fied to be in excess of such approved percentage of actual cost. Upon the Secretary's approval of the mortgagor's certification as required hereunder, such certification shall be final and incontestable, except for fraud or material misrepresentation on the part of the mortgagor. As used in this section

(a) The term "new or rehabilitated multifamily housing" means a project or property approved for mortgage insurance prior to the construction or the repair and rehabilitation involved and covered by a mortgage insured or to be insured (i) under section 207, (ii) under section 213 with respect to any property or project of a corporation or trust of the character described in paragraph numbered (1) of subsection (a) thereof or with respect to any property or project of a mortgagor of the character described in paragraph (3) of subsection (a) thereof, (iii) under section 220 if the mortgage meets the requirements of paragraph (3) (B) of subsection (d) thereof, (iv)1 under section 221 if the mortgage meets the requirements of paragraph (3) or paragraph (4) of subsection (d) thereof, (v) under section 231, (vi) under section 233 if the mortgage meets the requirements of subsection (b), (vii) under section 810 if the mortgage meets the requirements of subsection (f), (viii)3 under section 234(d), or (ix) under section 2364:

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(b) The term "approved percentage" means the percentage figure which, under applicable provisions of this Act, the Secretary is authorized to apply to his estimate of value, cost, or replacement cost, as the case may be, of the property or project in determining the maximum insurable mortgage amount; except that if the mortgage is to assist the financing of repair or rehabilitation and no part of the proceeds will be used to finance the purchase of the land or structure involved, the approved percentage shall be 100 per centum; and

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(c) The term "actual cost" has the following meaning: (i) in case the mortgage is to assist the financing of new construction, the term means the actual cost to the mortgagor of such construction, including amounts paid for labor, materials, construction contracts, off-site public utilities, streets, organizational and legal expenses, such allocations of general overhead items as are acceptable to the Secretary, and other items of expense approved by the Secretary, plus (1) a reasonable allowance for builder's profit if the mortgagor is also the builder as defined by the Secretary, and (2) an amount equal to the Secretary's estimate of the fair market value of any land (prior to the construction of the improvements built as a part of the project) in the property or project owned by the mortgagor in fee (or, in case the land in the property or project is held by the mortgagor un

1 Immediately prior to amendment by sec. 112(a), Housing Act of 1959, Public Law 86372, approved September 23, 1959, 73 Stat. 654, 661, clauses (iv), (v), and (vi) read as follows:

"(iv) under section 221 if the mortgage meets the requirements of paragraph (3) of subsection (d) thereof, (v) under section 803, or (vi) under sections 903 and 908".

2 Immediately prior to amendment by sec. 612,k) (1), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 183, clause (vi) read as follows: "or (vi) under section 810 if the mortgage meets the requirements of subsection (f);".

Sec. 119 (c), Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 769, 782, inserted", or (viii) under section 234 (d)”.

Sec. 201(b) (2), Housing and Urban Development Act of 1968, Public Law 90-448, approved Aug. 1, 1968, 82 Stat. 476, 502, inserted "(ix) under section 236".

Sec. 612(k) (2), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 183, inserted "cost".

This clause added by sec. 109, Housing Act of 1956, Public Law 1020, 84th Congress, approved August 7, 1956, 70 Stat. 1091, 1095.

der a leasehold or other interest less than a fee, such amount as the mortgagor paid for the acquisition of such leasehold or other interest but, in no event, in excess of the fair market value of such leasehold or other interest exclusive of the proposed improvements), but excluding the amount of any kickbacks, rebates, or trade discounts received in connection with the construction of the improvements, or (ii) in case the mortgage is to assist the financing of repair or rehabilitation, the term means the actual cost to the mortgagor of such repair or rehabilitation, including the amounts paid for labor, materials, construction contracts, off-site public utilities, streets, organization and legal expenses, such allocations of general overhead items as are acceptable to the Secretary, and other items of expense approved by the Secretary, plus (1) a reasonable allowance for builder's profit if the mortgagor is also the builder as defined by the Secretary, and (2) an additional amount equal to (A) in case the land and improvements are to be acquired by the mortgagor and the purchase price thereof is to be financed with part of the proceeds of the mortgage, the purchase price of such land and improvements prior to such repair or rehabilitation, or (B) in case the land and improvements are owned by the mortgagor subject to an outstanding indebtedness to be refinanced with part of the proceeds of the mortgage, the amount of such outstanding indebtedness secured by such land and improvements, but excluding (for the purpose of this clause (ii)) the amount of any kickbacks, rebates, or trade discounts received in connection with the construction of the improvements: Provided, That such additional amount under (A) of this clause (ii) shall in no event exceed the Secretary's estimate of the fair market value of such land and improvements prior to such repair or rehabilitation, and such additional amount under (B) of this clause (ii) shall in no event exceed the approved percentage of the Secretary's estimate of the fair market value of such land and improvements prior to such repair or rehabilitation. In the case of a mortgage insured under section 220, section 221 (d) (3), section 221(d) (4), section 231, section 233, or section 236 2 where the mortgagor is also the builder as defined by the Secretary, there shall be included in the actual cost, in lieu of the allowance for builder's profit under clause (i) or (ii) of the preceding sentence, an allowance for builder's and sponsor's profit and risk of 10 per centum (unless the Secretary, after finding that such allowance is unreasonable, shall by regulation prescribe a lesser percentage) of all other items entering into the term "actual cost" except land or amounts paid for a leasehold and amounts included under either (A) or (B) of clause (ii) of the preceding sentence. In the case of a mortgage insured under section 220, section 221(d) (3), section 221(d) (4), section 231, or section 233, or section 236, where the mortgagor is not also the builder as defined by the Secretary, there shall be included in

