68 S T A T. ]
1271
PUBLIC LAW 781-SEPT. 3, 1954
surrender shall be (i) free and clear of all liens and encumbrances whatsoever except the lien of the preferred mortgage, (ii) in class and (iii) in as good order and condition, ordinary wear and tear excepted, as when acquired by the mortgagor, except that any deficiencies with respect to freedom from encumbrances, condition and class may, to the extent covered by valid policies of insurance, be satisfied by the assignment to the United States of claims of the mortgagor under such policies; and "(11) shall contain such other provisions as may be agreed upon between the mortgagor and mortgagee, which are not inconsistent with the provisions of the preceding paragraphs of this subsection (a) and which are not disapproved by the Secretary of Commerce. "(b) To be eligible for insurance under this title a loan— "(1) shall be made by a lender approved by the Secretary of Commerce to a borrower approved by the Secretary of Commerce as possessing the ability, experience, financial resources and other qualifications necessary to the adequate operation and maintenance of the property; "(2) shall be made to aid in financing, including payment of loans previously made to finance, and reimbursement of the borrower for expenditures previously made for construction (including designing, inspecting, outfitting and equipping) of vessels under title V of this Act, as amended, or for the construction, reconstruction or reconditioning (including designing, inspecting, outfitting and equipping) subsequent to the enactment of this title, of vessels owned by citizens of the United States which are designed principally for commercial use (a) in the coastwise or intercoastal trade; (b) on the Great Lakes or on bays, sounds, rivers, harbors, or inland lakes of the United States; (c) in foreign trade; or (d) in the fishing trade or industry-; "(3) shall be payable prior to or simultaneously with the execution of the mortgage; "(4) shall provide that no advance shall be made thereunder unless the sum of such advance and the principal amount of all other advances under insured loans then outstanding at the time of said advance shall be less than 75 per centum of the actual cost of such vessel, such actual cost to be determined by the Secretary of Commerce and such determination to be conclusive for the purpose of determining the principal amount of the loan; "(5) shall provide that the borrower shall pay to the lender the amount required for the payment of each loan insurance premium charge at least sixty days before the payment of such premium charge to the Secretary of Commerce is due, and which shall further provide that the failure of the borrower to make such payment shall give the lender the right to mature the loan; "(6) shall bear interest at an average interest rate not to exceed the maximum rate permitted by paragraph (5) of subsection (a) of this section; and "(7) shall contain such other provisions as may be agreed upon between the borrower and the lender which are not inconsistent with the provisions of the preceding paragraphs of this subsection (b) and which are not disapproved by the Secretary of Commerce. "(c) No commitment to insure a mortgage or loan shall be made by the Secretary of Commerce unless he finds, at or prior to the time such commitment is made, that the property or project with respect to which the mortgage or loan will be executed will be, in his opinion,
Loansa
46 USC
seq.
1151 fit
Interests
Restrictions.
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