the State or, in the case of optometric care or treatment, is under the professional supervision of persons licensed to practice optometry in the State, or, in the case of dental diagnosis or treatment, is under the professional supervision of persons licensed to practice dentistry in the State, or, in the case of podiatric care or treatment, is under the professional supervision of persons licensed to practice podiatry in the State) and which is primarily for the provision of such health serv ices by a medical or dental group.

(2) The term "medical practice facility" means an adequately equipped facility in which not more than four persons licensed to practice medicine in the State where the facility is located can provide as may be appropriate, preventive, diagnostic, and treatment services and which is situated in a rural area or small town, or in a low-incom section of an urban area, in which there exists, as determined by th Secretary, a critical shortage of physicians. As used in thi paragraph

(A) the term "small town" means any town, village, or cit having a population of not more than 10,000 inhabitants accord ing to the most recent available data compiled by the Bureau o the Census; and

(B) the term "low-income section of an urban area" means section of a larger urban area in which the median family incom is substantially lower, as determined by the Secretary, than th median family income for the area as a whole.

(3) The term "medical or dental group" means a partnership o other association or group of persons licensed to practice medicine osteopathy, or surgery in the State, or of persons licensed to practic optometry in the State, or of persons licensed to practice dentistry i the State, or of persons licensed to practice podiatry in the State, o of any combination of such persons, who, as their principal profes sional activity and as a group responsibility, engage or undertake t engage in the coordinated practice of their profession primarily i one or more group practice facilities, and who (in this connection share common overhead expenses (if and to the extent such expense are paid by members of the group), medical and other records, an substantial portions of the equipment and the professional, technica and administrative staffs, and which partnership or association o group is composed of at least such professional personnel and mak available at least such health services as may be provided in regula tions prescribed under this title.

(4) The term "group practice unit or organization" means

(A) a private nonprofit agency or organization undertaking t provide, directly or through arrangements with a medical o dental group, comprehensive medical care, osteopathic care, optc metric care, dental care, or podiatric care, or any combinatio

1 Sec. 312(a) (6) of Housing and Community Developemnt Act of 1974, Publle La 93-383, 88 Stat. 633, approved August 22, 1974, redesignated paragraphs (2) through (8 as paragraphs (3) through (9) and inserted a new paragraph (2).

2Sec. 312(b) (2) of Housing and Community Development Act of 1974. Public La 93-383, 88 Stat. 633, approved August 22, 1974, inserted ", osteopathy," after "practic medicine" in part. (2) as redesignated by subsec. (a) (6) of this section; and inserte after "dentistry in the State," "or of persons licensed to practice podiatry in the State, 3 Sec. 312(b)(3) of Housing and Community Development Act of 1974, Public Lay 93-383, 88 Stat. 633, approved August 22, 1974 inserted the words "osteopathic care. after "comprehensive medical care," in par. (3) (A) (as so redesignated); and inserte the words or podiatric care," after the words "dental care," in par. (3) (A) (as s redesignated).

thereof, which may include hospitalization, to members or subscribers primarily on a group practice prepayments basis; or

1

(B) a private nonprofit agency or organization established for the purpose of improving the availability of medical, optometric, osteopathic, or dental or podiatric care in the community or having some function or functions related to the provision of such care, which will, through lease or other arrangement, make the group practice facility with respect to which assistance has been requested under this title available to a medical or dental group for use by it.

(5) The term "nonprofit organization" means a corporation, association, foundation, trust, or other organization not part of the net earnings of which inures, or may lawfully inure, to the benefit of any private shareholder or individual except, in the case of an organization the purposes of which include the provision of personal health. services to its members or subscribers or their dependents under a plan of such organization for the provision of such services to them (which plan may include the provision of other services or insurance benefits to them), through the provision of such health services (or such other services or insurance benefits) to such members or subscribers or dependents under such plan.

(6) The term "State" includes the Commonwealth of Puerto Rico, Guam, the Virgin Islands, American Samoa, and the District of Columbia.

