12 U.S.C. § 1715w — Mortgage insurance for nursing homes,

Page 643 TITLE 12—BANKS AND BANKING § 1715w 1 So in original. The word ‘‘a’’ probably should not appear. and $19,250 per family unit with four or more bed- rooms’’ for ‘‘and $17,000 per family unit with three or more bedrooms’’ and ‘‘$20,000 per family unit with three bedrooms, and $22,750 per family unit with four or more bedrooms’’ for ‘‘and $20,000 per family unit with three or more bedrooms’’. Subsec. (c)(4). Pub. L. 89–117, § 1108(l)(1), substituted ‘‘General Insurance Fund’’ for ‘‘section 207 Housing In- surance Fund’’. Subsec. (e). Pub. L. 89–117, § 1108(l)(2), struck out ref- erences to subsecs. (f), (m) and (p) of section 1713 of this title. 1964—Subsec. (c)(2). Pub. L. 88–560, § 107(e), changed limits on mortgages for property or project attrib- utable to dwelling use from ‘‘$2,250 per room (or $9,000 per family unit if the number of rooms in such property or project is less than four per family unit)’’ to ‘‘$8,000 per family unit without a bedroom, $11,250 per family unit with one bedroom, $13,500 per family unit with two bedrooms, and $17,000 per family unit with three or more bedrooms’’, changed such mortgage limits on project consisting of elevator-type structures from a sum ‘‘of $2,250 per room to not to exceed $2,750 per room, and the dollar amount limitation of $9,000 per family unit to not to exceed $9,400 per family unit’’ to dollar amount limitations ‘‘per family unit to not to exceed $9,500 per family unit without a bedroom, $13,500 per family unit with one bedroom, $16,000 per family unit with two bedrooms, and $20,000 per family unit with three or more bedrooms’’, and substituted provi- sions authorizing an increase ‘‘by not to exceed 45 per centum’’ of any of such limits because of cost levels for former provision authorizing such increase ‘‘by not to exceed $1,250 per room, without regard to the number of rooms being less than four, or four or more’’. Subsec. (f). Pub. L. 88–560, § 203(c), added subsec. (f). 1961—Subsec. (c)(2). Pub. L. 87–70 increased the max- imum amount of mortgages from not more than $9,000 per dwelling unit for such part of such property or project as may be attributable to dwelling use to not more than $2,250 per room (or $9,000 per family unit if the number of rooms in such property or project is less than four per family unit) for such part of such prop- erty or project as may be attributable to dwelling use (excluding exterior land improvements), and permitted an increase of from $2,250 per room to not more than $2,750 per room to compensate for the higher costs inci- dent to the construction of elevator-type structures. 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. REPEALS The directory language of, but not the amendment made by, Pub. L. 90–301, § 3(d), May 7, 1968, 82 Stat. 114, cited as a credit to this section, was repealed by Pub. L. 98–181, title I [title IV, § 404(a)], Nov. 30, 1983, 97 Stat. 1208. LIMITATION ON NUMBER OF DWELLING UNITS WITH MORTGAGES NOT PROVIDING FOR COMPLETE AMORTI- ZATION For limitation on the number of dwelling units with mortgages not providing for complete amortization pursuant to authority granted by amendment to sub- sec. (c)(5) by section 446 of Pub. L. 98–181, see section 446(f) of Pub. L. 98–181, set out as a note under section 1713 of this title. AMENDMENTS TO PROVISIONS FOR FAMILY UNIT LIMITS ON RENTAL HOUSING; EQUITABLE APPLICATION OF SUCH AMENDMENTS OR PRE-AMENDMENT PROVISIONS TO PROJECTS SUBMITTED FOR CONSIDERATION PRIOR TO SEPTEMBER 2, 1964 Equitable application of amendment to subsec. (c)(2) of this section by section 107(e) of Pub. L. 88–560 or pre- amendment provisions to projects submitted for con- sideration prior to Sept. 2, 1964, see section 107(g) of Pub. L. 88–560, set out as a note under section 1713 of this title. § 1715w. Mortgage insurance for nursing homes, intermediate care facilities, and board and care homes (a) Purpose The purpose of this section is to assist in the provision of facilities for any of the following purposes or for a combination of such purposes: (1) The development of nursing homes for the care and treatment of convalescents and other persons who are not acutely ill and do not need hospital care but who require skilled nursing care and related medical services, in- cluding additional facilities for the non- resident care of elderly individuals and others who are able to live independently but who re- quire care during the day. (2) The development of intermediate care fa- cilities and board and care homes for the care of persons who, while not in need of nursing home care and treatment, nevertheless are un- able to live fully independently and who are in need of minimum but continuous care pro- vided by licensed or trained personnel, includ- ing additional facilities for the nonresident care of elderly individuals and others who are able to live independently but who require care