Open-end Mortgages.
Section 21
SEC. 21. Open-end Mortgages. - Notwithstanding any other provisions of this Act, in connection with any mortgage guaranteed pursuant to any Section of this Act which covers a property upon which there is located a dwelling designed for residential use, the Corporation is authorized, upon such terms and conditions as it may prescribe, to guaranty the amount of any advances for the improvement or repair of property made to the mortgagor pursuant to an "open-end" provision in the mortgage and to add the amount of such advance to the original principal obligation in determining the value of the mortgage for the purpose of computing the amounts of debentures to which the mortgage may be entitled. The Corporation may require the payment of such charges, including charges in lieu of guaranty premiums, as it may consider appropriate for the guaranty of such "open-end" advances. Only advances for such improvements or repairs as will substantially protect or improve the basic liability or utility of the property involved shall be eligible for guaranty under this Section. No such advances shall be guaranteed under this Section if the amount thereof plus the amount of the unpaid balance of the original principal obligation of the mortgage would exceed the amount of such original principal obligation unless the mortgagor certifies that the proceeds of such advance will be used to finance the construction of additional rooms or other enclosed space as part of the dwelling. The guaranty of "open-end" advances shall not be taken into account in determining the aggregate amount of principal obligations of mortgages which may be guaranteed under this Act.