mortgages would be of material benefit to seasonal homebuyers and the homebuilding industry. The Commission and Department urge that the National Housing Act be amended to include such a provision as was done in S. 2700. Workable program certification The Commission and Department held fact-finding hearings on housing and community development problems in California last October. One of the findings of these hearings was that many cities and counties are greatly upset by the recertification procedures for workable programs. We recommend that this requirement be reduced from an annual recertification to a recertification every two years. We also recommend that the recertification information forms be greatly simplified. Such a change in procedure would materially improve the efforts of local government to carry out planning, urban renewal and other federally-assisted programs. Hardship resulting from suspending FNMA funds where FHA projects in processing stage A problem of serious proportions, which is more administrative in nature than legislative, but which nonetheless should be of concern to the Congress, is the hardship caused by the abrupt cutting off of FNMA Special Assistance funds in the case of FHA projects which are in the processing stage. A case in point is a Section 231 housing project for the elderly sponsored by a nonprofit organization-a church. The sponsor has devoted several years in bringing the project to the point of issuance of a FHA mortgage insurance commitment. Having obtained a determination of feasibility from the FHA, it has then proceeded to (1) purchase land for the site, making a down payment and executing a mortgage to secure the balance of the purchase price, (2) spend time and money in preparing and processing an application to the FHA for mortgage insurance (3) hire an architect to prepare plans and specifications. A commitment is issued, and the sponsor seeks financing. The statutory interest rate of 52% requires a discount of 10%, which is not funded in the mortgage loan but must be raised in cash. The sponsor does not have the money to pay such a discount so turns to FNMA only to find that no funds are available, even though the authorization has not been exhausted. The result is disaster to the sponsor. It is recommended that FNMA funds be made available for such hardship cases even though there is a general freeze. It is also recommended that funds be allocated and firmly committed at the time FHA determines the project to be feasible and invites the sponsor to file an application for mortgage insurance. (Whereupon, at 1:38 p.m., the subcommittee recessed, to be reconvened at 10 a.m., Thursday, March 21, 1968.) HOUSING AND URBAN DEVELOPMENT LEGISLATION OF 1968 HEARINGS BEFORE THE SUBCOMMITTEE ON HOUSING OF THE COMMITTEE ON BANKING AND CURRENCY UNITED STATES SENATE NINETIETH CONGRESS SECOND SESSION ON PROPOSED HOUSING LEGISLATION FOR 1968 PART 2 MARCH 21 AND 22, 1968 INCLUDES TESTIMONY OF WITNESSES, PENDING BILLS, 41-019 Printed for the use of the Committee on Banking and Currency U.S. GOVERNMENT PRINTING OFFICE WASHINGTON: 1968 COMMITTEE ON BANKING AND CURRENCY JOHN SPARKMAN, Alabama, Chairman WILLIAM PROXMIRE, Wisconsin WALLACE F. BENNETT, Utah HARRISON A. WILLIAMS, JR., New Jersey JOHN G. TOWER, Texas HARRISON A. WILLIAMS, JR., New Jersey WALLACE F. BENNETT, Utah WILLIAM PROXMIRE, Wisconsin EDMUND S. MUSKIE, Maine EDWARD V. LONG, Missouri JOHN G. TOWER, Texas BOURKE B. HICKENLOOPER, Iowa THOMAS J. MCINTYRE, New Hampshire WALTER F. MONDALE, Minnesota CARL A. S. COAN, Staff Director DUDLEY L. O'NEAL, Jr., Chief Counsel (IT) |