Public Law 89-117

79

STAT.]

PUBLIC LAW 89-117-AUGUST10, 1965

451

Public Law 89-117
AN A C T
To assist in the provision of housing for low- and modera'te-income families, to
promote orderly u r b a n development, to improve living environment in u r b a n
areas, and to extend and amend laws relating to housing, urban renewal, a n d
community facilities.

August 10, 1965
[H. R. 7984]

Be it enacted by the Senate and House of Representatives of the
United States of Am;erica in Congress assenibled^ That this Act may urt)an^D"e^vi»r'^
be cited as the "Housing and Urban Development Act of 1965".
men^"Act^ of "ges.
TITLE I—SPECIAL PEOVISIONS FOR DISADVANTAGED
PERSONS
FINANCIAL ASSISTANCE TO ENABLE CERTAIN PRIVATE HOUSING TO BE
AVAILABLE FOR LOWER INCOME FAMILIES WHO ARE ELDERLY, HANDICAPPED, DISPLACED, VICTIMS OF A NATURAL DISASTER, OR OCCUPANTS
OF SUBSTANDARD HOUSING

SEC. 101. (a) The Housing and Home Finance Administrator
(hereinafter referred to as the "Administrator") is authorized to
make, and contract to make, annual payments to a "housing owner" on
behalf of "qualified tenants", as those terms are defined herein, in such
amounts and under such circumstances as are prescribed in or pursuant to this section. I n no case shall a contract provide for such
payments with respect to any housing for a period exceeding forty
years. The aggregate amount of the contracts to make such payments
shall not exceed amounts approved in appropriation Acts, and payments pursuant to such contracts shall not exceed $30,000,000 per
annum prior to July 1, 1966, which maximum dollar amount shall be
increased by $35,000,000 on July 1, 19^6, by $40,000,000 on July 1,
1967, and by $45,000,000 on July 1, 1968.
(b) As used in this section, the term "housing owner" means a pri- "Housing
vate nonprofit corporation or other private nonprofit legal entit;;^, a °'^"^'"'
limited dividend corporation or other limited dividend legal entity,
or a cooperative housing corporation, which is a mortgagor under
section 221(d) (3) of the National Housing Act and which, after the Jj u?c vil'si.
enactment of this section, has been approved for mortgage insurance
thereunder and has been approved for receiving the benefits of this
section: Provided^ That, except as provided in subsection ( j ) , no
payments under this section may be made with respect to any property financed with a mortgage receiving the benefits of the interest
rate provided for in the proviso in section 221(d) (5) of that Act. ^°^^' P- '*54.
Subject to the limitations provided in subsection ( j ) , the term "housing
owner" also has the meaning prescribed in such subsection.
(c) As used in this section, the term "qualified tenant" means any ^^^^^W^^^'"^
individual or family who has, pursuant to criteria and procedures
established by the Administrator, been determined—
(1) to have an income below the maximum amount which can
be established in the area, pursuant to the limitations prescribed
in sections 2(2) and 15(7) (b) (ii) of the L"''nited States Housing
Act of 1937, for occupancy in public housing dwellings; and
63°star tri'
(2) to be one of the following—
42 use HIS
(A) displaced by governmental action;
(B) sixty-two years of age or older (or, in the case of a
family to have a head who is, or whose spouse is, sixty-two
years of age or o v e r ) ;

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PUBLIC LAW 89-117-AUGUST 10, 1965

'

[79 STAT.

(C) physically handicapped (or, in the case of a family,
to have a head who is, or whose spouse is, physically handicapped) ;
(D) occupying substandard housing; or
( E ) an occupant or former occupant of a dwelling which
is (or was) situated in an area determined by the Small
Business Administration, subsequent to April 1,1965, to have
been affected by a natural disaster, and which has been
extensively damaged or destroyed as the result of such disaster.
The terms "qualified tenant" and "tenant" include a member of a
cooperative who satisfies the foregoing requirements and who, upon
resale of his membership to the cooperative, will not be reimbursed for
any equity increment accumulated through payments under this section. With respect to members of a cooperative, the terms "rental"
and "rental charges" mean the charges under the occupancy agreements between such members and the cooperative.
(d) The amount of the annual payment with respect to any dwelling
unit shall not exceed the amount by which the fair market rental for
such unit exceeds one-fourth of the tenant's income as determined by
the Administrator pursuant to procedures and regulations established
by him.
(e) (1) For purposes of carrying out the provisions of this section,
the Administrator shall establish criteria and procedures for determining the eligibility of occupants and rental charges, including
criteria and procedures with respect to periodic review of tenant
incomes and periodic adjustment of rental charges. Tlie Administrator shall issue, upon the request of a housing owner, certificates as to
tlie following facts concerning the individuals and families applying
for admission to, or residing in, dwellings of such owner:
(A) the income of the individual or family; and
(B) whether the individual or family was displaced by governmental action, is elderly, is physically handicapped, or is (or was)
occupying substandard housing or housing extensively damaged
or destroyed as the result of a natural disaster.
(2) Procedures adopted by the Administrator hereunder shall provide for recertifications of the incomes of occupants, except the elderly,
at intervals of two years (or at shorter intervals in cases where the
Administrator may deem it desirable) for the purpose of adjusting
rental charges and annual payments on the basis of occupants' incomes,
but in no event shall rental charges adjusted under this section for any
dwelling exceed the fair market rental of the dwelling.
(3) The Administrator may enter into agreements, or authorize
housing owners to enter into agreements, with public or private agencies for services required in the selection of qualified tenants, including
those who may be approved, on the basis of the prc^bability of future
increases in their incomes, as lessees under an option to purchase (which
will give such approved qualified tenants an exclusive right to purchase at a price established or determined as provided in the option)
dwellings, and in the establishment of rentals. The Administrator is
authorized (without limiting his authority under any other provision
of law) to delegate to any such public or private agency his authority
to issue certificates pursuant to this subsection.
(4) No payments under this section may be made with respect to any
property tor which the costs of operation (including wages and salaries) are determined by the Administrator to be greater than similar
costs of operation of similar housing in the community where the property is situated.

79

STAT.]

PUBLIC LAW 89-117-AUGUST10, 1965

(f^ Section 101 (c) of the Housing Act of 1949 is amended by inserting '^(i)" after "a mortgage under" m the first proviso and by inserting
immediately before the colon at the end of such proviso the following:
", or (ii) section 221(d) (3) of the National Housing Act if payments
with respect to the mortgaged property are made or are to be made
imder section 101 of the Housing and Urban Development Act of
1965, except that no such mortgage shall be insured, and no commitment to insure such a mortgage shall be issued, with respect to property in any community for which a workable program for community
improvement was required and in effect at the time a contract for a
loan or capital grant was entered into under this title, or a contract for
annual contributions or capital grants was entered into pursuant to the
United States Housing Act of 1937, unless there is a workable program
for community improvement which meets the requirements oi this
subsection in effect in such community at the time of such insurance or
commitment".
(g) The Administrator is authorized to make such rules and regulations, to enter into such agreements, and to adopt such procedures as
he may deem necessary or desirable to carry out the provisions of this
section. Nothing contained in this section shall affect the authority of
(1) the Federal Housing Commissioner with respect to any housing
assisted under this section and under sections 221 (d) (3) and 231 (c) (3)
of the National Housing Act, or (2) the Housing and Home Finance
Administrator with respect to any housing assisted under this section
and under section 202 of the Housing Act of 1959, including the
authority to prescribe occupancy requirements under other provisions
of law or to determine the portion of any such housing which may be
occupied by qualified tenants.
(h) There are authorized to be appropriated such sums as may be
necessary to carry out the provisions of this section, including, but not
limited to, such sums as may be necessary to make annual payments as
prescribed in this section, pay for services provided under (or pursuant to agreements entered into under) subsection (e), and provide
administrative expenses.
(i) Section 114(c) (2) of the Housing Act of 1949 is amended by
inserting before the colon at the end of the first proviso the following:
", or a dwelling unit assisted under section 101 of the Housing and
Urban Development Act of 1965".
(j) (1) For the purpose of assisting housing under this section on
an experimental basis, subject to the limitations of this subsection, the
term "housing owner" (in addition to the meaning prescribed in subsection ( b ) ) includes—
(A) a private nonprofit corporation or other private nonprofit
legal entity, a limited dividend corporation or other limited dividend legal entity, or a cooperative housing corporation, which is a
mortgagor under a mortgage which receives the benefits of the
interest rate provided for in the proviso in section 221(d) (5) of
the National Housing Act and which, after the date of the enactment of this Act, has been approved for mortgage insurance under
section 221(d)(3) of the National Housing Act and has been
approved for receiving the benefits of this section;
(B) a private nonprofit corporation or other private nonprofit
legal entity which is a mortgagor under a mortgage insured under
section 23i(c) (3) of the National Housing Act and which, after
the date of the enactment of this Act, has obtained final endorsement of such mortgage for mortgage insurance and has been
approved for receiving the benefits of this section; and

453
68 Stat. 623.
42 u s e 1451.

H ^g^ 888
42 u s e 1430.

^o^l^^^^*" i | ° '
12 use n'lsi,
i7i5v.
H ^^c fy^o^iq,

^ ^^'^ ^ss.

^o^f- p- 454.

454

73 Stat. 667.
12
s e 170
. „ uTxor.
. ,„,Iq._

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

(C) a private nonprofit corporation, a public body or agency,
or a cooperative housing corpK)ration, which is a borrower under
SBction 202 of the Housing Act of 1959 and has been approved for
receiving the benefits of this section: Provided^ That, with respect
to properties financed with loans under such section made on or
before the date of the enactment of this Act, payments shall not
be made with respect to more than 20 per centum of the dwelling
units in any property so financed.
(2) Of the amounts approved in appropriation Acts pursuant to
subsection (a) for payments under this section in any year, not more
than 5 per centum in the aggregate shall be paid with respect to properties of housing owners as defined in paragraph (1) (A) of this
subsection, and not more than 5 per centum in the aggregate shall be
paid with respect to properties of housing owners as defined in paragraphs (1) (B) and (1) (C) of this subsection.
EXTENSION OP FHA SECTION 2 21 PROGRAMS; MODIFICATION OF INTEREST
R A T E ; POOLING OF MORTGAGES FOR SALE

SEC. 102. (a) The fifth sentence of section 221(f) of the National
Housing Act is amended by striking out "subsection (d) (2) or (d) (4)
after September 30, 1965, or under subsection (d) (3) after September 30, 1965," and inserting in lieu thereof "this section after October 1,1969,".
75 Stat. 152.
(^\y^ ^\^Q pToviso in scctiou 221(d) (5) of such Act is amended by
striking out "not less than the annual rate of interest determined" and
inserting in lieu thereof "not less than the lower of (A) 3 per centum
per annum, or (B) the annual rate of interest determined".
73 Stat. 661;
(Q\ The third sentence of section 212(a) of such Act is amended by
12 use 1715c. striking out "described in subsection (d) ( 3 ) " and all that follows and
inserting in lieu thereof "described in subsection (d) (3) or (d) (4)."
78 Stat. 800^
(d) Sectlon 302(c) of such Act is amended by inserting before the
12
er- 1717.
,o uTTsQ
''"''
last sentence thereof the following: "If there shall be included within
one or more of the trusts or other agencies created pursuant to the
authority of this subsection any mortgages bearing a below-market
interest rate and insured under section 221(d) (3) after the date of
the enactment of the Housing and Urban Development Act of 1965,
there are authorized to be appropriated from time to time such
amounts as may be necessary to reimburse the Association for the
amount of the differential (including interest, other costs, and a fair
proportion of administrative expense) between (1) the total outlay
with respect to outstanding participations or other instruments which,
at the time of issuance, were predicated upon or otherwise related to
such below-market interest rate mortgages, and (2) the total receipts
from such'mortgages."

78 Stat, 779.
12 u s e 1715i.

79

STAT.]

PUBLIC LAW 89-1 1 7 - A U G U S T 10, 1965

455

LOW-RENT HOUSING I N PRIVATE ACCOMMODATIONS

SEC. 103. (a) The United States Housing Act of 1937 is amended by
redesignating section 23 as section 24, and by adding after section 22
the following new section:

J^i^^^^i^'
42 use :1422.

" L O W - R E N T H O U S I N G I N PRIVATE ACCOMMODATIONS

"SEC. 23. ( a ) ( 1 ) F o r the purpose of providing a supplementary
form of low-rent housing which will aid in assuring a decent place to
live for every citizen and promote efficiency and economy in the program under this Act by taking fuil advantage of vacancies or potential
vacancies in the private housing market, each public housing agency
shall, to the maximum extent consistent with the achievement of the
objectives of this Act, provide low-rent housing under this Act in the
form of low-rent housing in private accommodations in accordance
with this section where such housing in private accommodations can
be provided at a cost equal to or less than housing in projects assisted
under other provisions of this Act.
"(2) The provisions of this section shall not apply to any locality
unless the governing body of the locality has by resolution approved
the application of such provisions to such locality.
"(3) As used in this section, the term 'low-rent housing in private
accommodations' means dwelling units in an existing structure, leased
from a private owner, which provide decent, safe, and sanitary dwelling accommodations and related facilities effectively supplementing
the accommodations and facilities in low-rent housing assisted under
the other provisions of this Act in a manner calculated to meet the
total housmg needs of the community in which they are located; and
the term 'owner' means any person or entity having the legal ri^ht to
lease or sublease property containing one or more dwelling units as
described in this section.
" ( b ) Beginning as soon as practicable after the date of the enactment of this section, each public housing agency shall conduct a continuing survey and listing of the available dwelling units within the
community or communities under its jurisdiction which provide
decent, safe, and sanitary dwelling accommodations and related
facilities and are, or may be made, suitable for use as low-rent housing
in private accommodations under this section.
"(c) Each public housing agency, by notification to the owners of
housing listed under subsection ( b ) , or by publication or advertisement, or otherwise, shall from time to time make known to the public
in the community or communities under its jurisdiction the anticipated
need for dwelling units in such community or communities to be used
as low-rent housing in private accommodations under this section,
inviting the owners of such dwelling units to make available for purposes of this section one or more of such units (not exceeding 10 per
centum of the units in any single structure except to the extent that
the agency, because of the limited number of units in the structure or
for any other reason, determines that such limit should not be applied).
The public housing agency shall conduct appropriate inspections of
the units offered to be made available in any residential structure by
the owner thereof in response to such invitation, and if—
"(1) it finds that such units are, or may be made, suitable for
use as low-rent housing in private accommodations within the
meaning of subsection (a) (3), and
"(2) the rentals to be charged for such units, as negotiated and
agreed to by the agency and the owner of the structure in a manner
consistent with subsection (d) (2), are within the financial range
of families of low income,

Definitions.

456

75 Stat. 163.
42 use 1410.

68 Stat. 631;
^\2*usc'^i4'io,
1415.

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

such agency may approve such units for use as low-rent housing in
private accommodations in accordance with (and subject to the applicable limitations contained in) this section. Each public housing
agency shall maintain and keep current a list of units approved by it
under this subsection, including such information with respect to each
such unit as it may consider necessary or appropriate.
" ( d ) To the extent of contracts for annual contributions entered
into by the Authority with a public housing agency under section
10(e), such agcucy may enter into contracts wdth the owners of structures containing dwelling units approved under subsection (c) for the
use of such units in accordance with this section. Each such contract
with an owner shall provide (with respect to any unit) that—
" (1) the selection of tenants for such unit shall be the function
of the owner, subject to the provisions of the contract between
the Authority and the agency;
"(2) the rental and other charges to be received by the owner
shall be negotiated and agreed to by the agency and the owner, and
the rental and other charges to be paid by the tenant shall be
determined in accordance with the standards applicable to units
in low-rent housing projects assisted under the other provisions of
this Act;
"(3) the agency shall have the sole right to give notice to
vacate, with the owner having the right to make representations to
the agency for termination of a tenancy;
"(4) maintenance and replacements (including redecoration)
shall be in accordance with the standard practice for the building
concerned, as established by the owner and agreed to by the
agency; and
"(5) the agency and the owner shall carry out such other
appropriate terms and conditions as may be mutually agreed to
by them.
Each contract between a public housing agency and an owner entered
into under this subsection shall be for a term of not less than twelve
months nor more than thirty-six months, and shall be renewable by
such agency and owner at the expiration of such term.
"(e) The annual contribution under this Act for a project of a public
housing agency for low-rent housing in private accommodations under
this section in lieu of any other guaranteed contribution authorized by
section 10 shall not exceed the amount of the fixed annual contribution
which w^ould be established under this Act for a newly constructed
project by such public housing agency designed to accommodate the
comparable number, sizes, and kinds of families. The period over
which payments will be made to a public housing agency for a project of low-rent housing in private accommodations under this section,
and the aggregate amount of such payments, under a contract for
annual contributions, shall be determined on the basis of the number
of units in the community or communities under the jurisdiction of
such agency which are in use (or can reasonably be expected to be
placed in use) as low-rent housing in private accommodations under
this section, taking into account the terms of the leases under which
such units are (or will be) so used. In addition, contracts for financial assistance entered into by the Authority with a public housing
agency pursuant to this section shall provide for reimbursement of
reasonable an^l necessary expenses incurred by such agency in conducting surveys, listings, and inspections described in subsections (b)
and (c).
'< (f) The provislous of sections 10(h) and 15 (7) of this Act, and the
workable program requirement in section 10(e) of this Act and section

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STAT.]

PUBLIC LAW 8 9 - 1 1 7 - A U G U S T 10, 1965

457

101(c) of the Housing Act of 1949, shall not apply to low-rent housing in private accommodations provided under this section."
(b) The last sentence of section 2(1) of such Act is amended by striking out "Income limits for occupancy and rents" and inserting in lieu
thereof "Except as otherwise provided in section 23, income limits for
occupancy and rents".
PARITY o r TREATMENT

FOR T H E H A N D I C A P P E D

A N D ELDERLY I N

^"'*' P- ^^S.
73 Stat. 680.
42 u s e 1402.

PUBLIC

HOUSING

SEC. 104. Section 2(2) of the United States Housing Act of 1937 is ^s stat. 794.
amended to read as follows:
"(2) The term 'families of low income' means families (including
elderly and displaced families) who are in the lowest income group and
who cannot afford to pay enough to cause private enterprise in their
locality or metropolitan area to build an adequate supply of decent,
safe, and sanitary dwellings for their use. The term 'families' includes families consisting of a single person in the case of elderly families and displaced families, and includes the remaining member of a
tenant family. The term 'elderly families' means families whose heads
(or their spouses), or whose sole members, have attained the age at
which an individual may elect to receive an old-age benefit under title
I I of the Social Security Act, or are under a disability as defined in 7o'*stat^*8it^^'
section 223 of that Act, or are handicapped within the meaning of sec- 42 use 401tion 202 of the Housing Act of 1959. The term 'displaced families' "^^s.
means families displaced by urban renewal or other governmental action, or families whose present or former dwellings are situated in areas
determined by the Small Business Administration, subsequent to April
1, 1965, to have been affected by a natural disaster, and which have
been extensively damaged or destroyed as the result of such disaster."
DIRECT LOANS TO PROVIDE H O U S I N G

FOR T H E ELDERLY OR

HANDICAPPED

SEC. 105. (a) Section 202(a)(4) of the Housing Act of 1959 is
amended by striking out "$350,000,000" and inserting in lieu thereof
"$500,000,000".
(b) Effective with respect to loans made on or after the date of the
enactment of this Act, section 202(a) (3) of such Act is amended by
striking out "the higher of (A) 2 % per centum per annum, or" and inserting in lieu thereof "the lower of (A) 3 per centum per annum, or".

78 stat. 783.
^^ "^^ ^'°''''
^3 stat. 667.

