## Facts

- Stadium Apartments, Inc. executed an FHA-insured mortgage in 1949 to finance construction of an apartment project in Caldwell, Idaho under Title VI of the National Housing Act.
- The mortgage was made on a federally prescribed form and contained a clause waiving, “to the extent permitted by law,” any right to a stay of proceedings or statutory redemption.
- The original mortgagee later assigned the mortgage to the United States (through HUD) after Stadium Apartments defaulted in 1966.
- The United States foreclosed in federal district court and obtained a default judgment of foreclosure.
- The district court’s foreclosure decree nevertheless granted a one-year right of redemption based on Idaho’s redemption statute.
- The United States appealed, arguing that state redemption law should not apply to a foreclosure of an FHA-insured mortgage held and enforced by the federal government.

## Issues

1. Whether a state statutory right of redemption applies to a foreclosure action brought by the United States on an FHA-insured mortgage under Title VI of the National Housing Act.
2. Whether, absent congressional or regulatory adoption of state law, federal law governs the availability of any redemption period in such foreclosures.

## Decision

- The Ninth Circuit reversed the portion of the foreclosure judgment that provided a one-year redemption period under Idaho law.
- The court held that state redemption statutes do not apply to the United States’ foreclosure of an FHA-insured mortgage.
- The case was remanded with instructions to modify the judgment to eliminate the state-law redemption period.

## Legal Principles

- When the United States acts under a federal statute to enforce federal security interests, federal law governs unless Congress clearly provides otherwise.
- In FHA-insured mortgage foreclosures by the United States, state statutory redemption rights are displaced unless incorporated by federal statute or regulation.
- The National Housing Act’s Title VI scheme and federally prescribed mortgage forms support uniform federal foreclosure remedies rather than divergent state redemption periods.
- Protecting federal financial interests and the value of federal collateral supports excluding state redemption periods that can delay recovery and depress foreclosure sale outcomes.
- A waiver of stay or redemption in an FHA form mortgage is consistent with treating redemption as unavailable against the United States in these foreclosures.

## Conclusion

The Ninth Circuit held that federal law, not state redemption statutes, governs the availability of redemption when the United States forecloses an FHA-insured mortgage under Title VI, and it ordered removal of the Idaho one-year redemption period from the foreclosure decree.


United States v. Stadium Apartments, Inc., 425 F.2d 358 (9th Cir. 1970)