12 U.S.C. § 1749aaa | Insurance of mortgages

(a)

Authority of Secretary; termination date

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 subchapter, and (2) to make commitments for the insuring of such mortgages prior to the date of their execution or disbursement thereon.

(b)

Eligibility for insurance

To be eligible for insurance under this subchapter, the mortgage shall (1) be executed by a mortgagor that is a group practice unit or organization or other mortgagor approved by the Secretary, (2) be made to and held by a mortgagee approved by the Secretary as responsible and able to service the mortgage properly, and (3) cover a property or project which is approved for mortgage insurance prior to the beginning of construction or rehabilitation and is designed for use as a group practice facility or medical practice facility which the Secretary finds will be constructed in an economical manner, will not be of elaborate or extravagant design or materials, and will be adequate and suitable for carrying out the purposes of this subchapter. No mortgage shall be insured under this subchapter unless it is shown to the satisfaction of the Secretary that the applicant would be unable to obtain the mortgage loan without such insurance on terms comparable to those specified in subsection (c).

(c)

Replacement cost of property; maturity; amortization; interest rate

The mortgage shall—

(1)

Pub. L. 93–383, title III, § 304lAug. 22, 197488 Stat. 678 Repealed. (), , ;

(2)

section 1703(a) of this title 1

1 See References in Text note below.

not exceed 90 per centum of the amount which the Secretary estimates will be the replacement cost of the property or project when construction or rehabilitation is completed. The replacement cost of the property may include the land and the proposed physical improvements, equipment, utilities within the boundaries of the property, a solar energy system (as defined in subparagraph (3) of the last paragraph of ) or residential energy conservation measures (as defined in section 8211(11)(A) through (G) and (I) of title 42)  in cases where the Secretary determines that such measures are in addition to those required under the minimum property standards and will be cost-effective over the life of the measure, architects’ fees, taxes, and interest accruing during construction or rehabilitation, and other miscellaneous charges incident to construction or rehabilitation and approved by the Secretary;

(3)

have a maturity satisfactory to the Secretary but not to exceed twenty-five years from the beginning of the amortization of the mortgage, and provide for complete amortization of the principal obligation by periodic payments within such term as the Secretary shall prescribe; and

(4)

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

(d)

Conclusiveness of insurance contract as to eligibility; validity of contract incontestable

Any contract of insurance executed by the Secretary under this subchapter shall be conclusive evidence of the eligibility of the mortgage for insurance, and the validity of any contract for insurance so executed shall be incontestable in the hands of an approved mortgagee from the date of the execution of such contract, except for fraud or misrepresentation on the part of such approved mortgagee.

(e)

Undertaking

Each mortgage insured under this subchapter shall contain an undertaking (in accordance with regulations prescribed under this subchapter and in force at the time the mortgage is approved for insurance) to the effect that, except as authorized by the Secretary and the mortgagee, the property will be used as a group practice facility or medical practice facility until the mortgage has been paid in full or the contract of insurance otherwise terminated.

(f)

Recordkeeping; reports; examination and audit

No mortgage shall be insured under this subchapter unless the mortgagor and the mortgagee certify (1) that they will keep such records relating to the mortgage transaction and indebtedness, to the construction of the facility covered by the mortgage, and to the use of such facility as a group practice facility or medical practice facility as are prescribed by the Secretary at the time of such certification, (2) that they will make such reports as may from time to time be required by the Secretary pertaining to such matters, and (3) that the Secretary shall have access to and the right to examine and audit such records.

Editorial Notes

References in Text

Section 8211 of title 42 section 8229 of Title 42June 30, 1989, referred to in subsec. (c)(2), was omitted from the Code pursuant to , The Public Health and Welfare, which terminated authority under that section on .

Amendments

Pub. L. 100–242March 15, 19881988—Subsec. (a). struck out at end “No mortgage shall be insured under this subchapter after , except pursuant to a commitment to insure issued before that date.”

Pub. L. 100–200March 15, 1988December 16, 19871987—Subsec. (a). substituted “” for “”.

Pub. L. 100–179December 16, 1987December 2, 1987 substituted “” for “”.

Pub. L. 100–170December 2, 1987November 15, 1987 substituted “” for “”.

Pub. L. 100–154November 15, 1987October 31, 1987 substituted “” for “”.

Pub. L. 100–122October 31, 1987September 30, 1987 substituted “” for “”.

Pub. L. 99–430September 30, 1987September 30, 19861986—Subsec. (a). substituted “” for “”.

Pub. L. 99–345September 30, 1986June 6, 1986 substituted “” for “”.

Pub. L. 99–289June 6, 1986April 30, 1986 substituted “” for “”.

Pub. L. 99–272 Pub. L. 99–219 made amendment identical to . See 1985 Amendment note below.

Pub. L. 99–267April 30, 1986March 17, 1986 substituted “” for “”.

Pub. L. 99–219March 17, 1986December 15, 19851985—Subsec. (a). substituted “” for “”.

