12 U.S.C. § 1715z–5 | Purchase of fee simple title from lessors

(a)

Authorization to insure loans for purpose of financing purchases

The Secretary is authorized, upon such terms and conditions as he may prescribe, to make commitments to insure and to insure loans made by financial institutions for the purpose of financing purchases by homeowners of the fee simple title to property on which their homes are located.

(b)

Definitions

As used in this section—

(1)

section 1703 of this title section 1709(b)(1) of this title the term “financial institution” means a lender approved by the Secretary as eligible for insurance under or a mortgagee approved under ; and

(2)

the term “homeowner” means a lessee under a long-term ground lease.

(c)

Eligibility for insurance

To be eligible for insurance under this section, a loan shall—

(1)

relate to property on which there is located a dwelling designed principally for a one-, two-, three-, or four-family residence;

(2)

not exceed the cost of purchasing the fee simple title, or $10,000 ($30,000, if the property is located in Hawaii) per family unit, whichever is the lesser;

(3)

section 1709(b) of this title be limited to an amount which when added to any outstanding indebtedness related to the property (as determined by the Secretary) creates a total outstanding indebtedness which does not exceed the applicable mortgage limit prescribed in ;

(4)

bear interest at such rate as may be agreed upon by the mortgagor and the mortgagee;

(5)

have a maturity satisfactory to the Secretary, but not to exceed twenty years from the beginning of amortization of the loan; and

(6)

comply with such other terms, conditions, and restrictions as the Secretary may prescribe.

(d)

Applicability of other provisions of law

section 1715k(h) of this titleThe provisions of paragraphs (3), (5), (6), (7), (8), and (10) of shall be applicable to loans insured under this section and, as applied to loans insured under this section, references in those paragraphs to “home improvement loans” and “this subsection” shall be construed to refer to loans under this section.

June 27, 1934, ch. 847 Pub. L. 90–448, title III, § 304(a)Aug. 1, 196882 Stat. 507 Pub. L. 95–557, title III, § 314Oct. 31, 197892 Stat. 2099 Pub. L. 96–399, title III, § 333(f)Oct. 8, 198094 Stat. 1653 Pub. L. 98–181, title INov. 30, 198397 Stat. 1210 Pub. L. 98–479, title II, § 204(a)(10)Oct. 17, 198498 Stat. 2232 (, title II, § 240, as added , , ; amended , , ; , , ; [title IV, § 404(b)(13)], , ; , , .)

Editorial Notes

Amendments

Pub. L. 98–4791984—Subsec. (a). substituted “purchases” for “purchasers”.

Pub. L. 98–1811983—Subsec. (c)(4). substituted provision that the interest rate be such rate as agreed upon by the mortgagor and the mortgagee for provision that the interest rate not exceed such per centum per annum, not in excess of 6 per centum, on the amount of the principal obligation outstanding at any time, as the Secretary finds necessary to meet market conditions, and such other charges as approved by the Secretary.

Pub. L. 96–3991980—Subsec. (c)(5). struck out “or three-quarters of the remaining economic life of the home, whichever is the lesser” after “loan”.

Pub. L. 95–5571978—Subsec. (c)(2). inserted “($30,000, if the property is located in Hawaii)” after “$10,000”.

Section text and notes