such mortgagee which, except for this subparagraph (E), meet the requirements of this section.

"(F) no mortgage shall be purchased by the Association unless the mortgagee certifies that the housing with respect to which the mortgage was made meets the construction standards prescribed for insurance of mortgages on the same class of housing under the National Housing Act, as amended. "(2) to borrow money for any of the foregoing purposes through the issuance of notes or other such obligations as hereinafter provided.

"(b) The Federal National Mortgage Association, a subsidiary of the Reconstruction Finance Corporation and established pursuant to the provisions of this title as in effect prior to June 1, 1948, shall be the Association referred to in subsection (a) of this section. The Board of Directors of the Association shall consist of not less than five persons to be appointed by the Chairman of the Board of Directors of the Reconstruction Finance Corporation, or the Acting Chairman in the case of a vacancy in the office of Chairman, from the Directors, officers, or employees of such Corporation and the officers shall be appointed by the Board of Directors from the Directors, officers, or employees of the Reconstruction Finance Corporation.

(c) The Association created under this section shall have succession from the date of its organization unless it is dissolved by order of the Administrator as hereinafter provided, or by Act of Congress, and shall have power

"(1) to adopt and use a corporate seal;

"(2) to make contracts;

(3) to sue and be sued; complain and defend, in any court of law or equity, State or Federal;

"(4) to conduct its business in any State of the United States, or in the District of Columbia, Alaska, Hawaii, Puerto Rico, or the Virgin Islands, and to have one or more offices in such State, or in the District of Columbia, Alaska, Hawaii, or Puerto Rico, one of which offices shall be designated at the time of organization as its principal office;

"(5) to do all things as are necessary or incidental to the proper management of its affairs and the proper conduct of its business. "(d) The Association may have a capital stock of not to exceed $20,000,000 and paid-in surplus of $1,000,000, subscribed by the Reconstruction Finance Corporation.

"(e) The Association, for the purpose of all actions by or against it, real, personal, or mixed, and all suits in equity, shall be deemed a citizen of the place in which its principal office is located.

"(f) No individual, association, partnership, or corporation, except the Association organized under this section, shall hereafter use the words 'Federal National Mortgage Association' or any combination of such words, as the name or a part thereof under which he or it shall do business. Every individual, partnership, association, or corporation violating this prohibition shall be guilty of a misdemeanor and shall be punished by a fine of not exceeding $100 or imprisonment not exceeding thirty days, or both, for each day during which such violation is committed or repeated. The provisions of section 5243 of the

Revised Statutes shall not apply to the Association created under this title.

"OBLIGATIONS

"SEC. 302. The Association is authorized to issue and have outstanding at any time notes or other obligations in an aggregate amount not to exceed (1) forty times the amount of its capital and surplus, and in no event to exceed (2) the current unpaid principal of mortgages held by it and insured under the provisions of titles II and VI of this Act and guaranteed under section 501, 502, or 505 (a) of the Servicemen's Readjustment Act of 1944, as amended, plus the amount of its cash on hand and on deposit and the amortized value of its investments in bonds or other obligations of, or in bonds or other obligations guaranteed as to principal and interest by, the United States.

"INVESTMENT OF FUNDS

"SEO. 803. Moneys of the Association not invested in mortgages or in operating facilities shall be kept in cash on hand or on deposit, or invested in bonds or other obligations of, or in bonds or other obligations guaranteed as to principal and interest by, the United States; except that the Association shall keep and maintain such reserves as it may deem necessary.

"TAXATION PROVISIONS

"SEC. 304. The Association, including its franchise, capital, reserves, surplus, mortgage loans, income, and stock shall be exempt from all taxation now or hereafter imposed by the United States, by any Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority, except that any real property of the Association shall be subject to State, Territorial, county, municipal, or local taxation to the same extent according to its value as other real property is taxed.

"MANAGEMENT OF ACQUIRED PROPERTIES

"SEC. 305. The Association shall have power to deal with, rent, renovate, modernize, or sell for cash, with a view to assuring a maximum financial return to the Association, any property acquired by it as a result of foreclosure proceedings or otherwise.

"LIQUIDATION

"SEO. 806. The Administrator shall have power to terminate the existence of the Association and order its liquidation and the winding up of its affairs whenever the Administrator determines, in his judg ment, that the need therefor no longer exists. The Association shall make a report of its activities to the Administrator in January and July of each year for the preceding six months' period, which report shall be transmitted to the Congress, together with the Administrator's recommendations thereon."

SEC. 2. Nothing in the amendment made by the first section of this Act shall limit the authority of the Federal National Mortgage Association to service or sell any mortgage purchased prior to the date of the enactment of this Act, or to purchase, service, or sell any mortgage

with respect to which a commitment to purchase was made prior to the date of the enactment of this Act.

SEC. 3. Section 4 (c) of the Reconstruction Finance Corporation Act, as amended, is hereby amended by striking out "$1,500,000,000" and inserting in lieu thereof "$2,000,000,000”.

SEC. 4. Section 4 of the Reconstruction Finance Corporation Act, as amended, is hereby amended by adding at the end thereof a new subsection reading as follows:

"(h) The Corporation may subscribe for the nonassessable stock of the Federal National Mortgage Association: Provided, That the total face amount of stock so subscribed for and held by the Corporation shall not exceed at any one time $20,000,000."

SEC. 5. The Servicemen's Readjustment Act of 1944, as amended, is hereby amended by inserting immediately after section 510 thereof the following new section:

"INCONTESTABILITY

"SEC. 511. Any evidence of guaranty or insurance issued by the Administrator shall be conclusive evidence of the eligibility of the loan for guaranty or insurance under the provisions of this title and of the amount of such guaranty or insurance, except that nothing in this section shall preclude the Administrator from establishing, as against the original lender, defenses based on fraud or material misrepresentation, and except that the Administrator shall not, by reason of anything contained in this section, be barred from establishing, by regulations in force at the date of such issuance or disbursement, whichever is the earlier, partial defenses to the amount payable on the guaranty or insurance."

