An Act to assist in the provision of housing for low- and moderate-income families, to promote orderly urban development, to improve living environment in urban areas, and to extend and amend laws, relating to housing, urban renewal, and community facilities
PL 89-117 (H.R.7984), enacted 08/10/1965

79 STAT.] 
PUBLIC LAW 89-117-AUGUST10, 1965 
451 
Public Law 89-117 
AN A C T 
August 10, 1965 
To assist in the provision of housing for low- and modera'te-income families, to 
[H. R. 7984] 
promote orderly urban development, to improve living environment in urban 
areas, and to extend and amend laws relating to housing, urban renewal, and 
community facilities. 
Be it enacted by the Senate and House of Representatives 
of the 
United States of Am;erica in Congress assenibled^ That this Act may urt)an^D"e^vi»r'^ 
be cited as the "Housing and Urban Development Act of 1965". 
men^"Act^ o
f "ges. 
TITLE I—SPECIAL PEOVISIONS FOR DISADVANTAGED 
PERSONS 
FINANCIAL ASSISTANCE TO ENABLE CERTAIN PRIVATE HOUSING TO BE 
AVAILABLE FOR LOWER INCOME FAMILIES WHO ARE ELDERLY, HANDI-
CAPPED, DISPLACED, VICTIMS OF A NATURAL DISASTER, OR OCCUPANTS 
OF SUBSTANDARD HOUSING 
SEC. 101. (a) The Housing and Home Finance Administrator 
(hereinafter referred to as the "Administrator") is authorized to 
make, and contract to make, annual payments to a "housing owner" on 
behalf of "qualified tenants", as those terms are defined herein, in such 
amounts and under such circumstances as are prescribed in or pur-
suant to this section. In no case shall a contract provide for such 
payments with respect to any housing for a period exceeding forty 
years. 
The aggregate amount of the contracts to make such payments 
shall not exceed amounts approved in appropriation Acts, and pay-
ments pursuant to such contracts shall not exceed $30,000,000 per 
annum prior to July 1, 1966, which maximum dollar amount shall be 
increased by $35,000,000 on July 1, 19^6, by $40,000,000 on July 1, 
1967, and by $45,000,000 on July 1, 1968. 
(b) As used in this section, the term "housing owner" means a pri- 
"Housing 
vate nonprofit corporation or other private nonprofit legal entit;;^, a °'^"^'"' 
limited dividend corporation or other limited dividend legal entity, 
or a cooperative housing corporation, which is a mortgagor under 
section 221(d) (3) of the National Housing Act and which, after the 
Jj u?c vil'si. 
enactment of this section, has been approved for mortgage insurance 
thereunder and has been approved for receiving the benefits of this 
section: Provided^ That, except as provided in subsection (j), no 
payments under this section may be made with respect to any prop-
erty financed with a mortgage receiving the benefits of the interest 
rate provided for in the proviso in section 221(d) (5) of that Act. 
^°^^' P- '*54. 
Subject to the limitations provided in subsection (j), the term "housing 
owner" also has the meaning prescribed in such subsection. 
(c) As used in this section, the term "qualified tenant" means any ^^^^^W^^^'"^ 
individual or family who has, pursuant to criteria and procedures 
established by the Administrator, been determined— 
(1) to have an income below the maximum amount which can 
be established in the area, pursuant to the limitations prescribed 
in sections 2(2) and 15(7) (b) (ii) of the L"''nited States Housing 
Act of 1937, for occupancy in public housing dwellings; and 
63°star tri' 
(2) to be one of the following— 
42 use HIS 
(A) displaced by governmental action; 
(B) sixty-two years of age or older (or, in the case of a 
family to have a head who is, or whose spouse is, sixty-two 
years of age or over); 
452 
PUBLIC LAW 89-117-AUGUST 10, 1965 
[79 STAT. 
(C) physically handicapped (or, in the case of a family, 
to have a head who is, or whose spouse is, physically handi-
capped) ; 
(D) occupying substandard housing; or 
(E) an occupant or former occupant of a dwelling which 
is (or was) situated in an area determined by the Small 
Business Administration, subsequent to April 1,1965, to have 
been affected by a natural disaster, and which has been 
extensively damaged or destroyed as the result of such dis-
aster. 
The terms "qualified tenant" and "tenant" include a member of a 
cooperative who satisfies the foregoing requirements and who, upon 
resale of his membership to the cooperative, will not be reimbursed for 
any equity increment accumulated through payments under this sec-
tion. 
With respect to members of a cooperative, the terms "rental" 
and "rental charges" mean the charges under the occupancy agree-
ments between such members and the cooperative. 
(d) The amount of the annual payment with respect to any dwelling 
unit shall not exceed the amount by which the fair market rental for 
such unit exceeds one-fourth of the tenant's income as determined by 
the Administrator pursuant to procedures and regulations established 
by him. 
(e) (1) For purposes of carrying out the provisions of this section, 
the Administrator shall establish criteria and procedures for deter-
mining the eligibility of occupants and rental charges, including 
criteria and procedures with respect to periodic review of tenant 
incomes and periodic adjustment of rental charges. Tlie Administra-
tor shall issue, upon the request of a housing owner, certificates as to 
tlie following facts concerning the individuals and families applying 
for admission to, or residing in, dwellings of such owner: 
(A) the income of the individual or family; and 
(B) whether the individual or family was displaced by govern-
' 
mental action, is elderly, is physically handicapped, or is (or was) 
occupying substandard housing or housing extensively damaged 
or destroyed as the result of a natural disaster. 
(2) Procedures adopted by the Administrator hereunder shall pro-
vide for recertifications of the incomes of occupants, except the elderly, 
at intervals of two years (or at shorter intervals in cases where the 
Administrator may deem it desirable) for the purpose of adjusting 
rental charges and annual payments on the basis of occupants' incomes, 
but in no event shall rental charges adjusted under this section for any 
dwelling exceed the fair market rental of the dwelling. 
(3) The Administrator may enter into agreements, or authorize 
housing owners to enter into agreements, with public or private agen-
cies for services required in the selection of qualified tenants, including 
those who may be approved, on the basis of the prc^bability of future 
increases in their incomes, as lessees under an option to purchase (which 
will give such approved qualified tenants an exclusive right to pur-
chase at a price established or determined as provided in the option) 
dwellings, and in the establishment of rentals. The Administrator is 
authorized (without limiting his authority under any other provision 
of law) to delegate to any such public or private agency his authority 
to issue certificates pursuant to this subsection. 
(4) No payments under this section may be made with respect to any 
property tor which the costs of operation (including wages and sal-
aries) are determined by the Administrator to be greater than similar 
costs of operation of similar housing in the community where the prop-
erty is situated. 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST10, 1965 
453 
68 Stat. 623. 
42 use 1451. 
888 
42 use 1430. 
(f^ Section 101 (c) of the Housing Act of 1949 is amended by insert-
ing '^(i)" after "a mortgage under" m the first proviso and by inserting 
immediately before the colon at the end of such proviso the following: 
", or (ii) section 221(d) (3) of the National Housing Act if payments 
with respect to the mortgaged property are made or are to be made 
imder section 101 of the Housing and Urban Development Act of 
1965, except that no such mortgage shall be insured, and no commit-
ment to insure such a mortgage shall be issued, with respect to prop-
erty in any community for which a workable program for community 
improvement was required and in effect at the time a contract for a 
loan or capital grant was entered into under this title, or a contract for 
annual contributions or capital grants was entered into pursuant to the 
United States Housing Act of 1937, unless there is a workable program 
H ^g^ 
for community improvement which meets the requirements oi this 
subsection in effect in such community at the time of such insurance or 
commitment". 
