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1 multifamily housing project. The mortgage shall be executed 2 by a mortgagor approved by the Secretary. The mortgage 3 may involve the financing of new construction, the rehabili4 tation of an existing structure or structures, or the purchase 5 or refinancing of an existing project (as defined by the Sec6 retary) which meets such standards as may be prescribed 7 by the Secretary.

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(c) If new construction is involved, the mortgage shall have a principal obligation not in excess of 90 per centum

10 (98 per centum in the case of a cooperative mortgagor) of 11 the estimated replacement cost of the property or project 12 when the proposed improvements are completed. 13 (d) If rehabilitation is involved, the mortgage shall 14 have a principal obligation not in excess of 90 per centum 15 (98 per centum in the case of a cooperative mortgagor) of 16 the sum of (i) the Secretary's estimate of the cost of the 17 rehabilitation plus (ii) the Secretary's estimate of the value 18 of the property before the rehabilitation.

19 (e) If the purchase or refinancing of an existing prop20 erty without rehabilitation is involved, the mortgage shall 21 have a principal obligation not in excess of 90 per centum of 22 the appraised value of the property (98 per centum in the 23 case of a cooperative mortgagor) as of the date the mortgage 24 is accepted for insurance.

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(f) In the case of a cooperative or nonprofit mortgagor,

the percentages otherwise applicable under subsection (c),

3 (d), or (e) shall be increased to 100 per centum if the 4 principal obligation of the mortgage does not exceed the 5 amount which could be insured with respect to the project 6 under section 502.

7 (g) If the dwelling units in a project are to be sold 8 to individual purchasers, the principal obligation of the 9 blanket mortgage shall be further limited to the sum of the 10 individual mortgage amounts which could be insured for 11 owner-occupants of the proposed individual dwellings or 12 condominium units under title IV.

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(h) The mortgage shall provide for complete amorti14 zation within such term as the Secretary shall prescribe. (i) The property or project shall include five or more 16 dwelling units (which, with the approval of the Secretary, 17 need not be self-contained living units) or five or more 18 spaces in a mobile home park, and may include such non19 dwelling facilities as the Secretary deems adequate and 20 appropriate to serve the occupants and the surrounding 21 neighborhood, except that the project shall be predominantly 22 residential. The Secretary shall give due consideration to the 23 possible effect of the project on other business enterprises 24 in the community.

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MULTIFAMILY HOUSING ASSISTANCE

SEC. 502. (a) For the purpose of reducing rentals for 3 lower income tenants, the Secretary is authorized to make, 4 and to contract to make, periodic assistance payments on 5 behalf of the owner of a multifamily housing project, which 6 shall be accomplished through payments to mortgagees 7 holding mortgages meeting the requirements specified in this 8 section and supplemental loans meeting the requirements of 9 section 504 (c).

10 (b) Assistance payments with respect to a project shall 11 only be made by the Secretary during such time as the proj12 ect is operated as a multifamily housing project and (1) is 13 subject to a mortgage which is insured under subsection (h) 14 or has been assigned to the Secretary; or (2) is owned by 15 a private nonprofit corporation or other private nonprofit 16 entity, a limited distribution corporation or other limited 17 distribution entity, or a cooperative housing corporation, and 18 is financed under a State or local program providing assist19 ance through loans, loan insurance, or tax abatements, and 20 which prior to completion of construction or rehabilitation 21 is approved for receiving the benefits of this section with 22 respect to all or a part of the project.

23 (c) The Secretary may include in the payment to the 24 mortgagee such amount, in addition to the amount computed 25 under subsection (f), as he deems appropriate to reimburse

+

ICHIGAN.

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1 the mortgagee for its additional expenses in handling the

2 mortgage.

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(d) As a condition for receiving the benefits of assistance 4 payments, the project owner shall operate the project in 5 accordance with such requirements with respect to tenant 6 eligibility and rents as the Secretary may prescribe. In pre7 scribing such requirements the Secretary shall seek to assure 8 that in each assisted project there is a reasonable range in the 9 income levels of tenants.

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(e) For each dwelling unit there shall be established 11 with the approval of the Secretary (i) a basic rental charge 12 determined on the basis of operating the project with pay13 ments of principal and interest due under a mortgage and 14 any supplemental loan bearing interest at the rate of 1 per 15 centum per annum; and (ii) a fair market rental charge de16 termined on the basis of operating the project with payments 17 of principal, interest, and mortgage insurance premium (or 18 other comparable charges approved by the Secretary) which 19 the mortgagor is obligated to pay under the mortgage and 20 any supplemental loan covering the project. The rental 21 for each dwelling unit shall not be lower than 20 per centum 22 of the tenant's income as determined by the Secretary, but 23 shall not exceed the fair market rental charge.

24

(f) The assistance payment to a mortgagee by the

25 Secretary on behalf of a project owner shall not exceed

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1 an amount which would reduce the aggregate fair market 2 rental charges for all dwelling units in the project to 80 per 3 centum (65 per centum where the project is designed for 4 elderly or handicapped tenants) of the aggregate basic rental 5 charges for such units. At the time of the initial renting of 6 the project (other than a project designed for elderly or 7 handicapped tenants), at least one-half of the units shall be 8 rented to tenants whose incomes are such that the basic 9 rental charges do not exceed 20 per centum of their incomes. 10 (g) There are authorized to be appropriated such sums 11 as may be necessary to carry out the provisions of this sec12 tion, including such sums as may be necessary to make 13 assistance payments under contracts entered into by the Sec14 retary under this section. The aggregate amount of outstand15 ing contracts to make such payments shall not exceed amounts 16 approved in appropriation Acts, and payments pursuant to 17 such contracts (and any contracts entered into under section 18 236 of the National Housing Act) shall not exceed $75,000,19 000 per annum prior to July 1, 1969, which maximum dollar 20 amount shall be increased by $125,000,000 on July 1, 1969, 21 by $150,000,000 on July 1, 1970, by $200,000,000 on 22 July 1, 1971, and by $200,000,000 on July 1, 1974. 23 (h) (1) The Secretary is authorized to insure a mort24 gage (which meets the requirements of section 501, except 25 as such requirements are modified by this section) upon a