Page:United States Statutes at Large Volume 93.djvu/1147

 PUBLIC LAW 96-153—DEC. 21, 1979

93 STAT. 1115

MODIFICATION OF GRADUATED PAYMENT MORTGAGE PROGRAM

SEC. 311. (a) This section may be cited as the "Homeownership Homeownership Opportunity Act Opportunity Act of 1979". of 1979. (b) Section 245 of the National Housing Act is amended— 12 USC 1701 note. (1) by inserting "(a)" after "SEC. 245."; (2) by inserting after "title" in the second sentence the follow- 12 USC 1715Z-10. ing: ", except as provided in subsection (b) of this section,"; (3) by striking out "section" after "pursuant to this" and inserting in lieu thereof "subsection"; (4) by striking out the last sentence; and (5) by adding at the end thereof the following: "(b) Notwithstanding the provisions of subsection (a), the Secretary may insure under any provision of this title a mortgage or loan which meets the requirements of the first sentence of subsection (a) and which has provisions for varying rates of amortization if the Secretary determines— "(1) the mortgagor could not reasonably afford to purchase the dwelling unit by means of a mortgage insured under subsection (a) or any other mortgage insurance program under this title; "(2) the principal obligation of the mortgage or loan initially does not exceed the percentage of the initial appraised value of the property specified in section 203(b) of this title as of the date Ante, p. 1114 the mortgage or loan is accepted for insurance; "(3) the principal obligation of the mortgage or loan thereafter (including all interest to be deferred and added to principal) will not at any time be scheduled to exceed 97 per centum, or, if the mortgagor is a veteran, such higher percentage as is provided under section 203(b)(2) for veterans, of the projected value of the property; and "(4) the principal obligation of the mortgage thereafter will not exceed 113 per centum of the initial appraised value of the property. Mortgage insurance under this subsection shall be limited to mortgages executed by mortgagors who, as determined by the Secretary, have not owned dwelling units within the preceding three years. For the purpose of this subsection, the projected value of the property shall be calculated by the Secretary by increasing the initial appraised value of the property at a rate not in excess of 2 ¥2 per centum per annum. The number of mortgages which are insured in accordance with this subsection in any fiscal year may not exceed (A) that number of mortgages the aggregate initial principal obligation of which equals 10 per centum of the aggregate amount of the initial principal obligation of all mortgages secured by properties improved by one- to four-family residences which are insured under this title during the preceding fiscal year, or (B) 50,000 mortgages, whichever is greater. "(c) Any mortgage or loan insured pursuant to this section which contains or sets forth any graduated mortgage provisions (including but not limited to provisions for adding deferred interest to principal) which are authorized under this section and applicable regulations, or which have been insured on the basis of their being so authorized, shall not be subject to any State constitution, statute, court decree, common law, or rule or public policy (1) limiting the amount of interest which may be charged, taken, received, or reserved, or the manner of calculating such interest (including but not limited to prohibitions against the charging of interest on interest), if such constitution, statute, court decree, common law, or rule would not

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