R E H A B I L I T A T I O N G P ^ N T S TO H O M E O W N E R S I N U R B A N R E N E W A L AREAS

SEC. 106. (a) Title I of the Housing Act of 1949 is amended by ^ ^^^- ^^^^^
adding at the end thereof the following new section:
i465.
" R E H A B I L I T A T I O N GRANTS

"SEC. 115. (a) Notwithstanding any other provision of this title,
the Administrator may authorize a local public agency to make grants
(and the urban renewal project may include the making of such
grants) as prescribed in this section. Any such grant may be made
only to an individual or family, as described in subsection ( b ) , who
owns and occupies a structure in an urban renewal area, and only for
the purpose of covering the cost of repairs and improvements necessary to make such structure conform to public standards for decent,
safe, and sanitary housing as required by applicable codes or other
requirements of the urban renewal plan for the area. Any contract for
financial assistance under this title shall provide that the capital grant
49-850 0-66—32

458

42 use 1*450
1465.
"

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

otherwise payable for the project shall be increased by an amount
equal to the total amount of the grants under this section and that no
part of the total amount of such grants shall be required to be contributed as part of the local grant-in-aid.
" ( b ) A grant authorized by this section may be made to an individual or family whose income does not exceed $3,000 a year, and such
grant may be in the amount which does not exceed the lesser of (1) the
actual (and approved) cost of the repairs and improvements involved,
or (2) $1,500, I n case the income of the individual or family exceeds
$3,000 a year, a grant may be made under this section, subject to the
limitations specified in clauses (1) and (2) of the preceding sentence,
but only in an amount not to exceed that portion of the cost of the
repairs and improvements which cannot be paid for with any available
loan that can be amortized as part of such individual's or family's
monthly housing expense without requiring such monthly housing
expense to exceed 25 per centum of such individual's or family's
monthly income."
(b) Any contract with a local public agency which was executed
under title I of the Housing Act of 1949 before the date of enactment
of this Act may be amended to provide for grants authorized by
section 115 of the Housing Act of 1949.
MORTGAGE R E L I E F FOR H O M E O W N E R S W H O ARE U N E M P L O Y E D AS T H E
R E S U L T OF T H E CLOSING OF A FEDERAL I N S T A L L A T I O N

48 Stat, 1246.
58 Stat. 284;'
72 Stat. 'i203,'
^^3^8 "use 18011825.

mora't^rium^ °^

SEC. 107. (a) For the purposes of this section—
(1) The term "mortgage" means a mortgage which (A) is insured
under the National Housing Act, or (B) secures a home loan guaran^eed OT iusured under the Servicemen's Readjustment Act of 1944 or
chapter 37 of title 38, United States Code.
(^) The term "Federal mortgage agency" means—
(A) the Federal Housing Commissioner when used in connection with mortgages insured under the National Housing Act, and
(B) the Administrator of Veterans' Affairs when used in connection with mortgages securing home loans guaranteed or insured
under the Servicemen's Readjustment Act of 1944 or chapter 37
of title 38, United States Code.
(3) The term "distressed mortgagor" means an individual who—
(A) is unemployed, although willing to work, as the result of
the closing (in whole or in part) of a Federal installation, and
(B) is the owner-occupant of a dwelling upon which there is a
mortgage securing a loan which is in default because of the inability of such individual to make payments of principal and/or
interest under such mortgage.
(b) (1) Any distressed mortgagor, for the purpose of avoiding foreclosure of his mortgage, may apply to the appropriate Federal mortgage agency for a determination that suspension of his obligation to
make payments of principal and/or interest under such mortgage
during a temporary period is necessary in order to avoid such foreclosure.
(^) Upon Tcceipt of au application made under this subsection by
a distressed mortgagor, the Federal mortgage agency shall issue to
such mortgagor a certificate of moratorium if it determines, after
consultation with the interested mortgagee, that—
(A) the mortgagor is not in default with respect to any condition or covenant of the mortgage other than that requiring the
payment of installments of principal and/or interest under the
mortgage, and

79

STAT.]

PUBLIC LAW 89-117-AUGUST10, 1965

(B) such action is the only available means whereby a foreclosure of such mortgage can be avoided.
(3) Prior to the issuance to any distressed mortgagor of a certificate
of moratorium under paragraph (2)^ the Federal mortgage agency
shall require such mortgagor to enter into a binding agreement under
which he will be required to make payments to such agency, after the
expiration of such certificate, in an aggregate amount equal to the
amount paid by such agency on behalf of such mortgagor as provided
in subsection (c). The manner and time in which such payments shall
be made shall be determined by the Federal mortgage agency having
due regard to the purposes sought to be achieved oy this section.
(4) Any certificate of moratorium issued under this subsection shall
expire on whichever of the following dates is the earliest—
(A) one year from the date on which such certificate is issued;
(B) thirty days after the date on which the mortgagor to whom
such certificate is issued ceases to be a distressed mortgagor as
defined in subsection ( a ) ; or
(C) the date on which such mortgagor becomes in default with
respect to any condition or covenant m his mortgage other than
that requiring the payment by him of installments of principal
and/or interest under the mortgage.
(c) (1) Whenever a Federal mortgage agency issues a certificate of
moratorium to any distressed mortgagor with respect to any mortgage,
it shall transmit to the mortgagee a copy of such certificate, together
with a notice stating that, while such certificate is in effect, such agency
will assume the obligation of such mortgagor to make payments of
principal, and, if so specified in the certificate, of interest, under the
mortgage.
(2) Payments made by any Federal mortgage agency pursuant to a
certificate of moratorium issued under this section with respect to the
mortgage of any distressed mortgagor shall include, in addition to the
payments referred to in paragraph (1), an amount equal to the unpaid
principal and interest charges which had accrued under such mortgage
prior to the issuance of such certificate and subsequent to the date on
which such mortgagor became a distressed mortgagor as defined in
subsection ( a ) .
(3) While any certificate of moratorium issued under this section is
in effect with respect to the mortgage of any distressed mortgagor, no
further payments of principal, and, if so specified in the certificate, of
interest, under the mortgage shall be required of such mortgagor, and
no action (legal or otherwise) shall be taken or maintained by the
mortgagee to enforce or collect such payments. Upon the expiration
of such ceitificate, the mortgagor shall again be liable for the payment
of all amounts due under the mortgage in accordance with its terms.
(4) Each Federal mortgage agency shall give prompt notice in writing to the interested mortgagor and mortgagee of the expiration of any
certificate of moratorium issued by it under this se-ction.
(d) The Federal mortgage agencies are authorized to issue such individual and joint regulations as may be necessary to carry out this section and to insure the uniform administration thereof.
(e) There shall be in the Treasury (1) a fund which shall be available to the Federal Housing Commissioner for the purpose of extending financial assistance in behalf of distressed mortgagors as provided
in subsection (c), and (2) a fund which shall be available to the
Administrator of Veterans' Affairs for the same purpose. The capital
of each such fund shall consist of such sums as may, from time to
time, be appropriated thereto, and any sums so appropriated shall
remain available until expended. Receipts arising from the pro-

459

460

72 Stat. 1212.

78 Stat. 380.

PUBLIC LAW 89-117-AUGUST 10, 1965

[79 STAT.

grams of assistance under subsection (c) shall be credited to the
fund from which such assistance was extended. Moneys in either of
such funds not needed for current operations, as detemiined by the
Federal Housing Commissioner, or the Administrator of Veterans'
Affairs, as the case may be, shall be invested in bonds or other obligations of the United States, or paid into the Treasury as miscellaneous
receipts.
(fj Section 1816 of title 38, United States Code, is amended by
inserting " ( a ) " before the text of such section, and by adding at the
end thereof a new subsection as follows:
" ( b ) With respect to any loan made under section 1811 which has
not been sold as provided in subsection (g) of such section, if the
Administrator finds, after there has been a default in the payment of
any installment of principal or interest owing on such loan, that the
default was due to the fact that the veteran who is obligated under
the loan has become unemployed as the result of the closing (in
whole or in part) of a Federal installation, he shall (1) extend the
time for curing the default to such time as he determines is necessary
and desirable to enable such veteran to complete payments on such
loan, including an extension of time beyond the stated maturity
thereof, or (2) modify the terms of such loan for the purpose of
changing the amortization provisions thereof by recasting, over the
remaining term of the loan, or over such longer period as he may
determine, the total unpaid amoimt then due with the modification to
become effective currently or upon the termination of an agreed-upon
extension of the period for curing the default."
A C Q U I S I T I O N OF C E R T A I N PROPERTIES SITUATED AT OR N E A R M I L I T A R Y
BASES W H I C H H A V E B E E N ORDERED TO BE CLOSED

SEC. 108. (a) The Secretary of Defense is authorized to acquire title
to any property, improved with a one- or two-family dwelling, which is
situated at or near a military base or installation which the Department of Defense has, subsequent to November 1, 1964, ordered to be
closed in whole or in part, if he determines—
(1) that the owner of such property is, or has been, employed or
performing military service, at such base or installation;
(2) that the closing of such base or installation, in whole or in
part, has required or will require the termination of such owner's
employment or service at such base or installation; and
(3) that as the result of the actual or pending closing of such
base or installation there is no present market for the sale of such
property upon reasonable terms and conditions.

79 STAT.}

PUBLIC LAW 89-117-AUGUST 10, 1965

461

(b) The purchase price of any property which is situated at or near
a military base or installation and is acquired under this section shall
be equal to an amount determined by the Secretary of Defense to be the
average price at which properties, similar in size, construction, condition, and location to that of the property to be acquired, were sold during a representative period, as determined by the Secretary, prior to
the announcement of the intention of the Department of Defense to
close all or part of such base or installation.
(c) The title to any property acquired under this section shall be
free and clear of any outstanding liens or encumbrances and shall conform to such requirements as the Secretary of Defense shall by regulation require. Such regulations shall also prescribe the terms and
conditions under which payments may be made under this section,
and decisions by the Secretary regarding such payments,^ and the
terms and conditions under which the same are approved or disapproved, shall be final and conclusive and shall not be subject to judicial
review.
(d) Properties acquired under this section shall be transferred to
the Federal Housing Commissioner, and the Federal Housing Commissioner shall have power to deal with, rent, renovate, or sell for
cash or credit any properties so transferred. Receipts from the management or sale of any such properties may be utilized by the Commissioner to defray expenses arising in connection with the management of such properties, and any part of such receipts not required for
such expenses shall be covered into the Treasury as miscellaneous
receipts.
(e) Section 223 (a) of the National Housing Act is amended—
e/stat^ 484°^'
(1) by striking out the period at the end of paragraph (7) and 12 use insn.
inserting in lieu thereof " ; or"; and
(2) by inserting after paragraph (7) a new paragraph as folfollows:
"(8) executed in connection with the sale by the Commissioner of any housing acquired pursuant to section 108 of the
Housing and Urban Development Act of 1965."
(f) Such sums as may be necessary to carry out the provisions of
this section are hereby authorized to be appropriated, and any sums
so appropriated shall remain available until expended.
TITLE II—FHA INSURANCE OPERATIONS
LAND DEVELOPMENT

SEC. 201. (a) The National Housing Act is amended by adding at \\^^lc 1701'and
the end thereof the following new title:
note.
" T I T L E X—MORTGAGE I N S U R A N C E F O R
DEVELOPMENT

LAND

"DEFINITIONS

"SEC. 1001. As used in this title—
" ( a ) the term 'mortgage' means a lien or liens on real estate in
fee simple, or on a leasehold (1) under a lease for not less than
ninety-nine years which is renewable, or (2) under a lease having
a period of not less than fifty years to run from the date the
mortgage was executed;
"(b) the term 'first mortgage' includes such classes of first
liens as are commonly given to secure advances (including but not

462

52 Stat. 16.

12 u s e 1713.

PUBLIC LAW 89-117-AUGUST 10, 1965

[79 STAT.

limited to advances during construction) on, or the unpaid purchase price of, real estate under the laws of the State in which the
real estate is located, together with the credit instrument or instruments, if any, secured thereby, and may be in the form of trust
mortgages or mortgage indentures or deeds of trusts securing
notes, bonds, or other credit instruments;
"(c) the terms 'mortgage', 'mortgagor', and 'State' have the
same meaning as in section 207 of this Act:
(d) the term 'improvements means waterlmes and water
supply installations, sewerlines and sewerage disposal installations, roads, streets, curbs, gutters, sidewalks, storm drainage
facilities, and other installations or work, whether on or off the
site, which the Commissioner deems necessary or desirable to
prepare land primarily for residential and related uses or to provide facilities for public or common use; but such term shall not
include any building unless it is (1) a building which is needed
in connection with a water supply or sewage disposal installation,
or (2) a building, other than a school, which is to be owned and
maintained jointly by the property owners; and
" (e) the term 'land development' means the process of making,
installing, or constructing improvements.
((BASIC

CONDITIONS FOR INSURANCE

"SEC. 1002. (a) The Commissioner is authorized (1) to insure,
upon such terms and conditions as he may prescribe, any first mortgage (including advances on such mortgage) in accordance with the
provisions of this title, and (2) to make a commitment for the insurance of such mortgage prior to the date of execution of such mortgage
or prior to the date of disbursement of the mortgage proceeds. No
mortgage shall be insured under this title after October 1,1969, except
pursuant to a commitment to insure issued before such date.
" ( b ) The mortgage shall—
"(1) be executed by a mortgagor, other than a public body,
approved by the Commissioner;
"(2) be made to and held by a mortgagee approved by the
Commissioner; and
" (3) cover the land to be developed and the improvements to be
made with the assistance of the mortgage insurance under this
title, except facilities intended for public use and in public ownership.
"(c) The principal obligation of the mortgage shall (1) not exceed
75 per centum of the Commissioner's estimate of the value of the
property upon completion of the land development, and (2) not exceed
the sum of 50 per centum of the Commissioner's estimate of the value
of the land before development and 90 per centum of his estimate of
the cost of such development. The outstanding principal obligations
of mortgages involving a single land development undertaking, as
defined by the Commissioner, shall at no time exceed $10,000,000.
" ( d ) The mortgage shall—
"(1) have a maturity not to exceed seven years or such longer
maturity as the Commissioner deems reasonable in the case of a
privately owned system for water or sewerage, and contain repayment provisions satisfactory to the Commissioner;
"(2) bear interest at a rate satisfactory to the Commissioner,
and such interest shall be exclusive of premium charges for mortgage insurance and such service charges and fees as may be
approved by the Commissioner; and

79

STAT.]

PUBLIC LAW

89-117-AUGUST

10, 1965

"(3) contain such terms and provisions with respect to protection of the security, pajonent of taxes, delinquency charges,
prepayment, additional and secondary liens, and other matters as
the Commissioner may in his discretion prescribe.
"(e) A property or project to be financed oy a mortgage insured
under this title shall—
" (1) represent a good mortgage insurance risk; and
"(2) involve improvements that comply with all applicable
State and local governmental requirements and with minimum
standards approved by the Commissioner.
"LAND PLANNING

"SEC. 1003. (a) The land development covered by a mortgage
insured under this title shall be undertaken pursuant to a schedule,
conforming to such requirements and procedures as the Commissioner
may prescribe, that will assure the use of the land for the purposes
for which it is to be developed within the shortest reasonable period
consistent with the objectives of sound and economic community
growth or urban development.
" (b) The land development shall be undertaken in accordance with
an overall development plan, appropriate to the scope and character
of the undertaking, which—
" (1) has received all governmental approvals required by State
or local law or by the Commissioner;
•
" (2) is acceptable to the Commissioner as providing reasonable
assurance that the land development will contribute to good living
conditions in the area being developed, which area (A^ will have
a sound economic base and a long economic life, (B) will be characterized by sound land-use patterns, and (C) will include or be
served by such shopping, school, recreational, transportation, and
other facilities as the Commissioner deems adequate or necessary;
and
"(3) is consistent with a comprehensive plan which covers, or
with comprehensive planning being carried on for, the area in
which the land is situated, and which meets criteria established by
the Housing and Home Finance Administrator for such plans or
planning.
u ENCOURAGEMENT OF SMALL BUILDERS AND MODERATE COST HOUSING

"SEC. 1004. The Commissioner shall adopt such requirements as he
deems necessary in land development covered by mortgages insured
under this title to encourage the maintenance of a diversified local
homebuilding industry, b r o ^ participation by builders, and the inclusion of a proper balance of housing for families of moderate or low
income.
"WATER

A N D S E W E R A G E FACILITIES

" S E C 1005. After development of the land it shall be served by
public systems for water and sewerage which are consistent with other
existing or prospective systems within the area, except that the Commissioner may approve an adequate privately or cooperatively owned
system which will be regulated in a manner acceptable to him with
respect to user rates and charges, capital structure, methods of operation, rate of return, and conditions and terms of any sale or transfer.

463

464

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

'RELEASES

"SEC. 1006. The Coimnissioner may, on such terms and conditions
as he may prescribe, consent to the release or subordination of a p a r t or
parts of the mortgaged property from the lien of the mortgage.
((PREMIUMS

Report to Congress

AND FEES

"SEC. 1007. The Commissioner shall collect reasonable premiums for
the insurance of any mortgage under this title and make such charges
as he determines are reasonable for the analysis of the land development plan and the appraisal and inspection of the property and improvemeuts. On or before January 1, 1967, the Commissioner shall
make a report to the Congress concerning the premium rates and other
charges under this title that he estimates will be adequate to provide
income sufficient for a self-supporting program.
"INSURANCE BENEFITS

52 Stat, 16.
12 u s e 1713.

"SEC. 1008. The provisions of subsections (e), ( g ) , ( h ) , ( i ) , (j), ( k ) ,
(1), and (n) of section 207 of this Act shall be applicable to mortgages
insured under this title, except that as applied to such mortgages (1)
any reference therein to section 207 shall be deemed to refer to this title,
and (2) any reference to an annual premium shall be deemed to refer
to such premiums as the Commissioner may designate under this title.
IIINCONTESTABILITY PROVISIONS

"SEC. 1009. Any contract of insurance executed by the Commissioner
under this title shall be conclusive evidence of the eligibility of the
mortgage for insurance, and the validity of any contract of insurance
so executed shall be incontestable in the hands of an approved mortgagee from the date of the execution of such contract, except for fraud
or material misrepresentation on the part of such approved mortgagee.
"RULES AND REGULATIONS

"SEC. 1010. The Commissioner is authorized to make such rules and
regulations and to require such agreements as he may deem necessary
or desirable to carry out the provisions of this title.
"TAXATION PROVISIONS

"SEC. 1011. Nothing in this title shall be construed to exempt any
real property acquired and held b y the Commissioner under this title
from taxation by any State or political subdivision thereof to the same
extent, according to its value, as other real property is taxed.
((COST

CERTIFICATION

"SEC. 1012. (a) The Commissioner shall adopt such requirements
as he determines necessary to assure, at reasonable intervals of time
during land development and upon completion of such development,
that the amount of the mortgage loan outstanding at each such interval
does not exceed with respect to that portion of the land remaining
under the lien of the mortgage (1) 50 per centum of the Commissioner's estimate of the value of such remaining land before development, plus (2) 90 per centum of the actual costs of the development
allocated by the Commissioner to such remaining land.

79 STAT.]

PUBLIC LAW 89-117-AUGUST 10, 1965

465

" (b) From time to time during, and upon completion of, the development, the Commissioner shall require the mortgagor to certify as to
the actual costs of development of the land.
"(c) Certifications required pursuant to this section shall be accompanied bv such data and records as the Commissioner shall prescribe.
" ( d ) A mortgagor's certification approved by the Commissioner
shall be final and incontestable except for fraud or material misrepresentation on the part of the mortgagor.
" (e) As used in this section, the term 'actual costs' means the costs
(exclusive of kickbacks, rebates, or trade discounts) to the mortgagor
of the improvements involved. These costs may include amounts paid
for labor, materials, construction contracts, land planning, engineers'
and architect's fees, surveys, taxes, and interest during development,
organizational and legal expenses, such allocation of general overhead
expenses as are acceptable to the Commissioner, and other items of
expense incidental to development which may be approved by the
Commissioner. If the Commissioner determines there is an identity
of interest between the mortgagor and the contractor, there may be
included an allowance for contractor's profit in an amount deemed
reasonable by the Commissioner."
(b) (1) Section 302(b) of the National Housing Act is amended by ^2 use uii
striking out "the term 'mortgages' " in the last sentence and inserting
in lieu thereof "the terms 'mortgages' and 'home mortgages' ".
(2) The first paragraph of section 24 of the Federal Keserve Act is ^^ ^^^ g^^^^^amended by inserting before the next to last sentence the following
new sentence: "Notwithstanding the foregoing limitations and restrictions in this section, any national banking association may make loans
for land development which are secured by mortgages insured under
title X of the National Housing Act."
(3) Section 5 (c) of the Home Owners Loan Act of 1933 is amended f^ ^*|^-1^^^
by adding at the end thereof the following new paragraph:
"Without regard to any other provision of this subsection, any such
association may, to such extent as the Federal Home Loan Bank
Board may by regulation permit, invest in loans, and interests in
loans, (1) secured by mortgages as to which the association has the
benefit of insurance under title X of the National Housing Act or of
a commitment or agreement for such insurance, or (2) guaranteed
by the President under section 224 of the Foreign Assistance Act of
1961, as amended. Investments under clause (1) of this paragraph ^°«' ^- ^ss.
shall not be included in any percentage of assets or other percentage
referred to in this subsection. Investments under clause (2) of this
paragraph shall not exceed, in the case of any association, 1 per centum
of the assets of such association."
(4) Section 212(a) of the National Housing Act is amended by ^^ ^^^ ^^o?^^
inserting at the end thereof the following new sentence: "The provisions of this section shall also apply to insurance under title X with
I'espect to laborers and mechanics employed in land development
financed with the proceeds of any mortgage insured under that title."
EXTENSION OF INSURANCE AUTHORIZATIONS

SEC. 202. (a) Section 2(a) of the National Housing Act is amended
by striking out "October 1,1965" and inserting in lieu thereof "October
1, 1969".
(b) Section 217 of such Act is amended—
(1) by striking out "title V I I I " and inserting in lieu thereof
"title V i l l , or title X " , and
(2) by striking out "October 1, 1965" and inserting in lieu
thereof "October 1, 1969".