during the day. (3) The development of assisted living facili- ties for the care of frail elderly persons. (b) Definitions For the purposes of this section— (1) the term ‘‘nursing home’’ means a public facility, proprietary facility or facility of a private nonprofit corporation or association, licensed or regulated by the State (or, if there is no State law providing for such licensing and regulation by the State, by the munici- pality or other political subdivision in which the facility is located), for the accommodation of convalescents or other persons who are not acutely ill and not in need of hospital care but who require skilled nursing care and related medical services, in which such nursing care and medical services are prescribed by, or are performed under the general direction of, per- sons licensed to provide such care or services in accordance with the laws of the State where the facility is located; (2) the term ‘‘intermediate care facility’’ means a proprietary facility or facility of a private nonprofit corporation or association licensed or regulated by the State (or, if there is no State law providing for such licensing and regulation by the State, by the munici- pality or other political subdivision in which the facility is located) for the accommodation of persons who, because of incapacitating in- firmities, require minimum but continuous care but are not in need of continuous medical or nursing services; (3) the term a 1 ‘‘nursing home’’ or ‘‘inter- mediate care facility’’ may include such addi- tional facilities as may be authorized by the Page 644 TITLE 12—BANKS AND BANKING § 1715w 2 So in original. 3 See References in Text note below. Secretary for the nonresident care of elderly individuals and others who are able to live independently but who require care during the day; (4) the term ‘‘mortgage’’ means a first mort- gage on real estate in fee simple, or on the in- terest of either the lessor or lessee thereof (A) under a lease for not less than ninety-nine years which is renewable, or (B) under a lease having a period of not less than ten years to run beyond the maturity date of the mortgage. The term ‘‘first mortgage’’ means such classes of first liens as are commonly given to secure advances (including but not limited to ad- vances during construction) on, or the unpaid purchase price of, real estate under the laws of the State in which the real estate is located, together with the credit instrument or instru- ments, if any, secured thereby, and any mort- gage may be in the form of one or more trust mortgages or mortgage indentures or deeds of trust, securing notes, bonds, or other credit in- struments, and, by the same instrument or by a separate instrument, may create a security interest in initial equipment, whether or not attached to the realty. The term ‘‘mortgagor’’ shall have the meaning set forth in section 1713(a) of this title; (5) the term ‘‘board and care home’’ means any residential facility providing room, board, and continuous protective oversight that is regulated by a State pursuant to the provi- sions of section 1616(e) of the Social Security Act [42 U.S.C. 1382e(e)], so long as the home is located in a State that, at the time of an ap- plication is made for insurance under this sec- tion, has demonstrated to the Secretary that it is in compliance with the provisions of such section 1616(e); (6) the term ‘‘assisted living facility’’ means a public facility, proprietary facility, or facil- ity of a private nonprofit corporation that— (A) is licensed and regulated by the State (or if there is no State law providing for such licensing and regulation by the State, by the municipality or other political sub- division in which the facility is located); (B) makes available to residents sup- portive services to assist the residents in carrying out activities of daily living, such as bathing, dressing, eating, getting in and out of bed or chairs, walking, going out- doors, using the toilet, laundry, home man- agement, preparing meals, shopping for per- sonal items, obtaining and taking medica- tion, managing money, using the telephone, or performing light or heavy housework, and which may make available to residents home health care services, such as nursing and therapy; and (C) provides separate dwelling units for residents, each of which may contain a full kitchen and bathroom, and which includes common rooms and other facilities appro- priate for the provision of supportive serv- ices to the residents of the facility; and (7) the term ‘‘frail elderly person’’ has the meaning given the term in section 8011(k) of title 42. (c) Authorization The Secretary is authorized to insure any mortgage (including advances on such mortgage during construction) in accordance with the pro- visions of this section upon such terms and con- ditions as he may prescribe and to make com- mitments for insurance of such mortgage prior to the date of its