Housing and Community Development Amendments
PL 95-557 (S.3084), enacted 10/31/1978

92 STAT. 2080 
PUBLIC LAW 95-557—OCT. 31, 1978 
Oct. 31. 1978 
[S. 3084] 
Housing and 
Community 
Development 
Amendments of 
1978. 
42 u s e 5301 
note. 
Public Law 95-557 
95th Congress 
An Act 
To amend and extend certain Federal laws relating to housing, community, and 
neigliborhood development and preservation, and related programs, and for 
other purposes. 
Be it enacted hy the Senate and Hmjise of Representatives of the 
United States of America in Congress assembled, 
SHORT 
TITLE 
SECTION 1. This Act may be cited as the "Housing and Community 
Development Amendments of 1978". 
TITLE I—COMMUNITY AND NEIGHBORHOOD 
DEVELOPMENT AND CONSERVATION 
REHABILITATION LOANS AND LOAN INSURANCE 
42 use 1452b. 
SEC. 101. (a) Section 312 of the Housing Act of 1964 is amended— 
(1) by striking out the undesignated paragraph which follows 
subsection (a) (3) and inserting in lieu thereof the following new 
undesignated paragraph: 
"The Secretary shall, in making loans under this section, give prior-
ity to applications by low- and moderate-income persons who own the 
property to be rehabilitated and will occupy such property upon com-
pletion of the rehabilitation, including applications by condominiums 
and cooperatives in which the residents are principally of low and 
moderate income. For the purpose of the preceding sentence, the term 
'low and moderate income' means income which does not exceed 95 
per centum of the median income for the area."; 
(2) by striking out subsection (c) (3) and inserting in lieu 
thereof the following: 
Interest rate. 
" (3) The loan shall bear interest at such rate as the Secretary deter-
mines to be appropriate, but not to exceed 3 per centum per annum 
for loans to families with adjusted incomes of not more than 80 per 
centum of the median income for the area. For loans to families with 
adjusted incomes above 80 per centum of the median income for the 
area, as determined by the Secretary, the Secretary may establish inter-
est rates based on adjusted family income, ranging from above 3 
per centum to a rate determined by the Secretary, but in no case may 
any such rate exceed the current average market yield on outstanding 
marketable securities of the United States with remaining periods to 
maturity comparable to the terms of loans made pursuant to this sec-
tion, adjusted to the nearest one-eighth of 1 per centum. The Secretary 
may prescribe such other charges adequate in the judgment of the 
Secretary to cover administrative costs and possible losses under the 
program."; 
(3) by inserting the following before the semicolon at the end 
of subsection (c) (4) (A) : ", or if such refinancing is deemed 
necessary by the Secretary to minimize displacement of existing 
tenants of a multif amily property"; 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2081 
(4) by striking out "$50,000" in subsection (c) (4) (B) and 
inserting in lieu thereof "$100,000"; 
(5) by striking out "and not to exceed $60,000,000 for the fiscal 
year beginning on October 1, 1977" in subsection (d) and insert-
ing in lieu thereof "not to exceed $60,000,000 for the fiscal year 
beginning on October 1, 1977, and not to exceed $245,000,000 for 
the fiscal year beginning on October 1,1978"; 
(6) by adding at the end of subsection (d) the following: "Of 
the amounts available for loans under this section during the 
fiscal year beginning October 1, 1978, the Secretary may utilize 
not more than $60,000,000 for rehabilitation loans for multifamily 
properties."; and 
(7) by adding at the end thereof the following new subsection: 
"(i) The Secretary may not, after 270 days following the date of 
the enactment of this subsection, make any loan under this section 
with respect to any property unless the Secretary has determined that 
the improvements to such property, upon completion of the rehabilita-
tion, will meet cost-effective energy conservation standards prescribed 
by the Secretary.". 
(b) Section 312 of such Act is amended by adding at the end thereof 42 USC 1452b. 
the following: 
"(i) Kehabilitation loans under this section for multifamily prop-
erties shall be subject to the following additional limitations and 
conditions: 
"(1) The property must meet the requirements of subsection 
; isl! 
(a) and— 
"(A) be located in a low- or moderate-income neighbor-
hood ; or 
-
"(B) have a majority of tenants of low and moderate 
income. 
All such loans must be consistent with an overall community 
development strategy developed pursuant to title I of the Housing 
and Community Development Act of 1974. 
42 USC 5301. ; 
"(2) The property must have fewer than 100 units, except 
where the Secretary determines that a loan under this section is 
essential to meet the community development needs of a neigh-
borhood and alternative sources of financing are not available. 
"(3) The Secretary shall enter into an agreement with the 
investor-owner of a multifamily property which is to be rehabili-
tated with a loan under this section to limit, for a period of at 
least five years, the increased rent caused by the rehabilitation. 
"(4) The Secretary shall minimize involuntary displacement 
caused by rehabilitation loans under this section with respect to 
multifamily properties, 
"(i) In conjunction with the annual report required under section Reports to 
113(a) of the Housing and Community Development Act of 1974, the Congress. 
Secretary shall submit to the Congress a report on the rehabilitation ^^ USC 5313. 
loan program under this section. Such report shall include a summary 
of the use of funds under this section, particularly with regard to the 
types of neighborhoods and persons aided under this section, and an 
evaluation of progress made toward community development goals 
under this section. As soon as feasible, but not later than December 1, 
1979, the Secretary shall submit to Congress an interim report evaluat-
ing the use of funds under this section for multifamily properties, with 
legislative recommendations for improving the overall effectiveness of 
Federal assistance for the rehabilitation of multifamily properties.". 
(c) (1) Section 203 (k) of the National Housing Act is amended to 12 USC 1709. 
read as follows: 
39-194 O—80—pt. 2 
51 : QL3 
92 STAT. 2082 
PUBLIC LAW 95-557—OCT. 31, 1978 
Commitments to 
insure loans. 
Ante, p. 2080. 
"Rehabilitation 
loan." 
'Rehabilitation. 
Eligibility. 
"(k) (1) The Secretary may, in order to assist in the rehabilitation 
of one- to four-family structures used primarily for residential pur-
poses, insure and make commitments to insure rehabilitation loans 
(including advances made during rehabilitation) made by financial 
institutions on and after 180 days following the date of the enactment 
of the Housing and Community Development Amendments of 1978. 
Such commitments to insure and such insurance shall be made upon 
such terms and conditions which the Secretary may prescribe and 
which are consistent with the provisions of subsections (h), (c), (e), 
(i), and (j) of this section, except as modified by the provisions of this 
subsection. 
"(2) For the purpose of this subsection— 
"(A) the term 'rehabilitation loan' means a loan, advance of 
credit, or purchase of an obligation representing a loan or advance 
of credit, made for the purpose of financing— 
"(i) the rehabilitation of an existing one- to four-unit 
structure which will be used primarily for residential 
purposes; 
"(ii) the rehabilitation of such a structure and the refinanc-
ing of the outstanding indebtedness on such structure and the 
real property on which the structure is located; or 
"(iii) the rehabilitation of such a structure and the pur-
chase of the structure and the real property on which it is 
located; and 
"(B) the term'rehabilitation'means the improvement (includ-
ing improvements designed to meet cost-effective energy conser-
vation standards prescribed by the Secretary) 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, a community development plan, or a 
statewide property insurance plan to be provided by'the owner or 
tenant of the project. 
"(3) To be eligible for insurance under this subsection, a rehabilita-
tion loan shall— 
"(A) involve a principal obligation (including such initial 
service charges, appraisal, inspection, and other fees as the Secre-
tary shall approve) in an amount which does not exceed, when 
added to any outstanding indebtedness of the borrower which is 
secured by the structure and the property on which it is located, 
the amount specified in subsection (b) (2); except that, in deter-
mining the amount of the principal obligation for purposes of 
this subsection, the Secretary shall establish as the appraised value 
of the property an amount not to exceed the sum of the estimated 
cost of rehabilitation and the Secretary's estimate of the value 
of the property before rehabilitation; 
"(B) bear interest at a rate permitted by the Secretary for 
mortgages insured under this section; except that the Secretary 
may permit a higher rate of interest to be applied to the loan with 
respect to the period beginning with the making of the loan and 
ending with the completion of the rehabilitation or such earlier 
time as the Secretary may determine; 
"(C) be an acceptable risk, as determined by the Secretary; and 
" (D) comply with such other terms, conditions, and restrictions 
as the Secretary may prescribe. 
"(4) Any rehabilitation loan insured under this subsection may be 
refinanced and extended in accordance with such terms and conditions 
as the Secretary may prescribe, but in no event for an additional 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2083 
12 use 1715k. 
12 use 1709. 
amount or term which exceeds the maximum provided for in this 
subsection. 
"(5) All funds received and all disbursements made pursuant to the 
authority established by this subsection shall be credited or charged, 
as appropriate, to the General Insurance Fund, and insurance benefits 
shall be paid in cash out of such Fund or in debentures executed in the 
name of such Fund. Insurance benefits paid with respect to loans 
insured under this subsection shall be paid in accordance with para-
graphs (6) and (7) of section 220(h), except that any reference to 
'this subsection' in such paragraphs shall be construed as referring to 
this subsection.". 
(2) Section 203(c) of such Act is amended— 
(A) by striking out "subsection (n) is" in the first proviso and 
inserting in lieu thereof "subsections (n) and (k) are"; and 
(B) by inserting "or (k)" after "subsection (n)" the second 
time it appears in such proviso. 
(3) The proviso in the first sentence of section 302(b) (1) of such 12 USe 1717. 
Act is amended by inserting "or section 203 (k)" after "title VIII" in 
clause (3). 
URBAN HOMESTEADING 
SEC. 102. (a) Section 810(f) of the Housing and Community 
Development Act of 1974 is amended— 
12 USe 1706e. 
(1) by inserting "and the Administrator of Veterans' Affairs" 
after "Secretary" the first place it appears; and 
(2) by inserting "or the Administrator" after "Secretary" the 
second place it appears. 
(b) The first sentence of section 810(g) of such Act is amended— 
(1) by striking out "and" immediately following "fiscal year 
1977,"; and 
(2) by inserting the following before the period at the end 
thereof: ", and not to exceed $26,000,000 for the fiscal year 1979". 
COMMUNITY nEVELOPMENT BLOCK GRANT PR(XiRAM AMENDMENTS 
SEC. 103. (a) Section 104(a)(4)(A) of the Housing and Com-
nmnity Development Act of 1974 is amended by inserting "owners of 42 USC 5304. 
homes requiring lehabilitation assistance," after "large families," 
(b) Section 104(a) (4) (B) (i) of such Act is amended by inserting 
"including existing rental and owner occupied dwelling units to be 
upgraded and thereby preserved," after "existing dwelling units,". 
(c) Section 104(a) of such Act is amended by inserting after 
"expected to reside in the community" in paragraphs (3) (C) and 
(4) (A) the following: "as a result of existing or projected employ-
ment opportunities in the community (and those elderly persons resid-
ing in or expected to reside in the community), or as estimated in a 
community accepted State or regional housing opportunity plan 
approved by the Secretary,". 
(d) Section 104(c) of such Act is amended by adding the following 
new sentence at the end thereof: 
"The Secretary may not disapprove an application on the basis that 
such application addresses any one of the primary purposes described 
in paragraph (^3) to a greater or lesser degree than any other, except 
that such application may be disapproved if the Secretary determines 
that the extent to which a primary purpose is addressed is plainly 
inappropriate to meeting the needs and objectives which are consistent 
with the community's efforts to achieve the primary objective of this 
title.". 
92 STAT. 2084 
PUBLIC LAW 95-557—OCT. 31, 1978 
Relocation 
payments. 
42 use 5305. 
Technical 
assistance. 
42 use 5307. 
42 use 5318. 
(e) Section 105(a) (11) of such Act is amended to read as follows: 
"(11) relocation payments and assistance for displaced individ-
uals, families, businesses, organizations, and farm operations, 
when determined by the grantee to be appropriate to the com-
munity development program;". 
(f) The last sentence of section 107(a) (8) of such Act is amended 
to read as follows: "The Secretary may also provide, directly or 
through contracts, technical assistance under this paragraph to such 
governmental units, or to a group designated by such a governmental 
unit for the purpose of assisting that governmental unit to carry out 
its Community Development Program.". 
(g) Section 119(c) of such Act is amended— 
(1) by striking out "and" at the end of clause (4); 
(2) by striking out the period at the end of clause (5) and 
inserting in lieu thereof "; and"; and 
(3) by adding at the end thereof the following: 
"(6) include a statement analyzing the impact of the proposed 
urban development action program on the residents, particularly 
those of low and moderate income, of the residential neighbor-
hood, and on the neighborhood, in which the program is to be 
located.", 
(h) Section 119(e) of such Act is amended by inserting before "arid 
feasibility" the following: "impact of the proposed urban development 
action program on the residents, particularly those of low and moder-
ate income, of the residential neighborhood, and on the neighborhood, 
in which the program is to be located;". 
(i) Title I of such Act is amended by adding at the end thereof the 
following new section: 
FAIR PARTICIPATION FOR SMALL 
COMMUNITIES 
42 use 5319. 
"SEC. 120. No community shall be barred from participating in any 
program authorized under this title solely on the basis of population, 
except as expressly authorized by statute.". 
12 use 1709 
note. 
EFFECTIVE DATE 
SEC. 104. The amendments made by this title shall become effective 
October 1,1978. 
TITLE II—HOUSING ASSISTANCE PKOGRAMS 
12 use 
1715z-la. 
12 u s e 1701. 
12 u s e 1701 
note. 
OPERATING ASSISTANCE FOR TROUBLED MULTIFAMILY HOUSING PROJECTS 
SEC. 201. (a) The purposes of this section are to provide assistance to 
restore or maintain the financial soundness, to assist in the improve-
ment of the management, and to maintain the low- to moderate-income 
character of certain projects assisted or approved for assistance under 
the National Housing Act or under the Housing and Urban Develop-
ment Act of 1965. 
(b) The Secretary of Housing and Urban Development (hereinafter 
referred to in this section as the "Secretary") may make available, and 
contract to make available, to such extent and in such amounts as may 
be approved in appropriation Acts, financial assistance to owners of 
rental or cooperative housing projects meeting the requirements of 
this section. Such assistance shall be made on an annual basis and in 
accordance with the provisions of this section. 
(c) a rental or cooperative housing project is eligible for assistance 
under this section only if such project— 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2085 
(1) (A) is assisted under section 236 or the proviso of section 
221(d) (5) of the National Housing Act, or under section 101 of 12USC1715z-
the Housing and Urban Development Act of 1965; except that, in 1715Z. 
the case of any such project which is not insured under the 79 Stat. 451. 
National Housing Act such assistance may not be provided before 12 USC 1701. 
October 1, 1979; or 
(B) met the criteria specified in subparagraph (A) of this para-
graph before the acquisition of such project by the Secretary and 
has been sold by the Secretary, subject to a mortgage insured or 
held by the Secretary and subject to an agreement (in effect during 
the period of assistance under this section) which provides that 
the low- and moderate-income character of the project will be 
maintained; except that, with respect to projects sold after Octo-
ber 1,1978, assistance shall be available for a period not to exceed 
three years; and 
(2) meets such other requirements consistent with the purposes 
of this section as the Secretary may prescribe. 
(d) No assistance may be made available under this section unless 
the Secretary has determined that— 
(1) such assistance, when considered with other resources avail-
able to the project, is necessary and, in the determination of the 
Secretary, will restore or maintain the financial soundness of the 
project and maintain the low- and moderate-income character of 
the project; 
(2) the assistance which could reasonably be expected to be 
provided over the useful life of the project will be less costly to 
the Federal Government than other reasonable alternatives by 
which the Secretary could maintain the low- and moderate-
income character of the project; 
(3) the owner of the project, together with the mortgagee in 
the case of a project not insured under the National Housing Act, 
has provided or has agreed to provide assistance to the project 
in such manner as the Secretary may determine; 
(4) the project is or can reasonably be made structurally sound, 
as determined on the basis of information obtained as a result of 
an onsite inspection of the project; 
(5) the management of the project is being conducted by per-
sons who meet minimum levels of competency and experience 
prescribed by the Secretary; and 
(6) the project is being operated and managed in accordance 
with a management-improvement-and-operating plan which ia 
designed to reduce the operating costs of the project, which has 
been approved by the Secretary, and which includes the follow-
ing: (A) a detailed maintenance schedule; (B) a schedule for 
correcting past deficiencies in maintenance, repairs, and replace-
ments; (C) a plan to upgrade the project to meet cost-effective 
energy efficiency standards prescribed by the Secretary; (D) a 
plan to improve financial and management control systems; (E) 
a detailed annual operating budget taking into account such 
standards for operating costs in the area as may be determined 
by the Secretary; and (F) such other requirements as the Secre-
tary may determine. 
(e) Prior to making assistance available to a project, the Secretary Consultation, 
shall consult with the appropriate officials of the unit of local govern-
ment in which such project is located and seek assurances that— 
(1) the community in which the project is located is or will 
provide essential services to the project in keeping with the com-
munity's general level of such services; 
92 STAT. 2086 
PUBLIC LAW 95-557—OCT. 31, 1978 
(2) the real estate taxes on the project are or will be no greater 
f
, 
than would be the case if the property were assessed in a manner 
consistent with normal property assessment procedures for the 
community; and 
(3) assistance to the project under this section would not be 
inconsistent with local plans and priorities. 
