Lapas attēli
PDF
ePub

[S. 2912, 86th Cong., 2d sess.]

Mr. JAVITS (for himself and Mr. Keating)

A BILL To amend the Housing Act of 1950 with respect to the amount of loans permitted to be made in any State

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 403 of the Housing Act of 1950 is amended by striking out "10" and inserting in lieu thereof “121⁄2”.

S. 2912

DIGEST OF BILL

Increases from 10 to 121⁄2 percent the amount of the total college loan authorization available to institutions in any one State.

(See report of Housing and Home Finance Agency on S. 2911, p. 40.)

TREASURY DEPARTMENT, February 8, 1960. Hon. A. WILLIS ROBERTSON, Chairman, Committee on Banking and Currency, U.S. Senate, Washington, D.C.

MY DEAR MR. CHAIRMAN: Reference is made to your request for the views of this Department on S. 2912, to amend the Housing Act of 1950 with respect to the amount of loans permitted to be made in any State.

The bill would amend section 403 of the Housing Act of 1950 to increase from 10 to 122 percent the maximum amount of college housing loans permitted to be made available to educational institutions in any one State.

The proposed legislation is not of primary interest to this Department and the Department has no comments to make with respect to the general merits of the bill.

Very truly yours,

DAVID A. LINDSAY, General Counsel.

(See report of Department of Health, Education, and Welfare on S. 914, p. 8.)

[S. 2950, 86th Cong., 2d sess.]

Mr. FULBRIGHT (for himself and Mr. SPARKMAN)

A BILL To increase the borrowing authority of the Housing and Home Finance Agency for college housing loans

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled, That section 401 (d) of the Housing Act of 1950 is amended by striking out the matter preceding the first colon and inserting in lieu thereof the following: "To obtain funds for loans under this title, the Administrator may issue and have outstanding at any one time notes and obligations for purchase by the Secretary of the Treasury in an amount not to exceed $1,425,000,000, which amount shall be increased by $250,000,000 on July 1, 1960".

S. 2950

DIGEST OF BILL

Increase the college housing loan authorization by $250 million upon enactment, and $250 million on July 1, 1960.

(See Housing and Home Finance Agency report on S. 2911, p. 40.)

TREASURY DEPARTMENT,

May 6, 1960.

Hon. A. WILLIS ROBERTSON,

Chairman, Committee on Banking and Currency,
U.S. Senate, Washington, D.C.

MY DEAR MR. CHAIRMAN: Reference is made to your request for the views of this Department on S. 2950, to increase the borrowing authority of the Housing and Home Finance Agency for college housing loans.

The proposed legislation would increase by $500 million the authorization under title IV of the Housing Act of 1950 for direct loans to educational institutions to provide housing and related facilities for students and faculties.

The President in his budget message for the fiscal year 1961 stated that no additional authorizations are proposad for the existing college housing direct loan program. He further stated that he had recommended the termination of the college housing program and the enactment of legislation authorizing a new program of grants and loan guarantees for college facilities. To help colleges finance academic, housing, and related facilities, this program would authorize Federal guarantees of $1 billion in bonds with interest subject to Federal taxation, and would provide Federal grants, payable over 20 years, equal to 25 percent of the principal of $2 billion of bonds.

In view of the foregoing, the Department would be opposed to the enactment of S. 2950.

The Department has been advised by the Bureau of the Budget that there is not objection to the submission of this report to your committee and that enactment of the proposed legislation would not be in accord with the program of the President.

Very truly yours,

JULIAN B. BAIRD, Acting Secretary of the Treasury.

(See Department of Health, Education, and Welfare report on S. 914, p. 8.)

[S. 3042, 86th Cong., 2d sess.]
MR. JAVITS

A BILL To amend the laws relating to mortgage insurance, urban renewal authorization and relocation payments

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

MORTGAGE INSURANCE PREMIUM

SECTION 1. Section 203 (c) of the National Housing Act is amended by striking out "Provided," immediately following the first colon and inserting in lieu thereof the following: "Provided, That such charge shall be not less than an amount equivalent to one-fourth of 1 per centum per annum of the amount of such outstanding principal obligation, if the mortgage is eligible for insurance under section 207, 213 (other than an individual mortgage under 213(d)), 220 (d) (3) (B), or 221 (d) (3) : Provided further,”.

STATE LIMITATION

SEC. 2. Section 106 (e) of the Housing Act of 1949 as amended is further amended by striking out "$100,000,000" and inserting in lieu thereof "$200,000,000".

RELOCATION PAYMENTS

SEC. 3. Section 106 (f) of the Housing Act of 1949, as amended, is further amended by inserting at the end thereof the following:

"(4) Notwithstanding any other provisions of this title, upon a finding by the Administrator that the relocation payments provided for in paragraph (2) of this section are insufficient to compensate for the reasonable and necessary moving expenses and actual losses of property provided for in such paragraph, an urban renewal project may, subject to such rules and regulations as may be prescribed by the Administrator, include the making of relocation payments in excess of those provided for in paragraph (2), but not exceeding $500 in the case

of an individual or a family, or $5,000 in the case of a business concern: Provided, That such amount thereof as exceeds the payments provided for in paragraph (2) shall be included in gross project cost and subject to local contribution on the same basis as expenditures enumerated in section 110(c) of this Act. Such rules and regulations may include provisions authorizing payment to individuals and families of fixed amounts (not to exceed in any case a total of $500 including the amounts authorized under paragraph (2)) in lieu of their respective and reasonable moving expenses."

