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"(C) The principal payments shall be not less than one-half of 1 per centum per annum of the sales price during the first five years after purchase, 1 per centum per annum during the next five years, 11⁄2 per centum per annum during the third five years, and thereafter not less than the principal payments resulting from a level debt service of interest and principal over the balance of the payment period;

"(D) If at any time (i) a purchaser fails to carry out his contract with the public housing agency and if no member of his family who resides in the dwelling assumes such contract, or (ii) if the purchaser or a member of his family who assumes the contract does not reside in the dwelling, the public housing agency shall have an option to acquire his interest under such contract upon payment to him or his estate of an amount equal to his aggregate principal payments plus the value to the public housing agency of any improvements made by him, less an amount equal to 22 per centum of the sales price.

If the public housing agency determines with respect to any project that it is not feasible to enter into such contracts, it may permit a tenant family in such project whose income has increased beyond the limit for continued occupancy to continue in occupancy so long as (i) the public housing agency, after investigation (made at least annually), finds that it is impossible for the family to obtain through rental or purchase a decent, safe, and sanitary private dwelling suitable for its use and at a cost within its financial means, and (ii) the family pays a rental equal to the amount which it would be required to pay (during the first five years after purchase) if it purchased its dwelling unit under the foregoing terms of this paragraph (e). Actions taken pursuant to the provisions of this paragraph (e) shall not be deemed to violate the low-rent character of the project, and any such actions shall not be taken into account in making the determination required in the first proviso of section 10(h).” (2) Such Act is further amended

(1) by inserting after the words "unless such project" in section 10(h) the following: "(excluding any part thereof covered by a contract or conveyed pursuant to paragraph (8) (e) of section 15)";

(2) by inserting after "may be made" in section 10(1) the following: ", subject to any outstanding contracts made pursuant to paragraph (8) (e) of section 15,";

(3) by inserting after "acquisition" in paragraphs (1), (2), and (3) of section 15 the following: "(except pursuant to paragraph (8) (e) of section 15)"; and

(4) by inserting before the semicolon at the end of paragraph (1) of section 22(a) a colon and the following: "Provided, That such conveyance or delivery of title shall be subject to the rights of third parties vested pursuant to paragraph (8) (e) of section 15".

HOUSING FOR THE ELDERLY

SEC. 6. (a) Section 202 (a) (4) of the Housing Act of 1959 (relating to the authorization for direct loans in aid of elderly persons' housing) is amended by striking out "$50,000,000" and inserting in lieu thereof "$100,000,000”.

(b) (1) Section 231 (c) (7) of the National Housing Act (relating to housing projects for elderly persons which may be assisted by mortgage insurance) is amended by inserting before the period a colon and the following: Provided, That such special facilities as the Commissioner determines are necessary to provide adequately for the health, social, and recreational needs of elderly persons in any such property or project shall be included therein".

(2) Section 202 (c) of the Housing Act of 1959 (relating to certain limitation on elderly persons' housing assisted by direct loans) is amended by adding at the end thereof a new pararaph as follows:

"(4) No housing shall be constructed with a loan under this section unless such related facilities are provided in connection with such housing as the Administrator determines are necessary to serve the health, social, and recreational needs of the occupants."

(3) Section 10(m) of the United States Housing Act (relating to low-rent housing for elderly families) is amended by inserting after the first sentence a new sentence as follows: "Any such housing shall include such facilities as the Authority determines are necessary to provide adequately for the health, social, and recreational needs of such families."

CITY PLANNING SCHOLARSHIPS AND FELLOWSHIPS

SEC. 7. There is hereby authorized to be appropriated not to exceed $500,000 annually, for a three-year period commencing on July 1, 1960, to be used by the Housing and Home Finance Administrator for the purpose of providing scholarships and fellowships in public and private nonprofit institutions of higher education for the graduate training of professional city planning and housing technicians and specialists. Persons shall be selected for such scholarships and fellowships solely on the basis of ability.

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Section 2(a).-Increases FHA's general mortgage insurance authorization by $4 billion.

Section 2(b).-(1) Amends section 220 of the National Housing Act to make it clear that the program may be used to accomplish conservation and prevention of deterioration of housing.

