HOMEOWNERSHIP FOR LOWER INCOME FAMILIES

SEC. 235(a)

(m) No mortgage shall be insured under this section after [September 30, 1979] September 30, 1980, except pursuant to a commitment to insure before that date.

(o) The Secretary may insure a mortgage under this section involving a principal obligation which exceeds, by not more than 25 per centum, the maximum limits specified under subsection (b) (2) or (i) (3) of this section if the mortgage relates to a dwelling in an area designated by the Secretary as an area undergoing significant revitalization activity and the Secretary determines that such action is necessary to enable eligible families already residing in such area to remain in the area as homeowners.

RENTAL AND COOPERATIVE HOUSING FOR LOWER INCOME FAMILIES

SEC. 236(a) ***

(f) (3) For each project there shall be established an initial operat ing expense level, which shall be the sum of the cost of utilities and local property taxes payable by the project owner at the time the Secretary determines the property to be fully occupied, taking into account anticipated and customary vacancy rates. For each fiscal year prior to the fiscal year 1979, the Secretary is authorized to make, and shall contract to make to the extent of the moneys in the reserve fund established under subsection (g) and to the further extent of funds authorized in appropriation Acts, an additional monthly assistance payment to the project owner up to the amount by which the sum of the cost of utilities and local property taxes exceeds the initial operating expense level. Such payment shall be used by the project owner solely to effect, and there shall be, a reduction in the basic rental charges established for the project. Any contract to make additional monthly assistance payments shall be for a one-year period and shall be adjusted periodically to provide, to the extent approved in appropriation Acts, for continuation of the payments and for an appropriate adjustment in the amount of the assistance payments.

Any contract to make additional assistance payments may be amended periodically to provide for appropriate adjustments in the amount of the assistance payments. Additional assistance payments shall be made pursuant to this paragraph unless the Secretary finds that the increase in the cost of utilities or local property taxes is not reasonable or not comparable to cost increases affecting other rental projects in the community.

(B) The Secretary shall utilize amounts credited to the fund described in subsection (g) on or after October 1, 1978, or credited to such fund prior to October 1, 1978 but remaining unobligated on October 31, 1978, for the sole purpose of carrying out the purposes of section 201 of the Housing and Community Development Amendments of 1978.

No payments may be made from such fund unless approved in an appropriation Act. No amount may be so approved for any fiscal year beginning after [September 30, 1979.] September 30, 1980.

(n) No mortgage shall be insured under this section after [September 30, 1979, September 30, 1980, except pursuant to a commitment to insure before that date.

(d) No mortgage, advance, or loan shall be insured pursuant to this section after [September 30, 1979,] September 30, 1980, except pursuant to a commitment to insure made before that date. The aggregate principal amount of mortgages and loans insured pursuant to this section in any fiscal year beginning on or after July 1, 1974, and ending prior to [October 1, 1979,] October 1, 1980, shall not exceed 20 per centum of the aggregate principal amount of all mortgages and loans. insured under this title during such fiscal year. The overall percentage limitation specified in the preceding sentence shall also apply separately within each of the following categories—

(1) mortgages and loans covering one- to four-family dwellings; and

(2) mortgages and loans covering projects with five or more dwelling units.

GRADUATED PAYMENT MORTGAGE

SEC. 245 (a) The Secretary may insure under any provision of this title mortgages and loans with provisions of varying rates of amortization corresponding to anticipated variations in family income to the extent he determines such mortgages or loans (1) have promise for expanding housing opportunities or meet special needs, (2) can be developed to include any safeguards for mortgagors or purchasers that may be necessary to offset special risks of such mortgages, and (3) have a potential for acceptance in the private market. Notwithstanding any other provision of this title, except as provided in subsection (b) of this section, the principal obligation (including all interest to be deferred and added to principal) of a mortgage insured pursuant to this [section] subsection may not exceed 97 per centum of the appraised value of the property covered by the mortgage as of the date the mortgage is accepted for insurance, or if the mortgagor is a veteran and the mortgage is to be insured in accordance with the provisions of section 203 of this title, such higher percentage of appraised value as is provided for purposes of determining the maximum mortgage amount eligible for insurance under section 203 (b) (2) in the case of veterans. A mortgage or loan may not be insured pursuant to this section after [September 30, 1979,] September 30, 1980 except pursuant to a commitment entered into prior to such date.

