shall be entitled to receive the benefits of the insurance as hereinafter provided, upon assignment, transfer, and delivery to the Administrator, within a period and in accordance with rules and regulations to be prescribed by the Administrator of (1) all rights and interests arising under the mortgage so in default; (2) all claims of the mortgagee against the mortgagor or others, arising out of the mortgage transaction; (3) all policies of title or other insurance or surety bonds or other guaranties and any and all claims thereunder; (4) any balance of the mortgage loan not advanced to the mortgagor; (5) any cash or property held by the mortgagee or to which it is entitled, as deposits made for the account of the mortgagor and which have not been applied in reduction of the principal of the mortgage indebtedness; and (6) all records, documents, books, papers, and accounts relating to the mortgage transaction. Upon such assignment, transfer, and delivery the obligation of the mortgagee to pay the premium charges for mortgage insurance shall cease, and the Administrator shall, subject to the adjustment provided for in subparagraph (h), issue to the mortgagee debentures having a total face value equal to the original principal face amount of the mortgage plus such amount as the mortgagee may have paid for (1) taxes, special assessments, and water rates, which are liens prior to the mortgage; (2) insurance on the property; and (3) reasonable expenses for the preservation of the property, less such principal amount as has been repaid by the mortgagor and any net income received by the mortgagee from the property as of the date of such assignment, transfer, and delivery.

"(g) Debentures issued under this section shall be executed in the name of the housing fund as obligor and signed by the Administrator, by either his written or engraved signature, and shall be negotiable. They shall bear interest at a rate determined by the Administrator at the time the mortgage was insured, but not to exceed 3 per centum per annum payable semiannually on the 1st day of January and the 1st day of July of each year, and shall mature three years after the 1st day of July following the maturity date of the mortgage in exchange for which the debentures were issued. Such debentures as are issued in exchange for property covered by mortgages insured after the effective date of this amendment shall not be exempt from taxation, shall be paid out of the housing fund which shall be primarily liable therefor, and shall be fully and unconditionally guaranteed as to principal and interest by the United States and such guaranty shall be expressed on the face of the debentures. In the event the housing fund fails to pay upon demand, when due, the principal of or interest on any debentures so guaranteed, the Secretary of the Treasury shall pay to the holders the amount thereof which is hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, and thereupon, to the extent of the amount so paid, the Secretary of the Treasury shall succeed to all the rights of the holders of such debentures. Mortgagees of mortgages accepted for insurance prior to this amendment shall be entitled to receive cash adjustments and debentures issued in accordance with this section 207 as hereby amended.

"(h) Debentures issued under this section shall be in such form and denominations in multiples of $50 and subject to such terms and conditions and shall include such provision for redemption, if any, as may be prescribed by the Administrator with the approval of the Secretary of the Treasury, and may be in coupon or registered form. Any difference between the amount of debentures to which the mortgagee is entitled under this section, and the aggregate face value of the debentures issued, not to exceed $50, shall be adjusted by the payment by the Administrator of cash from the housing fund.

"(i) The Administrator is herby authorized either to (1) acquire possession of and title to any property, covered by a mortgage insured under this section and assigned to him, by voluntary conveyance in extinguishment of the mortgage indebtedness, or (2) institute proceedings for the foreclosure of such a mortgage and prosecute such proceedings to conclusion. The Administrator shall so acquire possession of and title to the property by voluntary conveyance or institute foreclosure proceedings as provided in this section within one year from the date on which any such mortgage becomes in default under its terms or under the regulations prescribed by the Administrator: Provided, That the foregoing shall not be construed in any manner to limit the power of the Administrator to foreclose after the expiration of such period, or the right of the mortgagor to reinstate the mortgage by the payment, prior to the expiration of such period, of all delinquencies thereunder. The Administrator at any sale under foreclosure may, in his discretion, for the protection of the housing fund, bid any sum up to but not in excess of the total unpaid indebtedness secured by the mortgage, plus taxes, insurance, foreclosure costs, fees, and other expenses, and may become the purchaser of the property at such sale. The Administrator is authorized to pay from the housing fund such sums as may be necessary to defray such taxes, insurance, costs, fees,

