I
105TH CONGRESS
2D SESSION
H. R. 3637
To amend the National Housing Act to authorize the Secretary of Housing
and Urban Development to insure mortgages for the acquisition, con-
struction, or substantial rehabilitation of child care and development
facilities and to establish the Children’s Development Commission to
certify such facilities for such insurance, and for other purposes.
IN THE HOUSE OF REPRESENTATIVES
APRIL 1, 1998
Mrs. MALONEY of New York (for herself, Mr. BAKER, Mr. KANJORSKI, Mr.
JACKSON of Illinois, Mrs. MEEK of Florida, Mr. MANTON, Mr. ALLEN,
Ms. VALA´ZQUEZ, Ms. WOOLSEY, and Mrs. TAUSCHER) introduced the fol-
lowing bill; which was referred to the Committee on Banking and Finan-
cial Services
A BILL
To amend the National Housing Act to authorize the Sec-
retary of Housing and Urban Development to insure
mortgages for the acquisition, construction, or substan-
tial rehabilitation of child care and development facilities
and to establish the Children’s Development Commission
to certify such facilities for such insurance, and for other
purposes.
Be it enacted by the Senate and House of Representa-
tives of the United States of America in Congress assembled,
Between 1992 and 2005 the participation of women
24 to 54 years of age in the labor force is projected
to increase from 75 percent to 83 percent.
(5) In States that have set up a mechanism to
provide capital improvements for child care facilities,
the demand for services of such facilities still has
not been met.
(6) The United States is behind other western,
industrialized countries when it comes to providing
child care services. In France, almost 100 percent of
all children 3 to 5 years of age attend nursery
school. In Germany this number is 65 to 70 percent.
In Japan 90 percent of such children attend some
form of preschool care. In all of these countries early
childhood care has proven to increase children’s de-
velopment and performance.
SEC. 3. INSURANCE FOR MORTGAGES ON NEW AND REHA-
BILITATED CHILD CARE AND DEVELOPMENT
FACILITIES.
Title II of the National Housing Act (12 U.S.C. 1707
et seq.) is amended by adding at the end the following
new section:
ulated or restricted as to charges and methods of fi-
nancing and, if the mortgagor is a corporate entity,
as to capital structure and rate of return. As an aid
to the regulation or restriction of any mortgagor
with respect to any of the foregoing matters, the
Secretary may make such contracts with and acquire
for not more than $100 such stock or interest in
such mortgagor as the Secretary may consider nec-
essary. Any stock or interest so purchased shall be
paid for out of the General Insurance Fund, and
shall be redeemed by the mortgagor at par upon the
termination of all obligations of the Secretary under
the insurance.
‘‘(2) PRINCIPAL
OBLIGATION.—The mortgage
shall involve a principal obligation in an amount not
to exceed 90 percent of the estimated value of the
property or project, or 95 percent of the estimated
value of the property or project in the case of a
mortgagor that is a private nonprofit corporation or
association (as such term is defined pursuant to sec-
tion 221(d)(3)), including—
‘‘(A) equipment to be used in the operation
of the facility when the proposed improvements
are completed and the equipment is installed; or
‘‘(B) a solar energy system (as defined in
subparagraph (3) of the last paragraph of sec-
tion 2(a)) or residential energy conservation
measures (as defined in subparagraphs (A)
through (G) and (I) of section 210(11) of the
National Energy Conservation Policy Act), in
cases in which the Secretary determines that
such measures are in addition to those required
under the minimum property standards and will
be cost-effective over the life of the measure.
‘‘(3) 
AMORTIZATION
AND
INTEREST.—The
mortgage shall—
‘‘(A) provide for complete amortization by
periodic payments under such terms as the Sec-
retary shall prescribe;
‘‘(B) have a maturity satisfactory to the
Secretary, but in no event longer than 25 years;
and
‘‘(C) bear interest at such rate as may be
agreed upon by the mortgagor and the mortga-
gee, and the Secretary shall not issue any regu-
lations or establish any terms or conditions that
interfere with the ability of the mortgagor and
mortgagee to determine the interest rate.
‘‘(d) CERTIFICATION BY CHILDREN’S DEVELOPMENT
COMMISSION.—The Secretary may not insure a mortgage
under this section unless the Children’s Development
Commission established under section 258 certifies that
the facility is in compliance, or will be in compliance not
later than 12 months after such certification, with—
‘‘(1) any laws, standards, and requirements ap-
plicable to such facilities under the laws of the
State, municipality, or other unit of general local
government in which the facility is or is to be lo-
cated; and
‘‘(2) after the effective date of the standards
and 
requirements 
established 
under 
section
258(c)(2), such standards and requirements.
‘‘(e) RELEASE.—The Secretary may consent to the
release of a part or parts of the mortgaged property or
project from the lien of any mortgage insured under this
section upon such terms and conditions as the Secretary
may prescribe.
‘‘(f) MORTGAGE INSURANCE TERMS.—The provisions
of subsections (d), (e), (g), (h), (i), (j), (k), (l), and (n)
of section 207 shall apply to mortgages insured under this
section, except that all references in such subsections to
section 207 shall be considered, for purposes of mortgage
insurance under this section, to refer to this section.