Public Law 80–784

That title III of the National Housing Act, as amended, is hereby amended to read as

48 Stat. 1252.

12 U. S. C. §§ 1716–1723.

Post, p. 1275.

follows:

“TITLE III— FEDERAL NATIONAL MORTGAGEASSOCIATION

“creation and powers of the federal national mortgage association

“Sec. 301.

(a)(a)

The Administrator is further authorized and empowered to provide for the establishment of a Federal National Mortgage Association (hereinafter referred to as the “Association”) which shall be authorized, subject to such rules and regulations as may be prescribed by the Association—

“(1)“(1)

to purchase, service, or sell any mortgages, which are

Purchase, etc., of mortgages; conditions.

Post, p. 1275.

48 Stat. 1248; 55 Stat. 56.

12 U. S. C. §§ 1709, 1738; Supp. I, § 1738.

Ante, p. 101; post, pp. 1272, 1273, 1268.

58 Stat. 292, 293.

38 U. S. C. §§ 694a, 694b, 694e (a).

insured after April 30, 1948, under section 203 or section 603 of this Act, or guaranteed under section 501, 502, or 505 (a) of the Servicemen’s Readjustment Act of 1944, as amended: Provided, however, That—

“(A)“(A)

no mortgage shall be offered to the Association for purchase by, or if it covers property held by, Federal, State, or municipal instrumentalities;

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“(B)“(B)

no mortgage may be purchased for an amount exceeding the unpaid principal balance thereof, plus accrued interest, at the time of purchase;

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“(C)“(C)

no mortgage shall be offered to the Association for purchase if the original principal obligation of the loan exceeds or exceeded $10,000 for each family residence or dwelling unit covered by the mortgage or other lien securing the loan;

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“(D)“(D)

no mortgage shall be offered to the Association for purchase unless offered by the original mortgagee prior to any other sale thereof;

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“(E)“(E)

no mortgage shall be offered to the Association for

Post, p. 1275.

purchase by any one mortgagee (1) unless such mortgage is secured by property used, or designed to be used, for residential purposes and (2) if the unpaid principal balance thereof, when added to the aggregate amount paid for all mortgages purchased by the Association from such mortgagee pursuant to authority contained herein, exceeds 25 per centum of the original principal amount of all mortgages made by such mortgagee which, except for this subparagraph (E), meet the requirements of this section.

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“(F)“(F)

no mortgage shall be purchased by the Association unless the mortgagee certifies that the housing with respect to which the mortgage was made meets the construction standards prescribed for insurance of mortgages on the same class of housing under the National Housing Act, as amended.

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“(2)“(2)

to borrow money for any of the foregoing purposes through

Borrowing of money.

the issuance of notes or other such obligations as hereinafter provided.

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“(b)“(b)

The Federal National Mortgage Association, a subsidiary of the Reconstruction Finance Corporation and established pursuant to the provisions of this title as in effect prior to June 1, 1948, shall be the Association referred to in subsection (a) of this section. The

Board of directors.

Board of Directors of the Association shall consist of not less than five persons to be appointed by the Chairman of the Board of Directors of the Reconstruction Finance Corporation, or the Acting Chairman in the case of a vacancy in the office of Chairman, from the Directors, officers, or employees of such Corporation and the officers shall be appointed by the Board of Directors from the Directors, officers, or employees of the Reconstruction Finance Corporation.

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“(c) Powers of Association.

The Association created under this section shall have succession from the date of its organization unless it is dissolved by order of the Administrator as hereinafter provided, or by Act of Congress, and shall have power—

“(1)“(1)

to adopt and use a corporate seal;

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“(2)“(2)

to make contracts;

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“(3)“(3)

to sue and be sued; complain and defend, in any court of law or equity, State or Federal;

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“(4)“(4)

to conduct its business in any State of the United States, or in the District of Columbia, Alaska, Hawaii, Puerto Rico, or the Virgin Islands, and to have one or more offices in such State, or in the District of Columbia, Alaska, Hawaii, or Puerto Rico, one of which offices shall be designated at the time of organization as its principal office;

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“(5)“(5)

to do all things as are necessary or incidental to the proper management of its affairs and the proper conduct of its business.

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“(d) Capital stock.

The Association may have a capital stock of not to exceed $20,000,000 and paid–in surplus of $1,000,000, subscribed by the Reconstruction Finance Corporation.

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“(e)“(e)

The Association, for the purpose of all actions by or against it, real, personal, or mixed, and all suits in equity, shall be deemed a citizen of the place in which its principal office is located.

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“(f) Restriction on use of term.

