II. HOUSING INSURANCE OF HOUSING LOANS AND CREDIT p. 312 See also: NATIONAL HOUSING ACT [Public Law 479, 73d Congress, 48 Stat. 1246, 12 U.S.C. 1701 et seq.] AN ACT To encourage improvement in housing standards and conditions, to provide a system of mutual mortgage insurance, and for other purposes. Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That this Act may be cited as the "National Housing Act." TITLE I-HOUSING RENOVATION AND MODERNIZATION ADMINISTRATIVE PROVISIONS 1 SECTION 1. The 2 powers conferred by this Act shall be exercised by the Secretary of Housing and Urban Development (hereinafter referred to as the "Secretary"). In order to carry out the provisions of this title and titles II, III, V, VI, VII, VIII, IX, X, and XI, the Secretary may establish such agencies, accept and utilize such voluntary and uncompensated services, utilize such Federal officers and employees, and, with the consent of the State, such State and local officers and employees, and appoint such other officers and employees as he may find necessary, and may prescribe their authorities, duties, responsibilities, and tenure and fix their compensation, without regard to the provisions of other laws applicable to the employment or compensation of officers or employees 1 Sec. 1(b) of Public Law 90-19, approved May 25, 1967, 81 Stat. 17, substituted this heading for "Creation of Federal Housing Administration." Sec. 1 of Public Law 90-19, approved May 25, 1967, 81 Stat. 18, amended this sentence to read as set forth in the text. Prior to this amendment the sentence read as follows: "The President is authorized to create a Federal Housing Administration, all of the powers of which shall be exercised by a Federal Housing Commissioner (hereinafter referred to as the 'Commissioner'), who shall be appointed by the President, by and with the advice and consent of the Senate. The Department of Housing and Urban Development Act, Public Law 89-174, effective November 9, 1965, 79 Stat. 667, established the Department of Housing and Urban Development and provided in sec. 4(a) that "There shall be in the Department a Federal Housing Commissioner, who shall be one of the Assistant Secretaries, who shall head a Federal Housing Administration within the Department, who shall have such duties and powers as may be prescribed by the Secretary, and who shall administer, under the supervision and direction of the Secretary, departmental programs relating to the private mortgage market." Sec. 5(a) of that act transferred to and vested in the Secretary of Housing and Urban Development all of the functions, powers and duties of the Federal Housing Administration and of the heads and other officers and offices of that Administration. Sec. 1 of Public Law 90-19, amended all provisions in the National Housing Act with respect to its administration to reflect this transfer. The changes are too numerous to be noted by separate footnotes. of the United States. The Secretary may delegate any of the functions and powers conferred upon him under this title and titles II, III, V, VI, VII, VIII, IX, X, and XI, to such officers, agents, and employees as he may designate or appoint and may make such expenditures (including expenditures for personal services and rent at the seat of government and elsewhere for law books and books of reference, and for paper, printing, and binding) as are necessary to carry out the provisions of this title and titles II, III, V, VI, VII, VIII, IX, X, and XI without regard to any other provisions of law governing the expenditure of public funds. All such compensation, expenses, and allowances shall be paid out of funds made available by this Act: Provided, That, notwithstanding any other provisions of law except provisions of law hereafter enacted expressly in limitation hereof, all expenses of the Department of Housing and Urban Development in connection with the examination and insurance of loans or investments under any title of this Act, all properly capitalized expenditures, and other necessary expenses not attributable to general overhead in accordance with generally accepted accounting principles shall be considered nonadministrative and payable from funds made available by this Act, except that, unless made pursuant to specific authorization by the Congress therefor, expenditures made in any fiscal year pursuant to this proviso, other than the payment of insurance claims and other than expenditures (including services on a contract or fee basis, but not including other personal services) in connection with the acquisition, protection, completion, operation, maintenance, improvement, or disposition of real or personal property of the Department acquired under authority of this Act, shall not exceed 35 per centum of the income received by the Department of Housing and Urban Development from premiums and fees during