12 USC 1749aaa - Insurance of mortgages

(a) Authority of Secretary; termination date 
The Secretary is authorized
(1)  to insure mortgages (including advances on such mortgages during construction), upon such terms and conditions as he may prescribe, in accordance with the provisions of this subchapter, and
(2)  to make commitments for the insuring of such mortgages prior to the date of their execution or disbursement thereon.
(b) Eligibility for insurance 
To be eligible for insurance under this subchapter, the mortgage shall
(1)  be executed by a mortgagor that is a group practice unit or organization or other mortgagor approved by the Secretary,
(2)  be made to and held by a mortgagee approved by the Secretary as responsible and able to service the mortgage properly, and
(3)  cover a property or project which is approved for mortgage insurance prior to the beginning of construction or rehabilitation and is designed for use as a group practice facility or medical practice facility which the Secretary finds will be constructed in an economical manner, will not be of elaborate or extravagant design or materials, and will be adequate and suitable for carrying out the purposes of this subchapter. No mortgage shall be insured under this subchapter unless it is shown to the satisfaction of the Secretary that the applicant would be unable to obtain the mortgage loan without such insurance on terms comparable to those specified in subsection (c) of this section.
(c) Replacement cost of property; maturity; amortization; interest rate 
The mortgage shall
(1) Repealed. Pub. L. 93–383, title III, § 304(l), Aug. 22, 1974, 88 Stat. 678;
(2) not exceed 90 per centum of the amount which the Secretary estimates will be the replacement cost of the property or project when construction or rehabilitation is completed. The replacement cost of the property may include the land and the proposed physical improvements, equipment, utilities within the boundaries of the property, a solar energy system (as defined in subparagraph (3) of the last paragraph of section 1703 (a) of this title) or residential energy conservation measures (as defined in section 8211 (11)(A) through (G) and (I) of title 42)[1] in cases where the Secretary determines that such measures are in addition to those required under the minimum property standards and will be cost-effective over the life of the measure, architects fees, taxes, and interest accruing during construction or rehabilitation, and other miscellaneous charges incident to construction or rehabilitation and approved by the Secretary;
(3) have a maturity satisfactory to the Secretary but not to exceed twenty-five years from the beginning of the amortization of the mortgage, and provide for complete amortization of the principal obligation by periodic payments within such term as the Secretary shall prescribe; and
(4) bear interest at such rate as may be agreed upon by the mortgagor and the mortgagee.
(d) Conclusiveness of insurance contract as to eligibility; validity of contract incontestable 
Any contract of insurance executed by the Secretary under this subchapter shall be conclusive evidence of the eligibility of the mortgage for insurance, and the validity of any contract for insurance so executed shall be incontestable in the hands of an approved mortgagee from the date of the execution of such contract, except for fraud or misrepresentation on the part of such approved mortgagee.
(e) Undertaking 
Each mortgage insured under this subchapter shall contain an undertaking (in accordance with regulations prescribed under this subchapter and in force at the time the mortgage is approved for insurance) to the effect that, except as authorized by the Secretary and the mortgagee, the property will be used as a group practice facility or medical practice facility until the mortgage has been paid in full or the contract of insurance otherwise terminated.
(f) Recordkeeping; reports; examination and audit 
No mortgage shall be insured under this subchapter unless the mortgagor and the mortgagee certify
(1)  that they will keep such records relating to the mortgage transaction and indebtedness, to the construction of the facility covered by the mortgage, and to the use of such facility as a group practice facility or medical practice facility as are prescribed by the Secretary at the time of such certification,
(2)  that they will make such reports as may from time to time be required by the Secretary pertaining to such matters, and
(3)  that the Secretary shall have access to and the right to examine and audit such records.
[1] See References in Text note below.