of their housing projects, and in the development and use of practical means for members of cooperatives to acquire (subject to the right of the cooperative to repurchase) ownership of their individual dwellings where such dwellings are free standing.

"PRELIMINARY ADVANCES OF FUNDS

"SEC. 303. To further assist in carrying out the purposes of this title, the Administrator, upon application by an eligible borrower, may make a preliminary advance of funds to such borrower to assist in the formulation of a proposed housing project eligible for a mortgage loan under section 309 hereof: Provided, That such preliminary advance of funds shall be limited to the amounts required for necessary work preliminary to construction, and shall in no event exceed an amount equal to 5 per centum of the estimated development cost of such project as determined by the Administrator: And provided further, That no such advance of funds shall be made until the Administrator shall have determined that the borrower is a bona fide nonprofit cooperative ownership housing corporation or a private nonprofit corporation of the character described in section 315 (a) hereof, and that the borrower proposes to undertake a housing project designed to meet the housing needs of families of moderate income. Such advance of funds shall bear interest at the applicable going Federal rate plus one-half of 1 per centum and shall be repaid out of the proceeds of any construction or other loan obtained by the borrower for the project.

"PROVISION OF FUNDS

"SEC. 304. (a) To obtain funds for preliminary advances as provided in section 303, the Administrator may, with the approval of the President, issue and have outstanding at any one time notes and other obligations for purchase by the Secretary of the Treasury in an amount not to exceed $25,000,000.

"(b) Notes or other obligations issued by the Administrator under this title shall be in such forms and denominations, have such maturities, and be subject to such terms and conditions as may be prescribed by the Administrator, with the approval of the Secretary of the Treasury. Such notes or other obligations shall bear interest at a rate determined by the Secretary of the Treasury taking into consideration the current average rate on outstanding marketable obligations of the United States as of the last day of the month preceding the issuance of such notes or other obligations. The Secretary of the Treasury is authorized and directed to purchase any notes and other obligations of the Administrator issued under this title and for such purpose is authorized to use as a public-debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued under such title, as amended, are extended to include any purchases of such notes and other obligations. The Secretary of the Treasury may at any time sell any of the notes or other obligations acquired by him under this section. All purchases, sales, and redemptions by the Secretary of the Treasury of such notes or other obligations shall be treated as public debt transactions of the United States

"(c) Funds made available to the Administrator pursuant to the provisions of this section shall be deposited in a checking account or accounts with the Treasurer of the United States. Principal repayments on advances made under section 303 shall be applied to the retirement of notes or other obligations issued by the Administrator pursuant to this section: Provided, That this requirement shall not be construed as limiting the authority of the Administrator under section 304 (a). Other receipts and assets obtained or held by the Administrator in connection with the performance of his functions under this title shall be available for any of his functions thereunder. There are hereby authorized to be appropriated, out of any moneys in the Treasury not otherwise appropriated, such sums as may be necessary for administrative expenses of the Administrator in carrying out his functions under this title.

"POWERS OF ADMINISTRATOR

"SEC. 305. The Housing and Home Finance Administrator shall supervise the National Mortgage Corporation for Housing Cooperatives (hereinafter referred to as the Corporation) created by section 306 (a) of this title, shall perform the other duties prescribed herein, and shall have the power to adopt, amend, and require the observance of such rules, regulations, and orders as shall be necessary from time to time for carrying out the purposes of this title and for coordinating the activities of the Corporation with the housing functions and activities admin

istered within the Housing and Home Finance Agency and with the general economic and fiscal policies of the Government, and in carrying out these responsibilities the Administrator shall consult with the board of directors of the Corporation who shall, in addition to their responsibilities under section 308 hereof, act as an advisory board to the Administrator in the administration of this title. In the performance of, and with respect to, the functions, powers, and duties vested in him by this title, the Administrator, notwithstanding the provisions of any other law, may exercise any of the powers enumerated in the second sentence of section 306 (a) of this title and shall

"(a) appoint a Director to exercise, under the direction and supervision of the Administrator, the functions, powers, and duties vested in the Administrator by this title, and the basic rate of compensation of such position shall be the same as the basic rate of compensation established for the heads of the constituent agencies of the Housing and Home Finance Agency: Provided, That the Administrator may, in his discretion, delegate any of the functions, powers, and duties vested in him by this title to any officers or employees under his direction and supervision;

