Page:United States Statutes at Large Volume 114 Part 5.djvu/977

 PUBLIC LAW 106-569—DEC. 27, 2000 114 STAT. 2991 "(A) IN GENERAL.— The loan shall be made only by a lender approved by, and meeting qualifications established by, the Secretary, including any lender described in subparagraph (B), except that a loan otherwise insured or guaranteed by an agency of the Federal Government or made by the Department of Hawaiian Home Lands from amounts borrowed from the United States shall not be eligible for a guarantee under this section. "(B) APPROVAL. — The following lenders shall be considered to be lenders that have been approved by the Secretary: "(i) Any mortgagee approved by the Secretary for participation in the single family mortgage insurance program under title II of the National Housing Act (12 U.S.C.A. 1707etseq.). "(ii) Any lender that makes housing loans under chapter 37 of title 38, United States Code, that are automatically guaranteed under section 3702(d) of title 38, United States Code. "(iii) Any lender approved by the Secretary of Agriculture to make guaranteed loans for single family housing under the Housing Act of 1949 (42 U.S.C.A 1441 et seq.). "(iv) Any other lender that is supervised, approved, regulated, or insured by any agency of the Federal Government. "(5) TERMS. —The loan shall— "(A) be made for a term not exceeding 30 years; "(B) bear interest (exclusive of the guarantee fee under subsection (e) and service charges, if any) at a rate agreed upon by the borrower and the lender and determined by the Secretary to be reasonable, but not to exceed the rate generally charged in the area (as determined by the Secretary) for home mortgage loans not guaranteed or insured by any agency or instrumentality of the Federal Government; "(C) involve a principal obligation not exceeding— "(i) 97.75 percent of the appraised value of the property as of the date the loan is accepted for guarantee (or 98.75 percent if the value of the property is $50,000 or less); or "(ii) the amount approved by the Secretary under this section; and "(D) involve a payment on account of the property— "(i) in cash or its equivalent; or "(ii) through the value of any improvements to the property made through the skilled or unskilled labor of the borrower, as the Secretary shall provide. " (d) CERTIFICATE OF GUARANTEE.— "(1) APPROVAL PROCESS.— "(A) IN GENERAL.— Before the Secretary approves any loan for guarantee under this section, the lender shall submit the application for the loan to the Secretary for examination. "(B) APPROVAL.—If the Secretary approves the application submitted under subparagraph (A), the Secretary shall

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