(7) The term "mortgage" means a first mortgage on real estate in fee simple, or on the interest of either the lessor or lessee thereof (A) under a lease for not less than ninety-nine years which is renewable, or (B) under a lease having a period of not less than fifty years to run from the date the mortgage was executed. The term "first mortgage" means such classes of first liens as are commonly given to secure advances (including but not 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 any mortgage may be in the form of one or more trust mortgages or mortgage indentures or deeds of trust, securing notes, bonds, or other credit instruments, and, by the same instrument or by a separate instrument, may create a security interest in initial equipment, whether or not attached to the realty.

(8) The term "mortgagee" means the original lender under a mortgage, and his or its successors and assigns, and includes the holders of credit instruments issued under a trust mortgage or deed of trust pursuant to which such holders act by and through a trustee named therein.

(9) The term "mortgagor" means the original borrower under a mortgage and his or its successors and assigns.

1 See. 312(b) (4) of Housing and Community Development Act of 1974. Public Law 93-383, 88 Stat. 633, approved August 22, 1974, inserted the word "osteopathic," after the word "optometric," and the words "or podiatric" after the word "dental" in para. (3) (B) as so redesignated.

45-704 0 - 79 - 25

§3

FHA AND VA INTEREST RATES AND COMMISSION TO

STUDY

Excerpts from Public Law 90-301

[82 Stat. 113, 12 U.S.C. 1709-1]

AN ACT to amend chapter 37 of title 38 to the United States Code with respect to the veterans' home loan program, to amend the National Housing Act with respect to interest rates on insured mortgages, and for other purposes.

SEC. 3. (a) Notwithstanding the provisions of sections 203 (b) (5), 207(c) (3), 213 (d), 220 (d) (4), 220 (h) (2) (iii), 221 (d) (5), 231 (c) (6), 232(d) (3) (B), 234(f), 235 (j) (2) (C), 236 (j) (4) (B), 240 (c) (4), 241 (b) (3), 242 (d) (3) (B),1 and 1101 (c) (4) of the National Housing Act regarding the maximum interest rates which the Secretary of Housing and Urban Development may establish for certain mortgage insurance programs authorized by that Act, the Secretary is authorized, until October 1, 1979,2 to set the maximum interest rates for such programs at not to exceed such per centum per annum on the amount of the principal obligation outstanding at any time as he finds necessary to meet the mortgage market, and during that time the interest rates so set shall be deemed to be for all purposes the interest rates in effect under the provisions of said section 203(b) (5) and the other sections referred to above: Provided, That in determining the rate to be applicable for the said section 203 (b) (5) program, the Secretary shall consult with the Administrator of Veterans' Affairs regarding the rate which the Administrator considers necessary to meet the mortgage market for guaranteed or insured home loans to veterans under chapter 37 of title 38, United States Code. Notwithstanding the provisions of section 2(b) of the National Housing Act regarding the maximum interest rate which may be established for obligations with respect to which insurance is granted to financial institutions under section 2 of such Act, the Secretary of Housing and Urban Development is also authorized, until the date specified in the preceding sentence, to set the maximum interest rate for obligations with respect to which insurance

1 Sec. 315. Housing and Urban Development Act of 1968, Public Law 90-448, approved August 1, 1968, 82 Stat. 476, 512, added "235(j) (2) (C), 236 (j) (4) (B), 240(c) (4), 241(b) (3), 242 (d) (3) (B)".

