---
kind: "section"
citation: "12 U.S.C. § 1750b"
title: "12"
title_heading: "Banks and Banking"
number: "1750b"
heading: "Insurance in critical areas"
release: "119-102"
date: "2026-07-12"
url: "https://uscodex.org/usc/12/1750b"
units:
  - "Chapter 13 — National Housing"
  - "Subchapter X — National Defense Housing Insurance"
---

# §1750b. Insurance in critical areas

- (a) **Limitations; termination of certain commitments; requirements; discrimination against children—** This subchapter is designed to supplement systems of [mortgage](/usc/12/1707.md?p=a) insurance under other provisions of this chapter in order to assist in providing adequate housing in areas which the President, pursuant to [section 1591 of title 42](/usc/42/1591.md), shall have determined to be critical defense housing areas. The [Secretary](/usc/12/1715z–22a.md?p=4) is authorized, upon application by the [mortgagee](/usc/12/1707.md?p=b), to insure under this section or [section 1750g of this title](/usc/12/1750g.md) as hereinafter provided any [mortgage](/usc/12/1707.md?p=a) which is eligible for insurance as hereinafter provided and upon such terms as the [Secretary](/usc/12/1715z–22a.md?p=4) may prescribe to make commitments for the insuring of such [mortgages](/usc/12/1707.md?p=a) prior to the date of their execution or disbursement thereon: Provided, That the property covered by the [mortgage](/usc/12/1707.md?p=a) is in an area which the President, pursuant to [section 1591 of title 42](/usc/42/1591.md), shall have determined to be a critical defense housing area, and that the total number of dwelling units in properties covered by [mortgages](/usc/12/1707.md?p=a) insured under this subchapter in any such area does not exceed the number authorized by the [Secretary](/usc/12/1715z–22a.md?p=4) of Housing and Urban Development from time to time as needed in such area for defense purposes and to be insured pursuant to this subchapter: Provided further, That in the event the [Secretary](/usc/12/1715z–22a.md?p=4) has issued a commitment to insure a [mortgage](/usc/12/1707.md?p=a) under this section, which commitment was in force and effect on June 1, 1953, and the [Secretary](/usc/12/1715z–22a.md?p=4) determines that, because of changes in defense requirements, there is reasonable doubt that such housing is needed for defense purposes and that it is probable that the [mortgage](/usc/12/1707.md?p=a) would become immediately in default and claim made for payment under the [mortgage](/usc/12/1707.md?p=a) insurance contract if the unit or units are completed and the [mortgage](/usc/12/1707.md?p=a) insured, the [Secretary](/usc/12/1715z–22a.md?p=4) is authorized, in the interest of conserving the General Insurance Fund, to pay (in cash from the General Insurance Fund) to the [mortgagee](/usc/12/1707.md?p=b) for the account of the [mortgagor](/usc/12/1707.md?p=b) such amount as the [Secretary](/usc/12/1715z–22a.md?p=4) shall determine to be necessary to reimburse the [mortgagor](/usc/12/1707.md?p=b) the amounts paid or to be paid by the [mortgagor](/usc/12/1707.md?p=b) on account of labor performed and materials in place, less the [Secretary](/usc/12/1715z–22a.md?p=4)’s estimate of the reasonable salvage value of such materials, plus an allowance for development costs equal to 4 per centum of the principal amount of the [mortgage](/usc/12/1707.md?p=a) specified in such commitment, and no payments shall be made pursuant to this proviso unless a claim therefor is filed not later than six months from date of the determination of lack of need and the claim is in such form and contains such supporting information, documents, and data as the [Secretary](/usc/12/1715z–22a.md?p=4) may require: Provided further, That the aggregate amount of principal obligations of all [mortgages](/usc/12/1707.md?p=a) insured under this subchapter shall not exceed such sum as may be authorized by the President from time to time for the purposes of this subchapter pursuant to his authority under [section 1715h](/usc/12/1715h.md)[^1] of this title: Provided further, That the [Secretary](/usc/12/1715z–22a.md?p=4) shall have power to require properties covered by [mortgages](/usc/12/1707.md?p=a) insured under this subchapter to be held for rental for such periods of time and at such rentals or other charges as he may prescribe; and, with respect to such properties being held for rental, (1) to require that the property be held by a [mortgagor](/usc/12/1707.md?p=b) approved by him, and (2) to prescribe such requirements as he deems to be reasonable governing the method of operation and prohibiting or restricting sales of such properties or interests therein or agreements relating to such sales: Provided further, That the [Secretary](/usc/12/1715z–22a.md?p=4) shall require each dwelling covered by a [mortgage](/usc/12/1707.md?p=a) insured under this section, for which a commitment to insure is issued after August 