of the United States. The Secretary may delegate any of the func tions 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 expendi tures (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 accord ance 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, 1970, for the purpose of (i) 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 "October 1, 1969," for "October 1, 1965,"; sec. 2(a) of Public Law 91-18, approved September 30, 1969. 83 Stat. 125, substituted "January 1, 1970" for "October 1, 1969,"; and sec. 101(a), Housing and Urban Development Act of 1969, Public Law 91-152, approved December 24, 1969, S3 Stat. 379, substituted "October 1, 1970," for "January 1, 1970,".

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; and for the purpose of (ii) financing the purchase of a mobile home to be used by the owner as his principal residence. 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 1954,3 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 per centum of such loss.*

5 After the effective date of the Housing Act of 1954, (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 other than mobile homes that have not

1 Sec. 103(c) (2), Housing and Urban Development Act of 1969, Public Law 91-152, approved December 24, 1969. 83 Stat. 379, 380, inserted"; and for the purpose of (ii) financing the purchase of a mobile home to be used by the owner as his principal residence". This proviso added by sec. 101(a), Housing Act of 1954, Public Law 560, 83d Congress, approved August 2, 1954, 68 Stat. 590.

3 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.

5 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 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).

7 Sec. 103 (c) (3), Housing and Urban Development Act of 1969. Public Law 91 152, approved December 24, 1969, 83 Stat. 379, 380, inserted "other than mobile homes".

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 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. The Secretary is hereby authorized and directed, with respect to mobile homes to be financed under this section, to (i) prescribe minimum property standards to assure the livability and durability of the mobile home and the suitability of the site on which the mobile home is to be located; and (ii) obtain assurances from the borrower that the mobile home will be placed on a site which complies with the standards prescribed by the Secretary and with local zoning and other applicable local requirements.

(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, except that an obligation financing the purchase of a mobile home may be in an amount not exceeding $10,000; (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 5 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: Provided, That an obligation financing the purchase of a mobile home may have a maturity not in excess of twelve years and thirty-two days; 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

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.

This sentence inserted by sec. 103(c) (4), Housing and Urban Development Act of 1969, Public Law 91-152, approved December 24, 1969, S3 Stat. 379, 380.

3 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”'.

Sec. 103 (c)(5), Housing and Urban Development Act of 1969, Public Law 91-152, approved December 24, 1969, 83 Stat. 379, 380, inserted this parenthetical phrase.

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 August 1, 1968, 82 Stat. 476, 509, substituted "seven' for "five".

This proviso added by sec. 103 (c) (6), Housing and Urban Development Act of 1969, Public Law 91-152, approved December 24, 1969, 83 Stat. 379, 380.

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 $4.503 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 a maturity not in excess of seven years and thirty-two days representing any such loan, advance of credit, or purchase made by it if such loan, advance of credit, or purchase is made for the purpose of financing the alteration, repair, improvement, or conversion of an existing structure used or to be used as an apartment house or a dwelling for two or more families: Prorided further, That any obligation with respect to which insurance is granted under this section on or after July 1, 1939, may be refinanced and extended in accordance with such terms and conditions as the Secretary may prescribe, but in no event for an additional amount or term in excess of the maximum provided for in this subsection.

(c) (1) Notwithstanding any other provision of law, the Secretary shall have the power, under regulations to be prescribed by him and approved by the Secretary of the Treasury, to assign or sell at public or private sale, or otherwise dispose of, any evidence of debt, contract, claim, personal property, or security assigned to or held by him in connection with the payment of insurance heretofore or hereafter granted under this section, and to collect or compromise all obligations assigned to or held by him and all legal or equitable rights accruing to him in connection with the payment of such insurance until such time as such obligations may be referred to the Attorney General for suit or collection.

(2) The Secretary is authorized and empowered (a) to deal with, complete, rent, renovate, modernize, insure, or sell for cash or credit, in his discretion, and upon such terms and conditions and for such consideration as the Secretary shall determine to be reasonable, any

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.

* Sec. 308, Housing and Urban Development Act of 1968. Public Law 90-448, approved August 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 August 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".

44-023 0-70-2

1

real or personal property conveyed to or otherwise acquired by him in connection with the payment of insurance heretofore or hereafter granted under this title and (b) to pursue to final collection, by way of compromise or otherwise, all claims against mortgagors assigned by mortgagees to the Secretary in connection with such real or 1 personal property by way of deficiency or otherwise: Provided, That section 3709 of the Revised Statutes shall not be construed to apply to any contract of hazard insurance or to any purchase or contract for services or supplies on account of such property if the amount thereof does not exceed $1,000. The power to convey and to execute in the name of the Secretary deeds of conveyance, deeds of release, assignments and satisfactions of mortgages, and any other written instrument relating to real or personal property or any interest therein heretofore or hereafter acquired by the Secretary pursuant to the provisions of this title may be exercised by an officer appointed by him without the execution of any express delegation of power or power of attorney: Provided, That nothing in this paragraph shall be construed to prevent the Secretary from delegating such power by order or by power of attorney, in his discretion, to any officer or agent he may appoint.

(d) The Secretary is authorized and empowered, under such regulations as he may prescribe, to transfer to any such approved financial institution any insurance in connection with any loans and advances of credit which may be sold to it by another approved financial institution.

(e) The Secretary is authorized to waive compliance with regulations heretofore or hereafter prescribed by him with respect to the interest and maturity of and the terms, conditions, and restrictions under which loans, advances of credit, and purchases may be insured under this section and section 6, if in his judgment the enforcement of such regulations would impose an injustice upon an insured institution which has substantially complied with such regulations in good faith and refunded or credited any excess charge made, and where such waiver does not involve an increase of the obligation of the Secretary beyond the obligation which would have been involved if the regulations had been fully complied with.

(f) The Secretary shall fix a premium charge for the insurance hereafter granted under this section, but in the case of any obligation representing any loan, advance of credit, or purchase, such premium charge shall not exceed an amount equivalent to 1 per centum per annum of the net proceeds of such loan, advance of credit, or purchase, for the term of such obligation, and such premium charge shall be payable in advance by the financial institution and shall be paid at such time and in such manner as may be prescribed by the Secretary. (g) Any payment for loss made to an approved financial institution under this section shall be final and incontestable after two years from the date the claim was certified for payment by the Secretary,

1 Sec. 103(e) (7), Housing and Urban Development Act of 1969, Public Law 91-152, approved December 24, 1969, 83 Stat. 379, 380, inserted "or personal".

This subsection as added by sec. 105 of the Housing Act of 1957, Public Law 85-104, 85th Congress, approved July 12, 1957, 71 Stat. 294, 297, was applicable only to payments for losses made after December 31, 1957. Section 101 of the Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 769, made the subsection applicable to all payments for losses.