republic-os/legal/us/code/title-12/chapter-13/section-1715z-18.md

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LegalText	12 U.S.C. § 1715z–18	Shared appreciation mortgages for multifamily housing	us	united_states_code	code_section	12	BANKS AND BANKING	13	NATIONAL HOUSING	1715z–18	12 U.S.C. § 1715z–18	current	119-100	2026-06-26	official	https://uscode.house.gov/download/releasepoints/us/pl/119/100/xml_usc12@119-100.zip	/us/usc/t12/s1715z–18	data/legal/raw/us/code/title-12/usc12.xml	30a0b8f16e8d90cf49b4e034e3f2ababbee26272102e7554b64194af9a00ae44	e6b98700ef4156ac33fde5d105824845d727afa91a53f3762be2cf4d1a3b01fa	d1683a435f91ccfe99c0fd9d9902e597631a755b1c9c83f88e606d34c2db4c0e	2026-07-04	official	legal us-code

12 U.S.C. § 1715z–18 - Shared appreciation mortgages for multifamily housing

Text

(a) Five or more family units; requirements Notwithstanding any provision of this subchapter that is inconsistent with this section, the Secretary may insure, under any provision of this subchapter providing for insurance of mortgages on properties including 5 or more family units, a mortgage secured by a first lien on the property that (1) provides for the mortgagee 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 may require by regulation.

(b) Payment of mortgagee’s share of net appreciated value; term of mortgage; repayment; “net appreciated value” defined The mortgagee’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) of the property, whichever occurs first. The term of the mortgage shall not be less than 15 years, and shall be repayable in equal monthly installments of principal and fixed interest during the mortgage 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 which will not be completely amortized during the mortgage term, the principal obligation of the mortgage 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’s selling costs) exceeds the actual project cost after completion, as approved by the Secretary. If there has been no sale or transfer at the time the mortgagee’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 and provided for in the mortgage.

(c) Entitlement of mortgagee upon default In the event of a default, the mortgagee shall be entitled to receive the benefits of insurance in accordance with section 1713 of this title, but such insurance benefits shall not include the mortgagee’s share of net appreciated value. 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.

(d) Maximum percentage of net appreciated value; disclosure requirements The Secretary shall establish by regulation the maximum percentage of net appreciated value which may be payable to a mortgagee as the mortgagee’s share. The Secretary shall also establish disclosure requirements applicable to mortgagees making mortgage loans pursuant to this section, to assure that mortgagors are informed of the characteristics of such mortgages.

(e) Inapplicability of State constitution, statute, etc., limiting or prohibiting increases in outstanding loan balance Mortgages 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 constitution, statute, court decree, common law, rule, or public policy limiting or prohibiting increases in the outstanding loan balance after execution of the mortgage.

(f) Number of dwelling units The number of dwelling units included in properties covered by mortgages insured pursuant to this section in any fiscal year may not exceed 5,000.

(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

Amendments1988—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”.