adversely affect the qualitative ability of the program to meet the housing needs of elderly and handicapped families.

Legislative review procedures

Section 313 would amend section 7(c) (3) of the Department of Housing and Urban Development Act to delete the provision requiring a 90-day delay in the effective date of any rule or regulation which has been the subject of committee action.

Single-family loan limitation

Section 314 of the bill would amend section 5(c)(1) (B) of the Home Owner's Loan Act, to provide that the single-family loan ceiling for federally chartered savings and loan associations shall be raised from $60,000 to $75,000.

Amendment to the Federal Home Loan Mortgage Corporation Act

Section 315 would amend the definition of a residential loan in section 302 of the Federal Home Loan Mortgage Corporation Act to include a mortgage, lien, or other security interest on the stock or membership issued to a tenant-stock holder or resident-member of a cooperative housing corporation, and on the instrument granting a right of tenancy in the dwelling unit, as eligible loans under the Federal Home Loan Mortgage Corporation Act.

Stock to advances ratio

Section 316 of the bill would amend section 6(c)(2)(ii) of the Federal Home Loan Bank Act to provide for a decrease of the ratio of stock required to be purchased by a Federal Savings and Loan Association to be eligible for advances of funds from the Federal Home Loan Banks. The ratio is changed from 12-to-1 to 20-to-1. Study of minimum rents

Section 318 requires HUD to study the feasibility and financial desirability of requirements for minimum rent payments from tenants in low-income housing assisted under the United States Housing Act of 1937. The study shall examine: the extent to which tenants are not required to or do not pay rent; the incentive for greater tenant care which minimum rents create; the administrative costs of assessing and collecting minimum rents; the effect of several alternative minimum rent specifications on appropriations for assisted housing_for fiscal years 1981 through 1984. The report shall be submitted to Congress within ten days of submission of the 1981 budget.

Study of mortgage insurance premiums

Section 317 would require the Secretary of Housing and Urban Development to conduct a study of relative risk of loss which exists with respect to the various classes of mortgages which may be insured under section 203 (b) and 213 of the National Housing Act. The study would have to be completed and recommendations transmitted to Congress within eighteen months of enactment of this act. Usury exemption

Section 319 would add a new section 529 to the National Housing Act to provide that no State constitutional provision or State law expressly limiting interest, discount points or other charges, will apply to a loan insured pursuant to title I or II of the National Housing Act. This provision would not apply where a State subsequently reenacts a usury limit applying to FHA loans.

Modification of graduated payment mortgage program

Section 320 provides for a modification of the graduated payment mortgage (GPM) program under section 245 of the National Housing Act.

It would designate the existing GPM program as section 245 (a), and would establish a new section 245 (b) graduated payment mortgage program with a down payment requirement which is equivalent to the section 203 FHA-insured program. Under section 245 (b), the mortgage balance would not exceed 97 percent of the projected value of the property, or such higher percentage as is provided for veterans under section 203 (b) (2). The projected value of the property would be computed by increasing the initial appraised value of the property by an appreciation rate not to exceed 21/2 percent a year. The principal amount of mortgages under this section would be limited to not more than 20 percent of the initial principal amount of all mortgages insured under the FHA one- to four-family insurance programs in that year.

Finally, this subsection would apply to both the 245 (a) and 245 (b) programs, the limited preemption of any State restriction on interest rates or the payment of interest on interest, which otherwise would apply to a mortgage insured under section 245.

Collateral for advances

Section 321 of the bill would amend section 10 of the Federal Home Loan Bank Act (12 USC 1430) by deleting the first two sentences of subsection (b) and amending subsection (a) to provide that each Federal Home Loan Bank is authorized to use as collateral for advances from the Federal Home Loan Bank System such residential home mortgages and U.S. Government obligations or obligations guaranteed by the U.S. Government as prescribed by the Federal Home Loan Bank Board.

TITLE IV-INTERSTATE LAND SALES

Section 401 (a) amends section 1403 (b) of the Interstate Land Sales Full Disclosure Act making technical corrections to the municipal exemption enacted by Public Law 95-557.

Section 401 (b) amends section 1403 (b) (1) of such Act relating to the municipal exemption. It makes technical corrections to the text of the exemption and clarifies the availability of the exemption on a lot-by-lot basis.

Section 401 (c) amends section 1403 (b) (2) by deleting the reference to "public" in both places in which it appears and adding an additional provision that certain roads would meet the requirements of the exemption if provisions have been approved to insure the perpetual maintenance of the road.

Section 401 (d) amends section 1403 (b) (4) by adding the clarification that in addition to a warranty deed, "a grant or similar deed conveying title to real property and commonly used in the State" also qualifies for purposes of the exemption.

Section 401 (e) amends section 1403 (b) (5) to restate the requirement for a title insurance binder or title opinion showing that marketable title to the property is vested in the seller to qualify for the exemption. Section 402 further amends section 1403 of such act by adding two new exemptions from the registration and disclosure requirements of

the act. The first exemption, for a sales operation which is intrastate in nature, is available on a lot-by-lot basis if:

(1) The lot is free and clear of liens, encumbrances and adverse claims (as specifically defined in the exemption);

(2) An onsite inspection has been made; and

(3) Each purchase or lease agreement clearly describes the party responsible for providing specific facilities.