75 Stat. 177,
12 u s e 1703.

12 use 1715h.

466

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

i2uS:*m8h-i,
(^) "^^^ second sentences of sections 809(f) and 810(k) of such
i748h-2.
' Act are each amended by striking out "October 1,1965" and inserting
in lieu thereof "October 1,1969".
MORTGAGE LIMITS FOR HOMES UNDER SECTION 203(b)
71 Stat 29575 Stat! 178. '
12 use 1709.

• ^^^^ ^^' ^^lause (iii) of section 203(b) (2) of the National Housi^g Act is amended by striking out "75 per centum" and inserting in
lieu thereof "80 per centum".
DOWNPAYMENT REQUIREMENT IN CASE OF LOW-INCOME HOUSING
DEMONSTRATION HOMES

II l'^'^ i^4^|g

SEC. 204. Section 203(b)(9) of the National Housing Act is
amended by inserting after "a mortgage meeting the requirements of
subsection (i) of this section," the following: "or with respect to a
mortgage covering a single-family home being purchased under the
low-income housing demonstration project assisted pursuant to section
207 of the Housing Act of 1961,".
MORTGAGE LIMIT FOR HOMES IN OUTLYING AREAS UNDER FHA SECTION
203 (i) PROGRAM
SEC. 205. Section 203 (i) of the National Housing Act is amended
by striking out "$11,000" and inserting in lieu thereof "$12,500".
FHA MORTGAGE FINANCING FOR VETERANS
SEC. 206. (a) Section 203(b)(2) of the National Housing Act is
amended—
(1) by striking out "and not to exceed" and inserting in lieu
thereof "and (except as provided in the next to the last sentence
of this paragraph) not to exceed"; and
(2) by adding at the end thereof the following new sentences:
"If the mortgagor is a veteran who has not received any direct,
guaranteed, or insured loan under laws administered by the Veterans' Administration for the purchase, construction, or repair of
a dwelling (including a farm dwelling) which was to be owned
and occupied hj him as his home, and the mortgage to be insured
under this section covers property upon which there is located a
dwelling designed principally for a one-family residence, the
principal obligation may be in an amount equal to the sum of (i)
100 per centum of $15,000 of the appraised value of the property
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) 85 per centum of such value in excess of $20,000.
As used herein, the term 'veteran' means any person who served on
active duty in the armed forces of the United States for a period
of not less than ninety days (or is certified by the Secretary of
Defense as having performed extra-hazardous service), and who
was discharged or released therefrom under conditions other than
dishonorable."
(b) Section 203(b) (9) of such Act is amended by inserting after
"on account of the property" the following:" (except in a case to which
the next to the last sentence of paragraph (2) applies)".

79 STAT. ]

PUBLIC LAW 89-117-AUGUST 10,1965

467

M U L T I F A M I L Y MORTGAGE L I M I T S FOR FOUR OR MORE BEDROOM U N I T S

SEC. 207. (a) Section 207(c) (3) of the National Housing Act is
amended—
(1) by striking out "and $18,500 per family unit with three or
more bedrooms" and inserting in lieu thereof "$18,600 per family
unit with three bedrooms, and $21,000 per family unit with four
or more bedrooms,"; and
(2) by striking out "and $22,500 per family unit with three or
more bedrooms" and inserting in lieu thereof "$22,500 per family
unit with three bedrooms, and $25,500 per family unit with four
or more bedrooms".
(b) (1) Section213(b) (2) of such Act is amended—
(A) by striking out "and $18,500 per family unit with three or
more bedrooms" and inserting in lieu thereof "$18,500 per family
unit with three bedrooms, and $21,000 per family unit with four
or more bedrooms"; and
(B) by striking out "and $22,500 per family unit with three or
more bedrooms" and inserting in lieu thereof "22,500 per family
unit with three bedrooms, and $25,500 per family unit with four
or more bedrooms".
(2) Section 213(c) of such Act is amended by striking out "and
not to exceed" and all that follows and inserting in lieu thereof the
following: "and not to exceed a sum computed on the basis of a separate mortgage for each single-family dwelling (irrespective of
v/hether such dwelling has a party wall or is otherwise physically
connected with another dwelling or dwellings) comprising the property or project, equal to the total of each of the maximum principal
obligations of such mortgages which would meet the requirements of
section 203(b) (2) if the mortgagor were the owner and occupant who
had made any required payment on account of the property prescribed
in such paragraph."
(c) Section 220(d) (3) (B) (iii) of such Act is amended—
(1) by striking out "and $18,500 per family unit with three or
more bedrooms" and inserting in lieu thereof "$18,500 per family
unit with three bedrooms, and $21,000 per family unit with four
or more bedrooms"; and
(2) by striking out "and $22,500 per family unit with three or
more bedrooms" and inserting in lieu thereof "$22,500 per family
unit with three bedrooms, and $25,500 per family unit with four
or more bedrooms".
(d) Section 221(d) of such Act is amended—
(1) by striking out "and $17,000 per family unit with three or
more bedrooms" in paragraphs (3) (ii) and (4) (ii) and inserting
in lieu thereof "$17,000 per family unit with three bedrooms, and
$19,250 per family unit with four or more bedrooms"; and
(2) by striking out "and $20,000 per family unit with three or
more bedrooms" m paragraphs (3) (li) and (4) (ii) and inserting
in lieu thereof "$20,000 per family unit with three bedrooms, and
$22,750 per family unit with four or more bedrooms".
(e) Section 231 (c) (2) of such Act is amended—
(1) by striking out "and $17,000 per family unit with three or
more bedrooms" and inserting in lieu thereof "$17,000 per family
unit with three bedrooms, and $19,250 per family unit with four
or more bedrooms"; and
(2) by striking out "and $20,000 per family unit with three or
more bedrooms" and inserting in lieu thereof "$20,000 per family
unit with three bedrooms, and $22,750 per family unit with four
or more bedrooms".

^^ f}^' 7J,'*-

^^ use irise,

64 stat. 55.

^^ ^^^ ^^^^
78 Stat. 775.
12 u s e 1715k.

12 use nisz.

12 use ivisv,

468
^g78 Stat. 780,
12 use i7i5y.

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

(f) Section 234(e) (3) of such Act is amended—
(1) by stHking out "and $18,500 per family unit with three or
more bedrooms" and inserting in lieu thereof "$18,500 per family
unit with three bedrooms, and $21,000 per family unit with four
or more bedrooms"; and
(2) by striking out "and $22,500 per family unit with three or
more bedrooms" and inserting in lieu thereof "$22,500 per family
unit with three bedrooms, and $25,500 per family unit with four
or more bedrooms".
MUTUALITY

FOR

MANAGEMENT-TYl'E

COOPEKATIVES

fn°a°ement''Hous
^^^' ^^^" ^^^ Sectiou 213 of the National Housing Act is amended
ing"rns^<^ance °"^" by adding at the end thereof the following new subsections:
Fund.
"(k) There is hereby created a Cooperative Management Housing
12 us^c mse.
Insurance Fund (hereinafter referred to as the 'Management F u n d ' ) .
The Management Fund shall be used by the Commissioner as a revolv• ing fund for cariying out the provisions of this section with respect
to mortgages or loans insured, on or after the date of the enactment
of this subsection, under subsections (^a) (1), (a) (3) (if the project
is acquired by a cooperative corporation), (i), and (j). The Management Fund shall also be used as a revolving fund for mortgages,
loans, and commitments transferred to it pureuant to subsection (m).
The Commissioner is directed to transfer to the Management Fund
Post, p. 471.
from the General Insurance Fund established pursuant to section 519
such amount as the Commissioner determines to be necessary and
appropriate. General expenses of operation of the Federal Housing
Administration relating to mortgages or loans which are the obligation of the Management F u n d may be cliarged to the Management
Fund.
General Surplus
"(^j) ^j^g Commlssiouer shall establish in the Management Fund, as
ticip^t'ing' Re^serve of the date of the enactment of this subsection, a General Surplus AcAccounts,
count 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 or the Participating Reserve
Account or both 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 or loan insured under this section, and at
such time or times prior to such termination as the Commissioner may
determine, the Commissioner is authorized to distribute to the mortgagor or borrower 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 the distributable share
exceed the aggregate scheduled annual premiums of the mortgagor or
borrower to the year of payment of the share less the total amount of
any share or shares previously distributed by the Commissioner to the
mortgagor or borrower: And provided further. That in no event may
a distributable share be distributed until any funds transferred from
the General Insurance Fund to the Management Fund pui*suant \o
subsection (k) or (o) have been repaid in full to the General Insurance
Fund. No mortgagor, mortgagee, borrower, or lender 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. The
determination of the Commissioner as to the amount to be paid by him
to any mortgagor or borrower shall be final and conclusive.

79 STAT.]

PUBLIC LAW 89-117-AUGUST 10, 1965

469

" ( m ) The Commissioner is authorized to transfer to the Management F u n d commitments for insurance issued under subsections (a)
(1), ( i ) , and (j) prior to the date of the enactment of this subsection,
and to transfer to the Management F u n d the insurance of any mortgage
or loan insured prior to the date of the enactment of this subsection
under subsection (a) (1), (a) (3) (if the project is acquired by a cooperative corporation), ( i ) , or ( j ) , but only in cases where the consent
of the mortgagee or lender to the transfer is obtained or a request by
the mortgagee or lender for the transfer is received by the Commissioner within such period of time after the date of the enactment of
this subsection as the Commissioner shall prescribe: Provided^ That
the insurance of any mortgage or loan shall not be transferred under
the provisions of this subsection if on the date of the enactment of this
subsection the mortgage or loan is in default and the mortgagee or
lender has notified the Commissioner in writing of its intention to file
an insurance claim. Any insurance or commitment not so transferred
shall continue to be an obligation of the General Insurance Fund.
" ( n ) Notwithstanding the limitations contained in other provisions
of this Act, premium charges for mortgages or loans insured under
Stat. 1(5;
this section and sections 207,231, and 232 may be payable in debentures 7352Stat.
665, 663.
issued in connection with mortgages or loans transferred to the Man- 12 usc"l7'i3^
agement F u n d or in connection with mortgages or loans insured pur- ^^isv, i7i5w
suant to commitments transferred to the Management Fund, as provided in subsection (m) of this section.
"(o) Notwithstanding any other provision of this Act, the Commissioner is authorized to transfer funds between the Cooperative
Management Housing Insurance Fund and the General Insurance
Fund in such amounts and at such times as he may determine, taking
into consideration the requirements of each such Fund, to assist in
carrying out effectively the insurance programs for which such Funds
were respectively established."
64 Stat. 54.
(b) Section 213 of such Act is further amended—
12 u s e 1715e.
(1) by inserting before the period at the end of subsection (a)
the following: " : Provided^ That as applied to mortgages the
mortgage insurance for which is the obligation of the Management Fund, the reference to the General Insurance Fund in section 207(b) (2) shall be construed to refer to the Management
Fund";and
(2) by inserting before the period at the end of subsection (e)
the following: " : Provided^ That as applied to mortgages or loans
the insurance for which is the obligation of the Management
F u n d (1) all references to the General Insurance Fund shall be
construed to refer to the Management Fund, and (2) all references
to section 207 shall be construed to refer to subsections (a) (1),
(a) (3) (if the project involved is acquired by a cooperative corporation), ( i ) , a n d (j) of this section".
R E H A B I L I T A T I O N I N U R B A N R E N E W A L AREAS

SEC. 209. Section 2 2 0 ( d ) ( 3 ) ( A ) of the National Housing Act is ^^lS^^^\il^''
amended—
12 use 1715k.
(1) by striking out the second proviso in clause ( i ) ; and
(2) by striking out clause (ii) and inserting in lieu thereof the
following:
" ( i i ) in a case where the mortgagor is not the occupant of the
property and intends to hold the property for rental purposes,
have a principal obligation in an amount not to exceed 93 per
centum of the amount computed under the provisions of clause

(i);

470

PUBLIC LAW 89-117-AUGUST 10, 1965

[79 STAT.

"(idi) 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, in an amount equal to the 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,
or by such greater amount as may be required to meet the limitations of clause (iv), 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 occupant of the property and who assumes and agrees to
pay the mortgage indebtedness; and
"(iv) in no case involving refinancing (except as provided in
clause (iii)) 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 b^^ the property or project,
plus any existing indebtedness incurred in connection with improving, repairing, or rehabilitating the property; or".
NONDWELLING FACILITIES FOR URBAN RENEWAL HOUSING

i2trec msk.

SEC. 210. Section 2 2 0 ( d ) ( 3 ) ( B ) of the National Housing Act is
amended by striking out clause (iv) and inserting in lieu thereof the
following:
"(iv) include such nondwelling facilities as the Commissioner
deems desirable and consistent with the urban renewal p l a n : Provided^ That the project shall be predominantly residential and any
nondwelling facility included in the mortgage shall be found by
the Commissioner to contribute to the economic feasibility of the
project, and the Commissioner shall give due consideration to the
possible effect of the project on other business enterprises in the
community."
LARGER HOME IMPROVEMENT LOANS IN HIGH COST AREAS

75 Stat. 155,

78 Stat. 778.

S E C 211. (a) Section 220(h) (2) (i) of the National Housing Act is
amended by inserting before the semicolon at the end thereof'': Provided^ That the Commissioner may, by regulation, increase such
amount by not to exceed 45 per centum in any geographical area where
he finds that cost levels so require".
(^j) Section 220(h) (11) of such Act is amended by inserting before
the period at the end thereof "or such additional amount as the Commissioner has by regulation prescribed in any geographical area where
he finds cost levels so require pursuant to the authority vested in him by
the proviso in paragraph (2) (i) of this subsection".
LARGER INSURED MORTGAGES FOR SERVICEMEN

71 Stat. 296;
12 use V7"i5m.

§£(.. 212. Sectiou 222(b) of the National Housing Act is amended—
(1) by stHking out "$20,000" in paragraph (2) and inserting
in lieu thereof "$30,000"; and
(2) by striking out paragraph (3) and inserting in lieu thereof
the following:
"(3) have a principal obligation not in excess of the sum of (i)
97 per centum of $15,000 of the appraised value of the property

79 STAT.]

PUBLIC LAW 89-117-AUGUST 10, 1965

471

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) 85 per centum of such value in excess of
$20,000; and".
REFINANCING OF INSURED MORTGAGES

SEC. 213. Section 223 (a) (7) of the National Housing Act is amended
by striking out "section 608 of title V I prior to the effective date of
the Housing Act of 1954 or under section 220, 221, 903, or section 908"
and inserting in lieu thereof "this Act".

^^ use i7i5n.

CONSOLIDATION OF FHA INSURANCE FUNDS

SEC. 214. Title V of the National Housing Act is amended by i735b"^^ ^^^^^"
adding at the end thereof the following new section:
" E S T A B L I S H M E N T O F G E N E R A L INSURANCE FUND

"SEC. 519. (a) There is hereby created a General Insurance F u n d
which shall be used by the Commissioner, on and after the date of the
enactment of the Housing and Urban Development Act of 1965, as a
revolving fund for carrying out all the insurance provisions of this
Act with the exception of those specified in subsection (e). All mortgages or loans insured under this Act pursuant to commitments issued
on or after the date of the enactment of the Housing and Urban
Development Act of 1965, except those specified in subsection ( e ) , and
all loans reported for insurance under section 2 on or after the date
of the enactment of the Housing and Urban Development Act of 1965,
shall be insured under the General Insurance Fund. The Commissioner shall transfer to the General Insurance Fund—
"(1) the assets and liabilities of all insurance accounts and
funds, except the Mutual Mortgage Insurance Fund, existing
under this Act immediately prior to the enactment of the Housing
and Urban Development Act of 1965;
"(2) all outstanding commitments for insurance issued prior to
the date of the enactment of the Housing and Urban Development
Act of 1965, except those specified in subsection (e) ;
"(3) the insurance on all mortgages and loans insured prior
to the date of the enactment of the Housing and Urban Development Act of 1965, except insurance specified in subse-ction (e) ;
and
"(4) the insurance of all loans made by approved financial
institutions pursuant to section 2 prior to the date of the enactment of the Housing and Urban Development Act of 1965.
" ( b ) The general expenses of the operations of the Federal Housing
Administration relating to mortgages and loans w^hich are the obligation of the General Insurance Fund may be charged to the General
Insurance Fund.
"(c) Moneys in the General Insurance Fund not needed for the
current operations of the Federal Housing Administration with respect
to mortgages a,nd loans which are the obligation of the General Insurance Fund shall be deposited with the Treasurer of the United States
to the credit of such Fund, or invested in bonds or other obligations
of, or in bonds or other obligations guaranteed as to principal and
interest by, the United States. The Commissioner may, with the
approval of the Secretary of the Treasury, purchase in the open
market debentures issued as obligations of the General Insurance
F u n d or issued prior to the enactment of the Housing and Urban

472

^2 use 1709,
Ante, p. 468.

PUBLIC LAW 89-117-AUGUST 10, 1965

[79 STAT.

Development Act of 1965 under other provisions of this Act, except
debentures issued under the Mutual Mortgage Insurance Fund. Such
purchases shall be made at a price which will provide an investment
y,ield of not less than the yield obtainable from other investments
authorized by this section. Debentures so purchased shall be canceled
and not reissued.
" ( d ) Premium charges, adjusted premium charges, and appraisal
and other fees received on account of the insurance of any mortgage
or loan which is the obligation of the General Insurance Fund, the
receipts derived from the property covered by such mortgages and
loans and from the claims, debts, contracts, property, and security
assigned to the Commissioner in connection therewith, and all earnings on the assets of the Fund shall be credited to the General Insurance Fund. The principal of, and interest paid and to be paid on,
debentures which are the obligation of such Fund, cash insurance
payments and adjustments, and expenses incurred in the handling,
management, renovation, and disposal of properties acquired, in
connection with mortgages and loans which are the obligation of
such Fund, shall be charged to such Fund.
"(e) The General Insurance Fund shall not be used for carrying out
the provisions of sections 208 (b), 203 ( h ) , and 203(i), or the provisions
of section 213 to the extent that they involve mortgages the insurance
for which is the obligation of the Cooperative Management Housing
Insurance Fund created by section 213 (k) ; and nothing in this section
shall apply to or affect any mortgages, loans, commitments, or insurance under such provisions."
OPTIONAL CASH P A Y M E N T

OF I N S U R A N C E

BENEiFITS

SEC. 215. Title V of the National Housing Act is amended by adding
at the end thereof (after the new section added by section 214 of this
Act) the following new section:
uOPTIONAL

CASH

PAYMENT

OF I N S U R A N C E

BENEFITS

"SEC. 520. (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 any insurance claim or part thereof which is paid on or after the date of the
enactment of the Housing and Urban Development Act of 1965 on a
mortgage or a loan wiiicli was insured under any section of this Act
either before or after such 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 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
guaranteed by the United States, as provided in this Act) pursuant to
the provisions of this section. Notes or other obligations issued by the
Commissioner in borrovv^ing under this subsection shall be subject to
such terms and conditions as the Secretary of the Treasury may prescribe. Each sum borrowed pursuant to 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."

79 STAT.]

PUBLIC LAW 89-117-AUGUST 10, 1965

473

APPROVAL OF TECHNICALLY SUITABLE MATERIALS

SEC. 216. Title V of the National Housing Act is amended by inserting after section 520 (added by section 215 of this Act) a new section
as follows:
" A P P R O V A L O F TECHNICALLY SUITABLE MATERIALS

"SEC. 521. The Commissioner shall adopt a uniform procedure for
the acceptance of materials and products to be used in structures
approved for mortgages or loans insured under this Act. Lender such
procedure any material or product which the Commissioner finds is
technically suitable for the use proposed shall be accepted. Acceptance of a material or product as technically suitable shall not be
deemed to restrict the discretion of the Commissioner to determine
that a structure, with respect to which a mortgage is executed, is
economically sound or an acceptable risk."
W^\TER AND S E W E R F A C I L I I T E S IN CONNECTION WITH CERTAIN
FEDERALLY ASSISTED HOUSING

SEC. 217. (a) Title V of the National Housing Act is amended by
inserting after section 521 (added by section 216 of this Act) a new
section as follows:
" W ^ A T E R AND

S E W E R FACILITIES

"SEC. 522. Notwithstanding any other provision of this Act, no
mortgage which covers new construction shall be approved for insurance under this Act (except pursuant to a commitment made prior to
the date of the enactment of the Housing and Urban Development
Act of 1966) if the mortgaged property includes housing which is
not served by a public or adequate community water and sewerage
system: Provided^ That this limitation shall be applicable only to
property which is not served b j a system approved oy the Commissioner pursuant to title X of this Act and which is situated in an area
certified by appropriate local officials to be an area where the establishment of public or adequate community water and sewerage systems
is economically feasible: Provided further^^ That for purposes of this
section the economic feasibility of establishing such public or adequate
community water and sewerage systems shall be determined without
regard to whether such establishment is authorized by law or is subject
to approval by one or more local governments or public bodies."
(b) Section 1804 of title 38, United States Code, is amended by adding at the end thereof a new subsection as follows:
"(e) No loan for the purchase or construction of new residential
]:>roperty (other than property served by a water and sewerage system
approved by the Federal Housing Commissioner pursuant to title X
of the National Housing Act) shall be financed through the assistance
of this chapter, except pursuant to a commitment made prior to the
date of the enactment of the Housing and Urban Development Act of
1965, if such property is not served by a public or adequate community
Avater and sewerage system and is located in an area where the appropriate local officials certify that the establishment of such systems is
economically feasible. For purposes of this subsection, the economic
feasibility of establishing public or adequate community water and
sew^erage syctems shall be determined without regard to whether such
establishment is authorized by law or is subject to approval by one or
more local governments or public bodies."
49-850 0-66—33

^"'^' P- '*^'^-

^^ stat. 1206.