and other expenses in connection with the acquisition or foreclosure of property under this section. Pending such acquisition by voluntary conveyance or by foreclosure, the Administrator is authorized, with respect to any mortgage assigned to him under the provisions of subsection (f), to exercise all the rights of a mortgagee under such mortgage and to take any action and advance such sums as may be necessary to preserve or protect the lien of such mortgage.

"(j) Notwithstanding any other provisions of law relating to the acquisition, handling, or disposal of real and other property by the United States, the Administrator shall also have power, for the protection of the interests of the housing fund, to pay out of the housing fund all expenses or charges in connection with, and to deal with, complete, reconstruct, rent, renovate, modernize, insure, make contracts for the management of, or establish suitable agencies for the management of, or sell for cash or credit or lease in his discretion, any property acquired by him under this section; and notwithstanding any other provision of law, the Administrator shall also have power to pursue to final collection by way of compromise or otherwise all claims assigned and transferred to him in connection with the assignment, transfer, and/or delivery provided for in this section, and at any time, upon default, to foreclose any mortgage assigned and transferred to or held by him: Provided, That section 3709 of the Revised Statutes shall not be construed to apply to any purchase or service on account of such property.

"(k) Premium charges, appraisal and other fees, received for the insurance of any mortgage insured under this section or section 210, the receipts derived from any such mortgage or claim assigned to the Administrator and from any property acquired by the Administrator and all earnings on the assets of the housing fund shall be credited to the housing fund. The principal of and interest paid and to be paid on debentures issued in exchange for any mortgage or property insured under this section or section 210, cash adjustments, and expenses incurred in the handling of such mortgages or property and in the foreclosure and collection of mortgages and claims assigned to the Administrator shall be charged to the housing fund.

"(1) In the event that a mortgage insured under this section becomes in default through failure of the mortgagor to make any payment due under or provided to be paid by the terms of the mortgage and such mortgage continues in default for a period of thirty days, but the mortgagee does not assign and transfer such mortgage, and the credit instrument secured thereby, to the Administrator in accordance with subsection (f), or in the event that the mortgagor pays the obligation under the mortgage in full prior to the maturity thereof and written notice thereof is given to the Administrator, or in the event the mortgagee shall create or sell partial interests therein except upon such conditions and restrictions as the Administrator shall prescribe, the obligation to pay the annual mortgage insurance premium shall cease, and all rights of the mortgagee under this section shall likewise terminate.

"(m) Moneys in the housing fund not needed for current operations of this section and section 210 shall be deposited with the Treasurer of the United States to the credit of the housing fund, or invested in bonds or other obligations of, or guarantee as to principal and interest by, the United States. The Administrator may, with the approval of the Secretary of the Treasury, purchase, in the open market, debentures issued under this section and section 210. Such purchases shall be made at a price which will provide an investment yield of not less than the yield obtainable from other investments authorized by this subsection. Debentures so purchased shall be canceled and not reissued.

"(n) The Administrator, with the consent of the mortgagee and the mortgagor of a mortgage heretofore insured under section 207 of the National Housing Act, shall be empowered to reissue such mortgage insurance in accordance with the provisions of this amended section 207.

"(o) The Administrator is authorized and directed to make such rules and regulations as may be necessary to carry out the provisions of this section." SEC. 23. Section 208 of title II is amended by striking out the word "subsidivision" and inserting in lieu thereof the word “subdivision”.

SEC. 24. Section 209 of title II is amended by striking out the last sentence of said section and inserting in lieu thereof the following: "Expenses of such studies and surveys, and expenses of publication and distribution of results of such studies and surveys, shall be charged as a general expense of the fund and the housing fund in such proportion as the Administrator shall determine."

