonconformity to such approved plans and specifications (including any amendment thereof, or changes or variations therein, which have been approved in writing, as provided herein, by the Secretary of Housing and Urban Development) as to which the purchaser or homeowner has given written notice to the warrantor within one year from the date of conveyance of title to, or initial occupancy of, the dwelling, whichever first occurs: Provided further, That such warranty shall be in addition to, and not in derogation of, all other rights and privileges which such purchaser or owner may have under any other law or instrument: And provided further, That the provisions of this section shall apply to any such property covered by a mortgage insured by the Secretary of Housing and Urban Development on and after October 1, 1954, unless such mortgage is insured pursuant to a commitment therefor made prior to October 1, 1954. (b) The Secretary of Housing and Urban Development is further directed to permit copies of the plans and specifications (including written approvals of any amendments thereof, or changes or variations therein, as provided herein) for dwellings in connection with which warranties are required by subsection (a) of this section to be made. available in their appropriate local offices for inspection or for copying by any purchaser, homeowner, or warrantor during such hours or periods of time as the said Secretary may determine to be reasonable. Approved August 2, 1954. SECONDARY MARKET FOR HOUSING LOANS-PARTICIPA See also: Participation sales: TION SALES Excerpts from Participation Sales Act of 1966- Excerpts from Independent Offices Appropriation Act, 1967.. Page 481 481 482 483 Excerpts from Independent Offices and Department of Housing 483 485 Excerpts from Departments of State, Justice, and Commerce, the 486 EXCERPTS FROM THE NATIONAL HOUSING ACT TITLE III-FEDERAL NATIONAL MORTGAGE 1 ASSOCIATION 1 PURPOSES SEC. 301. The Congress hereby declares that the purposes of this title are to establish in the Federal Government a secondary market facility for home mortgages, to provide that the operations of such facility shall be financed by private capital to the maximum extent feasible, and to authorize such facility to (a) provide supplementary assistance to the secondary market for home mortgages by providing a degree of liquidity for mortgage investments, thereby improving the distribution of investment capital available for home mortgage financing; (b) provide special assistance (when, and to the extent that, the President has determined that it is in the public interest) for the financing of (1) selected types of home mortgages (pending 1 Sec. 201 of the Housing Act of 1954, Public Law 560, 83d Congress, approved August 2, 1954, 68 Stat. 590, 612, 12 U.S.C. 1716 et seq., rewrote title III of the National Housing Act to recharter the Federal National Mortgage Association and prescribe its functions. See sec. 312 of the National Housing Act, infra, which provides that title III may be referred to as the "Federal National Mortgage Association Charter Act." Title III of the National Housing Act as it was originally enacted authorized the creation of national mortgage associations to purchase and sell first mortgages on real estate. At the request of the President of the United States, on February 10, 1938, pursuant to title III, the Federal National Mortgage Association was chartered by the Federal Housing Administration as the "National Mortgage Association of Washington". The name was changed to the Federal National Mortgage Association on April 5, 1938. The entire capital stock and paid-in surplus were subscribed and paid for by the Reconstruction Finance Corporation, and the conduct of the Association's affairs was integrated with and directed by the RFC. On September 7, 1950, the Association was transferred to the Housing and Home Finance Agency pursuant to Reorganization Plan No. 22 of 1950, 64 Stat. 1277. Sec. 202 of the Housing Act of 1954 provided that the "Federal National Mortgage Association, established pursuant to the provisions of title III of the National Housing Act as in effect prior to July 1, 1948, and named in sec. 101 of the Government Corporation Control Act, as amended, shall be the body corporate referred to in sec. 302 of title III of the National Housing Act, as amended by the Housing Act of 1954". Sec. 5(b) of the Department of Housing and Urban Development Act, Public Law 89174, approved September 9. 1965, 79 Stat. 667, 669, transferred the Association to the Department established by that Act. the establishment of their marketability) originated under special housing programs designed to provide housing of acceptable standards at full economic costs for segments of the national population which are unable to obtain adequate housing under established home financing programs, and (2) home mortgages generally as a means of retarding or stopping a decline in mortgage lending and home building activities which threatens materially the stability of a high level national economy; and (c) manage and liquidate the existing mortgage portfolio of the Federal National Mortgage Association in an orderly manner, with a minimum of adverse effect upon the home mortgage market and minimum loss to the Federal Government. CREATION OF ASSOCIATION SEC. 302. (a) There is hereby created a body corporate to be known as the "Federal National Mortgage Association" (hereinafter referred to as the "Association"), which shall be in the Department of Housing and Urban Development. The Association shall have succession until dissolved by Act of Congress. It shall maintain its principal office in the District of Columbia and shall be deemed, for purposes of venue in civil actions, to be a resident thereof. Agencies or offices may be established by the Association in such other place or places as it may deem necessary or appropriate in the conduct of its business. (b) For the purposes set forth in section 301 and subject to the limitations and restrictions of this title, the Association is authorized, pursuant to commitments or otherwise, to purchase, lend (under section 304) on the security of, service, sell, or otherwise deal in any mortgages which are insured under the National Housing Act or title V of the Housing Act of 1949,1 or which are insured