12 U.S.C. § 1749aaa
(a) Authority of Secretary; termination date
The Secretary is authorized (1) to insure mortgages (including advances on such mortgages during construction), upon such terms and conditions as he may prescribe, in accordance with the provisions of this subchapter, and (2) to make commitments for the insuring of such mortgages prior to the date of their execution or disbursement thereon.
(b) Eligibility for insurance
To be eligible for insurance under this subchapter, the mortgage shall (1) be executed by a mortgagor that is a group practice unit or organization or other mortgagor approved by the Secretary, (2) be made to and held by a mortgagee approved by the Secretary as responsible and able to service the mortgage properly, and (3) cover a property or project which is approved for mortgage insurance prior to the beginning of construction or rehabilitation and is designed for use as a group practice facility or medical practice facility which the Secretary finds will be constructed in an economical manner, will not be of elaborate or extravagant design or materials, and will be adequate and suitable for carrying out the purposes of this subchapter. No mortgage shall be insured under this subchapter unless it is shown to the satisfaction of the Secretary that the applicant would be unable to obtain the mortgage loan without such insurance on terms comparable to those specified in subsection (c).
(c) Replacement cost of property; maturity; amortization; interest rate
The mortgage shall-
(1) Repealed. Pub. L. 93-383 §304(l), Aug. 22, 1974, 88 Stat. 678;
(2) not exceed 90 per centum of the amount which the Secretary estimates will be the replacement cost of the property or project when construction or rehabilitation is completed. The replacement cost of the property may include the land and the proposed physical improvements, equipment, utilities within the boundaries of the property, a solar energy system (as defined in subparagraph (3) of the last paragraph of section 1703(a) of this title) or residential energy conservation measures (as defined in section 8211(11)(A) through (G) and (I) of title 42) 1 in cases where the Secretary determines that such measures are in addition to those required under the minimum property standards and will be cost-effective over the life of the measure, architects' fees, taxes, and interest accruing during construction or rehabilitation, and other miscellaneous charges incident to construction or rehabilitation and approved by the Secretary;
(3) have a maturity satisfactory to the Secretary but not to exceed twenty-five years from the beginning of the amortization of the mortgage, and provide for complete amortization of the principal obligation by periodic payments within such term as the Secretary shall prescribe; and
(4) bear interest at such rate as may be agreed upon by the mortgagor and the mortgagee.
(d) Conclusiveness of insurance contract as to eligibility; validity of contract incontestable
Any contract of insurance executed by the Secretary under this subchapter shall be conclusive evidence of the eligibility of the mortgage for insurance, and the validity of any contract for insurance so executed shall be incontestable in the hands of an approved mortgagee from the date of the execution of such contract, except for fraud or misrepresentation on the part of such approved mortgagee.
(e) Undertaking
Each mortgage insured under this subchapter shall contain an undertaking (in accordance with regulations prescribed under this subchapter and in force at the time the mortgage is approved for insurance) to the effect that, except as authorized by the Secretary and the mortgagee, the property will be used as a group practice facility or medical practice facility until the mortgage has been paid in full or the contract of insurance otherwise terminated.
(f) Recordkeeping; reports; examination and audit
No mortgage shall be insured under this subchapter unless the mortgagor and the mortgagee certify (1) that they will keep such records relating to the mortgage transaction and indebtedness, to the construction of the facility covered by the mortgage, and to the use of such facility as a group practice facility or medical practice facility as are prescribed by the Secretary at the time of such certification, (2) that they will make such reports as may from time to time be required by the Secretary pertaining to such matters, and (3) that the Secretary shall have access to and the right to examine and audit such records.
1 See References in Text note below.
12 U.S.C. § 1749aaa
EDITORIAL NOTES
REFERENCES IN TEXTSection 8211 of title 42, referred to in subsec. (c)(2), was omitted from the Code pursuant to section 8229 of Title 42, The Public Health and Welfare, which terminated authority under that section on June 30, 1989.