[Any mortgage or loan insured pursuant to this section which contains or sets forth any graduated mortgage provisions (including but not limited to provisions for adding deferred interest to principal)

which are authorized under this section and applicable regulations, or which have been insured on the basis of their being so authorized, shall not be subject to any State constitution, statute, court decree, common law, or rule or public policy limiting the amount of interest which may be charged, taken, received, or reserved, or the manner of calculating such interest (including but not limited to prohibitions against the charging of interest on interest), if such statute, court decree, common law, or rule would not apply to the mortgage or loan in the absence of such graduated payment mortgage provisions.]

(b) Notwithstanding the provisions of subsection (a), the Secretary may insure under any provision of this title a mortgage or loan which meets the requirements of the first sentence of subsection (a) and which has provisions for varying rates of amortization if (1) the principal obligation of the mortgage or loan initially does not exceed the percentage of the initial appraised value of the property specified in section 203(b) of this title as of the date the mortgage or loan is accepted for insurance, and (2) the principal obligation of the mortgage or loan thereafter (including all interest to be deferred and added to principal) will not at any time be scheduled to exceed 97 per centum, or, if the mortgagor is a veteran, such higher percentage as is provided under section 203(b)(2) for veterans, of the projected valuc of the property. For the purpose of this subsection, the projected value of the property shall be calculated by the Secretary by increasing the initial appraised value of the property at a rate not in excess of 21/2 per centum per annum. The initial aggregate principal amount of mortgages which are insured in accordance with this subsection in any fiscal year may not exceed 20 per centum of the initial principal amount of all mortgages secured by properties improved by one- to fourfamily residences which are insured in that year.

(c) Any mortgage or loan insured pursuant to this section which contains or sets forth any graduated mortgage provisions (including but not limited to provisions for adding deferred interest to principal) which are authorized under this section and applicable regulations, or which have been insured on the basis of their being so authorized, shall not be subject to any State constitution, statute, court decree, common law, or rule or public policy (1) limiting the amount of interest which may be charged, taken, received, or reserved, or the manner of calculating such interest (including but not limited to prohibitions against the charging of interest on interest), if such constitution, statute, court decree, common law, or rule would not apply to the mortgage or loan in the absence of such graduated payment mortgage provisions, or (2) requiring a minimum amortization of principal under the mortgage or loan.

ARMED SERVICES HOUSING MORTGAGE INSURANCE

SEC. 809 (a) ***

(f) The provisions of sections 801, 802, 803 (c), 803 (i), 803 (j), 804 (a), 804 (b), and 807 and the provisions of section 803 (a) relating to the aggregate amount of all mortgages insured under this title, shall be applicable to mortgages insured under this section. No more

mortgages shall be insured under this section after [September 30, 1979] September 30, 1980, except pursuant to a commitment to insure before such date.

(k) The provisions of sections 801, 802, 803 (c), 803 (i), 803 (j), 804 (a), 804 (b), and 807 and the provisions of section 803 (a) relating to the aggregate amount of all mortgages insured under this title shall be applicable to mortgages insured under this section. No more mortgages shall be insured under this section after [September 30, 1979 September 30, 1980, except pursuant to a commitment to insure before such date.

MORTGAGE INSURANCE FOR LAND DEVELOPMENT

BASIC CONDITIONS FOR INSURANCE

SEC. 1002. (a) The Secretary is authorized (1) to insure upon such terms and conditions as he may prescribe, any first mortgage (including advances on such mortgage) in accordance with the provisions of this title, and (2) to make a commitment for the insurance of such mortgage prior to the date of execution of such mortgage or prior to the date of disbursement of the mortgage proceeds. No mortgage shall be insured under this title after [September 30, 1979,] September 30, 1980, except pursuant to a commitment to insure issued before such date.

