financed with a mortgage receiving the benefits of the interest rate provided for in the proviso in section 221(d) (5) of that Act. Subject to the limitations provided in subsection (j), the term "housing owner" also has the meaning prescribed in such subsection.

(c) As used in this section, the term "qualified tenant" means any individual or family who has, pursuant to criteria and procedures established by the Administrator, been determined

(1) to have an income below the maximum amount which can be established in the area, pursuant to the limitations prescribed in sections 2(2) and 15(7)(b) (ii) of the United States Housing Act of 1937, for occupancy in public housing dwellings; and (2) to be one of the following

(A) displaced by governmental action;

(B) sixty-two years of age or older (or, in the case of a family to have a head who is, or whose spouse is, sixty-two years of age or over);

(C) physically handicapped (or, in the case of a family, to have a head who is, or whose spouse is, physically handicapped);

(D) occupying substandard housing; or

(E) an occupant or former occupant of a dwelling which is (or was) situated in an area determined by the Small Business Administration, subsequent to April 1, 1965, to have been affected by a natural disaster, and which has been extensively damaged or destroyed as the result of such disaster. The terms “qualified tenant" and "tenant" including a member of a cooperative who satisfies the foregoing requirements and who, upon resale of his membership to the cooperative, will not be reimbursed for any equity increment accumulated through payments under this section. With respect to members of a cooperative, the terms "rental" and "rental charges" mean the charges under the occupancy agree. ments between such members and the cooperative.

(d) The amount of the annual payment with respect to any dwelling unit shall not exceed the amount by which the fair market rental for such unit exceeds one-fourth of the tenant's income as determined by the Administrator pursuant to procedures and regulations established by him.

(e) (1) For purposes of carrying out the provisions of this section, the Administrator shall establish criteria and procedures for deter mining the eligibility of occupants and rental charges, including criteria and procedures with respect to periodic review of tenant incomes and periodic adjustment of rental charges. The Administrator shall issue, upon the request of a housing owner, certificates as to the following facts concerning the individuals and families applying for admission to, or residing in, dwellings of such owner:

(A) the income of the individual or family; and

(B) whether the individual or family was displaced by governmental action, is elderly, is physically handicapped, or is (or was) occupying substandard housing or housing extensively damaged or destroyed as the result of a natural disaster.

(2) Procedures adopted by the Administrator hereunder shall provide for recertifications of the incomes of occupants, except the elderly,

at intervals of two years (or at shorter intervals in cases where the Administrator may deem it desirable) for the purpose of adjusting rental charges and annual payments on the basis of occupants' incomes, but in no event shall rental charges adjusted under this section for any dwelling exceed the fair market rental of the dwelling.

(3) The Administrator may enter into agreements, or authorize housing owners to enter into agreements, with public or private agencies for services required in the selection of qualified tenants, including those who may be approved, on the basis of the probability of future increases in their incomes, as lessees under an option to purchase (which will give such approved qualified tenants an exclusive right to purchase at a price established or determined as provided in the option) dwellings, and in the establishment of rentals. The Administrator is authorized (without limiting his authority under any other provision of law) to delegate to any such public or private agency his authority to issue certificates pursuant to this subsection.

(4) No payments under this section may be made with respect to any property for which the costs of operation (including wages and salaries) are determined by the Administrator to be greater than similar costs of operation of similar housing in the community where the property is situated.

(f) 1

1 * * *

(g) The Administrator is authorized to make such rules and regulations, to enter into such agreements, and to adopt such procedures as he may deem necessary or desirable to carry out the provisions of this section. Nothing contained in this section shall affect the authority of (1) the Federal Housing Commissioner with respect to any housing assisted under this section and under sections 221 (d) (3) and 231 (c) (3) of the National Housing Act, or (2) the Housing and Home Finance Administrator with respect to any housing assisted under this section and under section 202 of the Housing Act of 1959, including the authority to prescribe occupancy requirements under other provisions of law or to determine the portion of any such housing which may be occupied by qualified tenants.

(h) There are authorized to be appropriated such sums as may be necessary to carry out the provisions of this section, including, but not limited to, such sums as may be necessary to make annual payments as prescribed in this section, pay for services provided under (or pursuant to agreements entered into under) subsection (e), and provide administrative expenses.