Pub. L. 99–156December 15, 1985November 14, 1985 substituted “” for “”.

Pub. L. 99–120November 14, 1985September 30, 1985 substituted “” for “”.

Pub. L. 98–4791984—Subsec. (c)(4). substituted “at such rate as may be agreed upon by the mortgagor and the mortgagee,” for “(exclusive of premium charges for insurance, and service charges if any) at a rate of not to exceed 5 per centum per annum of the amount of the principal obligation outstanding at any time, or not to exceed such rate (not in excess of 6 per centum per annum) as the Secretary finds necessary to meet the mortgage market.”

Pub. L. 98–181September 30, 1985November 30, 19831983—Subsec. (a). substituted “” for “”.

Pub. L. 98–109November 30, 1983September 30, 1983 substituted “” for “”.

Pub. L. 98–35September 30, 1983May 20, 1983 substituted “” for “”.

Pub. L. 97–289May 20, 1983September 30, 19821982—Subsec. (a). substituted “” for “”.

Pub. L. 97–351981—Subsec. (a). substituted “1982” for “1981”.

Pub. L. 96–399, § 301(k)September 30, 1981October 15, 19801980—Subsec. (a). , substituted “” for “”.

Pub. L. 96–372October 15, 1980September 30, 1980 substituted “” for “”.

Pub. L. 96–399, § 310(i)Subsec. (c)(2). , inserted provisions relating to solar energy systems and residential energy conservation measures.

Pub. L. 96–153September 30, 1980November 30, 19791979—Subsec. (a). substituted “” for “”.

Pub. L. 96–105November 30, 1979October 31, 1979 substituted “” for “”.

Pub. L. 96–71October 31, 1979September 30, 1979 substituted “” for “”.

Pub. L. 95–557September 30, 1979October 31, 19781978—Subsec. (a). substituted “” for “”.

Pub. L. 95–406October 31, 1978September 30, 1978 substituted “” for “”.

Pub. L. 95–128September 30, 1978September 30, 19771977—Subsec. (a). substituted “” for “”.

Pub. L. 95–80September 30, 1977July 31, 1977 substituted “” for “”.

Pub. L. 95–60July 31, 1977June 30, 1977 substituted “” for “”.

Pub. L. 93–383, § 316(g)June 30, 1977October 1, 19741974—Subsec. (a). , substituted “” for “”.

Pub. L. 93–383, § 312(a)(1)Subsec. (b). , (2), in cl. (1) inserted “or other mortgagor” after “or organization”, and in cl. (3) inserted “or medical practice facility” after “group practice facility”.

Pub. L. 93–383, § 304lSubsec. (c)(1). (), struck out par. (1) which set forth limitation on amount of mortgage.

Pub. L. 93–383, § 312(a)(3)Subsecs. (e), (f). , (4), inserted “or medical practice facility” after “group practice facility”.

Pub. L. 93–117October 1, 1974October 1, 19731973—Subsec. (a). substituted “” for “”.

Pub. L. 93–85October 1, 1973June 30, 1973 substituted “” for “”.

Pub. L. 92–503June 30, 1973October 1, 19721972—Subsec. (a). substituted “” for “”.

Pub. L. 91–609October 1, 1972January 1, 19711970—Subsec. (a). substituted “” for “”.

Pub. L. 91–525January 1, 1971December 1, 1970 substituted “” for “”.

Pub. L. 91–473December 1, 1970November 1, 1970 substituted “” for “”.

Pub. L. 91–432November 1, 1970October 1, 1970 substituted “” for “”.

Pub. L. 91–152, § 101(i)October 1, 1970January 1, 19701969—Subsec. (a). , substituted “” for “”.

Pub. L. 91–78January 1, 1970October 1, 1969 substituted “” for “”.

Pub. L. 91–152, § 418(f)Subsec. (c)(2). , substituted “replacement cost” for “value” wherever appearing.

Pub. L. 90–4481968—Subsec. (c)(3). limited term of mortgage to not more than twenty-five years from beginning of amortization of mortgage.

Statutory Notes and Related Subsidiaries

Effective Date of 1981 Amendment

Pub. L. 97–35Oct. 1, 1981section 371 of Pub. L. 97–35 section 3701 of this titleAmendment by effective , see , set out as an Effective Date note under .

Declaration of Purpose

Pub. L. 89–754, title V, § 501Nov. 3, 196680 Stat. 1273

section 77ddd of Title 15“It is the purpose of this title [enacting this subchapter and amending sections 24, 371, 1715c, and 1715r of this title, section 663 of former Title 11, Bankruptcy, and , Commerce and Trade] to assure the availability of credit on reasonable terms to units or organizations engaged in the group practice of medicine, optometry, or dentistry, particularly those in smaller communities and those sponsored by cooperative or other nonprofit organizations, to assist in financing the construction and equipment of group practice facilities.”

, , , provided that: