"TITLE X-ARMED SERVICES HOUSING INSURANCE

"AUTHORITY TO INSURE

"SEC. 1001. The purpose of this title is to assist in relieving the acute shortage of housing accommodations that now exists on military installations and to increase the supply of necessary housing accommodations for military personnel at such installations. To effectuate this purpose, the Commissioner shall, upon application of the mortgage, insure mortgages (including advances on such mortgages during construction) which are eligible for insurance as hereinafter provided, and, make commitments for so insuring such mortgages prior to the date of their execution or disbursement thereon: Provided, That the aggregate amount of contingent liability outstanding at any one time under insurance contracts and commitments to insure made pursuant to this title shall not exceed $1,350,000,000.

"ELIGIBILITY

"SEC. 1002. To be eligible for insurance under this title, a mortgage shall meet the following conditions:

"(1) The mortgage property shall be designed for use for residential purposes by military personnel of the armed services and situated at or near a military installation. No mortgage shall be insured under this title unless the Secretary of the Army, Navy, or Air Force, or their designees, shall have certified to the Commissioner that the housing with respect to which the mortgage is made is necessary to provide public quarters at such military installation and that there is no present intention to curtail substantially the activities at such installation. The certification shall be accepted by the Federal Housing Commissioner as conclusive evidence of the necessity of providing public quarters for such military installation.

"(2) The mortgage shall involve a principal obligation in an amount

"(A) not to exceed the amount which an eligible builder (as defined in section 3 of the Armed Services Housing Insurance Act of 1955) has bid to construct the housing project; and

"(B) not to exceed an average of $13,500 per family unit for such part of the property as may be attributable to dwelling use.

"AMORTIZATION AND INTEREST

"SEC. 1003. The mortgage shall provide for complete amortization by periodic payments over a period of not to exceed twenty-five years and shall bear interest (exclusive of premium charges for insurance) at not to exceed 4 per centum per annum of the amount of the principal obligation outstanding at any time. The Commissioner may consent to the release of a part or parts of the mortgaged property from the lien of the mortgage and the mortgage may provide for such release.

"PREMIUM

"SEC. 1004. For insurance granted pursuant to this title, the Commissioner shall fix and collect a premium charge in an amount not to exceed one-half of 1 per centum of the outstanding investment for the operating year for which such premium charge is payable, without taking into account delinquent payments or prepayments. Such premium charge shall be payable annually in advance by the mortgagee, either in cash or in debentures issued by the Commissioner under this title at par plus accrued interest. Upon presentation of a mortgage for insurance that complies with the provisions of this title and tender of the initial premium charge, such mortgage shall be accepted for insurance by endorsement or otherwise as the Commissioner may prescribe. In insuring mortgages under this section, the Commissioner is authorized to waive his usual requirement for property and hazard insurance. In the event the principal obligation of any mortgage accepted for insurance under this title is paid in full prior to the maturity date, the Commissioner is authorized to refund to the mortgagee for the account of the mortgagor all, or such portion as he shall determine to be equitable, of the current unearned premium charge theretofore paid.

"DEFAULT

"SEC. 1005. (a) The failure of the mortgagor to make any payment due under or provided to be paid by the terms of a mortgage insured under this title shall be considered a default under such mortgage and, if such default continues for a period of thirty days, the mortgagee shall be entitled to receive the benefits of the insurance as hereinafter provided, upon assignment, transfer, and delivery to the Commissioner, within a period and in accordance with rules and regulations to be prescribed by the Commissioner of—

"(1) all rights and interest arising under the mortgage in default; "(2) all claims of the mortgagee against the mortgagors or others, arising out of the mortgage transaction;

"(3) all policies of title or other insurance or surety bonds or other guarantees 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.

"(b) Upon such assignment, transfer, and delivery, the obligation of the mortgagee to pay the premium charge for mortgage insurance shall cease, and the Commission shall, subject to the cash adjustment provided for in section 1006 of this title, issue to the mortgagee debentures having a total face value equal to the value of the mortgage, and a certificate of claim as hereinafter provided. "(c) For the purposes of this section, the value of the mortgage shall be determined in accordance with rules and regulations prescribed by the Commissioner, by adding to the amount of the original principal obligation of the mortgage which was unpaid on the date of default, the amount the mortgagee may have paid for

"(1) any liens that are prior to the mortgage, including special assessments, water rates, or taxes when applicable;

"(2) insurance on the property; and

"(3) reasonable expenses for the completion and preservation of the property and any mortgage insurance premiums paid after default; less the sum of

"(A) any amount received on account of the mortgage after such date; and

"(B) any net income received by the mortgagee from the property after such date:

Provided, That the mortgagee in the event of a default under the mortgage may, at its option and in accordance with regulations of, and in a period to be determined by the Commissioner, proceed to foreclose on and obtain possession of or otherwise acquire such property from the mortgagor after default, and receive the benefits of the insurance as hereinafter provided, upon

"(1) the prompt conveyance to the Commissioner of the mortgagee's interest in the property which meets the requirements of the rules and regulations of the Commissioner in force at the time the mortgage was insured, and which is evidenced in the manner prescribed by such rules and regulations; and

"(2) the assignment to him of all claims of the mortgagee against the mortgagor or others, arising out of the mortgage transaction or foreclosure proceedings, except such claims that may have been released with the consent of the Commissioner. Upon such conveyance and assignment, the obligation of the mortgagee to pay the premium charge for insurance shall cease and the mortgagee shall be entitled to receive the benefits of the insurance as provided in this section.

"DEBENTURES

"SEC. 1006. (a) Debentures issued under this title shall be in such form and denominations in multiples of $50, shall be subject to such terms and conditions, and shall include such provisions for redemption, if any, as may be prescribed by the Commissioner with the approval of the Secretary of the Treasury, and may be in coupon or registered form. Any difference between the value of the mortgage determined as herein provided and the aggregate face value of the

debentures issued, not to exceed $50, shall be adjusted by the payment of cash by the Commissioner to the mortgagee from the Armed Services Housing Insurance Fund.

"(b) Debentures issued under this title shall be executed in the name of the Armed Services Housing Insurance Fund as obligor, shall be signed by the Commissioner, by either his written or engraved signature, and shall be negotiable. All such debentures shall be dated as of the date of default as determined in accordance with section 1005 of this title, and shall bear interest from such date at a rate determined by the Commissioner, with the approval of the Secretary of the Treasury, at the time the mortgage was accepted for insurance, but not to exceed 3 per centum per annum, payable semiannually on the first day of January and the first day of July of each year, and shall mature ten years after the date thereof.

"(c) Such debentures shall be exempt, both as to principal and interest, from all taxation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed, by any Territory, dependency, or possession of the United States or by the District of Columbia, or by any State, county, municipality, or local taxing authority. They shall be paid out of the Armed Services Housing Insurance Fund which shall be primarily liable therefor, and they 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 Armed Services Housing Insurance 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, and thereupon to the extent of the amount so paid the Secretary of the Treasury shall succeed to all the rights of the holder of such debentures.

"CERTIFICATE OF CLAIM

"SEC. 1007. The certificate of claim issued by the Commission to any mortgage in connection with the insurance of mortgages under this title shall be for an amount determined in accordance with subsections (e) and (f) of section 604 of this Act, except that any amount remaining after the payment of the full amount under the certificate of claim shall be retained by the Commissioner and credited to the Armed Services Housing Insurance Fund.

