56 Provisos. Cancelation of Cor- poration notes. Transfer of evidence of indebtedness, etc. Allocation of funds. Insurance of eligible mortgages. Provisos. Locality of proper- ty. Aggregate insur- ance. Post, p. 686 . Duration of author- Ity. Eligibility require- ments. Qualification of mortgagee. Amount of principal obligation. PUBLIC LAWS-CH. 31-MAR . 28, 1941 [55 STAT. cient to provide such funds: Provided, That the Secretary of the Treasury is authorized and directed to cancel from time to time, upon the request of the Corporation, notes of the Corporation (which notes are hereby made available to the Secretary of the Treasury for purposes of this section), and to discharge its liability, as respects all sums due and unpaid upon or in connection with such notes at the time of such cancelation and discharge in a principal amount equal to the funds made available to the Administrator by the Corporation under or by reason of this title together with interest paid to the Treasury thereon: Provided further, That any evidence of indebted- ness with respect to funds so disbursed by the Corporation shall be transferred to the Secretary of the Treasury; that the Secretary and the Corporation are authorized and directed to make such adjustments on their books and records as may be necessary to carry out the purposes of this section; that the amount of notes, debentures, bonds, or other such obligations which the Corporation is authorized to issue and have outstanding at any one time under the provisions of this section shall be correspondingly reduced by the amount of notes so canceled by the Secretary, and that any sums at any time received by the Corporation, representing repayments or recoveries of funds so disbursed shall forthwith be covered into the general fund of the Treasury: And provided further, There shall be allocated immedi- ately to the Defense Housing Insurance Fund the sum of $5,000,000 out of funds made available to the Administrator for this purpose. General expenses of operation of the Federal Housing Administra- tion under this title may be charged to the Defense Housing Insurance Fund. "SEC. 603. (a) The Administrator is authorized, upon application by the mortgagee, to insure as hereinafter provided any mortgage which is eligible for insurance as hereinafter provided and upon such terms as the Administrator may prescribe to make commitments for the insuring of such mortgages prior to the date of their execution or disbursement thereon: Provided, That the property covered by the mortgage is in an area or locality in which the President shall find that an acute shortage of housing exists or impends which would impede national-defense activities: Provided further. That the aggre- gate amount of principal obligations of all mortgages insured under this section shall not exceed $100,(00,000: And provided further. That no mortgage shall be insured under this section after July 1, 1942, or after such earlier date as the emergency, declared by the President on September 8, 1939, to exist, has by his declaration ceased to exist, except pursuant to a commitment to insure issued on or before July 1, 1942, or such earlier date, whichever first occurs. "(b) To be eligible for insurance under this section a mortgage shall- "(1) have been made to, and be held by, a mortgagee approved by the Administrator as responsible and able to service the mortgage properly; "(2) involve a principal obligation (including such initial service charges, appraisal, inspection, and other fees as the Administrator shall approve) in an amount not to exceed 90 per centum of the appraised value (as of the date the mortgage is accepted for insurance) of a property, urban, suburban, or rural upon which there is located a dwelling designed principally for residential use for not more than four families in the aggre- gate, which is approved for mortgage insurance or defense hous- ing insurance prior to the beginning of construction, and (i) the construction of which is begun after the date of enactment of
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