(i)2 *

2***

(j) (1) For the purpose of assisting housing under this section on an experimental basis, subject to the limitations of this subsection, the

1 Subsection (f) amended sec. 101(c) of the Housing Act of 1949 to provide that the requirement that the community must have a workable program for community improvement before the housing is eligible for FHA mortgage insurance does not apply in the case of housing to be used under the rent supplement program, unless the workable program was previously required and in effect in the community for purposes of Federal assistance to code enforcement, urban renewal, or public housing. However, the Second Supplemental Appropriation Act, 1966. Public Law 89-426, 80 Stat. 141, and the Independent Offices Appropriation Act, 1967, Public Law 89-555, provide that no part of the rent supplement contract authority contained in those laws may be used for incurring any obligation in connection with any dwelling unit or project which is not either part of a workable program for community improvement, or which is without local official approval for participation in the rent supplement program.

2 Subsection (1) amended sec. 114(c) (2) of the Housing Act of 1949 to provide that a displaced person or family who obtains a dwelling unit with the assistance of a rent supplement will not be entitled to receive a relocation adjustment payment, although he may, if otherwise eligible, receive a payment for moving expenses.

term "housing owner" (in addition to the meaning prescribed in subsection (b)) includes

(A) a private nonprofit corporation or other private nonprofit legal entity, a limited dividend corporation or other limited dividend legal entity, or a cooperative housing corporation, which is a mortgagor under a mortgage which receives the benefits of the interest rate provided for in the proviso in section 221(d) (5) of the National Housing Act and which, after the date of the enactment of this Act, has been approved for mortgage insurance under section 221(d)(3) of the National Housing Act and has been approved for receiving the benefits of this section;

(B) a private nonprofit corporation or other private nonprofit legal entity which is a mortgagor under a mortgage insured under section 231 (c) (3)1 of the National Housing Act and which, after the date of the enactment of this Act, has obtained final endorsement of such mortgage for mortgage insurance and has been approved for receiving the benefits of this section; and

(C) a private nonprofit corporation, a public body or agency, or a cooperative housing corporation, which is a borrower under section 202 of the Housing Act of 19591 and has been approved for receiving the benefits of this section: Provided, That, with respect to properties financed with loans under such section made on or before the date of the enactment of this Act, payments shall not be made with respect to more than 20 per centum of the dwelling units in any property so financed.

(2) Of the amounts approved in appropriation Acts pursuant to subsection (a) for payments under this section in any year, not more than 5 per centum in the aggregate shall be paid with respect to properties of housing owners as defined in paragraph (1)(A) of this subsection, and not more than 5 per centum in the aggregate shall be paid with respect to properties of housing owners as defined in paragraphs (1) (B) and (1) (C) of this subsection.

*

Approved August 10, 1965.

1 Housing for the elderly or handicapped.

LOANS FOR HOUSING FOR THE ELDERLY OR
HANDICAPPED

See also:
Rural housing, Title V, Housing Act of 1949_-.

EXCERPTS FROM THE HOUSING ACT OF 1959

[Public Law 86-372, 73 Stat. 654, 667, 12 U.S.C. 1701q]

TITLE II-HOUSING FOR THE ELDERLY OR
HANDICAPPED 1

*

LOAN PROGRAM

Page No.

232

SEC. 202. (a) (1) The purpose of this section is to assist private nonprofit corporations, consumer 2 cooperatives, or public bodies or agencies to provide housing and related facilities for elderly or handicapped families.

(2) In order to carry out the purpose of this section, the Administrator may make loans to any corporation (as defined in subsection (d) (2)), to any consumer cooperative, or to any public body or agency for the provision of rental or cooperative housing and related facilities for elderly or handicapped families, except that (A) no such loan shall be made unless the applicant shows that it is unable to secure the necessary funds from other sources upon terms and conditions equally as favorable as the terms and conditions applicable to loans under this section, (B) no such loan shall be made unless the Administrator finds that the construction will be undertaken in an economical manner and that it will not be of elaborate or extravagant design or materials, and (C) no such loan shall be made to a public body or agency unless it certifies that it is not receiving financial assistance from the United States exclusively pursuant to the United States Housing Act of 1937.

1 Sec. 203, Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 769, 783, 784, amended the program of loans for housing for the elderly (and also the FHA secs. 221 and 231 mortgage insurance programs, the PHA low-rent public housing program, and the demonstration grant programs for low-income housing) to include handicapped persons and families.