the preceding fiscal year. The Secretary shall, in carrying out the provisions of this title and titles II, III, V, VI, VII, VIII, IX, X, and XI be authorized, in his official capacity to sue and be sued in any court of competent jurisdiction, State or Federal. INSURANCE OF FINANCIAL INSTITUTIONS SEC. 2. (a) The Secretary is authorized and empowered upon such terms and conditions as he may prescribe, to insure banks, trust companies, personal finance companies, mortgage companies, building and loan associations, installment lending companies, and other such financial institutions, which the Secretary finds to be qualified by experience or facilities and approves as eligible for credit insurance, against losses which they may sustain as a result of loans and advances of credit, and purchases of obligations representing loans and advances of credit, made by them on and after July 1, 1939, and prior to October 1, 1969,1 for the purpose of financing alterations, repairs, and improvements upon or in connection with existing structures, and the building of new structures, upon urban, suburban, or rural real property (including the restoration, rehabilitation, rebuilding, and replacement of such improvements which have been damaged or destroyed by 1 Sec. 202 (a), Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 465, substituted "1969" for “1965”. earthquake, conflagration, tornado, hurricane, cyclone, flood, or other catastrophe), by the owners thereof or by lessees of such real property under a lease expiring not less than six months after the maturity of the loan or advance of credit. In no case shall the insurance granted by the Secretary under this section to any such financial institution on loans, advances of credit, and purchases made by such financial institution for such purposes on and after July 1, 1939, exceed 10 per centum of the total amount of such loans, advances of credit, and purchases: Provided, That with respect to any loan, advance of credit, or purchase made after the effective date of the Housing Act of 1954,2 the amount of any claim for loss on any such individual loan, advance of credit, or purchase paid by the Secretary under the provisions of this section to a lending institution shall not exceed 90 percentum of such loss.3 *After the effective date of the Housing Act of 1954,5 (i) the Secretary shall not enter into contracts for insurance pursuant to this section except with lending institutions which are subject to the inspection and supervision of a governmental agency required by law to make periodic examinations of their books and accounts, and which the Secretary finds to be qualified by experience or facilities to make and service such loans, advances or purchases, and with such other lending institutions which the Secretary approves as eligible for insurance pursuant to this section on the basis of their credit and their experience or facilities to make and service such loans, advances or purchases; (ii) only such items as substantially protect or improve the basic livability or utility of properties shall be eligible for financing under this section, and therefore the Secretary shall from time to time declare ineligible for financing under this section any item, product, alteration, repair, improvement, or class thereof which he determines would not substantially protect or improve the basic livability or utility of such properties, and he may also declare ineligible for financing under this section any item which he determines is especially subject to selling abuses; and (iii) the Secretary is hereby authorized and directed, by such regulations or procedures as he shall deem advisable, to prevent the use of any financial assistance under this section (1) with respect to new residential structures that have not been completed and occupied for at least six months, or (2) which would, through multiple loans, result in an outstanding aggregate loan balance with respect to the same structure exceeding the dollar amount limitation prescribed in 1 This proviso added by sec. 101(a), Housing Act of 1954, Public Law 560, 83d Congress, approved August 2, 1954, 68 Stat. 590. 