(f) (1) The Secretary may, with respect to any year, provide assist-
ance under this section, and make commitments to provide such 
assistance, with respect to any project in any amount which the Secre-
tary determines is consistent with the project's management-improve-
ment-and-operating plan described in subsection (d) (6) and which 
does not exceed the sum of— 
(A) an amount determined by the Secretary to be necessary to 
correct deficiencies in the project which exist at the beginning of 
the first year with respect to which assistance is made available 
for the project under this section, which were caused by the defer-
ral of regularly scheduled maintenance and repairs or the failure 
to make necessary and timely replacements of equipment and other 
components of the project, and for which payment has not previ-
ously been made; 
(B) an amount determined by the Secretary to be necessar^^ to 
maintain the low- and moderate-income character of the project 
by reducing deficiencies, which exist at the beginning of the first 
year with respect to which assistance is made available for the 
project under this section and for which payment has not previ-
ously been made, in the reserve funds established by the project 
owner for the purpose of replacing capital items; and 
(C) an amount not greater than the amount by which the esti-
mated operating expenses (as described in paragraph (2) of this 
subsection) for the year with respect to which such assistance is 
made available exceeds the estimated revenues to be received (as 
described in paragraph (2) of this subsection) by the project 
during such year. 
(2) The estimated revenues for any project under paragraph (1) 
(C) of this subsection with respect to any year shall be equal to the 
sum of— 
(A) the estimated amount of rent which is to be expended by 
the tenants of such project during such year, as determined by 
the Secretary without regard to section 236(f) (1) of the National 
12 use 1715Z-1. 
Housing Act ; 
(B) the estimated amount of rental assistance payments to be 
made on behalf of such tenants during such year, other than assist-
ance made under this section; 
(C) the estimated amount of a^istance payments to be made on 
behalf of the owner of such project under section 221(d) (5) or 
12 use 1715/, 
section 236 of the National Housing Act during; such year; and 
1715z-l. 
(D) other income attributable to the project as determined by 
the Secretary; 
except that— 
(E) in computing the estimated amount of rent to be expended 
by tenants, the Secretary shall provide that (i) at least 25 percent 
(or such lesser percentage as is provided for under any other Fed-
eral housing assistance program in which such tenant is partici-
pating) of the income of each such tenant is included, or (ii) in 
the case of a tenant paying his or her own utilities, a percentage 
of income which is less than 25 percent and which takes into 
account the reasonable costs of such utilities; except that no 
amount shall be provided for any tenant under clause (i) or (ii) 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2087 
which exceeds the fair market rental charge as determined pur-
suant to section 236(f) (1) of the National Housing Act for such 
tenant; and 
(F) in computing the estimated amount of rent to be expended 
by tenants and the estimated amount of rental assistance payments 
to be made on behalf of such tenants, the Secretary may permit a 
delinquency-and-vacancy allowance of not more than 6 per centum 
of the estimated amount of such rent and payments computed 
without regard to such allowance; except that, with respect to the 
first three years in which assistance is provided to a project under 
this section, the Secretary may permit such allowance for such 
project to exceed such 6 percent by an amount which the Secretary 
determines is appropriate to carry out the purposes of this section. 
For purposes of computing estimated operating expenses of any 
such project Avith respect to any year, the Secretary shall include all 
estimated operating costs which the Secretary determines to be neces-
sary and consistent with the management-improvement-and-operating 
plan for the project for such year, including, but not limited to, taxes, 
utilities, maintenance and repairs (except for maintenance and repairs 
which should have been performed in previous years), management, 
insurance, debt service, and payments made by the owner for the pur-
pose of establishing or maintaining a reserve fund for replacement 
costs. The Secretary may not include in such estimated operating 
expenses any return on the equity investment of the owner in such 
project. 
(3) In order to carry out the purposes of this section, the Secretary 
may, notwithstanding the provisions of section 236(f)(1) of the 
National Housing Act, provide that, for purposes of establishing a 
rental charge under such section, there may be excluded from the com-
putation of the cost of operating a project an amount equivalent to the 
amount of assistance payments made for the project under this section. 
(4) Any assistance payments made pursuant to this section with 
respect to any project shall be made on an annual basis, payable at 
such intervals, but at least quarterly, as the Secretary may determine, 
and may be in any amount (which the Secretary determines to be con-
sistent with the purpose of this section), except that the sum of such 
assistance payments for any year may not exceed the amount com-
puted pursuant to paragraph (1) of this subsection. The Secretary 
shall review the operations of the project at the time of such payments 
to determine that such operations are consistent with the management-
improvement-and-operating plan. 
(g) The Secretary is authorized to issue such rules and regulations 
as may be necessary to carry out the provisions and purposes of this 
section, including regulations requiring the establishment of a project 
reserve or such other safeguards as the Secretary determines to be 
necessary for the financial soundness of any project for which assist-
ance payments are provided. 
(h) There is authorized to be appropriated, for the purpose of pro-
viding financial assistance under this section, an amount (in addition 
to any amount appropriated for use under this section pursuant to sec-
tion '236(f)(3)(B) of the National Housing Act, not to exceed 
$74,000,000 for the fiscal year 1979. Any amounts appropriated under 
this section shall remain available imtil expended, 
(i) Eifective October 1, 1978, section 236 of the National Housing 
Act is amended— 
(1) in subsection (f) (3)— 
(A) by inserting ^' (A)" after " (3)"; 
12 u s e 1715Z-1. 
Estimated 
operated 
expenses, 
computation. 
Annual 
assistance 
payments. 
Review. 
Rules and 
regulations. 
Appropriation 
authorization. 
Effective date. 
12 u s e 1715Z-1. 
92 STAT. 2088 
PUBLIC LAW 95-557—OCT. 31, 1978 
(B) by striking out "The" in the second sentence and insert-
ing in lieu thereof "For each fiscal year prior to the fiscal year 
1979, the"; and 
(C) by adding at the end thereof the following: 
"(B) The Secretary shall utilize amounts credited to the fund 
described in subsection (g) on or after October 1, 1978, for the sole 
purpose of carrying out the purposes of section 201 of the Housing and 
Community Development Amendments of 1978. No payments may be 
made from such fund unless approved in an appropriation Act. No 
amount may be so approved for any fiscal year beginning after Septem-
ber 30,1^79."; and 
(2) by striking out the third and fourth sentences of subsection (g). 
TENANT PARTICIPATION IN MULTIPAMILY HOUSING PROJECTS 
12 use 
SEC. 202. (a) The purpose of this section is to recognize the impor-
1715z-lb. 
tance and benefits of cooperation and participation of tenants in creat-
ing a suitable living environment in multifamily housing projects and 
in contributing to the successful operation of such projects, including 
their good physical condition, proper maintenance, security, energy 
"Multifamily 
efficiency, and control of operating costs. For the purpose of this sec-
housing project." tion, the term "multifamily housing project" means a project which is 
eligible for assistance as described in section 201 (c) of this Act. 
(b) The Secretary shall assure that— 
(1) where the Secretary's written approval is required with 
respect to an owner's action and the Secretary deems it appro-
priate, tenants have adequate notice of, reasonable access to 
relevant information about, and an opportunity to comment on 
such actions (and in the case of a project owned by the Secretary, 
any proposed disposition of the project) and that such comments 
are taken into consideration by the Secretary ; 
(2) project owners not interfere with the efforts of tenants to 
obtain rent subsidies or other public assistance; 
(3) leases approved by the Secretary provide that tenants may 
not be evicted without good cause or without adequate notice of 
the reasons therefor and do not contain unreasonable terms and 
conditions; and 
(4) project owners do not impede the reasonable efforts of resi-
dent tenant organizations to represent their members or the rea-
sonable efforts of tenants to organize. 
Regulations. 
(c) The Secretary shall promulgate regulations to carry out the 
provisions of this section not later than 90 days after the date of 
enactment of this Act. 
12 use 
1701Z-11. 
12 use 1701. 
MANAGEMENT AND PRESERVATION OF HUD-OWNED 
MUIjTirAMILY HOUSING PROJECTS 
SEC. 203. (a) It is the policy of the United States that the Secretary 
of Housing and Urban Development (hereinafter referred to as the 
"Secretary") shall manage and dispose of multifamily housing 
projects which are owned by the Secretary in a manner consistent with 
the National Housing Act and this section. The purpose of the prop-
erty management and disposition program of the Department of 
Housing and Urban Development shall be to manage and dispose of 
projects in a manner which will protect the financial interests of the 
Federal Government and be less costly to the Federal Government 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2089 
than other reasonable alternatives by Avhich the Secretary can further 
the goals of— 
(1) preserving the housing units so that they can remain avail-
able to and affordable by low- and moderate-income families; 
(2) preserving and revitalizing residential neighborhoods; 
(3) maintaining the existing housing stock in a decent, safe, 
and sanitary condition; 
(4) minimizing the involuntary displacement of tenants; and 
(5) minimizing the need to demolish projects. 
The Secretary, in determining the manner by which a project shall be 
managed or disposed of, may balance competing goals relating to 
individual projects in a manner which will further the achievement of 
the overall purpose of this section. 
(b) The Secretary is authorized, in carrying out this section— 
(1) to dispose of a niultifamily housing project owned by the 
Secretary on a negotiated, competitive bid, or other basis, on such 
terms as the Secretary deems appropriate considering the low-
and moderate-income character of the project and the require-
ments of subsection (a) of this section, to a purchaser determined 
by the Secretary to be capable of (A) satisfying the conditions 
of the disposition; (B) implementing a sound financial and 
physical management program; (C) responding to the needs of 
the tenants and working cooperatively with resident organiza-
tions; (D) providing adequate organizational, staff and financial 
resources to the project; and (E) meeting such other require-
ments as the Secretary may determine; and 
(2) to contract for management services for a multifamily 
housing project, owned by the Secretary, on a negotiated, competi-
tive bid, or other basis at a price determined by the Secretary to 
be reasonable, with a manager the Secretary has determined is 
capable of (A) implementing a sound financial and physical 
management program, (B) responding to the needs of the ten-
ants and working cooperatively with resident organizations, (C) 
providing adequate organizational, staff, and other resources to 
implement a management program determined by the Secretary, 
and (D) meeting such other requirements as the Secretary may 
determine. 
(e) Except where the Secretary has determined on a case-by-case 
basis that it would be clearly inappropriate, given the manner by 
which an individual project is to be managed or disposed of pursuant 
to subsection (a) of this section, the Secretary shall seek to— 
(1) maintain all occupied multifamily housing projects owned 
by the Secretary in a decent, safe, and sanitary condition; and 
(2) to the greatest extent possible, maintain full occupancy in 
all multifamily housing projects owned by the Secretary. 
(d) (1) Whenever tenants will be displaced as a result of the dis-
position of, or repairs to, a multifamily housing project owned by the 
Secretary, the Secretary shall identify tenants who will be displaced, 
and shall notify all such tenants of their pending displacement and of 
any relocation assistance which may be available. 
(2) The Secretary shall seek to assure the maximum opportunity 
for any such tenant— 
(A) to return, whenever possible, to a repaired unit; 
(B) to occupy a unit in another multifamily housing project 
owned by the Secretary; 
(C) to obtain housing assistance under the United States 
Housing Act of 1937; or 
Tenant 
displacement, 
notification. 
42 use 1437 
note. 
92 STAT. 2090 
PUBLIC LAW 95-557—OCT. 31, 1978 
"Multifamily 
housing project." 
12 use 1715Z-1, 
12 use 1715/. 
12 use 1701. 
Rules and 
regulations. 
(D) to receive any other available relocation assistance as the 
Secretary determines to be appropriate. 
(e) Notwithstanding any other provision of law, whenever the Sec-
retary is requested to accept assignment of a mortgage insured by the 
Secretary which covers a multifamily housing project, and the Secre-
tary determines that partial payment would be less costly to the 
Federal Government than other reasonable alternatives for maintain-
ing the low- and moderate-income character of the project, the Secre-
tary may request the mortgagee in lieu of assignment, to accept partial 
payment of the claim under the mortgage insurance contract and to 
recast the mortgage, under such terms and conditions as the Secretary 
may determine. As a condition to a partial claim payment under this 
section, the mortgagor shall agree to repay to the Secretary the 
amount of such payment and such obligation shall be secured by a sec-
ond mortgage on the property on such terms and conditions as the 
Secretary may determine. 
(f) For the purpose of this section, the term "multifamily housing 
project" means a multifamily project which is, or prior to acquisition 
by the Secretary was, assisted under section 236, the proviso of section 
221(d) (5) of the National Housing Act, or section 101 of the Housing 
and Urban Development Act of 1965, and which is insured under the 
National Housing Act. 
(g) The Secretary shall issue such rules and regulations as may 
be necessary to carry out the provisions of this section within 90 days 
after the date of enactment of this Act. 
HOUSING ACCESS 
12 use 
SEC." 204. The Secretary shall require any purchaser of a multifamily 
1701z-12. 
housing project owned by the Secretary which is sold on or after 
October 1, 1978, to agree not to refuse unreasonably to lease a vacant 
dwelling unit in the project which rents for an amount not greater than 
the fair market rent for a comparable unit in the area as determined 
by the Secretary under section 8 of the United States Housing Act of 
42 use 1437f. 
1937 to a holder of a certificate of eligibility under that section solely 
because of such prospective tenant's status as a certificate holder. 
HOUSING FOR THE 
HANDICAPPED 
12 use 1701q. 
SEC. 205. (a) Section 202 of the Housing Act of 1959 is amended by 
adding at the end thereof the following new subsection: 
"(h) Of the amounts made available in appropriation Acts for 
loans pursuant to subsection (a) (4) (C) for the fiscal year commenc-
ing on October 1, 1978, not less than $50,000,000 shall be available for 
loans for the development of rental housing and related facilities 
specifically designed to meet the needs of handicapped (primarily non-
elderly) persons. The Secretary shall take such steps as may be neces-
sary to assure that— 
"(1) funds made available pursuant to this subsection will be 
used to support innovative methods of meeting the needs of handi-
capped persons by providing a variety of housing options, rang-
ing from small group homes to independent living complexes; and 
"(2) housing and related facilities assisted under this subsec-
tion will provide handicapped persons occupying units within 
such housing with an assured range of services specified under 
subsection (f) and the opportunity for optimal independent living 
and participation in normal daily activities, and will facilitate 
access by such persons to the community at large and to suitable 
employment opportunities within such community.". 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2091 
(b) The second sentence of section 202(a) (4) (C) of such Act is 12 USC 1701q. 
amended— 
(1) by striking out "in any fiscal year" immediately after "under 
this section"; and 
(2) by striking out "for such year" immediately after "author-
ity established". 
(c) Section 202(d) (3) of such Act is amended by inserting "the cost 
of movables necessary to the basic operation of the project as deter-
mined by the Secretary," immediately after "related facilities,". 
(d) Section 202(d) (2) of such Act is amended to read as follows: 
"(2) The term 'corporation' means any incorporated private "Corporation." 
institution or foundation— 
"(A) no part of the net earnings of which inures to the 
benefit of any member, founder, contributor, or individual; 
"(B) which has a governing board (i) the membership of 
, 
which is selected in a manner to assure that there is significant 
representation of the views of the community in which such 
project is located, and (ii) which is responsible for the opera-
tion of the housing project assisted under this section; and 
"(C) which is approved by the Secretary as to financial 
responsibility.". 
LOW-INCOME HOUSING 
SEC. 206. (a) Section 5(c) of the United States Housing Act of 
1937 is amended-- 
42 USC 1437c. 
(1) by striking out "and" immediately after "October 1,1976," 
in the first sentence; 
(2) by inserting immediately after "on October 1,1977," in the 
first sentence the following: "and by $1,195,043,000 on October 1, 
1978"; 
(3) by striking out the second and fourth sentences; and 
(4) by inserting "and on and after October 1, 1978," immedi-
ately after "October 1,1976," in the third sentence. 
(b) Section 5(c) of such Act is amended by inserting after the fourth 
sentence the following: "Of the additional authority to enter into con-
tracts for annual contributions provided on October 1, 1978, and 
approved in appropriation Acts, the Secretary shall make available 
not less than $50,000,000 for modernization of low-income housing 
projects.". 
(c) Section 3(2) (D) of such Act is amended by striking out "10" 42 USC 1437a. 
in the first proviso and inserting in lieu thereof "15". 
(d)(1) Section 8 of such Act is amended by adding at the end 42 USC 1437f. 
thereof the following new subsection: 
"(i) In entering into contracts under this section with respect to Contracts, 
substantially rehabilitated dwelling units, the Secretary shall provide 
that— 
"(1) the maximum monthly rent permitted for the assisted 
units be not greater than the amount permitted under subsection 
(c) or a lesser amount which the Secretary determines is appro-
priate taking into consideration the investment of the owner in 
the assisted units and such other factors as the Secretary deter-
mines to be relevant; 
^ 
"(2) the assisted units be rehabilitated to a level which meets 
but does not exceed applicable codes and standards for decent, 
safe, and sanitary housing which are prescribed by the Secretary; 
"(3) all the dwelling units in the housing structure in which 
the assisted units are located meet applicable codes and standards 
prescribed by the Secretary for decent, safe, and sanitary housing; 
" (4) the term of any such contract does not exceed the maxi-
92 STAT. 2092 
PUBLIC LAW 95-557—OCT. 31, 1978 
Effective date. 
42 use 1437f 
note. 
42 use 1437f. 
Terms and 
conditions. 
Annual 
contributions 
contracts. 
mum term permitted under subsection (e) (1) or a shorter term 
which the Secretary determines is appropriate taking into con-
sideration the amount of investment of the owner in the assisted 
units and such other factors as the Secretary determines to be 
relevant; and 
" (5) the assisted units meet cost-effective energy efficiency stand-
ards prescribed by the Secretary.". 
(2) The amendment made by this subsection shall become effective 
with respect to contracts entered into on or after 270 days following 
the date of enactment of this Act. 