Sec. 201 (a) (1), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 162, added "consumer cooperatives, or public bodies or agencies".

Immediately prior to amendment by sec. 201 (a) (2), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 162, this subsection read as follows:

"In order to carry out the purpose of this section, the Administrator may make loans to any corporation (as defined in subsection (d) (2) for the provision of rental housing and related facilities for elderly families and elderly persons, except that (A) no such loan shall be made unless the corporation shows that it is unable to secure the necessary funds from other sources upon terms and conditions equally as favorable as the terms and conditions applicable to loans under this section, and (B) no such loan shall be made unless the Administrator finds that the construction will be undertaken in an economical manner, and that it will not be of elaborate or extravagant design or materials."

(3) A loan1 under this section may be in an amount not exceeding 2 the total development cost (as defined in subsection (d) (3), as deter mined by the Administrator; shall be secured in such manner and be repaid within such period, not exceeding fifty years, as may be determined by him; and shall bear interest at a rate determined by him which shall be not more than the lower of (A) 3 per centum per annum, or (B) the total of one-quarter of 1 per centum added to the average annual interest rate on all interest-bearing obligations of the United States then forming a part of the public debt as computed at the end of the fiscal year next preceding the date on which the loan is made and adjusted to the nearest one-eighth of 1 per centum.

(4) There is authorized to be appropriated not to exceed $500,000,000 which shall constitute a revolving fund to be used by the Administrator in carrying out this section.5

(b) In the performance of, and with respect to, the functions, powers, and duties vested in him by this section the Administrator shall (in addition to any authority otherwise vested in him) have the functions, powers, and duties set forth in section 402 (except subsection (c) (2) of the Housing Act of 1950.

(c) (1) Housing constructed with a loan made under this section shall not be used for transient or hotel purposes while such loan is outstanding.

(2) As used in paragraph (1), the term "transient or hotel purposes" shall have such meaning as may be prescribed by the Administrator, but rental for any period less than thirty days shall in any event constitute use for such purposes. The provisions of subsections (f) through (j) of section 513 of the National Housing Act (as added by section 132 of the Housing Act of 1954) shall apply in the case of violations of paragraph (1) as though the housing described in such subsection were multifamily housing (as defined in section 513(e) (2) of the National Housing Act) with respect to which a mortgage is insured under such Act, except that for purposes of this subsection the Administrator shall perform the functions vested in the Commissioner by such section 513.

1 Sec. 201(a)(3), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 163, deleted "to a corporation".

2 Sec. 201(b), Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 163, deleted "98 per centum of".

3 Sec. 105(b), Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 457, substituted "the lower of (A) 3 per centum per annum, or" for "the higher of (A) 24 per centum per annum, or". Sec. 105(b) further provided that this change is effective with respect to loans made on or after the date of the enactment of the Housing and Urban Development Act of 1965 (August 10, 1965).

Sec. 1001, Demonstration Cities and Metropolitan Development Act of 1966, Public Law 89-754, approved November 3, 1966, 80 Stat. 1255, 1284, further amended sec. 105(b) of the Housing and Urban Development Act of 1965 to provide that the 3 percent ceiling would also apply to loans made before August 10, 1965, if construction of the housing or related facilities to be assisted by such loan was not commenced before such date, and not completed before the filing of an application for the benefits of such ceiling.

Sec. 201 (c), Housing Act of 1961, Public Law 87-70, approved June 30. 1961, 75 Stat. 149, 163, substituted "$125,000,000" for "$50,000,000," sec. 3(a) of the Senior Citizens Housing Act of 1962, Public Law 87-723, approved September 28, 1962, 76 Stat. 670, substituted "$250,000,000" for "$125,000,000", Public Law 88-158, aproved October 24, 1963, 77 Stat. 278, substituted "$275,000,000" for "$225,000,000", sec. 201. Housing Act of 1964, Public Law 88-560, approved September 2, 1964, 78 Stat. 769, 783, substituted "$350,000,000" for "$275,000,000", and sec. 105(a), Housing and Urban Development Act of 1965. Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 457, substituted "$500,000,000" for "$350,000,000".

5 Sec. 201(c), Housing Act of 1961, Public Law 87-70. approved June 30, 1961, 75 Stat. 149, 163, deleted the sentence following which read: "The amount outstanding from such fund at any one time for related facilities (as defined in subsection (d) (8)) shall not exceed $5,000,000."