The second exemption, for sale or lease of real estate not to exceed five hundred lots in a subdivision by a developer to the resident of another State when the principal residence of the purchaser is within 100 miles from the property, is available on a lot-by-lot basis if:

(1) The three requirements for the "intrastate" exemption are complied with;

(2) The developer designates an agent for the service of process within the home state of the purchaser, and the purchaser is so notified; and

(3) The developer provides simple notification to the Secretary that all requirements have been complied with.

Section 403 amends section 1404 (b) of such act and clarifies the application of the voidability section to those situations where a property report is required to be given but has not been given.

Section 404 amends section 1412 of such act, relating to limitations on actions, by adding a new subsection clarifying the time a contractual relationship is created between developer and purchaser as the date of sale for purposes of the tolling of the statute.

Section 405 amends section 1416 of such act, relating to administration, by adding a new subsection clarifying that actions relating to rulemaking or adjudications be conducted in accordance with the provisions of the Administrative Procedures Act; and that in the case of other actions the Secretary shall provide for notice of actions to be given, along with a statement of legal authority and reasons.

Hon. WILLIAM PROXMIRE,

CONGRESSIONAL BUDGET OFFICE,

U.S. CONGRESS.

Washington, D.C., May 15, 1979.

Chairman, Committee on Banking, Housing and Urban Affairs, U.S. Senate, Dirksen Senate Office Building, Washington, D.C.

DEAR MR. CHAIRMAN: Pursuant to section 403 of the Congressional Budget Act of 1974, the Congressional Budget Office has prepared the attached cost estimate for the Housing and Community Development Amendments of 1979.

Should the committee so desire, we would be pleased to provide further details on this estimate.

Sincerely,

ALICE M. RIVLIN, Director.

CONGRESSIONAL BUDGET OFFICE COST ESTIMATE

MAY 15, 1979.

1. Bill number: Not yet assigned.

2. Bill title: Housing and Community Development Amendments of

1979.

3. Bill status: As ordered reported by the Senate Committee on Banking, Housing and Urban Affairs, May 9, 1979.

4. Bill purpose: The bill, if enacted, would amend several laws relating to the Federal Government's housing and community development programs. Additional funding would be provided for the assisted housing and community development activities of the Department of Housing and Urban Development (HUD). In addition, various mortgage loan guarantee and insurance authorities would be extended. The bill also contains revisions to the Interstate Land Sales Full Disclosure Act.

5. Cost estimate: The estimated budget impact of this bill, by title is summarized in the following table.

The estimated budget impact of this bill, by function, is summarized below (by fiscal years, in millions of dollars):

Rehabilitation loan fund.-The bill would authorize the appropriation of an amount not to exceed $130 million for fiscal year 1980 for section 312 rehabilitation loans. It would also extend, through fiscal year 1980, HUD's authority to make rehabilitation loans. The $130 million is $100 million less than the 1979 appropriation for the 312 program. It is assumed that the full authorized level would be appropriated and that all $130 million would be obligated during fiscal year 1980. The estimated outlays of this provision represent annual loan disbursements minus receipts.

Comprehensive planning.-The bill would authorize an appropriation not to exceed $40 million for fiscal year 1980 for the section 701 comprehensive planning assistance program, a program that was appropriated $53 million for fiscal year 1979. All $40 million is assumed to be appropriated; outlays are estimated on the basis of historical spending patterns.

Neighborhood Reinvestment Corporation.-The bill would authorize appropriations not to exceed $12 million for the Neighborhood Reinvestment Corporation for fiscal year 1980. The full $12 million is assumed to be appropriated. Funds are assumed to be used for technical assistance and administrative activities by Corporation staff and to neighborhood housing service programs. Administrative and technical assistance funds would probably be fully expended in fiscal year 1980, while grant monies would probably be disbursed over a 2-year period.

Neighborhood self-help development.-This bill would amend existing law to reduce the fiscal years 1979 and 1980 authorization levels for the neighborhood self-help development program from $15 million to $13.5 million. The cost estimate reflects a reduction of $1.5 million in the 1980 authorization level.

Livable cities.-The bill would amend existing law to reduce from $10 million to $4.5 million the funds authorized to be appropriated for the livable cities program for fiscal year 1980. The cost estimate reflects the reduction of $5.5 million in the 1980 authorization.

Community development block grant program.-An appropriation of up to $675 million for fiscal year 1980 would be authorized for the urban development action grant program, an increase of $275 million over the existing $400 million authorization for 1980. Outlays are estimated by assuming appropriation in 1980 of the full additional $275 million, and by applying a disbursement rate derived from experience in similar grant programs.

Section 119 of the Housing and Community Development Act of 1974 (42 U.S.C. 5319) would be amended to broaden the eligibility requirements for urban development action grants. It would open the action grant program to cities which do not qualify under existing law, but which have one or more contiguous census tracts within their bounds which have the levels of physical and economic distress set forth in the existing law's minimum standards. The amendment would require HUD to make available up to 20 percent of action grant funds for use in these so-called "pockets of poverty." It would authorize no new appropriations and would not appreciably alter the program's disbursement levels.

Urban homesteading.-The bill would authorize HUD to reimburse the Veteran's Administration (VA) and the Department of Agriculture (DOA) for property that they convey directly to local authorities for use in urban homesteading programs. Under existing law, property titles must be transferred from the VA or DOA to HUD prior to conveyance to local agencies. The amendment would remove the intermediate step in the property transfer process. Some savings in administrative costs would probably result from the change, though these are not appreciable.

The budget impact of title I is summarized in the following table (by fiscal years, in millions of dollars):