Sec. 3 of Public Law 91-78, approved September 30, 1969, 83 Stat. 125, substituted "January 1, 1970", for "October 1, 1969"; sec. 401, Housing and Urban Development Act of 1969, Public Law 91-152, approved December 24, 1969, 83 Stat. 379, 394, substituted October 1, 1970", for "January 1, 1970: sec. 601, Emergency Home Finance Act of 1970. Public Law 91-351, approved July 24, 1970, 84 Stat. 450, 461, substituted "Janury 1, 1972" for "October 1, 1970"; sec. 1 of Public Law 92-213, approved December 22, 1971, 85 Stat. 775, substituted "June 30, 1972" for "January 1, 1972" and sec. 1 of Public Law 92-335, approved July 1, 1972, 86 Stat. 405, substituted "June 30, 1973" for "June 30, 1972". Sec. 2 of Public Law 93-85, approved August 10, 1973, 87 Stat. 220, substituted "October 1, 1973" for "June 30, 1973"; sec. 3 of Public Law 93-117, approved October 2, 1973, 87 Stat. 421, substituted "October 1, 1974" for "October 1, 1973". Sec. 317 of Housing and Community Development Act of 1974, Public Law 93-383. 88 Stat. 633, approved August 22, 1974, substituted "June 30, 1977" for "October 1, 1974". Amended by Housing and Community Development Act of 1977, Public Law 95-128, approved Oct. 12 1977. (Public Law 95-60, approved June 30, 1977, had previously extended the date from June 30, 1977 to August 1, 1977; Public Law 95-80, approved July 31, 1977, further extended the date from August 1, 1977 to October 1, 1977). This was extended further by Housing and Community Development Amendments of 1978, Sec. 302, Public Law 95-557, 92 Stat. 2080, approved October 31, 1978.

is granted under such section, at such level as he finds necessary to meet the loan market.1

SEC. 4. (a) The Congress finds that the national goal of "a decent home and a suitable living environment for every American family” cannot be reached unless there is an adequate supply of mortgage credit at rates of interest the American family can afford; that in recent years this credit has been available only at unreasonably high rates of interest, up as much as 50 per centum in the last three years; that for a moderate income family the cost of financing a home now is greater than the combined cost of land, labor, and construction material; that under existing constitutional arrangements our monetary and fiscal policies seem to be inadequate to cope with these high finance charges; that many financial institutions tend to withdraw from the mortgage market during tight money periods; that the purpose of Government ceilings seems to be thwarted by insidious discount points; that there exists in the public and private sections of the economy the resources and capabilities necessary to eliminate the problems; and that new and more effective ways should be explored to exploit the power of Government and the economic resources of our Nation to resolve this difficult problem.

(b) There is hereby established a commission to study mortgage interest rates and to make recommendations to assure the availability of an adequate supply of mortgage credit at a reasonable cost to the consumer (hereinafter referred to as the "Commission") which shall be comprised of fifteen members as follows:

(1) The chairman and ranking minority member of the Banking and Currency Committee of the United States Senate.

(2) The chairman and ranking minority member of the Banking and Currency Committee of the House of Representatives.

(3) The chairman and the ranking minority member of the Committee on Veterans' Affairs of the House of Representatives.

(4) Two members appointed by the President of the Senate, one from the majority party and one from the minority party other than those referred to in paragraph (1).

(5) Two members appointed by the Speaker of the House of Representatives, one from the majority party and one from the minority party other than those referred to in paragraphs (2) and (3).

(6) Five members appointed by the President, at least three of whom will be public members representing the consumer.

(c) A vacancy in the Commission shall not affect its powers, but shall be filled in the same manner as the original appointment.

(d) The Chairman of the Commission shall be designated by the President.

(e) Eight members of the Commission shall constitute a quorum, but a lesser number may conduct hearings.

(f) The Commission shall undertake a comprehensive study and make recommendations on

(1) The necessity for statutory or administrative controls over interest rates in connection with Government-assisted mortgages;

1 This sentence added by sec. 203 of the Flood Disaster Protection Act of 1973. Public Law 93-234, 87 Stat. 975. approved December 3. 1973. Sec. 309 (e) of the Housing and Community Development Act of 1974, Public Law 93-383, approved August 22, 1974, 88 Stat. 633, deleted after section, "and which represent loans and advances of credit made for the purpose of financing purchases of mobile homes,".