execution or disbursement thereon. (d) Terms and conditions; limitation on max- imum amount of mortgage; amortization; in- terest; certification from State agency In order to carry out the purposes of this sec- tion, the Secretary is authorized to insure any mortgage which covers a new or rehabilitated nursing home,,2 assisted living facility, or inter- mediate care facility, including a new addition to an existing nursing home, assisted living fa- cility, or intermediate care facility and regard- less of whether the existing home or facility is being rehabilitated, or any combination of nurs- ing home, assisted living facility, and inter- mediate care facility or a board and care home, including equipment to be used in its operation, subject to the following conditions: (1) The mortgage shall be executed by a mortgagor approved by the Secretary. The Secretary may in his discretion require any such mortgagor to be regulated or restricted as to charges and methods of financing, and, in addition thereto, if the mortgagor is a cor- porate entity, as to capital structure and rate of return. As an aid to the regulation or re- striction of any mortgagor with respect to any of the foregoing matters, the Secretary may make such contracts with and acquire for not to exceed $100 such stock or interest in such mortgagor as he may deem necessary. Any stock or interest so purchased 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) The mortgage shall involve a principal obligation in an amount not to exceed 90 per centum of the estimated value of the property or project, or 95 percent of the estimated value of the property or project in the case of a mortgagor that is a private nonprofit corpora- tion or association (under the meaning given such term for purposes of section 1715l(d)(3) of this title), including— (A) equipment to be used in the operation of the home or facility or combined home and facility when the proposed improve- ments are completed and the equipment is installed; or (B) a solar energy system (as defined in subparagraph (3) of the last paragraph of sec- tion 1703(a) of this title) or residential en- ergy conservation measures (as defined in section 8211(11)(A) through (G) and (I) of title 42) 3 in cases where the Secretary deter- mines 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. (3) The mortgage shall— Page 645 TITLE 12—BANKS AND BANKING § 1715w 4 So in original. The ‘‘; and’’ probably should be a period. (A) provide for complete amortization by periodic payments within such terms as the Secretary shall prescribe; and (B) bear interest at such rate as may be agreed upon by the mortgagor and the mort- gagee. The Secretary shall not promulgate regula- tions or establish terms or conditions that interfere with the ability of the mortgagor and mortgagee to determine the interest rate; and 4 (4)(A) With respect to nursing homes and in- termediate care facilities and combined nurs- ing home and intermediate care facilities, the Secretary shall not insure any mortgage under this section unless he has received, from the State agency designated in accordance with section 604(a)(1) or section 1521 3 of the Public Health Service Act [42 U.S.C. 291d (a)(1), 300m] for the State in which is located the nursing home or intermediate care facility or com- bined nursing home and intermediate care fa- cility covered by the mortgage, a certification that (i) there is a need for such home or facil- ity or combined home and facility, and (ii) there are in force in such State or in the mu- nicipality or other political subdivision of the State in which the proposed home or facility or combined home and facility is to be located reasonable minimum standards of licensure and methods of operation governing it. No such mortgage shall be insured under this sec- tion unless the Secretary has received such as- surance as he may deem satisfactory from the State agency that such standards will be ap- plied and enforced with respect to any home or facility or combined home and facility located in the State for which mortgage insurance is provided under this section. If no such State agency exists, or if the State agency exists but is not empowered to provide a certification that there is a need for the home or facility or combined home and facility as required in clause (i) of the first sentence, the Secretary shall not insure any mortgage under this sec- tion unless (i) the State in which the home or facility or combined home and facility is lo- cated has conducted or commissioned and paid for the preparation of an independent study of market need and feasibility that (I) is pre- pared in accordance with the principles estab- lished by the American Institute of Certified Public Accountants; (II) assesses, on a marketwide basis, the impact of the proposed home or facility or combined home and facil- ity on, and its relationship to, other health care facilities and services, the