Page:United States Statutes at Large Volume 97.djvu/1258

 97 STAT. 1226 PUBLIC LAW 98-181—NOV. 30, 1983 "Net appreciated value. " Ante, p. 1218. Consumer protections and disclosure requirements. Ante, pp. 1223, 1225. "(2) bears interest at a rate which meets criteria prescribed by the Secretary; "(3) provides for amortization over a period of not to exceed 30 years, but the actual term of the mortgage (excluding any refinancing) may be not less than 10 nor more than 30 years, and contains such provisions relating to refinancing of the principal balance of the mortgage and any contingent deferred interest as the Secretary may provide; and "(4) meets such other conditions as the Secretary may require by regulation. "(b) The mortgagee's share of a property's or stock's net appre- ciated value shall be payable upon sale or transfer (as defined by the Secretary) of the property or stock or payment in full of the mort- gage, whichever occurs first. For purposes of this section, the term net appreciated value' means the amount by which the sales price of the property or stock (less the mortgagor s selling costs) exceeds the value of the property or stock at the time the commitment to insure is issued (with adjustments for capital improvements stipu- lated in the loan contract). If there has been no sale or transfer at the time the mortgagee's share of net appreciated value becomes payable, the sales price for purposes of this section shall be deter- mined by means of an appraisal conducted in accordance with procedures approved by the Secretary and provided for in the mortgage. "(c) In the event of a default, the mortgagee shall be entitled to receive the benefits of insurance in accordance with section 204(a), but such insurance benefits shall not include the mortgagee's share of net appreciated value. The term 'original principal obligation of the mortgage' as used in section 204 shall not include the mortga- gee's share of net appreciated value. "(d) Mortgages insured pursuant to this section which contain provisions for sharing appreciation or which otherwise require or permit increases in the outstanding loan balance which are author- ized under this section or under applicable regulations shall not be subject to any State constitution, statute, court decree, common law, rule, or public policy limiting or prohibiting increases in the out- standing loan balance after execution of the mortgage. "(e) In carrying out the provisions of this section, the Secretary shall encourage the use of insurance under this section by low and moderate income tenants who would otherwise be displaced by the conversion of their rental housing to condominium or cooperative ownership. "(f) The Secretary shall prescribe adequate consumer protections and disclosure requirements with respect to mortgages insured under this section, and may prescribe such other terms and condi- tions as may be appropriate to carry out the provisions of this section. "(g) The aggregate number of mortgages and loans insured under this section, section 245(c), and section 251 in any fiscal year may not exceed 10 percent of the aggregate number of mortgages and loans insured by the Secretary under this title during the preceding fiscal year.". SHARED APPRECIATION MORTGAGES FOR MULTIFAMILY HOUSING SEC. 445. Title II ot the National Housing Act is amended by adding at the end thereof the following new section:

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