FEDERAL MORTGAGE INSURANCE TO FACILITATE SALE OR REFINANCING OF HOUSING IN NEIGHBORHOOD PRESERVATION AREAS

SEC. 203. (a) Title II of the National Housing Act is amended by adding at the end thereof the following new section:

"MORTGAGE INSURANCE IN NEIGHBORHOOD PRESERVATION AREAS

"SEC. 244. (a) The purpose of this section is to assist in the preservation and upgrading of housing in designated neighborhood preservation areas by facilitating the refinancing of such housing or its transfer to resident or nonprofit ownership. "(b) The Secretary is authorized to insure any mortgage in accordance with the provisions of this section upon such terms and conditions as he may prescribe and to make commitments for such insurance prior to the date of the execution of the mortgage or disbursement thereon.

"(c) In order to carry out the purpose of this section, the Secretary is authorized to insure any mortgage which covers residential property located in a neighborhood preservation area (as designated and approved under section 202 of the Housing and Urban Development Act of 1971), subject to the following conditions: "(1) The mortgage shall cover property which is basically sound or is capable of being placed in standard condition without substantial rehabilitation, and which contains

"(A) two or more (but less than seven) dwelling units if the mortgagor is an individual described in clause (A) of paragraph (2), or

"(B) seven or more dwelling units if the mortgagor is an organization described in clause (B) or (C) of paragraph (2).

"(2) The mortgage shall be executed by (A) an individual who owns and occupies the property and is refinancing outstanding indebtedness related to the property, or who is purchasing the property and will occupy one or more of the units in the property after its purchase, or (B) a cooperative or condominium organization which consists of or includes a majority of the occupants of the property, or (C) a private nonprofit organization or association approved by the Secretary. "(3) The mortgage shall involve a principal obligation (indlucing such initial service charges, and appraisal, inspection, and other fees, as the Secretary shall approve) in an amount not to exceed the sum of 97 per centum of the Secretary's estimate of the value of the property before any repairs or improvements deemed necessary by the Secretary to help restore or maintain the area in which the property is situated as a suitable and stable living environment, except that in no case involving refinancing shall such principal amount exceed such estimated cost of repair or improvements and the amount (as determined by the Secretary) required to refinance existing indebtedness secured by the property.

(4) The mortgage shall—

"(A) provide for complete amortization by periodic payments within such term (not exceeding twenty years) as the Secretary shall prescribe; and "(B) bear interest (exclusive of premium charges for insurance and service charges, if any) on the amount of the principal obligation outstanding at any time, at such percent per annum not in excess of 6 per centum as the Secretary finds necessary to meet the mortgage market. "(d) The Secretary shall not insure any mortgage under this section unless he has received satisfactory and enforceable assurances from the mortgagor that the refinancing or sale of the property (and any improvements thereto) will not result, directly or indirectly, in any increase in the rentals charged for dwelling units in the property for a period of at least one year from the date of final endorsement for mortgage insurance, or in any increases in such rentals thereafter in excess of such increases as the Secretary finds justified and approves on the basis of increased operating expenses. In addition, the Secretary shall place such further restrictions on the mortgagor as to sales, charges, capital structure, rate of return, and methods of operation as, in the opinion of the Secretary, will best effectuate the purpose of this section.

"(e) The Secretary may consent to the release of a part or parts of the mortgaged property from the lien of any mortgage insured under this section upon such terms and conditions as he may prescribe.

"(f) The provisions of

"(1) subsections (b), (c), (d), (e), (f), (g), (h), (j), and (k) of section 204, or "(2) subsections (d), (e), (g), (h), (i), (j), (k), (1), and (n) of section 207, as may be appropriate, shall apply to mortgages insured under this section; except that (A) all references in the enumerated subsections of section 204 to the

Mutual Mortgage Insurance Fund or the Fund shall be construed to refer to the Special Risk Insurance Fund and all references in such subsections to section 203 shall be construed to refer to this section, and (B) all references in the enumerated subsections of section 207 to the General Insurance Fund or the Fund shall be construed to refer to the Special Risk Insurance Fund and all references in such subsections to section 207 shall be construed to refer to this section."

