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(4) The institutional changes, through legislation, administration, or tax incentives, that can be made


the Nation's financial institutions to encourage them to make available a

larger share of capital funds for home financing purposes.

(g) Said report of the Commission shall be made by April 1, 1969, Study commisso as to enable the President, Congress, and the Secretary of Housing sion report. and Urban Development to take necessary action before October 1, 1969, when the authorization for the increase in interest rates above present statutory ceilings will expire.

(h) The Commission is authorized to secure directly from any department, bureau, agency, board, commission, office, independent estabfishment, or instrumentality of the executive branch of the Federal Government information, suggestions, estimates, and statistics for the purposes of its work; and each department, bureau, agency, board, commission, office, independent establishment, or instrumentality is authorized to furnish such information, suggestions, estimates, and statistics to the extent permitted by law and within available funds.

(i) The members of the Commission specified in paragraphs (1) through (4) of subsection (a) shall serve without additional compensation. The members of the Commission appointed under paragraph (5) of subsection (a) shall receive $75 per diem when engaged in the performance of the duties of the Commission. All members of the Traveling Commission shall receive reimbursement for necessary traveling and expenses. subsistence expenses incurred by them in the performance of the duties of the Commission

(j) The Secretary of Housing and Urban Development shall desig- Executive Dinate the Executive Director of the (Commission. Financial and admin- rector of comistrative services (including those relating to budgeting, accounting, mission. financial reporting, personnel, and procurement) shall be provided the ('ommission by the Department of Housing and Urban Development, for which payment shall be made in advance, or by reimbursement, from funds of the Commission in such amounts as may be agreed upon by the Chairman of the ('ommission and said Department.

(k) The Commission shall have power to appoint and fix the compensation of such additional personnel as may be necessary to carry out its duties, without regard to the provisions of the civil service laws and the Classification Act of 1919.,

63 Stat. 954. (1) The Commission may also procure, without regard to the civil 5 USC 5101 service laws and the Classification Act of 1949, temporary and inter- et seg. inittent services to the same extent as is authorized for the executive L:2 Stat 115 departments by section 15 of the Administrative Expenses Act of 82 STAT. 116 1946 (5 U.S.C. 55a) but at rutes not to exceed $50 per diem for individuals.

(m) To the extent of available appropriations, the Commission may obtain, by purchase, rental, donation, or otherwise, such additional property, facilities, and services as may be needed to carry out its duties.

(n) There are authorized to be appropriated, out of any money in Appropriation. the Treasury not otherwise appropriated, such sums as may be necessary to carry out this section.

(o) The Commission shall cease to exist sixty days after the sub- Commission termission of its final report.

mination, Sec. 5. (a) Chapter 37 of title 38, United States Code, is amended 37 USC 1801. by adding at the end thereof the following new section : "g 1827. Expenditures to correct or compensate for structural

defects in mortgaged homes “(a) The Administrator is authorized, with respect to any property improved by a one- to four-family dwelling inspected during construction by the Veterans' Administration or the Federal Housing

82 STAT. 116

Administration which he finds to have structural defects seriously affecting the livability of the property, to make expenditures for (1) correcting such defects, (2) paying the claims of the owner of the property arising from such 'defects, or (3) acquiring title to the property; except that such authority of the Administrator shall exist only (A) if the owner requests assistance under this section not later than four years (or such shorter time as the Administrator may prescribe) after the mortgage loan was made, guaranteed, or insured, and (B) if the property is encumbered by a mortgage which is made, guaranteed, or insured under this chapter after the date of enactment

of this section. Expenditures.

"(b) The Administrator shall by regulation prescribe the terms and conditions under which expenditures and payments may be made under the provisions of this section, and his decisions regarding such expenditures or 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.

"(c) The Administrator is authorized to make expenditures for the purposes

of this section from the funds established pursuant to sections 1823 and 1824 of this title, as applicable.”

