(a) Purpose; housing certificates

The purpose of this section is to aid in the provision of housing accommodations for servicemen in the armed forces of the United States and their families, servicemen in the United States Coast Guard and their families, and servicemen in the United States National Oceanic and Atmospheric Administration and their families by supplementing the insurance of mortgages under section 1709 of this title with a system of mortgage insurance specially designed to assist the financing required for the construction or purchase of dwellings by those persons. As used in this section, a ''serviceman'' means a person to whom the Secretary of Defense (or any officer or employee designated by him), the Secretary of Transportation (or any officer or employee designated by him), or the Secretary of Commerce (or any officer or employee designated by him), as the case may be, has issued a certificate hereunder indicating that such person requires housing, is serving on active duty in the armed forces of the United States, in the United States Coast Guard, or in the United States National Oceanic and Atmospheric Administration and has served on active duty for more than two years, but a certificate shall not be issued hereunder to any person ordered to active duty for training purposes only. The Secretary of Defense, the Secretary of Transportation, and the Secretary of Commerce, respectively, are authorized to prescribe rules and regulations governing the issuance of such certificates and may withhold issuance of more than one such certificate to a serviceman whenever in his discretion issuance is not justified due to circumstances resulting from military assignment, or, in the case of the United States Coast Guard or the United States National Oceanic and Atmospheric Administration, other assignment.

(b) Eligibility of mortgage for insurance

To be eligible for insurance under this section a mortgage shall -

(1)

meet the requirements of section 1709(b), 1709(i), 1715l(d)(2), or 1715y(c) of this title, except as such requirements are modified by this section;

(2)

involve a dwelling designed principally for a one-family residence or a one-family unit in a condominium project;

(3)

have a principal obligation not in excess of the sum of

(i)

97 per centum of $25,000 of the appraised value of the property as of the date the mortgage is accepted for insurance, and

(ii)

95 per centum of such value in excess of $25,000; and

(4)

be executed by a mortgagor who at the time of application for insurance is certified as a ''serviceman'' and who at the time of insurance is the owner of the property and either occupies the property as a principal residence or certifies that his failure to do so is the result of his military assignment, or, in the case of the United States Coast Guard or the United States National Oceanic and Atmospheric Administration, other assignment.

(c) Manner of acceptance; payment of premiums

The Secretary may prescribe the manner in which a mortgage may be accepted for insurance under this section. Premiums fixed by the Secretary under section 1709 of this title with respect to, or payable during, the period of ownership by a serviceman of the property involved shall not be payable by the mortgage ^[1] but shall be paid not less frequently than once each year, upon request of the Secretary to the Secretary of Defense, the Secretary of Transportation, or the Secretary of Commerce, as the case may be, from the respective appropriations available for pay and allowances of persons eligible for mortgage insurance under this section. As used herein, ''the period of ownership by a serviceman'' means the period, for which premiums are fixed, prior to the date that the Secretary of Defense (or any officer or employee or other person designated by him), the Secretary of Transportation (or any officer or employee or other person designated by him), or the Secretary of Commerce (or any officer or employee or other person designated by him), as the case may be, furnishes the Secretary with a certification that such ownership (as defined by the Secretary), has terminated.

(d) Entitlement of mortgagee to benefits

Any mortgagee under a mortgage insured under this section is entitled to the benefits of the insurance as provided in section 1710(a) of this title with respect to mortgages insured under section 1709 of this title.

(e) Applicability of other provisions

The provisions of subsections (b), (c), (d), (e), (f), (g), (h), title shall apply to mortgages insured under this section, except that as applied to those mortgages

(1)

all references to the Fund, or Mutual Mortgage Insurance Fund, shall refer to the General Insurance Fund, and

(2)

all references to section 1709 of this title shall refer to this section.

(f) Transfer of insurance on mortgages covering single-family dwellings or one-family units in condominium projects if mortgage is assumed by serviceman

The Secretary is authorized to transfer to this section the insurance on any mortgage covering a single-family dwelling or a one-family unit in a condominium project insured under this chapter, if the mortgage indebtedness thereof has been assumed by a serviceman who at the time of assumption is the owner of the property and either occupies the property as a principal residence or certifies that his failure to do so is the result of his military assignment, or, in the case of the United States Coast Guard or the United States National Oceanic and Atmospheric Administration, other assignment.

(g) Extension of period of ownership where serviceman dies while on active duty

Where a serviceman dies while on active duty in the armed forces of the United States or in the United States Coast Guard or in the United States National Oceanic and Atmospheric Administration, leaving a surviving widow as owner of the property, the period of ownership by the serviceman (within the meaning of subsection (c) of this section) shall extend for two years beyond the date of the serviceman's death or until the date the widow disposes of the property, whichever date occurs first. The Secretary of Defense or the Secretary of Transportation, or the Secretary of Commerce, as the case may be, shall notify such widow promptly following the serviceman's death of the additional costs to be borne by the mortgagor following termination of the two-year period