percentage of excess beds, demographic projections, alter- native health care delivery systems, and the reimbursement structure of the home, facility, or combined home and facility; (III) is ad- dressed to and is acceptable to the Secretary in form and substance; and (IV) in the event the State does not prepare the study, is pre- pared by a financial consultant who is selected by the State or the applicant for mortgage in- surance and is approved by the Secretary; and (ii) the State complies with the other provi- sions of this subparagraph that would other- wise be required to be met by a State agency designated in accordance with section 604(a)(1) or section 1521 3 of the Public Health Service Act. The proposed mortgagor may reimburse the State for the cost of the independent feasi- bility study required in the preceding sen- tence. In the case of a small intermediate care facility for the mentally retarded or develop- mentally disabled, or a board and care home housing less than 10 individuals, the State pro- gram agency or agencies responsible for li- censing, certifying, financing, or monitoring the facility or home may, in lieu of the re- quirements of clause (i) of the third sentence, provide the Secretary with written support identifying the need for the facility or home. (B) With respect to board and care homes, the Secretary shall not insure any mortgage under this section unless he has received from the appropriate State licensing agency a statement verifying that the State in which the home is or is to be located is in compli- ance with the provisions of section 1616(e) of the Social Security Act [42 U.S.C. 1382e(e)]. (C) With respect to assisted living facilities or any such facility combined with any other home or facility, the Secretary shall not in- sure any mortgage under this section unless— (i) the Secretary determines that the level of financing acquired by the mortgagor and any other resources available for the facility will be sufficient to ensure that the facility contains dwelling units and facilities for the provision of supportive services in accord- ance with subsection (b)(6); (ii) the mortgagor provides assurances sat- isfactory to the Secretary that each dwell- ing unit in the facility will not be occupied by more than 1 person without the consent of all such occupants; and (iii) the appropriate State licensing agency for the State, municipality, or other polit- ical subdivision in which the facility is or is to be located provides such assurances as the Secretary considers necessary that the facil- ity will comply with any applicable stand- ards and requirements for such facilities. (e) Release of part of mortgaged property or project from lien The Secretary may consent to the release of a part or parts of the mortgaged property or proj- ect from the lien of any mortgage insured under this section upon such terms and conditions as he may prescribe. (f) Applicability of other laws The provisions of subsections (d), (e), (g), (h), (i), (j), (k), (l), and (n) of section 1713 of this title shall apply to mortgages insured under this sec- tion and all references therein to section 1713 of this title shall refer to this section. (g) Regulations covering intermediate care facili- ties; consultations The Secretary shall prescribe such regulations as may be necessary to carry out the provisions of this section relating to intermediate care fa- cilities, after consulting with the Secretary of Health and Human Services with respect to any health or medical aspects of the program which may be involved in such regulations. Page 646 TITLE 12—BANKS AND BANKING § 1715w (h) Consultations concerning need for and avail- ability of intermediate care facilities The Secretary shall also consult with the Sec- retary of Health and Human Services as to the need for and the availability of intermediate care facilities in any area for which an inter- mediate care facility is proposed under this sec- tion. (i) Fire safety equipment for nursing homes, as- sisted living facilities, intermediate care fa- cilities, or board and care homes (1) The Secretary is authorized upon such terms and conditions as he may prescribe to make commitments to insure and to insure loans made by financial institutions or other ap- proved mortgagees to nursing homes, assisted living facilities, and intermediate care facilities or to board and care homes to provide for the purchase and installation of fire safety equip- ment necessary for compliance with the 1967 edi- tion of the Life Safety Code of the National Fire Protection Association (or any subsequent edi- tion specified by the Secretary of Health and Human Services) or other such codes or require- ments approved by the Secretary of Health and Human Services as conditions of participation for providers of services under title XVIII and title XIX of the Social Security Act [42 U.S.C. 1395 et seq., 1396 et seq.] or as mandated by a State