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1 Sec. 612(k) (3), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 183, amended this sentence to include mortgages insured under secs. 221 (d) (3) and 233(b) (2) in addition to mortgages insured under secs. 220, 221(d) (4), and 231.

Sec. 201(b) (3), Housing and Urban Development Act of 1968, Public Law 90-448, approved Aug. 1, 1968, 82 Stat. 476, 502, added "section 236".

Sec. 612(k) (3), Housing Act of 1981, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 183, amended this sentence to include mortgages insured under secs. 221(d) (3) and 233(b) (2) in addition to mortgages insured under secs. 220, 221(d) (4), and 231.

Sec. 201 (b) (3), Housing and Urban Development Act of 1968, Public Law 90 448, approved Aug. 1, 1968, 82 Stat. 476, 502, inserted "section 236".

the actual cost an allowance for sponsor's profit and risk of the said 10 per centum or lesser percentage of all other items entering into the term "actual cost" except land or amounts paid for a leasehold, amounts included under either (A) or (B) of the said clause (ii), and amounts paid by the mortgagor under a general construction contract. SEC. 228. Repealed.'

VOLUNTARY TERMINATION OF INSURANCE

SEC. 229. Notwithstanding any other provision of this Act and with respect to any loan or mortgage heretofore or hereafter insured under this Act, except under section 2, the Secretary is authorized to terminate any insurance contract upon request by the borrower or mortgagor and the financial institution or mortgagee and upon payment of such termination charge as the Secretary determines to be equitable, taking into consideration the necessity of protecting the various insurance Funds. Upon such termination, borrowers and mortgagors and financial institutions and mortgagees shall be entitled to the rights, if any, to which they would be entitled under this Act if the insurance contract were terminated by payment in full of the insured loan or mortgage.

ACQUISITION OF MORTGAGES TO AVOID FORECLOSURE

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SEC. 230. Upon receiving notice of the default of any mortgage covering a one-, two-, three-, or four-family residence heretofore or hereafter insured under this Act, the Secretary, in his discretion and for the purpose of avoiding foreclosure of the mortgage, and notwithstanding the fact that he has previously approved a request of the mortgagee for an extension of the time for curing the default and of the time for commencing foreclosure proceedings or for otherwise acquiring title to the mortgaged property, or has approved a modification of the mortgage for the purpose of changing the amorization provisions by recasting the unpaid balance, may acquire the loan and security therefor upon payment of the insurance benefits in an amount equal to the unpaid principal balance of the loan plus any unpaid mortgage interest plus reimbursement for such costs and attorney's fees as the Secretary finds were properly incurred in connection with the defaulted mortgage and its assignment to the Secretary, and

Repealed by sec. 12(c), Public Law 94, 84th Congress, approved June 28, 1955, 69 Stat. 172, 182. Immediately prior to amendment by sec. 612(1), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 183, section 229 read as follows:

"SEC. 229. Notwithstanding any other provision of this Act and with respect to any mortgage covering a one-, two, three, or four-family residence heretofore or hereafter insured under this Act, the Commissioner is authorized to terminate any mortgage insurance contract upon request by the mortgagor and mortgagee and upon payment of such termination charge as the Commissioner determines to be equitable, taking into consideration the necessity of protecting the various insurance funds. Upon such termination mortgagors and mortgagees shall be entitled to the rights, if any, to which they would be entitled under this Act if the insurance contract were terminated by payment in full of the insured mortgage."

Sec. 114(a), Housing Act of 1959, Public Law 86-372, approved September 23, 1959, 73 Stat. 654, 662, added sec. 230.

Sec. 104 (b), Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 79, 769, 770, amended the first sentence of sec. 230 to make it clear that the Secretary can accept assignment of a mortgage in default even though the lender had previously granted forbearance relief to the mortgagor. In addition, the payment of insurance benefits to the lender in such cases may include not only the unpaid interest on the mortgage but also such costs and attorneys' fees as are properly incurred by the lender in making the assignment.

for any proper advances theretofore made by the mortgagee under the provisions of the mortgage. After the acquisition of such mortgage by the Secretary, the mortgagee shall have no further rights, liabilities, or obligations with respect thereto. The provisions of section 204 relating to the issuance of debentures incident to the acquisition of foreclosed properties shall apply with respect to debentures issued under this subsection, and the provisions of section 204 relating to the rights, liabilities, and obligations of a mortgagee shall apply with respect to the Secretary when he has acquired an insured mortgage under this section, in accordance with and subject to regulations (modifying such provisions to the extent necessary to render their application for such purposes appropriate and effective) which shall be prescribed by the Secretary.

