(b) Title V of the Housing Act of 1949 is amended by adding at the end thereof the following new sections:

"SEC. 516. (a) The Secretary is authorized to insure and to make loans to be sold and insured in accordance with the provisions of sections 501, 502, 514, 515, this section, and 517, exclusive of 514(a) (3), (4), and (5) and (b) and 515 (a) and (b)(4), and except that such loans in accordance with sections 501 and 502—

"(1) to owners of nonfarm rural tracts of low or moderate income as defined by the Secretary and to owners of farms shall not exceed amounts necessary to provide adequate housing modest in size, design, and cost as determined by the Secretary, and the aggregate of loans to such owners made and insured in any one fiscal year shall not exceed $300,000,000; and "(2) to other owners of nonfarm rural tracts shall bear interest and provide for insurance or service charges at rates determined by the Secretary, not to exceed the maximum rates of interest and premium charges provided in section 203 of the National Housing Act.

"(b) The Secretary may use the fund established pursuant to section 517 for the purpose of making loans to be sold and insured under this section, provided that the aggregate of such loans made and not disposed of at any one time shall not exceed $100,000,000.

(c) The Secretary may insure loans advanced by lenders other than the United States, and may sell and insure loans made by the Secretary out of the fund, for the payment of principal and interest thereon as the same becomes due. Any contract of insurance executed by the Secretary shall be an obligation supported by the full faith and credit of the United States and incontestable except for fraud or misrepresentation of which the holder has actual knowledge. In connection with loans insured under this section the Secretary may take liens running to the United States notwithstanding the fact that the notes evidencing such loans may be held by lenders other than the United States. Notes evidencing such loans shall be freely assignable but the Secretary shall not be bound by any assignment until notice thereof is given to and acknowledged by the Secretary.

“(d) After 90 days after the original capitalization of the fund created by section 517, no loans, other than loans then held or insured by the Secretary pursuant to section 514 or 515(b), shall be made or insured under section 514 or 515(b) except in accordance with this section.

"SEC. 517. (a) There is hereby created a fund, to be known as the Rural Housing Insurance Fund (hereinafter referred to as the 'fund'), which shall be used by the Secretary as a revolving fund for carrying out the provisions of section 516 and this section. There are hereby authorized to be appropriated to the Secretary such sums as may be necessary for the purposes of the fund.

(b) Money in the fund not needed for current operations shall be invested in direct obligations of the United States or obligations guaranteed by the United States.

"(c) Loans made or insured under section 516 and held or acquired by the Secretary, and security in connection with such loans, shall become a part of the fund. Loans may be held in the fund and collected in accordance with their terms or may be sold by the Secretary with or without agreements for insurance thereof. The Secretary is authorized to make agreements with respect to servicing such loans and, when necessary for liquidation or servicing, to purchase such loans on such terms and conditions as he may prescribe. Loans may be sold by the Secretary at prices within the range of market prices for the particular classes of loans, as determined by the Secretary from time to time. The aggregate of (1) any amount by which the balance outstanding on loans at the time of sale exceeds the price at which the loans are sold and (2) the amount of any fees and charges paid in connection with any sales shall be reimbursed to the fund by annual appropriations.

"(d) The Secretary is authorized to make and issue notes to the Secretary of the Treasury for the purpose of obtaining funds necessary for discharging obligations under section 516 and this section and for authorized expenditures out of the fund. Such notes shall be in such form and denominations and have such maturities and be subject to such terms and conditions as may be prescribed by the Secretary with the approval of the Secretary of the Treasury. Such notes shall bear interest at the rate fixed by the Secretary of the Treasury, taking into consideration the current average market yield of outstanding marketable obligations of the United States having maturities comparable to the notes issued

by the Secretary under this section. The Secretary of the Treasury is authorized and directed to purchase any notes of the Secretary issued hereunder, and for that purpose the Secretary of the Treasury 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 such securities may be issued under such Act, as amended, are extended to include purchases of notes issued by the Secretary. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes shall be treated as public debt transactions of the United States. The notes issued by the Secretary to the Secretary of the Treasury shall become obligations of the fund. Except as may be authorized by Congress from time to time in appropriation Acts, the authority of this subsection shall not extend to the original or any increased capitalization of the fund or to the restoration of any depletion of the fund occasioned by the sale of loans at prices less than the balances outstanding thereon.