2, 1954, to be held for rental for a period of not less than three years after the dwelling is made available for initial occupancy: And provided further, That no [mortgage](/usc/12/1707.md?p=a) shall be insured under this subchapter unless the [mortgagor](/usc/12/1707.md?p=b) certifies under oath that in selecting tenants for any property covered by the [mortgage](/usc/12/1707.md?p=a) he will not discriminate against any family by reason of the fact that there are children in the family, and that he will not sell the property while the insurance is in effect unless the purchaser so certifies, such certification to be filed with the [Secretary](/usc/12/1715z–22a.md?p=4). Violation of any such certification shall be a misdemeanor punishable by a fine of not to exceed $500.
- (b) **Eligibility requirements—** To be eligible for insurance under this section a [mortgage](/usc/12/1707.md?p=a) shall—
  - (1) have been made to, and be held by, a [mortgagee](/usc/12/1707.md?p=b) approved by the [Secretary](/usc/12/1715z–22a.md?p=4) as responsible and able to service the [mortgage](/usc/12/1707.md?p=a) properly;
  - (2) involve a principal obligation (including such initial service charges, appraisal, inspection, and other fees as the [Secretary](/usc/12/1715z–22a.md?p=4) shall approve) in an amount not to exceed 90 per centum of the appraised value (as of the date the [mortgage](/usc/12/1707.md?p=a) is accepted for insurance) of a property, urban, suburban, or rural, upon which there is located a dwelling designed principally for residential use for not more than two families in the aggregate, which is approved for [mortgage](/usc/12/1707.md?p=a) insurance prior to the beginning of construction, the construction of which is begun after September 1, 1951. The principal obligation of such [mortgage](/usc/12/1707.md?p=a) shall not, however, exceed $8,100 if such dwelling is designed for a single-family residence, or $15,000 if such dwelling is designed for a two-family residence except that the [Secretary](/usc/12/1715z–22a.md?p=4) may by regulation increase these amounts to not to exceed $9,000 and $16,000, respectively, in any geographical area where he finds that cost levels so require: Provided, That if the [Secretary](/usc/12/1715z–22a.md?p=4) finds that it is not feasible within the aforesaid dollar amount limitations to construct dwellings containing three or four bedrooms per family unit without sacrifice of sound standards of construction, design, and livability, he may increase such dollar amount limitations by not exceeding $1,080 for each additional bedroom (as defined by the [Secretary](/usc/12/1715z–22a.md?p=4)) in excess of two contained in such family unit if he finds that such unit meets sound standards of livability as a three-bedroom or a four-bedroom unit as the case may be;
  - (3) have a maturity satisfactory to the [Secretary](/usc/12/1715z–22a.md?p=4) but not to exceed thirty years from the date of the insurance of the [mortgage](/usc/12/1707.md?p=a);
  - (4) contain complete amortization provisions satisfactory to the [Secretary](/usc/12/1715z–22a.md?p=4);
  - (5) bear interest (exclusive of premium charges for insurance) at not to exceed 4½ per centum per annum on the amount of the principal obligation outstanding at any time;
  - (6) provide, in a manner satisfactory to the [Secretary](/usc/12/1715z–22a.md?p=4), for the application of the [mortgagor](/usc/12/1707.md?p=b)’s periodic payments (exclusive of the amount allocated to interest and to the premium charge which is required for [mortgage](/usc/12/1707.md?p=a) insurance as herein provided) to amortization of the principal of the [mortgage](/usc/12/1707.md?p=a); and
  - (7) contain such terms and provisions with respect to insurance, repairs, alterations, payment of taxes, default reserves, delinquency charges, foreclosure proceedings, anticipation of maturity, additional and secondary liens, and other matters as the [Secretary](/usc/12/1715z–22a.md?p=4) may in his discretion prescribe.
- (c) **Premium charges; payments; needs of national defense as prerequisite; adjustments and refunds—** The [Secretary](/usc/12/1715z–22a.md?p=4) is authorized to fix a premium charge for the insurance of [mortgages](/usc/12/1707.md?p=a) under this subchapter but in the case of any [mortgage](/usc/12/1707.md?p=a) such charge shall not be less than an amount equivalent to one-half of 1 per centum per annum nor more than an amount equivalent to 1½ per centum per annum of the amount of the principal obligation of the [mortgage](/usc/12/1707.md?p=a) outstanding at any time, without taking into account delinquent payments or prepayments. Such premium charges shall be payable by the [mortgagee](/usc/12/1707.md?p=b), either in cash or in debentures issued by the [Secretary](/usc/12/1715z–22a.md?p=4) under this subchapter at par plus accrued interest, in such manner as may be prescribed by the [Secretary](/usc/12/1715z–22a.md?p=4): Provided, That the [Secretary](/usc/12/1715z–22a.md?p=4) may require the payment of one or more such premium charges at the time the [mortgage](/usc/12/1707.md?p=a) is insured, at such discount rate as he may prescribe not in excess of the interest rate specified in the [mortgage](/usc/12/1707.md?p=a). If the [Secretary](/usc/12/1715z–22a.md?p=4) finds upon the presentation of a [mortgage](/usc/12/1707.md?p=a) for insurance and the tender of the initial premium charge or charges so required that the [mortgage](/usc/12/1707.md?p=a) complies with the provisions of this subchapter, such [mortgage](/usc/12/1707.md?p=a) may be accepted for insurance by endorsement or otherwise as the [Secretary](/usc/12/1715z–22a.md?p=4) may prescribe; but no [mortgage](/usc/12/1707.md?p=a) shall be accepted for insurance under this subchapter unless the [Secretary](/usc/12/1715z–22a.md?p=4) finds that the project with respect to which the [mortgage](/usc/12/1707.md?p=a) is executed is an acceptable risk in view of the needs of national defense. In the event that the principal obligation of any [mortgage](/usc/12/1707.md?p=a) accepted for insurance under this subchapter is paid in full prior to the [maturity date](/usc/12/1707.md?p=c), the [Secretary](/usc/12/1715z–22a.md?p=4) is further authorized in his discretion to require the payment by the [mortgagee](/usc/12/1707.md?p=b) of an adjusted premium charge in such amount as the [Secretary](/usc/12/1715z–22a.md?p=4) determines to be equitable, but not in excess of the aggregate amount of the premium charges that the [mortgagee](/usc/12/1707.md?p=b) would otherwise have been required to pay if the [mortgage](/usc/12/1707.md?p=a) has continued to be insured under this subchapter until such [maturity date](/usc/12/1707.md?p=c); and in the event that the principal obligation is paid in full as herein set forth the [Secretary](/usc/12/1715z–22a.md?p=4) is authorized to refund to the [mortgagee](/usc/12/1707.md?p=b) for the account of the [mortgagor](/usc/12/1707.md?p=b) all, or such portion as he shall determine to be equitable, of the current unearned premium charges theretofore paid. Upon application of the [mortgagee](/usc/12/1707.md?p=b) with the consent of the [mortgagor](/usc/12/1707.md?p=b) of a [mortgage](/usc/12/1707.md?p=a) for which a commitment to insure has been issued pursuant to [section 1709 of this title](/usc/12/1709.md) covering property on which the construction of the dwellings thereon was begun prior to the enactment of this subchapter and the determination of prevailing wages in the locality in accordance with [section 1715c of this title](/usc/12/1715c.md), the [Secretary](/usc/12/1715z–22a.md?p=4) is authorized, notwithstanding such beginning of construction, to convert such commitment to a commitment under [section 1750g of this title](/usc/12/1750g.md); any charges or fees paid to the [Secretary](/usc/12/1715z–22a.md?p=4) with respect to such insurance under [section 1709 of this title](/usc/12/1709.md) shall be credited to charges or fees due the [Secretary](/usc/12/1715z–22a.md?p=4) with respect to such insurance under [section 1750g of this title](/usc/12/1750g.md); and the determination of prevailing wages in the locality for purposes of [section 1715c of this title](/usc/12/1715c.md) may be made by the [Secretary](/usc/12/1715z–22a.md?p=4) of Labor at any time prior to the insurance under [section 1750g of this title](/usc/12/1750g.md): Provided, That such [mortgage](/usc/12/1707.md?p=a), or the [mortgage](/usc/12/1707.md?p=a) covering the same property executed in substitution therefor, is otherwise eligible for insurance under [section 1750g of this title](/usc/12/1750g.md).
- (d) **Preference or priority in purchasing or renting properties—** Notwithstanding any other provisions of this chapter or any other Act, except provisions of law enacted hereafter expressly referring to this [subsection (d)](#d), the [Secretary](/usc/12/1715z–22a.md?p=4) is further authorized to prescribe such procedures as are necessary to secure to [persons](/usc/12/5481.md?p=19) engaged or to be engaged in national defense activities preference or priority of opportunity to purchase or rent properties, or interests therein, covered by [mortgages](/usc/12/1707.md?p=a) insured under this subchapter.
- (e) **Conclusiveness of insurance contract as to eligibility—** Any contract of insurance heretofore or hereafter executed by the [Secretary](/usc/12/1715z–22a.md?p=4) under this subchapter shall be conclusive evidence of the eligibility of the [mortgage](/usc/12/1707.md?p=a) for insurance, and the validity of any contract of insurance so executed shall be incontestable in the hands of an approved [mortgagee](/usc/12/1707.md?p=b) from the date of the execution of such contract, except for fraud or misrepresentation on the part of such approved [mortgagee](/usc/12/1707.md?p=b).

