"TAXATION PROVISIONS

"SEC. 1011. Nothing in this title shall be construed to exempt any real property acquired and held by 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 CERTIFICATIONS

"SEC. 1012. (a) The Commissioner shall adopt such regulations and procedures, and require such certifications, as he deems reasonably necessary to

assure

"(1) that the outstanding balance of any mortgage insured in accordance with the provisions of section 1004 of this title shall not at any time exceed— "(A) in the case of basic community systems improvements, the aggregate amount of (i) 75 per centum of the value, as estimated by the Commissioner, of the mortgagor's interest in the land before development and (ii) 90 per centum of the actual cost of land development attributable to such improvements, as such aggregate amount is allocated by the Commissioner at the time to the property remaining under the lien of the mortgage; and

"(B) in the case of other land development, the aggregate amount of (i) 75 per centum of the value, as estimated by the Commissioner, of the mortgagor's interest in the land before land development and (ii) 75 per centum of the actual costs of the land development, as such aggregate amount is allocated by the Commissioner at the time to the property remaining under the lien of the insured mortgage; and “(2) that the outstanding balance of any mortgage insured in accordance with the provisions of section 1005 of this title shall not at any time exceed the aggregate amount of (A) 50 per centum of the value, as estimated by the Commissioner, of the mortgagor's interest in the land before development and (B) 90 per centum of the actual costs of development, as such aggregate amount is allocated by the Commissioner at the time to the property remaining under the lien of the insured mortgage.

"(b) Notwithstanding any other provision of this title, the Commissioner may permit the outstanding balance of any mortgage to exceed the limits set forth in subsection (a) when, and to the extent that, he determines that such action is necessary in order to enable the mortgagor to give priority to land development in connection with the provision of housing for low- and moderate-income families: Provided, That the Commissioner shall not under this subsection permit said outstanding balance at any time to exceed 85 per centum of the sum of the value, as estimated by the Commissioner, of the mortgagor's interest in the land before development and the actual cost of land development as such sum is allocated by the Commissioner at the time to the property remaining under the lien of the mortgage.

"(e) For purposes of this section, the Commisioner shall require the mortgagor to certify, from time to time during the development of the land, and upon completion of such development but prior to final endorsement of the mortgage. as to the actual costs of development. Certifications required pursuant to this section shall be accompanied by such data and records as the Commissioner shall prescribe. Upon the Commissioner's approval of a mortgagor's certification, such certification shall be final and incontestable, except for fraud or material misrepresentation on the part of the mortgagor. 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, including amounts paid for labor, materials, construction contracts, land planning, engineers' and architects' fees, surveys, taxes, and interest during development, organizational and legal expenses, such allocation of general overhead expenses as are acceptable to the Commissioner, and allowance for contractors' profit deemed reasonable by the Commissioner if the mortgagor is also the contractor as defined by the Commissioner, and other items of expense incidental to development which may be approved by the Commissioner.”

CONFORMING AMENDMENTS

SEC. 202. (a) Section 219 of the National Housing Act is amended by inserting "the Land Development Insurance Fund," after "the Apartment Unit Insurance Fund,”.

H. Doc. 206, 88-2- 4

(b) Section 212 of the National Housing Act is amended by inserting after the third sentence of subsection (a) of such section the following new sentence: "The provisions of this section shall also apply to insurance under title X with respect to laborers or mechanics employed in land development financed with the proceeds of any mortgage insured under that title."

(c) Section 302 (b) of the Federal National Mortgage Association Charter Act is amended by

(1) inserting ", section 1004," after "section 220" in the first proviso; and (2) striking out "the term 'mortgages'" in the last sentence and substituting "the terms 'mortgages' and 'home mortgages' ".

(d) The first paragraph of section 24 of the Federal Reserve Act is amended by inserting before the last sentence the following new sentence: "Notwithstanding the 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."

(e) Section 5(c) of the Home Owners Loan Act of 1933 is amended 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, 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, and investments under this sentence shall not be included in any percentage of assets referred to in this subsection."