474

PUBLIC LAW 89-117-AUGUST 10, 1965

[79 STAT.

TITLE III—URBAN RENEWAL
BTUDY OF HOUSTXG A N D B U I L D I N G CODES, Z O N I N G , TAX P O L I C I E S , A N D
D E V E L O P M E N T STANDARDS

SEC. 301. (a) The Congress finds that the general welfare of the
Nation requires that local authorities be encouraged and aided to prevent slums, blight, and sprawl, preserve natural beauty, and provide
for decent, durable housing so that the goal of a decent home and a
suitable living environment for every American family may be realized
as soon as feasible. The Congress further finds that there is a need
to study housing and building codes, zoning, tax policies, and development standards in order to determine how (1) local property owners
and private enterprise can be encouraged to serve as large a part as
they can of the total housing and building need, and (2) Federal,
State, and local governmental assistance can be so directed as to place
greater reliance on local property owners and private enterprise and
enable them to serve a greater share of the total housing and building
need. The Housing and Home Finance Administrator is therefore
directed to study the structure of (1) State and local urban and suburban housing and building laws, standards, codes, and regulations
and their impact on housing and building costs, how they can be simplified, improved, and enforced, at the local level, and what methods
might be adopted to promote more uniform building codes and the
acceptance of technical innovations including new building practices
and materials; (2) State and local zoning and land use laws, codes,
and regulations, to find ways by w^hich States and localities may
improve and utilize them in order to obtain further growth and development; and (3) Federal, State, and local tax policies with respect to
their effect on land and property cost and on incentives to build housing and make improvements in existing structures.
Report to Presi(^y^j -pj^g Administrator shall submit a report based on such study to
ongress. ^^^^ President and to the Congress within 18 months after the date of
the enactment of the Housing and Urban Development Act of 1965 or
the appropriation of funds for the study, whichever is later.
(c) There are authorized to be appropriated such funds as may be
necessary to carry out the purposes of this section. Any funds so
appropriated shall remain available until expended.
WORKABLE PROGRAM REQUIREMENT

42uscf45i

SEC. 302. ( a ) ( 1 ) Section 101 of the Housing Act of 1949 is amended
by adding at the end thereof the following new subsection:
"(e) No loan or grant contract may be entered into by the Administrator for an urban renewal project unless he determines that (1) the
workable program for community improvement presented by the
locality pursuant to subsection (c) is of sufficient scope and content to
furnish a basis for evaluation of the need for the urban renewal
project; and (2) such project is in accord with the program."
(2) The requirements imposed by the amendment made by paragraph (1) shall not be applicable to any project which received Federal recognition prior to the date of the enactment of this Act.
(b) Section 101(c) of such Act is amended by adding at the end
thereof the following new sentence: "Notwithstanding any other provision of law, in the case of a contract with an Indian tribe, band, or
nation (or a public housing or other public agency for such tribe,
band, or nation established under State or tribal law), the workable
program and minimum standards housing code, referred to in the
preceding sentence, may be presented to the Administrator by such

79 STAT.]

PUBLIC LAW 89-117-AUGUST 10, 1965

475

tribe, band, or nation, and it shall be subject to the requirements of law
Avith respect to such program and code only to the extent that such
tribe, band, or nation has the legal jurisdiction and power to carry out
such requirements."
GENERAL NEIGHBORHOOD RENEWAL, P L A N S

SEC. 303. Section 102(d) of the Housing Act of 1949 is amended—
(1) by striking out the tirst sentence of the second paragraph and
inserting in lieu thereof the following:
"In order to facilitate proper preliminary planning for the attainment of the urban renewal objectives of this title, the Administrator
may also make advances of funds (in addition to those authorized
above) to local public agencies for the preparation of General Neighborhood Kenewal Plans (as herein defined). A General Neighborhood Renewal Plan may be prepared for an area consisting of an
urban renewal area or areas, together with any adjoining areas having
specially related problems, and which is of such size that the urban
renewal activities in the urban renewal area or areas may have to be
initiated in stages, consistent w4th the capacity and resources of the
respective local public agency or agencies, over an estimated period of
not more than ei^ht years."; and
(2) by striking out the first numbered paragraph and inserting
in lieu thereof the following:
" (1) in the interest of sound community planning, it is desirable
that the urban renewal activities proposed for the area be planned
in their entirety;".

Jo Jta^- ^'o^g.

I N C R E A S E I N A U T H O R I Z A T I O N FOR CAPITAL GRANTS

SEC. 304. (a) The first sentence of section 103(b) of the Housing
Act of 1949 is amended by striking out "$4,725,000,000" and inserting
in lieu thereof "$4,700,000,000, which amount shall be increased by
$675,000,000 on the date of the enactment of the Housing and Urban
Development Act of 1965, by $725,000,000 on July 1, 1966, and by
$750,000,000 on July 1 in eacli of the years 1967 and 1968".
(b) The proviso in the first sentence of section 103(b) of such Act,
and the second sentence of section 6(b) of the Urban Mass Transportation Act of 1964, are repealed.
RELOCATION OF DISPLACEES FROM U R B A N R E N E W A L

J

Repeals
If f,*f!,- f£f:

AREAS

SEC. 305. (a) Section 105 (c) of the Housing Act of 1949 is amended
4.

78 Stat. 785.
42 u s e 1453.

Jt u

to read as loilows:
"(c) (1) There shall be a feasible method for the temporary relocation of individuals and families displaced from the urban renewal
area, and there are or are being provided, in the urban renewal area
or in other areas not generally less desirable in regard to public
utilities and public and commercial facilities and at rents or prices
within the financial means of the individuals and families displaced
from the urban renewal area, decent, safe, and sanitary dwellings
equal in number to the number of and available to such displaced
individuals and families and reasonably accessible to their places of
employment. The Administrator shall issue rules and regulations to
aid in implementing the requirements of this subsection and in otherwise achieving the objectives of this title. Such rules and regulations
shall require that there be established, at the earliest practicable time,
for each urban renewal project involving the displacement of individuals, families, and business concerns occupying property in the urban

63 stat. 4i7.
42 u s e 1455.

476

^s ^^^Vc^^^'
42 use 1451.

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

renewal area, a relocation assistance program wliicli sliall include
such measures, facilities, and services as may be necessary or appropriate in order (A) to determine the needs of such individuals, families, and business concerns for relocation assistance; (B) to provide
information and assistance to aid in relocation and otherwise minimize
the hardships of displacement, including information as to real estate
agencies, brokers, and boards in or near the urban renewal area which
deal in residential or business property that might be appropriate for
the relocating of displaced individuals, families, and business concerns; and (C) to assure the necessary coordination of relocation
activities Avith other project activities and other planned or proposed
governmental actions in the community which may affect the carrying
out of the relocation program, particularly planned or proposed lowrent housing projects to be constructed in or near the urban renewal
area.
"(2) As a condition to further assistance after the enactment of
this paragraph with respect to each urban renewal project involving
the displacement of individuals and families, the Administrator shall
require, within a reasonable time prior to actual displacement, satisfactory assurance by the local public agency that decent, safe, and
sanitary dwellings as required by the first sentence of this subsection
are available for the relocation of each such individual or family,"
(b) Clause (iii) in the second proviso of section 101(c) of such Act
is amended by striking out "section 105(c)" and inserting in lieu
thereof "section 105(c)(1)".
(c) The requirements imposed by the amendment made by subsection (a) of this section shall not be applicable to any project which
received Federal recognition prior to the date of the enactment of this
Act.
REDEVELOPMENT I N ACCORDANCE W I T H U R B A N R E N E W A L P L A N

J3 uS;' tise

^^^' ^^^- S^c^io^^ ^^^ of the Housing Act of 1949 is amended by adding at the end thereof the following new subsection:
" ( h ) Notwithstanding any other provision of this title, no contract
shall be entered into for any loan or capital grant under this title with
any local public agency unless the local public agency establishes, by
evidence satisfactory to the Administrator, that any urban renewal
project with respect to which such local public agency has received a
loan or capital grant under this title has been, or will be, undertaken
and carried out; in substantial accordance with the urban renewal
plan, and any amendments thereto, approved with respect to such
project, and the terms of the contract for loan or capital grant coveru\g such project."
TTSE o r GRANT OR LOAN F U N D S I N CODE E N F O R C E M E N T A N D R E H A B I L I T A T I O N
PROJECTS

78 Stat. 787.

42 u s e 1460.

lo
T^^n II^^u
42 u s e 1452b.

SEC. 307. The first unnumbered paragraph following the numbered
i)i\ragraphs in section 110 (c) of the Housing Act of 1949 is amended—
(1) by inserting (A) ' before no contracr'; and
(2) by inserting before the period at the end of the paragraph
the following: ", and (B) not less than 10 per centum of the aggregate amount of (i) grants authorized to be contracted for under
this title by the Housing and Urban Development Act of 1965 and
subsequent Acts, and (ii^ loans authorized to be made under sect^o^ ^12 of the Housing Act of 1964, shall be available for projects
assisted with such grants or loans which involve primarily code
enforcement and rehabilitation".

79

STAT.]

PUBLIC LAW 89-117-AUGUST10, 1965

477

INCREASE I N NONRESIDENTIAL EXCEPTION

SEC, 308. The third unnumbered paragraph following the numbered
paragraphs in section 110(c) of the Housing Act of 1949 is amended
by striking out the period and inserting in lieu thereof the following:
" : And provided further, That the aggregate amount of capital grants
made available under this title with respect to such projects after the
date of the enactment of the Housing and Urban Development Act of
1965 may be in an amount not to exceed (in addition to amounts previousl;^ available for such projects) 35 per centum of the amount of
additional capital grants authorized under this title by such Act."
PRESERVATION

OF HISTORIC

H ^^^ J'J|^

STRUCTURES

SEC. 309. (a) Section 110(c) of the Housing Act of 1949 is
amended—•
(1) by striking out "and" at the end of paragraph ( 7 ) ;
(2) by striking out the period at the end of paragraph (8) and
inserting in lieu thereof " ; and";
(3) by inserting a new paragraph (9) as follows:
"(9) relocating within the project area a structure which the
local public agency determines to be of historic value and which
will be disposed of to a public body or a private nonprofit organization which will renovate and maintain such structure for historic purposes."; and
(4) by striking out "paragraphs (7) and ( 8 ) " in the second
unnumbered paragraph following the numbered paragraphs and
inserting in lieu thereof "paragraphs (7), (8), and (9)".
(b) Section 110(e) of such Act is amended by striking out "and
( 8 ) " in clause (i) and inserting in lieu thereof " ( 8 ) , and (9)".
E L I G I B I L I T Y OF CERTAIN E X P E N S E S OF PROJECTS F I N A N C E D ON T H R E E F O U R T H S GRANT BASIS

SEC. 310. (a) Clause (i) of the third sentence of section 110(e) of the
Housing Act of 1949 is amended by (1) inserting "staff services in connection with programs of code enforcement and voluntary rehabilitation and repair (including community organization)," after "disposition of land,"; and (2) inserting " ( 5 ) , " after "(4),".
(b) Any contract for a capital grant under title I of the Housing
Act of 1949, executed prior to the date of the enactment of this Act, ^^"^2 use i45omay be amended to incorporate the provisions of subsection (a) as to
costs incurred on or after the date of the enactment of this Act.
DEMOLITION

OF

UNSAFE

STRUCTURES;

CODE

ENFORCEMENT

SEC. 311. (a) Title I of the Housing Act of 1949 is amended by inserting after section 115 (added by section 106 of this Act) two new
sections as follows:
"DEMOLITION

"SEC. 116. (a) Notwitlistanding any other provision of this title,
the Administrator is authorized to enter into contracts to make, and to
make, grants as provided in this section (payable from any grant
funds provided under section 103(b)) t,o cities, other municipalities,
and counties to assist in financing the cost of demolishing structures
which under State or local law have been determined to be structurally unsound or unfit for human habitation, and which such city,
municipality, or county has authority to demolish. The amount of

^^ stat. 4ji6^

42 u s e 1453.

478

42 use f45^i

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

any grant under this section shall not exceed two-thirds of the cost of
the demolition of such structures.
"(b) No grant shall be made under this section unless the structures to be demolished are located in an urban renewal area, pr, in the
case of structures outside an urban renewal area, (1) the locality
involved has an approved workable program for community improvenient in accordance with the requirements of section 101(c), as determined by the Administrator, (2) the demolition to be assisted will be
on a planned neighborhood basis and will further the over-all renewal
objectives of such locality, (3) there is in such locality a program of
enforcement of existing local housing and related codes, (4) the
structures to be demolished constitute a public nuisance and a serious
hazard to the public health or welfare, and (5) the governing body
of such locality has determined that other available legal procedures
have been exhausted to secure remedial action by the owner of the
structures involved and that demolition by governmental action is
required.
"CODE ENFORCEMENT

"SEC. 117. Notwithstanding any other provision of this title, the
Administrator is authorized to enter into contracts to make, and to
make, grants as provided in this section (payable from any grant
42 us^c M5^3
funds provided under section 103(b)) to cities, other municipalities,
and counties for the purpose of assisting such localities in carrying
out programs of concentrated code enforcement in deteriorated or
deteriorating areas in which such enforcement, together with those
public improvements to be provided by the locality, may be expected
to arrest the decline of the area. Such grants shall not exceed twothirds (or three-fourths in the case of any city, other municipality,
or county having a population of 50,000 or less according to the most
recent decennial census) of the cost of planning and carrying out
such programs which may include the provision and repair of necessary
streets, curbs, sidewalks, street lighting, tree planting, and similar
improvements within such areas. The Administrator shall not make
any grant under this section unless he has obtained adequate assurances
(1) that the locality will maintain during the period of the contract,
in addition to its expenditures for planning and carrying out any
program assisted under this section, a level of expenditures for code
enforcement activities at not less than its normal expenditures for such
activities prior to the execution of such contract, and (2) that the
locality has a satisfactory program for the provision of all necessary
public improvements for such areas. The provisions of sections 101 (c),
I4^65-"A'^ ^^^^45
^^^' ^^'^' '^^^^ ^^^ shall be applicable to activities and undertakings
' " ' ^' • assisted under this section to the same extent as if such activities and
undertakings were being carried out in an urban renewal area as part
of an urban renewal project."
42 u^c i^-feo
(^^ Section 110(c) of such Act is amended by—
(1) striking out "or a program of code enforcement in an urban
renewal area," in the first sentence; and
(2) striking out the proviso in paragraph (5).
12 vie !iik
^^) Section 220 (d) (1) (A) of the National Housing Act is amended
by inserting before the first proviso the following: ", or (iv) an area
in which a program of concentrated code enforcement activities is
being carried out pursuant to section 117 of the Housing Act of 1949".
75 Stat. 154.
( J ) Sectiou 220(h) (1) of the National Housing Act is amended by
inserting after "virban renewal project" in the first sentence the following : "or in an area in which a program of concentrated code enforce-

79 STAT.]

PUBLIC LAW 89-117-AUGUST 10, 1965

ment activities is being carried out pursuant to section 117 of the
Housing Act of 1949".
(e) Section 312(a) of the Housing Act of 1964 is amended by inserting after "urban renewal area" in the first sentence the following: "or
an area in which a program of concentrated code enforcement activities is being carried out pursuant to section 117 of the Housing Act
of 1949".

479

78 Stat. 790.
42 u s e 1452b.

Ante, p. 478.

R E H A B I L I T A T I O N LOANS

SEC. 312. (a) Section 312(a) of the Housing Act of 1964 is aniended
by striking out "reasonable" in the second sentence and inserting in
lieu thereof "comparable".
(b) Section 312(d) of such Act is amended by striking out
"$50,000,000" and inserting in lieu thereof "$100,000,000 for each
fiscal year", and by adding at the end thereof a new sentence as
follows: "All moneys in such revolving fund shall be available for
necessary expenses of servicing loans made pursuant to this section,
including reimbursement or payment for services and facilities of
the Federal National Mortgage Association and of any public or
private agency for the servicing of such loans."
(c) Section 312 of such Act is further amended by adding at the
end thereof the following new subsection:
" (h) No loan shall be made under the authority of this section after
October 1, 1969, except pursuant to a contract, commitment, or other
obligation entered into pursuant to this section before that date."
E L I G I B I L I T Y O F C O M M U N I T I E S I N DEPRESSED AREAS FOR U R B A N R E N E W A L
ASSISTANCE

SEC. 313. (a) Subparagraph (B) of section 103(a) (2) of the Housing Act of 1949 is amended to read as follows:
J2 ijsc i^h
" ( B ) three-fourths of the aggregate net project costs of any
such projects which are located in (i) a municipality having a
population of fifty thousand or less according to the most recent
decennial census, or (ii) a municipality situated in a labor market
area which, at the time the contract or contracts involved are
entered into or at such earlier time as the Administrator may
specify in order to avoid hardship, is designated as a redevelopment area under the second sentence of section 5(a) of the Area
Eedevelopment Act or any other legislation enacted after the date ^ ^^^' ^^^^
of the enactment of the Housing and Urban Development Act of
1965 containing standards for designation as a redev^opment area
generally comparable to those set forth in the second sentence of
section 5(a) of the Area Redevelopment Act, and",
(b) The amendment made by subsection (a) shall apply only with
respect to urban renewal projects placed under contract for capital
grant on or after the date of the enactment of this Act, except that
such amendment shall apply with respect to all urban renewal projects
in the city of Providence, Rhode Island, placed under contract for
capital grant during the period Providence was designated as a redevelopment area under section 5(a) of the Area Redevelopment Act
(or at such earlier time as the Administrator may specify m order to
avoid hardship) and not completed prior to the date of the enactment
of this Act.
LOCAL G R A N T - I N - A I D CREDIT FOR CERTAIN COAL ROYALTIES

SEC. 314. (a) Section 110(d) of the Housing Act of 1949 is
amended by adding at the end thereof the following new paragraph:

tl 1%' 1?^^

480

42 u s e 14501465.

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

"Where a project in any municipality includes an area affected by
an underground mine fire or by a coal mine subsidence and where it is
necessary in such project to remove any underlying coal deposits in
order to stabilize the soil or to control the underground mine fire, then
any royalties received by the project from the removal and sale oi such
coal deposits shall be credited to the project as a local grant-in-aid
made by such municipality."
(b) Any contract under title I of the Housing Act of 1949 executed
prior to the date of the enactment of this Act shall, at the request of the
municipality involved, be amended to reflect the amendment made by
subsection (a).
SPECIFIC URBAX RENEWAL PROJECTS

42 use uso
note.

^A fxe^A- fi^l-

42 u s e 1460.

