Housing has long been the preoccupation of people and of governments. Some have handled it well, others badly. Poor handling of housing policy has caused more blight upon the world's societies than almost any non-war activity. We hope that this has been helpful in your consideration of the Federal housing program.

[Attachment A]

PROPOSED AMENDMENTS TO INCLUDE MOBILE DWELLINGS IN THE NATIONAL HOUSING ACT FOR CONSIDERATION OF THE BANKING AND CURRENCY COMMITTEE OF THE SENATE AND HOUSE OF REPRESENTATIVES, 2D SESSION, 83D CONGRESS, IN CONNECTION WITH H. R. 7839 AND S. 2938

To aid in the provision of housing for families in essential and migratory occupations and to encourage the growth of a mobile housing resource for national security by extending certain credit insurance provisions of the National Housing Act to occupants of trailer-coach mobile dwellings.

FEDERAL HOUSING ADMINISTRATION

Amendments of title I of National Housing Act

Section 2 (a) of the National Housing Act, as amended, is hereby amended by striking out the period at the end of the first sentence and inserting the following: "and for the purpose of financing trailer-coach mobile dwellings by owner-occupants thereof.".

Section 2 (b) of said act, as amended, is hereby amended (1) by striking out the semicolon at the end of the clause numbered (1) and inserting the following: "or for the purpose of financing mobile dwellings exceeds 75 percent of the purchase price or $5,000, whichever is less:". (2) by inserting in clause numbered (2) the following: "or for mobile dwellings 7 years and 32 days," between the words "days" and "except".

Section 2 (c) of said Act, as amended, is hereby amended by inserting in paragraph numbered (2) the words "or mobile dwelling" immediately after the phrase "any real property".

Amendments of title II of National Housing Act

Section 207 (a) of said Act, as amended, is hereby amended (1) by inserting in paragraph numbered (1) a comma followed by the words "including facilities for trailer coach mobile dwellings" immediately following the phrase "designed principally for residential use". (2) by striking out the period at the end of paragraph numbered (6) and inserting the words "or space in a trailer court or park properly arranged and equipped to accommodate a trailer-coach mobile dwelling.".

Section 207 (c) of said Act, as amended, is hereby amended by inserting in paragraph numbered (3) the words "or not to exceed $1,000 per space or $300,000 per mortgage for trailer courts or parks" immediately following the parenthesis and words "four per family unit".

[Attachment B]

MASTER DRAFT OF NATIONAL HOUSING ACT, TITLE I, SECTION 2, AND TITLE II, SECTION 207, SHOWING PROPOSED AMENDMENTS, 2D SESSION, 83D CONGRESS

Key:

Present law, shown in regular type.

Changes proposed in H. R. 7839 and S. 2938:

Additions to present law shown in italics.

Deletions from present law shown in black brackets.

Changes to include mobile dwellings and parks shown in boldface.

TITLE I, SECTION 2. INSURANCE OF FINANCIAL INSTITUTIONS

(a) The Commissioner is authorized and empowered upon such terms and conditions as he may prescribe, to insure banks, trust companies, personal finance companies, mortgage companies, building and loan associations, installment lending companies, and other such financial institutions, which the Commissioner finds to be qualified by experience or facilities and approves as eligible

for credit insurance, against losses which they may sustain as a result of loans and advances of credit, and purchases of obligations representing loans and advances of credit, made by them on and after July 1, 1939, and prior to July 1, 1955, for the purpose of financing alterations, repairs, and improvements upon or in connection with existing structures, and the building of new structures, upon urban, suburban, or rural real property (including the restoration, rehabilitation, rebuilding, and replacement of such improvements which have been damaged or destroyed by earthquake, conflagration, tornado, hurricane, cyclone, flood, or other catastrophe), by the owners thereof or by lessees of such real property under a lease expiring not less than 6 months after the maturity of the loans or advance of credit and for the purpose of financing trailer coach mobile dwellings by owners-occupants thereof. In no case shall the insurance granted by the Commissioner under this section to any such financial institution on loans, advances of credit, and purchases made by such financial institution for such purposes on and after July 1, 1939, exceed 10 per centum of the toral amount of such loans, advances of credit, and purchases. The aggregate amount of all loans, advances of credit, and obligations purchased, exclusive of financing charges, with respect to which insurance may be heretofore or hereafter granted under this section and outstanding at any one time shall not exceed $1,750,000,000. (b) No insurance shall be granted under this section to any such financial institution with respect to any obligation representing any such loan, advance of credit, or purchase by it [(1) if the amount of such loan, advance of credit, or purchase made for the purpose of financing the alteration, repair, or improvement of existing structures exceeds $2,500, or for the purpose of financing the construction of new structures exceeds $3,000;1 (1) if the amount of such loan, advance of credit, or purchase exceeds $3,000, or for the purpose of financing mobile dwellings exceeds 75 percent of the purchase price or $5,000, whichever is less; (2) if such obligation has a maturity in excess of [three years,] 5 years and thirty-two days or for mobile dwellings seven years and thirty-two days, except that such maturity limitation shall not apply if such loan, advance of credit, or purchase is for the purpose of financing the construction of a new structure for use in whole or in part for agricultural purposes; or (3) unless the obligation bears such interest, has such maturity, and contains such other terms, conditions, and restrictions as the Commissioner shall prescribe, in order to make credit available for the purposes of this subchapter; Provided, That insurance may be granted to any such financial institution with respect to any obligation not in excess of [$10,000 and having a maturity net in excess of seven years] $10,000 or $1,500 per family unit, whichever is the greater, and having a maturity not in excess of ten years and thirty-two days representing any such loan, advance of credit, or purchase made by it if such loan, advance of credit, or purchase is made for the purpose of financing the alteration, repair, improvement or conversion of an existing structure used or to be used as an apartment house or a dwelling for two or more families; Provided further, That any obligation with respect to which insurance is granted under this section on or after July 1, 1939, may be refinanced and extended in accordance with such terms and conditions as the Commissioner may prescribe, but in no event for an additional amount or term in excess of the maximum provided for in this subsection.

(c) (1) Notwithstanding any other provision of law, the Commissioner shall have the power, under regulations to be prescribed by him and approved by the Secretary of the Treasury, to assign or sell at public or private sale, or otherwise dispose of, any evidence of debt, contract, claim, personal property, or security assigned to or held by him in connection with the payment of insurance heretofore or hereafter granted under this section, and to collect or compromise all obligations assigned to or held by him and all legal or equitable rights accruing to him in connection with the payment of such insurance until such time as such obligations may be referred to the Attorney General for suit or collection.

(2) The Commissioner is authorized and empowered (a) to deal with, complete, rent, renovate, modernize, insure, or sell for cash or credit, in his discretion, and upon such terms and conditions and for such consideration as the Commissioner shall determine to be reasonable, any real property or mobile dwelling conveyed to or otherwise acquired by him in connection with the payment of insurance heretofore or hereafter granted under this subchapter and (b) to pursue to final collection, by way of compromise or otherwise, all claims against mortgagors assigned by mortgagees to the Commissioner in connection with such real property by way of deficiency or otherwise: Provided, That section 5 of title 41 shall not be construed to apply to any contract of hazard insur

ance or to any purchase or contract for services or supplies on account of such property if the amount thereof does not exceed $1,000. The power to convey and to execute in the name of the Commissioner deeds of conveyance, deeds of release, assignments and satisfactions of mortgages, and any other written instrument relating to real property or any interest therein heretofore or hereafter acquired by the Commissioner pursuant to the provisions of this subchapter may be exercised by the Commissioner or by any Assistant Commissioner appointed by him without the execution of any express delegation of power or power of attorney: Provided, That nothing in this paragraph shall be construed to prevent the Commissioner from delegating such power by order or by power of attorney, in his discretion, to any officer or agent he may appoint.

(d) The Commissioner is authorized and empowered, under such regulations as he may prescribe, to transfer to any such approved financial institution any insurance in connection with any loans and advances of credit which may be sold to it by another approved financial institution.

(e) The Commissioner is authorized to waive compliance with regulations heretofore or hereafter prescribed by him with respect to the interest and maturity of and the terms, conditions, and restrictions under which loans, advances of credit, and purchases may be insured under this section and section 210 of this title, if in his judgment the enforcement of such regulations would impose an injustice upon an insured institution which has substantially complied with such regulations in good faith and refunded or credited any excess charge made, and where such waiver does not involve an increase of the obligation of the Commissioner beyond the obligations which would have been involved by the regulations had been fully complied with.

