Insurance of mortgages for condominium associations to finance repair and replacement of common facilities of condominium projects

Section 234 of the National Housing Act (12 U.S.C. 1715y) is amended— (1) in subsection (a), by inserting and preserving after increasing; (2) in the first sentence of subsection (b), by inserting before the period at the end the following:, and except that the term mortgage, for the purposes of subsection (l), includes a loan financing the costs of a rehabilitation, alteration, repair, improvement, or replacement of any common system, infrastructure, facility, feature, portion, or area serving a condominium project and that is secured by future lien-based mandatory unit owner payments required pursuant to State statute, a recorded declaration of covenants, or lawful rule, by-law, or guideline adopted by the governing body of the condominium project, real property, or a combination thereof; (3) by adding at the end the following new subsection: (l) Insurance of mortgages To finance repairs and replacements of common facilities (1) In general In addition to mortgages insured under the other provisions of this section, the Secretary may insure, in the discretion of the Secretary and under such terms and conditions as the Secretary may prescribe, a mortgage— (A) that finances, in the case of condominium projects, the costs of a rehabilitation, alteration, repair, improvement, or replacement of any common system, infrastructure, facility, feature, portion, or area serving the project; and (B) under which the mortgagor is the governing body of the condominium project. (2) Loan limit To be eligible for insurance under this subsection, a mortgage may not involve a principal obligation in an amount exceeding 90 percent of the cost of the proposed rehabilitation, alteration, repair, improvement, or replacement project.; and (4) in subsection (h), by inserting or (l) after subsection (d).