remaining after payment to the holder of the full amount of the certificate of claim shall be retained by the Commissioner and credited to the War Housing Insurance Fund; and";

(6) redesignating paragraph (2) of subsection (f) as (ii); and

(7) designating the second unnumbered paragraph 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 certificate 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 to settle, without awaiting the final liquidation of the Commissioner's interest in the property, any certificate of claim issued pursuant to subsection (e) with respect to which a 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 increment 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".

(e) Section 904 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"; and

(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".

REHABILITATION IN URBAN RENEWAL AREAS

SEC. 804. Section 220 of the National Housing Act is amended by

(1) striking out the colon and the second proviso preceding the semicolon at the end of clause (i) in subsection (d) (3) (A);

(2) striking out clause (ii) in subsection (d) (3) (A) and inserting in lieu thereof the following:

"(ii) in a case where the mortgagor is not the occupant of the property and the mortgagor intends to hold the property for rental purposes, have a principal obligation in an amount not to exceed (1) the amount available to a mortgagor who is the occupant of the property computed under the provisions of clause (i), nor (2) 90 per centum of the Commissioner's estimate of the replacement cost, nor (3) 90 per centum of the sum referred to in the proviso in clause (i);

"(iii) in a case where the mortgagor is not the occupant of the property and intends to hold the property for the purpose of sale, have a principal obligation in an amount not to exceed 85 per centum of the amount computed under the provisions of clause (i), or in the alternative, an amount computed under the provisions of clause (i) if the mortgagor and mortgagee assume responsibility in a manner satisfactory to the Commissioner for the reduction of the mortgage by an amount not less than 15 per centum of the outstanding principal amount thereof in the event the mortgaged property is not, prior to the due date of the eighteenth amortization payment of the mortgage, sold to a purchaser acceptable to the Commissioner who is the 30-150-64- 3

occupant of the property and who assumes and agrees to pay the mortgage indebtedness; and

"(iv) in no case involving refinancing, have a principal obligation in an amount exceeding the sum of the estimated cost of repair and rehabilitation and the amount (as determined by the Commissioner) required to refinance existing indebtedness secured by the property or project and any existing indebtedness incurred in connection with improving, repairing, or rehabilitating the property; or".

FHA SECTION 221 HOUSING FOR LOW- OR MODERATE-INCOME ELDERLY PERSONS

SEC. 805. Section 221 (c) of the National Housing Act is amended by adding at the end thereof the following sentence: "Any person sixty-two years of age or over may be construed to be a family within the meaning of the terms 'family' or 'families' as those terms are used in this section 221.".

MORTGAGE INSURANCE FOR SERVICEMEN

SEC. 806. Section 222(b) of the National Housing Act is amended by

(1) striking out in paragraph (1) "203(b) or 203 (i)" and inserting in lieu thereof "203 (b), 203 (i), or 221(d) (2),”; and

(2) striking out in paragraph (2) "such principal obligation shall not exceed $9,000." and inserting in lieu thereof "or section 221(d)(2) such principal obligation shall not exceed the maximum limits prescribed for these sections.".

PRIVATE FINANCING OF SALE OF FHA-ACQUIRED PROPERTIES

SEC. 807. Section 223 (c) of the National Housing Act is amended by striking out "limitation upon eligibility contained in this title II" and inserting in lieu thereof the following: "limitations or requirements contained in title II upon the eligibility of the mortgage, the payment of insurance premiums, or upon the terms and conditions of insurance settlement and the benefits of the insurance to be included in such settlement."

MORTGAGE INSURANCE FOR CONDOMINIUMS

SEC. 808. (a) Section 234 of the National Housing Act is amended by(1) striking out the heading and inserting in lieu thereof "MORTGAGE INSURANCE FOR CONDOMINIUMS";

(2) striking out "structure" each place it appears in this section and inserting in lieu thereof "project":

(3) striking out in subsection (b) "the term 'mortgage' for the purposes of this section" and inserting in lieu thereof "the term 'mortgage' for the purposes of subsection (c)";

(4) striking out in subsection (c) "this section" each time it appears and inserting in lieu thereof "this subsection";

(5) striking out in subsection (c) "section 213" each time it appears and inserting in lieu thereof "section 213(a) (1) and (2)";

(6) striking out the third sentence of subsection (c) and inserting in lieu thereof the following: "To be eligible for insurance pursuant to this subsection, a mortgage shall (A) involve a principal obligation in an amount not to exceed $30,000, and not to exceed the sum of (i) 97 per centum of $15,000 of the amount which the Commissioner estimates will be the appraised value of the family unit including common areas and facilities as of the date the mortgage is accepted for insurance, (ii) 90 per centum of such value in excess of $15,000 but not in excess of $20,000, and (iii) 75 per centum of such value in excess of $20,000, and (B) have a maturity satisfactory to the Commissioner, but not to exceed, in any event, thirtyfive years from the date of the beginning of amortization of the mortgage or three-fourths of the Commissioner's estimate of the remaining economic life of the project, whichever is the lesser."