SEC. 25. Title II is amended by adding at the end thereof a new section numbered 210 as follows:

"SEC. 210. (a) In addition to mortgages insured under sections 203 and 207 the Administrator is authorized to insure mortgages as defined in section 207 (a)

including advances thereon during construction, covering property upon which there is to be constructed one or more multifamily dwellings or a group of not less than twenty-five single-family dwellings: Provided, That the property shall have been approved for mortgage insurance prior to the beginning of construction. "(b) To be eligible for insurance under this section a mortgage must"(1) Involve a principal obligation (including such initial service charges, appraisal, inspection and other fees, as the Administrator shall approve) in an amount in excess of $16,000 but not in excess of $200,000, not in excess of 80 per centum of the amount which the Administrator estimates will be the value of the property when the proposed improvements are completed, and such part thereof as may be attributable to dwelling use shall not exceed $1,000 per room.

"(2) Have a maturity satisfactory to the Administrator, but not to exceed twenty years and contain complete amortization provisions satisfactory to the Administrator.

"(3) Contain such terms, conditions, and provisions with respect to interest, advances during construction, assurance of completion, recognition of equitable rights of contract purchasers in good standing, release of part of the mortgaged premises from the lien of the mortgage, insurance, repairs, alterations, payment of taxes, default and management reserves, delinquency charges, foreclosure proceedings, anticipation of maturity, additional and secondary liens, and other matters as the Administrator may in his discretion prescribe.

The

"(c) The Administrator shall collect a premium charge for the insurance of mortgages under this section which shall be payable annually in advance by the mortgagee in cash or in debentures issued by the Administrator under this title at par plus accrued interest, and which premium charge shall be in such an amount as the Administrator shall prescribe. In addition to the premium charge herein provided for, the Administrator is authorized to charge and collect such amounts as he may deem reasonable for the appraisal of a property or project offered for insurance and for the inspection of such property or project during construction, provided that such charges for appraisal and inspection shall not aggregate more than one-half of 1 per centum of the original face amount of the mortgage. provisions of the last sentence of section 203 (c), as amended, shall be applicable to mortgages insured under this section. No mortgage shall be accepted for insurance under this section unless the Administrator finds that the relation of the project to its immediate environment and to the entire community in which it is located, the suitability of the site, and the site and building plans,the relation between the debt-service requirements and the estimated earning capacity of the project, the relation between the principal amount of the mortgage and the value of the property, and the sufficiency and character of the proposed equity, are such as to make the project economically sound.

"(d) The provisions of section 204 shall be applicable to mortgages insured under this section, except that the debentures issued hereunder shall be the primary liability of the housing fund created under section 207 (e) and shall be paid out of said housing fund. They shall be guaranteed by the United States as provided in section 204. The provisions of section 205 shall not be applicable to such mortgages.

"(e) In the event that any mortgagee under a mortgage insured under this section shall create or sell partial interests therein, except upon such conditions and restrictions as the Administrator shall determine, or forecloses on the mortgaged property but does not convey such property to the Administrator in accordance with section 204, or in the event the mortgager pays the obligation under the mortgage in full prior to maturity thereof and the Administrator is given due notice of such payment, the obligation to pay the annual premium charge for insurance shall cease and all rights of the mortgagee and the mortgagor under section 204 shall terminate.

"(f) The Administrator is authorized and directed to make such rules and regulations as may be necessary to carry out the provisions of this section.” SEC. 26. Section 301 (a) of title III is amended to read as follows:

"SEC. 301. (a) The Administrator is further authorized and empowered to provide for the establishment of national mortgage associations as hereinafter provided which shall be authorized, subject to rules and regulations to be prescribed by the Administrator, (1) to purchase, service, and sell first mortgages and such other first liens as are commonly given to secure advances on real estate held in fee simple or under a lease for not less than ninety-nine years, under the laws of the State in which the real estate is located, together with the credit instruments, if any, secured thereby, such mortgages not to exceed 80 per centum of the appraised value of the property as of the date the mortgage is purchased,

and to make loans and advances upon, and to purchase, service, and sell mortgages or partial interests therein which are insured under section 207 of this Act; (2) to borrow money for such purposes through the issuance of notes, bonds, debentures, or other such obligations as hereinafter provided."

