---
kind: "section"
citation: "12 U.S.C. § 1746"
title: "12"
title_heading: "Banks and Banking"
number: "1746"
heading: "Insurance on mortgages on large-scale housing projects"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/1746"
units:
  - "Chapter 13 — National Housing"
  - "Subchapter VI — War Housing Insurance"
---

# §1746. Insurance on mortgages on large-scale housing projects

- (a) **Additional authorization; encouragement of cost-reduction techniques; advances—** In addition to [mortgages](/usc/12/1736.md?p=a) insured under other sections of this subchapter, and in order to assist and encourage the application of cost-reduction techniques through large-scale modernized site construction of housing and the erection of houses produced by modern industrial processes, the [Secretary](/usc/12/1715z–22a.md?p=4) is authorized to insure [mortgages](/usc/12/1736.md?p=a) (including advances on such [mortgages](/usc/12/1736.md?p=a) during construction) which are eligible for insurance as hereinafter provided.
- (b) **Eligibility requirements—** To be eligible for insurance under this section, a [mortgage](/usc/12/1736.md?p=a) shall—
  - (1) have been made to and be held by a [mortgagee](/usc/12/1736.md?p=b) approved by the [Secretary](/usc/12/1715z–22a.md?p=4) as responsible and able to service the [mortgage](/usc/12/1736.md?p=a) properly;
  - (2) cover property, held by a [mortgagor](/usc/12/1736.md?p=b) approved by the [Secretary](/usc/12/1715z–22a.md?p=4), upon which there is to be constructed or erected dwelling units for not less than twenty-five families consisting of a group of single-family dwellings approved by the [Secretary](/usc/12/1715z–22a.md?p=4) for [mortgage](/usc/12/1736.md?p=a) insurance prior to the beginning of construction: Provided, That during the course of construction there may be located upon the mortgaged property a plant for the fabrication or storage of such dwellings or sections or parts thereof, and the [Secretary](/usc/12/1715z–22a.md?p=4) may consent to the removal or release of such plant from the lien of the [mortgage](/usc/12/1736.md?p=a) upon such terms and conditions as he may approve;
  - (3) involve a principal obligation in an amount—
    - (A) not to exceed 85 per centum of the amount which the [Secretary](/usc/12/1715z–22a.md?p=4) estimates will be the value of the completed property or project, exclusive of any plant of the character described in paragraph (2) of this subsection located thereon, and
    - (B) not to exceed a sum computed on the individual dwellings comprising the total project as follows: $5,950 or 85 per centum of the valuation, whichever is the lower amount, with respect to each single-family dwelling: Provided, That if the [Secretary](/usc/12/1715z–22a.md?p=4) finds that it is not feasible, within the dollar amount limitation in this clause on the principal obligation of the [mortgage](/usc/12/1736.md?p=a), to construct dwellings containing three or four bedrooms without sacrifice of sound standards of construction, design, and livability, he may increase such dollar amount limitation by not exceeding $850 for each additional bedroom (as defined by the [Secretary](/usc/12/1715z–22a.md?p=4)) in excess of two contained in each such dwelling if he finds that such dwelling meets sound standards of design and livability as a three-bedroom unit or a four-bedroom unit, as the case may be, but the amount computed under this clause for each such dwelling shall not exceed, in any event, $7,650.

    With respect to the insurance of advances during construction, the [Secretary](/usc/12/1715z–22a.md?p=4) is authorized to approve advances by the [mortgagee](/usc/12/1736.md?p=b) to cover the cost of materials delivered upon the mortgaged property and labor performed in the fabrication or erection thereof;

