necessary or desirable to encourage financial participation by private lenders and investors in connection with a public work or facility for which principal or interest on the financial assistance extended is postponed pursuant to this subsection, the security for such financial assistance may be made subordinate and inferior to the lien or liens securing other loans made in connection with such public work or facility."

(b) Paragraph (2) of section 202 (b) of the Housing Amendments of 1955 (redesignated as section 202 (c) thereof by section 602(a) of this Act) is amended by striking out the second sentence thereof.

ADVANCES FOR PUBLIC WORKS PLANNING

SEC. 604. (a) Section 702(e) of the Housing Act of 1954 is amended to read as follows:

"(e) In order to provide moneys for advances in accordance with this section, the Administrator is hereby authorized to establish a revolving fund which shall comprise all moneys heretofore or hereafter appropriated pursuant to this section, together with all repayments and other receipts heretofore or hereafter received in connection with advances made under this section and all repayments and other receipts hereafter received in connection with advances made pursuant to title V of the War Mobilization and Reconversion Act of 1944 (58 Stat. 791) and the Act of October 13, 1948 (63 Stat. 841-2). There are hereby authorized to be appropriated to such revolving fund such sums as may be necessary to carry out the provisions of this section."

(b) Section 702 of the Housing Act of 1954 is amended by adding at the end thereof the following new subsection:

"(h) (1) Notwithstanding any other provision of law, if a public agency undertakes to construct only a portion of a public work planned with an advance under this section, title V of the War Mobilization and Reconversion Act of 1944 (58 Stat. 791), or the Act of October 13, 1949 (63 Stat. 841-2), it shall repay such proportionate amount of the advance relating to the public work as the Administrator determines to be equitable.

"(2) The Administrator is authorized to terminate, upon such terms and conditions as he shall deem equitable, all or a portion of the liability for repayment of any advance made pursuant to this section, title V of the War Mobilization and Reconversion Act of 1944 or the Act of October 13, 1949. Whenever the Administrator determines that there is no reasonable likelihood that the public work, or a portion of the public work, planned with such advance will be constructed, he may terminate the agreement for the advance. Such determination shall be conclusive and shall be based on standards prescribed by regulations to be issued by the Administrator."

(c) Section 702 of the Housing Act of 1954 is amended by

(1) striking out in subsection (a) “public agencies" wherever that term appears and inserting in lieu thereof "public agencies and Indian tribes"; (2) striking out in clause (3) of subsection (b) "public agency" and inserting in lieu thereof "public agency or Indian tribe";

(3) striking out in subsection (c) "public agency" wherever that term occurs and inserting in lieu thereof “public agency or Indian tribe", and striking out "by such agency" and inserting in lieu thereof "by such agency or tribe"; and

(4) striking out in subsection (c) the following: "That if the public agency undertakes to construct only a portion of a planned public work it shall repay such proportionate amount of the advance relating to the public work as the Administrator determines to be equitable: And provided further,".

(d) Section 702(f) of the Housing Act of 1954 is amended by striking out “$50,000" and inserting in lien thereof “$100,000”.

TITLE VII-FEDERAL-STATE TRAINING PROGRAMS

FINDINGS AND PURPOSE

SEC. 701. (a) The Congress finds that the rapid expansion of the Nation's urban areas and urban population has caused severe problems in urban and suburban development and created a national need to (1) provide special training in skills needed for economic and efficient community development and (2)

support research in new or improved methods of dealing with community development problems.

(b) It is the purpose of this title to assist and encourage the States, in cooperation with public or private universities and colleges and urban centers, to (1) organize, initiate, develop and expand programs which will provide special training in skills needed for economic and efficient community development to those technical and professional people who are, or are likely to be, employed by a governmental or public body which has responsibilities for community development; and (2) support State and local research that is needed in connection with housing programs and needs, public improvement and programing, code problems, efficient land use, urban transportation, and similar community development problems.