SEC. 6. Section 207 (c) (2) of the National Housing Act, as amended, is hereby amended as follows:

(1) By striking out the semicolon and the word "and" at the end of paragraph numbered (2), inserting in lieu thereof a colon, and adding the following new proviso: "And provided further, That, notwithstanding any of the provisions of this paragraph (2), a mortgage with respect to a project of a nonprofit cooperative ownership housing corporation (whose membership consists primarily of veterans of World War II) the permanent occupancy of the dwellings of which is restricted to members of such corporation, or a project constructed by a nonprofit corporation (whose membership consists primarily of veterans of World War II) organized for the purpose of construction of homes for members of the corporation, at prices, costs, or charges comparable to the prices, costs, or charges proposed to be charged such members, may involve a principal obligation in an amount not exceeding 95 per centum of the amount which the Administrator estimates will be the value of the project when the proposed improvements are completed; and".

Approved July 1, 1948.

[PUBLIC LAW 901-80TH CONGRESS]

[CHAPTER 832-2D SESSION]

[H. R. 6959]

AN ACT

To amend the Nationl Housing Act, as amended, 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 "Housing Act of 1948".

TITLE I-FHA TITLE VI AND TRANSITIONAL PERIOD AMENDMENTS

SEC. 101. The National Housing Act, as amended, is hereby amended as follows:

TITLE VI AMENDMENTS

(a) Section 603 (a) is amended

(1) By striking out "$5,350,000,000" and inserting in lieu thereof "$5,750,000,000 except that with the approval of the President such aggregate amount may be increased to not to exceed $6,150,000,000";

(2) By striking out the second proviso and inserting in lieu thereof the following: "Provided further, That no mortgage shall be insured under section 603 of this title after April 30, 1948, except (A) pursuant to a commitment to insure issued on or before April 30, 1948, or (B) a mortgage given to refinance an existing mortgage insured under section 603 of this title and which does not exceed the original principal amount and unexpired term of such existing mortgage, and no mortgage shall be insured under section 608 of this title after March 81, 1949, except (i) pursuant to a commitment to insure issued on or before March 31, 1949, or (ii) a mortgage given to refinance an existing mortgage insured under section 608 of this title and which does not exceed the original principal amount and unexpired term of such existing mortgage: Provided further, That no mortgage shall be insured under section 608 of this title unless the mortgagor certifies under oath that in selecting tenants for the property covered by the mortgage he will not discriminate against any family by reason of the fact that there are children in the family, and that he will not sell the property while the insurance is in effect unless the purchaser so certifies, such certifications to be filed with the Administrator; and violation of any such certification shall be a misdemeanor punishable by a fine of not to exceed $500:".

(b) Section 608 (b) (3) (B) is amended by striking out the semicolon and the word "and" at the end of the first proviso and inserting in lieu thereof a colon and the following: "And provided further, That the principal obligation of the mortgage shall not, in any event, exceed 90 per centum of the Administrator's estimate of the replacement cost of the property or project on the basis of the costs prevailing

on December 31, 1947, for properties or projects of comparable quality in the locality where such property or project is to be located; and". (c) Section 608 (b) (3) (C) is amended

(1) By striking out "$1,500 per room" and inserting in lieu thereof "$8,100 per family unit"; and

(2) By striking out the colon and the proviso and inserting in lieu thereof a period.

(d) Section 609 is amended

(1) By striking out all of paragraph (1) of subsection (b) and inserting in lieu thereof the following:

"(1) The manufacturer shall establish that binding purchase contracts have been executed satisfactory to the Administrator providing for the purchase and delivery of the houses to be manufactured, which contracts shall provide for the payment of the purchase price at such time as may be agreed to by the parties thereto, but, in no event, shall the purchase price be payable on a date in excess of thirty days after the date of delivery of such houses, unless not less than 20 per centum of such purchase price is paid on or before the date of delivery and the lender has accepted and discounted or has agreed to accept and discount, pursuant to subsection (i) of this section a promissory note or notes, executed by the purchaser, representing the unpaid portion of such purchase price, in which event such unpaid portion of the purchase price may be payable on a date not in excess of one hundred and eighty days from the date of delivery of such houses;".

(2) By striking out the first and second sentences of paragraph (4) of subsection (b) and inserting in lieu thereof the following:

"The loan shall involve a principal obligation in an amount not to exceed 90 per centum of the amount which the Administrator estimates will be the necessary current cost, exclusive of profit, of manufacturing the houses, which are the subject of such purchase contracts assigned to secure the loan, less any sums paid by the purchaser under said purchase contracts prior to the assignment thereof. The loan shall be secured by an assignment of the aforesaid purchase contracts and of all sums payable thereunder on or after the date of such assignment, with the right in the assignee to proceed against such security in case of default as provided in the assignment, which assignment shall be in such form and contain such terms and conditions, as may be prescribed by the Administrator; and the Administrator may require such other agreements and undertakings to further secure the loan as he may determine, including the right, in case of default or at any time necessary to protect the lender, to compel delivery to the lender of any houses then owned and in the possession of the borrower."

(3) By adding at the end of subsection (f) the following new sentence: "The provisions of section 603 (d) shall also be applicable to loans insured under this section and the reference in said section 603 (d) to a mortgage shall be construed to include a loan or loans with respect to which a contract of insurance is issued pursuant to this section."

57-272 O-66-17