(e) Section 8(e) of such Act is amended by adding at the end 
thereof the following: 
"(5) For the purpose of upgrading and thereby preserving the 
Nation's housing stock, the Secretary is authorized to make assist-
ance payments under this section directly or through public hous-
ing agencies pursuant to contracts with owners or prospective 
owners who agree to upgrade housing so as to make and keep 
such housing decent, safe, and sanitary through upgrading which 
involves less than substantial rehabilitation, as such upgrading 
and rehabilitation are defined by the Secretary. The Secretary is 
authorized to prescribe such terms and conditions for contracts 
entered into under this section pursuant to this paragraph as the 
Secretary determines to be necessary and appropriate, except that 
such terms and conditions, to the maximum extent feasible, shall 
be consistent with terms and conditions otherwise applicable with 
respect to other dwelling units assisted under this section. The 
Secretary is also authorized to make assistance available under 
this section pursuant to this paragraph to any unit in a housing 
project which, on an overall basis, reflects the need for such 
upgrading.". 
(f) Section 8 of such Act is amended by adding at the end thereof 
the following new subsection: 
"(j)(l) The Secretary may enter into annual contributions con-
tracts under this subsection for the purpose of assisting lower income 
families by making rental assistance payments with respect to real 
property on which is located a mobile home which is owned by any 
such family and utilized by such family as its principal place of resi-
dence. In carrying out this subsection, the Secretary may (A) enter 
into annual contributions contracts with public housing agencies pur-
suant to which such agencies may enter into contracts to make such 
assistance payments to the owners of such real property, or (B) enter 
into such contracts directly with the owners of such real property. 
"(2) Contracts entered into pursuant to this subsection shall estab-
lish the maximum monthy rent (including maintenance and manage-
ment charges) which the owner is entitled to receive for each space 
on which a mobile home is located and with respect to which assistance 
E
ayments are to be made. The maximum monthly rent shall not exceed 
y more than 10 per centum the fair market rental established by 
the Secretary periodically (but not less than annually) with respect 
to the market area for the rental of real property suitable for occu-
pancy by families assisted imder this subsection. The provisions of 
subsection (c) (2) of this section shall apply to the adjustments of 
maximum monthly rents under this subsection. 
"(3) The amount of any monthly assistance payment with respect 
to any family assisted under this subsection shall be the difference 
between 25 per centum of one-twelfth of the annual income of such 
family and the sum of— 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2093 
"(A) the monthly payment made by such family to amortize 
the cost of purchasing the mobile home; 
"(B) monthly utility payments made by such family, subject 
to reasonable limitations prescribed by the Secretary; and 
"(C) the maximum monthly rent permitted with respect to the 
real property which is rented by such family for the purpose of 
locating its mobile home; 
except that in no case may such assistance exceed the total amount of 
such maximum monthly rent. 
"(4) Each contract entered into under this subsection shall be for a 
term of not less than one month and not more than 180 months. 
"(5) The Secretary may prescribe other terms and conditions which 
are necessary for the purpose of carrying out the provisions of this 
subsection and whicli are consistent with the purposes of this 
subsection.". 
(g) Section 9(c) of such Act is amended— 
(1) by striking out "and" immediately following "on or after 
October 1,1976,"; and 
(2) by inserting immediately before the period at the end 
thereof the following: ", and not to exceed $729,000,000 on or after 
October 1,1978". 
(h) The amendments made by this section, except the amendment 
made by subsection (d), shall become effective on October 1, 1978. 
PUBLIC HOUSING 
SECURITY 
SEC. 207. (a) This section may be cited as the "Public Housing 
Security Demonstration Act of 1978". 
(b) (1) The Congress finds that— 
(A) low-income and elderly public housing residents of the 
Nation have suffered substantially from rising crime and violence, 
and are being threatened as a result of inadequate security 
arrangements for the prevention of physical violence, theft, 
burglary, and other crimes; 
(B) older persons generally regard the fear of crime as the 
most serious problem in their lives, to the extent that one-fourth 
of all Americans over 65 voluntarily restrict their mobility 
because of it; 
(C) crime and the fear of crime have led some residents to move 
from public housing projects; 
(D) an integral part of successfully providing decent, safe, and 
sanitary dwellings for low-income persons is to insure that the 
housing is secure; 
(E) local public housing authorities may have inadequate 
security arrangements for the prevention of crime and vandalism; 
and 
(F) action is needed to provide for the security of public hous-
ing residents and to preserve the Nation's investment in its public 
housing stock. 
(2) It is, therefore, declared to be the policy of the United States to 
provide for a demonstration and evaluation of effective means of 
mitigating crime and vandalism in public housing projects, in order 
to provide a safe living environment for the residents, particularly the 
elderly residents, of such projects. 
(c) (1) The Secretary of Housing and Urban Development shall 
promptly initiate and carry out during the fiscal year beginning on 
October 1, 1978, to the extent approved in appropriation Acts, a pro-
Terms and 
conditions. 
42 u s e 1437g. 
Effective date. 
42 u s e 1437c 
note. 
Public Housing 
Security 
Demonstration 
Act of 1978. 
12 u s e 1701Z-6 
note. 
92 STAT. 2094 
PUBLIC LAW 95-557—OCT. 31, 1978 
Comprehensive 
community 
anticrime and 
security plans, 
consideration. 
Crime and 
vandalism, 
survey. 
Report to 
Congress. 
42 u s e 1437c. 
gram for the development, demonstration, and evaluation of improved, 
innovative community anticrime and security methods, concepts and 
techniques which will mitigate the level of crime in public housing 
projects and their surrounding neighborhoods. 
(2) In selecting public housing projects to receive assistance under 
this section, the Secretary shall assure that a broad spectrum of project 
types, locations and tenant populations are represented and shall con-
sider at least the following: the extent of crime and vandalism currently 
existing in the projects; the extent, nature and quality of community 
anticrime efforts in the projects and surrounding areas; the extent, 
nature and quality of police and other protective services available to 
the projects and their tenants; the demand for public housing units in 
the locality, the vacancy rate, and extent of abandonment of such units; 
and the characteristics and needs of the public housing tenants. 
(3) In selecting the anticrime and security methods, concepts and 
techniques to be demonstrated under this section, the Secretary shall 
consider the improvement of physical security equipment or dwelling 
units in those projects, social and environmental design improvements, 
tenant awareness and volunteer programs, tenant participation and 
employment in providing security services, and such other measures 
as deemed necessary or appropriate by the Secretary. Particular atten-
tion shall be given to comprehensive community anticrime and security 
plans submitted by public housing authorities which (i) provide for 
coordination between public housing management and local law 
enforcement officials, or (ii) coordinate resources available to the com-
munity through programs funded by the Law Enforcement Assistance 
Administration, the Department of Health, Education, and Welfare, 
the Department of Labor, the Community Services Administration, 
and ACTION, or other Federal or State agencies. 
(4) In carrying out the provisions of this section, the Secretary shall 
coordinate and jointly target resources with other agencies^ particu-
larly the Law Enforcement Assistance Administration, the Depart-
ment of Health, Education, and Welfare, the Department of Labor, 
the Community Services Administration, and ACTION. 
(d) The Secretary shall initiate and carry out a survey of crime and 
vandalism existing in the Nation's public housing projects. The sur-
vey shall include the nature, extent and impact of crime and vandalism 
and the nature and extent of resources currently available and 
employed to alleviate crime and vandalism in public housing. 
(e) The Secretary shall report to the Congress not later than eighteen 
months after the date of enactment of this Act. Such report shall 
include the results of the survey on crime and vandalism in public 
housing; findings from the demonstration and evaluation of various 
methods of reducing the level of crime; and legislative recommenda-
tions, if appropriate for (A) a comprehensive program to increase 
security in public housing projects and (B) increasing the coordina-
tion between anticrime programs of other State and Federal agencies 
that may be used by public housing authorities. Any recommendations 
shall include estimated costs of such programs. 
(f) Of the additional authority approved in appropriation Acts 
with respect to entering into annual contributions contracts under 
section 5(c) of the United States Housing Act of 1937 for the fiscal 
year beginning on October 1, 1978, the Secretary may utilize up to 
$12,000,000 of such authority in the fiscal year beginning on October 1, 
1978, for the establishment of the public housing security demonstra-
tion program authorized by this section. 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2095 
SECTION 8 HOUSING FOK LARGE FAMIUES 
SEC. 208. (a) The Secretary of Housing and Urban Development 
shall conduct a study for the purpose of examining alternative means 
of encouraging the development of housing to be assisted under section 
8 of the United States Housing Act of 1937 for occupancy by large 
families which reside in areas with a low-vacancy rate in rental 
housing. 
(b) The Secretary shall report to the Congress no later than one 
year after the date of enactment of this Act, for the purpose of pro-
viding legislative recommendations with respect to the study described 
in subsection (a). 
SOLAR ENERGY SYSTEMS 
SEC. 209. (a) It is the purpose of this section to promote and extend 
the application of viable solar energy systems as a desirable source of 
energy for residential single-family and multifamily housing units. 
(b) (1) The Secretary, in carrying out programs and activities under 
section 312 of the Housing Act of 1964, section 202 of the Housing 
Act of 1959, and section 8 of the United States Housing Act of 1937, 
shall permit the installation of solar energy systems which are cost-
effective and economically feasible. 
(2) For the purpose of this Act, the term "solar energy system" 
means any addition, alteration, or improvement to an existing or new 
structure which is designed to utilize wind energy or solar energy 
either of the active type based on mechanically forced energy trans-
fer or of the passive type based on convective, conductive, or radiant 
energy transfer or some combination of these types to reduce the 
energy requirements of that structure from other energy sources, and 
which is in conformity with such criteria and standards as shall be 
prescribed by the Secretary in consultation with the Secretary of 
Energy. 
(c) In carrying out subsection (b), the Secretary shall take such 
steps as may be necessary to encourage the installation of cost-effective 
and economically feasible solar energy systems in housing assisted 
under the programs and activities referred to in such subsection taking 
into account the interests of low-income homeowners and renters, 
including the implementation of a plan of action to publicize the avail-
ability and feasibility of solar energy systems to current or potential 
recipients of assistance under such programs and activities. 
(d) The Secretary shall, in conjuction with the Secretary of Energy, 
transmit to the Congress, within eighteen months after the date of 
enactment of this Act, a report setting forth— 
(1) the number of solar units which were contracted for or 
installed or which are on order under the provisions of subsection 
(b) (1) of this section during the first twelve full calendar months 
after the date of enactment of this Act; and 
(2) an analysis of any problems and benefits related to encour-
aging the use of solar energy systems in the programs and activi-
ties referred to in subsection (b). 
42 use 1437f 
note. 
42 use 1437f. 
Report to 
eongress. 
12 use 
1701Z-13. 
42 
use 
1452b. 
12 
use 
ITOlq. 
"Solar energy 
system." 
Joint report to 
eongress. 
TITLE III—PROGRAM AMENDMENTS AND EXTENSIONS 
EXl'ENSION OF FEDERAL HOUSING ADMINISTRATION MORTGAGE INSURANCE 
PROGRAMS 
SEC. 301. (a) Section 2(a) of the National Housing Act is amended 
by striking out "November 1, 1978" in the first sentence and inserting 
in lieu thereof "October 1, 1979". 
12 use 1703. 
92 STAT. 2096 
PUBLIC LAW 95-557—OCT. 31, 1978 
12 use 1715h. 
12 use 1715Z. 
12 use 1715z. 
12 use 
1715Z-1. 
12USei715z-9. 
12 use 
1715Z-10. 
12 use 
1748h-l. 
12 use 
1748h-2. 
12 use 1749bb. 
12 use 1749aaa. 
(b) Section 217 of such Act is amended by striking out "October 31, 
1978" and inserting in lieu thereof "September 30, 1979". 
(c) Section 221(f) of such Act is amended by striking out "October 
31,1978" in the fifth sentence and inserting in lieu thereof "September 
30, 1979". 
(d) Section 235 (m) of such Act is amended by striking out "October 
31, 1978" and inserting in lieu thereof "September 30, 1979". 
(e) Section 236(n) of such Act is amended by striking out "October 
31, 1978" and inserting in lieu thereof "September 30, 1979". 
(f) Section 244(d) of such Act is amended— 
(1) by striking out "October 31, 1978" in the first sentence and 
inserting in lieu thereof "September 30, 1979"; and 
(2) by striking out "November 1, 1978" in the second sentence 
and inserting in lieu thereof "October 1, 1979". 
(g) Section 245 of such Act is amended by striking out "October 31, 
1978" in the third sentence and inserting in lieu thereof "September 30, 
1979". 
(h) Section 809 (f) of such Act is amended by striking out "October 
31, 1978" in the second sentence and inserting in lieu thereof "Septem-
ber 30,1979". 
(i) Section 810(k) of such Act is amended by striking out "October 
31,1978" in the second sentence and inserting in lieu thereof "Septem-
ber 30, 1979". 
(j) Section 1002(a) of such Act is amended by striking out "Octo-
ber 31, 1978" in the second sentence and inserting in lieu thereof 
"September 30,1979". 
(k) Section 1101(a) of such Act is amended by striking out "Octo-
ber 31, 1978" in the second sentence and inserting in lieu thereof 
"September 30,1979". 
EXTENSION OF FLEXIBLE INTEREST RATE AUTHORITY 
12 use 1709-1. 
SEC. 302. Section 3(a) of the Act entitled "An Act to amend chapter 
37 of title 38 of the United States Code with respect to the veterans' 
home loan program, to amend the National Housing Act with respect 
to interest rates on insured mortgages, and for other purposes", 
approved May 7,1968, as amended, is amended by striking out "Novem-
ber 1,1978" and inserting in lieu thereof "October 1,1979". 
EXTENSION o r EMERGENCY HOME PURCHASE ASSISTANCE 
ACT OF 1974 
S E C 303. Section 3(b) of the Emergency Home Purchase Assistance 
12 use 1723e 
Act of 1974 is amended by striking out "November 1,1978" and insert-
note, 
ing in lieu thereof "October 1,1979". 
COMPREHENSIVE PLANNING 
S E C 304. (a) The second sentence of section 701(e) of the Housing 
40 use 461. 
Act of 1954 is amended by striking out "and not to exceed $75,000,000 
for the fiscal year 1978" and inserting in lieu thereof "not to exceed 
$75,000,000 for the fiscal year 1978, and not to exceed $57,000,000 for 
the fiscal year 1979". 
(b) The second sentence of section 701(c) of such Act is amended 
by striking out "biennially" and inserting in lieu thereof "triennially". 
(c) Section 701 (d) (2) of such Act is amended by striking out "bien-
nially" and inserting in lieu thereof "at least triennially" and by strik-
ing out "two" and inserting in lieu thereof "three". 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2097 
(d) Section 701 (m) of such Act is amended by adding at the end 
thereof the following: 
"(5) The term 'Indian tribal group or body' means any Indian 
tribe, band, group, and nation, including Alaska Indians, Aleuts, 
and Eskimos, and any Alaskan Native Village, of the United 
States, which is considered an eligible recipient under the Indian 
Self-Determination and Education Assistance Act (Public Law 
93-638) or under the State and Local Fiscal Assistance Act of 
1972 (Public Law 92-512).". 
RESEARCH AUTHORIZATIONS 
40 use 461. 
"Indian tribal 
group or body.' 
25 u s e 450 note. 
31 u s e 1221 
note. 
Demonstration. 
12 u s e 1701Z-9. 
SEC. 305. (a) Title V of the Housing and Urban Development Act 
of 1970 is amended by striking out in the second sentence of section 
501 "and not to exceed $60,000,000 for the fiscal year 1978" and insert- 12 USe 1701z-l. 
ing in lieu thereof "not to exceed $60,000,000 for the fiscal year 1978, 
and not to exceed $62,000,000 for the fiscal year 1979". 
(b) Such title is further amended by adding at the end thereof the 
following new section: 
"CONVERSIONS 
"SEC. 510. In carrying out activities under section 501, the Secretary 
is authorized to conduct demonstrations to determine the feasibility of 
expanding homeownership opportunities in urban areas and encourag-
ing the creation and maintenance of decent, safe, and sanitary housing 
in such areas by utilizing techniques including, but not limited to, the 
conversion of multifamily housing properties to condominium or 
cooperative ownership by individuals and families.". 
(c) The Secretary of Housing and Urban Development shall conduct 
a study of the feasibility of underground construction of residential 
housing and changes in housing codes and financing which may be 
necessary as the result of the adoption of this construction method. 
The Secretary shall transmit a final report no later than one year after 
the date of enactment of this Act to the Congress containing the find-
ings and conclusions made as a result of such study, along with any 
legislative recommendations which the Secretary determines should be 
enacted with respect to the subject of such study. 
Study. 
12 u s e 1701Z-9 
note. 
Report to 
Congress. 
NEW COMMUNITIES 
SEC. 306. Section 720(a) of the Housing and Urban Development 
Act of 1970 is amended by striking out "November 1,1978" and insert- 42 USe 4521. 
ing in lieu thereof "Octoljer 1,1979". 
EXTENSION o r CRIME INSURANCE AND RIOT REINSURANCE PROGRAMS 
SEC. 307. (a) Section 1201 of the National Housing Act is amended— 12 USe 
(1) by striking out, in subsection (b) (1), "October 31, 1978" 1749bbb. 
and inserting in lieu thereof "September 30,1980" ; 
(2) by striking out, in subsection (b)(1)(A), "October 31, 
1981" and inserting in lieu thereof "September 30, 1983"; and 
(3) by striking out, in subsection (b) (2), "October 31, 1978" 
and inserting in lieu thereof "September 30, 1981". 
(b) Section 1211 of such Act is amended by adding the following 12 USC 
new subsection at the end thereof: 
1749bbb-3. 
"(c) At least one-third of the voting members of every board of 
directors, board of governors, advisory committee, and other govern-
ing or advisory board or committee for each plan described in subsec-
39-194 O—80—pt. 2 
52 : QL3 
92 STAT. 2098 
PUBLIC LAW 95-557—OCT. 31, 1978 
12 use 
1749bbb-3. 
tion (b) shall be individuals who are not employed by, or otherwise 
affiliated with, insurers, insurance agents, brokers, producers, or other 
entities of the insurance industry.". 