"(e) The Secretary may retain out of payments by the borrower an annual charge in an amount specified in the insurance or sale agreement applicable to the loan. Out of the charges retained by the Secretary, if any, not to exceed one-half of 1 per centum of the unpaid balance of the loan shall be deposited in the fund and the remainder of such charges so retained, if any, shall be available for administrative expenses in carrying out the provisions of this title, to be transferred annually and become merged with any appropriation for administrative expenses of the Farmers Home Administration. "(f) The Secretary may also utilize the fund

"(1) to pay amounts to which the holder of the note is entitled in accordance with insurance or sales agreements under this title accruing between the date of any prepayment by the borrower and the date of transmittal of any such prepayments to the holder of the note. In the discretion of the Secretary, prepayments other than final payments need not be remitted to the holder until due;

"(2) to pay the holder of any note insured under this title any defaulted installment or, upon assignment of the note to the Secretary at the Secretary's request, the entire balance outstanding on the note:

"(3) to pay taxes, insurance, prior liens, expenses necessary to make fiscal adjustments in connection with the application and transmittal of collections, and other expenses and advances to protect the security for loans which are insured under this title or held in the fund and to acquire such security property at foreclosure sale or otherwise; and

"(4) to pay fees and charges in connection with sales by the Secretary of loans insured under this title."

FNMA SECONDARY MARKET OPERATIONS FOR RURAL HOUSING INSURED LOANS

SEC. 503. (a) Section 302(b) of the Federal National Mortgage Association Charter Act is amended by

(1) inserting after "which are insured under the National Housing Act” and before the comma the following: "or title V of the Housing Act of 1949";

(2) striking out in clause (2) of the first proviso "a Federal, State," and inserting in lieu thereof "a Federal instrumentality or, except a mortgage insured under title V of the Housing Act of 1949, a State,"; and

(3) inserting in the last sentence before the period the following: “or title V of the Housing Act of 1949".

(b) Section 303 (b) of the Federal National Mortgage Association Charter Act is amended by inserting "and other" in the first sentence, after "private". LOANS AND GRANTS TO DOMESTIC FARM LABORERS FOR ESSENTIAL DWELLING REPAIRS

SEC. 504. (a) The first sentence of section 504 (a) of the Housing Act of 1949 is amended to read as follows: "In the event the Secretary determines that an individual who meets the requirements of eligibility set forth in section 501(c), or who is a domestic farm laborer, cannot qualify for a loan under the provisions of section 502 or 503 and that repairs or improvements should be made to a dwelling occupied by him, in order to make such dwelling safe and sanitary and remove hazards to the health of the occupant, his family, or the community, or that repairs should be made to farm buildings in order to remove hazards and make such buildings safe, the Secretary may make a grant or a combined loan and grant to such individual to cover the cost of improvements or additions,

such as repairing roofs, providing toilet facilities, providing a convenient and sanitary water supply, supplying screens, repairing or providing structural supports, or making other similar repairs or improvements: Provided, however, That assistance to domestic farm laborers under this subsection may be provided only to repair or improve a dwelling in a rural area occupied by the applicant or his family for a substantial portion of the year and only upon such conditions as the Secretary shall prescribe to assure that the major benefits of such assistance will accrue to the applicant and his family, or to the applicant and his family and other domestic farm laborers."

(b) Section 504 of such Act is further amended by adding at the end thereof a new subsection as follows:

"(c) As used in this section, the term 'domestic farm laborer' means a citizen of the United States who receives a substantial portion (as determined by the Secretary) of his income as a laborer on a farm or farms situated in the United States."

DEFINITION OF DOMESTIC FARM LABOR

SEC. 505. Clause (3) of section 514(f) of the Housing Act of 1949 is amended to read as follows: "(3) the term 'domestic farm labor' means persons who receive a substantial portion (as determined by the Secretary) of their income as laborers on farms situated in the United States and either (A) are citizens of the United States or (B) reside in the United States after being legally admitted for permanent residence therein."