(g) The Administrator is authorized to make such rules and regu-
lations, to enter into such agreements, and to adopt such procedures as 
he may deem necessary or desirable to carry out the provisions of this 
section. Nothing contained in this section shall affect the authority of 
(1) the Federal Housing Commissioner with respect to any housing 
assisted under this section and under sections 221 (d) (3) and 231 (c) (3) 
of the National Housing Act, or (2) the Housing and Home Finance ^o^l^^^^*" i|°' 
Administrator with respect to any housing assisted under this section 
1
2 use n'lsi, 
and under section 202 of the Housing Act of 1959, including the i7i5v. 
authority to prescribe occupancy requirements under other provisions 
H ^^c f
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, 
of law or to determine the portion of any such housing which may be 
occupied by qualified tenants. 
(h) There are authorized to be appropriated such sums as may be 
necessary to carry out the provisions of this section, including, but not 
limited to, such sums as may be necessary to make annual payments as 
prescribed in this section, pay for services provided under (or pur-
suant to agreements entered into under) subsection (e), and provide 
administrative expenses. 
(i) Section 114(c) (2) of the Housing Act of 1949 is amended by 
^ ^^'^ ^ss. 
inserting before the colon at the end of the first proviso the following: 
", or a dwelling unit assisted under section 101 of the Housing and 
Urban Development Act of 1965". 
(j) (1) For the purpose of assisting housing under this section on 
an experimental basis, subject to the limitations of this subsection, the 
term "housing owner" (in addition to the meaning prescribed in sub-
section (b)) includes— 
(A) a private nonprofit corporation or other private nonprofit 
legal entity, a limited dividend corporation or other limited divi-
dend legal entity, or a cooperative housing corporation, which is a 
mortgagor under a mortgage which receives the benefits of the 
interest rate provided for in the proviso in section 221(d) (5) of 
the National Housing Act and which, after the date of the enact- 
^o^f- p- 454. 
ment of this Act, has been approved for mortgage insurance under 
section 221(d)(3) of the National Housing Act and has been 
approved for receiving the benefits of this section; 
(B) a private nonprofit corporation or other private nonprofit 
legal entity which is a mortgagor under a mortgage insured under 
section 23i(c) (3) of the National Housing Act and which, after 
the date of the enactment of this Act, has obtained final endorse-
ment of such mortgage for mortgage insurance and has been 
approved for receiving the benefits of this section; and 
12 use 170 Iq. 
454 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
(C) a private nonprofit corporation, a public body or agency, 
or a cooperative housing corpK)ration, which is a borrower under 
73 Stat. 667. 
SBction 202 of the Housing Act of 1959 and has been approved for 
. „ T
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r
. . ,„, _ 
receiving the benefits of this section: Provided^ That, with respect 
to properties financed with loans under such section made on or 
before the date of the enactment of this Act, payments shall not 
be made with respect to more than 20 per centum of the dwelling 
units in any property so financed. 
(2) Of the amounts approved in appropriation Acts pursuant to 
subsection (a) for payments under this section in any year, not more 
than 5 per centum in the aggregate shall be paid with respect to prop-
erties of housing owners as defined in paragraph (1) (A) of this 
subsection, and not more than 5 per centum in the aggregate shall be 
paid with respect to properties of housing owners as defined in para-
graphs (1) (B) and (1) (C) of this subsection. 
EXTENSION OP FHA SECTION 2 21 PROGRAMS; MODIFICATION OF INTEREST 
R A T E ; POOLING OF MORTGAGES FOR SALE 
SEC. 102. (a) The fifth sentence of section 221(f) of the National 
Housing Act is amended by striking out "subsection (d) (2) or (d) (4) 
after September 30, 1965, or under subsection (d) (3) after Septem-
ber 30, 1965," and inserting in lieu thereof "this section after Octo-
ber 1,1969,". 
75 Stat. 152. 
(^\y^ ^\^Q pToviso in scctiou 221(d) (5) of such Act is amended by 
striking out "not less than the annual rate of interest determined" and 
inserting in lieu thereof "not less than the lower of (A) 3 per centum 
per annum, or (B) the annual rate of interest determined". 
73 Stat. 661; 
(Q\ The third sentence of section 212(a) of such Act is amended by 
1
2 use 1715c. striking out "described in subsection (d) (3)" and all that follows and 
inserting in lieu thereof "described in subsection (d) (3) or (d) (4)." 
78 Stat. 800^ 
(d) Sectlon 302(c) of such Act is amended by inserting before the 
,o T
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last sentence thereof the following: "If there shall be included within 
one or more of the trusts or other agencies created pursuant to the 
authority of this subsection any mortgages bearing a below-market 
interest rate and insured under section 221(d) (3) after the date of 
the enactment of the Housing and Urban Development Act of 1965, 
there are authorized to be appropriated from time to time such 
amounts as may be necessary to reimburse the Association for the 
amount of the differential (including interest, other costs, and a fair 
proportion of administrative expense) between (1) the total outlay 
with respect to outstanding participations or other instruments which, 
at the time of issuance, were predicated upon or otherwise related to 
such below-market interest rate mortgages, and (2) the total receipts 
from such'mortgages." 
78 Stat, 779. 
12 use 1715i. 
12 use 1717. 
79 STAT.] 
PUBLIC LAW 89-1 1 7 - A U G U S T 10, 1965 
455 
LOW-RENT HOUSING IN PRIVATE ACCOMMODATIONS 
SEC. 103. (a) The United States Housing Act of 1937 is amended by 
redesignating section 23 as section 24, and by adding after section 22 
J^i^^^^i^' 
the following new section: 
42 use :1422. 
"LOW-RENT HOUSING I N PRIVATE ACCOMMODATIONS 
"SEC. 23. (a)(1) For the purpose of providing a supplementary 
form of low-rent housing which will aid in assuring a decent place to 
live for every citizen and promote efficiency and economy in the pro-
gram under this Act by taking fuil advantage of vacancies or potential 
vacancies in the private housing market, each public housing agency 
shall, to the maximum extent consistent with the achievement of the 
objectives of this Act, provide low-rent housing under this Act in the 
form of low-rent housing in private accommodations in accordance 
with this section where such housing in private accommodations can 
be provided at a cost equal to or less than housing in projects assisted 
under other provisions of this Act. 
"(2) The provisions of this section shall not apply to any locality 
unless the governing body of the locality has by resolution approved 
the application of such provisions to such locality. 
"(3) As used in this section, the term 'low-rent housing in private 
accommodations' means dwelling units in an existing structure, leased 
from a private owner, which provide decent, safe, and sanitary dwell-
ing accommodations and related facilities effectively supplementing 
the accommodations and facilities in low-rent housing assisted under 
the other provisions of this Act in a manner calculated to meet the 
total housmg needs of the community in which they are located; and 
the term 'owner' means any person or entity having the legal ri^ht to 
lease or sublease property containing one or more dwelling units as 
described in this section. 
"(b) Beginning as soon as practicable after the date of the enact-
ment of this section, each public housing agency shall conduct a con-
tinuing survey and listing of the available dwelling units within the 
community or communities under its jurisdiction which provide 
decent, safe, and sanitary dwelling accommodations and related 
facilities and are, or may be made, suitable for use as low-rent housing 
in private accommodations under this section. 
"(c) Each public housing agency, by notification to the owners of 
housing listed under subsection (b), or by publication or advertise-
ment, or otherwise, shall from time to time make known to the public 
in the community or communities under its jurisdiction the anticipated 
need for dwelling units in such community or communities to be used 
as low-rent housing in private accommodations under this section, 
inviting the owners of such dwelling units to make available for pur-
poses of this section one or more of such units (not exceeding 10 per 
centum of the units in any single structure except to the extent that 
the agency, because of the limited number of units in the structure or 
for any other reason, determines that such limit should not be applied). 