(c) Section 1211(b) of such Act is amended by striking out "and" 
at the end of paragraph (9), by striking out the period at the end of 
paragraph (10) and inserting m lieu thereof "; and", and by adding 
the following, new paragraph at the end thereof: 
"(11) Notwithstanding any other provision of this section, on 
and after January 31,1979, no risk within the plan shall be insured 
at a rate higher than the rates or advisory rates set by the prin-
cipal State-licensed rating organization for essential property 
insurance in the voluntary market; except that this provision shall 
not be deemed to prohibit the application to any such risk, on a 
nondiscriminatory basis, of condition charges for substandard 
physical conditions within the control of the applicant for insur-
ance as set by the principal State-licensed rating organization for 
the voluntary market.". 
EXTENSION OF NATIONAL FLOOD INSURANCE PROGRAM 
42 use 4026. 
SEC. 308. (a) Section 1319 of the National Flood Insurance Act of 
1968 is amended by striking out "October 31, 1978" and inserting in 
lieu thereof "September 30,1980". 
42 use 4056. 
(b) Section 1336(a) of such Act is amended by striking out "Octo-
ber 31, 1978" and inserting in lieu thereof "September 30, 1980". 
FLOOD INSURANCE STUDIES 
SEC. 309. Section 1376(c) of the National Flood Insurance Act of 
42 use 4127. 
1968 is amended by striking out "and not to exceed $108,000,000 for 
the fiscal year 1978" and inserting in lieu thereof the following: ", not 
to exceed $108,000,000 for the fiscal year 1978, and not to exceed 
$114,000,000 for the fiscal year 1979.". 
FEDERAL HOUSING ADMINISTRATION GENERAL INSURANCE FUND 
12 use 1735c. 
SEC. 310. Section 519 (f) of the National Housing Act is amended by 
inserting the following before the period: ", which amount shall be 
increased by $165,000,000 on October 1,1978". 
MULTIFAMILY MORTGAGE INSURANCE 
SEC. 311. (a) The last sentence of section 207(c) of the National 
12 use 1713. 
Housing Act is amended by striking out "eight" and inserting in lieu 
thereof "five". 
12 use 1715z-6. 
(b) Section 241(d) of such Act is amended by adding at the end 
thereof the following: "At any sale under foreclosure of a mortgage 
on a project or facility which is not insured under this Act but which 
is senior to a loan assigned to the Secretary pursuant to subsection (c), 
the Secretary is authorized to bid, in addition to amounts authorized 
under section 207 (k), any sum up to but not in excess of the total 
unpaid indebtedness secured by such senior mortgage, plus taxes, insur-
ance, foreclosure costs, fees, and other expenses. In the event that, pur-
suant to subsection (c), the Secretary acquires title to, or is assigned, 
a loan covering a project or facility which is subject to a mortgage 
which is not insured under this Act, the Secretary is authorized to 
make payments from the General Insurance Fund on the debt secured 
by such mortgage, and to take such other steps as the Secretary may 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2099 
deem appropriate to preserve or protect the Secretary's interest in the 
project or facility.". 
MORTGAGE INSURANCE FOR NONRESIDENT CARE FACILITIES 
SEC. 312. (a) Section 232(a) of the National Housing Act is 
amended— 
(1) by inserting the following immediately before the period 
at the end of paragraph (1): ", including additional facilities for 
the nonresident care of elderly individuals and others who are 
able to live independently but who require care during the day"; 
and 
(2) by inserting the following immediately before the period 
at the end of paragraph (2) : ", including additional facilities for 
the nonresident care of elderly individuals and others who are able 
to live independently but who require care during the day". 
(b) Section 232(b) (2) of such Act is amended by inserting imme-
diately after "nursing services;" in the first sentence the following: 
"(3) a 'nursing home' or 'intermediate care facility' may include such 
additional facilities as may be authorized by the Secretary for the non-
resident care of elderly individuals and others who are able to live 
independently but who require care during the day;". 
12 use 1715w. 
"Nursing home" 
or "intermediate 
care facility." 
CONDOMINIUM MORTGAGE INSURANCE 
SEC. 313. (a) The first sentence of section 234(c) of the National 
Housing Act is amended by inserting immediately after "less units" in 12 USC 1715y. 
the proviso of clause (2) the following: ", or twelve or more units in 
the case of a multifamily project the construction of which was com-
pleted more than a year prior to the application for mortgage 
insurance,". 
(b) The third sentence of section 234(c) of such Act is amended 
by inserting "(100 per centum if the mortgagor is a veteran as defined 
under section 203 (b) (2) of this Act)" after "centum" in clause (A) (i). 
PURCHASE OF FEE SIMPLE TITLE 
SEC. 314. Section 240(c) (2) of the National Plousing Act is amended 
by adding "($30,000, if the property is located in Hawaii)" immedi-
ately after "$10,000". 
12 USC 1715Z-5. 
NATIONAL NEIGHBORHOOD POLICY ACT 
SEC. 315. The National Neighborhood Policy Act is amended by 
striking out "one year" in section 204(c) and inserting in lieu thereof 
"fifteen months". 
42 USC 1441 
note. 
HOUSING AND URBAN DEVELOPMENT DAT CARE CENTER FACILITIES 
SEC. 316. Section T(n) of the Department of Housing and Urban 
Development Act is amended to read as follows: 
"(n) Notwithstanding any other provision of law, the Secretary 
is authorized by contract or otherwise to establish, equip, and operate 
a day care center facility or facilities, or to assist in establishing, 
equipping, and operating interagency day care facilities for the pur-
pose of serving children who are members of households of employees 
of the Department. The Secretary is authorized to establish or pro-
vide for the establishment of appropriate fees and charges to be 
42 USC 3535. 
92 STAT. 2100 
PUBLIC LAW 95-557—OCT. 31, 1978 
40 use 484b. 
Federal surplus 
real property, 
transfer to 
Secretary of 
Housing and 
Urban 
Development. 
40 u s e 471 
note. 
42 u s e 5301 
note. 
chargeable against the Department of Housing and Urban Develop-
ment employees or others who are beneficiaries of services provided by 
any such day care center. In addition, limited start-up costs may be 
provided by the Secretary in an amount limited to 3 per centum of 
the first year's operating budget, but not to exceed $3,500.". 
SALE OF SURPLUS FEDERAL lAND FOR HOUSING 
SEC. 317. (a) The first and second sentences of section 414(a) of 
the Housing and Urban Development Act of 1969 are amended to read 
as follows: "Notwithstanding the provisions of the Federal Property 
and Administrative Services Act of 1949, any Federal surplus real 
property within the meaning of such Act may, in the discretion of the 
Administrator of General Services, be transferred to the Secretary 
of Housing and Urban Development at the Secretary's request for 
sale or lease by the Secretary at its fair value for use in the provision 
of housing to be occupied predominantly by families or individuals of 
low and moderate income, assisted under a Federal housing assistance 
program administered by the Secretary or under a State or local pro-
gram found by the Secretary to have the same general purpose, and 
for related public commercial or industrial facilities approved by the 
Secretary. Prior to any disi^osition of Federal surplus real property 
to an entity other than a public body, the Secretary shall notify the 
governing body of the locality where such property is located of the 
proposed disposition and no such disposition shall be made if the local 
governing body, within ninety days of such notification, formally 
advises the Secretary that it objects to the proposed disposition, unless 
the Secretary determines (1) that the proposed disposition would be 
consistent with any approved housing assistance and community devel-
opment plans developed by such body pursuant to the Housing and 
Community Development Act of 1974, or (2) in cases where such 
plans are not available, that there is a need for low- and moderate-
income housing taking into consideration any applicable State housing 
plans, and that there is or will be available in the area public facilities 
and services adequate to serve any housing proposed in conjunction 
with the proposed disposition.". 
(b) Subsection (b) of section 414 of such Act is amended to read 
as follows: 
"(b) As a condition of any disposition by the Secretary of Federal 
surplus real property under this section to an entity other than a public 
body, the Secretary shall obtain such undertakings as the Secretary 
may consider appropriate to assure that the property will be used, to 
the maximum practicable extent, in the provision of housing and 
related facilities to be occupied by families or individuals of low and 
moderate income for a period of not less than thirty years. If during 
such period the property is used for any purpose other than the purpose 
for which it was disposed of, it shall revert to the United States (or, 
in the case of leased property, the lease shall terminate) unless the 
Secretary and the Administrator, after the expiration of the first 
twenty years of such period, have approved the use of the property 
for such other purposes.". 
12 use 1717. 
INCREASE IN GOVERNMENT NATIONAL MORTGAGE ASSOCIATION MORTGAGE 
PURCHASE AUTHORITY AND 
LIMITS 
SEC. 318. (a) The third clause of the proviso in section 302(b) (1) 
of the National Housing Act is amended by striking "if the original 
principal obligation thereof exceeds or exceeded $33,000 (or such 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2101 
higher amount not in excess of $38,000 as the Secretary may by regula-
tion specify in any geographical area where he finds that cost levels 
so require), for each family residence or dwelling unit covered by the 
mortgage (plus an additional $2,500 for each such family residence 
or dwelling unit which has four or more bedrooms)" and inserting in 
lieu thereof "if the original principal obligation thereof exceeds or 
exceeded $55,000 in the case of property upon which is located a 
dwelling designed principally for a one-family residence; or $60,000 
in the case of a two- or three-family residence; or $68,750 in the case 
of a four-family residence; or, in the case of a property containing 
more than four dwelling units, $38,000 per dwelling unit (or such 
higher amount not in excess of $45,000 per dwelling unit as the Secre-
tary may by regulation specify in any geographical area where the 
Secretary finds that cost levels so require) for that part of the property 
attributable to dwelling use". 
(b) Section 305(c) of such Act is amended by striking out "and by 12 USC 1720. 
$2,000,000,000 on July 1, 1969" and inserting in lieu thereof "by 
$2,000,000,000 on July 1,1969, and subject to approval in an appropria-
tion Act, by $500,000,000 on October 1,1978". 
NATIONAL INSTITUTE OF BUIIJJING SCIENCES 
SEC. 319. Section 809(h) of the Housing and Community Develop-
ment Act of 1974 is amended by inserting after "1978" the following: 12 USC 1701j~2. 
", and any amounts not appropriated in fiscal years 1977 and 1978 may 
be appropriated in any fiscal year through 1982". 
TITLE I HOME IMPROVEMENT LOANS FOR MULTIFAMILY DWELLINGS 
SEC. 320. The first sentence of section 2(b) of the National Housing 
Act is amended by striking out "$25,000", "$5,000", and "twelve years" 12 USC 1703. 
in the third proviso in clause (3) and inserting in lieu thereof 
"$37,500", "$7,500", and "fifteen years", respectively. 
AMENDMENTS TO THE FEDERAL HOME LOAN MORTGAGE CORPORATION ACT 
SEC. 321. (a) Paragraph (1) of subsection (a) of section 305 of the 
Federal Home Loan Mortgage Corporation Act is amended by insert- 12 USC 1454. 
ing the following before the period at the end of the first sentence 
thereof: "or from any mortgagee approved by the Secretary of Hous-
ing and Urban Development for participation in any mortgage insur-
ance program under the National Housing Act". 
12 USC 1701. 
(b) Paragraph (1) of subsection (a) of section 305 of the Federal 
Home Loan Mortgage Corporation Act is amended by adding at the 12 USC 1454. 
end thereof the following new sentences: "The Corporation may estab-
lish requirements, and impose charges or fees, which may be regarded 
as elements of pricing, for different classes of sellers or servicers, and 
for such purposes- the Corporation is authorized to classify sellers or 
servicers according to type, size, location, assets, or, wdthout limita-
tion on the generality of the foregoing, on such other basis or bases 
of differentiation as the Corporation may consider necessary or appro-
priate to effectuate the purposes or provisions of this Act. The Corpora-
tion may specify requirements concerning among other things, (A) 
minimum net worth; (B) supervisory mechanisms; (C) warranty 
compensation mechanisms; (D) prior approval of facilities; (E) prior 
origination and servicing experience with respect to different types of 
mortgages; (F) capital contributions and substitutes; (G) mortgage 
purchase volume limits; and (H) reduction of mortgage purchases 
92 STAT. 2102 
PUBLIC LAW 95-557—OCT. 31, 1978 
Effective date. 
12 use 1454 
note. 
during periods of borrowing. With respect to any particular type of 
seller, the Corporation shall not be required to make available pro-
grams involving prior approval of mortgages, optional delivery of 
mortgages, and purchase of other than conventional mortgages to an 
extent greater than the Corporation elects to make such programs 
available to other types of eligible sellers. Any requirements specified 
by the Corporation pursuant to the preceding three sentences must bear 
a rational relationship to the purposes or provisions of this Act, but 
will not be considered discriminatory solely on the grounds of differen-
tial effects on types of eligible sellers. Insofar as is practicable, the Cor-
poration shall make reasonable efforts to encourage participation in its 
programs by each type of eligible seller.". 
(c) The amendments made by this section shall become effective at 
the end of the two hundred and ten calendar days after enactment of 
this Act, but not before January 31,1979, or on such earlier date as the 
Federal Home Loan Mortgage Corporation may prescribe. 
SALE 
OF 
ACQUIRED PROPERTY 
TO COOPERATIVES 
12 use 
SEC. 322. Section 246 of the National Housing Act is amended to 
1715Z-11. 
read as follows: 
"SALE OF ACQUIRED PROPERTY TO COOPERATIVES 
"SEC. 246. In any case which the Secretary sells a multifamily hous-
ing project acquired as the result of a default on a mortgage which was 
insured under this Act to a cooperative which will operate it on a non-
profit basis and restrict permanent occupancy of its dwellings to mem-
bers, or to a nonprofit corporation which operates as a consumer 
cooperative as defined by the Secretary, the Secretary may accept a 
purchase money mortgage, or upon application of the mortgagee, 
insure a mortgage under this section upon such terms and conditions 
as the Secretary determines are reasonable and appropriate, in a 
principal amount equal to the value of the property at the time of 
purchase, which value shall be based upon a mortgage amount on 
which the debt service can be met from the income of property when 
operated on a nonprofit basis after payment of all operating expenses, 
taxes, and required reserves; except that the Secretary may add to the 
mortgage amount an amount not greater than the amount of prepaid 
expenses and costs involved in achieving cooperative ownership, or 
make such other provisions for payment of such expenses and costs as 
the Secretary deems reasonable and appropriate. Prior to such disposi-
tion of a project, funds may be expended by the Secretary for neces-
, 
sary repairs and improvements.". 
SECONDARY MORTGAGES ON INSURED PROPERTIES 
12 use 1731a. 
SEC. 323. Title V of the National Housing Act is amended by add-
ing at the end thereof the following new section: 
u 
SECONDARY MORTGAGES ON INSURED PROPERTIES 
12 use 1735f-6. 
"SEC. 528. In carrying out the provisions of title I I of this Act with 
12 use 1707. 
respect to insuring mortgages secured by a one- to four-family dwell-
ing unit, the Secretary may not deny such insurance for any such 
mortgage solely because the dwelling unit which secures such mort-
gage will be subject to a secondary mortgage or loan made or insured, 
or other secondary lien held, by any State or local governmental 
agency or instrumentality under terms and conditions approved by 
the Secretary.". 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2103 
LEGISLATIVE REVIEW 
SEC. 324. Section 7 of the Department of Housing and Urban 
Development Act is amended by adding at the end thereof the follow-
ing new subsection: 
"(o) (1) Notwithstanding any other provision of law, the Secretary 
sliall transmit to the Committee on Banking, Housing, and Urban 
Affairs of the Senate and the Committee on Banking, Finance and 
Urban Affairs of the House of Representatives an agenda of all rules 
legulations which are under development or review by the Depart 
42 use 3535. 
Rules or 
regulations 
agenda, 
transmittal to 
congressional 
committees. 
ment. Such an agenda shall be transmitted to such Committees within 
30 days of the date of enactment of this subsection and at least semi-
annually thereafter. 
"(2) (A) Any rule or regulation which is on any agenda submitted 
under paragraph (1) may not be published for comment prior to or 
during the first period of 15 calendar days of continuous session of 
Congress Avhich occurs after the date on which such agenda was trans-
mitted. If within such period, either Committee notifies the Secretary Notification, 
in writing that it intends to review any rule or regulation or portion 
thereof which appears on the agenda, the Secretary shall submit to 
both Committees a copy of any such rule or regulation, in the form it 
is intended to be proposed, at least 15 calendar days of continuous 
session prior to its being published for comment in the Federal 
Register. 
"(B) Any rule or regulation which has not been published for com-
ment before the date of enactment of this subsection and which does 
not appear on an agenda submitted under paragraph (1) shall be sub-
mitted to both such Committees at least 15 calendar days of continu-
ous session of Congress prior to its being published for comment. 
"(3) No rule or regulation may become effective until after the 
first period of 20 calendar days of continuous session of Congress 
which occurs after the day on which such rule or regulation is pub-
lished as final. If within such 20-day period, either Committee has 
reported out or been discharged from further consideration of a joint 
resolution of disapproval or other legislation which is intended to 
modify or invalidate the rule or regulation or any portion thereof, the 
rule or regulation or portion thereof so addressed shall not become 
effective for a period of 90 calendar days from the date of Committee 
action or discharge unless the House to which such Committee reports 
has rejected such resolution or legislation, in which case the rule or 
regulation may go into effect only after the expiration of the 20 calen-
dar days described in the first sentence of this paragraph if the other 
House does not have such a resolution or legislation pending or 
adopted, and if the requirements of section 553 of title 5, United States 
Code, are met. 
> 
"(4) The provisions of paragraphs (2) and (3) may be waived Waiver, 
upon the written request of the Secretary, if agreed to by the Chairmen 
and Ranking Minority Members of both Committees. 
"(5) Congressional inaction on any rule or regulation shall not be 
deemed an expression of approval of the rule or regulation involved. 