under the provisions of section 1616(e) of such Act [42 U.S.C. 1382e(e)]. (2) To be eligible for insurance under this sub- section a loan shall— (A) not exceed the Secretary’s estimate of the reasonable cost of the equipment fully in- stalled; (B) bear interest at such rate as may be agreed upon by the mortgagor and the mort- gagee; (C) have a maturity satisfactory to the Sec- retary; (D) be made by a financial institution or other mortgagee approved by the Secretary as eligible for insurance under section 1703 of this title or a mortgagee approved under section 1709(b)(1) of this title; (E) comply with other such terms, condi- tions, and restrictions as the Secretary may prescribe; and (F) in the case of board and care homes, be made with respect to such a home located in a State with respect to which the Secretary has received from the appropriate State licensing agency a statement verifying that the State in which the home is or is to be located is in compliance with the provisions of section 1616(e) of the Social Security Act [42 U.S.C. 1382e(e)]. (3) The provisions of paragraphs (5), (6), (7), (9), and (10) of section 1715k(h) of this title shall be applicable to loans insured under this sub- section, except that all references to ‘‘home im- provement loans’’ shall be construed to refer to loans under this subsection. (4) The provisions of subsections (c), (d), and (h) of section 1703 of this title shall apply to loans insured under this subsection, and for the purpose of this subsection references in such subsections to ‘‘this section’’ or ‘‘this title’’ shall be construed to refer to this subsection. (j) Schedules and deadlines for processing and approval of applications The Secretary shall establish schedules and deadlines for the processing and approval (or provision of notice of disapproval) of applica- tions for mortgage insurance under this section. The Secretary shall submit a report to the Con- gress annually describing such schedules and deadlines and the extent of compliance by the Department with the schedules and deadlines during the year. (June 27, 1934, ch. 847, title II, § 232, as added Pub. L. 86–372, title I, § 115, Sept. 23, 1959, 73 Stat. 663; amended Pub. L. 87–70, title VI, § 610, June 30, 1961, 75 Stat. 180; Pub. L. 88–560, title I, § 117, Sept. 2, 1964, 78 Stat. 779; Pub. L. 89–117, title XI, § 1108(m), Aug. 10, 1965, 79 Stat. 505; Pub. L. 90–19, § 1(a)(3), May 25, 1967, 81 Stat. 17; Pub. L. 90–448, title III, § 314, Aug. 1, 1968, 82 Stat. 511; Pub. L. 91–152, title I, § 111, Dec. 24, 1969, 83 Stat. 382; Pub. L. 93–204, Dec. 28, 1973, 87 Stat. 883; Pub. L. 93–383, title III, § 304(g), Aug. 22, 1974, 88 Stat. 678; Pub. L. 95–128, title III, § 308(a), Oct. 12, 1977, 91 Stat. 1135; Pub. L. 95–557, title III, § 312, Oct. 31, 1978, 92 Stat. 2099; Pub. L. 96–399, title III, § 310(f), Oct. 8, 1980, 94 Stat. 1643; Pub. L. 98–181, title I [title IV, §§ 404(b)(10), 437], Nov. 30, 1983, 97 Stat. 1209, 1222, 1223; Pub. L. 98–479, title I, § 104(a)(1), Oct. 17, 1984, 98 Stat. 2224; Pub. L. 100–242, title IV, §§ 410(a), (b), 429(e), Feb. 5, 1988, 101 Stat. 1904, 1918; Pub. L. 102–550, title V, § 511(a)–(e), Oct. 28, 1992, 106 Stat. 3784–3786; Pub. L. 105–65, title II, § 216, Oct. 27, 1997, 111 Stat. 1367; Pub. L. 105–276, title II, § 214(a), Oct. 21, 1998, 112 Stat. 2486.) Editorial Notes REFERENCES IN TEXT The General Insurance Fund, referred to in subsec. (d)(1), was established by section 1735c of this title. Section 8211 of title 42, referred to in subsec. (d)(2)(B), was omitted from the Code pursuant to section 8229 of Title 42, The Public Health and Welfare, which termi- nated authority under that section on June 30, 1989. Section 1521 of the Public Health Service Act, re- ferred to in subsec. (d)(4)(A), is section 1521 of act July 1, 1944, which was classified to section 300m of Title 42, The Public Health and Welfare, prior to repeal, effec- tive Jan. 1, 1987, by Pub. L. 99–660, title VII, § 701(a), Nov. 14, 1986, 100 Stat. 3799. The Social Security Act, referred to in subsec. (i)(1), is act Aug. 13, 1935, ch. 531, 49 Stat. 620. Titles XVIII and XIX of the Act are classified generally to subchapters XVIII (§ 1395 et seq.) and XIX (§ 1396 et seq.) of chapter 7 of Title 42, The Public Health and Welfare. For com- plete classification of this Act to the Code, see section 1305 of Title 42 and Tables. AMENDMENTS 1998—Subsec. (b)(4)(B). Pub. L. 105–276 made technical correction to directory language of Pub. L. 105–65. See 1997 Amendment note below. 1997—Subsec. (b)(4)(B). Pub. L. 105–65, as amended by Pub. L. 105–276, substituted ‘‘ten years to run beyond the maturity date of the mortgage’’ for ‘‘fifty years to run from the date the mortgage was executed’’. 