(b) (1) The first sentence of section 238(b) of the National Housing Act is amended by striking out "and 243" and inserting in lieu thereof "243, and 244". (2) The third sentence of section 238 (b) of such Act is amended by striking out "and 243" and inserting in lieu thereof "243, and 244".

(3) The fourth sentence of section 238(b) of such Act is amended by striking out "and 243" and inserting in lieu thereof "243, and 244".

TITLE III-COUNSELING AND IMPROVED MANAGEMENT

ACTIVITIES

PURPOSE

SEC. 301. It is the purpose of this title to increase the capabilities of the Secretary of Housing and Urban Development to meet the urgent need for improved housing management practices and homeownership counseling services in federally assisted housing programs in a manner which will be responsive to the needs and desires of those assisted and supportive of the national housing production goal.

COUNSELING AND IMPROVED MANAGEMENT ACTIVITIES

SEC. 302. (a) Section 238 of the National Housing Act is amended by adding at the end thereof the following new subsection:

"(c) With respect to receipts from premium charges for any mortgage or loan the insurance of which is an obligation of the Special Risk Insurance Fund, and which is accepted for insurance pursuant to a commitment issued on or after the date of enactment of the Housing and Urban Development Act of 1971, up to 100 per centum of the amount received during the first twelve months after the mortgage or loan is accepted for insurance and 50 per centum of the amounts received thereafter shall be available to the Secretary for the following purposes:

"(1) the provision, either directly or by contract, of training programs in family budgeting, recordkeeping, maintenance, and other activities related to homeownership for families eligible for mortgages or loans which are, or would be, obligations of the Special Risk Insurance Fund;

'(2) making studies of typical homeowner problems, including but not limited to basic home maintenance problems, and disseminating information on such problems through periodic consumer bulletins;

"(3) conducting continuing analyses and studies designed to develop criteria for determining the eligibility of families for Federal homeownership assistance that makes such assistance available to a maximum number of families while furthering successful homeownership;

"(4) providing counseling programs in family budgeting, homemaking, and utilization of equipment for tenants in federally subsidized rental housing covered by mortgages or loans which are obligations of the Special Risk Insurance Fund;

"(5) providing training programs for local and other personnel recruited to be members of the management staffs of federally assisted rental housing; "(6) preparing model management operating manuals for project managers in federally assisted rental housing projects;

"(7) providing 'seed money' loans (repayable with interest) and advanced training for those with management experience to help them form corporations to manage federally subsidized housing projects covered by mortgages or loans which are, or would be, obligations of the Special Risk Insurance Fund;

"(8) participating in Federal Housing Administration rental project application reviews and conferences prior to approval to ascertain that design, materials, and the management and operating budget and plan is conducive to good management and operating efficiency;

(9) providing encouragement and assistance to management in the formation of tenant councils in projects covered by mortgages or loans which are obligations of the Special Risk Insurance Fund; and

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"(10) engaging in adequate Federal monitoring of management operations in order to identify developing weaknesses before federally assisted projects covered by mortgages or loans which are obligations of the Special Risk Insurance Fund reach a serious problem condition."

SPECIAL ASSISTANT TO SECRETARY OF HOUSING AND URBAN DEVELOPMENT

SEC. 303. Section 4(d) of the Department of Housing and Urban Development Act is amended to read as follows:

"(d) There shall be in the Department a Special Assistant to the Secretary, designated by the Secretary, who shall be responsible for

"(1) providing information and advice to nonprofit organizations desiring to sponsor housing projects assisted under programs administered by the Department,

"(2) maintaining surveillance over present and proposed fees and charges required in connection with federally assisted housing which will be reflected in monthly housing costs,

"(3) maintaining surveillance over present and proposed minimum property standards affecting the livability of housing,

"(4) investigating inquiries and complaints from consumer groups concerning procedures and regulations, and their interpretations by the Department, and

"(5) representing, within the Department, the special interests and needs of the occupants of federally assisted housing."