The public housing agency shall conduct appropriate inspections of 
the units offered to be made available in any residential structure by 
the owner thereof in response to such invitation, and if— 
"(1) it finds that such units are, or may be made, suitable for 
use as low-rent housing in private accommodations within the 
meaning of subsection (a) (3), and 
"(2) the rentals to be charged for such units, as negotiated and 
agreed to by the agency and the owner of the structure in a manner 
consistent with subsection (d) (2), are within the financial range 
of families of low income, 
Definitions. 
456 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
such agency may approve such units for use as low-rent housing in 
private accommodations in accordance with (and subject to the appli-
cable limitations contained in) this section. Each public housing 
agency shall maintain and keep current a list of units approved by it 
under this subsection, including such information with respect to each 
such unit as it may consider necessary or appropriate. 
"(d) To the extent of contracts for annual contributions entered 
into by the Authority with a public housing agency under section 
75 Stat. 163. 
10(e), such agcucy may enter into contracts wdth the owners of struc-
42 use 1410. 
tures containing dwelling units approved under subsection (c) for the 
use of such units in accordance with this section. 
Each such contract 
with an owner shall provide (with respect to any unit) that— 
" (1) the selection of tenants for such unit shall be the function 
of the owner, subject to the provisions of the contract between 
the Authority and the agency; 
"(2) the rental and other charges to be received by the owner 
shall be negotiated and agreed to by the agency and the owner, and 
the rental and other charges to be paid by the tenant shall be 
determined in accordance with the standards applicable to units 
in low-rent housing projects assisted under the other provisions of 
this Act; 
"(3) the agency shall have the sole right to give notice to 
vacate, with the owner having the right to make representations to 
the agency for termination of a tenancy; 
"(4) maintenance and replacements (including redecoration) 
shall be in accordance with the standard practice for the building 
concerned, as established by the owner and agreed to by the 
agency; and 
"(5) the agency and the owner shall carry out such other 
appropriate terms and conditions as may be mutually agreed to 
by them. 
Each contract between a public housing agency and an owner entered 
into under this subsection shall be for a term of not less than twelve 
months nor more than thirty-six months, and shall be renewable by 
such agency and owner at the expiration of such term. 
"(e) The annual contribution under this Act for a project of a public 
housing agency for low-rent housing in private accommodations under 
this section in lieu of any other guaranteed contribution authorized by 
section 10 shall not exceed the amount of the fixed annual contribution 
which w^ould be established under this Act for a newly constructed 
project by such public housing agency designed to accommodate the 
comparable number, sizes, and kinds of families. 
The period over 
which payments will be made to a public housing agency for a proj-
ect of low-rent housing in private accommodations under this section, 
and the aggregate amount of such payments, under a contract for 
annual contributions, shall be determined on the basis of the number 
of units in the community or communities under the jurisdiction of 
such agency which are in use (or can reasonably be expected to be 
placed in use) as low-rent housing in private accommodations under 
this section, taking into account the terms of the leases under which 
such units are (or will be) so used. In addition, contracts for finan-
cial assistance entered into by the Authority with a public housing 
agency pursuant to this section shall provide for reimbursement of 
reasonable an^l necessary expenses incurred by such agency in con-
ducting surveys, listings, and inspections described in subsections (b) 
and (c). 
68 Stat. 631; 
'
< (f) The provislous of sections 10(h) and 15 (7) of this Act, and the 
^\2*usc'^i4'io, 
workable program requirement in section 10(e) of this Act and section 
1415. 
79 STAT.] 
PUBLIC LAW 8 9 - 1 1 7 - A U G U S T 10, 1965 
457 
73 Stat. 680. 
42 u s e 1402. 
101(c) of the Housing Act of 1949, shall not apply to low-rent hous- 
^"'*' P- ^^S. 
ing in private accommodations provided under this section." 
(b) The last sentence of section 2(1) of such Act is amended by strik-
ing out "Income limits for occupancy and rents" and inserting in lieu 
thereof "Except as otherwise provided in section 23, income limits for 
occupancy and rents". 
PARITY o r TREATMENT 
FOR T H E HANDICAPPED 
AND ELDERLY I N 
PUBLIC 
HOUSING 
SEC. 104. Section 2(2) of the United States Housing Act of 1937 is 
^s stat. 794. 
amended to read as follows: 
"(2) The term 'families of low income' means families (including 
elderly and displaced families) who are in the lowest income group and 
who cannot afford to pay enough to cause private enterprise in their 
locality or metropolitan area to build an adequate supply of decent, 
safe, and sanitary dwellings for their use. The term 'families' in-
cludes families consisting of a single person in the case of elderly fami-
lies and displaced families, and includes the remaining member of a 
tenant family. The term 'elderly families' means families whose heads 
(or their spouses), or whose sole members, have attained the age at 
which an individual may elect to receive an old-age benefit under title 
I I of the Social Security Act, or are under a disability as defined in 7o'*stat^*8it^^' 
section 223 of that Act, or are handicapped within the meaning of sec- 42 use 401-
tion 202 of the Housing Act of 1959. The term 'displaced families' "^^s. 
means families displaced by urban renewal or other governmental ac-
tion, or families whose present or former dwellings are situated in areas 
determined by the Small Business Administration, subsequent to April 
1, 1965, to have been affected by a natural disaster, and which have 
been extensively damaged or destroyed as the result of such disaster." 
DIRECT LOANS TO PROVIDE HOUSING 
FOR T H E ELDERLY OR 
HANDICAPPED 
SEC. 105. (a) Section 202(a)(4) of the Housing Act of 1959 is 
78 stat. 783. 
amended by striking out "$350,000,000" and inserting in lieu thereof 
^^ "^^ ^'°'''' 
"$500,000,000". 
(b) Effective with respect to loans made on or after the date of the 
enactment of this Act, section 202(a) (3) of such Act is amended by 
^3 stat. 667. 
striking out "the higher of (A) 2% per centum per annum, or" and in-
serting in lieu thereof "the lower of (A) 3 per centum per annum, or". 
REHABILITATION G P ^ N T S TO HOMEOWNERS I N URBAN RENEWAL AREAS 
SEC. 106. (a) Title I of the Housing Act of 1949 is amended by 
^ ^^^- ^^^^^ 
adding at the end thereof the following new section: 
i465. 
" R E H A B I L I T A T I O N GRANTS 
"SEC. 115. (a) Notwithstanding any other provision of this title, 
the Administrator may authorize a local public agency to make grants 
(and the urban renewal project may include the making of such 
grants) as prescribed in this section. Any such grant may be made 
only to an individual or family, as described in subsection (b), who 
owns and occupies a structure in an urban renewal area, and only for 
the purpose of covering the cost of repairs and improvements neces-
sary to make such structure conform to public standards for decent, 
safe, and sanitary housing as required by applicable codes or other 
requirements of the urban renewal plan for the area. Any contract for 
financial assistance under this title shall provide that the capital grant 
49-850 0-66—32 
458 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
otherwise payable for the project shall be increased by an amount 
equal to the total amount of the grants under this section and that no 
part of the total amount of such grants shall be required to be con-
tributed as part of the local grant-in-aid. 
"(b) A grant authorized by this section may be made to an individ-
ual or family whose income does not exceed $3,000 a year, and such 
grant may be in the amount which does not exceed the lesser of (1) the 
actual (and approved) cost of the repairs and improvements involved, 
or (2) $1,500, In case the income of the individual or family exceeds 
$3,000 a year, a grant may be made under this section, subject to the 
limitations specified in clauses (1) and (2) of the preceding sentence, 
but only in an amount not to exceed that portion of the cost of the 
repairs and improvements which cannot be paid for with any available 
loan that can be amortized as part of such individual's or family's 
monthly housing expense without requiring such monthly housing 
expense to exceed 25 per centum of such individual's or family's 
monthly income." 