MATCHING GRANTS TO STATES

SEC. 702. (a) Subject to the provisions of this title and in accordance with regulations prescribed by him, the Administrator may make matching grants to States to assist in

(1) organizing, initiating, developing, or expanding programs to provide special training in skills needed for economic and efficient community development to those technical and professional people who are, or are likely to be, employed by a governmental or public body which has responsibilities for community development; and

(2) supporting State and local research that is needed in connection with housing programs and needs, public improvement programing, code problems, efficient land use, urban transportation, and similar community development problems, and in collecting, collating, and publishing statistics and information relating to such research.

(b) No grants may be made to a State under this title unless the Administrator has approved a plan for the State which—

(1) sets forth the proposed use of the funds and the objectives to be accomplished;

(2) explains the method by which the required amounts from non-Federal sources will be obtained;

(3) provides such fiscal control and fund accounting procedures as may be reasonably necessary to assure proper disbursement of, and accounting for, Federal funds paid to the State under this title;

(4) designates the officer or agency of the State government who has responsibility and authority for the administration of a statewide research and training program as the officer or agency with responsibility and authority for the execution of the State program; and

(5) provides that such officer or agency will make such reports to the Administrator, in such form, and containing such information, as may be reasonably necessary to enable the Administrator to perform his duties under this title.

(c) No grant may be made under this title for any use unless an amount at least equal to such grant is made available from non-Federal sources for the same purpose and for concurrent use.

(d) There are hereby authorized to be appropriated for grants under this title $5,000,000 for the fiscal year ending June 30, 1965, $15,000,000 for each of the two succeeding fiscal years, and $25,000,000 for each fiscal year thereafter.

ALLOTMENT AND PAYMENT

SEC. 703. (a) The funds appropriated under section 702 for a fiscal year shall be allotted by the Administrator among the several States on the basis of the proportion which the total urban population of each State bears to the total urban population of the United States according to the most recent available Bureau of the Census data: Provided, That no allotment to a State shall be less than $50,000, or more than 121⁄2 per centum of the amount appropriated in any one fiscal year.

(b) The amount of any State's allotment for a fiscal year which the Administrator determines will not be required, for the period such allotment is available for carrying out the State plan (if any) approved under section 702 shall be available for reallotment from time to time is the Administrator may determine.

(c) From a State's allotment available for the purpose, the Administrator may pay to such State the Federal share of expenditures under the State plan. Such payments may be made in advance or by way of reimbursement, in such installments and at such times as the Administrator may determine.

(d) Whenever the Administrator, after full consultation with the officer or agency administering a State plan, finds that-

(1) the State plan has been so changed that it no longer complies with the provisions of section 702(b); or

(2) in the administration of the plan there is a failure to comply substan tially with any of its provisions, the Administrator shall notify such State agency or officer that no further payments will be made to the State under this title until he is satisfied that the change or failure will be corrected. Until he is so satisfied, the Administrator shall make no further payments to such State under this title, or shall limit payments to portions of the State plan not affected by such change or failure.

TECHNICAL ASSISTANCE, STUDIES, AND PUBLICATION OF INFORMATION

SEC. 704. In order to carry out the purpose of this title, the Administrator is authorized to provide technical assistance to State and local public bodies and to undertake such studies and publish and distribute such information, either directly or by contract, as he shall determine to be desirable. Nothing contained in this title shall limit any authority of the Administrator under any other provision of law.

MISCELLANEOUS

SEC. 705. (a) As used in this title, the term "State" means any State of the United States, the District of Columbia, the Commonwealth of Puerto Rico, and the Virgin Islands; and the term "Administrator" means the Housing and Home Finance Administrator.

(b) There are hereby authorized to be appropriated such sums as may be necessary for administrative and other expenses in carrying out this title. TITLE VIII-MORTGAGE INSURANCE PROCEDURAL AMENDMENTS TIME LIMIT ON FHA RECOUPMENT OF TITLE I INSURANCE PAYMENTS SEC. 801. Section 2(g) of the National Housing Act is amended by striking out "after December 31, 1957,".