  - (4) provide for complete amortization by periodic payments within such term as the [Secretary](/usc/12/1715z–22a.md?p=4) shall prescribe and shall bear interest (exclusive of premium charges for insurance) as not to exceed 4 per centum per annum on the amount of the principal obligation outstanding at any time: Provided, That the [Secretary](/usc/12/1715z–22a.md?p=4) with the approval of the [Secretary](/usc/12/1715z–22a.md?p=4) of the Treasury, may prescribe by regulation a higher maximum rate of interest, not exceeding 4½ per centum per annum on the amount of the principal obligation outstanding at any time, if he finds that the [mortgage](/usc/12/1736.md?p=a) market demands it. The [Secretary](/usc/12/1715z–22a.md?p=4) may consent to the release of a part or parts of the mortgaged property from the lien of the [mortgage](/usc/12/1736.md?p=a) upon such terms and conditions as he may prescribe and the [mortgage](/usc/12/1736.md?p=a) may provide for such release, and the [mortgage](/usc/12/1736.md?p=a) may provide that, upon the completion of the construction of the project, such [mortgage](/usc/12/1736.md?p=a) may be replaced by individual [mortgages](/usc/12/1736.md?p=a) covering each individual dwelling in the project. Each such individual [mortgage](/usc/12/1736.md?p=a) may be insured under this section with the [mortgagor](/usc/12/1736.md?p=b) being either the builder who constructed the dwellings or the owner and occupant of the dwelling at the time, and where the [mortgagor](/usc/12/1736.md?p=b) is the owner and occupant, may involve a principal obligation in such amount and have such maturity and interest rate as a [mortgage](/usc/12/1736.md?p=a) eligible for insurance under [section 1709(b)(2)(D) of this title](/usc/12/1709.md).
- (c) **Preferences in occupancy for veterans and hardship cases—** 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](/usc/12/1715z–22a.md?p=4) shall be provided under such regulations and procedures as may be prescribed by the [Secretary](/usc/12/1715z–22a.md?p=4).
- (d) **Applicability of other provisions—** The provisions of subsections (c), (d), (e), and (f) of [section 1743 of this title](/usc/12/1743.md) shall be applicable to [mortgages](/usc/12/1736.md?p=a) insured under this section covering a project described in [subsection (b)](#b) of this section, and the provisions of subsections (a) to (f), and (h) of [section 1739 of this title](/usc/12/1739.md) shall be applicable to the individual [mortgages](/usc/12/1736.md?p=a) insured pursuant to [subsection (b)(4)](#b-4) of this section covering individual dwellings in the project.

## Source credit

(June 27, 1934, ch. 847, title VI, § 611, as added Aug. 10, 1948, ch. 832, title I, § 101(f), 62 Stat. 1271; amended Apr. 20, 1950, ch. 94, title I, §§ 121, 122, 64 Stat. 58, 59; Pub. L. 90–19, § 1(a)(3), May 25, 1967, 81 Stat. 17.)

## Notes

### Editorial Notes

### References in Text

Section 1709(b)(2)(D) of this title, referred to in subsec. (b)(4), is a reference to subsec. (b)(2)(D) of section 1709 prior to amendment by section 104 of act Aug. 2, 1954, ch. 649, 68 Stat. 590.

### Amendments

1967—Pub. L. 90–19 substituted “Secretary” for “Commissioner” wherever appearing in subsecs. (a), (b), and (c).

1950—Act Apr. 20, 1950, § 122, substituted “Commissioner” for “Administrator” wherever appearing.

Subsec. (b)(3). Act Apr. 20, 1950, § 121(1), (2), substituted “85” for “80” in cl. (A), and inserted entirely new material in cl. (B).

Subsec. (b)(4). Act Apr. 20, 1950, § 121(2), inserted “, and the mortgage may provide that, upon the completion of the construction of the project, such mortgage may be replaced by individual mortgages covering each individual dwelling in the project. Each such individual mortgage may be insured under this section with the mortgagor being either the builder who constructed the dwellings or the owner and occupant of the dwelling at the time, and where the mortgagor is the owner and occupant, may involve a principal obligation in such amount and have such maturity and interest rate as a mortgage eligible for insurance under section 1709(b)(2)(D) of this title”.

Subsec. (d). Act Apr. 20, 1950, § 121(3), inserted “covering a project described in subsection (b) of this section, and the provisions of subsections (a) to (f), and (h) of section 1739 of this title shall be applicable to the individual mortgages insured pursuant to subsection (b)(4) of this section covering individual dwellings in the project”.