" (6) For purposes of this subsection— 
"(A) continuity of session is broken only by an adjournment 
of Congress sine die; 
"(B) the days on which either House is not in session because 
of an adjournment of more than 3 days to a day certain are 
excluded in the computation of calendar days of continuous session 
of Congress; and 
"(C) the term 'rule or regulation' does not include the setting "Rule or 
of interest rates pursuant to section 3 of Public Law 90-301.". 
regulation." 
12 use 1709-L. 
92 STAT. 2104 
PUBLIC LAW 95-557—OCT. 31, 1978 
INCREASED MORTGAGE CEILINGS FOR MORTGAGE INSURANCE PROGRAMS 
12 use 1715/. 
^ SEC. 325. (a) Section 221(d) (3) (ii) of the National Housing Act 
is amended— 
(1) by striking out "$16,860", "$18,648", "$22,356", "$28,152", 
and "$31,884" and inserting in lieu thereof "$21,563", "$24,662", 
"$29,984", "$38,379", and "$42,756", respectively; and 
(2) by striking out "$19,680", "$22,356", "$26,496", "$33,120", 
and "$38,400" and inserting in lieu thereof "$22,692", "$26,012", 
"$31,631", "$40,919", and "$44,917", respectively. 
(b) Section 221(d) (4) (ii) of such Act is amended by striking out 
"$18,450", "$20,625", "$24,630", "$29,640", and "$34,846" in the matter 
preceding the first semicolon and inserting in lieu thereof "$19,406", 
"$22,028", "$26,625", "$33,420", and "$37,870", respectively. 
FHA-INSURED MORTGAGE REFINANCING OF HOSPITALS 
12 use 1715n. 
SEC. 326. Section 223(f) of the National Housing Act is amended 
by— 
(1) inserting before the period at the end of the first sentence 
thereof the following: "or the refinancing of existing debt of an 
existing hospital."; 
(2) striking out "property" in the second sentence and insert-
ing in lieu thereof "multifamily housing project"; and 
(3) adding at the end thereof the following new sentence: 
"In the case of refinancing of an existing hospital the Secretary shall 
prescribe such terms and conditions as the Secretary deems necessary 
to assure that— 
"(A) the refinancing is employed to lower the monthly debt 
service costs (taking into account any fees or charges connected 
with such refinancing) of such existing hospital; 
"(B) the proceeds of any refinancing will be employed only to 
retire the existing indebtedness and pay the necessary cost of 
refinancing on such existing hospital; 
"(C) such existing hospital is economically viable; and 
"(D) such existing hospital has received such certifications 
from a State agency designated in accordance with section 604(a) 
(1) or section 1521 of the Public Health Service Act for the State 
in which the hospital is located as the Secretary deems necessary 
and appropriate and comparable to the certification required for 
hospitals insured under section 242 of this Act and that such State 
agency additionally certify that the services being provided by 
such existing hospital at the time of refinancing are appropriate 
as determined pursuant to section 1523 (a) (6) of the Public Health 
42 use 300m-2. 
Service Act". 
42 u s e 291cl, 
300m. 
12 use 
1715Z-7. 
eongregate 
Housing Services 
Act of 1978. 
42 u s e 8001 
note. 
42 u s e 8001. 
TITLE IV—CONGREGATE SERVICES 
SHORT TITLE 
SEC 401. This title may be cited as the "Congregate Housing Serv-
ices Act of 1978". 
FINDINGS 
SEC 402. The Congress finds that— 
(1) congregate housing, coordinated with the delivery of sup-
portive services, offers an innovative, proven, and cost-effective 
means of enabling temporarily disabled or handicapped indi-
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2105 
viduals to maintain their dignity and independence and to avoid 
costly and unnecessary institutionalization; 
(2) a large and growing number of elderly and handicapped 
residents of public housing projects and of nonprofit projects for 
the elderly and handicapped face premature and unnecessary 
institutionalization because of the absence of or deficiencies in the 
availability, adequacy, coordination, or delivery of the supportive 
services required for the successful development of adequate num-
bers of congregate housing projects; and 
(3) supplemental supportive services, available on a secure and 
continuing basis, are essential to a successful congregate housing 
program. 
DEFINITIONS 
SEC. 403. For the purpose of this title— 
42 USC 8002. 
(1) the term ''congregate housing" means (A) low-rent housing 
which, as of January 1,1979, was built or under construction, with 
which there is connected a central dining facility where whole-
some and economical meals can be served to such occupants; or 
(B) low-rent housing constructed after, but not under construc-
tion prior to, January 1, 1979, connected with which there is a 
central dining facility to provide wholesome and economical meals 
for such occupants; 
(2) the term "congregate services programs" means programs 
to be undertaken by a public housing agency or a nonprofit cor- 
,, .;,, ,,^, 
poration to provide assistance, including personal assistance and 
nutritional meals, to eligible project residents who, with such 
assistance, can remain independent and avoid unnecessary 
institutionalization; 
,-
(3) the term "elderly" means sixty-two years of age or over; 
(4) the term "eligible project resident" means elderly handi-
capped individuals, nonelderly handicapped individuals, or tem-
porarily disabled individuals, who are residents of congregate 
housing projects administered by a public housing agency or by 
a nonprofit corporation; 
(5) the term "handicapped" means having an impairment which 
(A) is expected to be of long-continued and indefinite duration, 
and (B) substantially impedes an individual's ability to live inde-
pendently unless the individual receives supportive congregate 
services; such impairment may include a functional disability or 
frailty which is a normal consequence of the human aging process; 
(6) the term "personal assistance" means service provided under 
this title which may include, but is not limited to, aid given to 
eligible project residents in grooming, dressing, and other activi-
ties which maintain personal appearance and hygiene; 
(7) the term "professional assessment committee" means a group 
of at least three persons appointed by a local public housing 
agency or a nonprofit corporation and shall include qualified 
medical professionals and other persons professionally competent 
to appraise the functional abilities of elderly or permanently dis-
abled adult persons, or both, in relation to the performance of 
the normal tasks of daily living; 
(8) the term "temporarily disabled" means an impairment 
which (A) is expected to be of no more than six months' dura-
tion, and (B) substantially impedes an individual's ability to live 
independently unless the individual receives supportive congre-
gate services: and 
92 STAT. 2106 
PUBLIC LAW 95-557—OCT. 31, 1978 
12 use 1701q. 
(9) the term "nonprofit corporation" means any corporation 
responsible for a housing project assisted under section 202 of the 
Housing Act of 1959. 
42 use 8003. 
42 use 1437 
note. 
AUTHORIZATION TO ENTER INTO CONTRACTS 
SEC. 404. The Secretary of Housing and Urban Development (here-
inafter referred to as the "Secretary") is authorized to enter into con-
tracts with local public housing agencies under the United States 
Housing Act of 1937 (hereinafter referred to as "public housing agen-
cies") and with nonprofit corporations, utilizing sums appropriated 
under this title, to provide congregate services programs for eligible 
project residents in order to promote and encourage maximum inde-
pendence within a home environment for such residents capable of self-
care with appropriate supportive congregate services. Each contract 
between the Secretary and a public housing agency or nonprofit corpo-
ration shall be for a term of not less than three years or more than five 
years and shall be renewable at the expiration of such term. Each 
public housing agency or nonprofit corporation entering into such a 
contract shall be reserved a sum equal to its total approved contract 
amount from the moneys authorized and appropriated for the fiscal 
year in which the notification date of funding approval falls. 
CONGREGATE SERVICES PROGRAM 
42 use 8004. 
SEC. 405. (a) Congregate services programs assisted under this title 
must include full meal service adequate to meet nutritional needs, and 
may also include housekeeping aid, personal assistance, and other serv-
ices essential for maintaining independent living. 
Nondiscrimination. 
(b) No services funded under this title may duplicate services which 
are already affordable, accessible, and sufficiently available on a long-
term basis to eligible project residents under programs administered 
by or receiving appropriations through any department, agency, or 
instrumentality of the Federal Government or any other public or 
private department, agency, or organization. 
(c) A public housing agency or nonprofit corporation applying for 
assistance shall consult with the Area Agency on Aging (or, where 
no Area Agency on Aging exists, with the appropriate State agency 
under the Older Americans Act of 1965) in determining the means of 
providing services under this title and in identifying alternative avail-
able sources of funding for such services. 
(d) Prior to the submission of a final application for either new or 
renewed funding under this title, a public housing agency and a non-
profit corporation shall present a copy of a proposed application to 
the Area Agency on Aging (or, where no Area Agency on Aging 
exists to the appropriate State agency under the Older Americans Act 
of 1965) for review and comment. Such agency and nonprofit corpo-
ration shall consider such review and comment in the development of 
any final application for either new or renewed funding under this 
title. 
(e) (1) When nonelderly handicapped individuals are included 
among the eligible project residents, the public housing agency and 
nonprofit corporation shall consult with the appropriate local agency, 
if any, designated by applicable State law as having responsibility for 
the development, provision, or identification of social services to per-
manently disabled adults, for the purpose of determining the means of 
providing services under this title and of identifying alternative avail-
able sources of funding for such services. 
Application, 
consultation, 
42 use 3001 
note. 
eopy. 
Review and 
comment. 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2107 
Fees. 
(2) Such public housing agency and nonprofit corporation shall Copy, 
also, prior to the submission of a final application for either new or Review and 
renewed funding under this title, present a copy of the proposed appli- comment, 
cation to such appropriate local agency for review ana comment. The 
public housing agency and nonprofit corporation shall consider such 
review and comment in the development of any final application for 
either new or renewed funding under this title. 
(f) Any nonprofit corporation or public housing agency receiving 
assistance under this title may provide congregate services directly to 
eligible project residents or may, by contract or lease, provide such 
services through other appropriate agencies or providers. 
(g) Nonprofit corporations and public housing agencies receiving 
assistance for congregate services programs under this title shall be 
required to maintain the same dollar amount of annual contribution 
which they were making, if any, in support of the provision of services 
eligible for assistance under this title before the date of the submission 
of the application for such assistance unless the Secretary determines 
that the waiver of this requirement is necessary for the maintenance of 
^ 
adequate levels of services to eligible project residents. If any contract 
or lease entered into by a public housing agency or nonprofit corpora-
tion pursuant to subsection (f) of this section provides for adjust-
ments in payments for services to reflect changes in the cost of living, 
then the amount of annual contribution required to be maintained by 
such public agency or nonprofit corporation under the preceding sen-
tence shall be readjusted in the same manner. 
(h) Each nonprofit corporation and public housing agency shall 
establish fees for meal service and other appropriate services provided 
to eligible project residents. These fees shall be reasonable, may not 
exceed the cost of providing the service, and shall be calculated on a 
sliding scale related to income which permits the provision of services 
to such residents who cannot afford meal and service fees. When meal 
services are provided to other project residents, fees shall be reasonable 
and may not exceed the cost of providing the meal service. 
(i) The Secretary shall establish standards for the provision of 
services under this title, and, in developing such service standards, the 
Secretary shall consult with the Secretary of the Department of 
Health, Education, and Welfare and with appropriate organizations 
representing the elderly and handicapped, as determined by the 
Secretary. 
ELIGIBILITY FOR SERVICES 
SEC. 406. (a) The identification of project residents eligible to par- 42 USC 8005. 
ticipate in a congregate services program assisted under this title, and 
the designation of the services appropriate to their individual func-
tional abilities and needs, shall be made by a professional assessment 
committee. Such committee shall utilize procedures which insure that 
the process of determining eligibility of individuals for services under 
this title shall accord such individuals fair treatment and due process 
and a right of appeal of such determination of eligibility, and shall 
also assure the confidentiality of personal and medical records. 
(b) Other residents may participate in a <?ongregate meal service 
program assisted under this title if the local public housing agency or 
nonprofit corporation determines that the participation of these 
individuals will not adversely affect the cost-effectiveness or operation 
of the program. 
(c) Any public housing agency or nonprofit corporation receiving Recipients 
assistance under this title shall notify the Secretary of any change in membership 
the membership of the professional assessment committee within thirty change, 
notification. 
Standards, 
consultation. 
92 STAT. 2108 
PUBLIC LAW 95-557—OCT. 31, 1978 
Procedures. 
days of such change. Such notification shall list the names and profes-
sional qualifications of new members of the committee. 
(d) Procedures shall be established to insure that changes in the 
membership of the professional assessment committee are consistent 
with the requirements of section 403 (7) of this title. 
42 use 8006. 
Submission 
deadlines and 
notification. 
Review. 
APPLICATION PROCEDURES 
SEC. 407. (a) An application for assistance under this title shall 
include— 
(1) a plan specifying the types and priorities of the basic serv-
ices the public housing agency or nonprofit corporation proposes 
to provide during the term of the contract; such plan must be 
related to the needs and characteristics of the eligible project 
residents and, to the maximum extent practicable, provide for 
the changing needs and characteristics of all project residents; 
such plan shall be determined after consultation with eligible 
project residents and with the professional assessment committee; 
(2) a list of names and professional qualifications of the mem-
bers of the professional assessment committee; 
(3) the fee schedule established pursuant to section 405(h) 
of this title; 
(4) any comment received in connection with any review of a 
proposed application pursuant to section 405(d) or 405(e)(2); 
and 
(5) a statement affirming (A) that the nonprofit corporation 
or public housing agency has followed the consultation procedures 
required in subsections (c), (d), and (e) of section 405, and (B) 
that such application complies with subsection (b) of such 
section. 
(b) The Secretary shall establish appropriate deadlines for each 
fiscal year for the submission of applications for funding under this 
title and shall notify any public housing agency and nonprofit corpora-
tion applying for assistance under this title of acceptance or rejection 
of its application within ninety days of such submission. 
(c) Within twelve months prior to the submission of an application 
for renewed funding under this title, each nonprofit corporation and 
public housing agency shall review the performance, appropriateness, 
and fee schedules of their congregate services program with eligible 
project residents and with the professional assessment committee. The 
results of such review shall be included in any application for renewal 
and shall be considered in the development of the application for 
renewal by the nonprofit corporation or public housing agency and in 
its evaluation by the Secretary. 
EVALUATION OF APPLICATION AND PROtiRAMS 
42 use 8007. 
SEC. 408. (a) In evaluating applications for assistance under this 
title, the Secretary shall consider— 
(1) the types and priorities of the basic services proposed to 
be provided, and the relationship of such proposal to the needs and 
characteristics of the eligible residents of the projects where the 
services are to be provided; 
(2) how quickly services will be established following approval 
of the application; 
(3) the degree to which local social services are adequate for 
the purpose of assisting eligible project residents to maintain 
independent living and avoid unnecessary institutionalization; 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2109 
(4) the professional qualifications of the members of the pro-
fessional assessment committee; and 
(5) the reasonableness of fee schedules established for each 
congregate service. 
(b) In evaluating programs receiving assistance under this title, 
the Secretary shall— 
(1) establish procedures for the review and evaluation of the Procedures 
performance of nonprofit corporations and public housing agen-
cies receiving assistance under this title, including provisions for 
the submission of an annual report, by each such nonprofit cor-
poration and public housing agency, which evaluates the impact 
and effectiveness of its congregate services program; and 
(2) publish annually and submit to the Congress, a report on 
and evaluation of the impact and effectiveness of congregate serv-
ices programs assisted imder this title. Such report and evaluation 
shall be based, in part, on the evaluations required to be sub-
mitted pursuant to paragraph (1). 
Report, annual 
publication and 
submittal to 
Congress. 
FUNDING PROCEDURES 
SEC. 409. (a) The Secretary shall establish procedures— 
42 USC 8008. 
(1) to assure timely payments to nonprofit corporations and 
public housing agencies for approved assisted congregate services 
programs with provision made for advance funding sufficient to 
meet necessary startup costs; 
(2) to permit reallocation of funds approved for the establish-
ment of congregate services in existing public housing projects 
and projects assisted under section 202 of the Housing Act of 
1959 if the services are not established within six months of the 
notification date of funding approval; 
(3) to assure that where such funding has been approved for 
the establishment of congregate services for public housing proj-
ects and projects assisted under section 202 of the Housing Act of 
1959 under construction or approved for construction, these serv- 12 USC 1701q. 
ices shall be in place at the start of the project's occupancy by 
tenants requiring such services for maintaining independent 
living; 
(4) to establish accounting and other standards in order to 
prevent any fraudulent or inappropriate use of funds under this 
title; and 
(5) to assure that no more than 1 per centum of the funds 
appropriated under this title for any fiscal year may be used by 
public housing agencies and nonprofit corporations for evaluative 
purposes as required by section 408(b) (1). 
(b) The Secretary shall establish a reserve fund, not to exceed 10 Reserve fund, 
per centum of the funds appropriated in each fiscal year for the provi- establishment, 
sion of services under this title, in order to supplement grants awarded 
to public housing agencies and nonprofit corporations under this title 
when, in the determination of the Secretary, such supplemental adjust-
ments are required to maintain adequate levels of services to eligible 
project residents. 
MISCELLANEOUS 
PROVISIONS 
SEC. 410. (a) Each public housing agency and nonprofit corporation 42 USC 8009. 
shall, to the maximum extent practicable, utilize elderly and perma-
nently disabled adult persons who are residents of public housing 
projects or projects assisted under section 202 of the Housing Act of 
1959, but who are not eligible project residents, to participate in pro-
92 STAT. 2110 
PUBLIC LAW 95-557—OCT. 31, 1978 
29 use 201. 
29 use 206. 
29 use 213. 
12 use 1701q. 
Regulations. 
42 use 8010. 
viding the services assisted under this title. Such persons shall be paid 
wages which shall not be lower than whichever is the highest of— 
(1) the minimum wage which would be applicable to the 
employee under the Fair Labor Standards Act of 1938, if section 
6(a) (1) of such Act applied to the resident and if he or she were 
not exempt under section 13 thereof; 
(2) the State or local minimum wage for the most nearly com-
parable covered employment; or 
(3) the prevailing rates of pay for persons employed in similar 
public occupations by the same employer. 
