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(b) A loan covering operating losses shall

(1) be limited to a term not exceeding the unex

pired term of the original mortgage; and

(2) be in an amount not exceeding the operating loss, as determined by the Secretary.

(c) A loan financing repairs, improvements, additions, 7 or equipment shall

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(1) be limited to 90 per centum (97 per centum in the case of a cooperative mortgagor) of the Secretary's estimate of the cost of such repairs, improvements, additions, and equipment; except that where the project is covered by an insured mortgage, such amount when added to the outstanding balance of the mortgage

covering the project, shall not exceed the maximum mortgage amount prescribed under the section of this title providing mortgage insurance for the type of project involved; and

(2) have a maturity satisfactory to the Secretary but not to exceed the remaining term of the mortgage, except that in the case of a cooperative housing project covered by an uninsured mortgage the loan may, in the discretion of the Secretary, have a maturity date up to

ten years in excess of the remaining term of the unin

sured mortgage.

(d) A loan to a cooperative to finance the purchase and

26 resale of memberships shall

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(1) be limited to an amount which when added to

the outstanding balance of the mortgage covering the

project does not exceed the maximum mortgage amount

prescribed under the section of this title providing mort

gage insurance for the type of project involved; and

(2) have a maturity satisfactory to the Secretary, but not to exceed the remaining term of the mortgage. (e) A loan insured under this section shall

(1) be secured in such manner as the Secretary may require; and

(2) contain such other terms, conditions, and restrictions as the Secretary may prescribe.

MORTGAGE INSURANCE FOR LAND DEVELOPMENT

SEC. 505. (a) For the purposes of this section—

(1) The term "land development" means the process 16 of making, installing, or constructing improvements. 17 (2) The term "improvements" means waterlines and 18 water supply installations, sewerlines and sewage disposal 19 installations, steam, gas, and electric lines and installations, 20 roads, streets, curbs, gutters, sidewalks, storm drainage facil21 ities, and other installations or work, whether on or off the 22 site, which the Secretary deems necessary or desirable to

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prepare land primarily for residential and related uses or 24 to provide facilities for public or common use. Related uses

25 may include industrial and commercial uses, with sites for

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such uses to be in proper proportion to the size and scope of 2 the development. The term "improvements" shall not include

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any building unless it is (i) a building which is needed in 4 connection with a water supply or sewage disposal installa5 tion or a steam, gas, or electric line or installation, or (ii) a 6 building, other than a school, which is to be owned and main7 tained jointly by the property owners.

8 (b) The Secretary is authorized to insure a mortgage 9 (including advances) which shall

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(1) cover the land to be developed and the improvements to be made, except facilities intended for public use and in public ownership;

(2) be executed by a mortgagor, other than a

public body, approved by the Secretary;

(3) contain repayment provisions satisfactory to the Secretary within such term as the Secretary shall prescribe; and

(4) contain such terms and provisions with respect to protection of the security, payment of taxes, delinquency charges, prepayment, additional and secondary liens, and other matters as the Secretary may in his discretion prescribe.

23 (c) The principal obligation of the mortgage shall not 24 exceed the sum of 80 per centum of the Secretary's esti25 mate of the value of the land before development and 90

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1 per centum of his estimate of the cost of such development. 2 (d) The land development shall involve improvements 3 that comply with all applicable State and local governmental 4 requirements and with minimum standards approved by the 5 Secretary and shall be undertaken

(1) pursuant to a schedule, conforming to such requirements and procedures as the Secretary may pre

scribe, that will assure the use of the land for the purposes for which it is to be developed within the shortest reasonable period consistent with the objectives of sound and economic community growth or urban development; and

(2) in accordance with an overall development plan which (i) has received all governmental approvals required by State or local law or by the Secretary, (ii) is acceptable to the Secretary as providing reasonable assurance that the land development will contribute to good living conditions in the area being developed, and (iii) is consistent with a comprehensive plan which covers, or with comprehensive planning being carried

on for, the area in which the land is situated, and which

meets criteria established by the Secretary for such

23 plans or planning.

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(e) The Secretary shall adopt such requrements as he

25 deems necessary in connection with the land development to

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encourage the maintenance of a diversified local homebuild

2 ing industry, broad participation by builders, including small 3 builders, and the inclusion of a proper balance of housing for 4 families of moderate or low income.

5 (f) After development of the land, it shall be served 6 by public or private systems for water and sewerage which 7 are consistent with other existing or prospective systems 8 within the area and which are approved by the Secretary. 9 (g) The Secretary may consent to the release or sub10 ordination of a part or parts of the mortgaged property 11 from the lien of the mortgage.

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12 (h) The Secretary shall adopt such requirements as he 13 determines necessary to assure, at reasonable intervals of 14 time during land development, that the amount of the mortgage loan outstanding at each such interval does not exceed 16 with respect to that portion of the land remaining under the 17 lien of the mortgage (1) 80 per centum of the Secretary's 18 estimate of the value of such remaining land before develop 19 ment, plus (2) 90 per centum of the actual costs (as defined by the Secretary) of the development allocated by the Sec

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retary to such remaining land.

COST CERTIFICATION

SEC. 506. (a) The Secretary shall adopt such require24 ments as he determines necessary to assure that the amount

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of any mortgage finally endorsed for insurance under this

T