S. 3042

DIGEST OF BILL

Section 1.-Amends section 203 (c) of the National Housing Act to reduce the minimum FHA insurance premium charge from one-half to one-fourth of 1 percent under the following FHA mortgage insurance programs:

(1) Section 207 (regular rental housing);

(2) Section 213 (cooperative housing) other than mortgages secured by individual dwellings:

(3) Section 220 (urban renewal housing), rental projects only; and

(4) Section 221 (relocation housing), rental projects only.

Section 2.-Amends section 106(e) of the Housing Act of 1949 to increase the capital grant funds available in any one State to 122 percent of the total capital grant authorization plus $200 million. (Existing law limits the capital grant for any one State to 122 percent of the total capital grant authorization plus $100 million.)

Section 3.-Amends section 106 (f) of the 1949 act to authorize the HHFA Administrator to prescribe such rules and regulations as would permit an urban renewal relocation payment made to individuals to be increased to a maximum of $500, or increased to a maximum of $5,000 in the case of a business concern, if payments permitted by existing law ($300 and $3,000, respectively) are insufficient to compensate for reasonable and necessary moving expenses, provided that any amounts paid in excess of $300 or $3,000 shall be included in the gross project cost and shared on a two-thirds one-third basis by the Federal and local governments. Also permits the maximum of $500 to be paid to an individual or family as a fixed amount in lieu of itemized moving expenses.

HOUSING AND HOME FINANCE AGENCY,
OFFICE OF THE ADMINISTRATOR,
Washington, D.C., May 6, 1960.

Re S. 3042, 86th Congress.
Hon. A. WILLIS ROBERTSON.

Chairman, Committee on Banking and Currency,

U.S. Senate, Washington, D.C.

DEAR MR. CHAIRMAN: This is in further reply to your letter of February 17 requesting the views of this Agency on S. 3042, a bill to amend the laws relating to mortgage insurance, urban renewal authorization and relocation payments. Each of these three amendments proposed by the bill are discussed separately below.

Section 1. FHA mortgage insurance premiums

Section 1 of the bill would amend section 203 (c) of the National Housing Act to permit the Federal Housing Administration mortgage insurance premiums to be reduced to not less than one-fourth of 1 percent of the outstanding principal obligation of a multifamily housing mortgage insured by the FHA under sections 207, 213, 220, and 221 of the act. However, the section would not be applicable to profitmaking multifamily housing under section 221(d) (4), although it would apply to profitmaking multifamily housing under sections 207 and 221.

We would not object to authority to reduce the insurance premium rate on any of the FHA insurance programs if it were made clear in the law that the authority was truly discretionary, and should not be exercised unless the FHA determined that the reduction would not jeopardize the soundness of the insurance funds involved.

However, on the basis of all our experience to date a premium of one-fourth of 1 percent would not be sufficient to provide the programs affected by the bill with funds for operating and administrative expenses and reserves for payment of insurance claims. Also, reduction of the premium rate on the four programs as provided in the bill would create pressure for premium reductions in other programs. The FHA could not remain self-sustaining if such premium reduc. tions were instituted.

The FHA has established its premium rates for its various programs within the statutory limits based on the expenses of administering each program plus reserves sufficient to cover assumed losses under depression conditions. Its reserve and loss rate assumptions have been studied by independent experts outside of the Government. Their consensus is that FHA assumptions are not unreasonable or inconsistent with experience data. In addition to the outside studies the FHA reexamines its reserve requirements periodically, and they are also examined by the General Accounting Office in the course of its annual audits. As yet none of these studies has shown a sound basis for reduction of premiums at this time beyond the present rates without imperiling the financial adequacy of the various insurance funds.

There is even less actuarial justification for reduction of the insurance premium rate in the urban renewal, relocation, and cooperative housing programs affected by the bill than in some other FHA-assisted housing programs. The sections 220 and 221 urban renewal housing and relocation housing programs each have a separate insurance fund. There is also a separate housing insurance fund for the section 207 rental housing program and the section 213 cooperative housing program. The earned reserves of these three funds aggregate only $9.7 million plus capital of $7.4 million contributed from other funds, for a total of $17.1 million. Their outstanding insurance totals $1.5 billion. If these funds had operated on a one-fourth of 1 percent premium to date, total fees and premiums would have failed to cover expenses by almost $7 million. The financial status of the two funds under sections 220 and 221, the greater risk characteristics involved in the two programs, and the lack of experience with the program would make a reduction in their insurance premium at this time especially inadvisable. For example, there is no requirement under these programs that the property be economically sound, as is required under most other FHA programs. In addition, an insured mortgage can cover a larger percentage of the property replacement cost under both of these programs (and also under the section 213 cooperative housing program) than under other FHA programs. The FHA title III mortgage insurance program for housing for the Armed Forces or employees of the military has been cited as a precedent for the proposed insurance premium reduction. There are three separate programs under title VIII of the National Housing Act. Only one, the Capehart Act military housing program under section 803, currently has an insurance premium of one-fourth of 1 percent, and that rate is subject to review and revision every 3 years. The premium under the other two programs is one-half of 1 percent, as in all the other FHA mortgage insurance programs.