(b) No service provided to a public housing resident or to a resident 
of a housing project assisted under section 202 of the Housing Act 
of 1959 under this title, except for wages paid under subsection (a) 
of this section, may be treated as income for the purpose of any other 
program or provision of State or Federal law. 
(c) Individuals receiving services assisted under this title shall be 
deemed to be residents of their own households, and not to be residents 
of a public institution, for the purpose of any other program or provi-
sion of State or Federal law. 
(d) The Secretary may issue regulations to carry out the provisions 
of this title. 
ATJTHORIZATION OP APPR0PRIATI0K8 
SEC. 411. (a) To carry out the provisions of this title, there are 
authorized to be appropriated— 
(1) for fiscal year 1979, not to exceed $20,000,000; 
(2) for fiscal year 1980, not to exceed $25,000,000; 
(3) for fiscal year 1981, not to exceed $35,000,000; and 
(4) for fiscal year 1982, not to exceed $40,000,000. 
(b) Sums appropriated pursuant to this section shall remain avail-
able until expended. 
"Congregate 
housing." 
42 use 1437e. 
Ante, p. 2104. 
AMENDMENT TO THE UNITED STATES HOUSING ACT OF 1937 
SEC. 412. Section 7 of the United States Housing Act of 1937 is 
amended by striking out the second sentence and inserting in lieu 
thereof the following: "As used in this section, the term 'congregate 
housing' means (1) low-rent housing which, as of January 1,1979, was 
built or under construction, with which there is connected a central 
dining facility where wholesome and economical meals can be served 
to such occupants; or (2) low-rent housing constructed after, but not 
under construction grior to, January 1, 1979, connected with which 
there is a central dining facility to provide wholesome and economical 
meals for such occupants. Such occui)ants of congregate housing ma,y 
also be provided with other supportive services appropriate to their 
needs under title IV of the Housing and Community Development 
Amendments of 1978.". 
TITLE V—RURAL HOUSING 
AUTHORIZATIONS 
42 use 1483. 
SEC. 501. (a) Section 513(b) of the Housing Act of 1949 is amended 
by inserting after "October 31,1978" the following:", and not to exceed 
$48,000,000 for the fiscal year ending September 30,1979". 
(b) Section 513(c) of such Act is amended by inserting before the 
semicolon at the end thereof the following: ", and not to exceed 
$38,000,000 for the fiscal year ending September 30,1979". 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2111 
42 use 1487. 
42 use 1490c. 
(c) Section 513 of such Act is amended by striking out clause (d) ^^ USe 1483. 
and inserting in lieu thereof the following: "(d) not to exceed 
$10,000,000 for research and study programs pursuant to subsections 
(b), (c), and (d) of section 506 for the fiscal year ending September 
30 1979 •". 
(d) Section 514 of such Act is amended by striking out "$25,000,000" 42 USe 1484. 
in subsection (d) and inserting in lieu thereof "$38,000,000 (subject to 
approval in an appropriation Act)". 
(e) Section 515(b)(5) of such Act is amended by striking out 42 USe 1485. 
"October 31,1978" and inserting in lieu thereof "September 30,1979". 
(f) Section 517(a)(1) of such Act is amended by striking out 
"October 31,1978" and inserting in lieu thereof "September 30, 1979". 
(g) Section 523 (f) of such Act is amended— 
(1) by striking out "November 1, 1978" and inserting in lieu 
^ 
thereof "October 1, 1979"; 
(2) by striking out "October 31, 1978" and inserting in lieu 
thereof "September 30,1979"; and 
(3) by striking out "$10,000,000" and inserting in lieu thereof 
"$16,500,000". 
(h) Section 523(g) of such Act is amended by inserting before the 
period at the end of the first sentence the following: ", and not to 
exceed $3,000,000 for the fiscal year ending September 30, 1979". 
(i) Section 525 (c) of such Act is amended by inserting after the first 42 USe 1490e. 
sentence the following new sentence: "There are also authorized to be 
appropriated for the fiscal year ending September 30, 1979, not to 
exceed $5,000,000 for the purposes of subsection (a) and not to exceed 
$5,000,000 for the purposes of subsection (b).". 
RURAL HOUSING RESEARCH 
Buildings and 
repairs. 
42 use 1476. 
SEC. 502. (a) Subsection (b) of section 506 of the Housing Act of 
1949 is amended to read as follows: 
"(b) The Secretary is further authorized and directed to conduct 
research, technical studies, and demonstrations relating to the mission 
and programs of the Farmers Home Administration and the national 
housing goals defined in section 2 of this Act. In connection with such 42 USe 1441 
activities, the Secretary shall seek to promote the construction of ade-
quate farm and other rural housing, with particular attention to the 
housing needs of the elderly, handicapped, migrant and seasonal farm-
workers, Indians and other identifiable groups with special needs. The 
Secretary shall conduct such activities for the purposes of stimulating 
construction and improving the architectural design and utility of 
dwellings and buildings.". 
(b) Section 506 of such Act is amended by adding the following Study, 
new subsection at the end thereof: 
"(f)(1) The Secretary shall conduct a study of housing which is 
available for migrant and settled farmworkers. In conducting such 
study, the Secretary shall— 
"(A) determine the location, number, quality, and condition of 
housing units which are available to such farmworkers and the 
cost assessed such farmworkers for occupying such units ; 
"(B) recommend legislative, administrative, and other action 
(including the need for new authority for such action) which may 
be taken for the purpose of improving both the availability and 
the condition of such housing units; and 
"(C) determine the possible roles which individual farm-
workers, farmworker associations, individual farmers, farmer 
92 STAT. 2112 
PUBLIC LAW 95-557—OCT. 31, 1978 
Results to House 
and Senate. 
associations, and public and private nonprofit agencies can per-
form in improving the housing conditions of farmworkers. 
"(2) The Secretary shall transmit the results of the study described 
in paragraph (1) to each House of the Congress within one year after 
the date of the enactment of this subsection.". 
APPEALS PROCEDURES 
Rules and 
SEC. 503. Section 510 of the Housing Act of 1949 is amended by 
regulations. 
redesignating paragraphs (g), (h), and (i) as paragraphs (h), (i), 
42 use 1480. 
and (j), respectively, and by inserting the following new paragraph 
after paragraph (f): 
"(g) issue rules and regulations which assure that applicants denied 
{issistance under this title or persons or organizations whose assistance 
under this title is being substantially reduced or terminated are given 
written notice of the reasons for denial, reduction or termination and 
are provided at least an opportunity to appeal an adverse decision and 
to present additional information relevant to that decision to a person, 
other than the person making the original determination, who has 
authority to reverse the decision;". 
Waiver. 
42 use 1484. 
42 use 1471. 
42 use 1481. 
DOMESTIC FARM LABOR HOUSING 
SEC. 504. Section 514 of the Housing Act of 1949 is amended by 
adding at the end thereof the following: 
"(g) The Secretary may waive the interest rate limitation contained 
in subsection (a) (2) and the requirement of section 501(c) (3) in any 
case in which the Secretary determines that qualified public or private 
nonprofit sponsors are not currently available and are not likely to 
become available within a reasonable period of time and such waiver is 
necessary to permit farmers to provide housing and related facilities 
for migrant domestic farm laborers, except that the benefits resulting 
from such waiver shall accrue to the tenants, and the interest rate on 
a loan insured under this section and for which the Secretary permits 
such waiver shall be no less than one-eighth of 1 per centvmi above the 
average interest rate on notes or other obligations which are issued 
under section 511 and have maturities comparable to such a loan.". 
SPONSORS PRIORITY 
42 use 1486. 
SEC. 505. Section 516(e) of the Housing Act of 1949 is amended by 
adding at the end thereof the following: "The Secretary shall not give 
priority for funding under this section to any one of the groups listed 
in subsection (a) over any of the others so listed.". 
ASSISTANCE TO PERSONS RECEIVING LOANS TO PROVIDE OCCUPANT-OWNED, 
RENTAL, AND COOPERATIVE HOUSING 
42 use 1490a. 
SEC. 506. (a) Section 521(a)(1) of the Housing Act of 1949 is 
amended— 
(1) by inserting "(A)" after "SEC. 521. (a)(1)"; 
(2) by striking out everything in the first sentence after "one-
eighth of 1 per centum" and inserting in lieu thereof a period; 
and 
(3) by inserting the following at the end thereof: 
"(B) From the interest rate so determined, the Secretary may pro-
vide the borrower with assistance in the form of credits so as to reduce 
the effective interest rate to a rate not less than 1 per centum per 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2113 
42 
use 
1472, 
1487. 
12 
use 
1701. 
42 
use 
1437 
n
o
t
e
. 
Maintenance 
incentives. 
annum for such periods of time as the Secretary may determine for 
applicants described in subparagraph (A) if without such assistance 
such applicants could not afford the dwelling or make payments on 
the indebtedness of the rental or cooperative housing. 
"(C) For persons of low income under section 502 or 517(a) who 
the Secretary determines are unable to afford a dwelling with the 
assistance provided under subparagraph (B) and when the Secretary 
determines that assisted rental housing programs (as authorized under 
this title, the National Housing Act, and the United States Housing 
Act of 1937) would be unsuitable in the area in which such persons 
reside, the Secretary may provide additional assistance, pursuant to 
amounts approved in appropriation Acts and for such periods of time 
as the Secretary may determine, which may be in an amount not to 
exceed the difference between (i) the amount determined by the Sec-
retary to be necessary to pay the principal indebtedness, interest, taxes, 
insurance, utilities, and maintenance, and (ii) 25 per centum of the 
income of such applicant. 
"(D) With respect to borrowers under section 502 or 517(a) who Recapture, 
have received assistance under subparagraph (B) or (C), the Sec-
retary shall provide for the recapture of all or a portion of such assist-
ance rendered upon the disposition or nonoccupancy of the property 
by the borrower. In providing for such recapture, the Secretary shall 
make provisions to provide incentives for the borrower to maintain 
the property in a marketable condition. Notwithstanding any other 
provision of law, any such assistance whenever rendered shall con-
stitute a debt secured by the security instruments given by the bor-
rower to the Secretary to the extent that the Secretary may provide 
for recapture of such assistance. 
"(E) Except for Federal or State laws relating to taxation, the 
assistance rendered to any borrower under subparagraphs (B) and 
(C) shall not be considered to be income or resources for any purpose 
under any Federal or State laws including, but not limited to, laws 
relating to welfare and public assistance programs. 
"(F) Loans subject to the interest rates and assistance provided 
under this paragraph (1) may be made only when the Secretary deter-
mines the needs of the appplicant for necessary housing cannot be met 
with financial assistance from other sources including assistance under 
the National Housing Act and the United States Housing Act of 
1937. 
"(G) Interest on loans under section 502 or 517(a) to victims of a 
natural disaster shall not exceed the rate which would be applicable 
to such loans under section 502 without regard to this section. 
"(H) The aggregate principal amount of loans made to borrowers 
receiving assistance pursuant to subparagraph (C) shall not exceed 
$440,000,000.". 
(b) Section 517 (j) of such Act is amended by striking out "(2)" 42 USC 1487. 
in paragraph (4). 
RTJRAL RENTAL ASSISTANCE 
SEC. 507. Section 521(a)(2)(A) of the Housing Act of 1949 is 42 USC 1490a. 
amended— 
(1) by striking out "the owners" in the first sentence and insert-
ing in lieu thereof "public and private nonprofit owners"; 
(2) by inserting "congregate, or cooperative" after "rental" the 
second time it appears in the first sentence; and 
39-194 O—80—pt. 2 
53 : QL3 
92 STAT. 2114 
PUBLIC LAW 95-557—OCT. 31, 1978 
(3) by inserting ", by a loan under section 514," immediately 
after "section 515 for elderly or handicapped housing" in clause 
(i) of the second sentence. 
42 use 1476 
note. 
Report to 
Congress. 
STUDY o r EMERGENCY POTABLE WATER AND SEWAGE PROGRAM 
SEC. 508. (a) The Secretary of Agriculture shall— 
(1) carry out a study to determine the approximate number of 
rural housing units without access to sanitary toilet facilities, 
potable water, or access to both sanitary toilet facilities and 
potable water, as defined under regulations established by the 
Secretary; and 
(2) prepare a projection of the cost of implementing an emer-
gency program to provide sanitary toilet facilities and potable 
water supplies for all such housing units over a two-year period. 
(b) Not later than six months after the date of enactment of this 
Act, the Secretary of Agriculture shall report to the Congress the 
results of the study and projection under subsection (a). 
42 use 1480 
note. 
Reports to 
eongress. 
tive 
recommendations. 
STUDY OF PROBLEMS CAUSED BY REMOTE CLAIMS 
SEC. 509. (a) The Secretary of Agriculture (hereafter referred to 
in this section as "Secretary") shall make a detailed study of the prob-
lems associated with obtaining title insurance by persons in rural areas 
with respect to real property encumbered by remote claims or other 
remote encumbrances which prevent such persons from receiving the 
full benefit of the use of such property, including the benefit of assist-
ance provided under this title. The Secretary shall, in making such 
study, consider and develop findings and conclusions with respect to— 
(1) the extent of such problems as they pertain to the lawful 
rights of such persons; 
(2) the location and amount of land affected by such problems; 
(3) the nature, extent, and effectiveness of remedies to such 
problems presently available, or proposed, under State law; 
(4) the potential impact (with respect to existing Federal, 
State, and local laws) of such remote claims and encumbrances 
and of any reasonable remedies determined necessary for resolv-
ing the problems created for persons by such remote claims or 
encumbrances; 
(5) the liability and losses which might accrue to the Federal 
Government as a result of each of the remedies considered in the 
study conducted under this section; and 
(6) other issues which the Secretary determines shall be con-
sidered, after consulting with the Secretary of Housing and Urban 
Development. 
(b) Not later than March 1,1979, the Secretary shall transmit to the 
Congress an interim report on the study conducted under this section. 
In addition, the Secretary shall, not later than one year after the date 
of the enactment of this Act, transmit a final report to the Congress. 
Such final report shall contain the findings and conclusions of the Sec-
retary with respect to the study made under this section. In addition, 
such final report shall include— 
(1) recommendations for Federal legislative actions necessary 
to implement reasonable remedies to the problems studied under 
this section; and 
(2) recommendations for legislative actions which may be 
undertaken by State and local governments for the purposes of 
providing such remedies. 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2115 
TITLE VI—NEIGHBORHOOD REINVESTMENT 
CORPORATION 
SHORT TITLE 
Neighborhood 
Reinvestment 
Corporation Act. 
SEC. 601. This title may be cited as the "Neighborhood Reinvestment 42 USC 8101 
Corporation Act". 
°ot«-
FINDINGS AND PURPOSE 
SEC. 602. (a) The Congress finds that— 
(1) the neighborhood housing services demonstration of the 
Urban Reinvestment Task Force has proven its worth as a success-
ful program to revitalize older urban neighborhoods by mobiliz-
ing public, private, and community resources at the neighborhood 
level; and 
(2) the demand for neighborhood housing services programs in 
cities throughout the United States warrants the creation of a 
public corporation tx) institutionalize and expand the neighbor-
hood housing services program and other programs of the present 
Urban Reinvestment Task Force. 
(b) The purpose of this title is to establish a public corporation 
which will continue the joint efforts of the Federal financial supervi-
sory agencies and the Department of Housing and Urban Development 
to promote reinvestment in older neighborhoods by local financial insti-
tutions working cooperatively with community people and local gov-
ernment, and which will continue the nonbureaucratic approach of the 
Urban Reinvestment Task Force, relying largely on local initiative for 
the specific design of local programs. 
42 USC 8101. 
ESTABLISHMENT OF CORPORATION 
i < 
SEC. 603. (a) There is established a National Neighborhood Rein- 42 USC 8102. 
vestment Corporation (hereinafter referred to as the "corporation") 
which shall be a body corporate and shall possess the powers, and shall 
be subject to the direction and limitations specified herein. 
(b) The corporation shall implement and expand the demonstration Duties, 
activities carried oiit by the Urban Reinvestment Task Force. 
(c) The corporation shall maintain its principal office in the District Offices, 
of Columbia or at such other place the corporation may from time to 
time prescribe. 
(d) The corporation, including its franchise, activities, assets, and 
income, shall be exempt from all taxation now or hereafter imposed by 
the United States, by any territory, dependency, or possession thereof, 
or by any State, county, municipality, or local taxing authority, except 
that any real property of the corporation shall be subject to State, 
territorial, county, municipal, or local taxation to the same extent 
according to its value as other real property is taxed. 
BOARD OF D I R E C T O R S ; 
ESTABLISHMENT 
SEC. 604. (a) The corporation shall be under the direction of a board 
of directors made uj) of the following members: 
(1) the Chairman of the Federal Home Loan Bank Board; 
(2) the Secretary of Housing and Urban Development; 
(3) a member of the Board of Governors of the Federal 
Reserve System, to be designated by the Chairman of the Board 
of Governors of the Federal Reserve System; 
Membership. 
42 USC 8103. 
92 STAT. 2116 
PUBLIC LAW 95-557—OCT. 31, 1978 
(4) the Chairman of the Federal Deposit Insurance Corpo-
ration ; 
(5) the Comptroller of the Currency; and 
(6) the 
Administrator 
of 
the 
National 
Credit 
Union 
J , 
Administration. 
Chairman. 
(b) The Board shall elect from among its members a chairman who 
shall serve for a term of two years, except that the Chairman of the 
Federal Home Loan Bank Board shall serve as Chairman of the Board 
,. ^ ;• 
of Directors for the first such two-year term. 
(c) Each director of the corporation shall serve ex officio during 
the period he holds the office to which he is appointed by the President. 
Compensation 
(d) The directors of the corporation, as full-time officers of the 
and expenses. 
United States, shall serve without additional compensation but shall 
be reimbursed for travel, subsistence, and other necessary expenses 
incurred in the performance of their duties as directors of the 
corporation. 
(e) The directors of the corporation shall adopt such bylaws, 
policies, and administrative provisions as are necessary to the func-
tioning of the corporation and consistent with the provisions of this 
title. 
