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12 U.S.C. § 1736 — Equity skimming penalty
Federal law — U.S. Code and appendices · legal_authorities
**(a) In general** Whoever, as an owner, agent, or manager, or who is otherwise in custody, control, or possession of a multifamily project or a 1- to 4-family residence that is security for a mortgage note that is described in subsection (b), willfully uses or authorizes the use of any part of the rents, assets, proceeds, income, or other funds derived from property covered by that mortgage note for any purpose other than to meet reasonable and necessary expenses that include expenses approved by the Secretary if such approval is required, in a period during which the mortgage note is in default or the project is in a nonsurplus cash position, as defined by the regulatory agreement covering the property, or the mortgagor has failed to comply with the provisions of such other form of regulatory control imposed by the Secretary, shall be fined not more than $500,000, imprisoned not more than 5 years, or both.
**(b) Mortgage notes described** For purposes of subsection (a), a mortgage note is described in this subsection if it—
(1) is insured, acquired, or held by the Secretary pursuant to this chapter;
(2) is made pursuant to [section 1701q of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1701q&num=0&edition=prelim) (including property still subject to section 1701q program requirements that existed before November 28, 1990); or
(3) is insured or held pursuant to [section 1715z–22 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715z-22&num=0&edition=prelim), but is not reinsured under [section 1715z–22 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715z-22&num=0&edition=prelim).
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Source file: Laws/federal/codes/united-states-code/title-12/section-1736-equity-skimming-penalty--ab5922483f.md
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Source location: Title 12, Chapter 13, § 1736; chapter-013-national-housing.md
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**(a) In general** Whoever, as an owner, agent, or manager, or who is otherwise in custody, control, or possession of a multifamily project or a 1- to 4-family residence that is security for a mortgage note that is described in subsection (b), willfully uses or authorizes the use of any part of the rents, assets, proceeds, income, or other funds derived from property covered by that mortgage note for any purpose other than to meet reasonable and necessary expenses that include expenses approved by the Secretary if such approval is required, in a period during which the mortgage note is in default or the project is in a nonsurplus cash position, as defined by the regulatory agreement covering the property, or the mortgagor has failed to comply with the provisions of such other form of regulatory control imposed by the Secretary, shall be fined not more than $500,000, imprisoned not more than 5 years, or both.
**(b) Mortgage notes described** For purposes of subsection (a), a mortgage note is described in this subsection if it—
(1) is insured, acquired, or held by the Secretary pursuant to this chapter;
(2) is made pursuant to [section 1701q of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1701q&num=0&edition=prelim) (including property still subject to section 1701q program requirements that existed before November 28, 1990); or
(3) is insured or held pursuant to [section 1715z–22 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715z-22&num=0&edition=prelim), but is not reinsured under [section 1715z–22 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1715z-22&num=0&edition=prelim).
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Federal law — U.S. Code and appendices · legal_authorities
### Statutory Notes
Section, act June 27, 1934, ch. 847, title VIII, § 804, as added Aug. 8, 1949, ch. 403, § 1, 63 Stat. 575; amended Aug. 11, 1955, ch. 783, title IV, § 401, 69 Stat. 650, provided for disposition and use of excess moneys in Armed Services Housing Mortgage Insurance Fund, issue and cancellation of debentures, and receipt and payment of credits and charges.
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 1701q
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Federal law — U.S. Code and appendices · legal_authorities
**(a) Additional authorization; advances during construction** In addition to mortgages insured under [section 1738 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1738&num=0&edition=prelim), the Secretary is authorized to insure mortgages as defined in [section 1736 of this title](https://uscode.house.gov/view.xhtml?req=granuleid:USC-prelim-title12-section1736&num=0&edition=prelim) (including advances on such mortgages during construction) which are eligible for insurance as hereinafter provided.
**(b) Eligibility requirements** To be eligible for insurance under this section a mortgage shall meet the following conditions:
(1) The mortgaged property shall be held by a mortgagor approved by the Secretary. The Secretary may, in his discretion, require such mortgagor to be regulated or restricted as to rents or sales, charges, capital structure, rate of return, and methods of operation. The Secretary may make such contracts with, and acquire for not to exceed $100 stock or interest in any such mortgagor, as the Secretary may deem necessary to render effective such restriction or regulation. Such stock or interest shall be paid for out of the General Insurance Fund, and shall be redeemed by the mortgagor at par upon the termination of all obligations of the Secretary under the insurance.
(2) Preference or priority of opportunity in the occupancy of the mortgaged property for veterans of World War II and their immediate families, and for hardship cases as defined by the Secretary, shall be provided under such regulations and procedures as may be prescribed by the Secretary.
(3) The mortgage shall involve a principal obligation in an amount—
(A) not to exceed $5,000,000; and
(B) not to exceed 90 per centum of the amount wh
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 1701g–4
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Federal law — U.S. Code and appendices · legal_authorities
The Act of May 26, 1942, ch. 319, 56 Stat. 301, may be cited as the “National Housing Act Amendments of 1942”.
Source: Supplied U.S. Code snapshot — release unconfirmed · 12 U.S.C. § 1703
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Federal law — U.S. Code and appendices · legal_authorities
Page 807
TITLE 12—BANKS AND BANKING
§ 1736
a military base or other Federal installation was ter-
minated subsequent to Nov. 1, 1964, as the result of
closing of such base or installation, formerly defined as
an individual who was unemployed, although willing to
work, as the result of the closing of a Federal installa-
tion, and providing in subpar. (B) for dwelling situated
at or near the base or installation and substituting
‘‘payments due under such mortgage’’ for ‘‘payments of
principal and/or interest under such mortgage’’.
Subsec. (b)(1). Pub. L. 89–754 substituted ‘‘payments
due under such mortgage’’ for ‘‘payments of principal
and/or interest under such mortgage’’.
Subsec. (b)(2). Pub. L. 89–754 struck out subpar. (A)
providing for determination that mortgagor is not in
default with respect to any condition or covenant of
the mortgage other than requiring the payment of in-
stallments of principal and/or interest under the mort-
gage and incorporated without subpar. designation pro-
vision for determination that such action is necessary
to avoid foreclosure, formerly providing in subpar. (B)
that such action was the only available means of avoid-
ing foreclosure of such mortgage.
Subsec. (b)(3). Pub. L. 89–754 substituted in introduc-
tory text ‘‘the Federal mortgage agency, the mort-
gagor, and the mortgagee shall enter into a binding
agreement’’ for ‘‘the Federal mortgage agency shall re-
quire such mortgagor to enter into a binding agree-
ment’’, designated existing provisions as subpar. (A),
provided for payment of interest at rate not to exceed
the rate provided in the mortgage, and added subpar.
(B).
Subsec. (b)(4). Pub. L. 89–754 increased the period
from one to two years in subpar. (A), substituted sub-
par. (B) provision for expira
Source: Supplied 2024 U.S. Code historical extraction · 12 U.S.C. § 1736
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