LOW-RENT HOUSING FOR DOMESTIC FARM LABOR

SEC. 506. (a) Title V of the Housing Act of 1949 is further amended by adding at the end thereof the following new section:

"FINANCIAL ASSISTANCE TO PROVIDE LOW-RENT HOUSING FOR DOMESTIC FARM

LABOR

"SEC. 518. (a) Upon the application of any nonprofit organization, or nonprofit association of domestic farm labor, the Secretary is authorized to provide financial assistance for the provision of low-rent housing and related facilities for domestic farm labor, if he finds that

"(1) the housing and related facilities for which financial assistance is requested will fulfill a pressing need in the area in which such housing and facilities will be located, and there is reasonable doubt that the same can be provided without financial assistance under this section;

(2) the applicant will contribute, from its own resources or from funds borrowed under section 514 or elsewhere, at least one-third of the total development cost;

"(3) the types of housing and related facilities to be provided are most practical, giving due consideration to the purposes to be served thereby and the needs of the occupants thereof; and

"(4) the construction will be undertaken in an economical manner, and the housing and related facilities will not be of elaborate or extravagant design or material.

"(b) The amount of any financial assistance provided under this section for low-rent housing and related facilities shall not exceed two-thirds of the total development cost thereof, as determined by the Secretary, less such amount as the Secretary determines can be practicably obtained from other sources (including a loan under section 514).

"(c) No financial assistance for low-rent housing and related facilities shall be made available under this section unless, to any extent and for any periods required by the Secretary, the applicant agrees—

"(1) that the rentals charged domestic farm labor shall not exceed such amounts as may be approved by the Secretary, giving due consideration to the income and earning capacity of the tenants, and the necessary costs of operating and maintaining such housing;

"(2) that such housing shall be maintained at all times in a safe and sanitary condition in accordance with such standards as may be prescribed by State or local law, or, in the absence of such standards, in accordance with such minimum requirements as the Secretary shall prescribe; and

"(3) an absolute priority will be given at all times in granting occupancy of such housing and facilities to domestic farm labor.

"(d) The Secretary may make payments pursuant to any contract for financial assistance under this section at such times and in such manner as may be specified in the contract. In each such contract the Secretary shall include such covenants, conditions, or provisions as he deems necessary to insure that the housing and related facilities, for which financial assistance is made available, be used only in conformity with the provisions of this section.

"(e) The Secretary shall prescribe regulations to insure that Federal funds expended under this section are not wasted or dissipated.

"(f) All laborers and mechanics employed by contractors or subcontractors on projects assisted by the Secretary which are undertaken by approved applicants under this section shall be paid wages at rates not less than those prevailing on similar construction in the locality, as determined by the Secretary of Labor in accordance with the Davis-Bacon Act, as amended (40 U.S.C. 276a-276a-5). The Secretary shall not extend any financial assistance under this section for any project without first obtaining adequate assurance that these labor standards will be maintained on the construction work; except that compliance with such standards may be waived by the Secretary in cases or classes of cases where laborers or mechanics, not otherwise employed at any time on the project, voluntarily donate their services without compensation for the purpose of lowering the costs of construction and the Secretary determines that any amounts thereby saved are fully credited to the person, corporation, association, organization, or other entity undertaking the project. The Secretary of Labor shall have, with respect to the labor standards specified in this section, the authority and functions set forth in Reorganization Plan Numbered 14 of 1950 (15 F.R. 3176; 64 Stat. 1267; 5 U.S.C. 133z-15), and section 2 of the Act of June 13, 1934, as amended (40 U.S.C. 276c).

"(g) As used in this section

"(1) the term 'low-rent housing' means rental housing within the financial reach of families of low income consisting of (A) new structures suitable for dwelling use by domestic farm labor, and (B) existing structures which can be made suitable for dwelling use by domestic farm labor by rehabilitation, alteration, conversion, or improvement;

"(2) the terms ‘related facilities' and 'domestic farm labor' shall have the meaning assigned to them in section 514(f); and

"(3) the term 'development cost' shall have the meaning assigned to it in section 515(d) (4).”

(b) Section 513 of the Housing Act of 1949 is amended by redesignating clause “(c)” and “(d)" as clauses "(d)" and "(e)” respectively and by inserting after the semicolon at the end of clause (b) the following: “(c) not to exceed $75,000,000 for financial assistance pursuant to section 518 for the period ending June 30, 1968 ;”.

CONFORMING AMENDMENTS

Sec. 507. (a) Section 506(a) of the Housing Act of 1949 is amended by striking out "sections 514 and 515” each place it appears and inserting in lieu thereof "sections 514 518”.

(b) Section 514(a) of the Housing Act of 1949 is amended by striking out "any State or political subdivision thereof, or any public or" and inserting in lieu thereof "or any".