## Footnotes

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

## Source credit

(June 27, 1934, ch. 847, title IX, § 903, as added Sept. 1, 1951, ch. 378, title II, § 201, 65 Stat. 296; amended July 14, 1952, ch. 723, § 13, 66 Stat. 604; June 30, 1953, ch. 170, § 11, 67 Stat. 124; Aug. 2, 1954, ch. 649, title I, § 128(b), 68 Stat. 609; Pub. L. 89–117, title XI, § 1108(x), Aug. 10, 1965, 79 Stat. 507; Pub. L. 90–19, § 1(a)(3), (4), (s), (t), May 25, 1967, 81 Stat. 17, 19.)

## Notes

### Editorial Notes

### References in Text

The General Insurance Fund, referred to in text, was established by section 1735c of this title.

Section 1715h of this title, referred to in subsec. (a), was repealed by Pub. L. 100–242, title IV, § 401(a)(1), Feb. 5, 1988, 101 Stat. 1898.

### Amendments

1967—Pub. L. 90–19, § 1(a)(3), substituted “Secretary” for “Commissioner” wherever appearing in subsecs. (a), (b)(1) to (4), (6), (7), and (c) to (e).

Subsec. (a). Pub. L. 90–19, § 1(a)(4), (s), substituted “Secretary’s” and “Secretary of Housing and Home Development” for “Commissioner’s” and “Housing and Home Finance Administrator”, respectively.

Subsec. (d). Pub. L. 90–19, § 1(t), struck out “, with the approval of the Housing and Home Finance Administrator,” before “is further authorized”.

1965—Subsec. (a). Pub. L. 89–117 substituted “General Insurance Fund” for “National Defense Housing Insurance Fund”.

1954—Subsec. (a). Act Aug. 2, 1954, inserted proviso relating to requirement for rental for a period of not less than three years after dwelling is made available for initial occupancy.

1953—Subsec. (a). Act June 30, 1953, inserted proviso commencing “Provided further, That in the event”.

1952—Subsec. (c). Act July 14, 1952, inserted last sentence.