(b) Any contract with a local public agency which was executed 
42 use 1
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under title I of the Housing Act of 1949 before the date of enactment 
1465. 
" 
of this Act may be amended to provide for grants authorized by 
section 115 of the Housing Act of 1949. 
MORTGAGE RELIEF FOR HOMEOWNERS W H O ARE UNEMPLOYED AS T H E 
RESULT OF T H E CLOSING OF A FEDERAL 
INSTALLATION 
SEC. 107. (a) For the purposes of this section— 
(1) The term "mortgage" means a mortgage which (A) is insured 
48 Stat, 1246. 
under the National Housing Act, or (B) secures a home loan guaran-
58 Stat. 284;' 
^eed O
T iusured under the Servicemen's Readjustment Act of 1944 or 
72 Stat. 'i203,' 
chapter 37 of title 38, United States Code. 
^
^
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(^) The term "Federal mortgage agency" means— 
1825. 
(A) the Federal Housing Commissioner when used in connec-
tion with mortgages insured under the National Housing Act, and 
(B) the Administrator of Veterans' Affairs when used in con-
nection with mortgages securing home loans guaranteed or insured 
under the Servicemen's Readjustment Act of 1944 or chapter 37 
of title 38, United States Code. 
(3) The term "distressed mortgagor" means an individual who— 
(A) is unemployed, although willing to work, as the result of 
the closing (in whole or in part) of a Federal installation, and 
(B) is the owner-occupant of a dwelling upon which there is a 
mortgage securing a loan which is in default because of the inabil-
ity of such individual to make payments of principal and/or 
interest under such mortgage. 
(b) (1) Any distressed mortgagor, for the purpose of avoiding fore-
closure of his mortgage, may apply to the appropriate Federal mort-
gage agency for a determination that suspension of his obligation to 
make payments of principal and/or interest under such mortgage 
during a temporary period is necessary in order to avoid such fore-
closure. 
mora't^rium^ °^ 
(^) Upon Tcceipt of au application made under this subsection by 
a distressed mortgagor, the Federal mortgage agency shall issue to 
such mortgagor a certificate of moratorium if it determines, after 
consultation with the interested mortgagee, that— 
(A) the mortgagor is not in default with respect to any con-
dition or covenant of the mortgage other than that requiring the 
payment of installments of principal and/or interest under the 
mortgage, and 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST10, 1965 
459 
(B) such action is the only available means whereby a fore-
closure of such mortgage can be avoided. 
(3) Prior to the issuance to any distressed mortgagor of a certificate 
of moratorium under paragraph (2)^ the Federal mortgage agency 
shall require such mortgagor to enter into a binding agreement under 
which he will be required to make payments to such agency, after the 
expiration of such certificate, in an aggregate amount equal to the 
amount paid by such agency on behalf of such mortgagor as provided 
in subsection (c). The manner and time in which such payments shall 
be made shall be determined by the Federal mortgage agency having 
due regard to the purposes sought to be achieved oy this section. 
(4) Any certificate of moratorium issued under this subsection shall 
expire on whichever of the following dates is the earliest— 
(A) one year from the date on which such certificate is issued; 
(B) thirty days after the date on which the mortgagor to whom 
such certificate is issued ceases to be a distressed mortgagor as 
defined in subsection (a); or 
(C) the date on which such mortgagor becomes in default with 
respect to any condition or covenant m his mortgage other than 
that requiring the payment by him of installments of principal 
and/or interest under the mortgage. 
(c) (1) Whenever a Federal mortgage agency issues a certificate of 
moratorium to any distressed mortgagor with respect to any mortgage, 
it shall transmit to the mortgagee a copy of such certificate, together 
with a notice stating that, while such certificate is in effect, such agency 
will assume the obligation of such mortgagor to make payments of 
principal, and, if so specified in the certificate, of interest, under the 
mortgage. 
(2) Payments made by any Federal mortgage agency pursuant to a 
certificate of moratorium issued under this section with respect to the 
mortgage of any distressed mortgagor shall include, in addition to the 
payments referred to in paragraph (1), an amount equal to the unpaid 
principal and interest charges which had accrued under such mortgage 
prior to the issuance of such certificate and subsequent to the date on 
which such mortgagor became a distressed mortgagor as defined in 
subsection (a). 
(3) While any certificate of moratorium issued under this section is 
in effect with respect to the mortgage of any distressed mortgagor, no 
further payments of principal, and, if so specified in the certificate, of 
interest, under the mortgage shall be required of such mortgagor, and 
no action (legal or otherwise) shall be taken or maintained by the 
mortgagee to enforce or collect such payments. Upon the expiration 
of such ceitificate, the mortgagor shall again be liable for the payment 
of all amounts due under the mortgage in accordance with its terms. 
(4) Each Federal mortgage agency shall give prompt notice in writ-
ing to the interested mortgagor and mortgagee of the expiration of any 
certificate of moratorium issued by it under this se-ction. 
(d) The Federal mortgage agencies are authorized to issue such indi-
vidual and joint regulations as may be necessary to carry out this sec-
tion and to insure the uniform administration thereof. 
(e) There shall be in the Treasury (1) a fund which shall be avail-
able to the Federal Housing Commissioner for the purpose of extend-
ing financial assistance in behalf of distressed mortgagors as provided 
in subsection (c), and (2) a fund which shall be available to the 
Administrator of Veterans' Affairs for the same purpose. The capital 
of each such fund shall consist of such sums as may, from time to 
time, be appropriated thereto, and any sums so appropriated shall 
remain available until expended. 
Receipts arising from the pro-
78 Stat. 380. 
460 
PUBLIC LAW 89-117-AUGUST 10, 1965 
[79 STAT. 
grams of assistance under subsection (c) shall be credited to the 
fund from which such assistance was extended. Moneys in either of 
such funds not needed for current operations, as detemiined by the 
Federal Housing Commissioner, or the Administrator of Veterans' 
Affairs, as the case may be, shall be invested in bonds or other obliga-
tions of the United States, or paid into the Treasury as miscellaneous 
receipts. 
72 Stat. 1212. 
(fj Section 1816 of title 38, United States Code, is amended by 
inserting " ( a ) " before the text of such section, and by adding at the 
end thereof a new subsection as follows: 
"(b) With respect to any loan made under section 1811 which has 
not been sold as provided in subsection (g) of such section, if the 
Administrator finds, after there has been a default in the payment of 
any installment of principal or interest owing on such loan, that the 
default was due to the fact that the veteran who is obligated under 
the loan has become unemployed as the result of the closing (in 
whole or in part) of a Federal installation, he shall (1) extend the 
time for curing the default to such time as he determines is necessary 
and desirable to enable such veteran to complete payments on such 
loan, including an extension of time beyond the stated maturity 
thereof, or (2) modify the terms of such loan for the purpose of 
changing the amortization provisions thereof by recasting, over the 
remaining term of the loan, or over such longer period as he may 
determine, the total unpaid amoimt then due with the modification to 
become effective currently or upon the termination of an agreed-upon 
extension of the period for curing the default." 