or guaranteed under the Servicemen's Readjustment Act of 1944 or chapter 37 of title 38, United States Code: Provided, That (1) no mortgage may be purchased at a price exceeding 100 per centum of the unpaid principal amount thereof at the time of purchase, with adjustments for interest and any comparable items; (2) the Association may not purchase any mortgage, except a mortgage insured under title V of the Housing Act of 1949,2 if it is offered by, or covers property held by, a 3 State, territorial, or municipal instrumentality; and (3) the Association may not purchase any mortgage under section 305, except a mortgage insured under section 220 or title VIII, or under title X with respect to a new community approved under section 1004 thereof, or insured under section 213 and covering property located in an urban renewal area, or a mortgage covering property located in Alaska, Guam, or Hawaii, if the original principal obligation thereof exceeds or exceeded $17,500 for each family residence or dwelling unit covered by the mortgage (plus an additional $2,500 for each such family residence or dwelling 1 Sec. 1004 (a)(1) of the Housing and Urban Development Act of 1955, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 501 inserted "or title V of the Housing Act of 1949" (rural housing mortgages). Sec. 1004 (a)(2) of the Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 501, inserted ", except a mortgage insured under title V of the Housing Act of 1949," (rural housing mortgages). Sec. 802 (a) (1) of the Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 493, struck out "Federal.". Sec. 405, Demonstration Cities and Metropolitan Development Act of 1966, Public Law 89-754, approved November 3, 1966, 80 Stat. 1255, 1273, inserted "or under title X with respect to a new community approved under section 1004 thereof,". 2 unit which has four or more bedrooms). Notwithstanding the provisions of clause (3) in the preceding sentence, the Association may purchase a mortagage under section 305 with an original principal obligation that exceeds $17,500 per dwelling unit if the mortgage (1) is a below-market interest rate mortgage insured under section 221(d) (3), and (2) covers property which has the benefit of local tax abatement in an amount determined by the Secretary of Housing and Urban Development to be sufficient to make possible rentals not in excess of those that would be approved by the Secretary if the mortgage amount did not exceed $17,500 per dwelling unit and if local tax abatement were not provided. For the purposes of this title, the term "mortgages" and "home mortgages" shall be inclusive of any mortgages or other loans insured under any of the provisions of the National Housing Act or title V of the Housing Act of 1949. (c) (1) Notwithstanding any other provision of this Act or of any other law, the Association is authorized under section 306 to create, accept, execute, and otherwise administer in all respects such trusts, receiverships, conservatorships, liquidating or other agencies, or other fiduciary and representative undertakings and activities, hereinafter in this subsection called "trusts", as might be appropriate for financing purposes; and in relation thereto the Association may acquire, hold and manage, dispose of, and otherwise deal in any mortgages or other types of obligations in which any department or agency of the United States listed in paragraph (2) of this subsection may have a financial interest. The Association may join in any such undertakings and activities notwithstanding that it is also serving in a fiduciary or representative capacity; and is authorized, consistent with section 307, to guarantee any participations or other instruments, whether evidence of property rights or debt, issued for such financing purposes. Participations or other instruments issued by the Association pursuant to this subsection shall to the same extent as securities which are direct obligations of or obligations guaranteed as to principal or interest by the United States be deemed to be exempt securities within the meaning of laws administered by the Securities and Exchange Commission. The amounts of any mortgages and other obligations acquired by the As 1 Sec. 201 of Public Law 1020, 84th Congress, approved August 7, 1956, 70 Stat. 1091, 1096, exempted a mortgage insured under sec. 803 or a mortgage covering property located in Alaska, Guam, or Hawaii from the $15,000 limitation provided by the 1954 FNMA Charter Act. Sec. 301 of Public Law 86-372, approved September 23, 1959, 73 Stat. 654, 669, provided $17,500 and $20,000 limitations in place of the $15.000 limitation. and exempted a mortgage insured under sec. 220. Sec. 602 of Public Law 87-70. approved June 30, 1961, 75 Stat. 149, 176. struck out "or 803" and inserted in lieu thereof "or title VIII", and exempted a mortgage insured under sec. 213 and covering property located in an urban renewal area. Sec. 702 of Public Law 88-560, approved September 2, 1964. 78 Stat. 769, 802, removed the $20.000 limitation. Sec. 804 of Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 494, inserted "(plus an additional $2,500 for each such family residence or dwelling unit which has four or more bedrooms)". Sec. 803, Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 494, inserted this sentence. As added by sec. 102(c) of Public Law 87-70, approved June 30, 1961, 75 Stat. 149. 158. this sentence read: "For the purposes of this title, the term 'mortgages' shall be inclusive of any mortgages or other loans insured under any of the provisions of the National Housing Act." Sec. 201(b) (1) of Public Law 89-117, approved August 10. 1965. 79 Stat. 451, 465, struck out "the term 'mortgages'" and inserted in lieu thereof "the terms 'mortgages' and 'home mortgages' ". Sec. 1004 (a) (3) of Public Law 89-117. 79 Stat. 501, inserted "or title V of the Housing Act of 1949". 4 Sec. 302 (c) was added by sec. 701(a) of Public Law 88-560, aproved September 2. 1964, 78 Stat. 769, 800, and amended by Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 494. Sec. 2(a) of the Participation Sales Act of 1966, Public Law 89-429. approved May 24, 1966, 80 Stat. 164, further amended this section and redesignated subsec. (c) as par. (1). Sec. 2(b) of Public Law 89-429, added pars. (2), (3), (4), and (5) to sec. 302 (c). |