(f) The Commissioner shall fix a premium charge for the insurance hereafter granted under this section, but in the case of any obligation representing any loan, advance of credit, or purchase, such premium charge shall not exceed an amount equivalent to 1 per centum per annum of the net proceeds of such loan, advance of credit, or purchase, for the term of such obligation, and such premium charge shall be payable in advance by the financial institution and shall be paid at such time and in such manner as may be prescribed by the Commissioner. The moneys derived from such premium charges and all moneys collected by the Commissioner as fees of any kind in connection with the granting of insurance as provided in this section, and all moneys derived from the sale, collection, disposition or compromise of any evidence of debt, contract, claim, property, or security assigned in or held by the Commissioner as provided in subsection (c) of this section with respect to insurance granted on and after July 1, 1939, shall be deposited in an account in the Treasury of the United States, which account shall be available for defraying the operating expenses of the Federal Housing Administration under this section, and any amounts in such account which are not needed for such purpose may be used for the payment of claims in connection with the insurance granted under this section. As amended June 26, 1947, c. 152, 61 Stat. 182; 1947 Reorg. Plan No. 3, eff. July 27, 1947, 12 F. R. 4981, 61 Stat. 954; Aug. 10, 1948, c. 832, Title I, 101 (s), 62 Stat. 1275; July 15, 1949, c. 338, Title II, 201 (1), 63 Stat. 421; Aug. 30, 1949, c. 524, 63 Stat. 681; Oct. 28, 1949, c. 729, 1 (1), 63 Stat. 905; Apr. 20, 1950, c. 94, Title I, 101 (a), 122, 64 Stat. 48, 59: Mar. 10, 1953, c. 5, 1, 67 Stat. 4.

(g) The Commissioner is authorized an directed to make such rules and regulations as may be necessary to carry out the provisions of this title. Title II Section 207 Rental Housing Insurance.

(a) As used in this section

(1) The term "mortgage" means a first mortgage on real estate in fee simple, or on the interest of either the lessor or lessee thereof (A) under a lease for not less than ninety-nine years which is renewable or (B) under a lease having a period of not less than fifty years to run from the date the mortgage was executed, upon which there is located or upon which there is to be constructed a building or buildings designed principally for residential use, including facilities for trailer coach mobile dwellings; and the term "first mortgage" means such classes of first liens as are commonly given to secure advances (including but not being limited to advances during construction) on, or the unpaid purchase price of, real estate under the laws of the State, in which the real estate is located, together with the credit instrument of instruments, if any, secured thereby, and may be in the form of trust mortgages or mortgage indentures or deeds of trust securing notes, bonds, or other credit instruments.

(2) The term "mortgagee" means the original lender under a mortgage, and its successors and assigns, and includes the holders of credit instruments issued

under a trust mortgage or deed of trust pursuant to which such holders act by and through a trustee therein named.

(3) The term "mortgagor" means the original borrower under a mortgage and its successors and assigns.

(4) The term "maturity date" means the date on which the mortgage indebtedness would be extinguished if paid in accordance with the periodic payments provided for in the mortgage.

(5) The term "slum or blighted area" means any area where dwellings predominate which, by reason of dilapidation, overcrowding, faulty arrangement. or design, lack of ventilation, light or sanitation facilities, or any combination of these factors, are detrimental to safety, health, or morals.

(6) The term "rental housing" means housing, the occupancy of which is permitted by the owner thereof in consideration of the payment of agreed charges, whether or not, by the terms of the agreement, such payment over a period of time will entitle the occupant to the ownership of the premises or space in a trailer court or park properly arranged and equipped to accommodate a trailer coach mobile dwelling.

(7) The term "State" includes the several States, and Alaska, Hawaii, Puerto Rico, the District of Columbia, Guam, and the Virgin Islands.

INSURANCE OF ADDITIONAL MORTGAGES

(b) In addition to mortgages insured under section 203 of this title, the Commissioner is authorized to insure mortgages as defined in this section (including advances on such mortgages during construction) which cover property held by

(1) Federal or State instrumentalities, municipal corporate instrumentalities of one or more States, or limited dividend or redevelopment or housing corporations restricted by Federal or State laws or regulations of State banking or insurance departments as to rents, charges, capital structure, rate of return, or methods of operation; or

(2) Private corporations, associations, cooperative societies which are legal agents of owner-occupants, or trusts formed or created for the purpose of rehabilitating slum or blighted areas, or providing housing for rent or sale, and which possess powers necessary therefor and incidental thereto, and which, until the termination of all obligations of the Commissioner under such insurance, are regulated or restricted by the Commissioner as to rents or sales, charges, capital structure, rate of return, and methods of operation to such extent and in such manner as to provide reasonable rentals to tenants and a reasonable return on the investment. The Commissioner may make such contracts with, and acquire for not to exceed $100 such stock or interest in, any such corporation, association, cooperative society, or trust as he may deem necessary to render effective such restriction or regulation. Such stock or interest shall be paid for out of such Housing Fund, and shall be redeemed by the corporation, association, cooperative society, or trust at par upon the termination of all obligations of the Commissioner under the insurance.

The insurance of mortgages under this section is intended to facilitate particularly the production of rental accommodations, at reasonable rents, of design and size suitable for family living. The Commissioner is, therefore, authorized and directed in the administration of this section to take action, by regulation or otherwise, which will direct the benefits of mortgage insurance hereunder primarily to those projects which made adequate provision for families with children, and in which every effort has been made to achieve moderate rental charges.