ACQUISITION OF CERTAIN PROPERTIES SITUATED AT OR NEAR MILITARY 
BASES W H I C H HAVE BEEN ORDERED TO BE CLOSED 
SEC. 108. (a) The Secretary of Defense is authorized to acquire title 
to any property, improved with a one- or two-family dwelling, which is 
situated at or near a military base or installation which the Depart-
ment of Defense has, subsequent to November 1, 1964, ordered to be 
closed in whole or in part, if he determines— 
(1) that the owner of such property is, or has been, employed or 
performing military service, at such base or installation; 
(2) that the closing of such base or installation, in whole or in 
part, has required or will require the termination of such owner's 
employment or service at such base or installation; and 
(3) that as the result of the actual or pending closing of such 
base or installation there is no present market for the sale of such 
property upon reasonable terms and conditions. 
79 STAT.} 
PUBLIC LAW 89-117-AUGUST 10, 1965 
461 
(b) The purchase price of any property which is situated at or near 
a military base or installation and is acquired under this section shall 
be equal to an amount determined by the Secretary of Defense to be the 
average price at which properties, similar in size, construction, condi-
tion, and location to that of the property to be acquired, were sold dur-
ing a representative period, as determined by the Secretary, prior to 
the announcement of the intention of the Department of Defense to 
close all or part of such base or installation. 
(c) The title to any property acquired under this section shall be 
free and clear of any outstanding liens or encumbrances and shall con-
form to such requirements as the Secretary of Defense shall by regu-
lation require. Such regulations shall also prescribe the terms and 
conditions under which payments may be made under this section, 
and decisions by the Secretary regarding such payments,^ and the 
terms and conditions under which the same are approved or disap-
proved, shall be final and conclusive and shall not be subject to judicial 
review. 
(d) Properties acquired under this section shall be transferred to 
the Federal Housing Commissioner, and the Federal Housing Com-
missioner shall have power to deal with, rent, renovate, or sell for 
cash or credit any properties so transferred. Receipts from the man-
agement or sale of any such properties may be utilized by the Com-
missioner to defray expenses arising in connection with the manage-
ment of such properties, and any part of such receipts not required for 
such expenses shall be covered into the Treasury as miscellaneous 
receipts. 
(e) Section 223 (a) of the National Housing Act is amended— 
e/stat^ 484°^' 
(1) by striking out the period at the end of paragraph (7) and 
1
2 use insn. 
inserting in lieu thereof "; or"; and 
(2) by inserting after paragraph (7) a new paragraph as fol-
follows: 
"(8) executed in connection with the sale by the Commis-
sioner of any housing acquired pursuant to section 108 of the 
Housing and Urban Development Act of 1965." 
(f) Such sums as may be necessary to carry out the provisions of 
this section are hereby authorized to be appropriated, and any sums 
so appropriated shall remain available until expended. 
TITLE II—FHA INSURANCE OPERATIONS 
LAND DEVELOPMENT 
SEC. 201. (a) The National Housing Act is amended by adding at 
\\^^lc 1701'and 
the end thereof the following new title: 
note. 
"TITLE X—MORTGAGE INSURANCE FOR LAND 
DEVELOPMENT 
"DEFINITIONS 
"SEC. 1001. As used in this title— 
"(a) the term 'mortgage' means a lien or liens on real estate in 
fee simple, or on a leasehold (1) under a lease for not less than 
ninety-nine years which is renewable, or (2) under a lease having 
a period of not less than fifty years to run from the date the 
mortgage was executed; 
"(b) the term 'first mortgage' includes such classes of first 
liens as are commonly given to secure advances (including but not 
12 u s e 1713. 
462 
PUBLIC LAW 89-117-AUGUST 10, 1965 
[79 STAT. 
limited to advances during construction) on, or the unpaid pur-
chase price of, real estate under the laws of the State in which the 
real estate is located, together with the credit instrument or instru-
ments, if any, secured thereby, and may be in the form of trust 
mortgages or mortgage indentures or deeds of trusts securing 
notes, bonds, or other credit instruments; 
"(c) the terms 'mortgage', 'mortgagor', and 'State' have the 
52 Stat. 16. 
same meaning as in section 207 of this Act: 
(d) the term 'improvements means waterlmes and water 
supply installations, sewerlines and sewerage disposal installa-
tions, roads, streets, curbs, gutters, sidewalks, storm drainage 
facilities, and other installations or work, whether on or off the 
site, which the Commissioner deems necessary or desirable to 
prepare land primarily for residential and related uses or to pro-
vide facilities for public or common use; but such term shall not 
include any building unless it is (1) a building which is needed 
in connection with a water supply or sewage disposal installation, 
or (2) a building, other than a school, which is to be owned and 
maintained jointly by the property owners; and 
" (e) the term 'land development' means the process of making, 
installing, or constructing improvements. 
(( 
BASIC CONDITIONS FOR INSURANCE 
"SEC. 1002. (a) The Commissioner is authorized (1) to insure, 
upon such terms and conditions as he may prescribe, any first mort-
gage (including advances on such mortgage) in accordance with the 
provisions of this title, and (2) to make a commitment for the insur-
ance of such mortgage prior to the date of execution of such mortgage 
or prior to the date of disbursement of the mortgage proceeds. 
No 
mortgage shall be insured under this title after October 1,1969, except 
pursuant to a commitment to insure issued before such date. 
"(b) The mortgage shall— 
"(1) be executed by a mortgagor, other than a public body, 
approved by the Commissioner; 
"(2) be made to and held by a mortgagee approved by the 
Commissioner; and 
" (3) cover the land to be developed and the improvements to be 
made with the assistance of the mortgage insurance under this 
title, except facilities intended for public use and in public owner-
ship. 
"(c) The principal obligation of the mortgage shall (1) not exceed 
75 per centum of the Commissioner's estimate of the value of the 
property upon completion of the land development, and (2) not exceed 
the sum of 50 per centum of the Commissioner's estimate of the value 
of the land before development and 90 per centum of his estimate of 
the cost of such development. 
The outstanding principal obligations 
of mortgages involving a single land development undertaking, as 
defined by the Commissioner, shall at no time exceed $10,000,000. 
"(d) The mortgage shall— 
"(1) have a maturity not to exceed seven years or such longer 
maturity as the Commissioner deems reasonable in the case of a 
privately owned system for water or sewerage, and contain repay-
ment provisions satisfactory to the Commissioner; 
"(2) bear interest at a rate satisfactory to the Commissioner, 
and such interest shall be exclusive of premium charges for mort-
gage insurance and such service charges and fees as may be 
approved by the Commissioner; and 
79 STAT.] 
PUBLIC LAW 8 9 - 1 1 7 - A U G U S T 10, 1965 
463 
"(3) contain such terms and provisions with respect to pro-
tection of the security, pajonent of taxes, delinquency charges, 
prepayment, additional and secondary liens, and other matters as 
the Commissioner may in his discretion prescribe. 
"(e) A property or project to be financed oy a mortgage insured 
under this title shall— 
" (1) represent a good mortgage insurance risk; and 
"(2) involve improvements that comply with all applicable 
State and local governmental requirements and with minimum 
standards approved by the Commissioner. 
"LAND PLANNING 
"SEC. 1003. (a) The land development covered by a mortgage 
insured under this title shall be undertaken pursuant to a schedule, 
conforming to such requirements and procedures as the Commissioner 
may prescribe, that will assure the use of the land for the purposes 
for which it is to be developed within the shortest reasonable period 
consistent with the objectives of sound and economic community 
growth or urban development. 