ADDITIONAL RELIEF FOR HOME MORTGAGORS IN DEFAULT DUE TO CIRCUMSTANCES BEYOND THEIR CONTROL

SEC. 203. (a) Section 204 of the National Housing Act is amended by striking out the fourth proviso in subsection (a) and inserting in lieu thereof the following: "And provided further, That with respect to any mortgage covering a one-, two-, three, or four-family residence insured under this Act, if the Commissioner finds, after notice of default, that the default was due to circumstances beyond the control of the mortgagor, he may, upon such terms and conditions as he may prescribe, (1) approve the request of the mortgagee for an extension of the time for the curing of the default and of the time for commencing foreclosure proceedings or for otherwise acquiring title to the mortgaged property to such time as the Commissioner may determine is necessary and desirable to enable the mortgagor to complete the mortgage payments, including an extension of time beyond the stated maturity of the mortgage, and in the event of a subsequent foreclosure or acquisition of the property by other means, the Commissioner is authorized to include in debentures an amount equal to any unpaid mortgage interest, or (2) approve a modification of the terms of the mortgage for the purpose of changing the amortization provisions by recasting, over the remaining term of the mortgage or over such longer period as may be approved by the Commissioner, the total unpaid amount then due, as determined by the Commissioner, with the modification to become effective currently or to become effective upon the termination of an agreed upon extension of the period for curing the default; and the principal amount of the mortgage, as modified, shall be considered to be the 'original principal obligation of the mortgage' as that term is used in this Act for the purpose of computing the total face value of the debentures to be issued or the cash payment to be made by the Commissioner to a mortgagee".

(b) Section 230 of said Act is amended by striking out the first sentence and inserting in lieu thereof the following:

"Upon receiving notice of the default of any mortgage covering a one-, two-, three-, or four-family residence heretofore or hereafter insured under this Act, the Commissioner, in his discretion and for the purpose of avoiding foreclosure of the mortgage, and notwithstanding the fact that he has previously approved a request of the mortgagee for an extension of the time for curing the defaulted mortgage and of the time for commencing foreclosure proceedings or for otherwise acquiring title to the mortgaged property, or has approved a modification of the mortgage for the purpose of changing the amortization provisions by recasting the unpaid balance, may acquire the loan and security therefor upon payment of the insurance benefits (by issuance to the mortgagee of debentures, or by payment of cash or issuance of debentures if the loan is insured under section 220, 221, or 233) in an amount equal to the unpaid principal balance of the loan plus any unpaid mortgage interest plus reimbursement for such costs and

attorney's fees as the Commissioner finds were properly incurred in connection with the defaulted mortgage and its assignment to the Commissioner, and for any proper advances theretofore made by the mortgagee under the provisions of the mortgage. After the acquisition of such mortgage by the Commissioner, the mortgagee shall have no further rights, liabilities, or obligations with respect thereto."

CORRECTION OF SUBSTANTIAL DEFECTS IN MORTGAGED HOMES

SEC. 204. Title V of the National Housing Act is amended by adding at the end thereof the following new section:

"EXPENDITURES TO CORRECT OR COMPENSATE FOR SUBSTANTIAL DEFECTS IN

MORTGAGED HOMES

"SEC. 517. (a) The Commissioner is authorized, with respect to any property improved by a one- to four-family dwelling approved for mortgage insurance prior to the beginning of construction which he finds to have structural or other major defects 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: Provided, That such authority of the Commissioner shall exist only (A) if the owner has requested assistance from the Commissioner not later than 4 years (or such shorter time as the Commissioner may prescribe) after insurance of the mortgage, and (B) with respect to property encumbered by a mortgage insured under this Act after or not more than 3 years prior to enactment of the Housing and Community Development Act of 1964.

"(b) The Commissioner shall by regulations 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."

