Page images
PDF
EPUB

1 (B)(1) the property is in an area (other than an area described in subparagraph (A) which the governing body of the locality has determined, and so certifies to the Secretary, contains a substantial number of structures in need of rehabilitation, (11) there is in effect for the locality a workable program meeting the requirements of section 101 (c) of the Housing Act of 1949, (iii) the property is residential and owner-occupied, (iv) the property is in need of rehabilitation and is in violation of the local minimum housing or similar code, and (v) the area is definitely planned for rehabilitation or concentrated code enforcement within a reasonable time, and the rehabilitation of such property is consistent with the plan for rehabilitation or code enforcement; or

(2) the applicant is unable to secure the necessary funds from other sources upon comparable? terms and conditions; and

(3) the loan is an acceptable risk taking into consideration the need for the rehabilitation, the security available for the loan, and the ability of the applicant to repay the loan.

(C) (1)3 the property has been determined to be uninsurable because of physical hazards after an inspection pursuant to a statewide property insurance plan approved by the Secretary under title XII of the National Housing Act," and (ii) the loan is made to the owner or tenant of the property to finance rehabilitation which the Secretary determines to be necessary to make the property meet reasonable underwriting standards. Notwithstanding the preceding provisions of this subsection, no loan with respect to residential property shall be made under this section to any person whose annual income, as determined pursuant to criteria and procedures established by the Secretary, exceeds the limits prescribed by the Secretary for occupants of projects financed with below-market interest rate mortgages insured (in the area involved) under section 221 (a) (3) of the National Housing Act: Provided, That the provisions of this sentence shall not apply to property in the area

1

Sec. 509(c), Housing and Urban Development Act of 1958, approved August 1, 1968, 82 Stat. 476, 523, added this paragraph.

2Sec. 312(a), Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 479, substituted "comparable" for "reasonable".

3 sec. 509(a) (1), Housing and Urban Development Act of 1968, Public Law 90-448, approved Aug. I, 1968, 82 Stat. 476, 523, added subparagraph (c)(i).

*Insurance program for riot-affected areas. 5

509(e), Housing and Urban Development Act of 1968, Public Law 90-448, approved August 1, 1968, 82 Stat, 476, 524, added this sentence.

Sec.

of an urban renewal project or a code enforcement project for which the city or other local public body or agency is receiving financial assistance under title I of the Housing Act of 1949 if, prior to the date of enactment of the Housing and Urban Development Act of 1968, such local public body or agency specifically developed plans for such project in reliance upon the availability of loans under this section. (b) For the purposes of this section

(1) the term "rehabilitation" means the improvement or repair of a structure or facilities in connection with a structure, and may include the provision of such sanitary or other facilities as are required by applicable codes, the urban renewal plan, or a statewide property insurance plan to be provided by the owner or tenant of the property;

(2) the term "urban renewal area" means a slum area or a blighted, deteriorated, or deteriorating area as defined in section i10(a) of the Housing Act of 1949;

(3) the term "tenant" means a person or organization who is occupying a structure under a lease having a period to run at the time a rehabilitation loan is made under this section of not less than the term of the loan; and

(4) the term "Secretary" means the Secretary of Housing and Urban Development. (c) A rehabilitation loan made under this section shall be subject to the following limitations:

(1) The loan shall be subject to such terms and conditions as may be prescribed by the Secretary.

(2) The term of the loan may not exceed twenty years or three fourths of the remaining economic life of the structure after rehabilitation, whichever is less.

(3) The loan shall bear interest at such rate as the Secretary determines to be appropriate but not to exceed 3 per centum per annum of the amount of the principal outstanding at any time, and the Secretary may prescribe such other charges as he finds necessary, including service charges and appraisal, inspection, and other fees. (4) The amount of the loan may not exceed-

(A) in the case of residential property, the amount of a loan which could be insured by the Secretary of Housing and Urban Development under section 220(h) of the National Housing Act: Provided, That, within the limitations otherwise applicable on the amount of a loan under such section, the loan may exceed the cost of rehabilitation in order to include an amount approved by the Secretary to refinance

1

Sec. 509(a)(2), Housing and Urban Development Act of 1968, Public Law 90-448, approved August 1, 1968, 82 Stat. 476, 524, inserted ", or a statewide property insurance plan".