" (b) The land development shall be undertaken in accordance with 
an overall development plan, appropriate to the scope and character 
of the undertaking, which— 
" (1) has received all governmental approvals required by State 
or local law or by the Commissioner; 
• 
" (2) is acceptable to the Commissioner as providing reasonable 
assurance that the land development will contribute to good living 
conditions in the area being developed, which area (A^ will have 
a sound economic base and a long economic life, (B) will be char-
acterized by sound land-use patterns, and (C) will include or be 
served by such shopping, school, recreational, transportation, and 
other facilities as the Commissioner deems adequate or necessary; 
and 
"(3) is consistent with a comprehensive plan which covers, or 
with comprehensive planning being carried on for, the area in 
which the land is situated, and which meets criteria established by 
the Housing and Home Finance Administrator for such plans or 
planning. 
u 
ENCOURAGEMENT OF SMALL BUILDERS AND MODERATE COST HOUSING 
"SEC. 1004. The Commissioner shall adopt such requirements as he 
deems necessary in land development covered by mortgages insured 
under this title to encourage the maintenance of a diversified local 
homebuilding industry, b r o ^ participation by builders, and the inclu-
sion of a proper balance of housing for families of moderate or low 
income. 
" W A T E R A N D SEWERAGE FACILITIES 
" S E C 1005. After development of the land it shall be served by 
public systems for water and sewerage which are consistent with other 
existing or prospective systems within the area, except that the Com-
missioner may approve an adequate privately or cooperatively owned 
system which will be regulated in a manner acceptable to him with 
respect to user rates and charges, capital structure, methods of opera-
tion, rate of return, and conditions and terms of any sale or transfer. 
464 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
gress 
52 Stat, 16. 
12 u s e 1713. 
'RELEASES 
"SEC. 1006. The Coimnissioner may, on such terms and conditions 
as he may prescribe, consent to the release or subordination of a part or 
parts of the mortgaged property from the lien of the mortgage. 
(( 
PREMIUMS AND FEES 
"SEC. 1007. The Commissioner shall collect reasonable premiums for 
the insurance of any mortgage under this title and make such charges 
as he determines are reasonable for the analysis of the land develop-
ment plan and the appraisal and inspection of the property and im-
Report to Con- 
provemeuts. On or before January 1, 1967, the Commissioner shall 
make a report to the Congress concerning the premium rates and other 
charges under this title that he estimates will be adequate to provide 
income sufficient for a self-supporting program. 
"INSURANCE BENEFITS 
"SEC. 1008. The provisions of subsections (e), (g), (h), (i), (j), (k), 
(1), and (n) of section 207 of this Act shall be applicable to mortgages 
insured under this title, except that as applied to such mortgages (1) 
any reference therein to section 207 shall be deemed to refer to this title, 
and (2) any reference to an annual premium shall be deemed to refer 
to such premiums as the Commissioner may designate under this title. 
II 
INCONTESTABILITY PROVISIONS 
"SEC. 1009. Any contract of insurance executed by the Commissioner 
under this title shall be conclusive evidence of the eligibility of the 
mortgage for insurance, and the validity of any contract of insurance 
so executed shall be incontestable in the hands of an approved mort-
gagee from the date of the execution of such contract, except for fraud 
or material misrepresentation on the part of such approved mortgagee. 
"RULES AND REGULATIONS 
"SEC. 1010. The Commissioner is authorized to make such rules and 
regulations and to require such agreements as he may deem necessary 
or desirable to carry out the provisions of this title. 
"TAXATION PROVISIONS 
"SEC. 1011. Nothing in this title shall be construed to exempt any 
real property acquired and held by the Commissioner under this title 
from taxation by any State or political subdivision thereof to the same 
extent, according to its value, as other real property is taxed. 
(( 
COST CERTIFICATION 
"SEC. 1012. (a) The Commissioner shall adopt such requirements 
as he determines necessary to assure, at reasonable intervals of time 
during land development and upon completion of such development, 
that the amount of the mortgage loan outstanding at each such interval 
does not exceed with respect to that portion of the land remaining 
under the lien of the mortgage (1) 50 per centum of the Commis-
sioner's estimate of the value of such remaining land before develop-
ment, plus (2) 90 per centum of the actual costs of the development 
allocated by the Commissioner to such remaining land. 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST 10, 1965 
465 
" (b) From time to time during, and upon completion of, the develop-
ment, the Commissioner shall require the mortgagor to certify as to 
the actual costs of development of the land. 
"(c) Certifications required pursuant to this section shall be accom-
panied bv such data and records as the Commissioner shall prescribe. 
"(d) A mortgagor's certification approved by the Commissioner 
shall be final and incontestable except for fraud or material misrepre-
sentation on the part of the mortgagor. 
" (e) As used in this section, the term 'actual costs' means the costs 
(exclusive of kickbacks, rebates, or trade discounts) to the mortgagor 
of the improvements involved. 
These costs may include amounts paid 
for labor, materials, construction contracts, land planning, engineers' 
and architect's fees, surveys, taxes, and interest during development, 
organizational and legal expenses, such allocation of general overhead 
expenses as are acceptable to the Commissioner, and other items of 
expense incidental to development which may be approved by the 
Commissioner. 
If the Commissioner determines there is an identity 
of interest between the mortgagor and the contractor, there may be 
included an allowance for contractor's profit in an amount deemed 
reasonable by the Commissioner." 
(b) (1) Section 302(b) of the National Housing Act is amended by 
^2 use uii 
striking out "the term 'mortgages' " in the last sentence and inserting 
in lieu thereof "the terms 'mortgages' and 'home mortgages' ". 
(2) The first paragraph of section 24 of the Federal Keserve Act is 
^^ ^^^ g
^
^
^
^
^
-
amended by inserting before the next to last sentence the following 
new sentence: "Notwithstanding the foregoing limitations and restric-
tions in this section, any national banking association may make loans 
for land development which are secured by mortgages insured under 
title X of the National Housing Act." 
(3) Section 5 (c) of the Home Owners Loan Act of 1933 is amended 
f^ ^*|^-1^^^ 
by adding at the end thereof the following new paragraph: 
"Without regard to any other provision of this subsection, any such 
association may, to such extent as the Federal Home Loan Bank 
Board may by regulation permit, invest in loans, and interests in 
loans, (1) secured by mortgages as to which the association has the 
benefit of insurance under title X of the National Housing Act or of 
a commitment or agreement for such insurance, or (2) guaranteed 
by the President under section 224 of the Foreign Assistance Act of 
1961, as amended. Investments under clause (1) of this paragraph 
^°«' ^- ^ss. 
shall not be included in any percentage of assets or other percentage 
referred to in this subsection. Investments under clause (2) of this 
paragraph shall not exceed, in the case of any association, 1 per centum 
of the assets of such association." 
(4) Section 212(a) of the National Housing Act is amended by 
^^ ^^^ ^^o?^^ 
inserting at the end thereof the following new sentence: "The pro-
visions of this section shall also apply to insurance under title X with 
I'espect to laborers and mechanics employed in land development 
financed with the proceeds of any mortgage insured under that title." 
EXTENSION OF INSURANCE AUTHORIZATIONS 
75 Stat. 177, 
12 use 1703. 
SEC. 202. (a) Section 2(a) of the National Housing Act is amended 
by striking out "October 1,1965" and inserting in lieu thereof "October 
1, 1969". 
(b) Section 217 of such Act is amended— 
1
2 use 1715h. 
(1) by striking out "title V I I I " and inserting in lieu thereof 
"title V i l l , or title X", and 
(2) by striking out "October 1, 1965" and inserting in lieu 
thereof "October 1, 1969". 
466 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
i2uS:*m8h-i, 
(^) "^^^ second sentences of sections 809(f) and 810(k) of such 
i748h-2. 
' Act are each amended by striking out "October 1,1965" and inserting 
in lieu thereof "October 1,1969". 
M
O
R
T
G
A
G
E LIMITS FOR HOMES UNDER SECTION 203(b) 
71 Stat 295- 
• ^^^^ ^^' 
^^lause (iii) of section 203(b) (2) of the National Hous-
75 Stat! 178. ' 
i^g Act is amended by striking out "75 per centum" and inserting in 
1
2 use 1709. 
lieu thereof "80 per centum". 
