Page:United States Statutes at Large Volume 112 Part 3.djvu/836

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112 STAT. 2666 PUBLIC LAW 105-276—OCT. 21, 1998 Contracts. 12 USC 1715Z-2 note. 12 USC 1701Z-1 note. total mortgage principal obligation (including such initial service charges, and such appraisal, inspection, and other fees as the Secretary shall approve). "(h) Before insuring a mortgage under this section, the Secretary shall enter into such contracts or other agreements as may be necessary to ensure that the mortgagee or other holder of the mortgage shall assume not less than 10 percent and not more than 50 percent of any loss on the insured mortgage, subject to any reasonable limit on the liability of the mortgagee or holder of the mortgage that may be specified in the event of unusual or catastrophic losses that may be incurred by any one mortgagee or mortgage holder. "(i) No guarantees may be issued under section 306(g) for the timely payment of interest or principal on securities backed, in whole or in part, by mortgages insured under this section.". (b) EFFECTIVE DATE. —The amendments under by this section are made on, and shall apply beginning upon, the date of the enactment of this Act. SEC. 599G. REHABIUTATION DEMONSTRATION GRANT PROGRAM. (a) IN GENERAL. —The Secretary of Housing and Urban Development shall, to the extent amounts are provided in appropriation Acts to carry out this section, carry out a program to demonstrate the effectiveness of making grants for rehabilitation of single family housing located within 10 demonstration areas designated by the Secretary. Of the areas designated by the Secretary under this section— (1) 6 shall be areas that have primarily urban characteristics; (2) 3 shall be areas that are outside of a metropolitan statistical area; and (3) 1 shall be an area that has primarily rural characteristics. In selecting areas, the Secretary shall provide for national geographic and demographic diversity. (b) GRANTEES.—Grants under the program under this section may be made only to agencies of State and local governments and non-profit organizations operating within the demonstration areas. (c) SELECTION CRITERIA.— In selecting among applications for designation of demonstration areas and grants under this section, the Secretary shall consider— (1) the extent of single family residences located in the proposed area that have rehabilitation needs; (2) the ability and expertise of the applicant in can:ying out the purposes of the demonstration program, including the availability of qualified housing counselors and contractors in the proposed area willing and able to participate in rehabilitation activities funded with grant amounts; (3) the extent to which the designation of such area and the grant award would promote affordable housing opportunities; (4) the extent to which selection of the proposed area would have a beneficial effect on the neighborhood or community in the area and on surrounding areas; (5) the extent to which the applicant has demonstrated that grant amounts will be used to leverage additional public