68 S T A T. ]
PUBLIC LAW 781-SEPT. 3, 1954
1269
" (b) The Secretary of Commerce, upon application by the borrower, is authorized to insure as hereinafter provided the interest on and 90 per centum of the unpaid balance of the principal of, any loan offered to him which is eligible for insurance as hereinafter provided and, upon such terms as the Secretary of Commerce may prescribe, is authorized to make commitments to insure any such loan prior to the date of execution or disbursement thereon: Provided, That in the case of special purpose vessels certified by the Secretary of Defense to be essential to national defense, the Secretary of Commerce may insure 100 per centum of the principal of and interest on any such loan eligible for insurance as hereinafter provided and upon such terms as the Secretary of Commerce may prescribe. Instirance c o n "(c) Each insurance contract made under this section shall run to tracts. the mortgagee or lender and be for the benefit of such mortgagee or lender and the holders of the obligations secured by the mortgage or evidencing the loan, and if the mortgagee or lender is a trustee under a trust indenture, for the benefit of the holders of the bonds or notes issued under such trust indenture. " (d) The faith of the United States is solemnly pledged to the P l e d g e of U. S. payment of the interest on and 90 per centum of the unpaid balance of the principal amount of each mortgage and loan insured under this title. A re at "(e) The aggregate unpaid principal amount of the mortgages paidg gp r ign c e pun-. i al and loans insured under this section and outstanding at any one time Hmitationl shall not exceed $1,000,000,000." SEC. 4. Section 1104 (46 U.S.C. 1274) is amended to read as follows: " (a) To be eligible for insurance under this title a mortgage, Eligibility. excepting as otherwise provided in section 1106 (46 U.S.C. 1276)— "(1) shall have a mortgagee approved by the Secretary of Commerce as responsible and able to service the mortgage properly; and a mortgagor 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 mortgaged property; "(2) shall involve an obligation in a principal amount which does not exceed 75 per centum of the actual cost of the vessel, such actual cost to be determined by the Secretary of Commerce prior to the execution of the mortgage and such determination to be conclusive for the purpose of determining the principal amount of the mortgage: Provided, however, That in the case of a vessel, the size and speed of which are approved by the Secretary of Commerce, which is eligible for mortgage aid under section 509 of this Act and in respect of which the minimum 46 USC 1159. downpayment by the mortgagor required by that section would be 1 2 ^ per centum of the cost of such vessel, the obligation may be in an amount which does not exceed 87^/2 per centum of such actual cost; or, in the case of vessels purchased pursuant 60 Stat. 41. to the Merchant Ship Sales Act of 1946, as amended, for exclusive 50 USC app. 1735 use on the Great Lakes, involve an obligation in a principal "°*« amount which does not exceed 75 per centum of the net purchase price of such vessels plus 75 per centum of the amounts expended for altering, modifying, converting, and equipping such vessels in excess of that purchase price, or 75 per centum of the amount which the Secretary of Commerce estimates will be the value of such vessel so purchased for exclusive use on the Great Lakes when the reconstruction or reconditioning is completed, whichever is the lesser;
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