TITLE XI-MORTGAGE INSURANCE FOR GROUP

PRACTICE FACILITIES

INSURANCE OF MORTGAGES

SEC. 1101. (a) The Secretary is authorized (1) to insure mortgages (including advances on such mortgages during construction), upon such terms and conditions as he may prescribe, in accordance with the provisions of this title, and (2) to make commitments for the insuring of such mortgages prior to the date of their execution or disbursement thereon. No mortgage shall be insured under this title after [September 30, 1979, September 30 1980,

FHA AND VA INTEREST RATES AND COMMISSION TO

STUDY

Excerpts from Public Law 90-301

[82 Stat. 113, 12 U.S.C. 1709-1]

An ACT to amend chapter 37 of title 38 to the United States Code with respect to the veterans' home loan program, to amend the National Housing Act with respect to interest rates on insured mortgages, and for other purposes.

SEC. 3. (a) Notwithstanding the provisions of sections 203 (b) (5), 207 (c) (3), 213 (d), 220 (d) (4), 220 (h) (2) (iii), 221 (d) (5), 231 (c) (6), 232(d) (3) (B), 234(f), 235 (j) (2) (C), 236 (j) (4) (B), 240 (c) (4), 241

232(d) (3) (B), 234(f), 235 (j) (2) (C), 236(j) (4) (B), 240 (c) (4), 241 (b) (3), 242 (d) (3) (B), and 1101 (c) (4) of the National Housing Act regarding the maximum interest rates which the Secretary of Housing and Urban Development may establish for certain mortgage insurance programs authorized by that Act, the Secretary is authorized, until [October 1, 1979]2 October 1, 1980, to set the maximum interest rates for such programs at not to exceed such per centum per annum on the amount of the principal obligation outstanding at any time as he finds necessary to meet the mortgage market, and during that time the interest rates so set shall be deemed to be for all purposes the interest rates in effect under the provisions of said section 203(b) (5) and the other sections referred to above: Provided, That in determining the rate to be applicable for the said section 203(b) (5) program, the Secretary shall consult with the Administrator of Veterans' Affairs regarding the rate which the Administrator considers necessary to meet the mortgage market for guaranteed or insured home loans to veterans under chapter 37 of title 38, United States Code. Notwithstanding the provisions of section 2(b) of the National Housing Act regarding the maximum interest rate which may be established for obligations with respect to which insurance is granted to financial institutions under section 2 of such Act, the Secretary of Housing and Urban Development is also authorized, until the date specified in the preceding sentence, to set the maximum interest rate for obligations with respect to which insurance is granted under such section, at such level as he finds necessary to meet the loan market.

ESTABLISHMENT OF GENERAL INSURANCE FUND

SEC. 519(a)

(f) There are authorized to be appropriated to cover losses sustained by the General Insurance Fund not to exceed $1,341,000,000, which amount shall be increased by $165.000.000 on October 1, 1978.] There are authorized to be appropriated such sums as may be necessary from time to time to cover losses sustained by the General Insurance Fund.

EXEMPTION FROM STATE USURY LAWS

SEC. 529. (a) The provisions of the constitution of any State expressly limiting the rate or amount of interest, discount points, or other charges which may be charged, taken, received, or reserved by lenders and the provisions of any State law expressly limiting the rate or amount of interest, discount points, or other charges which may be charged, taken, received, or reserved shall not apply to any loan, mortgage, or advance which is insured under title I or II of this Act.

(b) The provisions of subsection (a) shall apply to loans, mortgages, or advances made or executed in any State until the effective date (after the date of enactment of this section) of a provision of law of that State limiting the rate of amount of interest, discount points, or other charges on any such loan, mortgage, or advance.