OPTIONAL CASH PAYMENT OF INSURANCE BENEFITS

SEC. 802. Title V of the National Housing Act is amended by adding the following section:

"SEC. 518. (a) Notwithstanding any other provisions of this Act with respect to the payment of insurance benefits, the Commissioner is authorized, in his discretion, to pay in cash or in debentures, on the basis of regulations to be issued from time to time, an insurance claim filed by a mortgagee on or after the effective date of the Housing and Community Development Act of 1964 on a mortgage or a loan which was insured under any section of this Act either before or after such effective date. If payment is made in cash, it shall be in an amount equivalent to the face amount of the debentures that would otherwise be issued plus an amount equivalent to the interest which the debentures would have earned, computed to a date to be established pursuant to regulations issued by the Commissioner.

"(b) The Commissioner is hereby authorized to borrow from the Treasury from time to time such amounts as the Commissioner shall determine are necessary to make payments in cash (in lieu of issuing debentures) pursuant to the provisions of this section. Notes or other obligations issued by the Commissioner under this section shall be subject to such terms and conditions as the Secretary of the Treasury may prescribe. Each sum borrowed pursuant to the provisions of this subsection shall bear interest at a rate determined by the Secretary of the Treasury, taking into consideration the average market yield on outstanding marketable obligations of the United States of comparable maturities during the month preceding the issuance of such notes or other obligations."

CHANGES IN FHA INSURANCE BENEFITS AND SIMPLIFICATION OF PAYMENT
PROCEDURES

SEC. 803. (a) Section 204 of the National Housing Act is amended by(1) striking out in the third sentence of subsection (a) the words “insurance on the mortgaged property, and any mortgage insurance premiums paid after either of such dates" and inserting in lieu thereof the following: "charges for the administration, operation, maintenance, and repair of community-owned property or the maintenance and repair of the mortgaged property, the obligation for which arises out of a covenant filed for record and approved by the Commissioner prior to the insurance of the mortgage, insurance on the mortgaged property, and any mortgage insurance premiums";

(2) inserting after the second proviso of subsection (a) two additional provisos as follows: “And provided further, That, with respect to a mortgage accepted for insurance pursuant to a commitment issued on or after the effective date of the Housing and Community Development Act of 1964, the Commissioner may include in debentures or in the cash payment an amount not to exceed the foreclosure, acquisition, and conveyance costs actually paid by the mortgagee and approved by the Commissioner: And provided further, That, with respect to a mortgage accepted for insurance pursuant to a commitment issued prior to the effective date of the Housing and Community Development Act of 1964, the Commissioner may, with the consent of the mortgagee (in lieu of issuing a certificate of claim as provided in subsection (e)), include in debentures or in the cash payment, in addition to amounts otherwise allowed for such costs, an amount not to exceed one-third of the total foreclosure, acquisition, and conveyance costs actually paid by the mortgagee and approved by the Commissioner, but in no event may the total allowance for such costs exceed the amount actually paid by the mortgagee:"; (3) striking out "and the payment of insurance premiums" in the third proviso in subsection (a) and inserting the following at the end of that proviso preceding the colon: "or where claim is paid in cash pursuant to the provisions of section 220, 221, or 233 of this Act, there shall be included in the cash payment an amount equivalent to the compensation for loss of debenture interest that would be included in computing debentures if the claim were being paid in debentures";

(4) striking out "$50" in the second sentence of subsection (c) and inserting in lieu thereof "$350";

(5) striking out in the second sentence of subsection (d) ", except that debentures issued pursuant to the provisions of section 220 (f), section 221 (g), and section 233 may be dated as of the date the mortgage is assigned (or the propety is conveyed) to the Commissioner, and" and inserting in lieu thereof ": Provided, That debentures issued pursuant to claims for insurance filed on or after the effective date of the Housing and Community Development Act of 1964 shall be dated as of the date of default or as of such later date as the Commissioner, in his discretion, may establish by regulation. The debentures";

(6) adding at the end of subsection (e) the following new sentence: "With respect to a mortgage accepted for insurance pursuant to a commitment issued on or after the effective date of the Housing and Community Development Act of 1964, the provisions of this subsection shall not be applicable and a certificate of claim shall not be issued.";

(7) amending the first unnumbered paragraph of subsection (f) to read as follows:

“(f) (1) If, after deducting (in such manner and amount as the Commissioner shall determine to be equitable and in accordance with sound accounting practice) the expenses incurred by the Commissioner, the net amount realized from any property conveyed to the Commissioner under this section and the claims assigned therewith exceeds the face value of the debentures issued and the cash paid in exchange for such property plus all interest paid on such debentures, such excess shall be divided as follows:";

(8) redesignating paragraph (1) of subsection (f) and (i) and striking out "207; and" at the end of the paragaph and inserting in lieu thereof the following: "207: Provided, That on and after the effective date of the Housing and Community Development Act of 1964, any excess remaining after pay

ment to the holder of the full amount of the certificate of claim, together with the accrued interest increment thereon, shall be retained by the Commissioner and credited to the applicable insurance fund; and";

(9) redesignating paragaph (2) of subsection (f) as (ii); and (10) designating the second unnumbered paragaph of subsection (f) as (2) and inserting the following preceding the period at the end thereof: ": Provided, That the settlement authority created by the Housing Amendments of 1955 shall be terminated with respect to any certificates of claim outstanding as of the effective date of the Housing and Community Development Act of 1964.

"(3) With the consent of the holder thereof, the Commissioner is authorized, without awaiting the final liquidation of the Commissioner's interest in the property, to settle any certificate of claim issued pursuant to subsection (e) with respect to which settlement had not been effected prior to the effective date of the Housing and Community Development Act of 1964, by making payment in cash to the holder thereof of such amount not exceeding the face amount of the certificate of claim, together with the accrued interest thereon, as the Commissioner may consider appropriate: Provided, That in any case where the certificate of claim is settled in accordance with the provisions of this paragraph, any amounts realized after the effective date of the Housing and Community Development Act of 1964, in the liquidation of the Commissioner's interest in the property, shall be retained by the Commissioner and credited to the applicable insurance fund".

(b) Section 207(g) of the National Housing Act is amended by adding the following at the end thereof: "Notwithstanding any other provisions of this Act, upon receipt, after the effective date of the Housing and Community Development Act of 1964, of an application for insurance benefits on a mortgage insured under this section, the Commissioner may terminate the mortgagee's obligation to pay premuim charges on the mortgage.".

(c) Sections 203(k), 220(f)(3), 220(h) (6), 221(g) (3), and 233(g) of the National Housing Act are each amended by adding the following sentence at the end thereof: "If the insurance payment is made in cash, there shall be added to such payment an amount equivalent to the interest which the debentures would have earned, computed to a date to be established pursuant to regulations issued by the Commissioner."

(d) Section 604 of the National Housing Act is amended by—

(1) inserting after the first proviso in subsection (a) an additional proviso as follows: "And provided further, That with respect to any debentures issued on or after the effective date of the Housing and Community Development Act of 1964, the Commissioner may, with the consent of the mortgagee (in lieu of issuing a certificate of claim as provided in subsection (e)), include in debentures, in addition to amounts otherwise allowed for such costs, an amount not to exceed one-third of the total foreclosure, acquisition, and conveyance costs actually paid by the mortgagee and approved by the Commissioner, but in no event may the total allowance for such costs exceed the amount actually paid by the mortgagee:";

(2) striking out "$50" in the second sentence of subsection (c) and inserting in lieu thereof "$350";

(3) striking out "default, and" in the second sentence of subsection (d) and inserting in lieu thereof the following: "default, except that debentures issued pursuant to claims for insurance filed on or after the effective date of the Housing and Community Development Act of 1964, shall be dated as of the date of default or as of such later date as the Commissioner, in his discretion may establish by regulation. The debentures";

(4) amending the first unnumbered paragraph of subsection (f) to read as follows: “(f) (1) If, after deducting (in such manner and amount as the Commissioner shall determine to be equitable and in accordance with sound accounting practice) the expenses incurred by the Commissioner, the net amount realized from any property conveyed to the Commissioner under this section and the claims assigned therewith exceeds the face value of the debentures issued and the cash paid in exchange for such property plus all interest paid on such debentures, such excess shall be divided as follows:";

(5) redesignating paragraph (1) of subsection (f) as (i) and striking out "property; and" at the end of the paragraph and inserting in lieu thereof the following: "property: Provided, That on and after the effective date of the Housing and Community Development Act of 1964, any excess