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direct loans under this title.1 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. The notes and obligations issued by the Secretary shall be secured by the obligations of borrowers and the Secretary's commitments to make contributions under this title and shall be repaid from the payment of principal and interest on the obligations of the borrowers and from funds appropriated hereunder. The notes and other obligations issued by the Secretary shall be in such forms and denominations, shall have such maturities, and shall be subject to such terms and conditions as may be prescribed by the Secretary with the approval of the Secretary of the Treasury. Each such note or other obligation 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 or other obligation is issued, which are neither due nor callable for redemption for 15 years from their date of issue. The Secretary of the Treasury is authorized and directed to purchase any notes and other obligations of the Secretary issued hereunder and for such purpose 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 securities may be issued under such Act are extended to include any purchases of such obligations. The Secretary of the Treasury may at any time sell any of the notes or obligations acquired by him under this section. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes or obligations shall be treated as public debt transactions of the United States.

CONTRIBUTIONS

SEC. 512. In connection with loans made pursuant to section 503, the Secretary is authorized to make commitments for contributions aggregating not to exceed $10,000,000 during the period beginning July 1, 1956, and ending October 1, 1969.*

SEC. 513. There is hereby authorized to be appropriated to the Secretary (a) such sums as may be necessary to meet payments on notes or other obligations issued by the Secretary under section 511 equal to (i) the aggregate of the contributions made by the Secretary in the form of credits on principal due on loans made pursuant to section 503, and (ii) the interest due on a similar sum represented by notes or other obligations issued by the Secretary; (b) not to exceed $80,000,000 for loans and grants pursuant to section 504 during the period be

1 Sec. 1003 (b) (1), Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 500, inserted the word "direct" and deleted the remainder of this sentence which read "(other than loans under section 504 (b) or 515(a).". 2 Sec. 1003 (2), Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 500, substituted "October 1, 1969" for "September 30, 1965", and deleted the provision which had earmarked $50,000,000 exclusively for loans to assist in the construction and repair of dwellings and related facilities for elderly persons in rural areas. However, see the new sec. 517 that establishes a rural housing insurance fund that will be used for, among other purposes, elderly rental housing loans. See Participation Sales.

3 Immediately prior to amendment by sec. 1003 (b) (3), Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 501, this sentence reads as follows:

"Such notes or obligations shall bear interest at a rate determined by the Secretary of the Treasury, taking into consideration the current average rate on outstanding marketable obligations of the United States as of the last day of the month preceding the issuance of the notes or obligations by the Secretary.".

Sec. 1005 (a), Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 501, substituted "October 1, 1969" for "September 30. 1965".

ginning July 1, 1956, and ending June 30, 1977; (c) not to exceed $80,000,000 for financial assistance pursuant to section 516 for the period ending June 30, 1977; (d) not to exceed $250,000 per year for research and study programs pursuant to subsections (b), (c), and (d) of section 506 during the period beginning July 1, 1961, and ending June 30, 1974, and not to exceed $1,000,000 per year for such programs during the period beginning October 1, 1974, and ending June 30, 1977; (e) such further sums as may be necessary to enable the Secretary to carry out the provisions of this title; and (f) such sums as may be required by the Secretary to administer the provisions of sections 235 and 236 of the National Housing Act.

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INSURANCE OF LOANS FOR THE PROVISION OF HOUSING AND RELATED FACILITIES FOR DOMESTIC FARM LABOR

SEC. 514. (a) The Secretary is authorized to insure and make commitments to insure loans made by lenders other than the United States to the owner of any farm or any association of farmers for the purpose of providing housing and related facilities for domestic farm labor, or to any State (or political subdivision thereof), or any broadbased public or private nonprofit organization or any nonprofit organization of farmworkers incorporated within the State for the purpose of providing housing and related facilities for domestic farm labor any place within the State where a need exists. All such loans shall be made in accordance with terms and conditions substantially identical with those specified in section 502, except that

(1) no such loan shall be insured in an amount in excess of the value of the farm involved less any prior liens in the case of a loan to an individual owner of a farm, or the total estimated value of the structures and facilities with respect to which the loan is made in the case of any other loan;

(2) no such loan shall be insured if it bears interest at a rate in excess of 1 per centum per annum;

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(3) out of interest payments by the borrower the Secretary shall retain a charge in an amount not less than one-half of 1 per centum per annum of the unpaid principal balance of the loan;

(4) the insurance contracts and agreements with respect to any loan may contain provisions for servicing the loan by the Secretary or by the lender, and for the purchase by the Secretary of the loan if it is not in default, on such terms and conditions as the Secretary may prescribe; and

1 Sec. 509 of Housing and Community Development Act of 1974, Public Law 93-383 88 Stat. 633, approved August 22, 1974, amended subsections (b), (c) and (d). Prior to enactment of this Act these subsections read as follows: (b) not to exceed $50,000,000 for grants pursuant to section 504 (a) and loans pursuant to section 504 (b) during the period beginning July 1, 1956, and ending October 1, 1974; (c) not to exceed $50,000,000 for financial assistance pursuant to section 516 for the period ending October 1, 1974; (d) not to exceed $250,000 per year for research and study programs pursuant to subsections (b), (c), and (d) of section 506 during the period beginning July 1, 1961, and ending October 1, 1974.