DOWNPAYMENT REQUIREMENT IN CASE OF LOW-INCOME HOUSING 
DEMONSTRATION HOMES 
SEC. 204. Section 203(b)(9) of the National Housing Act is 
amended by inserting after "a mortgage meeting the requirements of 
subsection (i) of this section," the following: "or with respect to a 
mortgage covering a single-family home being purchased under the 
low-income housing demonstration project assisted pursuant to section 
II l'^'^ i
^
4
^
|
g 
207 of the Housing Act of 1961,". 
M
O
R
T
G
A
G
E LIMIT F
O
R HOMES IN OUTLYING AREAS UNDER FHA SECTION 
203 (i) P
R
O
G
R
A
M 
SEC. 205. Section 203 (i) of the National Housing Act is amended 
by striking out "$11,000" and inserting in lieu thereof "$12,500". 
FHA M
O
R
T
G
A
G
E FINANCING FOR VETERANS 
SEC. 206. (a) Section 203(b)(2) of the National Housing Act is 
amended— 
(1) by striking out "and not to exceed" and inserting in lieu 
thereof "and (except as provided in the next to the last sentence 
of this paragraph) not to exceed"; and 
(2) by adding at the end thereof the following new sentences: 
"If the mortgagor is a veteran who has not received any direct, 
guaranteed, or insured loan under laws administered by the Vet-
erans' Administration for the purchase, construction, or repair of 
a dwelling (including a farm dwelling) which was to be owned 
and occupied hj him as his home, and the mortgage to be insured 
under this section covers property upon which there is located a 
dwelling designed principally for a one-family residence, the 
principal obligation may be in an amount equal to the sum of (i) 
100 per centum of $15,000 of the appraised value of the property 
as of the date the mortgage is accepted for insurance, (ii) 90 per 
centum of such value in excess of $15,000 but not in excess of 
$20,000, and (iii) 85 per centum of such value in excess of $20,000. 
As used herein, the term 'veteran' means any person who served on 
active duty in the armed forces of the United States for a period 
of not less than ninety days (or is certified by the Secretary of 
Defense as having performed extra-hazardous service), and who 
was discharged or released therefrom under conditions other than 
dishonorable." 
(b) Section 203(b) (9) of such Act is amended by inserting after 
"on account of the property" the following:" (except in a case to which 
the next to the last sentence of paragraph (2) applies)". 
79 STAT. ] 
PUBLIC LAW 89-117-AUGUST 10,1965 
467 
MULTIFAMILY MORTGAGE LIMITS FOR FOUR OR MORE BEDROOM U N I T S 
SEC. 207. (a) Section 207(c) (3) of the National Housing Act is 
^^ f}^' 7J,'*-
amended— 
(1) by striking out "and $18,500 per family unit with three or 
more bedrooms" and inserting in lieu thereof "$18,600 per family 
unit with three bedrooms, and $21,000 per family unit with four 
or more bedrooms,"; and 
(2) by striking out "and $22,500 per family unit with three or 
more bedrooms" and inserting in lieu thereof "$22,500 per family 
unit with three bedrooms, and $25,500 per family unit with four 
or more bedrooms". 
(b) (1) Section213(b) (2) of such Act is amended— 
^
^ use irise, 
(A) by striking out "and $18,500 per family unit with three or 
more bedrooms" and inserting in lieu thereof "$18,500 per family 
unit with three bedrooms, and $21,000 per family unit with four 
or more bedrooms"; and 
(B) by striking out "and $22,500 per family unit with three or 
more bedrooms" and inserting in lieu thereof "22,500 per family 
unit with three bedrooms, and $25,500 per family unit with four 
or more bedrooms". 
(2) Section 213(c) of such Act is amended by striking out "and 
64 stat. 55. 
not to exceed" and all that follows and inserting in lieu thereof the 
following: "and not to exceed a sum computed on the basis of a sep-
arate mortgage for each single-family dwelling (irrespective of 
v/hether such dwelling has a party wall or is otherwise physically 
connected with another dwelling or dwellings) comprising the prop-
erty or project, equal to the total of each of the maximum principal 
obligations of such mortgages which would meet the requirements of 
section 203(b) (2) if the mortgagor were the owner and occupant who 
^^ ^^^ ^^^^ 
had made any required payment on account of the property prescribed 
in such paragraph." 
(c) Section 220(d) (3) (B) (iii) of such Act is amended— 
(1) by striking out "and $18,500 per family unit with three or 
more bedrooms" and inserting in lieu thereof "$18,500 per family 
unit with three bedrooms, and $21,000 per family unit with four 
or more bedrooms"; and 
(2) by striking out "and $22,500 per family unit with three or 
more bedrooms" and inserting in lieu thereof "$22,500 per family 
unit with three bedrooms, and $25,500 per family unit with four 
or more bedrooms". 
(d) Section 221(d) of such Act is amended— 
1
2 use nisz. 
(1) by striking out "and $17,000 per family unit with three or 
more bedrooms" in paragraphs (3) (ii) and (4) (ii) and inserting 
in lieu thereof "$17,000 per family unit with three bedrooms, and 
$19,250 per family unit with four or more bedrooms"; and 
(2) by striking out "and $20,000 per family unit with three or 
more bedrooms" m paragraphs (3) (li) and (4) (ii) and inserting 
in lieu thereof "$20,000 per family unit with three bedrooms, and 
$22,750 per family unit with four or more bedrooms". 
(e) Section 231 (c) (2) of such Act is amended— 
1
2 use ivisv, 
(1) by striking out "and $17,000 per family unit with three or 
more bedrooms" and inserting in lieu thereof "$17,000 per family 
unit with three bedrooms, and $19,250 per family unit with four 
or more bedrooms"; and 
(2) by striking out "and $20,000 per family unit with three or 
more bedrooms" and inserting in lieu thereof "$20,000 per family 
unit with three bedrooms, and $22,750 per family unit with four 
or more bedrooms". 
78 Stat. 775. 
12 u s e 1715k. 
468 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
^g78 Stat. 780, 
(f) Section 234(e) (3) of such Act is amended— 
1
2 use i7i5y. 
(1) by stHking out "and $18,500 per family unit with three or 
more bedrooms" and inserting in lieu thereof "$18,500 per family 
unit with three bedrooms, and $21,000 per family unit with four 
or more bedrooms"; and 
(2) by striking out "and $22,500 per family unit with three or 
more bedrooms" and inserting in lieu thereof "$22,500 per family 
unit with three bedrooms, and $25,500 per family unit with four 
or more bedrooms". 
MUTUALITY 
FOR 
MANAGEMENT-TYl'E 
COOPEKATIVES 
fn°a°ement''Hous 
^^^' ^^^" ^^^ Sectiou 213 of the National Housing Act is amended 
ing"rns^<^ance °"^" by adding at the end thereof the following new subsections: 
Fund. 
"(k) There is hereby created a Cooperative Management Housing 
1
2 us^c mse. 
Insurance Fund (hereinafter referred to as the 'Management Fund'). 
The Management Fund shall be used by the Commissioner as a revolv-
• ing fund for cariying out the provisions of this section with respect 
to mortgages or loans insured, on or after the date of the enactment 
of this subsection, under subsections (^a) (1), (a) (3) (if the project 
is acquired by a cooperative corporation), (i), and (j). 
The Man-
agement Fund shall also be used as a revolving fund for mortgages, 
loans, and commitments transferred to it pureuant to subsection (m). 