AMENDMENTS1988-Subsec. (a). Pub. L. 100-242 struck out at end "No mortgage shall be insured under this subchapter after March 15, 1988, except pursuant to a commitment to insure issued before that date."1987-Subsec. (a). Pub. L. 100-200 substituted "March 15, 1988" for "December 16, 1987". Pub. L. 100-179 substituted "December 16, 1987" for "December 2, 1987". Pub. L. 100-170 substituted "December 2, 1987" for "November 15, 1987". Pub. L. 100-154 substituted "November 15, 1987" for "October 31, 1987". Pub. L. 100-122 substituted "October 31, 1987" for "September 30, 1987". 1986-Subsec. (a). Pub. L. 99-430 substituted "September 30, 1987" for "September 30, 1986". Pub. L. 99-345 substituted "September 30, 1986" for "June 6, 1986". Pub. L. 99-289 substituted "June 6, 1986" for "April 30, 1986". Pub. L. 99-272 made amendment identical to Pub. L. 99-219. See 1985 Amendment note below. Pub. L. 99-267 substituted "April 30, 1986" for "March 17, 1986".1985-Subsec. (a). Pub. L. 99-219 substituted "March 17, 1986" for "December 15, 1985". Pub. L. 99-156 substituted "December 15, 1985" for "November 14, 1985". Pub. L. 99-120 substituted "November 14, 1985" for "September 30, 1985".1984-Subsec. (c)(4). Pub. L. 98-479 substituted "at such rate as may be agreed upon by the mortgagor and the mortgagee," for "(exclusive of premium charges for insurance, and service charges if any) at a rate of not to exceed 5 per centum per annum of the amount of the principal obligation outstanding at any time, or not to exceed such rate (not in excess of 6 per centum per annum) as the Secretary finds necessary to meet the mortgage market."1983-Subsec. (a). Pub. L. 98-181 substituted "September 30, 1985" for "November 30, 1983". Pub. L. 98-109 substituted "November 30, 1983" for "September 30, 1983". Pub. L. 98-35 substituted "September 30, 1983" for "May 20, 1983".1982-Subsec. (a). Pub. L. 97-289 substituted "May 20, 1983" for "September 30, 1982". 1981-Subsec. (a). Pub. L. 97-35 substituted "1982" for "1981".1980-Subsec. (a). Pub. L. 96-399 §301(k), substituted "September 30, 1981" for "October 15, 1980". Pub. L. 96-372 substituted "October 15, 1980" for "September 30, 1980".Subsec. (c)(2). Pub. L. 96-399 §310(i), inserted provisions relating to solar energy systems and residential energy conservation measures.1979-Subsec. (a). Pub. L. 96-153 substituted "September 30, 1980" for "November 30, 1979". Pub. L. 96-105 substituted "November 30, 1979" for "October 31, 1979". Pub. L. 96-71 substituted "October 31, 1979" for "September 30, 1979".1978-Subsec. (a). Pub. L. 95-557 substituted "September 30, 1979" for "October 31, 1978". Pub. L. 95-406 substituted "October 31, 1978" for "September 30, 1978".1977-Subsec. (a). Pub. L. 95-128 substituted "September 30, 1978" for "September 30, 1977". Pub. L. 95-80 substituted "September 30, 1977" for "July 31, 1977". Pub. L. 95-60 substituted "July 31, 1977" for "June 30, 1977".1974-Subsec. (a). Pub. L. 93-383 §316(g), substituted "June 30, 1977" for "October 1, 1974". Subsec. (b). Pub. L. 93-383 §312(a)(1), (2), in cl. (1) inserted "or other mortgagor" after "or organization", and in cl. (3) inserted "or medical practice facility" after "group practice facility".Subsec. (c)(1). Pub. L. 93-383 §304(l), struck out par. (1) which set forth limitation on amount of mortgage.Subsecs. (e), (f). Pub. L. 93-383 §312(a)(3), (4), inserted "or medical practice facility" after "group practice facility".1973-Subsec. (a). Pub. L. 93-117 substituted "October 1, 1974" for "October 1, 1973". Pub. L. 93-85 substituted "October 1, 1973" for "June 30, 1973". 1972-Subsec. (a). Pub. L. 92-503 substituted "June 30, 1973" for "October 1, 1972".1970-Subsec. (a). Pub. L. 91-609 substituted "October 1, 1972" for "January 1, 1971". Pub. L. 91-525 substituted "January 1, 1971" for "December 1, 1970". Pub. L. 91-473 substituted "December 1, 1970" for "November 1, 1970". Pub. L. 91-432 substituted "November 1, 1970" for "October 1, 1970".1969-Subsec. (a). Pub. L. 91-152 §101(i), substituted "October 1, 1970" for "January 1, 1970". Pub. L. 91-78 substituted "January 1, 1970" for "October 1, 1969".Subsec. (c)(2). Pub. L. 91-152 §418(f), substituted "replacement cost" for "value" wherever appearing. 1968-Subsec. (c)(3). Pub. L. 90-448 limited term of mortgage to not more than twenty-five years from beginning of amortization of mortgage.
STATUTORY NOTES AND RELATED SUBSIDIARIES
EFFECTIVE DATE OF 1981 AMENDMENT Amendment by Pub. L. 97-35 effective Oct. 1, 1981, see section 371 of Pub. L. 97-35 set out as an Effective Date note under section 3701 of this title.
DECLARATION OF PURPOSE Pub. L. 89-754 §501, Nov. 3, 1966, 80 Stat. 1273, provided that: "It is the purpose of this title [enacting this subchapter and amending sections 24, 371, 1715c, and 1715r of this title, section 663 of former Title 11, Bankruptcy, and section 77ddd of Title 15, Commerce and Trade] to assure the availability of credit on reasonable terms to units or organizations engaged in the group practice of medicine, optometry, or dentistry, particularly those in smaller communities and those sponsored by cooperative or other nonprofit organizations, to assist in financing the construction and equipment of group practice facilities."
- credit
- The term "credit" means the right granted by a person to a consumer to defer payment of a debt, incur debt and defer its payment, or purchase property or services and defer payment for such purchase.