2 Sec. 801(a), Housing and Urban Development Act of 1970, Public Law 91-609, approved December 31, 1970, 84 Stat. 1770, 1805, amended that part of section 514(a) that precedes paragraph (1) to authorize the Secretary of Agriculture to insure loans for farm labor housing made by private lenders to broad-based public or private nonprofit organizations of farmworkers incorporated within the State.

3 Sec. 801 (b), Housing and Urban Development Act of 1970, Public Law 91-609 approved December 31, 1970, 84 Stat. 1770, 1806, reduced the maximum interest rate on insurable loans from 5 per centum to 1 per centum per annum.

(5) the Secretary may take mortgages creating a lien running to the United States for the benefit of the insurance fund referred to in subsection (b) notwithstanding the fact that the note may be held by the lender or his assignee.

(b) The Secretary shall utilize the insurance fund created by section 11 of the Bankhead-Jones Farm Tenant Act (7 U.S.C. 1005a) and the provisions of section 13(a), (b), and (c) of such Act (7 U.S.C. 1005c (a), (b), and (c)) to discharge obligations under insurance contracts made pursuant to this section, and

(1) the Secretary may utilize the insurance fund to pay taxes, insurance, prior liens, and other expenses to protect the security for loans which have been insured hereunder and to acquire such security property at foreclosure sale or otherwise;

(2) the notes and security therefor acquired by the Secretary under insurance contracts made pursuant to this section shall become a part of the insurance fund. Loans insured under this section may be held in the fund and collected in accordance with their terms or may be sold and reinsured. All proceeds from such collections, including the liquidation of security and the proceeds of sales, shall become a part of the insurance fund; and

(3) of the charges retained by the Secretary out of interest payments by the borrower, amounts not less than one-half of 1 per centum per annum of the unpaid principal balance of the loan shall be deposited in and become a part of the insurance fund. The remainder of such charges shall be deposited in the Treasury of the United States and shall be available for administrative expenses of the Farmers Home Administration, to be transferred annually to and become merged with any appropriation for such

expenses.

(c) Any contract of insurance executed by the Secretary under this section shall be an obligation of the United States and incontestable except for fraud or misrepresentation of which the holder of the contract has actual knowledge.

(d) The aggregate amount of the principal obligations of the loans insured under this section shall not exceed $25,000,000 in any one fiscal year.

(e) Amounts made available pursuant to section 513 of this Act shall be available for administrative expenses incurred under this section.

(f) As used in this section

(1) the term "housing" means (A) new structures (including 1 household furnishings) suitable for dwelling use by domestic farm labor, and (B) existing structures (including1 household furnishings) which can be made suitable for dwelling use by domestic farm labor by rehabilitation, alteration, conversion, or improvement; and

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(2) the term "related facilities" means (A) new structures (including household furnishings) suitable for use as dining halls, community rooms or buildings, or infirmaries, or for other essential services facilities, (B) existing structures (including 1

1 Sec. 801(c). Housing and Urban Development Act of 1970, Public Law 91-609, approved December 31, 1970, 84 Stat. 1770, 1806, inserted "(including household furnishings)".

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household furnishings) which can be made suitable for the above uses by rehabilitation, alteration, conversion, or improvement and (C) 1 and necessary for an adequate site; and

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(3)2 the term "domestic farm labor" means persons who receive a substantial portion (as determined by the Secretary) of their income as laborers on farms situated in the United States and either (A) are citizens of the United States or (B) reside in the United States after being legally admitted for permanent residence therein.

DIRECT AND INSURED LOANS TO PROVIDE HOUSING AND RELATED FACILITIES FOR ELDERLY PERSONS AND FAMILIES IN RURAL AREAS

SEC. 515.3 (a) The Secretary is authorized to make loans to private nonprofit corporations and consumer cooperatives to provide rental or cooperative housing and related facilities for elderly persons and elderly families of low or moderate income or other persons and families of low income in rural areas, in accordance with terms and conditions substantially identical with those specified in section 502; except that

(1) no such loan shall exceed the development cost or the value of the security, whichever is less;

(2) such loans shall bear interest at rates determined by the Secretary, not to exceed the maximum rate provided in section 202 (a) (3) of the Housing Act of 1959; and

(3) such a loan may be made for a period of up to fifty years from the making of the loan.

There is authorized to be appropriated not to exceed $50,000,000, which shall constitute a revolving fund to be used by the Secretary in carrying out this subsection.