SEC. 315. ( a ) ( 1 ) Notwithstanding the date of the commencement of
construction of the Tanyard Creek collector sanitary sewer in Jasper,
Alabama, local expenditures made in connection with this collector
sanitary sewer system shall, to the extent otherwise eligible, be counted
as a local grant-in-aid to the downtown urban renewal project (Alabama R-49) in accordance with the provisions of title I of the Housing
Act of 1949.
(2) Notwithstanding the date of the commencement of construction
of the East Side High School and the start of construction of the improvements to Hickory Creek in Joliet, Illinois, expenditures made in
connections with such high school and such creek improvements shall,
to the extent otherwise eligible, be counted as a local grant-in-aid to the
proposed south central urban renewal project in accordance with the
provisions of title I of the Housing Act of 1949.
(3) Notwithstanding the date of commencement of the installation
of certain underground electrical wiring in Johnson City, Tennessee,
expenditures made in connection with such installation shall, to the
extent otherwise eligible, be counted as a local grant-in-aid to Johnson
(^ity's proposed downtown urban renewal project (Tennessee R-80)
in accordance with the provisions of title I of the Housing Act of 1949.
(4) Notwithstanding the provisions of section 312 of the Housing
*^^^' ^^ ^^^'^ or any request previously made pursuant to such section,
upon request of the local public agency the eligibility of the local
grants-in-aid for any project in the city of New Brunswick, New
Jersey, in connection with which the final capital grant payment has
not been made, shall be determined in accordance with the provisions
of section 110(d) of the Housing Act of 1949.
(5) Two-thirds of all expenditures by the city of Saint Louis, Missouri, in connection with its Downtown Sports Stadium project, to the
extent such expenditures would have been eligible under the provisions
of section 110(d) of the Housing Act of 1949 to be counted as non-cash
grants-in-aid toward such project if it had received Federal assistance
as an urban renewal project pursuant to the provisions of title I of
such Act, shall be eligible to be counted as a s:rant-in-aid toward any
federallv-assisted urban renewal projects in Saint Louis.
(6) Notwithstanding the extent to which the cultural and convention center proposed to be built adjacent to Urban Renewal Project
Colorado R-15 (Skyline) in Denver, Colorado, may benefit areas other
than the urban renewal area, expenses incurred by the city of Denver
in constructing such center shall, to the extent otherwise eligible, be
counted as a grant-in-aid toward such project.
(7) Notwithstanding the extent to which the cultural and convention center proposed to be built within Urban Renewal Project R-8
in Norfolk, Virginia, may benefit areas other than the urban renewal

79 STAT.]

PUBLIC LAW 89-117-AUGUST 10, 1965

481

area, expenses incurred by the city of Norfolk in constructing such
center shall, to the extent otherwise eligible, be counted as a grant-inaid toward such project.
(8) Expenses incurred in the construction of the Glenn Duncan
Elementary School and the Fred W. Traner Junior High School in
Keno, Nevada, shall not be deemed to be ineligible as a local grant-inaid in connection with the Northeast Urban Renewal Project (Nevada
R-2) because of any change in the urban renewal plan for such project
which is determined by the Housing and Home Finance Administrator
to have resulted from the proposed location of a federally-aided highway within or adjacent to the urban renewal area in which such project
v;as undertaken. For the purpose of computing the portion of the
cost of such schools which may be allowed as a local grant-in-aid, the
degree of benefit of the schools to such urban renewal area shall be
based on the latest estimate of benefit submitted by the local public
agency and accepted by the Administrator prior to such change in the
urban renewal plan.
(9) Notwithstanding the provisions of section 112(a) of the Hous75 Stat. 169.
ing Act of 1949, expenditures in the amount of $600,000 made by the 42
u s e 1463.
Memorial Hospital of Michigan City Foundation, Incorporated, for
the purchase of certain land and buildings on or about July 24, 1963,
from Doctors Hospital Realty Corporation shall, if otherwise eligible,
be counted as local grants-in-aid to the community center numbered
1 urban renewal project (Indiana R-46) in Michigan City, Indiana,
in accordance with the remaining provisions of title I of that Act.
(10) The provisions of section 113(c) of the Housing Act of 1949 ^^ ^^^ ^^^^
shall be applicable to the Hobo Jungle Urban Renewal Project in
Texarkana, Arkansas (Arkansas R - 3 ) .
(11) Notwithstanding the date of commencement of construction
of the Pulaski, Showalter, and Smedley Junior High Schools, and the
William Penn and Stetser Elementary Schools in Chester, Pennsylvania, local expenditures made in connection with such schools shall,
to the extent otherwise eligible, be counted as local grants-in-aid for
federally-assisted urban renewal projects in Chester that will be
served by such schools.
(12) Notwithstanding any other provision of law, moneys heretofore expended by the University of Pennsylvania and Wilkes College for land (and related expenditures for demolition and relocation) included in the overall development plans proposed by such
institutions and utilized, or to be utilized, in connection with new
facilities of such institutions within one mile of urban renewal projects
Pennsylvana 5-3 (University City) and Pennsylvania R-149 (Wright
Street), respectively, shall, if otherwise eligible, be allowed as local
grants-in-aid for such projects.
(13) Notwithstanding the June, 1956, commencement of certain
flood control work in Ottumwa, Iowa, local expenditures in connection
with such flood control work shall, to the extent otherwise eligible, be
counted as a local grant-in-aid to the Marina Gateway urban renewal
project (Iowa R-12) in accordance with the provisions of Title I of
theHousing Act of 1949.
^^\\ use uso(b)(1) Notwithstanding the provisions of title I of the Housing
Act of 1949 and the United States Housing Act of 1937, the Housing ^ l'^^ f ^^^
and Home Finance Administrator and the Public Housing Commissioner are authorized and directed to consent to the transfer by the
Housing Authority of the City of Macon, Georgia, to the Urban Renewal Department of the City of Macon, Georgia, of all property
acquired by the Housing Authority for low-rent housing project numbered Georgia 7-8, on condition that (A) an amount which, together

482

42 use M^"
note.

PUBLIC LAW 89-117-AUGUST 10, 1965

with any funds of the Housing Authority available for the purpose, is
sufficient to pay and discharge all obligations incurred by the Housing
Authority in connection with such low-rent housing project and owing
at the time of transfer, will be paid by the Urban Renewal Department of the City of Macon to the Public Housing Administration to
be applied in satisfaction of the Housing Authority's obligations
which it cannot meet with its own funds available for the purpose, and
(B) the total amount so paid by the Urban Renewal Department of
the City of Macon will be included in the gross project cost of its
Coliseum Urban Renewal Project, Georgia R-95.
(2) The Housing and Home Finance Administrator and the Public
Housing Commissioner are authorized to modify any contracts heretofore entered into and to take any other appropriate action necessary
to carry out the provisions of paragraph (1).
(^) (1) Notwithstanding any provision of the Housing Act of 1949
or any other provision of law, the urban renewal project in Savannah,
Georgia, known as Project " J " in the General Neighborhood Renewal
Plan for the Broad Street-Canal Urban Renewal Area adopted by resolution of the Mayor and Aldermen of the City of Savannah on November 18, 1958, may include the donation by Housing Authority of Savannah, by a suitable instrument of conveyance, of the right, title, and
interest of the Authority in and to all or any portion of the land included within the boundaries of such Project " J " in the City of Savannah, Chatham County, Georgia, the area of such Project " J " being
generally bounded on the North by properties of the Central of Georgia
Railway Company, on the East by West Broad Street, on the South by
the right-of-way for Interstate Highway No. 1-16, and on the West
by the Savannah and Ogeechee Canal and West Boundary Street.
(2) The conveyance authorized to be included in the urban renewal
project under paragraph (1) shall be made only if the donee represents, and furnishes such assurances as may be required by Housing
Authority of Savannah, that such donee will develop, preserve, and operate such property on a nonprofit basis as a historical site or
monument.
LEASE GUARANTEES FOR C E R T A I N S M A L L B U S I N E S S

;2stat_.689.
note.

[79 STAT.

CONCERNS

SEC. 316. (a) The Small Business Investment Act of 1958 is
amended by adding after title I I I a new title as follows:

75 Stat. 756.

"TITLE IV—LEASE GUARANTEES

15 use 63^^'
78 Stat. 526.
42 use 2901-

"SEC. 401. (a) The Administration may, whenever it determines
such action to be necessary or desirable, and upon such terms and
conditions as it may prescribe, guarantee the payment of rentals under
leases of commercial and industrial property entered into by small
business concerns that are (1) eligible for loans under section 7(b) (3)
^^ ^^® Small Business Act, or (2) eligible for loans under title I V of
the Ecouomic Opportunity Act of 1964, to enable such concerns to obtain such leases. Any such guarantee may be made or effected either
directly or m cooperation with any qualified surety company or other
qualified company through a participation agreement with such company. The foregoing powers shall be subject, however, to the following restrictions and limitations:
"(1) No guarantee shall be issued by the Administration (A)
if a guarantee meeting the requirements of the applicant is other-

"AUTHORITY or

THE ADMINISTRATION

79 STAT.]

PUBLIC LAW 89-117-AUGUST 10, 1965

483

wise available on reasonable terms, and (B) unless the Administration determines that there exists a reasonable expectation that
the small business concern in behalf of which the guarantee is issued will perform the covenants and conditions of the lease.
"(2) The Administration shall, to the greatest extent practicable, exercise the powers conferred by this section in cooperation
with qualified surety or other companies on a participation basis.
" ( b ) The Administration shall fix a uniform annual fee for its share
of any guarantee under this section which shall be payable in advance
at such time as may be prescribed by the Administrator. The amount
of any such fee shall be determined in accordance with sound actuarial
practices and procedures, to the extent practicable, but in no case shall
such amount exceed, on the Administration's share of any guarantee
made under this title, 2i/^ per centum per annum of the minimum annual guaranteed rental payable under any guaranteed lease: Provided^
That the Administration shall fix the lowest fee that experience under
the program established hereby has shown to be justified. The Administration may also fix such uniform fees for the processing of
applications for guarantees under this section as the Administrator
determines are reasonable and necessary to pay the administrative
expenses that are incurred in connection therewith.
"(c) I n connection with the guarantee of rentals under any lease
pursuant to authority conferred by this section, the Administrator may
require, in order to minimize the financial risk assumed under such
guarantee—
"(1) that the lessee pay an amount, not to exceed one-fourth of
the minimum guaranteed annual rental required under the lease,
which shall be held in escrow and shall be available (A) to meet
rental charges accruing in any month for which the lessee is in
default, or (B) if no default occurs during the term of the lease,
for application (with accrued interest) toward final payments of
rental charges under the lease;
"(2) that upon occurrence of a default under the lease, the
lessor shall, as a condition precedent to enforcing any claim under
the lease guarantee, utilize the entire period, for which there are
funds available in escrow for payment of rentals, in reasonably
diligent efforts to eliminate or minimize losses, by releasing the
commercial or industrial property covered by the lease to another
qualified tenant, and no claim shall be made or paid under the
guarantee until such effort has been made and such escrow funds
have been exhausted;
"(3) that any guarantor of the lease will become a successor
of the lessor for the purpose of collecting from a lessee in default
rentals which are in arrears and with respect to which the lessor
has received payment under a guarantee made pursuant to this
section; and
"(4) such other provisions, not inconsistent with the purposes
of this title, as the Administrator may in his discretion require.
u POWERS

"SEC. 402. Without limiting the authority conferred upon the Administrator and the Administration by section 201 of this Act, the Administrator and the Administration shall have, in the performance of
and with respect to the functions, powers, and duties conferred by this
title, all the authority and be subject to the same conditions prescribed
in section 5(b) of the Small Business Act with respect to loans, ineluding the authority to execute subleases, assignments of lease and

15 use' 57 ?;

J5 usc 63^^.'

484

PUBLIC LAW 89-117-AUGUST 10, 1965

[79 STAT.

new leases with any person, firm, organization, or other entity, in
order to aid in the liquidation of obligations of the Administration
hereunder.
"FUND

15 u*sc 6^71°"

7 2^"!^' 6 T^'
15 use 695.

"SEC. 403. There is hereby established a revolving fund for use by
the Administration in carrying out the provisions of this title. Initial capital for such fund shall consist of not to exceed $5,000,000 transferred from the fund established under section 4(c) of the Small Business Act: Provided^ That the last sentence of such section 4(c) shall
not apply to any amounts so transferred. Into the fund established
by this section there shall be deposited all receipts from the guarantee
program authorized by this title. Moneys in such fund not needed
for the payment of current operating expenses or for the payment of
claims arising under such program may be invested in bonds or other
obligations ot, or bonds or other obligations guaranteed as to principal
and interest by, the United States; except that moneys provided as
initial capital for such fund shall be returned to the fund established
by section 4(c) of the Small Business Act, in such amounts and at such
times as the Administration determines to be appropriate, whenever the
level of the fund herein established is sufficiently high to permit the
return of such moneys without danger to the solvency of the program
under this title."
(^) Section 201 of such Act is amended by striking out the third
sentence and inserting in lieu thereof the following: "The powers conferred by this Act upon the Administration and upon the Administrator, with the exception of those conferred by titles I V and V hereof,
shall be exercised through the Small Business Investment Division and
through the DejDuty Administrator appointed hereunder. The powers
conferred by this Act upon the Administration and upon the Administrator by titles I V and V hereof shall be exercised through such division, section, or other personnel as the Administrator in his discretion shall determine."
(c) The table of contents of such Act is amended by inserting after
the analysis of title I I I the following:
"TITLE IV—LEASE GUARANTEES
"Sec. 401. Authority of the Administration.
"Sec. 402. Powers.
••Sec. 403. Fund."

Ante, p. 207.

(^(j) Scctiou 4(c) of the Small Business Act is amended—
(1) by striking out "$1,716,000,000" and inserting in lieu thereof
"$1,721,000,000,"; and
(2) by striking out the period at the end of the fifth sentence
and inserting in lieu thereof the following: " : Provided^ That
such limitation shall not apply to functions under title I V
thereof."
A M E N D M E N T OF SECTION 3 1 6 OF T H E H O U S I N G ACT OF 1 9 5 4

68 Stat. 630.
^.^.
^„^. 5.D.C.
Code
717a.
14^65 ^^*^ ^^^°

SEC. 317. The first full paragraph of section 316(2) of the Housing
-^^^ ^^ l^O'i: is amended by striking out the first parenthetical clause
and inserting in lieu thereof the following: " (as such projects are now
^^ "^^y hereafter be defined in title I of the Housing Act of 1949,
including but not limited to projects authorized without regard to the
residential or nonresidential character or reuse of the urban renewal
area)".

79

STAT.]

PUBLIC LAW 89-117-AUGUST10, 1965

485

TITLE IV—COMPENSATION OF CONDEMXEES
DEFINITIONS

SEC. 401. For the purposes of this title—
(1) the term "development program" means any program established by or conducted under any of the following provisions of
law:
(A) the United States Housing Act of 1937;
(B) title I of the Housing Act of 1949;
(C) the Urban Mass Transportation Act of 1964;
(D) title I I of the Housing Amendments of 1955;
( E ) title V I I of the Housing Act of 1961; and
( F ) title V I I of the Housing and Urban Development Act of
1965;
(2) the term "Federal assistance" means a grant, loan, contract
of guaranty, annual contribution, or other assistance provided by
the United States;
(3) the term "applicant'' means any public body or other agency
authorized to receive Federal assistance under a development
program;
(4) the term "real property" means any land, or any interest
in land, and (A) any building, structure, or other improvements
embedded in or affixed to land, and any article so affixed or attached to such building, structure, or improvement as to be an
essential or integral part thereof; (B) any article affixed or attached to such real property in such manner that it cannot be
removed without mat'erial injury to itself or the real property;
and (C) any article so designed, constructed, or specially adapted
to the purpose for which such real property is used that (i) it is
an essential accessory or part of such real property, (ii) it is not
capable of use elsewhere, and (iii) it would lose substantially all
its value if removed from the real property; and
(5) the term "Administrator" means the Housing and Home
Finance Administrator.
LAND A C Q U I S I T I O N

POLICY

SEC. 402. As a condition of eligibility for Federal assistance pursuant to a development program, each applicant for such assistance
shall satisfy the Administrator that the following policies will be
followed in connection with the acquisition of real property by eminent domain in the course of such program—
(1) the applicant shall make every reasonable effort to acquire
the real property by negotiated purchase;
(2) no owner shall be required to surrender possession of real
property before the applicant pays to the owner (A) the agreed
purchase price arrived at by negotiation, or (B) in any case where
only the amount of the payment to the owner is in dispute, not
less than 75 per centum of the appraised fair value of such property as approved by the applicant; and
(3) the construction or development of any public improvements shall be so scheduled that no person lawnilly occupying the
real property shall be required to surrender possession on account
of such construction or development without at least 90 days'
written notice from the applicant of the date on which such construction or development is scheduled to begin.

"' "^"^ '•''°42 use i45o-i465.
49 use leoi note.
42 use 1491-1497.
^2 use isoo-isooe.
Post,

p„ 489.

4S6

PUBLIC LAW 89-117-AUGUST10, 1965
F U N D S FOR CERTAIN P A Y M E N T S I N E M I N E N T

[79 STAT.

DOMAIN

SEC. 403. N'otwitJistanding any other provision of law, financial
assistance under any federally assisted development program may
include amounts necessary for financing, in the same manner that other
costs of a project assisted under such program are financed, the payments described in paragraph (2) (B) of section 402 of this Act.
RELOCATION PAYMENTS UNDER FEDERALLY ASSISTED DEVELOPMENT
PROGRAMS

42 us^c M65

lllTcUis

SEC. 404. (a) To the extent not otherwise authorized under any
Federal law, financial assistance extended to an applicant under any
federally assisted development program may include grants for relocation payments, as herein defined. Such grants may be in addition
to other financial assistance under such federally assisted development
programs, and may cover the full amount of such relocation payments.
Any funds available for any such program may be used for such
grants. The term "relocation payments" means payments by the
applicant, to a displaced individual, family, business concern, or nonprofit organization, which are made on such terms and conditions and
subject to such limitations (to the extent applicable, but not including
the date of displacement) as are provided for relocation payments, at
the time such payments are approved, by sections 114(b), (c), and (d)
^^ ^^^^ Housing Act of 1949 with respect to projects assisted under
title I thereof. Relocation payments authorized by this subsection
shall be made subject to such rules and regulations as may be prescribed by the Administrator.
(b) Section 114(b) (2) of the Housing Act of 1949 is amended by
striking out "$1,500" and inserting in lieu thereof "$2,500".
(c) (1) Section 114 of such Act is further amended by redesignating subsection (d) as subsection (e) and by inserting after subsection
(c) the following new subsection:
" ( d ) In addition to payments authorized to be made under subsections (b) and (c), a local public agency may pay to any displaced
individual, family, business concern, or nonprofit organization reasonable and necessary expenses incurred for (1) recording fees, transfer
taxes, and similar expenses incidental to conveying real property to
a project assisted under this title, (2) penalty cosits for prepayment
of any mortgage encumbering such real property, and (3) the pro
rata portion of real property taxes allocable to a period subsequent
to the date of vesting of title or the effective date of the acquisition of
such real property by such agency, whichever is earlier."
(2) Section 15(8) of the United States Housing Act of 1937 is
amended by striking out "section 114 (b) or ( c ) " and inserting in lieu
thereof "section 114 (b), (c),and ( d ) " .
(cl) Subsection (a) shall not be applicable with respect to any displacement occurring prior to the date of the enactment of this Act (or
prior to March 4, 1965, in the case of the programs specified in subparagraphs (C) and (E) of section 401(1)).
T I T L E V—LOW-RENT PUBLIC HOUSING
ACCEPTANCE OF LOCAL C E R T I F I C A T I O N OF E Q U I V A L E N T E L I M I N A T I O N

42 u'sc M?'

SEC. 501. The fourth sentence of section 10(a) of the United States
Housing Act of 1937 is amended by inserting immediately after "elimination", where it first appears, the following: ", as certified by the
local governing body".

79 STAT.]

PUBLIC LAW 89-117-AUGUST 10, 1965

487

GREATER U S E OF E X I S T I N G H O U S I N G

SEC. 502. Section 10(c) of the United States Housing Act of 1937
is amended by striking out '•''And provided''' and inserting in lieu thereof '•''Provided''\ and by inserting before the period at the end thereof
the following: " : And provided further. That the amount of the fixed
annual contribution which would be established under this Act for a
newly constructed project by a public housing agency designed to accommodate a number of families of a given size and kind may be
established, as a maximum annual contribution in lieu of any Other
guaranteed contribution authorized under this section, for a project
by such public housing agency which would provide housing for the
comparable number, sizes, and kinds of families through the acquisition, acquisition and rehabilitation, or use under lease of existing
structures which are suitable for low-rent housing use and obtainable
in the local market".

so stau 892^

I N C R E A S E I N A U T H O R I Z A T I O N FOR A N N U A L C O N T R I B U T I O N S

SEC. 503. (a) Section 10(e) of the United States Housing Act of
1937 is amended by inserting immediately following "per annum" the nl\f^^\f^l'^''
following: ", which limit shall be increased by $47,000,000 on the date
of the enactment of the Housing and LTrban Development Act of 1965,
and by further amounts of $47,000,000 on July 1 in each of the years
1966,1967, and 1968, respectively".
REALLOCATION OF U N I T S

SEC. 504. Section 10(e) of the United States Housing Act of 1937
is amended by striking out ^''Provided^'' and inserting in lieu thereof
the following: ''''Provided, That subject to any contractual obligation
outstanding on the date of the enactment of the Housing and Urban
Development Act of 1965, any units not under construction within
five years from the date they were reserved to a public housing
agency may be reserved, allocated, or placed under contract for
annual contributions in any State without limitation as to the aggregate amount of units which may be placed under contract for annual
contributions in any one State: Provided furtlier,^\
SALE OF FEDERALLY-OWNED PROJECTS TO PRIVATE PURCHASERS

SEC. 505. The first sentence of section 12(c) of the United States
Housing Act of 1937 is amended to read as follows: "The Authority 4° us^c f41*2.
may sell a Federal project only to a public housing agency or to a
nonprofit body for use as low-rent housing."
INCREASE IN PER ROOM LIMITATIONS

SEC. 506. Paragraph (5) of section 15 of the United States Housing Act of 1937 is amended—
yil^X'iS^''
(1) by striking out "$2,000" and inserting in lieu thereof 42 use 14*15.
"$2,400";
(2) by striking out "$3,000", each place it appears, and inserting in lieu thereof "$3,500"; and
(3) by striking out "$3,500" and inserting in lieu thereof
"$4,000".