"(b) take such steps as he deems necessary and desirable to assure that the benefits of the nonprofit character of any borrower hereunder are not dissipated through speculative devices and to encourage borrowers to adopt methods by which occupants of dwellings may be permitted to reduce their rentals or other occupancy charges by occupant maintenance and repair or other means of self-help and methods whereby they may acquire (subject to the right of the cooperative to repurchase) ownership of their individual dwellings where such dwellings are free standing;

"(c) prepare annually and submit a budget program as provided for wholly owned Government corporations by the Government Corporation Control Act, as amended;

"(d) maintain an integral set of accounts which shall be audited annually by the General Accounting Office in accordance with the principles and procedures applicable to commercial transactions as provided by the Government Corporation Control Act, as amended, and no other audit shall be required: Provided. That such financial transactions of the Administrator as the making of advances of funds and vouchers approved by the Administrator in connection with such financial transactions shall be final and conclusive upon all officers of the Government; and

"(e) make an annual report to the President, for transmission to the Congress, to be submitted as soon as practicable following the close of the year for which such report is made.

"CREATION AND POWERS OF NATIONAL MORTGAGE CORPORATION FOR HOUSING

COOPERATIVES

"SEC. 306. (a) To effectuate the purpose of this title, there is hereby created a body corporate to be known as the 'National Mortgage Corporation for Housing Cooperatives' with authority, as herein provided, to make and service loans, issue obligations in such amounts, at such times, and on such terms as the Corporation may determine, and to exercise the other powers and duties prescribed in this title. In the performance of, and with respect to, the functions, powers, and duties vested in it by this title, the Corporation, notwithstanding the provisions of any other law, may

"(1) adopt and use a corporate seal;

(2) sue or be sued in any Federal, State, or local court of competent jurisdiction;

"(3) enter into contracts without regard to section 3709 of the Revised Statutes and make advance, progress, or other payments with respect to such contracts without regard to the provisions of section 3648 of the Revised Statutes, and include in any contract or instrument made pursuant to this title such other provisions as the Corporation deems necessary to assure that the purposes of this title will be achieved;

"(4) foreclose on any property or take any action to protect or enforce any right conferred upon it by any law, contract, or other agreement, and bid for and purchase at any foreclosure or any other sale any project or part thereof in connection with which it has made a loan pursuant to this title;

"(5) pay all expenses or charges in connection with, and deal with, complete, reconstruct, improve, rent, insure, manage, make contracts for the management of, or establish suitable agencies for the management of, or

sell for cash or credit or lease in its discretion, in whole or in part, any project acquired pursuant to this title and to pursue to final collection by way of compromise or otherwise all claims acquired by, or assigned or transferred to, it in connection with the acquisition or disposal of any housing project pursuant to this title, notwithstanding any other provisions of law relating to the acquisition, handling, or disposal of real or personal property: Provided, That any such acquisition of real property shall not deprive the State or any political subdivision thereof of its civil or criminal jurisdiction in and over such property or impair the civil rights under State or local laws of the inhabitants on such property;

"(6) acquire, hold, sell or exchange at public or private sale, or lease, or otherwise dispose of, real or personal property, and sell or exchange any securities or obligations;

"(7) obtain insurance against loss in connection with property and other assets held;

"(8) subject to the specific limitations in this title, consent to the modification, with respect to rate of interest, time of payment of any installment of principal or interest, security, or any other term, of any contract or agreement to which it is a party or which has been transferred to it pursuant to this title; "(9) utilize and act through, without regard to section 3709 of the Revised Statutes, any Federal, State, or local public agency or instrumentality, or nonprofit agency or organization, with the consent of the agency or organization concerned, and contract with any such agency, instrumentality, or organization for the furnishing of any services or facilities; and, may make advances, progress, or other payments with respect to such contracts without regard to the provisions of section 3648 of the Revised Statutes; and

(10) do all things which are necessary or incidental to the proper management of its affairs and the proper conduct of its business.

"(b) The Corporation shall have power, with the approval of the Administrator, to select, employ, and fix the compensation of such officers and employees as shall be necessary for the performance of its duties under this title, without regard to the provisions of laws applicable to the employment, compensation, leave, or expenses of officers and employees of the United States: Provided, That the rates of basic compensation of its officers and employees shall be comparable to those established for officers and employees under the Classification Act of 1949. Except as provided in provisions of law relating specifically to mixed-ownership Government corporations, the Corporation may determine the necessity for and the character of its obligations and expenditures and the manner in which they shall be incurred, allowed, and accounted for. The business of the Corporation shall not be considered official business of the United States within the meaning of any statute permitting the free use of the United States mails.

"CAPITAL STOCK

"SEC. 307. (a) The Corporation may issue capital stock from time to time which shall be subscribed for by the Secretary of the Treasury on behalf of the United States, and payments for such subscriptions shall be subject to call in whole or in part by the Corporation: Provided, That the total amount of such stock subscribed for and held by the Secretary of the Treasury at any time shall not exceed $100,000,000. Stock held by the Secretary of the Treasury shall be preferred as to dividends and assets of the Corporation and shall be entitled to cumulative dividends for each year equal to a return on the average amount, at par, of such stock outstanding during such fiscal year at a rate determined by the Secretary of the Treasury, taking into consideration the probable term of the stock investment and the current average rate on outstanding marketable obligations of the United States as of the last day of the sixth month of such fiscal year. The Corporation shall issue to the Secretary of the Treasury receipts for payments by him for or on account of such stock, and such receipts shall be evidence of the stock ownership of the United States. There are hereby authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, the amounts necessary to enable the Secretary of the Treasury to make payments on such stock when called. Such stock or any part thereof may be retired at any time by the Corporation.

"(b) The Corporation may issue capital stock from time to time for subscription by eligible borrowers. In order to assure direct financial participation by borrowers, each eligible borrower shall, as a condition precedent to obtaining any mortgage loan from the Corporation as hereinafter provided, subscribe for capital stock of the Corporation in an amount equal to 71⁄2 per centum of the original

principal amount of such loan. In the case of a borrower of the character described in section 315 (a) (1) hereof, such stock subscriptions shall be paid for in cash at the time of application for the loan, or, at the election of the borrower, one-sixth of the total amount payable shall be paid at the time of application, one-sixth shall be paid prior to receipt of any proceeds of the loan from the Corporation, and the balance shall be paid in installments within twenty years thereafter. In the case of a borrower of the character described in section 315 (a) (2) hereof, such stock subscription shall be paid in installments within twenty years after the receipt of the first proceeds of the loan. Each borrower shall hold such stock in the Corporation until the value thereof shall equal, or be greater than, the unpaid balance of the mortgage loan, and any such unpaid balance shall be paid out of the proceeds of any sale of such stock. Dividends payable on stock paid in by a borrower shall be credited to any payments subsequently due on the stock subscription of such borrower.

"(c) After the amount of capital of the Corporation paid by such subscribers, other than the United States, equals $50,000,000, the Corporation shall thereafter apply annually to the payment and retirement of the shares of the capital stock held by the Secretary of the Treasury, all sums paid in as capital until all such capital stock held by the Secretary is retired at par plus any dividends which shall have accrued on such stock: Provided, That no such capital stock held by the Secretary shall be retired if such retirement would reduce the net capital, reserves, and surplus of the Corporation to an amount less than $150,000,000.

"(d) Upon any liquidation of the Corporation, all stockholders (including the United States if any of its stock has not been retired) shall share, in proportion to the stock held, in any assets of the Corporation in excess of the amount necessary to retire all outstanding stock at par, to pay accrued dividends on preferred stock, and to retire, pay, or settle all outstanding obligations and claims.

"BOARD OF DIRECTORS

"SEC. 308. The management of the Corporation shall be vested in a board of five directors appointed by the Administrator. The directors who are first appointed shall be designated to serve for terms of one, two, three, four, and five years, respectively, from the date of their appointment, but thereafter directors shall be appointed for a term of office of five years except that all vacancies shall be filled for the unexpired term. A director shall hold office until his successor has been appointed and has qualified, unless sooner removed according to this section. The first and third vacancies resulting from the expiration of the initial terms of office shall be filled by the appointment of directors from among the members of stockholding corporations or other persons representative of housing cooperatives, and the successors to each of such directors shall also be appointed from among members of stockholding corporations or other persons representative of housing cooperatives. The Administrator shall designate a chairman from among the directors. The Administrator may remove a director from office at any time for inefficiency or failure to comply with any applicable provisions of this title or regulations issued thereunder. The Corporation may pay its directors reasonable compensation for their services and necessary expenses, subject to the approval of the Administrator.