(7) adding the following new subsections (d), (e), and (f): "(d) in addition to individual mortgages insured under subsection (c) of this section, the Commissioner is authorized, in his discretion and under such terms and conditions as he may prescribe, to insure blanket mortgages (including advances on such mortgages during construction) which cover multifamily proj

ects to be constructed or rehabilitated, and held by a mortgagor, approved by the Commissioner, which

"(1) has certified to the Commissioner, as a condition of obtaining the insurance of a blanket mortgage under this subsection, that upon completion of the multifamily project covered by such mortgage it intends to commit the ownership of the multifamily project to a plan of family unit ownership, under which each family unit would be eligible for individual mortgage insurance under subsection (c) of this section and will faithfully and diligently make and carry out all reasonable efforts to establish such plan of family unit ownership and to sell such family units to purchasers approved by the Commissioner; and

"(2) shall be regulated or restricted by the Commissioner as to rents, charges, capital structure, rate of return, and methods of operation until the termination of all obligations of the Commissioner under the insurance and during such further period of time as the Commissioner shall be the owner, holder, or reinsurer of the mortgage. The Commissioner may make such contracts with and acquire, for not to exceed $100, such stock or interest in such mortgagor as he may deem necessary to render effective the regulation and restriction of such mortgagor. The stock or interest acquired by the Commissioner shall be paid for out of the Apartment Unit Insurance Fund, and shall be redeemed by the mortgagor at par at any time upon the request of the Commissioner after the termination of all obligations of the Commissioner under the insurance.

"(e) To be eligible for insurance, a blanket mortgage on any multifamily property or project of a mortgagor of the character described in subsection (d) of this section shall involve a principal obligation in an amount

"(1) not to exceed $20,000,000, or not to exceed $25,000,000 if the mortgage is executed by a mortgagor regulated or supervised under Federal or State laws or by political subdivisions of States or agencies thereof, as to rents, charges, and methods of operation;

"(2) not to exceed 90 per centum of the amount which the Commissioner estimates will be the replacement cost of the project when the proposed physical improvements are completed;

"(3) not to exceed, for such part of the project as may be attributable to dwelling use (excluding exterior land improvements as defined by the Commissioner), $2,500 per room (or $9,000 per family unit if the number of rooms in the project is less than four per family unit): Provided, That as to projects to consist of elevator-type structures, the Commissioner may, in his discretion, increase the dollar amount limitation of $2,500 per room to not to exceed $3,000 per room and the dollar amount limitation of $9,000 per family unit to not to exceed $9,400 per family unit, as the case may be, to compensate for the higher costs incident to the construction of elevatortype structures of sound standards of construction and design, except that the Commissioner may, by regulation, increase any of the foregoing dollar amount limitations contained in this paragraph by not to exceed $1,250 per room without regard to the number of rooms being less than four, or four or more, in any geographical area where he finds that cost levels so require; and

"(4) not to exceed an amount equal to the sum of the unit mortgage amounts determined under the provisions of subsection (c) assuming the mortgagor to be the owner and occupant of each family unit. "(f) Any blanket mortgage insured under subsection (d) of this section shall provide for complete amortization by periodic payments within such terms as the Commissioner may prescribe but not to exceed forty years from the beginning of amortization of the mortgage, and shall bear interest (exclusive of premium charges for insurance) at not to exceed 54 per centum per annum, on the amount of the principal obligation outstanding at any time. The Commissioner may consent to the release of a part or parts of the mortgaged property from the lien of the blanket mortgage upon such terms and conditions as he may prescribe and the blanket mortgage may provide for such release. The property or project covered by the blanket mortgage may include 5 or more family units and such commercial and community facilities as the Commissioner deems adequate to serve the occupants.";

(8) redesignating subsection (d) as (g), striking out "this section" each time it appears therein and inserting in lieu thereof "subsection (c) of this section", and striking out therein "section 204(f) (1)" and inserting in lieu thereof "section 204 (f) (1) (i)”;

(9) inserting the following new subsection (h):

"(h) The provisions of subsections (d), (e), (g), (h), (i), (j), (k), (1), (m), (n), and (p) of section 207 shall be applicable to mortgages insured under subsection (d) of this section, except that all references to the Housing Insurance Fund, and Housing Fund, shall be construed to refer to the Apartment Unit Insurance Fund.";

(10) redesignating subsection (e) as (i); and

(11) redesignating subsection (f) as (j) and amending the subsection to read as follows:

"(j) The provisions of sections 225 and 230 shall be applicable to the mortgages insured under subsection (c) of this section.".

(b) Section 212(a) of said Act is amended by adding at the end thereof "The provisions of this section shall also apply to the insurance of any mortgage under section 234(d).”.

(c) Section 227(a) of said Act is amended by striking out "or (vii)” and inserting in lieu thereof "(vii)", and by adding at the end thereof preceding the semicolon ", or (viii) under section 234(d)”.