(2) Amends section 220 of the act to make the program applicable outside of urban-renewal areas in those neighborhoods in which a municipality is carrying out a code-enforcement program under an approved workable program and undertaken on an area basis, with the approval of the HHFA Administrator.

(3) Amends section 220 of the act to permit, in the case of dwellings designed principally for a two or more family residence, the FHA Commissioner to approve a mortgage involving a principal obligation in an amount equal to the sum of (1) 97 percent of $13,500 of the Commissioner's estimate of the appraised value of the property and (2) 90 percent of such appraised value in excess of $13,500.

Federal National Mortgage Association

Section 3.-Provides an additional $150 million mortgage purchase authority under the special assistance function of the Federal National Mortgage Association. These funds are allowed at the discretion of the President.

Urban renewal

Section 4(a).-Increases the capital grant authorization by $600 million to be made available upon enactment.

Section 4(b).-Increases from $3,000 to $5,000 the amount business concerns may be paid for their reasonable and necessary moving expenses and any actual direct losses, for which they are not compensated, as a result of displacement by urban renewal or certain other governmental activities.

Section 4(c).-Permits land already acquired as a part of an urban-renewal project to be used for public low-rent housing purposes, in addition to land to be acquired as a part of future projects.

Section 4(d).-Amends section 110 (c) of the Housing Act of 1949 to permit loans and grants to be made to local public agencies for the purpose of carrying out pilot rehabilitation programs within renewal areas limited to no more than (1) 50 dwelling units, or (2) 2 percent of the total number of dwelling units designated for rehabilitation under the renewal plan, whichever is less.

Section 4(e).-Makes technical amendments relating to the program established in 1959 to assist colleges and universities to carry out programs of blight elimination in areas to be developed by them. Amends existing law so that expenditures made by educational institutions shall not be deemed ineligible because construction or rehabilitation was commenced prior to the approval of urban-renewal plan or the development plan. Further provides that expenditures made by public authority for an educational institution may be credited as local grant-in-aid, the same as if the expenditures had been made directly by the institution.

Low-rent public housing programs

Section 5 (a).-Authorizes the payment of an additional annual Federal contribution in respect to each elderly family of not to exceed $120 per year for each elderly family, provided such additional contribution is required in any year to avoid a deficit in project operation.

Section 5(b).-Makes available the remaining balance of the annual contribution authorization contained in the Housing Act of 1949. The effect of this restoration would be to permit contracts with local housing authorities for about 100,000 dwelling units in addition to the 37,000 units authorized by the Housing Act of 1959.

Section 5(c).—Adds a new paragraph to the U.S. Housing Act of 1937 to stipulate the terms on which a low-rent dwelling unit may be sold to a publichousing tenant. The tenant would be required to pay local taxes, amortize the full purchase price of his home, and pay interest at not less than the cost the local agency must pay to borrow money. The local agency would have an option to repurchase a dwelling if the family fails to carry out its contract. This plan is permissive with local agencies. If any agency finds it is not feasible to operate under this plan, it could permit overincome tenants to remain in occupancy if the local agency determines that it is impossible for the family to rent or buy a decent private dwelling, and if an unsubsidized rent is paid.

Programs of housing for the elderly

Section 6(b).-Requires that projects for elderly persons constructed under section 202 of the Housing Act of 1959, section 231 of the National Housing Act, and section 10(m) of the U.S. Housing Act shall contain special facilities to serve the health, social, and recreational needs of elderly persons, as the respective administrators determine to be necessary.

Planning scholarships and fellowships

Section 7.-Authorizes $500,000 annually for a 3-year period to be used by the HHFA Administrator to provide scholarships and fellowships in public and private nonprofit institutions of higher education for the graduate training of professional city planning and housing technicians and specialists.

[S. 3512, 86th Cong., 2d sess.]

