Part IIIE+W+S The Housing Corporation

[F1Relevant Authority’s] powers with respect to grants and loansE+W+S

79 Lending powers.E+W+S

[F2(1)The Relevant Authority may lend to a registered social landlord or an unregistered self-build society, and the Housing Corporation may lend to any of its subsidiaries or to any other body in which it holds an interest, for the purpose of enabling the body to meet the whole or part of expenditure incurred or to be incurred by it in carrying out its objects.

(2)The Relevant Authority may lend to an individual for the purpose of enabling him to acquire from—

(a)the Relevant Authority, or

(b)any body to which the Relevant Authority may lend under subsection (1),

a legal estate or interest in a dwelling which he intends to occupy.]

(3)A loan under this section may be by way of temporary loan or otherwise, and the terms of a loan made under subsection (1) may include (though the terms of a loan made under subsection (2) may not) terms for preventing repayment of the loan or part of it before a specified date without the consent of the [F3Relevant Authority].

(4)The terms of a loan under this section shall, subject to subsection (3) and [F4(in the case of a loan by the Housing Corporation)]to any direction under section 76 (general power of Secretary of State to give directions), be such as the [F3Relevant Authority] may determine, either generally or in a particular case.

80 Security for loans to unregistered self-build societies.E+W+S

(1)Where the [F5Relevant Authority]—

(a)makes a loan to an unregistered self-build society under section 79(1); and

(b)under a mortgage or heritable security entered into by the society to secure the loan has an interest as mortgagee or creditor in land belonging to the society,

it may F6. . . give the society directions with respect to the disposal of the land.

(2)The society shall comply with directions so given so long as the [F5Relevant Authority] continues to have such an interest in the land.

(3)Directions so given may be varied or revoked by subsequent directions F7. . ..

[F8(3A)The written consent of the Secretary of State is required for the giving, varying or revoking of directions by the Housing Corporation.]

(4)The Secretary of State shall not [F9give directions under this section requiring a society to transfer its interest in land to him or any other person, and shall not consent to the Housing Corporation’s giving such directions requiring a society to transfer its interest in land to the Housing Corporation or] any other person, unless he is satisfied that arrangements have been made which will secure that the members of the society receive fair treatment in connection with the transfer.

81 Further advances in case of disposal on shared ownership lease.E+W

Where—

(a)a lease of a dwelling, granted otherwise than in pursuance of the provisions of Part V of the M1Housing Act 1985 (the right to buy) relating to shared ownership leases, contains a provision to the like effect as that required by paragraph 1 of Schedule 8 to that Act (terms of shared ownership lease: right of tenant to acquire additional shares), and

(b)the [F10Relevant Authority]has, in exercise of any of its powers, left outstanding or advanced any amount on the security of the dwelling,

that power includes power to advance further amounts for the purpose of assisting the tenant to make payments in pursuance of that provision.

82 Loans made under s. 2 of the Housing Act 1964.E+W+S

Schedule 7 (further powers of [F11Relevant Authority] with respect to land of certain housing associations) applies where a loan has been made to a housing association under section 2 of the M2Housing Act 1964 and the loan has not been repaid.

83 Power to guarantee loans.E+W+S

[F12(1)The Relevant Authority may guarantee the repayment of the principal of, and the payment of interest on, sums borrowed by registered social landlords or unregistered self-build societies; and the Housing Corporation may guarantee the repayment of the principal of, and the payment of interest on, sums borrowed by other bodies in which it holds an interest.]

[F13(1A)The consent of the Secretary of State given with the approval of the Treasury is required for the giving of a guarantee by the Housing Corporation and the approval of the Treasury is required for the giving of a guarantee by the Secretary of State.]

(2)Where the Corporation gives such a guarantee, it may impose such terms and conditions as it thinks fit.

(3)The aggregate amount outstanding in respect of—

(a)loans for which [F14the Housing Corporation] has given a guarantee under this section, and

(b)payments made by [F14the Housing Corporation] in meeting an obligation arising by virtue of such a guarantee and not repaid to [F14the Housing Corporation],

shall not exceed £300 million or such greater sum not exceeding £500 million as the Secretary of State may specify by order made with the approval of the Treasury.

[F15(3A)The aggregate amount outstanding in respect of—

(a)loans for which [F16the Secretary of State (or Housing for Wales)] has given a guarantee under this section, and

(b)payments made by [F16the Secretary of State (or Housing for Wales)] in meeting an obligation arising by virtue of such a guarantee and not repaid to [F16the Secretary of State (or Housing for Wales)],

shall not exceed £30 million or such greater sum not exceeding £50 million as the Secretary of State may specify by order made with the approval of the Treasury]

(4)An order under subsection (3) [F17or subsection (3A)] shall be made by statutory instrument and no such order shall be made unless a draft of it has been laid before and approved by the House of Commons.

84 Agreements to indemnify certain lenders: England and Wales.E+W+S

(1)The [F18Relevant Authority] may F19. . .enter into an agreement with—

(a)a building society lending on the security of a house, or

(b)a recognised body making a relevant advance on the security of a house,

whereby, in the event of default by the mortgagor, and in circumstances and subject to conditions specified in the agreement, the [F18Relevant Authority]binds itself to indemnify the society or body in respect of the whole or part of the mortgagor’s outstanding indebtedness and any loss or expense falling on the society or body in consequence of the mortgagor’s default.