1992—Subsec. (a). Pub. L. 102–550, § 511(a)(1), sub- stituted ‘‘any’’ for ‘‘either’’ in introductory provisions. Subsec. (a)(3). Pub. L. 102–550, § 511(a)(2), added par. (3). Subsec. (b)(6), (7). Pub. L. 102–550, § 511(b), added pars. (6) and (7). Subsec. (d). Pub. L. 102–550, § 511(c)(1), in introductory provisions, inserted ‘‘, assisted living facility,’’ after Page 647 TITLE 12—BANKS AND BANKING § 1715w ‘‘rehabilitated nursing home,’’, substituted ‘‘any com- bination of nursing home, assisted living facility, and intermediate care facility’’ for ‘‘combined nursing home and intermediate care facility’’, and inserted ‘‘, including a new addition to an existing nursing home, assisted living facility, or intermediate care fa- cility and regardless of whether the existing home or facility is being rehabilitated,’’ after first reference to ‘‘intermediate care facility’’. Subsec. (d)(2). Pub. L. 102–550, § 511(c)(2), inserted ‘‘or 95 percent of the estimated value of the property or project in the case of a mortgagor that is a private non- profit corporation or association (under the meaning given such term for purposes of section 1715l(d)(3) of this title),’’ before ‘‘including’’ in introductory provi- sions. Subsec. (d)(3). Pub. L. 102–550, § 511(c)(3), inserted con- cluding provisions. Subsec. (d)(4)(C). Pub. L. 102–550, § 511(c)(4), added sub- par. (C). Subsec. (i)(1). Pub. L. 102–550, § 511(d), inserted ‘‘, assisted living facilities,’’ after ‘‘nursing homes’’. Subsec. (j). Pub. L. 102–550, § 511(e), added subsec. (j). 1988—Subsec. (b)(1). Pub. L. 100–242, § 410(a), inserted ‘‘public facility,’’ before ‘‘proprietary’’. Subsec. (b)(3) to (5). Pub. L. 100–242, § 429(e)(1), in- dented as par. (3) former run-in cl. (3) defining ‘‘nursing home’’ and ‘‘intermediate care facility’’, inserted ‘‘the term’’, and struck out ‘‘and’’ after semicolon at end, re- designated as par. (4) former par. (3) defining ‘‘mort- gage’’, and redesignated as par. (5) former par. (4). Subsec. (d)(4)(A). Pub. L. 100–242, § 410(b), inserted ‘‘If no such State agency exists, or if the State agency ex- ists but is not empowered to provide a certification that there is a need for the home or facility or com- bined home and facility as required in clause (i) of the first sentence, the Secretary shall not insure any mort- gage under this section unless (i) the State in which the home or facility or combined home and facility is located has conducted or commissioned and paid for the preparation of an independent study of market need and feasibility that (I) is prepared in accordance with the principles established by the American Institute of Certified Public Accountants; (II) assesses, on a marketwide basis, the impact of the proposed home or facility or combined home and facility on, and its rela- tionship to, other health care facilities and services, the percentage of excess beds, demographic projections, alternative health care delivery systems, and the reim- bursement structure of the home, facility, or combined home and facility; (III) is addressed to and is accept- able to the Secretary in form and substance; and (IV) in the event the State does not prepare the study, is prepared by a financial consultant who is selected by the State or the applicant for mortgage insurance and is approved by the Secretary; and (ii) the State com- plies with the other provisions of this subparagraph that would otherwise be required to be met by a State agency designated in accordance with section 291d(a)(1) or section 300m of title 42. The proposed mortgagor may reimburse the State for the cost of the inde- pendent feasibility study required in the preceding sen- tence. In the case of a small intermediate care facility for the mentally retarded or developmentally disabled, or a board and care home housing less than 10 individ- uals, the State program agency or agencies responsible for licensing, certifying, financing, or monitoring the facility or home may, in lieu of the requirements of clause (i) of the third sentence, provide the Secretary with written support identifying the need for the facil- ity or home.’’ Subsec. (i)(2)(B). Pub. L. 100–242, § 429(e)(2), amended subpar. (B) generally. Prior to amendment, subpar. (B) read as follows: ‘‘bear interest at not to exceed a rate determined by the Secretary to be necessary to meet the loan market’’. 1984—Pub. L. 98–479 inserted reference to board and care homes in section catchline. 1983—Subsec. (a)(2). Pub. L. 98–181, § 437(a), inserted ‘‘and board and care homes’’ after ‘‘intermediate care facilities’’. Subsec. (b)(4). Pub. L. 98–181, § 437(b), added par. (4). Subsec. (d). Pub. L. 98–181, § 437(c)(1), in provisions preceding par. (1) inserted ‘‘or a board and care home’’ after ‘‘and intermediate care facility,’’. Subsec. (d)(3)(B). Pub. L. 98–181, § 404(b)(10), sub- stituted provision that the interest rate be at such a rate as agreed upon by the mortgagor and the mort- gagee for provision that the interest rate, exclusive of premium charges for insurance, not exceed 5 per cen- tum per annum on the amount of the principal obliga- tion outstanding at any time, or not exceed such per centum per annum not in excess of 6 per centum as the Secretary finds necessary to meet the mortgage mar- ket. Subsec. (d)(4). Pub. L. 98–181, § 437(c)(2), designated ex- isting provision as subpar. (A), substituted ‘‘With re- spect to nursing homes and intermediate care facilities and combined nursing home and intermediate care fa- cilities, the’’ for ‘‘The’’ and ‘‘(i)’’ and ‘‘(ii)’’ for ‘‘(A)’’ and ‘‘(B)’’, respectively, and added subpar. (B). Subsecs. (g), (h). Pub. L. 98–181, § 437(d), (e), sub- stituted ‘‘Health and Human Services’’ for ‘‘Health, Education, and Welfare’’. Subsec. (i)(1). Pub. L. 98–181, § 437(f)(1), inserted ‘‘or to board and care homes’’ after ‘‘intermediate care facili- ties’’, ‘‘(or any subsequent edition specified by the Sec- retary of Health and Human Services)’’ after ‘‘Associa- tion’’, and ‘‘or as mandated by a State under provisions of section 1616(e) of such Act’’ after ‘‘Social Security Act’’, and substituted ‘‘Health and Human Services’’ for ‘‘Health, Education, and Welfare’’. Subsec. (i)(2)(F). Pub. L. 98–181, § 437(f)(2), added sub- par. (F). 1980—Subsec. (d)(2). Pub. L. 96–399 revised existing provisions into introductory paragraph and subpar. (A) and added subpar. (B). 1978—Subsec. (a). Pub. L. 95–557, § 312(a), inserted ‘‘, including additional facilities for the nonresident care of elderly individuals and others who are able to live independently but who require care during the day’’ after pars. (1) and (2). Subsec. (b)(2). Pub. L. 95–557, § 312(b), inserted ‘‘(3) a ‘nursing home’ or ‘intermediate care facility’ may in- clude such additional facilities as may be authorized by the Secretary for the nonresident care of elderly indi- viduals and others who are able to live independently but who require care during the day’’. 1977—Subsec. (d)(4). Pub. L. 95–128 inserted reference to section 300m of title 42. 1974—Subsec. (d)(2). Pub. L. 93–383 struck out ‘‘not to exceed $12,500,000, and’’ after ‘‘an amount’’. 1973—Subsec. (i). Pub. L. 93–204 added subsec. (i). 1969—Subsec. (a). Pub. L. 91–152, § 111(1), added to stat- ed purpose of this section of developing nursing homes, the development of intermediate care facilities or the development of such facilities in combination with nursing home facilities. Subsec. (b). Pub. L. 91–152, § 111(2), (3), struck out ‘‘and’’ after ‘‘is located;’’ in par. (1), redesignated par. (2) as (3), and added par. (2). Subsec. (d). Pub. L. 91–152, § 111(4), inserted provision authorizing the Secretary to insure any mortgage which covers an intermediate care facility or combined nursing home and intermediate care facility. Subsec. (d)(2). Pub. L. 91–152, § 111(5), substituted ‘‘op- eration of the home or facility or combined home or fa- cility’’ for ‘‘operation of the nursing home’’. Subsec. (d)(4). Pub. L. 91–152, § 111(6), substituted ‘‘section 291d(a)(1) of title 42’’ for ‘‘section 291b(a)(1) of title 42’’, and made provisions applicable to the insur- ance of mortgages covering intermediate care facilities or combined nursing home and intermediate care facili- ties. Subsecs. (g), (h). Pub. L. 91–152, § 111(7), added subsecs. (g) and (h). 1968—Subsec. (b)(2). Pub. L. 90–448, § 314(1), redefined term ‘‘mortgage’’ to mean a first mortgage on real es- tate in fee simple, or on the interest of either the lessor or lessee thereof under a lease for not less than ninety- nine years which is renewable, or under a lease having Page 648 TITLE 12—BANKS AND BANKING § 1715x a period of not less than fifty years to run from the date the mortgage was executed, and inserted defini- tion of ‘‘first mortgage’’. Subsec. (d). Pub. L. 90–448, § 314(2), (3), authorized the Secretary to insure a mortgage which includes equip- ment to be used in the operation of a nursing home, and permitted the value of the equipment to be in- cluded in the calculation of the 90 per centum of the es- timated value. 1967—Pub. L. 90–19 substituted ‘‘Secretary’’ for ‘‘Com- missioner’’ wherever appearing. 1965—Subsec. (d)(1). Pub. L. 89–117, § 1108(m)(1), sub- stituted ‘‘General Insurance Fund’’ for ‘‘section 207 Housing Insurance Fund’’. Subsec. (f). Pub. L. 89–117, § 1108(m)(2), struck out ref- erences to subsecs. (f), (m) and (p) of section 1713 of this title. 1964—Subsec. (b)(1). Pub. L. 88–560 inserted ‘‘or facil- ity of a private nonprofit corporation or association’’ after ‘‘proprietary facility’’. 1961—Subsec. (d)(2). Pub. L. 87–70 substituted ‘‘90 per centum’’ for ‘‘75 per centum’’. Statutory Notes and Related Subsidiaries EFFECTIVE DATE OF 1998 AMENDMENT Pub. L. 105–276, title II, § 214(b), Oct. 21, 1998, 112 Stat. 2486, provided that: ‘‘The amendment made by sub- section (a) [amending this section] shall be construed to have taken effect on October 27, 1997.’’ REGULATIONS Pub. L. 100–242, title IV, § 410(c), Feb. 5, 1988, 101 Stat. 1904, provided that: ‘‘The Secretary of Housing and Urban Development shall issue such regulations as may be necessary to carry out the amendments made by this section [amending this section] by not later than the expiration of the 90-day period following the date of the enactment of this Act [Feb. 5, 1988].’’ TERMINATION OF REPORTING REQUIREMENTS For termination, effective May 15, 2000, of reporting provisions in subsec. (j) of this section, see section 3003 of Pub. L. 104–66, as amended, set out as a note under section 1113 of Title 31, Money and Finance, and page 105 of House Document No. 103–7. DELEGATION OF PROCESSING OF MORTGAGE INSURANCE Secretary of Housing and Urban Development to im- plement system of mortgage insurance for mortgages insured under this section that delegates processing functions to selected approved mortgagees, with Sec- retary to retain authority to approve rents, expenses, property appraisals, and mortgage amounts and to exe- cute firm commitments, see section 328 of Pub. L. 101–625, set out as a note under section 1713 of this title. § 1715x. Experimental housing insurance (a) Purpose; authorization (1) In order to assist in lowering housing costs and improving housing standards, quality, liv- ability, or durability or neighborhood design through the utilization of advanced housing technology, or experimental property standards, the Secretary is authorized to insure and to make commitments to insure, under this sec- tion, mortgages (including home improvement loans, and including advances on mortgages dur- ing construction) secured by properties includ- ing dwellings involving the utilization and test- ing of advanced technology in housing design, materials, or construction, or experimental property standards for neighborhood design if the Secretary determines that (A) the property is an acceptable risk, giving consideration to the need for testing advanced housing tech- nology or experimental property standards, (B) the utilization and testing of the advanced tech- nology or experimental property standards in- volved will provide data or experience which the Secretary deems to be significant in reducing housing costs or improving housing standards, quality, livability, or durability, or improving neighborhood design, and (C) the mortgages are eligible for insurance under the provisions of this section and under any further terms and conditions which may be prescribed by the Sec- retary to establish the acceptability of the mortgages for insurance. (2) The Secretary is further authorized to in- sure and to make commitments to insure, under this section, mortgages (including advances on mortgages during construction) secured by prop- erties in projects to be carried out in accordance with plans approved by the Secretary under sec- tion 1701z of this title. (b) Eligibility for insurance; conditions; limits To be eligible for insurance under this section, a mortgage shall meet the requirements of one of the other sections or subchapters of this chap- ter; except that, in lieu of determining the ap- praised value or the replacement cost of the property in cases involving new construction or the estimated cost of repair and rehabilitation or improvement in cases involving existing properties, the Secretary shall estimate the cost of replacing the property using comparable con- ventional design, materials, and construction, and any limitation upon the maximum mort- gage amount available to a nonoccupant owner shall not, in the discretion of the Secretary, be applicable to mortgages insured under this sec- tion. (c) Contracts, agreements, and financial under- takings with mortgagor The Secretary may enter into such contracts, agreements, and financial undertakings with the mortgagor and others as he deems necessary or desirable to carry out the purposes of this sec- tion, and may expend available funds for such purposes, including the correction (when he de- termines it necessary to protect the occupants), at any time subsequent to insurance of a mort- gage, of defects or failures in the dwellings which the Secretary finds are caused by or re- lated to the advanced housing technology uti- lized in their design or construction or experi- mental property standards. Any authority which the Secretary may exercise in connection with a mortgage, or property covered by a mortgage, insured under any other section of this sub- chapter (including payments to reduce rentals for, or to facilitate homeownership by, lower in- come families) may be exercised in connection with a mortgage, or property covered by a mort- gage, meeting the requirements of such other section (except as specified in subsection (b)), which is insured under this section to the same extent and in the same manner as if the mort- gage insured under this section was insured under such other section. (d) Investigations and analysis of data; publica- tion and distribution of reports The Secretary may make such investigations and analyses of data, and publish and distribute