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(a) All terms shall have the same meaning as given them in the Act.

(b) "Act" means title IV of the Housing Act of 1950, as amended (12 U.S.C. 1749 et seq.).

(c) "Construction" means erection of new structures, or rehabilitation, alteration, conversion, or improvement of existing structures.

(d) "Development cost" means the cost of construction, land and site improvements, and includes preliminary development expenses, architect and engineering expense, legal and administrative expense, and interest during construction; except that, in the case of purchase of facilities, such cost shall be as approved by the Secretary.

(e) "Educational institution" means any public or nonprofit private college, university, or other institution which offers or will offer within a reasonable time after completion of the facility at least a 2-year program acceptable for full credit toward a bachelor's degree; any hospital operating a school of nursing beyond the level of high school approved by State authority or internship and resident programs approved by recognized authority providing housing

for their students; or any nonprofit corporation, student cooperative, or public body, eligible under section 404(b) of the Act, providing housing and related facilities for students and faculty of educational institutions.

(f) "Housing and other educational facilities" means (1) structures suitable for dwelling use, including dormitories, apartments, and single family dwellings, and (2) structures suitable for use as cafeterias or dining halls, student centers or student unions, infirmaries, health facilities, or other essential service facilities.

(g) "Secretary" means the Secretary of Housing and Urban Development or any officer authorized to perform the functions of the Secretary.

(h) "State" means the several States, the District of Columbia, and the Territories and possessions of the United States, including the Commonwealth of Puerto Rico.

§ 279.2 General policy.

The objective of this program is to assist educational institutions in providing housing and other educational facilities for students and faculties through direct loans for the construction or purchase of such facilities, or through annual debt service grants to reduce the cost of borrowing from other sources for such purposes, where private financing is not available on terms and conditions equally as favorable as for a direct loan. Assistance is also provided to hospitals operating nursing schools beyond the high school level or approved for internships.

§ 279.3 Eligible projects.

Assistance in financing the construction or purchase of housing and other educational facilities may be provided under the following conditions:

(a) Construction must not be of elaborate or extravagant design or materials and must be undertaken in an economical manner.

(b) Construction must not have been completed at the time the application for assistance is made.

(c) A loan or grant-supported loan cannot be made solely for the purpose of refunding a long-term loan obtained prior to the filing of an application.

(d) Grant assistance will not accrue for any period prior to occupancy of the facilities.

(e) Site acquisition is limited to the amount of land reasonably necessary for the proposed housing or other educational facility.

(f) Projects to provide facilities for religious purposes or for theological seminaries or other schools providing training primarily for religious vocations are ineligible for assistance.

(g) Housing for the use of specific groups of students, such as fraternities or sororities, is eligible only if such housing is part of the overall housing plan of the college and if the housing will be operated under the direct responsibility and control of the college.

(h) An eligible service facility must provide an essential service in connection with the institution's housing plan.

§ 279.4 Applications.

(a) Information and application forms may be obtained from and applications submitted to the Regional Office of the Department of Housing and Urban Development which serves the area in which the educational institution is located. Applications will be received periodically and considered concurrently for both the direct loan and grant subsidy programs. In order to maintain flexibility in the allocation of available funds, HUD reserves the option to approve either a direct loan or a grant to a particular applicant.

(b) Prior to approval of a direct loan or grant, the applicant educational institution must establish that it:

(1) Has the necessary legal authority to finance, construct, operate and maintain the proposed facilities, to apply for and receive the proposed assistance, and to provide such security as shall be required by the Secretary;

(2) Has the ability to comply with the terms and conditions governing receipt of assistance and operation of the project;

(3) Has or will have such interest in or title to the project site, including access thereto, as will assure undisturbed use, possession and operation of the facilities during the period of assistance; and

(4) Will retain title to and all of its right, title, and interest in and to the project during the period of assistance, except as otherwise expressly approved by the Secretary.

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exceed 40 years (50 years for projects for which funds were reserved prior to July 1, 1968), bear interest at such rate not to exceed 3 percent per annum, and be so secured and subject to such terms and conditions, as shall be determined by the Secretary.

(b) Annual grants shall be made over a fixed period not exceeding 40 years, as determined by the Secretary, in an amount equal to the difference between the average annual debt service required to amortize the private market loan to cover eligible development cost and the average annual debt service which would be required to amortize a direct loan of like term. Fund limitations may require the setting of maximum limits for the grant.

§ 279.6

Assistance agreements.

Upon approval of a direct loan or grant, together with reservation of funds, the Secretary will prepare and forward a loan agreement or grant agreement for execution by the educational institution. The agreement will set forth the terms and conditions of the loan or grant and will also specify conditions which must be fulfilled precedent to making of the loan or grant. The fully executed agreement will constitute the contract between the educational institution and the Secretary during the life of the direct loan or grant, and in the case of a grant will guarantee continuation of the grant payments so long as the related private market bonds are outstanding.

§ 279.7 Grants to public educational institutions.

All public educational institutions approved for grant assistance must comply with the following requirements except as otherwise expressly approved by the Secretary:

(a) Submit a financing plan in form and substance acceptable to the private bond market and satisfying minimum standards established by the Secretary;

(b) Publicly advertise the bonds in a financial newspaper of general use by the bond market to which the bonds will be offered;

(c) Accept bids only for the entire issue; and

(d) Obtain an unqualified approving opinion of bond counsel experienced in municipal bonds whose opinions are marketable by reason of previous acceptance by investment dealers, banks, or insurance companies.