The Capehart Act program is not a typical FHA mortgage insurance program and is, therefore, not a good precedent for reduction of the FHA mortgage insurance premium. It differs from other multifamily housing programs in that the ownership of the housing provided under the program is assumed by the Department of Defense as soon as the housing is ready for occupancy. In addition the Federal Housing Commissioner has an agreement with the Secretary of Defense that the Secretary will, in certain cases, guarantee FHA against loss as a result of insurance of a mortgage under the program. The risk elements of the Capehart Act program are therefore substantially different and less than those of other FHA mortgage insurance programs.

In conclusion, we object to any bill providing for lower FHA premiums unless it is made clear that the authority to reduce the premiums would be discretionary and should not be exercised unless actuarial experience and assumptions reasonably justify such reduction. It would be particularly misleading at this time to hold out encouragement of a premium reduction in the three programs proposed to be given special treatment by section 1 of the bill. We note also that the section does not clearly indicate whether it is intended to be applicable to existing insured mortgages in addition to mortgages insured after its effective date.

Section 2. Urban renewal authorization

Section 106 (e) of the Housing Act of 1949 now limits the amount of urban renewal grants allocable to any one State to 122 percent of the total grant funds available. It provides, however, that, subject to the overall availability of grant funds, the Administrator may contract to make grants regardless of the 121⁄2-percent limit, up to a maximum of $100 million. Section 2 of this bill would double the size of this "extender fund," from $100 million to $200 million.

New York is the only State that is presently charged with any part of the present extender fund, or is likely to be charged with any in fiscal year 1961. By the end of fiscal 1960, up to $62 million of the fund may be charged against New York. At that time an additional $300 million of capital grant authority will automatically become available by law, of which New York's 121⁄2-percent share will be $37.5 million. The amount of the $100 million fund in use by New York will then be correspondingly reduced. Accordingly, the fiscal 1961 needs of New York (and of any other States) for use of the extender fund would be fully met within the present limit on that fund. We believe, therefore, that the enactment of section 2 is not necessary. Also, even if an increase were necessary to permit additional projects in one or a few States, we would not recommend such a very large increase.

Section 3. Urban renewal relocation payments

Section 3 of the bill, amending section 106(f) of the Housing Act of 1949, would increase the limits on relocation payments, under certain conditions, from the present $200 for families and individuals and $3,000 for businesses to $500 and $5,000, respectively. The first $200 and $3,000 of these payments would still be covered by 100-percent Federal grants. Any additional payments would be included in project costs and shared generally on the same two-thirds Federal, one-third local, basis as other urban renewal project costs.

We do not believe that there is a need for an increase in relocation payments for individuals or families, by any formula. There is no evidence that the type of relocation expense intended to be eligible for Federal assistance exceeds the present $200 limit except in relatively small amounts in a very few cases. These payments are averaging about $65 for the program as a whole. Accordingly, there is no need to increase the present $200 limit.

In the case of businesses in urban renewal areas, the present limit of $3,000 permits full compensation for the moving costs and loss of property of a great majority of business concerns. The national average for business relocation payments is only about $1,000. However, when a very large commercial establishment is moved, the relocation costs may be considerably more than either the present $3,000 limit or the $5,000 limit proposed in the bill. Thus, the bill does not really solve this one real problem. At the same time, it creates unnecessary difficulties by applying two different payment formulas.

We would be opposed to any program of Federal relocation payments, to businesses or otherwise, through the mixed method proposed in this bill, which includes a 100-percent Federal grant up to a fixed amount and a shared grant as to further expenses in the same case. If there had been no obstacle to relocation payments being included in project cost, then the Federal Government should, from the start, have paid only two-thirds of the entire authorized amount of the payments, in line with the Federal share of other project costs. As you know, however, under many State statutes and constitutions an obstacle does exist to including the payments in project cost. Since the property in urban renewal areas is taken by local agencies, it is acquired under State eminent domain laws. These laws seldom provide for relocation payments. Furthermore, many State statutes or constitutions prohibit any payments in addition to these eminent-domain awards, as being donations of public funds to private persons. Even a local one-third contribution to the cost of urban renewal relocation payments would, therefore, be prohibited in many States. As you will recall, it was because of these considerations that the Congress authorized the Federal Government, as an alternative, to fulfill its shared responsibility in this field by paying 100 percent of the amount of these relocation payments, up to fixed dollar amounts.

If the usual two-third ratio for Federal urban renewal assistance were applied to this particular type of project expense, the presently authorized $3,000 payment to a business would represent the Federal share of a business expense of $4,500. At present the Federal Government is assuming an exceptional share

« iepriekšējāTurpināt »