(b) The analysis of chapter 37 of title 38, United States Code, is
amended by adding at the end thereof the following:
"1827. Expenditures to correct or compensate for structural defets in mort-

gaged homes.”
Approved May 7, 1968.


HOUSE REPORT No. 1171 (Comm. on Veterans' Affairs).
SENATE REPORT No. 1090 (Comm. on Banking & Currency).

Mar. 26, Apr. 30: Considered and passed House.
Apr. 19, 30: Considered and passed Senate.

90th Congress, s. 3497
August 1, 1968

An Act

82 STAT. 476

To assist in the provision of housing for low and moderate income families, and

to extend and amend laws relating to housing and urban development.

Be it enacted by the Senate and House of Representatives of the l'nited States of America in Congress assembled. That this Act may Housing and be cited as the "Housing and Urban Development Act of 1968". Urban Develop

ment Act of



Sec. 2. The Congress affirms the national goal, as set forth in section 2 of the Housing Act of 1949, of “a decent home and a suitable 63 Stat. 413. living environment for every American family".

42 USC 1441. The ('ongress finds that this goal has not been fully realized for many of the Nation's lower income families; that this is a matter of grave national concern; and that there exist in the public and private sectors of the economy the resources and capabilities necessary to the full realization of this goal.

The Congress declares that in the administration of those housing programs authorized by this Act which are designed to assist families with incomes so low that they could not otherwise decently house thenselves, and of other Government programs designed to assist in the provision of housing for such families, the highest priority and emphasis should be given to meeting the housing needs of those families for which the national goal has not become a reality; and in the carrying out of such programs there should be the fullest practicable utilization of the resources and capabilities of private enterprise and of individual self-help techniques.



Sec. 3. In the administration of the programs authorized by sections 235 and 236 of the National Housing Act, the below-market Post, pp.477, 498 interest rate program under section 221 (d) (3) of such Act, the low- 75 Stat. 150. rent public housing program under the United States Housing Act 12 USC 1715). of 1937, and the rent supplement program under section 101 of the 50 Stat, 888, Housing and Urban Development Act of 1965, the Secretary of Hous- 42 USC 1430. ing and Urban Development shall

79 Stat. 451. (1) require, in consultation with the Secretary of Labor, that 12 USC 1749aa to the greatest extent feasible opportunities for training and note. employment arising in connection with the planning, construction, rehabilitation, and operation of housing assisted under such programs be given to lower income persons residing in the area of such housing; and

(2) require, in consultation with the Administrator of the Small Business Administration, that to the greatest extent feasible contracts for work to be performed pursuant to such programs shall, where appropriate, be awarded to business concerns, including but not limited to individuals or firms doing business in the fields of design, architecture, building construction, rehabilitation, maintenance, or repair, located in or owned in substantial part by persons residing in the area of such housing.


Sec. 4. The Congress finds that Federal aids to housing have not contributed fully to improvement in architectural standards. This objective has been contemplated in Federal housing legislation since the establishment of mortgage insurance through the Federal Housing Administration.

The Congress commends the Department of Housing and Urban Development for its recent efforts to improve architectural standards through competitive design awards and in other ways but at the same time recognizes that this important objective requires high priority if Federal aid is to make its full communitywide contribution toward improving our urban environment.

The Congress further finds that even within the necessary budget limitations on housing for low and moderate income families architectural design could be improved not only to make the housing more attractive, but to make it better suited to the needs of occupants.

The Congress declares that in the administration of housing programs which assist in the provision of housing for low and moderate income families, emphasis should be given to encouraging good design as an essential component of such housing and to developing housing which will be of such quality as to reflect its important relationship to the architectural standards of the neighborhood and community in which it is situated, consistent with prudent budgeting.



Report to con
o ommittees.