Notwithstanding any other provisions of this section, no mortgage shall be insured hereunder unless the mortgagor certifies under oath that in selecting tenants for the property covered by the mortgage he will not discriminate against any family by reason of the fact that there are children in the family, and that he will not sell the property while the insurance is in effect unless the purchaser so certifies, such certification to be filed with the Commissioner. Violation of any such certification shall be a misdemeanor punishable by a fine of not to exceed $500.

ELIGIBILITY FOR INSURANCE; RELEASE OF PART OF PROPERTY

(c) To be eligible for insurance under this section a mortgage on any property or project shall involve a principal obligation in an amount

(1) not to exceed $5,000, or, if executed by a mortgagor coming within the provisions of subsection (b) (1) of this section, not to exceed $50,000,000;

(2) not to exceed 80 per centum of the estimated value of the property or project (when the proposed improvements are completed): Provided, That except with respect to a mortgage executed by a mortgagor coming within the provisions of paragraph numbered (b) (1) of this section, such mortgage shall not exceed the amount which the Commissioner estimates will be the cost of the completed physical improvements on the property or project exclusive of public utilities and streets and organization and legal expenses: Provided further, That nothing contained in this section shall preclude the insurance of mortgages covering existing construction located in slum or blighted areas, as defined in paragraph numbered (5) of subsection (a) of this section, and the Commissioner may require such repair or rehabilitation work to be completed as is, in his discretion, necessary to remove conditions detrimental to safety, health, or morals: And provided further, That the above limitations in this paragraph shall not apply to mortgages on housing in the Territory of Alaska, or in Guam, but such a mortgage may involve a principal obligation in an amount not to exceed 90 per centum of the amount which the Commissioner estimates will be the replacement cost of the property or project when the proposed improvements are completed (the value of the property or project as such term is used in this paragraph may include the land, the proposed physical improvements, utilities within the boundaries of the property or project, architect's fees, taxes, and interest accruing during construction, and other miscellaneous charges incident to construction and approved by the Commissioner); and

(3) [not to exceed, for such part of such property or project as may be attributable to dwelling use, $2,000 per room (or $7,200 per family unit if the number of rooms in such property or project does not equal or exceed four per family unit) and not in excess of $10,000 per family unit.

[Notwithstanding any of the limitations contained in paragraph numbered (2) and (3) of this subsection, if the number of bedrooms in such property or project is equal to or exceeds two per family unit, and the principal obligation of the mortgage does not exceed $7,200 per family unit for such part of such property as may be attributable to dwelling use, the mortgage may involve a principal obligation not in excess of 90 per centum of the estimated value of the property or project (when the proposed improvements are completed).] (3) not to exceed, for such part of such property or project as may be attributable to dwelling use, $2.000 per room (or $7.200 per family unit if the number of rooms in such property or project does not equal or exceed four per family unit) or not to exceed $1,000 per space or $300,000 per mortgage for trailer courts or parks: Provided, That as to projects to consist of elevator type structures, the Commissioner may, in his discretion, increase the dollar amount limitation of $2,000 per room to not to exceed $2,400 per room and the dollar amount limitation of $7,200 per family unit to not to exceed $7,500 per family unit, as the case may be, to compensate for the higher costs incident to the construction of elerator type structures of sound standards of construction and design: And provided further, That such mortgage shall not involve a principal obligation exceeding the maximum amount prescribed by the provisions of this section 207 in effect prior to the effective date of the Housing Act of 1954, unless the President, pursuant to section 201 of the Housing Act of 1954, has authorized a greater maximum amount, in which event such principal shall not exceed such greater maximum amount.

PREMIUM, APPRAISAL, AND INSPECTION CHARGES

(d) The Commissioner shall collect a premium charge for the insurance of mortgages under this section and section 210 of this title which shall be payable annually in advance by the mortgagee, either in cash or in debentures of the Housing Insurance Fund issued by the Commissioner under this subchapter at par plus accrued interest. In addition to the premium charge herein provided for, the Commissioner is authorized to charge and collect such amounts as he may deem reasonable for the appraisal of a property or project offered for insurance and for the inspection of such property or project during construction: Provided, That such charges for appraisal and inspection shall not aggregate more than 1 per centum of the original principal face amount of the mortgage.

ADJUSTED PREMIUM CHARGE ON PAYMENT OF MORTGAGE

(e) In the event that the principal obligation of any mortgage accepted for insurance under this section is paid in full prior to the maturity date, the Commissioner is authorized in his discretion to require the payment by the mortgagee