488

PUBLIC LAW 89-117-AUGUST 10, 1965

[79 STAT.

P U R C H A S E OF U N I T S BY T E N A N T S

50 Stat. 895.^

SE^. 507. (a) SectioH 15 of the United States Housing Act is
amended by adding after paragraph (8) a new paragraph as follows:
"(9) Notwithstanding any other provision of this Act, but subject
to the provisions of any contract with the Authority, any public
housing agency may permit any member of a tenant family to enter
into a contract (either individually or as a member of a group) for
the acquisition of a dwelling unit in any project of the public housing
agency which is suitable by reason of its detached or semidetached
construction for sale and for occupancy by such purchaser or a
member or members of his family, upon the following terms:
" ( A ) The purchaser shall pay at least (i) a pro rata share cost of
any services furnished him by the public agency, including but not
limited to, administration, maintenance, repairs, utilities, insurance,
l)rovision of reserves, and other expenses, (ii) local taxes on his
dwelling unit, and (iii) monthly payments of interest and principal
sufficient to amortize a sales price, equal to the greater of the unamortized debt or the appraised value (at the time such purchase
contract is entered into) of the dwelling unit, in not more than forty
years: Pi'ovided, That the public housing agency may, under terms
and conditions to be prescribed by it, permit a purchaser to apply an
amount equal to the net rent paid for his dwelling unit, over a period
not exceeding three years prior to the entering into of any such contract, toward the purchase price of such unit;
" ( B ) The interest rate shall be fixed at not less than the average
interest cost of loans outstanding on the project, except that in the
case of a project on which bonds are not outstanding the interest rate
shall be fixed at not less tlian the going Federal rate applicable to
such project;
" ( C ) The principal payments shall be not less than one-half of 1
])er 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/^ 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; and
" ( 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 w^ho
resides in the dwelling assumes such contract, or (ii) 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 21^ per centum of the sales price."
(b) Such Act is further amended—
(1) by inserting in the parenthetical phrase in section 10(h)
after the words "exclusive of" the following: "any part thereof
covered by a contract or conveyed pursuant to paragraph (9) of
section 15, and exclusive of";
(2) by inserting after "may be made" in section 10(1) the following : ", subject to any outstanding contracts made pursuant to
paragraph (9) of section 15,";
(3) by inserting after "acquisition", the first place it appears in
paragraphs (1), (2), and (3) of section 15, the following:" (except
pursuant to paragraph (9) of section 15)"; and

79 STAT.]

PUBLIC LAW 8 9 - 1 1 7 - A U G U S T 10, 1965

489

(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 (9) of section 15".

^ ^^'^ ^^^4.^

T I T L E VI—COLLEGE HOUSING
I N C R E A S E I N A U T H O R I Z A T I O N FOR COLLEGE H O U S I N G LOANS

SEC. 601. Section 401(d) of the Housing Act of 1950 is amended by yJl^H^^^f^'
striking out "through 1964'', each place it appears, and inserting in lieu 12 use 1749.
thereof "through 1968".
I N T E R E S T RATE O N COLLEGE H O U S I N G

LOANS

SEC. 602. (a) Effective with respect to loan contracts entered into
after the date of the enactment of this Act, section 401 (c) of the Housing Act of 1950 is amended by striking out "the higher of (1) 2 % per
centum per annum, or" and inserting m lieu thereof "the lower of (1)
8 per centum per annum, or".
(b) Effective with respect to notes or other obligations financing loan
contracts entered into after the date of the enactment of this Act, section 401(e) of such Act is amended by striking out "the higher of (1)
21/^ per centum per annum, or" and inserting in lieu thereof "the lower
of (1) 2% per centum per annum, or".
PARTICIPATION

B Y N E W COLLEGES A N D C E R T A I N P U B L I C
AND TECHNICAL INSTITUTIONS

VOCATIONAL

S E C 603. Clause (1) of section 404(b) of the Housing Act of 1950 is
amended to read as follows: " ( 1 ) ( A ) any educational institution
which offers, or provides satisfactory assurance to the Administrator
that it will offer within a reasonable time after completion of a facility
for which assistance is requested under this title, at least a two-year
program acceptable for full credit toward a baccalaureate degree
(including any public educational institution, or any private educational institution no part of the net earnings of which inures to the
benefit of any private shareholder or individual), or (B) any public
educational institution which (i) is administered by a college or university which is accredited by a nationally recognized accrediting
agency or association, (ii) offers technical or vocational instruction,
and (iii) provides residential facilities for some or all of the students
receiving such instruction,".
TECHNICAL

Ji stan 304^^

AMENDMENTS

SEC. 604. (a) The second paragraph of section 404(b) of the Housing Act of 1950 is amendfed by inserting after "would provide
housing," the following: "or to a student housing cooperative corporation described in clause (5) of this subsection,".
(b) Section 401 (g) of such Act is amended by striking out " I n the
case" and inserting in lieu thereof "Except as otherwise provided in
the second paragraph of section 404(b), in the case".
T I T L E YII—COMMUNITY F A C I L I T I E S
PURPOSE

SEC. 701. The purpose of this title is to assist and encourage the
communities of the Nation fully to meet the needs of their citizens by
49-850 0-66—34

^9 stat. 644.

^^ ^*^*- ^''^•
"^^ ^*^*- ''^2.

490

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

making it possible, with Federal grant assistance, for their governmental bodies (1) to construct adequate basic water and sewer facilities needed to promote the efficient and orderly growth and development of our communities, (2) to construct neighborhood facilities
needed to enable them to carry on programs of necessary social services,
and (3) to acquire, in a planned and orderly fashion, land to be utilized
in connection with the future construction of public works and
facilities.
GRANTS FOR BASIC WATER A N D SEWER

33 u?c 466^'

FACILITIES

SEC. 702. (a) The Housing and Home Finance Administrator
(hereinafter in this title referred to as the "Administrator") is authorized to make grants to local public bodies and agencies to finance
specific projects for basic public water facilities (including works for
the storage, treatment, purification, and distribution of water), and
for basic public sewer facilities (other than "treatment works" as de^^^^^ i^ ^^^^ Federal Water Pollution Control Act) : Provided, That
no grant shall be made under this section for any sewer facilities
unless the Secretary of Health, Education, and Welfare certifies to
the Administrator that any w-aste material carried by such facilities
will be adequately treated before it is discharged mto any public
waterway so as to meet applicable Federal, State, interstate, or local
w^ater quality standards.
(b) T h e amount of any grant made under the authority of this
section shall not exceed 50 per centum of the development cost of the
project: Provided, That in the case of a community having a population of less than ten thousand, according to the most recent decennial
census, which is situated within a metropolitan area, the Administrator may increase the amount of a grant for a basic public sewer fapility
assisted under this section to not more than 90 per centum of the
development cost of such facility, if the community is unable to
finance the construction of such facility without the increased grant
authorized under this subsection, and if in such community (1) there
does not exist a public or other adequate sewer facility which serves a
substantial portion of the inhabitants of the community, and (2) the
rate of unemployment is, and has been continuously for the preceding
calendar year, 100 per centum above the national average: And provided further, That the limitations and restrictions contained in subsection (c) of this section shall not be applicable to any community
applying for an increased grant under this subsection.
(c) No grant shall be made under this section in connection with any
project unless the Administrator determines that the project is necessary to provide adequate water or sewer facilities for, and will contribute to the improvement of the health or living standards of, the people
in the community to be served, and that the project is (1) designed so
that an adequate capacity will be available to serve the reasonably foreseeable growth needs of the area; (2) consistent with a program meeting criteria, established by the Administrator, for a unified or officially
coordinated areawide water or sewer facilities system as part of the
comprehensively planned development of the area, except that prior to
July 1, 1968, grants may, in the discretion of the Administrator, be
made under this section when such a program for an areawide water
and sewer facilities system is under active preparation, although not
yet completed, if the facility or facilities for which assistance is sought
can reasonably be expected to be required as a part of such program,
and there is urgent need for the facility or facilities; and (3) necessary
to orderly community development.

79

STAT.]

PUBLIC LAW 8 9 - 1 1 7 - A U G U S T 10, 1965

491

GRANTS FOR NEIGHBORHOOD F A C I L I T I E S

SEC. 703. (a) I n accordance with the provisions of this section, the
Administrator is authorized to make grants to any local public body or
agency to assist in financing specific projects for neighborhood facilities. Any such project may be undertaken by such body or agency directly or through a nonprofit organization approved by i t : Provided,
That no grant shall be provided under this section for any project to
be undertaken through a nonprofit organization unless the Administrator determines (1) that such organization has or will have the legal,
financial, and technical capacity to carry out the project, and (2) that
the public body or agency to which the grant is made will have satisfactory continuing control over the use of the proposed facilities.
(b) The amount of any grant made under the authority of this section shall not exceed 66% per centum of the development cost of the
project for which the grant is made (or 75 per centum of such cost in
the case of a project located in an area which at the time the grant
is made is designated as a redevelopment area under the Area Redevel75 Stat. 47.
opment Act or any Act supplementary thereto).
42 u s e 2501
(c) No grant shall be made under this section for any project unless note."
the Administrator determines that the project will provide a neighborhood facility which is (1) necessary for carrying out a program of
health, recreational, social, or similar community service (including a
community action program approved under title I I of the Economic
Opportunity Act of 1964) in the area, (2) consistent with comprehen- ^ use 273^1 et
sive planning for the development of the community, and (3) so seq.
located as to be available for use by a significant portion (or number
in the case of large urban places) of the area's low- or moderate-income
residents.
(d) F o r a period of twenty years after a grant has been made under this section for a neighborhood facility, such facility shall not,
without the approval of the Administrator, be converted to uses other
than those proposed by the applicant in its application for a grant.
The Administrator shall not approve any conversion in the use of such
a neighborhood facility during such twenty-year period unless he finds
that such conversion is in accordance with the then applicable program
of health, recreational, social, or similar community services in the
area and consistent with comprehensive planning for the development
of the community in which the facility is located. I n approving any
such conversion, the Administrator may impose such additional conditions and requirements as he deems necessary.
(e) The Administrator shall give priority to applications for projects designed primarily to benefit members of low-income families or
otherwise substantially further the objectives of a community action
program approved under title I I of the Economic Opportunity Act of
1964.
ADVANCE A C Q U I S I T I O N

OF LAND

SEC. 704. (a) I n order to encourage and assist in the timely acquisition of land planned to be utilized in connection with the future construction of public works or facilities, the Administrator is authorized
to make grants to local public bodies and agencies to assist in financing
the acquisition of a fee simple estate or other interest in such land.
(b) The amount of any grant made under the authority of this
section shall not exceed tlie aggregate amount of reasonable interest
charges on the loan or other financial obligation incurred to finance
tlie acquisition of such land for a period not exceeding the lesser of
(1) five years from the date such loan was made or such financial
obligation was incurred, or (2) the period of time between the date

492

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

such loan was made or such financial obligation was incurred and the
date construction is begun on the public work or facility for which the
land acquired was planned to be utilized.
(c) No grant shall be made under this section for any project for
the acquisition of land unless the Administrator determines 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 (not
to exceed five years after a contract to make such grant is entered into)
and that construction of such public work or facility will contribute to
economy, efficiency, and the comprehensively planned development of
the area.
(d) As a condition to providing assistance under this section, the
Administrator may, under terms and conditions prescribed by him,
require an applicant to agree to repay such assistance, if (1) the land
purchased with such assistance is not utilized within five years after the
agreement is entered into in connection with the construction of the
])ublic work or facility for which such land was acquired, or (2) such
land is diverted to other uses.
GENERAL PROVISIONS

Ts^stat^yu'
12 use 1749a.
31 use 529.

SEC. 705. (a) I n the performance of, and with respect to, the functions, powers, and duties vested in him by this title, the Administrator
i*hall (in addition to any authority otherwise vested in him) have the
functions, powers, and duties set forth in section 402, except subsections ( a ) , (c) (2), and (f )_of the Housing Act of 1950.
(b) The Administrator is authorized, notwithstanding the provisions
^-f section 3648 of the Revised Statutes, to make advance or progress
payments on account of any grant made pursuant to this title. No
])art of any grant authorized to be made by the provisions of this title
shall be used for the payment of ordinary goA^ernmental operating
expenses.
DEFINITIONS

SEC. 706. As used in this title—
(a) The term "State" means the several States, the District of
Columbia, the Commonwealth of Puerto Rico, and the territories and
possessions of the LTnited States.
(b) The term "local public bodies and agencies" includes public
corporate bodies or political subdivisions; public agencies or instrumentalities of one or more States, municipalities, or political subdivisions of one or more States (including public agencies and instrumentalities of one or more municipalities or other political subdivisions of one or more States); Indian tribes; and boards or commissions established under the laws of any State to finance specific capital
improvement projects.
(c) The term "development cost'' means the cost of constructing the
facility and of acquiring the land on which it is located, including
necessary site improvements to permit its use as a site for the facility.
LABOR STANDARDS

49 Stat. 1011.

SEC. 707. All laborers and mechanics employed by contractors or
subcontractors on projects assisted under sections 702 and 703 shall be
paid wages at rates not less than those prevailing on similar construction in the locality as determined by the Secretary of I^abor in accordj^nce with the Davis-Bacon Act, as amended (40 U.S.C. 276a—276a-5).
No such project shall be approved without first obtaining adequate
assurance that these labor standards will be maintained upon the

79 STAT. ]

PUBLIC LAW 89-117-AUGUST 10, 1965

construction work. The Secretary of Labor sliall liave, 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 (48 Stat. 948; 40 U.S.C. 276c).

493

" stat. los.

APPROPRIATIONS

SEC. 708. (a) There are authorized to be appropriated for each fiscal
year commencing after June 30,1965, and ending prior to July 1,1969,
not to exceed (1) $200,000,000 for grants under section 702, (2)
$50,000,000 for grants under section 703, and (3) $25,000,000 for grants
under section 704.
(b) Any amounts appropriated under this section shall remain
available until expended, and any amounts authorized for any fiscal
year under this section but not appropriated may be appropriated for
any succeeding fiscal year commencing prior to July 1, 1969.
T I T L E V I I I — F E D E R A L NATIONAL MORTGAGE
ASSOCIATION
INCREASE I N SPECIAL ASSISTANCE

AUTHORITY

SEC. 801. (a) Section 305(c) of the National Housing Act is
amended by inserting before the period at the end thereof the following: ", which limit shall be increased by $100,000,000 on the date
of the enactment of the Housing and Urban Development Act of 1965,
by $450,000,000 on July 1, 1966, by $550,000,000 on July 1, 1967, and
by $525,000,000 on July 1, 1968".
(b) Section 305(f) of such Act is amended by inserting before the
period at the end thereof the following: " : Provided further. That any
portion of the total amount of authority set forth in the first proviso
of this subsection, which (1) is not required under the second proviso
of this subsection to be kept available for purchases and commitments
with respect to mortgages insured under section 809, and (2), on the
date of enactment of the Housing and Urban Development Act of 1965
and on each July 1 thereafter, would otherwise be available for making
new purchases and commitments pursuant to this subsection, shall be
transferred to and merged with the authority granted by subsection
(a) and added to the amount of such authority w^hich is available, as
of the date of the transfer, for purchases and commitments under subsection (c) ; and the total amount of authority as set forth in the first
proviso of this subsection shall progressively be reduced by the amount
of each such transfer".
P U R C H A S E OF MORTGAGES H E L D BY FEDERAL

75 Stat. 175.
12 u s e 1.720.

^^ ^*^*- '^^^•

^° ^^^ xj^ih

INSTRUMENTALITIES

SEC. 802. (a) Section 302 of the National Housing Act is amended
by—
(1) striking out "Federal," in clause (2) in subsection ( b ) ;
(2) inserting before "first mortgages" in the first sentence of
subsection (c) the following: "obligations offered to it by the
Housing and Home Finance Agency or its Administrator, or by
such Agency's constituent units or agencies or the heads thereof, or
any"; and
(3) inserting "and other obligations" after "mortgages" in the
last sentence of subsection (c).

\\ l'^^ ^j^^

78 stat. soo.

494
12 use m i

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

(^) Section 306(6) of such Act is amended to read as follows:
" (e) Notwithstanding any other provision of law, the Association is
authorized, under the aforesaid separate accountability, to make commitments to purchase, and to purchase, service, or sell any obligations
offered to it by the Housing and Home Finance Agency or its Administrator, or by such Agency's constituent units or agencies or the heads
thereof, or any mortgages covering residential property offered to it
by any Federal instrumentality, or the head thereof. There shall be
excluded from the total amounts set forth in subsection (c) the
amounts of any obligations or mortgages purchased by the Association
pursuant to this subsection."
P U R C H A S E OF B E L O W - M A R K E T I N T E R E S T RATE MORTGAGES

73^stat^*66l^^'
12 use 1717.
12 use 1720.
llijscinsi

^^^' ^^^- ^ectiou 302 (b) of the National Housing Act is amended by
inserting after the first sentence the following new sentence: "Notwithstanding the provisions of clause (3) in the preceding sentence,
^\^Q Association may purchase a mortgage under section 305 with an
original principal obligation that exceeds $17,500 per dwelling unit
if the mortgage (1) is a below-market interest rate mortgage insured
under section 2 2 1 ( d ) ( 3 ) , and (2) covers property which has the
benefit of local tax abatement in an amount determined by the Federal
Housing Commissioner to be sufficient to make possible rentals not
in excess of those that w'ould be approved by the Commissioner if the
mortgage amount did not exceed $17,500 per dwelling unit and if local
tax abatement were not provided."
INCREASE I N L I M I T A T I O N ON MORTGAGES FOR D W E L L I N G U N I T S
FOUR OR MORE BEDROOMS

HAVING

SEC. 804. Section 302(b) of the National Housing Act is amended by
inserting before the period at the end of the first sentence the following:
" (plus an additional $2,500 for each such family residence or dwelling
unit which has four or more bedrooms)".
T I T L E I X — O P E N - S P A C E L A N D AND U R B A N
B E A U T I F I C A T I O N AND I M P R O V E M E N T
C H A N G E I N N A M E OF P R O G R A M ; F I N D I N G S AND PURPOSE
75 Stat. 183
42 u s e 1500'

isooe.

SEC. 901. (a) The heading of title V I I of the Housing Act of 1961
is amended to read as follows:
" T I T L E V I I — O P E N - S P A C E L A N D AND U R B A N
BEAUTIFICATION AND IMPROVEMENT"
(b) Section 701 of such Act is amended by redesignating subsection
(b) as subsection (c) and inserting after subsection (a) a new subsection as follows:
" ( b ) The Congress further finds that there is an urgent need both
for the additional provision of parks and other open-space areas in the
developed portions of the Nation's urban areas and for greater and
better coordinated local efforts to beautify and improve open space and
other public land throughout urban areas to facilitate their increased
use and enjoyment by the Nation's urban population."
(c) Section 701(c) of such Act (as redesignated by subsection (b)
of this section) is amended—
(1) by striking out "preserve" and inserting in lieu thereof
"(1) provide, preserve, and develop"; and

79 STAT.]

PUBLIC LAW 89-117-AUGUST 10, 1965

495

(2) by striking out "purposes." and inserting in lieu thereof
"uses, and (2) beautify and improve open space and other public
urban land, in accordance with programs to encourage and coordinate local public and private efforts toward this end."
D E V E L O P M E N T GRANTS FOR O P E N - S P A C E USES

SEC. 902. (a) The first sentence of section 702(a) of the Housing
Act of 1961 is amended—
(1) by inserting "and development" after "acquisition" the first
place it appears; and
(2) by inserting before the period the following: ", and the development, for open-space uses, of land acquired under this title".
(b) Section 702 (c) of such Act is amended by striking out "development costs or".
(c) Section 709 of such Act (as redesignated by section 906 of this
Act) is amended by adding at the end thereof the following:
"(4) The term 'open-space uses' means any use of open-space
land for (A) park and recreational purposes, (B) conservation of
land and other natural resources, or (C) historic or scenic
purposes."

75 Stat. 184.
42 u s e 1500a.

INCREASED GRANT LEVEL FOR PRESERVATION A N D D E V E L O P M E N T OF
OPEN-SPACE LAND

SEC. 903. The second sentence of section 702(a) of the Housing Act
of 1961 is amended to read as follows: "The amount of any such grant
shall not exceed 50 per centum of the total cost, as approved by the Administrator, of such acquisition and development."
CONTRACT

AUTHORIZATION

SEC. 904. Section 702(b) of the Housing Act of 1961 is amended by
striking out "$75,000,000" and inserting in lieu thereof the following:
"$310,000,000: Provided^ That of such sum the Administrator may
contract to make grants under section 705 aggregating not to exceed
$64,000,000, and grants under section 706 aggregating not to exceed
$36,000,000".
O P E N - S P A C E P L A N N I N G A N D PROGRAM

^s stat. soe.

REQUIREMENTS

SEC. 905. Section 703(a) of the Housing Act of 1961 is amended to
read as follows:
" ( a ) The Administrator shall enter into contracts to make grants
under sections 702 and 705 of this title only if he finds that such assistance is needed for carrying out a unified or officially coordinated
program, meeting criteria established by him, for the provision and
development of open-space land as part of the comprehensively planned
development of the urban area."

42 use isoob.

GRANTS FOR PROVISION OF O P E N - S P A C E L A N D I N B U I L T - U P U R B A N AREAS
A N D FOR U R B A N B E A U T I F I C A T I O N A N D I M P R O V E M E N T

SEC. 906. Title V I I of the Housing Act of 1961 is amended by redesignating sections 705 and 706 as sections 708 and 709, respectively,
and by inserting after section 704 two new sections as follows:

^^ ^*^*- y'^i5ooe.

496

PUBLIC LAW 89-117-AUGUST10, 1965
uGRANTS

[79 STAT.

FOR PROVISION OF O P E N - S P A C E L A N D I N B U I L T - U P U R B A N AREAS

"SEC. 705. The Administrator is further authorized to enter into
contracts to make grants to States and local public bodies to help
finance the acquisition of title to, or other permanent interests in, developed land in built-up portions of urban areas to be cleared and used
as permanent open-space land. The Administrator shall make such
grants only where the local governing body determines that adequate
open-space land cannot effectively be provided through the use of existing undeveloped or predominantly undeveloped land. Grants under
this section shall not exceed 50 per centum of the cost of acquiring
such interests and of necessary demolition and removal of improvements.
"GRANTS FOR URBAN BEAUTIFICATION AND IMPROVEMENT

"SEC. 706. The Administrator is authorized to enter into contracts
to make grants, as herein provided, to States and local public bodies
to assist in carrying out local programs for the greater use and enjoyment of open-space and other public land in urban areas. The Administrator shall establish criteria for such programs to assure that each
program (1) represents significant and effective efforts, involving all
available public and private resources, for the beautification of such
land and its improvement for open-space uses; and (2) is important
to the comprehensively planned development of the locality. Grants
made under this section shall not exceed 50 per centum of the amount
by which the cost of the activities carried on by an applicant during
a fiscal year under an approved program exceeds its usual expenditures for comparable activities: Provided, That, notwithstanding any
other provision of this section, the Administrator may use not to exceed $5,000,000 of the sum authorized for contracts under this section
for the purpose of entering into contracts to make grants in amounts
not to exceed 90 per centum of the cost of activities which he determines have special value in developing and demonstrating new and
improved methods and materials for use in carrying out the purposes
of this section."
LABOR STANDARDS

SEC. 907. Title V I I of the Housing Act of 1961 is further amended
by inserting after section 706 (as added b}' section 906 of this Act) the
following new section:
((LABOR

T use 27*6^'
276a-5.
^'

63 Stat. 108.

STANDARDS

"SEC. 707. (a) The Administrator shall take such action as may be
necessary to insure that all laborers and mechanics employed by contractors or subcontractors in the performance of construction work
financed with the assistance of grants under this title shall be paid
Avages at rates not less than those prevailing on similar construction
in the locality as determined by the Secretary of Labor in accordance
^^^^^ ^^^ Davis-Bacon Act, as amended. The Administrator shall not
approve any such grant without first obtaining adequate assurance
that these labor standards will be maintained upon the construction
work.
" (b) The Secretary of Labor shall have, with respect to the labor
standards specified in subsection ( a ) , 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 (48 Stat. 948; 40 U.S.C. 276c)."

79 STAT.]

PUBLIC LAW 89-117-AUGUST 10, 1965
USE OF F U N D S FOR STUDIES A N D

497

PUBLICATION

SEC. 908. The second sentence of section 708 of the Housing Act of
1961 (as redesignated by section 906 of this Act) is amended to read
as follows: "The Administrator is authorized to use. during any fiscal
year not to exceed $50,000 of the funds available for grants under this
title to undertake such studies and publish such information."
CONFORMING

AMEND3IENTS

SEC. 909. (a) The heading of section 702 of the Housing Act of 1961
is amended to read as follows: "GRANTS FOR PRESERVATION AND DEVEL-

js stau ^i84.^^

OPMENT OF OPEN-SPACE LAND".

(b) Section 702(a) of such Act is amended by striking out "acceptable to the Administrator as capable of carrying out the provisions of
this title".
(c) Section 702(e) of such Act is amended by striking out in the
second sentence "served by the open-space land acquired" and inserting
in lieu thereof "assisted".
(d) Section 704 of such Act is amended by striking out in the first '^^ use isooc.
sentence "for which" and inserting in lieu thereof "for the acquisition
of which".
TITLE X—RURAL HOUSIXG
LOANS FOR PREVIOUSLY OCCUPIED B U I L D I N G S A N D M I N I M U M SITE
ACQUISITION

SEC. 1001. (a) Section 501(a) of the Housing Act of 1949 is ,/i^*^\-„"2;
,

,

^ '

^ '

"

amended—
(1) by inserting after "their farms," in clause (1) the following: "and to purchase previously occupied buildings and land
constituting a minimum adequate site, in order"; and
(2) by inserting after "rural areas" in clause (2) the following: "for the construction, improvement, alteration, or repair of
dwellings, related facilities, and farm buildings and to rural residents for such purposes and for the purchase of previously occupied buildings and the purchase of land constituting a minimum
adequate site, in order".
(b) Section 501(c) of such Act is amended by inserting "or a rural
resident" in clause (1) after "or that he is the owner of other real
estate in a rural area".

75 Stat. 186.

42 use uyi.

INTEREST RATE OX DIRECT RURAL HOUSING LOANS

SEC. 1002. Section .502(a) of the Housing Act of 1949 is amended ^^ use 1472.
by striking out "with interest at a rate not to exceed 4 per centum per
annum on the unpaid balance of principal" and inserting in lieu thereof the following: "with interest, in the case of applicants described in
clauses (1) and (2) of section 501(a), at a rate not to exceed 5 per
centum per annum on the unpaid balance of principal, and, in the case
of applicants described in clause (3) of section 501(a) and applicants ^^ ^*^*- ''''°under sections 503 and 504, at a rate not to exceed 4 per centum per " us^c MJI
annum on such unpaid balance. Loans made or insured under this 1473, 1474.
title shall be conditioned on the borrower paying such fees and other
charges as the Secretary may require".

498

PUBLIC LAW 89-117-AUGUST 10, 1965
I N S U R E D RURAL. H O U S I N G

63 Stat. 432.
42 u s e 1471 et
seq.

[79 STAT.

LOANS

SEC. 1003. (a) Title V of the Housing Act of 1949 is amended by
adding at the end thereof the following new sections:
a I N S U R E D RURAL. H O U S I N G LOANS

52 Stat. 10;
Ante, p . 466.
12 u s e 1709.

75 Stat. 186;
76 Stat. 671.
42 u s e 1484,
1485.

Rural Housing
Insurance Fund.

"SEC. 517. (a) The Secretary may insure loans meeting the requirements of section 502, and may make loans in accordance with
the requirements of such section to be sold and insured; except that
such loans shall—
" (1) if the borrowers are persons of low or moderate income (as
defined by the Secretary), (A) not exceed amounts necessary to
provide adequate housing, modest in size, design, and cost (as
determined by the Secretary), (B) bear interest at a rate not to
exceed 5 per centum per annum, and (C) not exceed in the aggregate $300,000,000 of new loans made or insured in any one fiscal
year; and
"(2) if the borrowers are persons other than those described in
clause (1), bear interest and provide for insurance or service
charges at rates comparable to the combined rate of interest and
premium charges in effect under section 203 of the National Housing Act, as determined by the Secretary.
"(b) The Secretary may insure loans in accordance with the requirements of sections 514 (exclusive of subsections ( a ) ( 3 ) , ( a ) ( 5 ) , and
(b)) and 515 (exclusive of subsections (a) and ( b ) ( 4 ) ) , and may
make loans meeting such requirements to be sold and insured. Upon
the expiration of ninety days after the original capitalization of the
Rural Housing Insurance Fund, created by subsection (e) of this
section, no new loans shall be made or insured under section 514 or
515 ( b ) , except in conformity with this section.
"(c) The Secretary may use the Rural Housing Insurance Fund for
the purpose of making loans to be sold and insured under this section,
but the aggregate of such loans which are held by the Secretary at
any one time shall not exceed $100,000,000.
" ( d ) The Secretary may, in conformity with subsections (a) and
( b ) , insure the payment of principal and interest as it becomes due on
loans made by lenders other than the United States, and on loans made
from the Rural Housing Insurance Fund which are sold by the Secretary. Any contract of insurance executed by the Secretary hereunder
shall be an obligation supported by the full faith and credit of the
United States, and shall be incontestable except for fraud or material
misrepresentation of which the holder has actual knowledge. I n 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 sliall not be bound by any such assignment until
notice thereof is given to and acknowledged by him.
"(e) There is hereby created 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 this
section. There are authorized to be appropriated to the Secretary
such sums as may be necessary for the purposes of the Fund.
" ( f ) 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.
" ( g ) All funds, claims, notes, mortgages, contracts, and property
acquired by the Secretary under this section, and all collections and

79

STAT.}

PUBLIC LAW 89-117-AUGUST10, 1965

proceeds therefrom, shall constitute assets of the Fund; and all liabilities and obligations of such assets shall be liabilities and obligations 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 loans held or insured by him
under this section and purchasing such insured loans on such terms
and conditions as he may prescribe.
" ( h ) The Secretary is authorized to issue notes to the Secretary of
the Treasury to obtain funds necessary for discharging obligations
under this section and for authorized expenditures out of the Fund,
but, except as may be authorized in appropriation Acts, not for the
original or any additional capital 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. Each note
shall bear interest at the average rate, as determined by the Secretary
of the Treasury, payable by the Treasury upon its marketable public
obligations outstanding at the beginning of the fiscal year in which
such note is issued, which are neither due nor callable for redemption
for fifteen years from their date of issue. 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 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 LTnited States. The notes issued by the Secretary to the
Secretary of the Treasury shall constitute obligations of the Fund.
" ( i ) The Secretary may retain out of interest payments by the
borrower an annual charge in an amount specified in the insurance
or sale agreement applicable to the loan. Of the charges retained
by the Secretary, if any, not to exceed 1 per centum per annum of the
unpaid balance of the loan shall be deposited in the Fund. Any retained charges not deposited in the Fund 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,
when and in such amounts as may be authorized in appropriation
Acts.
" (j) The Secretary may also utilize the Fund—
"(1) to pay amounts to which the holder of the note is entitled in accordance with an insurance or sale agreement under
this section accruing between the date of any prepayment by the
borrower to the Secretary and the date of transmittal of any such
prepayments to the holder of the note; and 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 section
any defaulted installment or, upon assignment of the note to the
Secretary at the Secretary's request, or pursuant to a purchase
agreement, the entire balance outstanding on the note; and
"(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

499

3° ^QQ ^f^-

500

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

section or held in the Fund, and to acquire such security property at foreclosure sale or otherwise.
((RURAL HOUSING
D ^ S Lo^n Account.

3° u'sc 7^74 •

42 use Ssi

DIRECT LOAN ACCOUNT

"^^^- ^^^- (^) There is hereby created the Rural Housing Direct
Loan Account (hereinafter referred to as the 'Account') which shall
be used by the Secretary for carrying out the provisions of this section. There are authorized to be appropriated to the Secretary such
sums as may be necessary for the purposes of the Account.
" ( b ) There are transferred to the Account (1) all funds, claims,
notes, mortgages, contracts, and property, and all collections and proceeds therefrom, held by the Secretary under the direct loan provisions
of this title, including those securing notes issued by the Secretary
to the Secretary of the Treasury under section 511 and any unexpended balance of amounts borrowed upon such notes, and (2) all
unexpended balances of appropriations for direct loans under this
title, including the fund authorized by section 515(a). All amounts
hereafter borrowed by the Secretary from the Secretary of the Treasury under section 511 shall be deposited in the Account. All collections and proceeds from assets acquired by the Account shall be
deposited in the Account.
"(c) When and in such amounts as may be authorized in appropriation Acts, the Secretary may issue notes to the Secretary of the Treasury to obtain funds to be deposited in the Account. The form, denominations, maturities, and other terms and conditions of such notes
shall be prescribed by the Secretary with the approval of the Secretary
of the Treasury. Each note shall bear interest at the average rate
determined by the Secretary of the Treasury, payable by the Treasury
upon its marketable public obligations outstanding at the beginning
of the fiscal year in which such note is issued, which are neither due
nor callable for redemption for fifteen years from their date of issue.
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 are extended to include
the purchase 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.
" ( d ) The Account shall remain available to the Secretary for the
payment of interest and principal on notes issued by the Secretary to
the Secretary of the Treasury under section 511 or this section, and for
direct loans and related advances under this title in such amounts as
are now authorized by law and in such further amounts as shall be
authorized in appropriation Acts. Amounts so authorized for such
loans and advances shall remain available until expended."
(^) Section 511 of such Act is amended—
(1) by striking out the first sentence and inserting in lieu thereof "The Secretary may issue notes and other obligations for purchase by the Secretary of the Treasury for the purpose of making
direct loans under this title.";
(2) by striking out the second sentence and inserting in lieu
thereof "The total principal amount of such notes and obligations
issued pursuant to this section during the period beginning July 1,
1956, and ending October 1, 1969, shall not exceed $850,000,000.";
and

79 STAT.]

PUBLIC LAW 89-117-AUGUST 10, 1965

501

(3) by striking out the fifth sentence and inserting in lieu thereof the following "Each such note or other obligation shall bear
interest at the average rate, as determined hj the Secretary of the
Treasury, payable by the Treasury upon its marketable public
obligations outstanding at the beginning of the fiscal year in which
such note or other obligation is issued, which are neither due nor
callable for redemption for 15 years from their date of issue."
FEDERAL N A T I O N A L MORTGAGE ASSOCIATION SECONDARY M A R K E T
T I O N S FOR I N S U R E D RURAL H O U S I N G LOANS

OPERA-

SEC. 1004. (a) Section 302(b) of the National Housing Act is
amended—
(1) by inserting immediately after "which are insured under
the National Housing Act" the following: "or title V of the Housing Act of 1949";
(2) by inserting after "any mortgage" in clause (2) of the
proviso the following: ", except a mortgage insured under title V
of the Housing Act of 1949,"; and
(3) by inserting before the period in the last sentence the following : "or title V of the Housing Act of 1949".
(b) Section 303(b) of such Act is amended by inserting "and other"
after "private" in the first sentence.
EXTENSION

OF RURAL

HOUSING

^v'scnii

42 u s e 1471 et
seq.

12 u s e 1718.

AUTHORIZATIONS

SEC. 1005. (a) Section 512 of the Housing Act of 1949 is amended
by striking out "September 30, 1965" and inserting in lieu thereof
"October 1, 1969".
(b) Section 513 of such Act is amended—
(1) by striking out "September 30, 1965" in clause (b) and
inserting in lieu thereof "October 1,1969";
(2) by striking out "$10,000,000" in clause (c) and inserting in
lieu thereof "$50,000,000", and by striking out "September 30,
1965" in the same clause and inserting in lieu thereof "October 1,
1969"; and
(3) by striking out "September 30, 1965" in clause (d) and inserting m lieu thereof "October 1,1969".
(c) Section 515 (b) (5) of such Act is amended by striking out "September 30,1965" and inserting in lieu thereof "October 1, 1969".
(d) Section 506(a) of such Act is amended by striking out "sections 501 to 504, inclusive, and sections 514—516", each place it occurs
and inserting in lieu thereof "this title".

^s sta^. ige^
'^^ ^^*^ ^*^^^s stat. 798.

42 us^c 1*47^6

S U M S EXCESS TO T H E N E E D S OF T H E RURAL H O U S I N G I N S U R A N C E F U N D OR
T H E RURAL H O U S I N G DIRECT LOAN A C C O U N T

SEC. 1006. Title V of the Housing Act of 1949 is amended by adding J^^ "sc i47i et
after section 518 (added by section 1003 of this Act) a new section as
follows:
" S U M S E X C E S S T O T H E NEEDS O F T H E RURAL H O U S I N G I N S U R A N C E F U N D
OR T H E RURAL H O U S I N G DIRECT LOAN A C C O U N T

"SEC. 519. Any sums in the Rural Housing Insurance Fund or the
Rural Housing Direct Loan Account which the Secretary determines
are in excess of amounts needed to meet the obligations and carry out
the purposes of such Fund or Account shall be returned to miscellaneous receipts of the Treasury."

502

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

DEFINITION OF A RURAL AREA

seq. "^^ ^"^^^ "'

SE<^- 1007. Title V of the Housing Act of 1949 is amended by adding
at the end thereof (after the new section added by section 1006 of this
Act) the following new section:
"DEFINITION OF RURAL AREA

"SEC. 520. As used in this title, the terms 'rural' and 'rural area'
mean any open country, or any place, town, village, or city which is
not part of or associated with an urban area and which (1) has a
population not in excess of 2,500 inhabitants, or (2) has a population
in excess of 2,500 but not in excess of 5,500 if it is rural in character."
TITLE XI—MISCELLANEOUS
ANNUAL REPORT ON HOUSING AND URBAN DEVELOPMENT PROGRAMS

12 use lioio.

SEC. 1101. Section 802(a) of the Housing Act of 1954 is amended to
read as follows:
" ( a ) The Housing and Home Finance Administrator shall, as soon
as practicable during each calendar year, make a report to the President for submission to the Congress on all operations and programs
(including but not limited to the F H A insurance, urban renewal, public housing, and rent supplement programs) under the jurisdiction of
the Housing and Home Finance Agency during the previous calendar
year. Such report shall contain recommendations for strengthening
or improving such programs, or, when necessary to implement more
effectively Congressional policies and purposes, for establishing new
or alternative programs."
URBAN P L A N N I N G GRANTS

SEC. 1102. (a) The fifth sentence of section 701(b) of the Housing
_ 73 Stat 678;
^^^t of 1954 is amended by striking out "$105,000,000" and inserting in
4ouic46u • lieu thereof "$230,000,000".
(b) Section 701(b) of such Act is amended by striking out the
period at the end and inserting in lieu thereof the following: " : Promded^ That not to exceed 5 per centum of any funds so appropriated
may be used by the Administrator for studies, research, and demonstration projects, undertaken independently or by contract, for the
development and improvement of techniques and methods for comprehensive planning and for the advancement of the purposes of this
section."
(c) (1) Section 701 of such Act is amended by adding at the end
thereof a new subsection as follows:
" ( g ) In addition to the planning grants authorized by subsection
( a ) , the Administrator is further authorized to make grants to organizations composed of public officials whom he finds to be representative of the political jurisdictions within a metropolitan area or urban
region for the purpose of assisting such organizations to undertake
studies, collect data, develop regional plans and programs, and engage
in such other activities as the Administrator finds necessary or desirable for the solution of the metropolitan or regional problems in such
areas or regions. To the maximum extent feasible, all grants under
this subsection shall be for activities relating to all the developmental
aspects of the total metropolitan area or urban region, including, but
not limited to, land use, transportation, housing, economic development, natural resources development, community facilities, and the

79 STAT.]

PUBLIC LAW 89-117-AUGUST 10, 1965

503

general improvement of living environments. A grant under this subsection shall not exceed two-thirds of the estimated cost of the work
for which the grant is made."
(2) Section 701 (b) of such Act is amended—
(A) by inserting "planning" immediately before "grant" the
first time it aj)pears in the first sentence, and
(B) by striking out "planning" in the fourth sentence.
(d) Section 701 (b) of such Act is amended by inserting after "Area
Redevelopment Act" the following: "(or under any Act supplementary thereto)".
AUTHORIZATION

FOR FEDERAL-STATE

TRAINING

PROGRAMS

SEC. 1103. (a) Section 802(d) of the Housing Act of 1964 is
amended by striking out "$10,000,000" and inserting in lieu thereof
"$30,000,000".
(b) Section 803 of such Act is amended (1) by striking out "authorized to be", and (2) by striking out "by section 802(d)" and
inserting in lieu thereof "for the purposes of this part".
A U T H O R I Z A T I O N FOR P U B L I C WORKS P L A N N I N G

HOUSING

DEMONSTRATION

TECHNICAL

^s stau ^799.