"MORTGAGE LOANS

"SEC. 309. (a) To assist the production of housing of sound standards of design, construction, livability, and size for adequate family life available for families of moderate income, the Corporation, upon application of an eligible borrower (as herein defined) and subject to the terms and conditions of this title, may make a mortage loan (including advances during the development of the housing project) to such borrower to finance the development of a housing project to be undertaken by such borrower: Provided, That no such loan shall be made unless"(1) the Administrator shall have certified that—

"(A) the borrower is a bona fide nonprofit cooperative ownership housing corporation or a private nonprofit corporation of the character described in section 315 (a) hereof;

"(B) the proposed housing project will meet a need for housing for families of moderate income in the locality;

"(C) the location and physical planning of the housing project will afford reasonable assurance as to the stability of the neighborhood, and the dwellings in the housing project will meet sound standards of design, construction, livability, and size for adequate family life; and

"(D) the housing project will not be of elaborate or extravagant design or construction, and such design and construction and the proposed methods of construction and of operation and maintenance are such as will promote such economies as are contemplated to be achieved through the nonprofit character of the borrower, increased efficiency in production through the use of new or improved materials and techniques and methods of construction or otherwise, increased efficiency in operation and management, minimum necessary operating services, occupant maintenance, or otherwise; and

"(2) the borrower shall have agreed with the Corporation

“(A) to establish an initial schedule of rents or charges for the dwellings in the housing project which will permit such dwellings to be made available for families of moderate income, and that such initial schedule of rents or charges and all revisions thereof shall be subject to the prior approval of the Corporation: Provided, That the Corporation shall not approve any initial schedule of rents or charges unless the Administrator has certified that such rents or charges will permit the dwellings to be made available for families of moderate income;

"(B) in the case of a borrower of the character described in section 315 (a) (2) (i), to give preference in the selection of tenants for the housing project (as among eligible applicants)

"first, to families which are to be displaced by any low-rent public housing project or by any public slum-clearance or redevelopment project initiated after January 1, 1947, or which were so displaced within three years prior to making application for admission to the housing project of the borrower; and as among such families first preference shall be given to families of disabled veterans whose disability has been determined by the Veterans' Administration to be service-connected, and second preference shall be given to families of deceased veterans and servicemen whose death has been determined by the Veterans' Administration to be service-connected, and third preference shall be given to families of other veterans and servicemen;

"second, to families of other veterans and servicemen and as among such families first preference shall be given to families of disabled veterans whose disability has been determined by the Veterans' Administration to be service-connected, and second preference shall be given to families of deceased veterans and servicemen whose death has been determined by the Veterans' Administration to be service-connected; and "(C) to comply with such other terms and conditions as the Corporation finds, prior to the mortgage loan, are necessary or desirable to carry out the purposes of this title.

"(b) The mortgage loan shall involve a principal obligation in an amount (1) not exceeding the development cost (as herein defined) of the housing project as determined by the Administrator; and (2) not exceeding such amount as the Administrator shall have determined to be the maximum within which the project must be constructed in order that it may be made available for families of moderate income at rentals or charges within their means.

"(c) The mortgage loan shall provide for complete amortization within a period of fifty years by periodic payments upon such terms as the Corporation shall prescribe, and shall bear interest, on the amount of the principal obligation outstanding at any time, at a fixed rate, taking into account the cost to the Corporation of capital investment and borrowings from the private market, plus a percentage to compensate the Corporation for its estimated overhead and administrative expenses in connection with such loan and for proportionate payments to required reserves. In the event of the refinancing of such a loan, within such period as the Corporation shall prescribe, the amortization period may be extended to a date not later than sixty years after the date of the original mortgage. The mortgage loan may, in the discretion of the Corporation, include provisions for the deferment of payments of principal and interest thereunder: Provided, That such deferments shall not in the aggregate result in an extension of the maturity of the mortgage for a period of more than three years nor shall any such deferments result in an extension of the maturity of the mortgage for more than three years beyond the mortgage maturity otherwise authorized herein.

"(d) Subject to the provisions of this section, the mortgage loan shall be in such form, contain such provision as to security, repayment, and redemption, and be subject to such other terms and conditions as the Corporation may determine: Provided, That in the case of a borrower of the character described in section 315