Quorum. 
(f) The presence of a majority of the board members shall con-
stitute a quorum. 
(g) The corporation shall be subject to the provisions of section 
552 of title 5, United States Code. 
(h) All meetings of the board of directors will be conducted in 
accordance with the provisions of section 552b of title 5, United States 
Code. 
OFFICERS AND EMPLOYEES 
42 use 8104. 
SEC. 605. (a) The board shall have power to select, employ, and fix 
the compensation and benefits of such officers, employees, attorneys, and 
agents as shall be necessary for the performance of its duties under 
this title, without regard to the provisions of title 5, United States 
Code, governing appointments in the competitive service, classification, 
and General Scnedule pay rates, except that no officer, employee, attor-
ney, or agent of the corporation may be paid compensation at a 
rate in excess of the highest rate provided for GS-18 of the General 
Schedule under section 5332 of title 5, United States Code. 
(b) The directors of the corporation shall appoint an executive 
director who shall serve as chief executive officer of the corporation. 
(c) The executive director of the corporation, subject to approval 
by the board, may appoint and remove such employees of the corpora-
tion as he determines necessary to carry out the purposes of the 
corporation. 
(d) No political test or political qualification shall be used in select-
ing, appointing, promoting, or taking any other personnel action with 
respect to any officer, agent, or employee of the corporation or of any 
recipient, or in selecting or monitoring any grantee, contractor, or per-
son or entity receiving financial assistance under this title. 
(e) Officers and employees of the corporation shall not be considered 
officers or employees of the United States, and the corporation shall 
not be considered a department, agency, or instrumentality of the Fed-
eral Government. The corporation shall be subject to administrative 
and cost standards issued by the Office of Management and Budget 
similar to standards applicable to non-profit grantees and educational 
institutions. 
. :•. . ., -;v5.<-w- .i.-^-.'!-" .•»,.,.....;.. 
. .,,, 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2117 
POWERS AND DUTIES 
SEC. 606. (a) (1) The corporation shall continue the work of the 
Urban Reinvestment Task Force in establishing neighborhood hous-
ing services programs in neighborhoods throughout the United States, 
supervising their progress, and providing them with grants and tech-
nical assistance. For the purpose of this paragraph, a neighborhood 
housing services program may involve a partnership of neighborhood 
residents and representatives of local governmental and financial insti-
tutions, organized as a State-chartered non-profit corporation, work-
ing to bring about reinvestment in one or more neighborhoods through 
a program of systematic housing inspections, increased public invest-
ment, increased private lending, increased resident investment, and a 
revolving loan fund to make loans available at flexible rates and terms 
to homeowners not meeting private lending criteria. 
(2) The corporation shall continue the work of the Urban Reinvest-
ment Task Force in identifying, monitoring, evaluating, and providing 
grants and technical assistance to selected neighborhood preservation 
projects which show promise as mechanisms for reversing neighbor-
hood decline and improving the quality of neighborhood life. 
(3) The corporation shall experimentally replicate neighborhood 
preservation projects which have demonstrated success, and after creat-
ing reliable developmental processes, bring the new programs to neigh-
borhoods throughout the United States which in the judgment of the 
corporation can benefit therefrom, by providing assistance in orga-
nizing programs, providing grants in partial support of program costs, 
and providing technical assistance to ongoing programs. 
(4) The corporation shall continue the work of the Urban Reinvest-
ment Task Force in supporting Neighborhood Housing Services of 
America, a nonprofit corporation established to provide services to 
local neighborhood housing services programs, with support which 
may include technical assistance and grants to expand its national loan 
purchase pool and may contract with it for services which it can per-
form more efficiently or effectively than the corporation. 
(5) The corporation shall, in making and providing the foregoing 
grants and technical and other assistance, determine the reporting and 
management restrictions or requirements with which the recipients of 
such grants or other assistance must comply. In making such deter-
minations, the corporation shall assure that recipients of grants and 
other assistance make available to the corportion such information as 
may be necessary to determine compliance with applicable Federal 
laws. 
(b) To carry out the foregoing purposes and engage in the forego-
ing activities, the corporation is authorized— 
^1) to adopt, alter, and use a corporate seal; 
(2) to have succession until dissolved by Act of Congress; 
(3) 
to make and perform 
contracts, agreements, and 
commitments; 
(4) to sue and be sued, complain and defend, in any State, Fed-
eral, or other court; 
(5) to determine its necessary expenditures and the manner in 
which the same shall be incurred, allowed, and paid, and appoint, 
employ, and fix and provide for the compensation of consultants, 
without regard to any other law, except as provided in section 
608(d); 
(6) to settle, adjust, and compromise, and with or without com-
pensation or bene6t to the corporation to release or waive in whole 
Housing services 
programs, 
continuation. 
42 use 8105. 
Preservation 
projects. 
92 STAT. 2118 
PUBLIC LAW 95-557—OCT. 31, 1978 
or in part, in advance or otherwise, any claim, demand, or right 
,,. 
,; i 
of, by, or against the corporation; 
(7) to invest such funds of the corporation in such investments 
as the board of directors may prescribe; 
(8) to acquire, take, hold, and own, and to deal with and dispose 
of any property; and 
(9) to exercise all other powers that are necessary and proper to 
carry out the purposes of this title. 
Contracts and 
(c) (1) The corporation may contract with the Office of Neighbor-
grants, 
hood Reinvestment of the Federal home loan banks for all staff, serv-
ices, facilities, and equipment now or in the future furnished by the 
/ 
Office of Neighborhood Reinvestment to the Urban Reinvestment Task 
Force, including receiving the services of the Director of the Office of 
Neighborhood Reinvestment as the corporation's executive director. 
(2) The corporation shall have the power to award contracts and 
grants to— 
(A) neighborhood housing services corporations and other non-
profit corporations engaged in neighborhood preservation activi-
ties; and 
(B) local governmental bodies. 
Services and 
(3) The Secretary of Housing and Urban Development, the Federal 
facilities. 
Home Loan Bank Board and the Federal home loan banks, the Board 
of Governors of the Federal Reserve System and the Federal Reserve 
banks, the Federal Deposit Insurance Corporation, and the Comptrol-
ler of the Currency, the National Credit Union Administration or 
any other department, agency, or other instrumentality of the Federal 
Government are authorized to provide services and facilities, with or 
without reimbursement, necessary to achieve the objectives and to 
carry out the purposes of this title. 
(d) (1) The corporation shall have no power to issue any shares of 
stocks, or to declare or pay any dividends. 
^ 
(2) No part of the income or assets of the corporation shall inure 
to the benefit of any director, officer, or employee, except as reasonable 
compensation for services or reimbursement for expenses. 
(3) The corporation may not contribute to or otherwise support any 
political party or candidate for elective public office. 
REPORTS AND 
AUDITS 
Transmittal to 
SEC. 607. (a) The corporation shall publish an annual report which 
President and 
shall be transmitted by the corporation to the President and the 
Congress. 
Congress. 
4^USC 8106. 
(b) The accounts of the corporation shall be audited annually. Such 
/ 
audits shall be conducted in accordance with generally accepted audit-
ing standards by independent certified public accountants who are 
certified by a regulatory authority of the jurisdiction in which the audit 
is undertaken. 
(c) In addition to the annual audit, the financial transactions of the 
corporation for any fiscal year during which Federal funds are avail-
/ 
able to finance any portion of its operations may be audited by the 
General Accounting Office in accordance with such rules and regula-
tions as may be prescribed by the Comptroller General of the United 
States. The financial transactions of the corporation shall be audited 
by the General Accounting Office at least once during each three years. 
(d) For any fiscal year during which Federal funds are available 
to finance any portion of the corporation's grants or contracts, the 
General Accounting Office, in accordance with such rules and regula-
tions as may be prescribed by the Comptroller General of the United 
States, may audit the grantees or contractors of the corporation. 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2119 
(e) The corporation shall conduct or require each grantee or con-
tractor to provide for an annual financial audit. The report of each 
such audit shall be maintained for a period of at least five years at the 
principal office of the corporation. 
AUTHORIZATION 
SEC. 608. (a) There are authorized to be appropriated to the corpo-
ration to carry out this title not to exceed $12,500,000 for fiscal year 
1979. 
(b) Funds appropriated pursuant to this section shall remain avail-
able until expended. 
(c) Non-Federal funds received by the corporation, and funds 
received by any recipient from a source other than the corporation, 
shall be accounted for and reported as receipts and disbursements 
separate and distinct from Federal funds. 
(d) The corporation shall prepare annually a business-type budget 
which shall be submitted to the Office of Management and Budget, 
under such rules and regulations as the President may establish as to 
the date of submission, the form and content, the classifications of 
data, and the manner in which such budget program shall be prepared 
and presented. The budget of the corporation as modified, amended, 
or revised by the President shall be transmitted to the Congress as a 
part of the annual budget required by the Budget and Accounting 
Act, 1921. Amendments to the annual budget program may be sub-
mitted from time to time. 
TITLE VII—NEIGHBORHOOD SELF-HELP 
DEVELOPMENT 
SHORT TITLE 
Appropriation 
authorization. 
42 use 8107. 
Annual budget 
submittal. 
Transmittal to 
Congress. 
31 USCl. 
Neighborhood 
Self-Help 
Development Act 
of 1978. 
SEC. 701. This title may be cited as the "Neighborhood Self-Help 42 USC 8121 
Development Act of 1978". 
note. 
FINDINGS AND PURPOSE 
SEC. 702. (a) The Congress finds and declares that— 
(1) existing urban neighborhoods are a national resource to be 
conserved and revitalized wherever possible, and that public policy 
should promote governmental and private programs and activities 
that further that objective; 
(2) to be effective, neighborhood conservation and revitaliza-
tion efforts must involve the fullest possible support and participa-
tion of those most directly affected at the neighborhood levels; 
and 
(3) an effective way to obtain such support and participation 
at the neighborhood level is through neighborhood organizations 
accountable to residents of a particular neighborhood with a 
demonstrable capacity for developing, assessing, and carrying out 
projects for neighborhood conservation and revitalization. 
(b) Therefore, the purposes of this title are (1) to provide grants 
and other forms of assistance to qualified neighborhood organizations 
to undertake specific housing, economic or community development, 
and other appropriate neighborhood conservation and revitalization 
projects in low- and moderate-income neighborhoods, which are in 
need of preservation and revitalization, and (2) in the process of pro-
42 USC 8121. 
92 STAT. 2120 
PUBLIC LAW 95-557—OCT. 31, 1978 
viding such assistance, to increase the capacity of neighborhood 
organizations to utilize and coordinate resources available from the 
public and private sectors and from the residents and neighborhoods 
themselves, m conserving and revitalizing such neighborhoods. 
DEFINITIONS 
42 use 8122. 
SEC. 703. As used in this title— 
(1) the term "neighborhood organization" means a voluntary, 
nonprofit organization which (A) is broadly representative of 
the neighborhood in which the project will be located (and may 
include representatives of local business, financial and other gov-
ernmental and nongovernmental entities), (B) is accountable to 
neighborhood residents with respect to the project being proposed, 
(C) has an objective the preservation and revitalization of such 
neighborhood, and (D) is found by the Secretary to have a 
proven record or demonstrable capacity for developing resources 
for, and effectively implementing neighborhood conservation and 
revitalization programs and projects; 
(2) the term "neighborhood conservation and revitalization 
projects" includes, but is not limited to, (A) locally initiated pro-
grams for housing rehabilitation or the creative reuse or improve-
ment of existing housing; (B) conservation and revitalization of 
neighborhood retail business areas and the recycling of vacant or 
•' 
' 
underutilized industrial sites, public facilities, and privately-
owned businesses for the purpose of expanding employment 
opportunities and neighborhood economic development; and (C) 
energy conservation and weatherization projects; and 
(3) the term "Secretary" means the Secretary of Housing and 
Urban Development. 
AUTHORITY TO PROVIDE ASSISTANCE 
Grants. 
SEC. 704. (a) The Secretary is authorized to make grants and to 
42 use 8123. 
provide other forms of assistance to neighborhood organizations for 
effectively preparing and implementing specific housing, economic and 
community development, and other appropriate neighborhood conser-
' 
- 
vation and revitalization projects within a particular neighborhood, 
and to assist such organizations in implementing such projects in 
partnership with local government and other public and private 
entities. 
(b) Grants and other forms of assistance may be made available 
under this section only if— 
(1) the assistance will be used for a specific project which is 
related to and supportive of a conservation or revitalization strat-
egy for the neighborhood in which the project will be located; 
(2) the project will, to the extent feasible, include a self-help 
component which involves a contribution of time or resources by 
neighborhood residents; 
(3) the project will directly benefit the residents of a low- or 
moderate-income neighborhood; 
(4) the project will, to the extent feasible, involve leveraging of 
resources available from the private sector; 
(5) the project will, to the extent feasible, involve the coordi-
nation of resources available from the local. State, or Federal 
Government; 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2121 
(6) the applicant demonstrates that the residents of the neigh-
borhood where the project will be located, and particularly resi-
dents who will be directly affected by the project, have been 
actively involved in and supportive of the selection of the project, 
and will continue to be involved in project development, imple-
mentation, and evaluation through an effective and continuing 
participation mechanism; and 
(7) the applicant provides evidence that identified funding 
sources support the project and can make funds available con-
tingent on the progress of the project. 
(c) Grants and other forms of assistance made available under this 
section shall be used primarily for preparing and the implementation 
of specific neighborhood housing, economic, and community develop-
ment projects. No grant or other assistance or portion thereof shall 
be made available under this section for (1) planning functions which 
are not directly combined with project implementation, (2) a public 
works project such as street repair which is not associated with the 
specific project being funded under this section, (3) operation of a 
social service program which is not associated with the specific project 
, 
being funded under this section, (4) an economic development project 
which will not primarily benefit the residents of the neighborhood in 
which it will be located, (5) operating costs of a community group 
which are not associated with the specific project being fmided under 
this section, or (6) other purposes which the Secretary may determine 
are not consistent with the purposes of this title. 
(d) Grants and other forms of assistance may be made available 
under this title only if the application contains a certification by the 
unit of general local government within which the neighborhood to be 
assisted is located that such assistance is consistent with, and sup-
portive of the specific objectives of that unit of government including 
housing and community development, economic development, and 
nei^borhood conservation or revitalization activities being carried 
ouVby such unit. 
(e) The Secretary shall consult with the heads of other Federal Consultation and 
departments and agencies having responsibilities related to the pur- coordination, 
poses of this title, including the Community Services Administration, 
with respect to (1) general standards, policies, and procedures to be 
followed in the administration of this title, and (2) particular assist-
ance actions or approvals which the Secretary believes to be of special 
interest or concern to one or more of such departments and agencies. 
The Secretary shall ensure the close coordination of activities assisted 
under this title with other related Federal, State, and local assistance 
programs, including the programs of the Community Services Admin-
istration, and, with respect to particular assistance actions or 
approvals, ensure a maximum commitment by the neighborhood orga-
nization of its own financial and other resources toward the assisted 
project. 
APPROPRIATIONS 
SEC. 705. There are authorized to be appropriated for the purpose 42 USC 8124. 
of carrying out this title not to exceed $15.000,000 for each of the fiscal 
years 1979 and 1980. Any amount appropriated pursuant to this section 
shall remain available until expended. 
92 STAT. 2122 
PUBLIC LAW 95-557—OCT. 31, 1978 
Livable Cities Act 
TITLE VIII—LIVABLE CITIES 
of 1978. 
SHORT TITLE 
42 use 8141 
SEC. 801. This title may be cited as the "Livable Cities Act of 1978". 
note. 
FINDINGS 
42 use 8141. 
SEC. 802. The Congress finds and declares— 
(1) that artistic, cultural, and historic resources, including 
urban design, constitute an integral part of a suitable living envi-
ronment for the residents of the Nation's urban areas, and should 
be available to all residents of such areas, regardless of income; 
(2) that the development or preservation of such resources is a 
significant and necessary factor in restoring and maintaining the 
vitality of the urban environment, and can serve as a catalyst for 
improving decaying or deteriorated urban communities and 
expanding economic opportunities, and for creating a sense of 
community identity, spirit, and pride; and 
(3) that the encouragement and support of local initiatives to 
develop or preserve such resources, particularly in connection with 
federally assisted housing or community development activities or 
in communities with a high proportion of low-income residents, is 
an appropriate function of the Federal Government. 
PURPOSE 
42 use 8142. 
SEC. 803. The primary purpose of this title is to assist the efforts of 
States, local governmentSj neighborhood and other organizations to 
provide a more suitable living environment, expand cultural oppor-
tunities, and to the extent practicable, stimulate economic opportuni-
ties, primarily for the low and moderate income residents of 
communities and neighborhoods in need of conservation and 
revitalization, through the utilization, design or development of 
artistic, cultural, or historic resources. 
DEFINITIONS 
42 use 8143. 
SEC. 804. For the purpose of this title— 
(1) the terms "art" and "arts" include, but are not limited to, 
architecture (including preservation, restoration, or adaptive use 
of existing structures), landscape architecture, urban design, 
interior design, graphic arts, fine arts (including painting and 
sculpture), performing arts (including music, drama, and dance), 
literature, crafts, photography, communications media and film, 
as well as other similar activities which reflect the cultural heritage 
of the Nation's communities and their citizens; 
(2) the term "nonprofit organization" means an organization 
in which no part of its net earnings inures to the benefit of any 
private stockholder or stockholders, individual or individuals and, 
if a private entity, which is not disqualified for tax exemption 
26 use 501. 
under section 501(c)(3) of the Internal Revenue Code of 1954 
by reason of attempting to influence legislation and does not par-
ticipate in or intervene in (including the publishing or distribu-
tion of statements) any political campaign on behalf of any 
candidate for public office; such organizations may include States 
and units of local government (including pulilic agencies or 
special authorities thereof), regional organizations of local gov-
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2123 
ernments and nonprofit societies, neighborhood groups, institu-
tions, organizations, associations or museums; 
(3) the term "project" means a program or activity intended 
to carry out the purposes of this title, including programs for 
neighborhood and community-based arts programs, urban design, 
user needs design, and the encouragement of the preservation of 
historic or other structures which have neighborhood or commu-
nity significance; 
(4) the term "Secretary" means the Secretary of Housing and 
Urban Development; 
(5) the term "Chairman" means the Chairman of the National 
Endowment for the Arts; 
(6) the term "Department" means the Department of Housing 
and Urban Development; and 
(7) the term "Endowment" means the National Endowment for 
the Arts. 