(2)The agreement may also, if the mortgagor is made party to it, enable or require the [F18Relevant Authority] in specified circumstances to take a transfer of the mortgage and assume rights and liabilities under it, the building society or recognised body being then discharged in respect of them.

(3)The transfer may be made to take effect—

(a)on terms provided for by the agreement (including terms involving substitution of a new mortgage agreement or modification of the existing one), and

(b)so that the [F18Relevant Authority]is treated as acquiring (for and in relation to the purposes of the mortgage) the benefit and burden of all preceding acts, omissions and events.

(4)The [F20Housing Corporation may not enter into an agreement without the approval of the Secretary of State who] may approve particular agreements or give notice that particular forms of agreement have his approval, and in either case may make his approval subject to conditions.

(5)The Secretary of State shall, before giving notice that a particular form of agreement has his approval [F21and before himself entering into an agreement in a form about which he has not previously consulted under this subsection], consult—

(a)in the case of a form of agreement with a building society, the [F22Financial Services Authority] and such organisations representative of building societies and local authorities as he thinks expedient, and

(b)in the case of a form of agreement with a recognised body, such organisations representative of such bodies and local authorities as he thinks expedient.

F23(6). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

85 Meaning of “recognised body” and “relevant advance”.E+W

(1)The expressions “recognised body” and “relevant advance” in section 84 (agreements to indemnify certain lenders) shall be construed in accordance with the following provisions.

(2)A “recognised body” means a body specified, or of a class or description specified, in an order made by statutory instrument by the Secretary of State F24. . ..

(3)Before making such an order varying or revoking an order previously made, the Secretary of State shall give an opportunity for representations to be made on behalf of a recognised body which, if the order were made, would cease to be such a body.

(4)A “relevant advance” means an advance made to a person whose interest in the dwelling is or was acquired by virtue of a conveyance of the freehold or an assignment of a long lease, or a grant of a long lease by—

• a local authority,

• a new town corporation,

• an urban development corporation,

• F25. . .

• the [F26Housing Corporation], or

• a [F27registered social landlord].[F28 or an advance made to such a person by the Secretary of State if the conveyance, assignment or grant was made under section 90.]

(5)In subsection (4) “long lease” has the same meaning as in Part V of the M3Housing Act 1985 (the right to buy).

86 Agreements to indemnify building societies: Scotland.S

(1)[F29Scottish Homes] may, with the approval of the Secretary of State, enter into an agreement with a building society [F30or recognised body] under which [F29Scottish Homes] binds itself to indemnify the building society [F30or recognised body] in respect of—

(a)the whole or part of any outstanding indebtedness of a borrower; and

(b)loss or expense to the building society [F30or recognised body] resulting from the failure of the borrower duly to perform any obligation imposed on him by [F31a] heritable security.

(2)The agreement may also, where the borrower is made party to it, enable or require [F29Scottish Homes] in specified circumstances to take an assignation of the rights and liabilities of the building society [F32or recognised body] under the heritable security.

(3)Approval of the Secretary of State under subsection (1) may be given generally in relation to agreements which satisfy specified requirements, or in relation to individual agreements, and with or without conditions, as he thinks fit, and such approval may be withdrawn at any time on one month’s notice.

(4)Before issuing any general approval under subsection (1) the Secretary of State shall consult with such bodies as appear to him to be representative of islands and district councils, and of building societies, and also with [F29Scottish Homes] and with the [F33Financial Services Authority].

F34(5). . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

[F35(6)In this section, “recognised body” means a body designated, or of a class or description designated, in an order made under this subsection by statutory instrument by the Secretary of State with the consent of the Treasury.

(7)Before making an order under subsection (6) above varying or revoking an order previously so made, the Secretary of State shall give an opportunity for representations to be made on behalf of a recognised body which, if the order were made, would cease to be such a body.]

[F3687 Financial assistance with respect to formation, management, etc. of certain housing associations.E+W

[F37(1)The [F38Relevant Authority]may give financial assistance to any person to facilitate the proper performance of the functions of registered social landlords or co-operative housing associations.]

(2)Assistance under this section may be in the form of grants, loans, guarantees or incurring expenditure for the benefit of the person assisted or in such other way as the [F38Relevant Authority] considers appropriate, except that the may not, in giving any form of financial assistance [F39under this section], purchase loan or share capital in a company.

(3)With respect to financial assistance under this section, the following—

(a)the procedure to be followed in relation to applications for assistance,

(b)the circumstances in which assistance is or is not to be given,

(c)the method for calculating, and any limitations on, the amount of assistance, and

(d)the manner in which, and the time or times at which, assistance is to be given,

shall be such as may be specified by the [F38Relevant Authority], acting in accordance with such principles as it may from time to time determine.

(4)In giving assistance under this section, the may provide that the assistance is conditional upon compliance by the person to whom the assistance is given with such conditions as it may specify.

(5)Where assistance under this section is given in the form of a grant, subsections (1), (2) and (7) to (9) of section 52 of the Housing Act 1988 (recovery, etc. of grants) shall apply as they apply in relation to a grant to which that section applies, but with the substitution, for any reference in those subsections to the [F40registered] housing association to which the grant has been given, of a reference to the person to whom assistance is given under this section.

(6)Section 53 of the Housing Act 1988 (determinations under Part II) shall apply in relation to a determination under this section as it applies to a determination under sections 50 to 52 of that Act.]