2 Sec. 101 (b), Housing Act of 1954, Public Law 560, 83d Congress, approved August 2, 1954, 68 Stat. 590, provided that as used in this section 2(a) the "effective date of the Housing Act of 1954" should mean "the first day after the first full calendar month following the date of approval of the Housing Act of 1954" (August 2, 1954). Sec. 2(a) of Public Law 86-788, approved September 14, 1960, 74 Stat. 1027, 1028, deleted the last sentence of subsection (a) which read: "The aggregate amount of all loans, advances of credit, and obligations purchased, exclusive of financing charges, with respect to which insurance may be heretofore or hereafter granted under this section and outstanding at any one time shall not exceed $1,750,000,000." This paragraph added by sec. 101 (a) of the Housing Act of 1954, Public Law 560, 83d Congress, approved August 2, 1954, 68 Stat. 590. Sec. 101 (b) of the Housing Act of 1954, Public Law 560, 83d Cong., approved Angust 2, 1954, 68 Stat. 590, provided that as used in this section 2(a) the "effective date of the Housing Act of 1954" should mean "the first day after the first full calendar month following the date of approval of the Housing Act of 1954" (August 2, 1954). this subsection for the type of loan involved: Provided, That this clause (iii) may in the discretion of the Secretary be waived with respect to the period of occupancy or completion of any such new residential structures. 3 (b) No insurance shall be granted under this section to any such financial institution with respect to any obligation representing any such loan, advance of credit, or purchase by it (1) if the amount of such loan, advance of credit, or purchase exceeds $5,000 2; (2) if such obligation has a maturity in excess of three years and thirty-two days, except that the Secretary may increase such maximum limitation to seven years and thirty-two days if he determines such increase to be in the public interest after giving consideration to the general effect of such increase upon borrowers, the building industry, and the general economy, and such maturity limitation shall not apply if such loan, advance of credit, or purchase is for the purpose of financing the construction of a new structure for use in whole or in part for agricultural purposes; or (3) unless the obligation bears such interest, has such maturity, and contains such other terms, conditions, and restrictions as the Secretary shall prescribe, in order to make credit available for the purposes of this title: Provided, That any such obligation with respect to which insurance is granted under this section on or after sixty days from the date of the enactment of this proviso shall bear interest, and insurance premium charges, not exceeding (A) an amount with respect to so much of the net proceeds thereof as does not exceed $2,500, equivalent to $5.50% discount per $100 of original face amount of a one-year note payable in equal monthly installments, plus (B) an amount, with respect to any portion of the net proceeds thereof in excess of $2,500, equivalent to $4.50 discount per $100 of original face amount of such a note: Provided further, That the amounts referred to in clauses (A) and (B) of the preceding proviso, when correctly based on tables of calculations issued by the Secretary or adjusted to eliminate minor errors in computation in accordance with requirements of the Secretary, shall be deemed to comply with such proviso: Provided further, That insurance may be granted to any such financial institution with respect to any obligation not in excess of $15,000 nor an average amount of $2,500 per family unit and having 6 1 Amended to read as set forth in the text by sec. 101 (a) of the Housing Act of 1956, Public Law 1020, 84th Congress, approved August 7, 1956, 70 Stat. 1091. As originally added to this section by Public Law 405, 84th Congress, approved February 10, 1956, 70 Stat. 11, this proviso provided that clause (iii) should not be mandatory with respect to the period of occupancy or completion of new residential structures where the structures had been damaged in a major disaster. 2 Sec. 308, Housing and Urban Development Act of 1968, Public Law 90-448, approved August 1, 1968, 82 Stat. 476, 509, substituted "$5,000" for "$3,500." Sec. 101 (b) of the Housing Act of 1956, Public Law 1020, 84th Congress, approved August 7, 1956, 70 Stat. 1091, substituted "exceeds $3,500" for "made for the purpose of financing the alteration, repair, or improvement of existing structures exceeds $2,500, or for the purpose of financing the construction of new structures exceeds $3,000". 3 Sec. 101 (b) of the Housing Act of 1956, Public Law 1020, 84th Congress, approved August 7, 1956, 70 Stat. 1091, inserted language authorizing the Secretary to increase maximum limitation to five years, and sec. 308, Housing and Urban Development Act of 1968, Public Law 90-448, approved Aug. 1, 1968, 82 Stat. 476, 509, substituted "seven" for "five". This proviso added by sec. 101 (c) of the Housing Act of 1956, Public Law 1020, 84th Congress, approved August 7, 1956, 70 Stat. 1091. 5 Sec. 308, Housing and Urban Development Act of 1968, Public Law 90-448, approved Aug. 1, 1968, 82 Stat. 476, 509, substituted "$5.50" for "$5". Sec. 308, Housing and Urban Development Act of 1968, Public Law 90-448, approved Aug. 1, 1968, 82 Stat. 476, 509, substituted "$4.50" for "$4". Sec. 101(b) of the Housing Act of 1956, Public Law 1020, 84th Congress, approved August 7, 1956, 70 Stat. 1091, substituted "$15,000 nor an average amount of $2,500 per family unit" for "$30,000". |