TITLE IV-EXPANSION OF EXPERIMENTAL HOUSING ALLOWANCE PROGRAM

PURPOSE

SEC. 401. It is the purpose of this title to expand the existing demonstration program of housing allowances for low-income families by providing sufficient funding to allow the testing and evaluation of a wider variety of housing allowance techniques.

EXPANSION OF PROGRAM

SEC. 402. (a) Section 504 of the Housing and Urban Development Act of 1970 is amended by striking out subsection (b) and inserting in lieu thereof the following new subsection:

"(b) The program undertaken pursuant to this section shall include the development and utilization of different types of housing allowances, and different techniques for providing such allowances to families of low income, in order that a wide variety of potentially effective types of and techniques for providing housing allowances may be tested and evaluated. Particular attention shall be given to the impact of such allowances on rent levels for housing units of comparable size throughout the housing market and the extent to which any increased rent levels reflect improved housing services."

(b) Section 504 (d) of such Act is amended by striking out "not to exceed $10,000,000 in each of the fiscal years 1972 and 1973" and inserting in lieu thereof "not to exceed $25,000,000 in each of the fiscal years 1972, 1973, and 1974".

(c) Section 504 (e) of such Act is amended by striking out "1972 and 1973" and inserting in lieu thereof “1972, 1973, and 1974".

(d) Section 504(g) of such Act is amended by striking out "June 30, 1973" and inserting in lieu thereof "June 30, 1974".

TITLE V-HOUSING BLOCK GRANTS TO STATE AND
METROPOLITAN HOUSING AGENCIES

STATEMENT OF PURPOSE

SEC. 501. It is the purpose of this title to provide for the establishment of State housing agencies and metropolitan housing agencies within States, to prescribe the powers and functions of State and metropolitan housing agencies, and to authorize the financial and other assistance needed to enable these agencies to develop, on an areawide basis, balanced housing programs which further the achievement of the national housing goal of a decent home and a suitable living environment for every American family. Its basic objective is to stimulate a

better focusing of all available local, State, private, and Federal resources upon the achievement of the national housing goal by bringing about (1) greater State and local capabilities for meeting their housing and other development needs on a rational, area wide basis, (2) more equitable allocation of Federal housing subsidy funds in accordance with State and local goals and priorities, (3) greater State and local capabilities for aggregating their markets for housing resulting in increased housing production at lower cost, and (4) greater economic opportunity and improved living conditions for low- and moderate-income families that are now unable to obtain housing within reasonable proximity to their places of employment.

DEFINITIONS

SEC. 502. (a) As used in this title

(1) The term "metropolitan area" means a standard metropolitan statistical area, as established by the Office of Mangement and Budget, subject, however, to such modifications or extensions as the Secretary deems to be appropriate for the purposes of this title.

(2) The term "State housing agency" includes an official State housing agency or (in a State where no such housing agency exists) an agency or instrumentality of State government designated by the Governor of the State and acceptable to the Secretary for purposes of this title.

(3) The term "metropolitan housing agency" means an official housing agency designated by the Governor (or Governors in the case of agencies with interstate jurisdiction) and acceptable to the Secretary for purposes of this title, empowered under State law or interstate compact to (A) establish housing needs and objectives throughout the metropolitan area involved, and (B) carry out all activities eligible for assistance under this title. To the greatest extent practicable, metropolitan housing agencies shall be representative of the elected officials of all of the units of general local government within the metropolitan area.

(4) The term "Secretary" means the Secretary of Housing and Urban Development.

(5) The term "unit of general local government" means any city, municipality, county, town, township, parish, village, or other general purpose political subdivision of a State, and the District of Columbia.

(6) The term "population", with respect to any area or unit, means the total resident population of such area or unit based on data compiled by the United States Bureau of the Census and referable to the same point or period in time.

(7) The term "amount of poverty" means the number of persons (or, alternatively, the number of families and unrealted individuals) whose incomes are below the poverty level multiplied by two. Poverty levels shall be determined by the Secretary pursuant to criteria provided by the Office of Management and Budget, taking into account and making appropriate adjustments for regional variations in income and cost of living, and shall be based on data referable to the same point or period in time.

(8) The term "amount of overcrowding" means the number of housing units with 1.01 or more persons per room based on data compiled by the United States Bureau of the Census and referable to the same point or period in time.