§ 279.8 Other requirements.

(a) All laborers and mechanics employed by contractors and subcontractors in the construction of housing and educational facilities assisted under the Act shall be paid wages at rates not less than those prevailing in the locality involved for the corresponding classes of laborers and mechanics employed on construction of a similar character as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a-276a-5), and shall receive overtime compensation in accordance with and subject to the provisions of the Contract Work Hours Standards Act (40 U.S.C. 327-332).

(b) All contracts for construction work paid for in whole or in part from assistance funds provided under the Act shall provide that the contractor shall comply with the Copeland (“Anti-Kickback") Act (40 U.S.C. 276c) and the regulations of the Secretary of Labor thereunder (29 CFR Part 3).

(c) The requirements of title VI of the Civil Rights Act (42 U.S.C. 2000d et seq.)

that no person in the United States shall, on the ground of race, color, or national origin, be excluded from participation in, or be denied the benefits of, or be otherwise subjected to discrimination are applicable to educational institutions receiving assistance under the Act.

(d) All contracts for construction work paid for in whole or in part from assistance funds provided under the Act are subject to Executive Order 11246 (30 F.R. 12319, Sept. 28, 1965), as amended by Executive Order 11375 (32 F.R. 14303, Oct. 17, 1967), providing for equal opportunity in employment, and the rules and regulations of the Department of Labor with respect thereto.

(e) The provisions of title VIII (Fair Housing) of the Civil Rights Act of 1968 (Public Law 90-284, 42 U.S.C. 36013619), prohibiting refusal to rent to or discrimination against any person in terms or conditions of rental or provision of services on account of race, color, religion, or national origin, are applicable to projects assisted under the Act.

CHAPTER III-GOVERNMENT NATIONAL
MORTGAGE ASSOCIATION, DEPARTMENT
OF HOUSING AND URBAN DEVELOPMENT

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66-047-72—37

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The Association is a Government corporation in the Department of Housing and Urban Development. The origin of the Association is in the creation on February 10, 1938, under title III of the National Housing Act, of the National Mortgage Association of Washington. On April 11, 1938, its name was changed to Federal National Mortgage Association. Effective November 1, 1954, it was rechartered by the Congress as a mixedownership corporation. Effective September 1, 1968, it was partitioned by the Congress into two corporations, one of which is the Association. The operations of the Association are conducted under its statutory charter contained in title III of the National Housing Act, 12 U.S.C. 1716 et seq.

§ 300.7 Area of operations.

The Association is authorized to conduct its business in any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and the territories and possessions of the United States.

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The Association directs its operations from its office located at 451 Seventh Street SW., Washington, D.C. 20414. It has made provisions for the carrying on of such operations through the Federal National Mortgage Association (FNMA). The regional offices of FNMA are listed below:

Atlanta, Ga. 30303, 34 Peachtree Street NE.: Alabama, Florida, Georgia, Kentucky. Mississippi, North Carolina, South Carolina, Tennessee.

Chicago, Ill. 60603, 1112 CommonwealthEdison Building, 72 West Adams Street: Illinois, Indiana, Iowa, Michigan, Minnesota, Nebraska, North Dakota, Ohio, South Dakota, Wisconsin.

Dallas, Tex. 75201, 411 North Akard Street: Colorado, Arkansas, Kansas, Louisiana, Missouri, New Mexico, Oklahoma, Texas.

Los Angeles, Calif. 90005, 3540 Wilshire Boulevard: Alaska, Arizona, California, Guam, Hawaii, Idaho, Montana, Nevada, Oregon, Utah, Washington, Wyoming.

Philadelphia, Pa. 19103, 5 Penn Center Plaza: Connecticut, Delaware, District of Columbia, Maine, Maryland, Massachusetts, New Hampshire, New Jersey, New York, Pennsylvania, Puerto Rico, Rhode Island, Vermont, Virgin Islands, Virginia, and West Virginia.

§ 300.11 Power of attorney.

(a) The Association does hereby make, constitute, and appoint each of the persons named in paragraph (c) of this section its true and lawful attorney-infact, for the Association and in its name and stead:

(1) To purchase or contract to purchase any note, bond, or other evidence of indebtedness and any accompanying real estate mortgage, deed to trust, security deed, chattel mortgage, or collateral or security of whatsoever kind or nature, to modify or consent to the modification of any such contract, and to act or authorize action to enforce any such contract;

(2) To endorse, assign, sell, exchange, amend, modify, extend, release, cancel, or renew any note, bond, check, or other evidence of indebtedness now or hereafter held by the Association, and to release from liability any maker, obligor, or guarantor on any such note, bond, check, or other evidence of indebtedness;

(3) To satisfy, discharge, release, amend, assign, modify, extend, renew, subordinate, foreclose, or liquidate in any legal manner, in whole or in part, any chattel mortgage, real estate mortgage, deed of trust, security deed, or collateral or security of whatsoever kind or nature, securing any note, bond, check, or other evidence of indebtedness now or hereafter held by the Association, and to exercise any right or authority which the Association has or may have pursuant to the terms of any such security instrument or evidence of indebtedness, including any power of appointment contained therein;

(4) To assign, convey, sell, lease, or sublease and to contract for the assignment, conveyance, sale, lease, or sublease of any real estate, chattel, security, or property of any sort or nature, or any interest therein, now held or hereafter acquired by the Association;

(5) To discharge, satisfy. release, waive, enforce, compromise, subordinate,

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