TITLE VI COMMUNITY FACILITIES

PUBLIC FACILITY LOANS

SEC. 601. (a) Section 202(a) of the Housing Amendments of 1955 is amended by striking out in clause (1) of the first sentence "instrumentalities of States" and inserting in lieu thereof "instrumentalities of one or more States" and by striking out "in the same State" and inserting in lieu thereof "of one or more States".

(b) Section 202(b)(4) of the Housing Amendments of 1955 is amended by

(1) striking out "the second sentence of section 5(a) of the Area Redevelopment Act" and inserting in lieu thereof "section 5 of the Area Redevelopment Act";

(2) inserting "(A)" before "to any municipality" in the first sentence and by striking out everything following the phrase "most recent decennial census, or" in that sentence and inserting in lien thereof; ", or (B) to any public agency or instrumentality serving one or more municipalities, political subdivisions, or unincorporated areas in one or more States, unless each municipality, political subdivision, or unincorporated area to be served

by the specific public work or facility for which assistance is sought under this section has a population less than the applicable figure under clause (A) according to such census."; and

(3) inserting "(A)" after "this section" in the second sentence thereof and adding the following before the period at the end thereof: ", (B) where principal or interest on such assistance is postponed under subsection (g) of this section, or (C) where such assistance is extended to finance the construction of public works or facilities in connection with the establishment of a new community under title X of the National Housing Act".

ADVANCE ACQUISITION OF LAND

SEC. 602. (a) Section 202 of the Housing Amendments of 1955 is further amended by inserting after subsection (a) the following new subsection (b) and redesignating the remaining subsections accordingly :

(b) In order to encourage and assist in the timely acquisition of open or predominantly undeveloped land planned to be utilized in connection with the future construction of public works and facilities, the Housing and Home Finance Administrator is authorized to purchase the securities and obligations of, or make loans to, municipalities and other political subdivisions and instrumentalities of one or more States (including public agencies and instrumentalities of one or more municipalities or other political subdivisions of one or more States), and Indian tribes to finance the acquisition of a fee simple estate or other interest in such land. A loan under this subsection may be in an amount which shall not exceed the total cost, as approved by the Administrator, of acquiring such interest; shall be reasonably secured; shall be repaid in such manner and within such period, not exceeding fifteen years, as may be determined by the Administrator; and shall bear interest at the rate prescribed for financial assistance extended under subsection (a) of this section. The Administrator in his discretion may provide for the postponement of the payment of principal and interest on any financial assistance extended under this subsection: Prorided. That any interest payment so deferred shall accrue and be compounded semiannually. The Administrator shall not extend any financial assistance under this subsection for the acquisition of land unless he finds that the public work or facility for which such land is to be utilized is planned to be constructed or initiated within a reasonable period of time and that construction of such public work or facility will contribute to economy, efficiency, and the comprehensively planned development of the area. The Administrator may set such further terms and conditions for assistance under this subsection as he deems to be desirable."

(b) Section 202 (e) of the Housing Amendments of 1955 (redesignated as section 202 (f) thereof by subsection (a) of this section) is amended by striking out therein the words "subsections (b) and (c)" and inserting in lieu thereof "subsections (c) and (d)”.

(c) Section 203 (a) of the Housing Amendments of 1955 is amended by striking “section 202(a)" and inserting in lieu thereof "section 202 (a) and pursuant to section 202 (b)".

GROWTH CAPACITY LOANS

SEC. 603. (a) Section 202 of the Housing Amendments of 1955 is further amended by adding at the end thereof a new subsection as follows:

"(g) Notwithstanding any other provision of this title, the Administrator in his discretion may provide for the postponement of the payment of principal and interest on financial assistance extended under clause (1) of subsection (a) of this section whenever he determines that the specific public work or facility for which such assistance is sought will serve a municipality, political subdivision, or other area which will experience substantial population growth and that the public work or facility to be constructed with financial assistance for which the repayment of principal and interest is postponed pursuant to this section will be needed as the result of such growth and will contribute to economy, efficiency, and the comprehensively planned development of the area: Provided, That such postponement of the time of payment of principal and interest shall be for not more than ten years after the year during which the financial assistance is extended and any interest payment so deferred shall accrue and be compounded semiannually: Provided further, That the financial assistance extended shall be repaid, together with the interest thereon, not later than fifty years after the year during which it is extended. Where the Administrator finds such action