Page:United States Statutes at Large Volume 90 Part 1.djvu/1123

 PUBLIC LAW 94-375—AUG. 3, 1976

90 STAT. 1073

(2) Section 518(b) of such Act is amended by striking out the last 12 USC 1735b. sentence and inserting in lieu thereof the following: "Expenditures pursuant to this subsection shall be made from the insurance fund chargeable for insurance benefits on the mortgage covering the structure to which the expenditures relate. There are hereby authorized to jropnation be appropriated such sums as may be necessary to cover the costs of authorization. such expenditures not otherwise provided for.". (b) Section 518 of the National Housing Act is amended by adding at the end thereof the following new subsections: "(d) The Secretary is authorized to make expenditures to correct or Corrected to reimburse the owner for the correction of structural or other major defects, defects which so seriously affect use and liveability as to create a serious expenditures. danger to the life or safety of inhabitants of any one-, two-, three-, or four-family dwelling which is more than one year old on the date of issuance of the insurance commitment, is located in an older, declining urban area, and is covered by a mortgage insured under section 203 or 221 on or after January 1, 1973, but prior to the date of enact- 12 USC 1709, ment of this subsection if (1) the owner requests assistance from the 1715/. Secretary not more than one year after the date of enactment of this subsection, and (2) the defect is one that existed on the date of the issuance of the insurance commitment and is one that a proper inspection could reasonably have been expected to have disclosed. The Secretary may require from the seller of any such dwelling an agreement to reimburse him for any payments made pursuant to this subsection with respect to such dwelling. Expenditures pursuant to this subsection shall be made from the insurance fund chargeable for insurance benefits on the mortgage covering the structure to which the expenditures relate. There are hereby authorized to be appropriated such sums as Appropriation may be necessary to cover the costs of such expenditures not otherwise authorization. provided for. "(e) The Secretary of Housing and Urban Development is author- Investigation and ized and directed to conduct a full and complete investigation and study; report to study and report to Congress, with recommendations, not later than Congress. March 1, 1977, with respect to an effective program for protecting home buyers from hidden or undisclosed defects seriously affecting the use and livability of the home, which would be applicable to existing homes financed with mortgages insured under this Act. In the study and report the Secretary shall particularly investigate the need for, cost and feasible structure of, a national home inspection and warranty program, with respect to such homes, to be operated by the Federal Government out of fees assessed on the home buyer and amortized over a period of two years. The Secretary's report shall also present an analysis of alternative Federal programs to meet these needs, and the cost and means of financing such programs. In the report the Secretary shall also outline administrative steps which can be taken to provide disclosure to purchasers of existing homes financed with mortgages insured under this Act of the actual condition of the home and the types of repairs or replacements likely to be needed within a period of two years, such as repairs or replacement of furnace, roof or major appliances, based on age and useful life expectancy of such appurtenances.". GENERAL INSURANCE F U N D AUTHORIZATION

SEC. 10. Section 519 of the National Housing Act is amended by 12 USC 1735c. adding at the end thereof the following new subsection: "(f) There are authorized to be appropriated to cover losses sus- Appropriation authorization. tained by the General Insurance Fund not to exceed $500,000,000.".

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