"INSURANCE FUND

"SEC. 1008. (a) There is hereby created the Armed Services Housing Insurance Fund which shall be used by the Commissioner as a revolving fund for carrying out the provisions of this title and for payment of his administrative expenses in connection therewith. For such purpose, the Secretary of the Treasury shall make available to the Commissioner such funds as the Commissioner shall deem necessary, but not to exceed $10,000,000, which amount is hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated. For immediate needs pending such appropriation, the Commissioner is directed to transfer the sum of $1,000,000 to such fund from the War Housing Insurance Fund created by section 602 of this Act, as amended, such amount to be reimbursed to the War Housing Insurance Fund upon the availability of the appropriations authorized by this section. General expenses of operation of the Federal Housing Administration under this title may be charged to the Armed Services Housing Insurance Fund.

"(b) Premium charges, adjusted premium charges, and appraisal and other fees, received on account of the insurance of any mortgage insured under this title, the receipts derived from any such mortgage or claim assigned to the Commissioner and any property acquired by the Commissioner under this title, and all earnings on the assets of the Armed Services Housing Insurance Fund, shall be credited to such fund. The principal of and interest paid and to be paid on debentures issued in exchange for any mortgage or property insured under this title, 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 Commissioner under this title, shall be charged to the Armed Services Housing Insurance Fund.

"(c) Moneys in the Armed Services Housing Insurance Fund not needed for current operations under this title shall be deposited with the Treasurer of the United States to the credit of such fund, or invested in bonds or other obligations of, or in bonds or other obligations guaranteed by, the United States. The

Commisioner may, with the approval of the Secretary of the Treasury, purchase in the open market debentures issued under this title. Such purchases shall be at a price which will provide an investment yield of not less than the yield obtainable from other investments authorized by this section. Debentures so purchased shall be canceled and not reissued.

"CONTRACT OF INSURANCE CONCLUSIVE

"SEC. 1009. Any contract of insurance executed by the Commissioner under this title shall be conclusive evidence of the eligibility of the mortgage for insurance, and the validity of any contract of 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.

"SECONDARY MARKET

"SEC. 1010. In order to assure an adequate market for mortgages insured under this title, the powers of the Federal National Mortgage Association and of any other Federal corporation or other Federal agency hereinafter established, to purchase, service, or sell any mortgages, or partial interests therein, may be utilized in connection with mortgages insured under this title.

"POWER TO INSURE UNDER OTHER TITLES

"SEC. 1011. The Commissioner shall also have power to insure under this title or titles II or VI any mortgage executed in connection with the sale by him of any property acquired under this title without regard to any limit as to eligibility, time or aggregate amount contained in this title or titles II or VI.

"APPLICABILITY OF OTHER SECTIONS OF ACT

"SEC. 1012. The provisions of section 207 (k) and section 207 (1) of this Act shall be applicable to mortgages insured under this title and to property acquired by the Commissioner hereunder, except that as applied to such mortgages and property

(1) all reference in such sections to the 'Housing Fund' shall be construed to refer to the 'Armed Services Housing Insurance Fund'; and

(2) the reference in section 207 (k) to 'subsection (g)' shall be construed to refer to 'section 1003' of this title.

"INAPPLICABILITY OF PROVISION IN SECTION 214

"SEC. 1013. The second sentence of section 214 of this Act, as amended, relating to housing in the Territory of Alaska, shall not apply to mortgages insured under this title on property in said Territory.

"RULES AND REGULATIONS

"SEC. 1014. The Commissioner may make such rules and regulations as may be necessary to carry out the provisions of this title.

"MISCELLANEOUS PROVISIONS

"SEC. 1015. Section 1 of the National Housing Act, as amended, is further amended by striking out 'titles II, III, VI, VII, VIII, and IX' each time it appears and inserting in lieu thereof 'titles II, III, VI, VII, VIII, IX, and X.'

"DEFINITIONS

"SEC. 1016. The following terms shall have the meanings respectively ascribed to them below:

"(a) 'Mortgage' means a first mortgage on real estate held in fee simple or under a lease.

"(b) 'First mortgage' means such classes of first liens as are commonly given to secure advances on or the unpaid purchase price of real estate under the laws of the State in which the real estate is located together with the credit instruments, if any, secured thereby.