HOME IMPROVEMENT LOANS OUTSIDE OF URBAN RENEWAL AREAS

SEC. 205. Section 203 (k) of the National Housing Act is amended by(1) striking out in the first sentence in designated clause (2) "economically sound" and inserting in lieu thereof "an acceptable risk":

(2) striking out in the first sentence designated clause (4) and inserting in lieu thereof the following: "(4) insurance benefits shall be paid in cash out of the section 203 Home Improvement Account or in debentures executed in the name of such Account."; and

(3) striking out in the third sentence "Debentures issued with respect to loans insured under this subsection shall be issued" and inserting in lieu thereof "Insurance benefits paid with respect to loans insured under this subsection shall be paid".

MORTGAGE LIMITS FOR HOMES

SEC. 206. (a) Section 203(b) (2) of the National Housing Act is amended by striking out "$25,000”, “$27,500", "$27,500", and "$35,000" and inserting in lieu thereof "$30,000", "$32,500", "$32,500", and "$37,500", respectively.

(b) Section 203 (i) of the National Housing Act is amended by

(1) striking out "$9,000" and inserting in lieu thereof "$11,000", and (2) inserting the following after the second proviso: "Provided further, That notwithstanding the requirements of this subsection, the Commissioner may in his discretion insure under this section a mortgage on a dwelling to be used by the mortgagor for vacation purposes if the amount of the mortgage is not in excess of 90 per centum of the appraised value of the property and he finds that the project with respect to which the mortgage is executed is an acceptable risk :".

TITLE III-URBAN RENEWAL AND GROWTH

LOAN CONTRACT FOR TWO OR MORE PROJECTS

SEC. 301. (a) Section 102 (a) of the Housing Act of 1949 is amended by adding at the end thereof: "Notwithstanding any other provisions of this title, the Administrator may make a temporary loan, as described in the first two sentences of this subsection, for two or more urban renewal projects being carried out by the same local public agency. Such a loan (outstanding at any one time)

shall be for an amount not exceeding the estimated expenditures to be made by the local public agency for such projects."

(b) Section 110 (g) of the Housing Act of 1949 is amended by striking out in the first sentence thereof the words "for any project".

GENERAL NEIGHBORHOOD RENEWAL PLANS

SEC. 302. Section 102 (d) of the Housing Act of 1949 is amended by striking out the fifth sentence and inserting in lieu thereof:

"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 Renewal 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 with the capacity and resources of the respective local public agency over an estimated period of not more than 10 years."

INCREASED CAPITAL GRANTS FOR REDEVELOPMENT AREAS

SEC. 303. Section 103 (a) (2) (B) of the Housing Act of 1949 is amended by striking out the words "the second sentence of section 5(a)” and inserting in lieu thereof "section 5".

CAPITAL GRANT AUTHORIZATION

SEC. 304. Section 103 (b) of the Housing Act of 1949 is amended by striking out "not to exceed $4,000,000,000" and inserting "not to exceed $5,400,000,000" in lieu thereof.

FEASIBLE METHOD FOR RELOCATION OF INDIVIDUALS

SEC. 305. (a) Section 105 (c) of the Housing Act of 1949 is amended by striking out "families" wherever that term appears and inserting in lieu thereof “individuals and families".

(b) The requirement imposed by the amendment contained in subsection (a) of this section shall not be applicable to any project receiving Federal recognition prior to the effective date of this Act.

DISPOSAL OF LAND FOR LOW- AND MODERATE-INCOME HOUSING

SEC. 306. (a) Subsection (b) of section 107 of the Housing Act of 1949 is redesignated as subsection (a) and is amended by inserting after the word "families" the words "or individuals".

(b) Subsection (a) of section 107 of the Housing Act of 1949 is redesignated as subsection (b) and is amended by

(1) striking out all that appears before the proviso and inserting in lieu thereof the following: "When it appears in the public interest that real property acquired as part of an urban renewal project should be used in whole or in part for a low-rent housing project assisted under the United States Housing Act of 1937, or under a State or local program found by the Administrator to have the same general purposes as the Federal program under such Act, the property shall be made available to the public housing agency undertaking the low-rent housing project at a price equal to its fair value, as determined in accordance with subsection (a), and such amount shall be included as part of the development cost of such low-rent housing project :"; (2) striking out the word "land" where it first appears in the proviso and inserting in lieu thereof "property"; and

(3) striking out the word "site" where it first appears in the proviso and inserting in lieu thereof “property”.