No individual, association, partnership, or corporation, except the Association organized under this section, shall hereafter use the words ‘Federal National Mortgage Association’ or any combination of such words, as the name or a part thereof under which he or it shall do business. Every individual, partnership, association, or corporation violating this prohibition shall be guilty of a misdemeanor and shall be punished by a fine of not exceeding $100 or imprisonment not exceeding thirty days, or both, for each day during which such violation is committed or repeated. The provisions of section 5243 of the Revised

12 U. S. C. § 583.

Statutes shall not apply to the Association created under this title.

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“obligations

“Sec. 302.

The Association is authorized to issue and have outstanding at any time notes or other obligations in an aggregate amount not to exceed (1) forty times the amount of its capital and surplus, and in no event to exceed (2) the current unpaid principal of mortgages

48 Stat. 1247; 55 Stat. 55.

12 U. S. C. §§ 1707–1715c, 1736–1742; Supp. I, §§ 1737, 1738.

Ante, p. 101; post, pp. 1209, 1268–1275.

held by it and insured under the provisions of titles II and VI of this Act and guaranteed under section 501, 502, or 505 (a) of the Servicemen’s Readjustment Act of 1944, as amended, plus the amount of its cash on hand and on deposit and the amortized value of its investments in bonds or other obligations of, or in bonds or other obligations guaranteed as to principal and interest by, the United States.

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“investment of funds

“Sec. 303.

Moneys of the Association not invested in mortgages or in operating facilities shall be kept in cash on hand or on deposit, or invested in bonds or other obligations of, or in bonds or other obligations guaranteed as to principal and interest by, the United States; except that the Association shall keep and maintain such reserves as it may deem necessary.

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“taxation provisions

“Sec. 304.

The Association, including its franchise, capital, reserves, surplus, mortgage loans, income, and stock shall be exempt from all taxation now or hereafter imposed by the United States, by any Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority, except that any real property of the Association shall be subject to State, Territorial, county, municipal, or local taxation to the same extent according to its value as other real property is taxed.

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“management of acquired properties

“Sec. 305.

The Association shall have power to deal with, rent, renovate, modernize, or sell for cash, with a view to assuring a maximum financial return to the Association, any property acquired by it as a result of foreclosure proceedings or otherwise.

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“liquidation

“Sec. 306.

The Administrator shall have power to terminate the existence of the Association and order its liquidation and the winding up of its affairs whenever the Administrator determines, in his judgment, that the need therefor no longer exists. The Association shall

Report to Congress.

make a report of its activities to the Administrator in January and July of each year for the preceding six months’ period, which report shall be transmitted to the Congress, together with the Administrator’s recommendations thereon.”

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Sec. 2.

Nothing in the amendment made by the first section of this Act shall limit the authority of the Federal National Mortgage Association to service or sell any mortgage purchased prior to the date of the enactment of this Act, or to purchase, service, or sell any mortgage with respect to which a commitment to purchase was made prior to the date of the enactment of this Act.

Sec. 3.

Section 4 (c) of the Reconstruction Finance Corporation

Ante, p. 264.

Act, as amended, is hereby amended by striking out “$1,500,000,000” and inserting in lieu thereof “$2,000,000,000”.

Sec. 4.

Section 4 of the Reconstruction Finance Corporation Act,

Ante, p. 263.

as amended, is hereby amended by adding at the end thereof a new subsection reading as follows:

“(h)“(h)

The Corporation may subscribe for the nonassessable stock of

Nonassessable stock.

the Federal National Mortgage Association: Provided, That the total face amount of stock so subscribed for and held by the Corporation shall not exceed at any one time $20,000,000.”

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Sec. 5.

The Servicemen’s Readjustment Act of 1944, as amended, is

58 Stat. 284; 59 Stat. 631.

38 U. S. C. §§ 693–697g; Supp. I, § 693 et seq.

Ante, pp. 160, 161, 472; post, p. 1275.

hereby amended by inserting immediately after section 510 thereof the following new section:

“Sec. 511. “incontestability

Any evidence of guaranty or insurance issued by the Administrator shall be conclusive evidence of the eligibility of the loan for guaranty or insurance under the provisions of this title and of the amount of such guaranty or insurance, except that nothing in this section shall preclude the Administrator from establishing, as against the original lender, defenses based on fraud or material misrepresentation, and except that the Administrator shall not, by reason of anything contained in this section, be barred from establishing, by regulations in force at the date of such issuance or disbursement, whichever is the earlier, partial defenses to the amount payable on the guaranty or insurance.”

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Sec. 6.

Section 207 (c) (2) of the National Housing Act, as

53 Stat. 807.

12 U. S. C. § 1713 (c) (2).

Post, p. 1273.

amended, is hereby amended as follows: