---
kind: "section"
citation: "12 U.S.C. § 1715z–17"
title: "12"
title_heading: "Banks and Banking"
number: "1715z–17"
heading: "Shared appreciation mortgages for single family housing"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/1715z-17"
units:
  - "Chapter 13 — National Housing"
  - "Subchapter II — Mortgage Insurance"
---

# §1715z–17. Shared appreciation mortgages for single family housing

- (a) **One- to four-family dwellings; requirements—** Notwithstanding any provision of this subchapter that is inconsistent with this section, the [Secretary](/usc/12/1715z–22a.md?p=4) may insure, under any provision of this subchapter providing for insurance of [mortgages](/usc/12/1707.md?p=a) on properties upon which there is located a dwelling designed principally for occupancy by one to four families, a [mortgage](/usc/12/1707.md?p=a) secured by a first lien on such a property or on the stock allocated to a dwelling unit in a residential cooperative housing corporation, which—
  - (1) provides for the [mortgagee](/usc/12/1707.md?p=b) to share in a predetermined percentage of the property’s or stock’s net appreciated value;
  - (2) bears interest at a rate which meets criteria prescribed by the [Secretary](/usc/12/1715z–22a.md?p=4);
  - (3) provides for amortization over a period of not to exceed 30 years, but the actual term of the [mortgage](/usc/12/1707.md?p=a) (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](/usc/12/1707.md?p=a) and any contingent deferred interest as the [Secretary](/usc/12/1715z–22a.md?p=4) may provide; and
  - (4) meets such other conditions as the [Secretary](/usc/12/1715z–22a.md?p=4) may require by regulation.
- (b) **Payment of mortgagee’s share of net appreciated value; “net appreciated value” defined—** The [mortgagee](/usc/12/1707.md?p=b)’s share of a property’s or stock’s net appreciated value shall be payable upon sale or transfer (as defined by the [Secretary](/usc/12/1715z–22a.md?p=4)) of the property or stock or payment in full of the [mortgage](/usc/12/1707.md?p=a), 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](/usc/12/1707.md?p=b)’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 stipulated in the loan contract). If there has been no sale or transfer at the time the [mortgagee](/usc/12/1707.md?p=b)’s 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](/usc/12/1715z–22a.md?p=4) and provided for in the [mortgage](/usc/12/1707.md?p=a).
- (c) **Entitlement of mortgagee upon default—** In the event of a default, the [mortgagee](/usc/12/1707.md?p=b) shall be entitled to receive the benefits of insurance in accordance with [section 1710(a) of this title](/usc/12/1710.md?p=a), but such insurance benefits shall not include the [mortgagee](/usc/12/1707.md?p=b)’s share of net appreciated value. The term “original principal obligation of the [mortgage](/usc/12/1707.md?p=a)” as used in [section 1710 of this title](/usc/12/1710.md) shall not include the [mortgagee](/usc/12/1707.md?p=b)’s share of net appreciated value.
- (d) **Inapplicability of State constitution, statute, etc., limiting or prohibiting increases in outstanding loan balance—** [Mortgages](/usc/12/1707.md?p=a) 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](/usc/12/1707.md?p=d) constitution, statute, court decree, common law, rule, or public policy limiting or prohibiting increases in the outstanding loan balance after execution of the [mortgage](/usc/12/1707.md?p=a).
- (e) **Encouraged use of insurance by low and moderate income families—** In carrying out the provisions of this section, the [Secretary](/usc/12/1715z–22a.md?p=4) 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) **Consumer protections and disclosure requirements—** The [Secretary](/usc/12/1715z–22a.md?p=4) shall prescribe adequate [consumer](/usc/12/5481.md?p=4) protections and disclosure requirements with respect to [mortgages](/usc/12/1707.md?p=a) insured under this section, and may prescribe such other terms and conditions as may be appropriate to carry out the provisions of this section.
- (g) **Number of mortgages and loans—** The aggregate number of [mortgages](/usc/12/1707.md?p=a) and loans insured under this section and [section 1715z–10(c)](/usc/12/1715z–10.md)[^1] of this title in any fiscal year may not exceed 10 percent of the aggregate number of [mortgages](/usc/12/1707.md?p=a) and loans insured by the [Secretary](/usc/12/1715z–22a.md?p=4) under this subchapter during the preceding fiscal year.

## Footnotes

[^1]: See References in Text note below.

## Source credit

(June 27, 1934, ch. 847, title II, § 252, as added Pub. L. 98–181, title I [title IV, § 444], Nov. 30, 1983, 97 Stat. 1225; amended Pub. L. 100–242, title IV, § 415(b)(2), Feb. 5, 1988, 101 Stat. 1907.)

## Notes

### Editorial Notes

### References in Text

Section 1715z–10(c) of this title, referred to in subsec. (g), was repealed by Pub. L. 110–289, div. B, title I, § 2120(a)(7), July 30, 2008, 122 Stat. 2835.

### Amendments

1988—Subsec. (g). Pub. L. 100–242 struck out reference to section 1715z–16 of this title.