Sec. 5. The Secretary shall, as early as practicable in the calendar year 1969 and in the calendar year 1970, make a report to the respective Committees on Banking and Currency of the House of Representatives and the Senate identifying specific areas of program administration and management which require improvement, describing actions taken and proposed for the purpose of making such improvements, and recommending such legislation as may be necessary to accomplish such improvements

. Each such report shall include, but not be limited to, the following areas of program administration

. and management: uniformity and standardization in program requirements, simplification of program procedures, ways and means of expediting consideration of proposed projects and applications for assistance, the provision of more useful and specific assistance to communities, organizations and individuals seeking to utilize the Department's programs, and ways and means of combining or otherwise adapting the Department's programs to increase their usefulness in meeting the individual needs of applicants.



52 Stat. 9. 12 USC 17071715y.

Sec. 101. (a) Title II of the National Housing Act is amended by adding at the end thereof the following new section:


“Sec. 235. (a) For the purpose of assisting lower income families in acquiring homeownership or in acquiring membership in a cooperative association operating a housing project, the Secretary is authorized to make, and to contract to make, periodic assistance payments on behalf of such homeowners and cooperative members. The assistance shall

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82 STAT. 478 be accomplished through payments to mortgagees holding mortgages meeting the special requirements specified in this section.

“(b) To qualify for assistance payments, the homeowner or the cooperative member shall be of lower income and satisfy eligibility requirements prescribed by the Secretary, and

“(1) the homeowner shall be a mortgagor under a mortgage which meets the requirements of and is insured under subsection (i) or. (j) (4) of this section: Provided, That a mortgage meeting the requirements of subsection (i) (3) (A) of this section but insured under section 237 may qualify for assistance payments if Post, p. 485. such mortgage was executed by a mortgagor who is determined not to be an acceptable credit risk for mortgage insurance purposes (but otherwise eligible) under subsection (j) (4) of this section or under section 221(d) (2) or 234(c) and accepted as a 68 Stat. 599. reasonably satisfactory credit risk under section 237; or

12 USC 17151 “(2) the cooperative association of which the family is a mem- 75 Stat. 160. ber shall operate a housing project the construction or substantial

12 USC 1715y. rehabilitation of which has been financed with a mortgage insured under section 213 and which has been completed within two years 64 Stat, 54. prior to the filing of the application for assistance payments and 12 USC 1715e. the dwelling unit has had no previous occupant other than the family: Provided, That if the initial cooperative member receiving assistance payments transfers his membership and occupancy rights to another person who satisfies the eligibility requirements prescribed by the Secretary, such new cooperative member may qualify for assistance payments upon the filing of an application with respect to the dwelling unit involved to be occupied by him: Provided further, That assistance payments may be made with respect to a dwelling unit in an existing cooperative project which meets such standards as the Secretary may prescribe, if the family qualifies as a displaced family as defined in section 221(f), or a family which includes five or more minor persons, 68 Stat, 5993 or a family occupying low-rent public housing: Provided further, 80 Stat. 1317. That the amount of the mortgage attributable to the dwelling unit shall involve a principal obligation not in excess of $15,000 ($17,500) in any geographical area where the Secretary authorizes an increase on the basis of a finding that cost levels so require), except that with respect to any family with five or more persons the foregoing limits shall be $17,500 and $20,000, respectively. “(c) The assistance payments to a mortgagee by the Secretary on behalf of a mortgagor shall be made during such time as the ortgagor shall continue to occupy the property which secures the mortgage: Provided, That assistance payments may be made on behalf of a homeowner who assumes a mortgage insured under subsection (j) (4) with respect to which assistance payments have been made on behalf of the previous owner, if the homeowner is approved by the Secretary is eligible for receiving such assistance. The payment shall be in an amount not exceeding the lesser of

(1) the balance of the monthly payment for principal, interest, taxes, insurance, and mortgage insurance premium due under the mortgage remaining unpaid after applying 20 per centum of the mortgagor's income; or

“(2) the difference between the amount of the monthly payment for principal, interest, and mortgage insurance premium which the mortgngor is obligated to pay under the mortgage and the monthly payment for principal and interest which the mortgagor would be obligated to pay if the mortgage were to bear interest at the rate of 1 per centum per annum.

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