Mr. WILLIAMS of New Jersey (by request)

A BILL To amend the laws relating to cooperative housing

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

AMENDMENTS RELATING TO FEDERAL HOUSING ADMINISTRATION

SECTION 1. Section 207 of the National Housing Act, as amended, is hereby amended by adding the following at the end of subsection (1): "When the Commissioner receives a request from—

"(1) a local public agency, or

"(2) an organization which the Commissioner determines is a properly qualified consumer cooperative, to purchase a project acquired by the Commissioner as a result of the default of a mortgage insured under section 608, 908, 207, 213, 220, or 221 of this Act.

the Commissioner shall give first preference (for such period as he may prescribe, pursuant to regulations issued to effectuate the purpose of this provision) to a sale of the project to such local public agency or such consumer cooperative at a price equal to the fair market value of the property as determined by the Commissioner."

SEC. 2. (a) Section 213 of the National Housing Act, as amended, is hereby amended

(1) by striking out, in paragraph (3) of subsection (a), the words "as certified pursuant to section 227 of this Act" and inserting in lieu thereof the following: "as defined in section 227 (c) of this Act and computed as of the date of such sale";

(2) by inserting, in paragraph (2) of subsection (b), after the words "as may be attributable to dwelling use" the following: "(excluding exterior land improvements as defined by the Commissioner)";

(3) by striking out, in paragraph (2) of subsection (b), the words "not to exceed 97 per centum of the amount which the Commissioner esitmates will be the replacement cost of the property or project when the proposed physical improvements are completed" and inserting in lieu thereof the fol

lowing: "not to exceed 97 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, which replacement cost of the property or project may include the Commissioner's estimate of the fair market value of the land (taking into account such off-site improvements as the Commissioner requires to be provided in connection with the project and are not included in the Commissioner's estimate of replacement cost, but exclusive of the physical improvements within the boundaries of the property to be built as a part of the project), the proposed physical improvements, utilities within the boundaries of the project, architect's fees, a reasonable allowance for builder's profit, organization and legal expenses, taxes and interest, and other miscellaneous charges (including premiums for mortgage and hazard insurance and such tax escrows and acquisition costs as are payable by the cooperative at the time it acquires title to the project) approved by the Commissioner, during construction and during such period thereafter as the Commissioner deems reasonable to permit such percentage of the dwelling units in the project to be sold and occupied as is necessary to produce the income required to meet operating expenses and debt service";

(4) by striking out, in paragraph (2) of subsection (b), the words "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 physical improvements are completed" and inserting in lieu thereof the following: "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, which replacement cost of the property or project may include the Commissioner's estimate of the fair market value of the land (taking into account such off-site improvements as the Commissioner requires to be provided in connection with the project and are not included in the Commissioner's estimate of replacement cost, but exclusive of the physical improvements within the boundaries of the property to be built as a part of the project), the proposed physical improvements, utilities within the boundaries of the project, architect's fees, a reasonable allowance for builder's profit, organization and legal expenses, taxes and interest, and other miscellaneous charges (including premiums for mortgage and hazard insurance and such tax escrows and acquisition costs as are payable by the cooperative at the time it acquires title to the project) approved by the Commissioner, during construction and during such period thereafter as the Commisisoner deems reasonable to permit such percentage of the dwelling units in the project to be sold and occupied as is necessary to produce the income required to meet operating expenses and debt service";

(5) by inserting the following before the period at the end of paragraph (2) of subsection (b): ": Provided further, That in the case of a mortgagor of the character described in paragraph (3) of subsection (a) the sole test of economic feasibility of the project shall be the availability of people in the community who need the housing and can afford it at the monthly charges applicable under its continued use as a cooperative";

(6) by inserting the following new sentence at the end of subsection (f): "The Commissioner shall appoint an Assistant Commissioner for Cooperative Housing (in lieu of the Special Assistant for Cooperative Housing) with such staff and authority as are necessary to administer the provisions of section 213 and effectuate its purposes.";

(7) by striking out, in subsection (h), the words "such mortgagor shall not thereafter be eligible by reason of such paragraph (3) for insurance of any additional mortgage loans pursuant to this section" and inserting in lieu thereof the following: "the Commissioner is authorized to refuse, for such period of time as he shall deem appropriate under the circumstances, to insure any additional section 213 investor sponsor type mortgage loans to such mortgagor or to any other investor sponsor mortgagor where, in the determination of the Commissioner, any of its stockholders were identified with such mortgagor";

