SEC-712 -- SECTION 515 LOANS. 

 
 (a) Equity Takeout Loans.-Section 515(t) of the Housing Act of 1949 (42
U.S.C. 1485(t)) is amended-
 
 (1) in paragraph (3), by striking "original loan on the project" in
the last sentence and inserting "original appraised value of the
project";
 
 (2) in paragraph (4)-
 
 (A) in the first sentence, by inserting "initial" before "loan";
and
 
 (B) in the second sentence, by inserting "initial payments, any
accrued payments, and" after "except that such" in the second
sentence; and
 
 (3) by striking paragraph (8) and inserting the following new
paragraph:
 
 "(8) Effective date.-The requirements of this subsection shall apply
to any loan obligated under this section on or after December 15, 1989.
This subsection shall not require retroactive reserve account payments
with respect to any loan that was obligated on or after December 15,
1989, and on or before June 16, 1990, but reserve account payments shall
be required for such loans beginning on the date of the enactment of
this paragraph.".
 
 (b) Reuse of Loan Authority.-Section 515(u) of the Housing Act of 1949
(42 U.S.C. 1485(u)) is amended by inserting at the end the following new
sentence: "Any loan authority under this section appropriated or made
available within limits established in appropriations Acts shall remain
available until expended.".
 
 (c) Assumption of Loans.-Section 515 of the Housing Act of 1949 (42
U.S.C. 1485) is amended by adding at the end the following new
subsection:
 
 "(v) Assumption of Loans.-The Secretary may provide for the assumption
or transfer of a loan or loan obligation under this section to any
person or entity qualified to receive a loan or loan obligation under
this section in any case of default or foreclosure with respect to the
original borrower. The Secretary shall provide in each assumption or
transfer under this subsection for the assumption of the obligations,
rights, and interests under the terms of the loan or loan obligation or
such other terms as the Secretary determines appropriate.".