INCREASE NONRESIDENTIAL EXCEPTION

SEC. 307. The fifth sentence of section 110 (c) of the Housing Act of 1949 is amended by striking out "30 per centum" in the second proviso and inserting in lieu thereof "35 per centum".

AMENDMENT OF DEFINITION OF "GOING FEDERAL RATE"

SEC. 308. Section 110(g) of the Housing Act of 1949 is amended by striking out the last sentence and inserting in lieu thereof:

"Any contract for loan or advance, authorized by the Administrator after the effective date of the Housing and Community Development Act of 1964, shall provide for a single interest rate which shall be applicable also to future amendments of the contract which provide additional funds thereunder and shall further provide for a periodic revision of the interest rate on the balance outstanding or to be outstanding on such loan or advance, based on the going Federal rate on the date of such revision: Provided, That any contract for loan or advance authorized prior to the effective date of the Housing and Community Development Act of 1964 shall be amended (with the first amendment to such contract authorized after the effective date of such Act) to provide for such a single interest rate (based on the going Federal rate at the time such amendment is authorized) and for periodic revision thereof.".

SEC. 309. Section 314 of the Housing Act of 1954 is amended by

(1) inserting "(a)" after "314." at the beginning of the section;

(2) inserting the following before the period at the end of the second sentence: ": Provided, That such a grant may cover the full cost of writing and publishing reports on such activities and undertakings" ;

(3) inserting "activities and” before "undertakings" in the third sentence; and

(4) striking out the last two sentences and inserting in lieu thereof two new paragraphs, as follows:

"(b) The Administrator is further authorized to pay for the cost of (1) writing and publishing reports on activities and undertakings financed by grants made under this section, as well as reports on similar activities and undertakings, not so financed, which are of significant value in furthering the purposes of this section, and (2) writing and publishing summaries and other informational material on such reports. "(c) The aggregate amount of grants made under subsection (a) and costs incurred pursuant to subsection (b) shall not exceed $10,000,000 and shall be payable from the grant funds provided under and authorized by section 103 (b) of the Housing Act of 1949. The Administrator may make advance or progress payments on account of any contract entered into pursuant to this section, notwithstanding the provisions of section 3648 of the Revised Statutes, as amended."

URBAN AND REGIONAL PLANNING GRANTS

SEC. 310. (a) Section 701 (a) of the Housing Act of 1954 is amended by deleting "resulting from rapid urbanization" in clause (B) of paragraph (1).

(b) Section 701 (a) of the Housing Act of 1954 is amended by

(1) deleting "and" at the end of paragraph (4);

(2) striking out the period at the end of paragraph (5) and inserting in lieu thereof a semicolon; and

(3) adding a new paragraph (6) after paragraph (5), as follows:

"(6) metropolitan and regional planning agencies, with the approval of the State planning agency or (in States where no such planning agency exists) of the Governor of the State, for the provision of planning assistance within the metropolitan area or region to cities, other municipalities, counties, groups of adjacent communities, or Indian reservations described in clauses (A), (B), (C), and (D) of paragraph (1) of this subsection; and".

(c) Section 701 (a) of the Housing Act of 1954 is amended by striking out "(a)" after "section 5" in paragraph (3).

(d) Section 701(b) of the Housing Act of 1954 is amended by striking out the proviso in the first sentence and inserting in lieu thereof: "Provided, That such a grant may be in an amount not exceeding three-fourths of such estimated cost for planning being carried out for a city, other municipality, county, group of adjacent communities, or Indian reservation in an area designated by the Secretary of Commerce as a redevelopment area under section 5 of the Area Redevelopment Act".