78 Stat. 796.
42 u s e 1436.

PROVISION

SEC. 1106. Section 601 of the Housing Act of 1949 is amended by
fctrikmg out the second sentence.
PUBLIC FACILITY

^o use so3.

PROGRAMS

SEC. 1105. Section 207 of the Housing Act of 1961 is amended by
striking out "$10,000,000" and inserting in lieu thereof "$15,000,000".
ADVISORY C O M M I T T E E S

Hl'i^IS2:

ADVANCES

SEC. 1104. The second sentence of section 702 (e) of the Housing Act
of 1954 is amended by striking out "$20,000,000" and inserting in lieu
thereof "$70,000,000".
.AUTHORIZATION FOR L O W - I N C O M E

H l'^^- ^^g^;

f^ f}^}: f:*f-

LOANS

SEC. 1107. (a) Section 202 (c) of the Housing Amendments of 1955 is ^9 sta^ 6«^
amended by adding at the end thereof the following new sentence:
"Notwithstanding any other provision of this title, the Administrator
may extend financial assistance, as otherwise authorized by clause (1)
of subsection (a) of this section, to any private nonprofit corporation
to finance the construction of works for the storage, treatment, purification, or distribution of water or the construction of sewage, sewage
treatment, and sewer facilities, if such works or facilities are needed to
serve a smaller municipality or rural area, and there is no existing
public body able to construct and operate such works or facilities."
(b) Section 202 (_b) (4) of such amendments is amended—
78^stat^'798'^'*'
(1) by strikmg out the parenthetical phrase in clause (A) and
inserting in lieu thereof the following: "(one hundred fifty thousand or more in the case of a community situated in an area designated as a redevelopment area under the Area Redevelopment
Act or any Act supplementary thereto)"; and
42 us^c 25() 1
(2) by inserting after "public works or facilities" in the sec- note.
ond sentence the following: " (i) in a community in or near which
is located a research or development installation of the National
Aeronautics and Space Administration, or (ii)".

504

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

FHA CONFORMING AMENDMENTS

12 us^c f7°o^3
12 use mec

75 Stat. 157.
12 u s e 1709.

12 u s e 1710.

12 u*sc m ^

12 use 1715.

^^^' ^^^^- (^) Section 2(f) of the National Housing Act is amended
by striking out all that follows the first sentence.
^^^ Section 8 of such Act is amended—
(1) by striking out "Title I Housing Insurance F u n d " in subsection (g) and inserting in lieu thereof "General Insurance
Fund";and
(2) by striking out subsections (h) and (i).
(c) Section 203 (k) of such Act is amended—
(1) by striking out "a separate section 203 Home Improvement
Account to be maintained as hereinafter provided under the Mutual Mortgage Insurance F u n d " in clause (3) of the first sentence
and inserting in lieu thereof "the General Insurance F u n d " ;
(2) by striking out "the section 203 Home Improvement Account or in debentures executed in the name of such Account" in
clause (4) of the first sentence and inserting in lieu thereof "the
General Insurance Fund or in debentures executed in the name of
such F u n d " ;
(3) by striking out all of the third sentence which follows
"refer to this section 203 ( k ) " and inserting in lieu thereof a
period; and
(4) by striking out the fourth, fifth, and sixth sentences.
(d) Section 204 of such Act is amended—
(1) by striking out "or section 210" in the first sentence of subsection ( a ) ;
(2) by striking out all of the second sentence of subsection (c)
after "the mortgagee" and inserting in lieu thereof "from the
Mutual Mortgage Insurance Fund.";
(3) by striking out all of the first sentence of subsection (d)
after "shall be negotiable" the first place it appears and inserting
in lieu thereof a period;
(4) by striking out "the F u n d " each place it appears in subsection (d) and inserting in lieu thereof "the Mutual Mortgage Insurance F u n d " ;
(5) by striking out "or the Housing Fund, as the case may be,"
in the fifth sentence of subsection (d) ^
(6) by striking out "or the Housing F u n d " in the sixth sentence of subsection ( d ) ; and
(7) by striking out the matter in subsection (f) (1) (i) which
follows "section 203" and precedes the colon.
(^) Section 207 of such Act is amended—
(1) by striking out "and section 210" in the first sentence of
subsection ( d ) ;
(2) by striking out "of the Housing Insurance Fund issued by
the Commissioner under this title" in the first sentence of subsection (d) and inserting in lieu thereof the following: "issued by the
Commissioner under any title and section of this Act, except debentures of the Mutual Mortgage Insurance Fund, or of the Cooperative Management Housing Insurance F u n d " ;
^3) by striking out subsections (f), ( m ) , and ( p ) ; and
(4) by striking out "the Housing Insurance F u n d " and "the
Housing F u n d " each place they appear in subsections ( b ) , ( h ) ,
(i), (j), ( k ) , and (1) and inserting in lieu thereof "the General
Insurance Fund".
^f ^ Section 209 of such Act is amended by striking out "or account
or accounts," in the second sentence.

79

STAT.]

PUBLIC LAW 89-117-AUGUST10, 1965

(g) Section 213 of such Act is amended—
(1) by striking out "the Housing F u n d " in subsection (a) (3)
and inserting in heu thereof "the Cooperative Management Housing Insurance F u n d " ; and
(2) by striking out "(1), (m), ( n ) , and ( p ) " in subsection (e)
and inserting in lieu thereof " (1), and ( n ) " .
(h) Section 220 of such Act is amended—
^
(1) by striking out "the section 220 Housing Insurance F u n d "
each place it appears in subsections (d) (2) and (f) and inserting
in lieu thereof "the General Insurance F u n d " ;
(2) by inserting "and" immediately before " ( B ) " in the second
full sentence in subsection (f) (3), and by striking out", and ( C ) "
and all that follows in such sentence and inserting in lieu
thereof a period;
(3) by striking out subsections (g) and (h) ( 4 ) ; and
(4) by striking out "the section 220 Home Improvement Account" each place it appears in subsections (h) (5) and (h) (7)
and inserting in lieu thereof "the General Insurance Fund".
(i) Section 221 of such Act is amended—
(1) by striking out "the section 221 Housing Insurance F u n d "
each place it appears in subsections ( d ) ( 4 ) , ( f ) , ( g ) ( 1 ) , and (g)
(3) and inserting in lieu thereof "the General Insurance Fund ;
(2) by striking out all of subsection (g) (2) after "mortgages
insured under this section" and inserting in lieu thereof " ; or";
(3) by inserting "and" immediately before " ( B ) " in the first
full sentence in subsection ( g ) ( 3 ) , and by striking out ", and
( C ) " and all that follows in such sentence and inserting in lieu
thereof a period; and
(4) by striking out subsection ( h ) .
(j) Section 222 of such Act is amended—
(1) by striking out "Servicemen's Mortgage Insurance F u n d "
in subsection (e) and inserting in lieu thereof "General Insurance
Fund";and
(2) by striking out subsection (f),
(k) Section 229 of such Act is amended by striking out "and Accounts" in the first sentence.
(1) Section 231 of such Act is amended—
(1) by striking out "the section 207 Housing Insurance F u n d "
in subsection (c) (4) and inserting in lieu thereof "the General Insurance F u n d " ; a n d
(2) by striking out " ( f ) , (g), ( h ) , , ( i ) , (j), ( k ) , (1), (m), ( n ) ,
and ( p ) " in subsection (e) and inserting m lieu thereof " ( g ) , ( h ) ,
(i),(j),(k),(l),and(n)".
(m) Section 232 of such Act is amended—
(1) by striking out "the section 207 Housing Insurance F u n d "
in subsection ( d ) ( 1 ) and inserting in lieu thereof "the General
Insurance F u n d " ; and
(2) by striking out " ( f ) , (g), ( h ) , (1), (j),_ ( k ) , (1), ( m ) ,
( n ) , and ( p ) " in subsection (f) and inserting in lieu thereof " ( g ) ,
(h),(i),(]),(k),(l),and(n)".
(n) SeOtion 233 of such Act is amended—
(1) by striking out "the Experimental Housing Insurance
Fund" in clause (1) of the third sentence of subsection (f) and
inserting in lieu thereof "the General Insurance F u n d " ;
(2) by inserting "and" immediately before " ( 2 ) " in the third
sentence of subsection (f), and by Striking out ", and ( 3 ) " and all
that follows and inserting in lieu thereof a period; and
(3) by striking out subsection ( g ) .
49-850 0-66—35

505
J^ ^^^ ^4.^^

^IVsc

nhk.

12 use 17 ii 5/.

12 use 171 sm.

H ^^^ ^f'^^^

H ^^^^ f^^^'j^^

12 use iVisx.

506
75 Stat. 160.
12 u s e 1715y

PUBLIC LAW 89-117-AUGUST 10, 1965

[79 STAT.

(o) Section 234 of such Act is amended—
(1) by striking out "the Apartment Unit Insurance F u n d " in
subseotions (d) (2) and (g) and inserting in lieu thereof "the General Insurance F u n d " ;
(2) by striking out subsection (h) and inserting in lieu thereof
the following:
" ( h ) The provisions of subsections ( d ) , (e), (g), ( h ) , (i), (j), ( k ) ,
12 u^sc m 3
(1)' ^^^ (^) o^ section 207 shall be applicable to mortgages insured
under subsection (d) of this section."; and
(3) by striking out subsection (i) and redesignating subsection
(j) as subsection ( i ) .
12 u*^c f7*39
(P^ Section 604 of such Act is amended by striking out "the W a r
Housing Insurance F u n d " each place it appears in subsections (c),
( d ) , and (f) (1) (i) and inserting in lieu thereof "the General Insurance Fund".
12 u*sc m i
(^) Section 608 of such Act is amended—
(1) by striking out "the W a r Housing Insurance F u n d " each
place it appears in subseotions (b) (1) and (d) and inserting in
lieu thereof "the General Insurance F u n d " ; and
(2) by striking out subsection (f) and inserting in lieu thereof
the following:
"(f) The provisions of section 207 (k) of this Act shall be applicable
to mortgages insured under this section, except that, as applied to such
mortgages, the reference therein to subsection (g) shall be construed to
refer to subsection (c) of this section,"
12 u*sc m 4
(''^) "^^^^fi^'®^'sentence of section 609(f) of such Act is amended by
striking out clause (1) and redesignating clauses (2), (3), and (4) as
clauses (1), (2), and (3), respectively.
62 Stat. 1278.
(s) Section 707 of such Act is amended by striking out "the Housing
12 u s e 1747f,
Investment Insurance F u n d " and inserting in lieu thereof "the General Insurance Fund".
12 use i747g.
^^^ Section 708 of such Act is amended by striking out "the Housing
Investment Insurance F u n d " each place it appears in subsections (c),
(e), ( g ) , and (h) and inserting in lieu thereof "the General Insurance
Fund".
52us^cm8b.
(") Section 803 of such Act is amended—
(1) by striking out "the Armed Services Housing Mortgage
Insurance F u n d " each place it appears in subsections ( b ) ( 1 ) ,
(b) (2), (e), (f), and (g) and inserting in lieu thereof "the General Insurance F u n d " ; and
(2) by striking out subsection (h) and inserting in lieu thereof
the following:
" ( h ) The provisions of section 207(k) and section 207(1) of this
Act shall be applicable to mortgages insured under this title and to
property acquired by the Commissioner hereunder, except that, as
applied to such m'ortgages and property, the reference in section 207
(k) to subsection (g) shall be construed to refer to subsection (d) of
this section."
12 use msh-i
^^} Section 809 of such Act is amended by striking out "the Armed
Services Housing Mortgage Insurance F u n d " each place it appears in
subsections (b), (e), and (g) and inserting in lieu thereof "the General Insurance Fund".
12 u*sc m8h-2
( ^ ) Section 810 of such Act is amended—
(1) by striking out "the Armed Services Housing Mortgage
Insurance F u n d " in subsection (e) and inserting in lieu thereof
"the General Insurance F u n d " ;
(2) by striking out "(1), ( m ) , ( n ) , and ( p ) " in subsection (j)
n.nd inserting in lieu thereof "(1), and ( n ) " ; and

79

STAT.]

PUBLIC LAW 89-117-AUGUST10, 1965

(3) by striking out the proviso in subsection (j) and inserting
in lieu thereof the following: " : Provided^ That wherever the
words 'Fund' or 'Mutual Mortgage Insurance Fund' appear in
section 204, such reference shall refer to the General Insurance
Fund with respect to mortgages insured under this section",
(x) Section 903 of such Act is amended by striking out "the National Defense Housing Insurance F u n d " each place it appears in subsection (a) and inserting in lieu thereof "the General Insurance Fund".
(y) Section 904 of such Act is amended—
(1) by striking out "the National Defense Housing Insurance
F u n d " each place it appears in subsections (c) and (d) and inserting in lieu thereof "the General Insurance F u n d " ; and
(2) by striking out all of subsection (e) which follows "of this
Act" and inserting in lieu thereof a period.
(z) Section 908 of such Act is amended—
_
(1) by^ striking out "the National Defense Housing Insurance
F u n d " m subsection (b)(1) and inserting in lieu thereof "the
General Insurance F u n d " ;
(2) by striking out all of subsection (d) which follows "of this
Act" and inserting in lieu thereof a period; and
(3) by striking out subsection (f) and inserting in lieu thereof
the following:
"(f) The provisions of section 207(k) and section 207(1) of this Act
shall be applicable to mortgages insured under this section and to
property acquired by the Commissioner hereunder, except that, as
applied to such mortgages and property, the reference therein to
subsection (g) shall be construed to refer to subsection (c) of this
Section
(aa) Sections 219, 602, 605, 710, 802, 804, 902, and 905 of such Act
are repealed.
(bb) Section 1 of such Act is amended by striking out "titles I I ,
I I I , VI, V I I , V I I I , and I X " , each place it appeal's, and inserting in
lieu thereof '^titles I I , I I I , V, V I , V I I , V I I I , IX^ and X " .

507

^2 stat_. u.
^^ ^*|^- ^^^^^^
^^ ^'^^

^I^Q^.

12 use 1750g.

\\12 ^'^^
/,^',u s e 1713.

Repeals.
^^ ^^^ ^''°2-

REPEAL OF SPECIAL PROVISION I N URBAN MASS T R A N S P O R T A ' n O N ACT

SEC. 1109. Section 9 of the Urban Mass Transportation Act of 1964
is amended by striking out subsection (c) and redesignating subsections ( d ) , (e), and (f) as subsections (c), ( d ) , and (e), respectively.
SAVINGS AND LOAN

78 sta^. aoe.
' '

ASSOCIATIONS

SEC. 1110. (a) Section 5 (c) of the Home Owners' Loan Act of 1933
is amended by adding at the end of the first paragraph a new sentence
as follows: "Structures or parts thereof designed or used as fraternity
or sorority houses which include sleeping accommodations for students of a college or university, or designed or used principally for the
provision of living accommodations for persons who are students,
employees, or members of the staff of a college, university, or hospital,
shall be considered, subject to such regulations as the Board may
prescribe, 'other dwelling units' for the purposes of this subsection."
(b) The ninth paragraph of section 5 (c) of such Act is amended by
striking out "fifteen years" and inserting in lieu thereof "ten years''.
(c) Section 5(c) of such Act is further amended by adding at the
end thereof (after the new paragraph added by section 201(b) (3) of
this Act) the following new paragraph:
"N,o building and loan association incorporated under the laws of
the District of Columbia or organized in such District or doing business in such District shall establish any branch or move its principal

js sta^ m^

78 Stat. 80 5.

508

12 u*sc ^2^?'

PUBLIC LAW 89-117-AUGUST10, 1965

[79 STAT.

office or any branch without the prior written approval of the Federal
Home Loan Bank Board, and no other building and loan association
shall establish any branch in such District or move its principal office
or any branch in such District without such approval. As used in the
sentence next preceding, 'branch' means any office, place of business,
or facility, other than the principal office as defined by the Board, of
a building and loan association at which accounts are opened or payments thereon are received or withdrawals therefrom are paid, or any
other office, place of business, or facility of a building and loan association defined by the Board as a branch within the meaning of such
sentence, and as used in such sentence and in this sentence 'building
and loan association' means any incorporated or unincorporated building, building or loan, building and loan, savings and loan, or homestead
association or cooperative bank."
^^) Section 404 of the National Housing Act is amended by adding
at the end thereof the following new subsection:
" ( h ) (1) Each insured institution shall make such deposits in the
Corporation as may from time to time be required by call of the
Federal Home Loan Bank Board. Any such call shall be calculated
by applying a specified percentage, which shall be the same for all
insured institutions, to the total amount of all withdrawable pr repurchasable shares, investment certificates, and deposits in each
insured institution. No such call shall be made unless such Board
determines that the total amount of such call, plus the outstanding
deposits previously made pursuant to such calls, does not exceed 1 per
centum of the total amount of all withdrawable or repurchasaole
shares, investment certificates, and deposits in all insured institutions.
For the purposes of this subsection, the total amounts hereinabove
referred to shall be determined or estimated by such Board or in such
manner as it may prescribe.
"(2) The Corporation, in accordance with such regulations as it
may prescribe, shall credit as of the close of each calendar year, to
each deposit outstanding at such close^ a return on the outstanding balance, as determined by the Corporation, of such deposit during such
calendar year, at a rate equal to the average annual rate of return,
as determined by the Corporation, to the Corporation during the
year ending at the close of November 30 of such calendar year, on the
investments held by the Corporation in obligations of, or guaranteed
as to principal and interest by, the United States.
"(3) The Corporation in its discretion may at any time repay all
such deposits, or repay pro rata a portion of each of such deposits,
in such manner and under such procedure as the Corporation may prescribe by regulation or otherwise. Any procedure for such pro rata
repayment may provide for total repayment of any deposit, if total
repayment of any and all deposits of equal or smaller amount is likewise provided for.
"(4) The provisions of subsection (f) of this section and of the
last sentence of subsection (e) of this section shall be applicable to
deposits under this subsection, and for the purposes of this subsection
Ihe references in such subsection (f) and such last sentence to the prepayments and the pro rata shares therein mentioned shall be deemed
instead to be references respectively to the deposits under this subsec1 ion and the pro rata shares of the holders thereof, and the references
in such subsection (f) to that subsection (except the last such reference) and to subsection (d) of this section shall be deemed instead
to be references to this subsection."

79

STAT.]

PUBLIC LAW 89-118-AUGUST11, 1965

509

FEDERAL RESERVE ACT

SEC. 1111. Section 24 of the Federal Eeserve Act is amended by
striking out "eighteen months", wherever it appears in the third paragraph, and inserting in lieu thereof "twenty-four months".

Jjus^ca^?^^'

R E P A Y M E N T OP C E R T A I N P L A N N I N G GRANTS

SEC. 1112. Notwithstanding any other provision of law, no advance
made under section 501 of Public Law 458, Seventy-eighth Congress;
Public Law 352, Eighty-first Congress; or section 702, Housing Act of
1954, Public Law 560, Eighty-third Congress, for the planning of any
public works project shall be required to be repaid if construction of
such project has been heretofore or is hereafter initiated as a result
of a grant-in-aid made from an allocation made by the President under
the Public Works Acceleration Act.

58 Stat. 791.
50 u s e app.
1671.
63 Stat. 841.
40 u s e 45 1-458,
69 Stat. 641.
40 u s e 462.
76 Stat. 541.

42 u s e 2641

note.
STUDY C O N C E R N I N G R E L I E F OF H O M E O W N E R S I N P R O X I M I T Y TO AIRPORTS

SEC. 1113. The Housing and Home Finance Administrator shall
undertake a study to determine feasible methods of reducing the economic loss and hardship sujffered by homeowners as the result of the
depreciation in the value of their properties following the construction
of airports in the vicinity of their homes, including a study of feasible
methods of insulating such homes from the noise of aircraft. Find- ident^and^ccn-^^"
ings and recommendations resulting from such study shall be reported gress.
to the President for transmission to the Congress at the earliest practicable date, but in no event later than one year after the date of the
enactment of this Act.
Approved August 10, 1965.

Public Law 89-118
AN A C T

August 11, 1965

To expand, extend, and accelerate the saline water conversion program conducted
by the Secretary of the Interior, and for other purposes.

^^^' ^"^^

Be it enacted hy the Senate and House of Representatives of the
Saline water
United States of America in Congress assembled, That in order to conversion
proexpand, extend, and accelerate the saline water conversion program gra'm.^
conducted by the Secretary of the Interior, the Act of July 3, 1952
(66 Stat. 328), as amended (42 U.S.C. 1951 et seq.), is hereby further ^s stat. 628
amended as follows:
(1) I n section 2(b) add the words ", module, component," after
the word "laboratory".
(2) In section 8 substitute "$90,000,000, plus such additional sums
as the Congress may hereafter authorize and appropriate but not to
exceed $185,000,000," in lieu of "$75,000,000 in all,^' and substitute
"1972" for "1967".
Approved August 11, 1965.