{"identifier":"/us/usc/t12/s1715z\u201318","title":12,"num":"\u00a7\u202f1715z\u201318.","heading":"Shared appreciation mortgages for multifamily housing","text":"\u00a7\u202f1715z\u201318.\nShared appreciation mortgages for multifamily housing\n(a)\nFive or more family units; requirements\nNotwithstanding any provision of this subchapter that is inconsistent with this section, the Secretary may insure, under any provision of this subchapter providing for insurance of mortgages on properties including 5 or more family units, a mortgage secured by a first lien on the property that (1) provides for the mortgagee to share in a predetermined percentage of the property\u2019s net appreciated value; and (2) meets such other conditions, including limitations on the rate of interest which may be charged, as the Secretary may require by regulation.\n(b)\nPayment of mortgagee\u2019s share of net appreciated value; term of mortgage; repayment; \u201cnet appreciated value\u201d defined\nThe mortgagee\u2019s share of a property\u2019s net appreciated value shall be payable upon maturity or upon payment in full of the loan or sale or transfer (as defined by the Secretary) of the property, whichever occurs first. The term of the mortgage shall not be less than 15 years, and shall be repayable in equal monthly installments of principal and fixed interest during the mortgage term in an amount which would be sufficient to retire a debt with the same principal and fixed interest rate over a period not exceeding 30 years. In the case of a mortgage which will not be completely amortized during the mortgage term, the principal obligation of the mortgage may not exceed 85 percent of the estimated value of the property or project. For purposes of this section, the term \u201cnet appreciated value\u201d means the amount by which the sales price of the property (less the mortgagor\u2019s selling costs) exceeds the actual project cost after completion, as approved by the Secretary. If there has been no sale or transfer at the time the mortgagee\u2019s share of net appreciated value becomes payable, the sales price for purposes of this section shall be determined by means of an appraisal conducted in accordance with procedures approved by the Secretary and provided for in the mortgage.\n(c)\nEntitlement of mortgagee upon default\nIn the event of a default, the mortgagee shall be entitled to receive the benefits of insurance in accordance with\nsection 1713 of this title\nsection 1713 of this title\n(d)\nMaximum percentage of net appreciated value; disclosure requirements\nThe Secretary shall establish by regulation the maximum percentage of net appreciated value which may be payable to a mortgagee as the mortgagee\u2019s share. The Secretary shall also establish disclosure requirements applicable to mortgagees making mortgage loans pursuant to this section, to assure that mortgagors are informed of the characteristics of such mortgages.\n(e)\nInapplicability of State constitution, statute, etc., limiting or prohibiting increases in outstanding loan balance\nMortgages 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 authorized 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 outstanding loan balance after execution of the mortgage.\n(f)\nNumber of dwelling units\nThe number of dwelling units included in properties covered by mortgages insured pursuant to this section in any fiscal year may not exceed 5,000.","url":"https://projectusc.org/usc/t12/s1715z\u201318.html","content":[{"t":"sec","id":"/us/usc/t12/s1715z\u201318","children":[{"t":"num","text":"\u00a7\u202f1715z\u201318."},{"t":"heading","text":"Shared appreciation mortgages for multifamily housing"},{"t":"subsec","id":"/us/usc/t12/s1715z\u201318/a","children":[{"t":"num","text":"(a)"},{"t":"heading","text":"Five or more family units; requirements"},{"t":"content","children":[{"t":"p","text":"Notwithstanding any provision of this subchapter that is inconsistent with this section, the Secretary may insure, under any provision of this subchapter providing for insurance of mortgages on properties including 5 or more family units, a mortgage secured by a first lien on the property that (1) provides for the mortgagee to share in a predetermined percentage of the property\u2019s net appreciated value; and (2) meets such other conditions, including limitations on the rate of interest which may be charged, as the Secretary may require by regulation.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t12/s1715z\u201318/b","children":[{"t":"num","text":"(b)"},{"t":"heading","text":"Payment of mortgagee\u2019s share of net appreciated value; term of mortgage; repayment; \u201cnet appreciated value\u201d defined"},{"t":"content","children":[{"t":"p","text":"The mortgagee\u2019s share of a property\u2019s net appreciated value shall be payable upon maturity or upon payment in full of the loan or sale or transfer (as defined by the Secretary) of the property, whichever occurs first. The term of the mortgage shall not be less than 15 years, and shall be repayable in equal monthly installments of principal and fixed interest during the mortgage term in an amount which would be sufficient to retire a debt with the same principal and fixed interest rate over a period not exceeding 30 years. In the case of a mortgage which will not be completely amortized during the mortgage term, the principal obligation of the mortgage may not exceed 85 percent of the estimated value of the property or project. For purposes of this section, the term \u201cnet appreciated value\u201d means the amount by which the sales price of the property (less the mortgagor\u2019s selling costs) exceeds the actual project cost after completion, as approved by the Secretary. If there has been no sale or transfer at the time the mortgagee\u2019s share of net appreciated value becomes payable, the sales price for purposes of this section shall be determined by means of an appraisal conducted in accordance with procedures approved by the Secretary and provided for in the mortgage.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t12/s1715z\u201318/c","children":[{"t":"num","text":"(c)"},{"t":"heading","text":"Entitlement of mortgagee upon default"},{"t":"content","children":[{"t":"p","text":"In the event of a default, the mortgagee shall be entitled to receive the benefits of insurance in accordance with ","children":[{"t":"ref","text":"section 1713 of this title","href":"/us/usc/t12/s1713","tail":", but such insurance benefits shall not include the mortgagee\u2019s share of net appreciated value. The term \u201coriginal principal face amount of the mortgage\u201d as used in "},{"t":"ref","text":"section 1713 of this title","href":"/us/usc/t12/s1713","tail":" shall not include the mortgagee\u2019s share of net appreciated value."}],"tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t12/s1715z\u201318/d","children":[{"t":"num","text":"(d)"},{"t":"heading","text":"Maximum percentage of net appreciated value; disclosure requirements"},{"t":"content","children":[{"t":"p","text":"The Secretary shall establish by regulation the maximum percentage of net appreciated value which may be payable to a mortgagee as the mortgagee\u2019s share. The Secretary shall also establish disclosure requirements applicable to mortgagees making mortgage loans pursuant to this section, to assure that mortgagors are informed of the characteristics of such mortgages.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t12/s1715z\u201318/e","children":[{"t":"num","text":"(e)"},{"t":"heading","text":"Inapplicability of State constitution, statute, etc., limiting or prohibiting increases in outstanding loan balance"},{"t":"content","children":[{"t":"p","text":"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 authorized 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 outstanding loan balance after execution of the mortgage.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"subsec","id":"/us/usc/t12/s1715z\u201318/f","children":[{"t":"num","text":"(f)"},{"t":"heading","text":"Number of dwelling units"},{"t":"content","children":[{"t":"p","text":"The number of dwelling units included in properties covered by mortgages insured pursuant to this section in any fiscal year may not exceed 5,000.","tail":"\n"}],"tail":"\n"}],"tail":"\n"},{"t":"text","text":"\n"},{"t":"text","text":"\n"}]}]}