GRANTS TO OR CONTRACTS WITH ORGANIZATIONS 
SEC. 805. (a) The Secretary is authorized to make grants to, or enter 
into contracts with, nonprofit organizations for the purpose of enabling 
such organizations to undertake or support in cities, urban commu-
nities, or neighborhoods, projects which the Secretary, in consultation 
with the Chairman, deterihines will carry out the purposes of this title 
and which— 
(1) have substantial artistic, cultural, historical, or design 
merit, 
(2) represent community or neighborhood initiatives which 
have a significant potential for conserving or revitalizing com-
munities or neighborhoods, and for enhancing community or 
neighborhood identity and pride, and 
(3) meet the criteria established jointly by the Secretary and 
the Chairman pursuant to this section. 
(b) The Secretary and the Chairman shall establish jointly criteria 
and procedures for evaluating and selecting projects to be assisted 
under this title. Such criteria shall address, but need not be limited 
to— 
(1) artistic, cultural, historical, or design quality; 
(2) the degree of broadly based, active involvement of neighbor-
hood residents, community groups, local officials, and persons with 
expertise in the arts with the proposed project; 
(3) the degree of or the potential for utilization or stimulation 
of assistance or cooperation from other Federal, State, and local 
public and private sources, including arts organizations; 
(4) the feasibility of project implementation, including the 
capability of the sponsor organization; 
(5) the potential contribution to neighborhood revitalization 
and the creation of a sense of community identity and pride; 
(6) the potential for stimulating neighborhood economic and 
community development, particularly for the benefit of persons of 
low and moderate income; and 
(7) the potential of utilization of the project by neighborhood 
residents, particularly residents of low and moderate income, 
senior citizens, and handicapped persons. 
(c) No assistance shall be made under this title except upon applica-
tion therefor submitted to the Secretary in accordance with reg:ula-
tions and procedures established jointly by the Secretary and the 
Chairman. 
42 use 8144. 
Assistance, 
criteria and 
procedures, joint 
establishment. 
92 STAT. 2124 
PUBLIC LAW 95-557—OCT. 31, 1978 
Consultation. 
Regulations. 
Reduction or 
waiver. 
Certification. 
(d) Prior to the approval of any application for assistance under 
this title, the Secretary shall consult with the Chairman and, in accord-
ance with regulations and procedures established jointly by the Sec-
retary and the Chairman, seek the recommendations of State and local 
officials and private citizens who have broad knowledge of, or experi-
ence or expertise in, community and economic development and revi-
talization, and of such officials and citizens who have broad knowledge 
of, or expertise in, the arts. 
(e) The Secretary, in cooperation with the Chairman, shall pre-
scribe regulations which require that specific portions of the cost of 
any projects assisted under this title shall be provided from sources 
other than funds made available under this title. Such matching 
requirements may vary depending on the type of applicant, and the 
Secretary may reduce or waive such requirements solely in order to 
take account of the financial capacity of the applicant. 
(f) Grants and other assistance may be made available under this 
title only if the application contains a certification by the unit of gen-
eral local government in which the project will be located that the 
project is consistent with and supportive of the objectives of that gov-
ernment for the area in which the project is located. 
(g) Funds made available under this title shall not be used to sup-
plant other public or private funds. 
(h) No more than 10 per centum of the funds appropriated for any 
fiscal year under section 807 shall be available for administrative 
expenses. 
COORDINATION AND DEVELOPMENT OF PROGRAM WITH OTHER FEDERAL 
AND NONFEDERAL PROGRAMS 
42 use 8145. 
SEC. 806. The Secretary shall coordinate the administration of the 
provisions of this title in cooperation with other Federal agencies and 
assure that projects assisted under this title are coordinated with 
ej[forts undertaken by State and local public and private entities, 
including arts organizations. 
AUTHORIZATION OF APPROPRIATIONS 
42 use 8146. 
SEC. 807. There are authorized to be appropriated for carrying out 
the purposes of this title not to exceed $5,000,000 for fiscal year 1979, 
and not to exceed $10,000,000 for fiscal year 1980. Any amounts appro-
priated under this section shall remain availaible until expended. 
TITLE IX—MISCELLANEOUS 
42 use 5425. 
REPORT ON MOBILE HOME CONSTRUCTION AND SAFETY STANDARDS 
SEC. 901. (a) The first sentence of section 626(a) of the National 
Mobile Home Construction and Safety Standards Act of 1974 is 
amended— 
(1) by striking out "March 1 of each year" and inserting in lieu 
thereof "July 1 of every other year beginning with calendar year 
1978"; and 
(2) by striking out "preceding calendar year" and inserting in 
lieu thereof "two preceding calendar years". 
(b) The second sentence of section 626(a) of such Act is amended 
by striking out "such year" in clauses (1), (2), and (5) and "the year" 
in clause (6) and inserting in lieu thereof "such years" in each such 
clause. 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2125 
STATEMENT OF POLICY AND STUDY ON HOUSING DISPLACEMENT 
SEC. 902. The Congress declares that in the administration of Fed-
eral housing and community development programs, consistent with 
other program goals and objectives involuntary displacement of per-
sons from their homes and neighborhoods should be minimized. In 
furtherance of the objective stated in the preceding sentence, the Sec-
retary of Housing and Urban Development shall conduct a study on 
the nature and extent of such displacement, and, not later than Jan-
uary 31,1979, shall report to the Congress on recommendations for the 
formulation of a national policy to minimize involuntary displace-
ment caused by the implementation of the Department's programs, and 
to alleviate the problems caused by displacement of residents of the 
Nation's cities due to residential and commercial development and 
housing rehabilitation, both publicly and privately financed. In carry-
ing out such study, the Secretary shall (1) consult with representatives 
of affected public interest groups, government, and the development 
and lending industries; (2) provide data on the nature and scope of 
the displacement problem, both past and projected, and identify steps 
needed to improve the availability of such data; and (3) report fully 
on the current legal and regulatory powers and policies of the Depart-
ment to prevent or compensate for displacement caused by its own 
programs. 
REHABILITATION GUIDELINES 
SEC. 903. Title V of the Housing and Urban Development Act of 
1970 is amended by adding at the end thereof the following: 
42 use 5313 
note. 
Report to 
Congress. 
REHABILITATION GUIDELINES 
12 use 
1701Z-10. 
"SEC. 511. (a) (1) The Secretary shall develop model rehabilitation 
f
uidelines for the voluntary adoption by States and communities to 
e used in conjunction with existing building codes by State and local 
officials in the inspection and approval of rehabilitated properties. 
"(2) Such guidelines shall be developed in consultation with the eonsultation. 
National Institute of Building Sciences, appropriate national organi-
zations of agencies and officials of State and local governments, rep-
resentatives of the building industry, and consumer groups, and other 
interested parties. 
"(3) The Secretary shall publish such guidelines for public com- Publication, 
ment not later than one year after the date of enactment of this section, 
and promulgate them no later than eighteen months after such date 
of enactment. 
"(4) The Secretary may furnish technical assistance to State and 
local governments to facilitate the use and implementation of such 
guidelines. 
"(b) The Secretary shall report to Congress not later than thirty- Report to 
six months after the date of enactment of this section regarding (1) eongress. 
actions taken by State and local governments to adopt guidelines or 
their equivalents, and (2) recommendations for further action.". 
ALASKA HOUSING 
PROGRAM 
SEC. 904. (a) Subsection (a) of section 1004 of the Demonstration 
Cities and Metropolitan Development Act of 1966 is amended to read 
as follows: 
"(a) The Secretary of Housing and Urban Development (herein-
after referred to as the 'Secretary') may make loans and grants on 
Loans and grants 
42 use 3371. 
92 STAT. 2126 
PUBLIC LAW 95-557—OCT. 31, 1978 
the basis of need to the regional native housing authorities duly con-
stituted under the laws of the State of Alaska for the purpose of pro-
viding planning assistance, housing rehabilitation, and maintaining 
an adequate administrative structure in conjunction with the provision 
of housing and related facilities for Alaska residents.". 
(b) Subsection (b) of such section is amended by inserting before 
the period at the end thereof the following: ", except that the Sec-
retary may make a grant in excess of such limitation in any case, af 
ccr 
'/ 
consultation with State officials". 
PAPERWORK 
REDUCTION 
42 use 3541. 
SEC. 905. (a) The Congress finds and declares— 
(1) that various departments, agencies, and instrumentalities 
of the Federal Government with responsibilities involving housing 
and housing finance programs, require, approve, use or otherwise 
employ a variety of different forms as residential mortgages (or 
deeds of trust or similar security instruments) as notes secured by 
those mortgages, and for applications, appraisals and other pur-
poses, and that such duplication of forms constitutes a paper-
work burden that adds to the costs imposed on the Nation's 
homeowners and home buyers: 
(2) that unnecessary paperwork impairs the effectiveness of 
Federal housing and housing finance programs; 
(3) that both single-family and multi-family programs are 
affected; and 
(4) that simplification of paperwork imposed by Federal hous-
ing and housing finance programs would contribute to achieving 
the Nation's housing goals by reducing housing costs. 
(b) (1) Insofar as it is practicable and to the extent permitted by 
law and to the extent that such action would result in a reduction in 
paperwork and regulatory burden, the Department of Housing and 
[Trban Development and the Veterans' Administration shall employ 
in their respective programs— 
(A) uniform single-family and multi-family note and mortgage 
^ 
forms; 
(B) a uniform application form for mortgage approval and 
commitment for mortgage insurance; 
^ • • 
(C) a uniform form for computation of the monthly net effec-
tive income of applicants; 
(D) a uniform property appraisal form; 
(E) a imiform settlement statement which shall satisfy the 
requirements of the Real Estate Settlement Procedures Act; and 
(F) such other consolidated or simplified forms, the consolida-
tion or simplification of which the Secretary of Housing and 
••' , 
Urban Development and the Administrator of Veterans' Affairs 
mutually agree would contribute to a reduction in the paperwork 
^
A 
and legulatory burden of housing and housing finance programs 
administered t3y the agencies. 
(2) Each agency may employ riders, addenda, or similar forms of 
modification agreements to adapt such uniform forms to its respective 
]irograms and policies, consistent with the goals of minimizing the use 
:i 
and extent of such modification a^-eements and maximizing the suita-
/ 
bility of such forms for the use of all participants, public and private. 
(3) To the extent permitted by law. the President may require the 
Farmers Home Administration and the Administrator of"the Farmers 
Home Administration to comply with the requirements of this section 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2127 
if such compliance will contribute to a reduction in the paperwork and 
regulatory burden of housing and housing finance programs adminis-
tered by the agency. 
(c) The Director of the Office of Management and Budget shall 
coordinate and monitor the development and implementation by Fed-
eral departments and agencies of the efforts required by subsection 
(b) and shall report to the Congress on such development and imple-
mentation as part of each report required under Public Law 93-556. 
HOUSING PRODUCTION REPORT 
SEC. 906. Section 1603 of the Housing and Urban Development Act 
of 1968 is amended to read as follows: 
Implementation, 
report to 
Congress. 
42 u s e 1441c. 
u 
REPORT ON GOALS 
"SEC. 1603. Not later than January 20 of each year, the President Transmittal to 
shall transmit to the Congress a report which— 
Congress. 
" (1) reviews the progress made in achieving housing production 
objectives during the preceding year, and in the event that pro-
posed objectives are not achieved, identifies the reasons for the 
failure; 
"(2) projects the level, composition, and general location of 
production and rehabilitation activity during the current year, and 
reassesses the availability of required resources; 
"(3) specifies Federal programs and policies to be implemented 
or recommended in order to achieve the objective; 
"(4) updates estimates of the housing needs of lower income 
families, analyzing these needs, insofar as possible, by type of 
household, housing need, including households with specialized 
needs, and general location, and in addition, reassesses the capac-
ity of each Federal housing program to serve the needs identified; 
" (5) reviews the progress made in achieving goals of conserving 
and upgrading older housing and neighborhoods, expanding home-
ownership and equal housing opportunities, and assuring reason-
able shelter costs; 
"(6) reports on progress made toward developing new methods 
for measuring and monitoring progress in achieving these goals; 
and 
"(7) identifies legislative and administrative actions which will 
or should be adopted or implemented during the current year to 
support achievement of the goals.". 
AMENDMENTS TO INTERSTATE LAND SALES FULL DISCLOSURE ACT 
SEC. 907. (a) Section 1403(a) of the Interstate Land Sales Full 
Disclosure Act is amended— 
15 USC 1702. 
(1) by inserting "condominium," after "commercial." in clause 
(2) by inserting after " 'adverse claims' do not refer to" in 
clause (10) the following: "United States land patents or Federal 
grants and reservations similar to United States land patents, nor 
to"; and 
92 STAT. 2128 
PUBLIC LAW 95-557—OCT. 31, 1978 
(3) by striking out the matter which precedes "when—" in 
clause (11) and inserting in lieu thereof the following: 
"(11) the sale or lease of real estate which is zoned by the 
J
- 
appropriate governmental authority for industrial or commercial 
development or which is restricted to such use by a declaration of 
"?' 
covenants, conditions, and restrictions which has been recorded 
in the official records of the city or county in which such real 
estate is located,". 
15 use 1702. 
(b) Section 1403 of such Act is amended— 
(1) by redesignating subsection (b) as subsection (c) ; and 
(2) by inserting after subsection (a) thereof the following: 
"(b) Unless the method of disposition is adopted by the purpose of 
15 use 
evasion of this title, the requirements of sections 1405 through 1408 
1704-1707. 
shall not apply to the sale or lease of a lot which is located within a 
municipality or county where a unit of local government specifies mini-
mum standards for the development of subdivision lots taking place 
within its boundaries, when— 
"(1) the subdivision meets all local codes and standards and is 
either zoned for single family residences or, in the absence of a 
zoning ordinance, is limited exclusively to single 
family 
residences; 
"(2) the lot is situated on a paved, public street or highway 
which has been built to a standard acceptable to the unit of local 
government in which the subdivision is located or a bond or other 
surety acceptable to the municipality or county in the full amount 
of the cost of the improvements has been posted to assure com-
pletion to such standards and the unit of local government has 
accepted or is obligated to accept the responsibility of maintaining 
the public street or highway; 
"(3) at the time of closing, potable water, sanitary sewage dis-
posal, and electricity have been extended to the lot or the unit of 
local government is obligated to install such facilities within 180 
days. For subdivisions which do not have a central water or sewage 
disposal system, rather than installation of water or sewer facili-
ties, there must be assurances that an adequate potable water sup-
ply is available year-round and that the lot is approved for the 
installation of a septic tank; 
"(4) the contract of sale requires delivery of a warranty deed 
. 
to the purchaser within 180 days after the signing of the sales 
contract; 
"(5) a policy of title insurance is issued in connection with the 
transaction showing that, at the time of closing, title to the lot pur-
chased or leased is vested in the seller or lessor subject only to such 
exceptions as may be approved in writing by the purchaser or 
lessee prior to recordation of the deed or execution of the lease ; 
n 
c I :;i 
"(6) each and every purchaser or spouse has made a personal, 
on the lot inspection of the lot purchased or leased, prior to signing 
of a contract to purchase or lease; and 
"(7) there are no direct mail or telephone solicitations or offers 
of gifts, trips, dinners, or other such promotional techniques to 
; 
induce prospective purchasers or lessees to visit the subdivision or 
to purchase or lease a lot.". 
PUBLIC LAW 95-557—OCT. 31, 1978 
92 STAT. 2129 
COST-BENEFIT ANALYSIS OF FIELD REORGANIZATIONS 
SEC. 908. Section 7 of the Department of Housing and Urban Devel-
opment Act is amended by adding at the end thereof the following: 
42 USC 3535. 
"(p) A plan for the reorganization of any regional, area, insuring, 
or other field office of the Department of Housing and Urban Develop-
ment may take effect only upon the expiration of 90 days after publica-
tion in the Federal Register of a cost-benefit analysis of the effect of 
the plan on each office involved. Such cost-benefit analysis shall include, 
but not be limited to— 
" (1) an estimate of cost savings supported by background infor-
mation detailing the source and substantiating the amount of the 
savings; 
"(2) an estimate of the additional cost which will result from 
the reorganization; 
" ^3^ a study of the impact on the local economy; and 
"^4) an estimate of the effect of the reorganization on the avail-
ability, accessibility, and quality of services provided for recipi-
ents of those services, 
where any of the above factors cannot be quantified, the Secretary 
shall provide a statement on the nature and extent of those factors in 
the cost-benefit analysis.". 
Approved October 31, 1978. 
LEGISLATIVE HISTORY: 
HOUSE REPORTS: No. 95-1161 accompanying H.R. 12433 (Comm. on Banking, 
Finance, and Urban Affairs) and No. 95-1792 (Comm. of Confer-
6nC6). 
SENATE REPORT No. 95-871 (Comm. on Banking, Housing, and Urban Affairs). 
CONGRESSIONAL RECORD, Vol. 124 (1978): 
July 19, 20, considered and passed Senate. 
June 23, 28, 29, July 20, 21, H.R. 12433 considered and passed House. 
July 24, considered and passed House, amended, in lieu of H.R. 12433. 
Oct. 14^ Senate agreed to conference report. 
Oct. 15, House agreed to conference report. 
39-194 O—80—pt. 2 
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