"(c) 'Mortgagee' includes the original lender under a mortgage and his successors and assigns approved by the Commissioner.

"(d) 'Mortgagor' includes the original borrower under a mortgage, its successors and assigns (including the United States acting through the Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force or their respective designees, and its assigns).

"(e) 'Maturity date' means the date on which the mortgage indebtedness would be extinguished if paid in accordance with periodic payments provided for in the mortgage.

"(f) Housing accommodations' means housing designed for use by Army, Navy, Air Force, and Marine Corps personnel, and their dependents, assigned to duty at the military installation at or in the area where such property is constructed.

"(g) 'Military' includes Army, Navy, Marine Corps, and Air Force.

"(h) 'State' includes the several States and Alaska, Hawaii, Puerto Rico, the District of Columbia, the Virgin Islands, and Guam."

SEC. 3. (a) The Secretary of the Army, the Secretary of the Navy, and the Secretary of the Air Force are hereby authorized to enter into contracts with any eligible builder to provide for the construction of urgently needed housing on lands owned or leased by the United States and situated on or near a military reservation or installation for the purpose of providing suitable living accommodations for military personnel of the armed services assigned to duty at the military installation at or in the area where the housing is situated. Any such contract shall contain such terms and conditions, including the amount of the mortgage that the Commissioner shall insure, as the Secretary may determine to be necessary to protect the interests of the United States. The terms and conditions of such contract shall be conclusive evidence to the Commissioner that the contractor is an eligible builder within the meaning of this Act and that the amount set forth in the contract as to the cost of the housing is the amount that shall be insured.

(b) Notwithstanding any other provision of law, the Secretary of the Army, the Secretary of the Navy, or the Secretary of the Air Force are authorized to acquire, by lease or otherwise, the housing constructed pursuant to such contracts; to maintain and operate such housing; to assume the payment of notes, mortgages, or other legal instruments required by the Federal Housing Commissioner of the owners or mortgagors or prospective owners or mortgagors constructing housing projects insured under title X of the National Housing Act, and to make amortization payments thereon; but all rental or other payments made during any year in the case of any housing so acquired shall not exceed an average living unit payment of $90 per month and, in the case of any one of the military departments, total payments per month for all housing so acquired shall not exceed $9,000,000 per month.

(c) For the purposes of this Act, the term "eligible builder" means a person, partnership, firm, or corporation determined by the Secretary (1) to be qualified by experience and financial responsibility to construct housing of the type described in subsection (a) of this section, and (2) to have submitted the lowest acceptable bid as provided in subsection (d) of this section.

(d) Before the Secretary of the Army, Navy, or Air Force shall enter into any contract with any builder as provided in this section for the construction of any housing he shall invite the submission of competitive bids after advertising in the manner prescribed in section 3 of the Armed Services Procurement Act of 1947.

SEC. 4. Whenever the Secretary of the Army, Navy, or Air Force shall deem it necessary for the purposes of this Act, he may acquire by purchase, donation, or other means of transfer, or may cause proceedings to be instituted in any court having jurisdiction of such proceedings to acquire by condemnation, any unimproved land adjacent to a military reservation or installation. Any such condemnation proceedings shall be conducted in accordance with the provisions of the Act of August 1, 1888 (25 Stat. 357), as amended, or any other applicable Federal statute. Before condemnation proceedings are instituted pursuant to this section, an effort shall be made to acquire the property involved by negotiation unless, because of reasonable doubt as to the identity of the owner or owners, because of the large number of persons with whom it would be necessary to negotiate, or for other reasons, the effort to acquire by negotiation would involve, in the judgment of the Secretary, such delay in acquiring the property as to be contrary to the interest of national defense. In any condemnation proceeding instituted pursuant to this section, the court shall not order the party in possession to surrender possession in advance of final judgment unless a