Fha v. The Darlington, Inc., 358 U.S. 84 (1958)

Federal Housing Administration v. The Darlington, Inc.

No. 13

Argued October 13, 1958
Decided November 24, 1958
358 U.S. 84

APPEAL FROM THE UNITED STATES DISTRICT COURT FOR THE

EASTERN DISTRICT OF SOUTH CAROLINA

Syllabus

Under § 608 of the National Housing Act and the regulations thereunder, appellee in 1949 obtained Federal Housing Administration insurance of its loan to finance the construction of an apartment house. Both before and after enactment of the Housing Act of 1954, providing specifically that the intent of the National Housing Act has been and is to exclude the use of such housing for transient or hotel purposes, appellee rented a few of the apartments to transients. Its right to do so was challenged by appellant. Appellee sued for a declaratory judgment that, so long as it operates its property "principally" for residential use, keeps apartments available for extended tenancies, and complies with the terms of the Act in existence at the time it obtained the insurance, it is entitled to rent to transients.

Held:

1. Though there was no express provision on the point in the Act or regulations when appellee’s mortgage was insured in 1949, the purpose of the Act, its administrative construction, and the meaning which a later Congress ascribed to it lead to the conclusion that appellee then had no right to rent to transients. Pp. 87-90.

2. The 1954 Act, prohibiting rental to transients by any insured mortgagor of multifamily housing, is not unconstitutional as applied to a mortgagor who obtained insurance before its enactment.

Pp. 90-92.

154 F.Supp. 411 reversed.