TRANSFER OF FUNDS

SEC. 809. Section 219 of the National Housing Act is amended by inserting "the General Surplus Account of the Mutual Mortgage Insurance Fund," after "the Title I Housing Insurance Fund,".

TITLE IX-MISCELLANEOUS

FN MA-REMOVAL OF $20,000 MORTGAGE AMOUNT LIMITATION

SEC. 901. Section 302 (b) of the Federal National Mortgage Association Charter Act is amended by

(1) striking out "any mortgage" in clause (3) and inserting in lieu thereof "any mortgage under section 305"; and

(2) striking out the colon and the proviso preceding the period in clause clause (3).

FNMA-NINETY PER CENTUM LOANS

SEC. 902. Section 304(a)(2) of the Federal National Mortgage Association Charter Act is amended by striking out "80 per centum" and inserting in lieu thereof "90 per centum".

FNMA-PURCHASE OF PARTICIPATIONS

SEC. 903. Section 304 (d) of the Federal National Mortgage Association Charter Act is hereby repealed.

OPEN-SPACE PROGRAM GRANT AUTHORIZATION

SEC. 904. Section 702(b) of the Housing Act of 1961 is amended by adding the following at the end thereof: "There are also authorized to be appropriated, after the date of enactment of the Housing and Community Development Act of 1964, such amounts for additional grants as may be necessary to carry out the purposes of this title. All funds so appropriated shall remain available until expended."

HOUSING FOR THE ELDERLY-LOAN AUTHORIZATION

SEC. 905. Section 202(a) (4) of the Housing Act of 1959 is amended by striking out "not to exceed $275,000,000" and inserting in lieu thereof "such sums as may be necessary to carry out the provisions of this section,”.

Mr. RAINS. We hope we can proceed as expeditiously as possible because we are going to have some rollcalls this afternoon. In fact, some of us are going to have to go over on the floor and help handle a bill that is over there later on, so we are hoping that we can get through on schedule.

I am going to ask Dr. Weaver to introduce, for the record, all of your associates so the reporter will know who they are. We know them but the reporter may not. Will you please do that?

STATEMENT OF ROBERT C. WEAVER, ADMINISTRATOR, HOUSING AND HOME FINANCE AGENCY; ACCOMPANIED BY STANLEY BAUGHMAN, PRESIDENT, FNMA; SIDNEY WOOLNER, COMMISSIONER, CFA; WILLIAM L. SLAYTON, COMMISSIONER, URA; PHILIP BROWNSTEIN, COMMISSIONER, FHA; MRS. MARIE MCGUIRE, COMMISSIONER, PHA; AND MILTON SEMER, GENERAL COUNSEL, HHFA

Mr. WEAVER. Starting from the right is Mr. Baughman, who is President of FNMA; Mr. Sidney Woolner, who is Commissioner of CFA; Mr. William L. Slayton, Commissioner of URA; Mr. Philip Brownstein, Commissioner of FHA; and to my left is Mr. Milton Semer, who is our General Counsel, and Mrs. Marie McGuire, who is Commissioner of PHA.

Mr. RAINS. We are delighted to have you, ladies and gentlemen. Doctor, you may proceed in any way you wish.

I see that you have a written statement, and it is a very long written statement. I assume the first 19 pages of your statement is your main statement and the rest of it are attachments. Is that what it is? Mr. WEAVER. Yes, sir.

Mr. RAINS. Well, all of the attachments will be included in the record at the end of your testimony, and you may proceed.

Mr. WEAVER. Thank you. Mr. Chairman and members of the committee, I appreciate this opportunity to present the views of the adminstration on the housing and community development legislation being considered by you today. Accompanying me are the heads of our five constituent agencies who will assist in discussing provisions affecting their respective activities.

In this statement, I shall discuss primarily the objectives and principal provisions of H.R. 9751, introduced by Mr. Rains, which is the administration's omnibus housing bill. I would like to submit for the record a more detailed statement on the specific provisions of that bill and H.R. 9769, a bill relating to the sale of mortgage assets by the Federal National Mortgage Association.

Three years ago in his housing message to the Congress, the late President Kennedy said:

A nation that is partly ill housed is not as strong as a nation with adequate homes for every family. A nation with ugly, crime-infested cities and haphazard suburbs does not present the same image to the world as a nation characterized by bright and orderly urban development.

The Congress responded to the late President's recommendations and enacted the Housing Act of 1961.

On January 27, President Johnson in his housing message to the Congress, said:

The dramatic increase in our Nation's population projected for the coming decades over 300 million by the year 2000-and the increasing concentration of our population around urban centers will create increased housing needs and intensified problems of community development which must be anticipated and acted upon immediately ***The substantive programs I have proposed in this special message will speed our solutions to today's problems and the pre dictable needs of tomorrow.

To provide legislation necessary for this purpose, the President recommended enactment of the administration bills before you today.