SEC. 27. Section 301 (d) of title II of said Act is amended by striking out in the last sentence of said section the words "paid in full in cash or Government securities at their par value" and inserting in lieu thereof the following: "that at least 25 per centum thereof has been paid in cash or Government securities at their par value or first mortgages, or such other first liens, as are described in section 301 (a) hereof, which mortgages or liens shall be taken at such value as the Administrator may determine not exceeding 80 per centum of the appraised value of the property as of the date of subscription, and that the remainder is payable at such time as may be determined by the Administrator: Provided, That no association shall issue notes, bonds, debentures, or other such obligations until such time as such subscriptions are paid in full in cash or Government securities at their par value or mortgages or other liens as hereinbefore set forth." SEC. 28. Section 302 of title III of said Act is amended to read as follows: "SEC. 302. Each national mortgage association is authorized to issue and have outstanding at any time notes, bonds, debentures, or other such obligations in an aggregate amount not to exceed (1) twenty times the amount of its paid-up capital and surplus, and in no event to exceed (2) the current unpaid principal mortgages held by it and insured under the provisions of title II of this Act, plus the amount of its cash on hand and on deposit and the amortized value of its investments in bonds or obligations of, or guaranteed as to principal and interest by, the United States. No national mortgage association shall borrow money otherwise than through the issuance of such notes, bonds, debentures, or other obligations, except with the approval of the Administrator and under such rules and regulations as he shall prescribe. An association may, if its bylaws so provide, accept any notes, bonds, debentures, or other obligations issued by it in payment of obligations due it at par plus accrued interest: Provided, That such notes, bonds, debentures, or other obligations so accepted shall be canceled

and not reissued.'

SEC. 29. Section 307 of title III is amended to read as follows:

"All notes, bonds, debentures, or other obligations issued by any national mortgage association shall be exempt, both as to principal and interest, from all taxation now or hereafter imposed by any State, county, municipality, or local taxing authority. Every national mortgage association, including its franchise, capital, reserves, surplus, mortgage loans, income, and stock, shall be exempt from taxation now or hereafter imposed by any State, county, municipality, or local taxing authority. Nothing herein shall be construed to exempt the real property of such association from taxation by any State, county, municipality, or local taxing authority to the same extent according to its value as other real property is taxed.' SEC. 30. Section 512 (a) of title V is amended to read as follows:

"SEC. 512. (a) Whoever, for the purpose of obtaining any loan or advance of credit from any person, partnership, association, or corporation with the intent that such loan or advance of credit shall be offered to or accepted by the Federal Housing Administration for insurance, or for the purpose of obtaining any extension or renewal of any loan, advance of credit, or mortgage insured by the said Administration, or the acceptance, release, or substitution of any security on such a loan, advance of credit, or for the purpose of influencing in any way the action of the said Administration under this Act, makes, passes, utters, or publishes, or causes to be made, passed, uttered, or published any statement, knowing the same to be false, or alters, forges, or counterfeits, or causes or procures to be altered, forged, or counterfeited, any instrument, paper, or document, or utters, publishes, or passes as true, or causes to be uttered, published, or passed as true, any instrument, paper, or document, knowing it to have been altered, forged, or counterfeited, or willfully overvalues any security, asset, or income, shall be punished by a fine of not more than $3,000 or by imprisonment for not more than two years, or both."