(9) The term "extent of housing deficiencies" means the number of housing units lacking some or all plumbing facilities based on data compiled by the United States Bureau of the Census and referable to the same point or period in time.

(b) Where appropriate, the definitions in subsection (a) shall be based on the most recent data compiled by the United States Bureau of the Census and the latest published reports of the Office of Management and Budget on the date of the enactment of this Act (with respect to the fiscal year in which this Act is enacted), and ninety days prior to the beginning of each subsequent fiscal year. The Secretary may by regulation change or otherwise modify the definitions in subsection (a) in order to reflect any change or modification thereof made subsequent to such date by the United States Bureau of the Census or the Office of Management and Budget.

GRANTS TO HELP COVER INITIAL OPERATING EXPENSES

SEC. 503. (a) The Secretary is authorized to make and contract to make grants to State and metropolitan housing agencies to assist such agencies in defraying the administrative and operating expenses incurred by them in carrying out activities assisted under this title. Grants made to any such agency under this section shall not exceed (1) the full amount of its administrative and operating expenses during the first year of its operations in carrying out such activities, (2) two-thirds of such expenses during the second year of such operations, and (3) one-half of such expenses during the third year of such operations.

(b) There are authorized to be appropriated for grants under this section not to exceed $10,000,000 for each of the fiscal years ending June 30, 1973, June 30, 1974, and June 30, 1975. Any amount so appropriated shall remain available until expended, and any amounts authorized for any such fiscal year but not appropriated may be appropriated for any succeeding fiscal year commencing prior to July 1, 1978.

SPECIAL PROGRAM GRANTS

SEC. 504. (a) The Secretary is authorized to make grants to any State or metropolitan housing agency to assist such agency in facilitating the provision of housing for low- and moderate-income families throughout the State or metropolitan area over which it has jurisdiction through such means as

(1) providing grants, loans, and technical and other assistance to public and private organizations carrying out homeownership and housing opportunity programs for low- and moderate-income families to help them fill uninet needs, initiate exceptional programs, and experiment with new approaches and programs for such families;

(2) providing grants, loans, and technical and other assistance to public and private organizations with respect to the construction, rehabilitation, and operation of housing for low- and moderate-income families, including but not limited to assistance to help cover necessary preconstruction costs incurred for architectural assistance, land options, application fees, and similar items;

(3) encouraging, by means of studies, technical assistance, and advisory and information services, the elimination of unreasonable restraints on the provision of housing for low- and moderate-income families; and

(4) carrying out, by means of studies, technical and financial assistance, and advisory and information services, programs designed to aggregate housing markets in order to achieve increased production and economies of scale.

(b) In order to be eligible for assistance under this section, the applicant seeking such assistance shall demonstrate to the satisfacrion of the Secretary that the funds requested are not available upon practicable terms and conditions from other sources.

(c) There are authorized to be appropriated for grants under this section not to exceed $30,000,000 for the fiscal year ending June 30, 1973, $30,000,000 for the fiscal year ending June 30, 1974, and $40,000,000 for the fiscal year ending June 30, 1975. Any amount so appropriated shall remain available until expended, and any amounts authorized for any such fiscal year but not appropriated may be appropriated for any succeeding fiscal year commencing prior to July 1, 1978.

METROPOLITAN INCENTIVE GRANTS

SEC. 505. (a) The Secretary is authorized to make and contract to make grants to State and metropolitan housing agencies to assist such agencies in carrying out programs which are designed to encourage the provision in metropolitan areas of an adequate supply of housing for low- and moderate-income families within reasonable proximity to their places of employment through the provision of financial assistance to units of general local government to help cover the difference between the cost to the unit of general local government involved of providing adequate supporting community services and facilities to the housing unit occupied by the low- or moderate-income family and the amount of revenues received through property and other taxes or assessments which are attributable to the housing unit occupied by such family. Assistance under this section shall be provided with respect to particular units of federally assisted low- and moderateincome housing, and may not exceed for each such unit a total amount of $3,000, which shall be provided in installments not exceeding $500 per annum.