(b) The Secretary is authorized to insure and make commitments to insure loans made to any individual, corporation, association, trust, or partnership to provide rental or cooperative housing and related facilities for elderly persons and elderly families or other persons and families of moderate income in rural areas, in accordance with terms and conditions substantially identical with those specified in section 502; except that

1 Sec. 1004, Housing and Urban Development Act of 1968, Public Law 90-448, approved Aug. 1, 1968, 82 Stat. 476, 553, added clause (C).

2 Immediately prior to amendment by ec. 502, Housing Act of 1964, Public Law 88-560, approved September 2, 1964. 78 Stat. 769, 796, this paragraph read as follows:

"(3) the term 'domestic farm labor' means citizens of the United States who receive a substantial portion (as determined by the Secretary) of their income as laborers on farms situated in the United States."

3 Sec. 4(b), Senior Citizens Housing Act of 1962, Public Law 87-723, approved September 28, 1962, 76 Stat. 670, 671, added sec. 515.

Sec. 804 (a) and (b), Demonstration Cities and Metropolitan Development Act of 1966, Public Law 89-754, approved November 3, 1966, 80 Stat. 1255, 1282, amended sec. 515 to expand the purposes of direct loans to private nonprofit corporations and consumer cooperatives to include rental housing for the low-income rural nonelderly. Prior to this amendment such loans were restricted to housing for the rural elderly of low or moderate income. Sec. 805 (a) of the Demonstration Cities and Metropolitan Development Act of 1966. amended sec. 515 to make cooperative housing eligible for direct or insured rural housing loans. Prior to this amendment such loans could be made to consumer cooperatives, but only for the purpose of "rental" housing. Sec. 805(b) of the Demonstration Citles and Metropolitan Development Act of 1966, also amended sec. 515 to make insured rural housing loons available for housing for the rural nonelderly with moderate incomes, as well as for the rural elderly.

(1) no such loan shall exceed the development cost or the value of the security, whichever is less; 2

(2) such loans shall bear interest at rates determined by the Secretary, not to exceed the maximum rate provided in section. 203 (b) (5) of the National Housing Act;

(3) provide for complete amortization by periodic payments within such term as the Secretary may prescribe;

(4) for insuring such loans, the Secretary shall utilize the Agricultural Credit Insurance Fund subject to all the provisions of section 309 and the second and third sentences of section 308 of the Consolidated Farmers Home Administration Act of 1961, including the authority in section 309 (f) (1) of that Act to utilize the insurance fund to make, sell, and insure loans which could be insured under this subsection; but the aggregate of the principal amounts of such loans made by the Secretary and not disposed of shall not exceed $10,000,000 outstanding at any one time; and the Secretary may take liens running to the United States though the notes may be held by other lenders; and

(5) no loan shall be insured under this subsection after June 30, 1977.3

(c) No loan shall be made or insured under subsection (a) or (b) unless the Secretary finds that the construction involved will be undertaken in an economical manner and will not be of elaborate or extravagant design or materials.

(d) As used in this section—

(1) the term "housing" means new or existing housing suitable for dwelling use by occupants eligible under this section;

(2) the term "related facilities" includes cafeterias or dining halls, community rooms or buildings, appropriate recreation facilities, and other essential service facilities;

(3) the term "elderly persons" means persons who are 62 years of age or over; and the term "elderly families" means families the head of which (or his spouse) is 62 years of age or over; and

(4) the term "development cost" means the costs of constructing, purchasing, improving, altering, or repairing new or existing housing and related facilities and purchasing and improving the necessary land, including necessary and appropriate fees and charges, and initial operating expenses up to 2 per centum of the aforementioned costs, approved by the Secretary. Such fees and charges may include payments of qualified consulting organiza

1 Sec. 510(a) (1) of Housing and Community Development Act of 1974, Public Law 93-383, 88 Stat. 633, approved August 22, 1974, deleted "$750,000 or".

2 Sec. 510(a)(2) of Housing and Community Development Act of 1974, Public Law 93-383, 88 Stat. 633, approved August 22, 1974, substituted the word "less" for "least".

Sec. 1 of Public Law 91-78, approved September 30, 1969, 83 Stat. 125, substituted "January 1, 1970" for "October 1, 1969", and sec. 413 (a), Housing and Urban Development Act of 1969, Public Law 91-152, approved December 24, 1969, 83 Stat. 379, 398, substituted "October 1, 1973" for "January 1, 1970". The original termination date (June 30, 1964) was extended to September 30, 1964, by Public Law 88-340, approved June 30, 1964, 78 Stat. 233, and extended to September 30, 1965, by sec. 501 (d) (2). Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 769, 796, and further extended to October 1, 1969, by sec. 1005 (c). Housing and Urban Development Act of 1965. Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 501, Sec. 13(b) of Public Law 93-117, 87 Stat. 421, approved October 2, 1973, substituted "October 1, 1974" for "October 1, 1973". Sec. 509 (b) 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".