SEC. 31. Section 512 of title V is amended by adding at the end thereof an additional subsection to be known as (d) as follows:

"(d) No individual, association, partnership, or corporation shall hereafter, while the Federal Housing Administration exists, use the words 'Federal Housing' or 'National Housing', or any combination or variation of any of these words, alone or with other words, as the name under which he or it shall do business, which shall have the effect of leading the public to believe that any such

individual, association, partnership, or corporation has any connection with, or authorization from, the Federal Housing Administration, the Government of the United States, or any instrumentality thereof, where such connection or authorization does not, in fact, exist. No individual, association, partnership, or corporation shall falsely advertise, or otherwise represent falsely by any device whatsoever, that any project or business in which he or it is engaged, or product which he or it manufactures, deals in, or sells, has been in any way endorsed, authorized, or approved by the Federal Housing Administration, or by the Government of the United States, or by any instrumentality thereof. Every violation of this subsection shall be punished by a fine not exceeding $1,000 or by imprisonment not exceeding one year, or both."

SEC. 32. Title V of the National Housing Act is amended by adding after section 513 the following new section:

"SECTION 514. The provisions of section 10 (a) 1 and 10b of the Federal Home Loan Bank Act, as amended (49 Stats. 294, 295); paragraph seventh of section 5136 of the Revised Statutes, as amended (49 Stats. 709); section 24 of the Federal Reserve Act, as amended (49 Stats. 706); subsection (n) of section 77B of the Bankruptcy Act, as amended (49 Stats. 664); section 5 (c) of the Act approved January 31, 1935, continuing and extending the functions of the Reconstruction Finance Corporation (49 Stats. 1); and all other provisions of law establishing rights under mortgages insured in accordance with the provisions of the National Housing Act, shall be held to apply to said National Housing Act as heretofore and hereby amended as fully as if enacted after the date of the approval of such amendments.'

SEC. 33. Section 35 of the Act of June 19, 1934, to regulate the business of life insurance in the District of Columbia, and entitled the "Life Insurance Act", is amended by inserting after subsection 3 and before subsection 4 of said section the following new section to be known as subsection 3 (a) and to read as follows:

"3. (a) Bonds or notes secured by mortgages or deeds of trust insured by the Federal Housing Administrator: The restrictions in subsection 3 of this section in regard to the ratio of the loan to the value of the property shall not apply to such insured mortgages."

SEC. 34. Said section 35 of said Act of June 19, 1934, is further amended by amending subsection 4 to read as follows:

"4. Bonds or other evidences of indebtedness of the farm loan banks authorized under the Federal Farm Loan Act or Acts amendatory thereof or supplementary thereto, and bonds or other evidences of indebtedness of national mortgage associations."

SEC. 35. Subsection (a) of section 2 of title I, as amended, is further amended by striking out the words "April 1, 1936, and prior to April 1, 1937" appearing in the first sentence of said subsection and inserting in lieu thereof the words "the date of the enactment of this Act and prior to July 1, 1939", by striking out the words "and the purchase and installation of equipment and machinery upon such real property," and by striking out the last two sentences of said section and inserting in lieu thereof the following: "In no case shall the insurance granted by the Administrator 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 the date of the enactment of this Act exceed 10 per centum of the total amount of such loans, advances of credit, and purchases. The total liability which may be outstanding at any time in respect of all insurance heretofore and hereafter granted under this section and section 6 shall not exceed in the aggregate $100,000,000."

SEC. 36. Subsection (b) of section 2, title I, as amended, is further amended to read as follows:

"(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, the face amount of which exceeds $10,000, nor unless the obligation bears such interest, has such maturity, and contains such other terms, conditions, and restrictions as the Administrator shall prescribe in order to make credit available for the purposes of this title."

SEC. 37. Section 5136 of the Revised Statutes, as amended, is further amended as follows:

The last sentence of paragraph seventh of such section is amended by inserting before the colon after the words "guaranteed as to principal and interest by the United States" a comma and the following: "or obligations of national mortgage associations".