existing indebtedness secured by such property if such
refinancing is necessary to enable the applicant to
amortize, with a monthly payment of not more than 20
per centum of his average monthly income, such loan
and any other indebtedness secured by his property; and

(B) in the case of nonresidential property, whichever
of the following is the least: $50,000, or the cost of
rehabilitation, or an amount which when added to any
outstanding indebtedness related to the property securing
the loan creates a total outstanding indebtedness that
the Secretary determines could be reasonably secured

by a first mortgage on the property. (5) A loan shall be secured as determined by the Secretary. (a) There is authorized to be appropriated not to exceed $150,000,000+ for each fiscal year which shall constitute a revolving fund to be used by the Secretary in carrying out this section. All moneys in such revolving fund shall be available for necessary expenses of servicing loans made pursuant to this section, including reimbursement or payment for services and facilities of the Government National Mortgage Association and of any public or private agency for the servicing of such loans.

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

(f) The Secretary is authorized to delegate or use as his agent any Federal or local public or private agency or organization to the extent he determines appropriate and desirable to carry out the objectives of this section in the area involved.

(g) The Secretary is authorized to issue such rules and regulations and impose such requirements and conditions (in addition to those specified in this section) as he determines to be desirable to carry out the objectives of this section, including limitations on the amount of a loan and restrictions on the use of the property

1sec. 312(b), Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 479, substituted "$100,000,000 for each fiscal year" for "$50,000,000" and added the last sentence of this subsec. (a).

Sec. 509(a), Housing and Urban Development Act of 1968, Public Law 90-448, approved August 1, 1968, 82 Stat. 476, 523, substituted "$150,000,000" for "$100,000,000".

(n)- No loan shall be made under the authority of this section after June 30, 1973, except pursuant to a contract, commitment, or other obligation entered into pursuant to this section before that date.

[blocks in formation]

1.

Sec. 312(c), Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10,1965, 79 Stat.451,479, added subsec. (h). Sec. 509(b), Housing and Urban Development Act of 1968, Public Law 90-448, approved August 1, 1968, 82 Stat. 476, 523, substituted "June 30, 1973" for "October 1, 1969",

Acquisition of Urban Renewal Property at "Write-down" Cost

Real property in urban renewal areas can be disposed of to limited dividend corporations, nonprofit bodies, or public bodies at write-down prices where it is to be used for rehabilitated housing for low or moderate income families. See section 107, Housing Act of 1949, supra.

Rehabilitation by Local Public Agencies

Under section 110(c)(8), Housing Act of 1949, supra, local public agencies can acquire and repair and rehabilitate structures in urban renewal areas for dwelling use or related facilities. Under the Housing and Urban Development Act of 1968 amendments of sections 220 and 221 of the National Housing Act, FHA can insure mortgages which finance the purchase of these properties. The amounts of the mortgages can be based upon the appraised value of the properties as of the time the mortgage is accepted for insurance.

Technical Assistance - "Seed Money"

Technical assistance and "seed money" can be provided for the assistance of rehabilitation of housing under the following provisions of the Housing and Urban Development Act of 1968:

EXCERPTS FROM THE
HOUSING AND URBAN DEVELOPMENT ACT OF 1968
Public Law 90-448, approved August 1, 1968

82 Stat. 476, 490

* *

ASSISTANCE TO NONPROFIT SPONSORS OF LOW AND MODERATE INCOME HOUSING

Sec. 106(a) The Secretary of Housing and Urban Development is authorized to provide, or contract with public or private organizations to provide, information, advice, and technical assistance with respect to the construction, rehabilitation, and operation by nonprofit organizations of housing for low or moderate income families. Assistance by the Secretary may include-

(1) the assembly, correlation, publication, and dissemination of information with respect to the construction, rehabilitation, and operation of low and moderate income housing, and

(2) the provision of advice and technical assistance with respect to the construction, rehabilitation, and operation of

low and moderate income housing.

(b)(1) The Secretary is authorized to make loans to nonprofit organizations for the necessary expenses, prior to construction, in plaming, and obtaining financing for, the rehabilitation or construction of housing for low or moderate income families under any federally assisted program. Such loans shall be made without interest and

« PreviousContinue »