(8) by inserting the following new subsection at the end of the section: "(j) In any case where, upon application by a mortgagee, the Commissioner finds, in the same area and with the same sponsorship

"(1) That more than one project is to be separately constructed or acquired with separate mortgages insured under this section; and

"(2) that the ownership, operation, management or financing of such projects by one nonprofit cooperative corporation will promote economy, efficiency and coordination,

each of the separate mortgages of such nonprofit cooperative corporation shall be eligible for insurance under this section and each such mortgage shall be a special obligation of such corporation payable from the income of the particular project covered by such mortgage and enforceable (by foreclosure and other remedies) only against such project and the assets and reserves relating thereto."; and

MUTUAL INSURANCE FUNDS FOR COOPERATIVES

(9) by inserting, after subsection (j) (as added by paragraph (8) of this section 2(a) the following new subsections:

"(k) There is hereby created a Cooperative Management Housing Insurance Fund (herein referred to as the 'Management Fund') which shall be used by the Commissioner as a revolving fund for carrying out the provisions of this title with respect to mortgages insured under subsection (a)(1) and subsection (a) (3) pursuant to commitments issued on or after the date of the enactment of this subsection or mortgage insurance or commitments reissued under subsection (o). The Commissioner is directed to transfer to the Management Fund from the Housing Insurance Fund established pursuant to section 207(f) such amount as the Commissioner determines to be the proper arithmetical apportionment of the funds to the Management Fund. General expenses of operation of the Federal Housing Administration relating to mortgages the mortgage insurance for which is the obligation of the Management Fund may be charged to the Management Fund.

"(1) The Commissioner shall establish, as of the date of enactment of this subsection, in the Management Fund, a General Surplus Account and a Participating Reserve Account. The aggregate net income thereafter received or any net loss thereafter sustained by the Management Fund in any semiannual period shall be credited or charged to the General Surplus Account and/or the Participating Reserve Account in such manner and amounts as the Commissioner may determine to be in accord with sound actuarial and accounting practice. Upon termination of the insurance obligation of the Management Fund by payment of any mortgage insured thereunder and/or at such time or times prior to such termination as the Commissioner may determine, the Commissioner is authorized to distribute to the mortgagor a share of the Participating Reserve Account in such manner and amount as the Commissioner shall determine to be equitable and in accordance with sound actuarial and accounting practice: Provided, That in no event shall the amount of such distributive share exceed the aggregate scheduled annual premiums of the mortgagor to the year of payment of such share less the total amount of any share or shares previously distributed by the Commissioner to the mortgagor: And provided further, That in no event may any such distributive shares be distributed until any funds transferred to the Management Fund pursuant to section 219 have been repaid in full to the transferring fund. No mortgagor or mortgagee shall have any vested right in a credit balance in any such account or be subject to any liability arising out of the mutuality of the Management Fund, and the determination of the Commissioner as to the amount to be paid by him to any mortgagor shall be final and conclusive.

"(m) There is hereby created a Cooperative Sales Housing Insurance Fund (herein referred to as the 'Sales Fund') which shall be used by the Commissioner as a revolving fund for carrying out the provisions of this title with respect to mortgages insured under subsection (a) (2) and individual mortgages insured under subsection (d) pursuant to commitments issued on or after the date of the enactment of this subsection or mortgag insurance or commitments reissued under subsection (o). The Commissioner is directed to transfer to the Sales Fund from the Housing Insurance Fund established pursuant to section 207 (f) such amount as the Commissioner determines to be the proper arithmetical apportionment of the funds to the Sales Fund. General expenses of the operation of the Federal Housing Administration relating to mortgages the mortgage insurance for which is the obligation of the Sales Fund may be charged to the Sales Fund.

"(n) The Commissioner shall establish, as of the date of enactment of this subsection, in the Sales Fund, a General Surplus Account and a Participating Reserve Account. The aggregate net income thereafter received or any net loss thereafter sustained by the Sales Fund in any semiannual period shall be

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