Page:United States Statutes at Large Volume 79.djvu/538

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PUBLIC LAW 89-117-AUGUST 10, 1965 I N S U R E D RURAL. H O U S I N G

63 Stat. 432. 42 USC 1471 et seq.

[79 STAT.

LOANS

SEC. 1003. (a) Title V of the Housing Act of 1949 is amended by adding at the end thereof the following new sections: a I N S U R E D RURAL. H O U S I N G LOANS

52 Stat. 10; Ante, p. 466. 12 USC 1709.

75 Stat. 186; 76 Stat. 671. 42 USC 1484, 1485.

Rural Housing Insurance Fund.

"SEC. 517. (a) The Secretary may insure loans meeting the requirements of section 502, and may make loans in accordance with the requirements of such section to be sold and insured; except that such loans shall— " (1) if the borrowers are persons of low or moderate income (as defined by the Secretary), (A) not exceed amounts necessary to provide adequate housing, modest in size, design, and cost (as determined by the Secretary), (B) bear interest at a rate not to exceed 5 per centum per annum, and (C) not exceed in the aggregate $300,000,000 of new loans made or insured in any one fiscal year; and "(2) if the borrowers are persons other than those described in clause (1), bear interest and provide for insurance or service charges at rates comparable to the combined rate of interest and premium charges in effect under section 203 of the National Housing Act, as determined by the Secretary. "(b) The Secretary may insure loans in accordance with the requirements of sections 514 (exclusive of subsections (a)(3), (a)(5), and (b)) and 515 (exclusive of subsections (a) and (b)(4)), and may make loans meeting such requirements to be sold and insured. Upon the expiration of ninety days after the original capitalization of the Rural Housing Insurance Fund, created by subsection (e) of this section, no new loans shall be made or insured under section 514 or 515 (b), except in conformity with this section. "(c) The Secretary may use the Rural Housing Insurance Fund for the purpose of making loans to be sold and insured under this section, but the aggregate of such loans which are held by the Secretary at any one time shall not exceed $100,000,000. " (d) The Secretary may, in conformity with subsections (a) and (b), insure the payment of principal and interest as it becomes due on loans made by lenders other than the United States, and on loans made from the Rural Housing Insurance Fund which are sold by the Secretary. Any contract of insurance executed by the Secretary hereunder shall be an obligation supported by the full faith and credit of the United States, and shall be incontestable except for fraud or material misrepresentation of which the holder has actual knowledge. I n connection with loans insured under this section, the Secretary may take liens running to the United States notwithstanding the fact that the notes evidencing such loans may be held by lenders other than the United States. Notes evidencing such loans shall be freely assignable, but the Secretary shall not be bound by any such assignment until notice thereof is given to and acknowledged by him. "(e) There is hereby created the Rural Housing Insurance Fund (hereinafter referred to as the 'Fund') which shall be used by the Secretary as a revolving fund for carrying out the provisions of this section. There are authorized to be appropriated to the Secretary such sums as may be necessary for the purposes of the Fund. " (f) Money in the Fund not needed for current operations shall be invested in direct obligations of the United States or obligations guaranteed by the United States. " (g) All funds, claims, notes, mortgages, contracts, and property acquired by the Secretary under this section, and all collections and

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