---
kind: "section"
citation: "12 U.S.C. § 1715z–18"
title: "12"
title_heading: "Banks and Banking"
number: "1715z–18"
heading: "Shared appreciation mortgages for multifamily housing"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/1715z-18"
units:
  - "Chapter 13 — National Housing"
  - "Subchapter II — Mortgage Insurance"
---

# §1715z–18. Shared appreciation mortgages for multifamily housing

- (a) **Five or more family units; 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 including 5 or more family units, a [mortgage](/usc/12/1707.md?p=a) secured by a first lien on the property that (1) provides for the [mortgagee](/usc/12/1707.md?p=b) to share in a predetermined percentage of the property’s net appreciated value; and (2) meets such other conditions, including limitations on the rate of interest which may be charged, as the [Secretary](/usc/12/1715z–22a.md?p=4) may require by regulation.
- (b) **Payment of mortgagee’s share of net appreciated value; term of mortgage; repayment; “net appreciated value” defined—** The [mortgagee](/usc/12/1707.md?p=b)’s share of a property’s 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](/usc/12/1715z–22a.md?p=4)) of the property, whichever occurs first. The term of the [mortgage](/usc/12/1707.md?p=a) shall not be less than 15 years, and shall be repayable in equal monthly installments of principal and fixed interest during the [mortgage](/usc/12/1707.md?p=a) 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](/usc/12/1707.md?p=a) which will not be completely amortized during the [mortgage](/usc/12/1707.md?p=a) term, the principal obligation of the [mortgage](/usc/12/1707.md?p=a) may not exceed 85 percent of the estimated value of the property or project. For purposes of this section, the term “net appreciated value” means the amount by which the sales price of the property (less the [mortgagor](/usc/12/1707.md?p=b)’s selling costs) exceeds the actual project cost after completion, as approved by the [Secretary](/usc/12/1715z–22a.md?p=4). 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 1713 of this title](/usc/12/1713.md), 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 face amount of the [mortgage](/usc/12/1707.md?p=a)” as used in [section 1713 of this title](/usc/12/1713.md) shall not include the [mortgagee](/usc/12/1707.md?p=b)’s share of net appreciated value.
- (d) **Maximum percentage of net appreciated value; disclosure requirements—** The [Secretary](/usc/12/1715z–22a.md?p=4) shall establish by regulation the maximum percentage of net appreciated value which may be payable to a [mortgagee](/usc/12/1707.md?p=b) as the [mortgagee](/usc/12/1707.md?p=b)’s share. The [Secretary](/usc/12/1715z–22a.md?p=4) shall also establish disclosure requirements applicable to [mortgagees](/usc/12/1707.md?p=b) making [mortgage](/usc/12/1707.md?p=a) loans pursuant to this section, to assure that [mortgagors](/usc/12/1707.md?p=b) are informed of the characteristics of such [mortgages](/usc/12/1707.md?p=a).
- (e) **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).
- (f) **Number of dwelling units—** The number of dwelling units included in properties covered by [mortgages](/usc/12/1707.md?p=a) insured pursuant to this section in any fiscal year may not exceed 5,000.

## Source credit

(June 27, 1934, ch. 847, title II, § 253, as added Pub. L. 98–181, title I [title IV, § 445], Nov. 30, 1983, 97 Stat. 1226; amended Pub. L. 100–242, title IV, § 429(j), Feb. 5, 1988, 101 Stat. 1919.)

## Notes

### Editorial Notes

### Amendments

1988—Subsec. (b). Pub. L. 100–242, § 429(j)(1), substituted “For purposes of this section, the term ‘net appreciated value’ means the amount by which the sales price of the property (less the mortgagor’s selling costs) exceeds the actual project cost after completion, as approved by the Secretary” for “For purposes of this section, the term ‘net appreciated value’ means the amount by which the sales price of the property (less the mortgagor’s selling costs) exceeds the value (or replacement cost, as appropriate) of the property at the time the commitment to insure is issued (with adjustments for capital improvements stipulated in the loan contract)”.

Subsec. (c). Pub. L. 100–242, § 429(j)(2), (3), substituted “in accordance with section 1713 of this title” for “in accordance with section 1710 of this title” and “The term ‘original principal face amount of the mortgage’ as used in section 1713 of this title shall not include the mortgagee’s share of net appreciated value” for “The term ‘original principal obligation of the mortgage’ as used in section 1710(a) of this title shall not include the mortgagee’s share of net appreciated value”.