HOUSING FOR ELDERLY PERSONS

SEC. 231.1 (a) The purpose of this section is to assist in relieving the shortage of housing for elderly persons and to increase the supply of rental housing for elderly persons.

For the purposes of this section

(1) the term "housing" means eight or more new or rehabilitated living units, not less than 50 per centum of which are specially designed for the use and occupancy of elderly persons;

(2) the term "elderly person" means any person, married or single, who is sixty-two years of age or over; and

(3) the terms "mortgage," "mortgagee," "mortgagor," and "maturity date" shall have the meanings respectively set forth in section 207 of this Act.

(b) The Secretary is authorized to insure any mortgage (including advances on mortgages during construction) in accordance with the provisions of this section upon such terms and conditions as he may prescribe and to make commitments for insurance of such mortgages prior to the date of their execution or disbursement thereon.

(c) To be eligible for insurance under this section, a mortgage to provide housing for elderly persons shall

(1) involve a principal obligation in an amount not to exceed $12,500,000 or, if executed by Federal or State instrumentalities, municipal corporate instrumentalities of one or more States, or nonprofit development or housing corporations restricted by Federal or State laws or regulations of State banking or insurance departments as to rents, charges, capital structure, rate of return, or methods of operation, not to exceed $50,000,000;

(2)2 not to exceed, for such part of the property or project as may be attributable to dwelling use (excluding exterior land im

1 Sec. 201(a), Housing Act of 1959, Public Law 86-372, approved September 23, 1959, 73 Stat. 654, 665, added sec. 231.

See also provisions for rent supplements, sec. 101 (j), Housing and Urban Development Act of 1965, and interest reduction payments for rental housing (sec. 236, infra).

2 Sec. 107 (e), Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 769, 776, deleted the previous per room limits in this par. (c) (2) on the amount of a mortgage and substituted dollar amount limitations based on the number of family units in the project with the dollar amount limitations varying according to the number of bedrooms in each unit.

Sec. 113(g), Housing and Urban Development Act of 1969. Public Law 91-152, approved December 24, 1969, 83 Stat. 379, 384, increased by ten percent as shown in the text the dollar limits in this par. (c) (2).

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provement as defined by the Secretary), $8,800 per family unit without a bedroom, $12,375 per family unit with one bedroom, $14,850 per family unit with two bedrooms, $18,700 per family unit with three bedrooms, and $21,175 per family unit with four or more bedrooms; except that as to projects to consist of elevator-type structures the Secretary may, in his discretion, increase the dollar amount limitations per family unit to not to exceed$10,450 per family unit without a bedroom, $14,850 per family unit with one bedroom, $17,600 per family unit with two bedrooms, $22,000 per family unit with three bedrooms, and $25,025 per family unit with four or more bedrooms, as the case may be, to compensate for the higher costs incident to the construction of elevator-type structures of sound standards of construction and design; and except that the Secretary may, by regulation, increase any of the foregoing dollar amount limitations contained in this paragraph by not to exceed 45 per centum in any geographical area where he finds that cost levels so require;

(3) if executed by a mortgagor which is a public instrumentality or a private nonprofit corporation or association or other acceptable private nonprofit organization regulated or supervised under Federal or State laws or by political subdivisions of States, or agencies thereof, or by the Secretary under a regulatory agreement or otherwise, as to rents, charges, and methods of operation, in such form and in such manner as, in the opinion of the Secretary, will effectuate the purpose of this section, involve a principal obligation not in excess of the amount which the Secretary estimates will be the replacement cost of the property or project when the proposed improvements are completed (the replacement cost may include the land, the proposed physical improvements, utilities within the boundaries of the land, architect's fees, taxes, interest during construction, and other miscellaneous charges incident to construction and approved by the Secretary): Provided, That in the case of properties other than new construction, the principal obligation shall not exceed the appraised value rather than the Secretary's estimate of the replacement cost;

(4) if executed by a mortgagor which is approved by the Secretary but is not a public instrumentality or a private nonprofit organization, involve a principal obligation not in excess (in the case of a property or project approved for mortgage insurance prior to the beginning of construction) of 90 per centum of the amount which the Secretary estimates will be the replacement cost of the property or project when the proposed improvements are completed (the replacement costs may include the land, the proposed physical improvements, utilities within the boundaries of the land, architect's fees, taxes, interest during construction, and other miscellaneous charges incident to construction and approved by the Secretary, and shall include an allowance for builder's and sponsor's profit and risk of 10 per centum of all of the foregoing items except the land unless the Secretary, after certification that such allowance is unreasonable, shall by regulation prescribe a lesser percentage): Provided, That in the case