The Commissioner is directed to transfer to the Management Fund 
Post, p. 471. 
from the General Insurance Fund established pursuant to section 519 
such amount as the Commissioner determines to be necessary and 
appropriate. 
General expenses of operation of the Federal Housing 
Administration relating to mortgages or loans which are the obliga-
tion of the Management Fund may be cliarged to the Management 
Fund. 
General Surplus 
"(^j) ^j^g Commlssiouer shall establish in the Management Fund, as 
ticip^t'ing' Re^serve of the date of the enactment of this subsection, a General Surplus Ac-
Accounts, 
count and a Participating Reserve Account. The aggregate net in-
come thereafter received or any net loss thereafter sustained by the 
Management Fund, in any semiannual period, shall be credited or 
charged to the General Surplus Account or the Participating Reserve 
Account or both in such manner and amounts as the Commissioner may 
determine to be in accord with sound actuarial and accounting practice. 
Upon termination of the insurance obligation of the Management Fund 
by payment of any mortgage or loan insured under this section, and at 
such time or times prior to such termination as the Commissioner may 
determine, the Commissioner is authorized to distribute to the mort-
gagor or borrower a share of the Participating Reserve Account in such 
manner and amount as the Commissioner shall determine to be equi-
table and in accordance with sound actuarial and accounting practice: 
Provided^ That in no event shall the amount of the distributable share 
exceed the aggregate scheduled annual premiums of the mortgagor or 
borrower to the year of payment of the share less the total amount of 
any share or shares previously distributed by the Commissioner to the 
mortgagor or borrower: And provided further. That in no event may 
a distributable share be distributed until any funds transferred from 
the General Insurance Fund to the Management Fund pui*suant \o 
subsection (k) or (o) have been repaid in full to the General Insurance 
Fund. No mortgagor, mortgagee, borrower, or lender shall have any 
vested right in a credit balance in any such account or be subject to any 
liability arising out of the mutuality of the Management Fund. The 
determination of the Commissioner as to the amount to be paid by him 
to any mortgagor or borrower shall be final and conclusive. 
52 Stat. 1(5; 
73 Stat. 665, 663. 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST 10, 1965 
469 
"(m) The Commissioner is authorized to transfer to the Manage-
ment Fund commitments for insurance issued under subsections (a) 
(1), (i), and (j) prior to the date of the enactment of this subsection, 
and to transfer to the Management Fund the insurance of any mortgage 
or loan insured prior to the date of the enactment of this subsection 
under subsection (a) (1), (a) (3) (if the project is acquired by a co-
operative corporation), (i), or (j), but only in cases where the consent 
of the mortgagee or lender to the transfer is obtained or a request by 
the mortgagee or lender for the transfer is received by the Commis-
sioner within such period of time after the date of the enactment of 
this subsection as the Commissioner shall prescribe: Provided^ That 
the insurance of any mortgage or loan shall not be transferred under 
the provisions of this subsection if on the date of the enactment of this 
subsection the mortgage or loan is in default and the mortgagee or 
lender has notified the Commissioner in writing of its intention to file 
an insurance claim. Any insurance or commitment not so transferred 
shall continue to be an obligation of the General Insurance Fund. 
"(n) Notwithstanding the limitations contained in other provisions 
of this Act, premium charges for mortgages or loans insured under 
this section and sections 207,231, and 232 may be payable in debentures 
issued in connection with mortgages or loans transferred to the Man- 
1
2 usc"l7'i3^ 
agement Fund or in connection with mortgages or loans insured pur- ^^isv, i7i5w 
suant to commitments transferred to the Management Fund, as pro-
vided in subsection (m) of this section. 
"(o) Notwithstanding any other provision of this Act, the Com-
missioner is authorized to transfer funds between the Cooperative 
Management Housing Insurance Fund and the General Insurance 
Fund in such amounts and at such times as he may determine, taking 
into consideration the requirements of each such Fund, to assist in 
carrying out effectively the insurance programs for which such Funds 
were respectively established." 
(b) Section 213 of such Act is further amended— 
(1) by inserting before the period at the end of subsection (a) 
the following: ": Provided^ That as applied to mortgages the 
mortgage insurance for which is the obligation of the Manage-
ment Fund, the reference to the General Insurance Fund in sec-
tion 207(b) (2) shall be construed to refer to the Management 
Fund";and 
(2) by inserting before the period at the end of subsection (e) 
the following: ": Provided^ That as applied to mortgages or loans 
the insurance for which is the obligation of the Management 
Fund (1) all references to the General Insurance Fund shall be 
construed to refer to the Management Fund, and (2) all references 
to section 207 shall be construed to refer to subsections (a) (1), 
(a) (3) (if the project involved is acquired by a cooperative cor-
poration), (i),and (j) of this section". 
REHABILITATION I N URBAN RENEWAL AREAS 
SEC. 209. Section 220(d)(3)(A) of the National Housing Act is ^^lS^^^\il^'' 
amended— 
1
2 use 1715k. 
(1) by striking out the second proviso in clause (i); and 
(2) by striking out clause (ii) and inserting in lieu thereof the 
following: 
"(ii) in a case where the mortgagor is not the occupant of the 
property and intends to hold the property for rental purposes, 
have a principal obligation in an amount not to exceed 93 per 
centum of the amount computed under the provisions of clause 
(i); 
64 Stat. 54. 
12 u s e 1715e. 
470 
PUBLIC LAW 89-117-AUGUST 10, 1965 
[79 STAT. 
"(idi) in a case where the mortgagor is not the occupant of the 
property and intends to hold the property for the purpose of sale, 
have a principal obligation in an amount not to exceed 85 per 
centum of the amount computed under the provisions of clause (i), 
or in the alternative, in an amount equal to the amount computed 
under the provisions.of clause (i) if the mortgagor and mortgagee 
assume responsibility in a manner satisfactory to the Commis-
sioner for the reduction of the mortgage by an amount not less 
than 15 per centum of the outstanding principal amount thereof, 
or by such greater amount as may be required to meet the limita-
tions of clause (iv), in the event the mortgaged property is not, 
prior to the due date of the eighteenth amortization payment of 
the mortgage, sold to a purchaser acceptable to the Commissioner 
who is the occupant of the property and who assumes and agrees to 
pay the mortgage indebtedness; and 
"(iv) in no case involving refinancing (except as provided in 
clause (iii)) have a principal obligation in an amount exceeding 
the sum of the estimated cost of repair and rehabilitation and the 
amount (as determined by the Commissioner) required to refi-
nance existing indebtedness secured b^^ the property or project, 
plus any existing indebtedness incurred in connection with improv-
ing, repairing, or rehabilitating the property; or". 
NONDWELLING FACILITIES FOR URBAN RENEWAL HOUSING 
i2trec msk. 
SEC. 210. Section 220(d)(3)(B) of the National Housing Act is 
amended by striking out clause (iv) and inserting in lieu thereof the 
following: 
"(iv) include such nondwelling facilities as the Commissioner 
deems desirable and consistent with the urban renewal plan: Pro-
vided^ That the project shall be predominantly residential and any 
nondwelling facility included in the mortgage shall be found by 
the Commissioner to contribute to the economic feasibility of the 
project, and the Commissioner shall give due consideration to the 
possible effect of the project on other business enterprises in the 
community." 
LARGER HOME IMPROVEMENT LOANS IN HIGH COST AREAS 
75 Stat. 155, 
SEC 211. (a) Section 220(h) (2) (i) of the National Housing Act is 
amended by inserting before the semicolon at the end thereof'': Pro-
vided^ That the Commissioner may, by regulation, increase such 
amount by not to exceed 45 per centum in any geographical area where 
he finds that cost levels so require". 
78 Stat. 778. 
(^j) Section 220(h) (11) of such Act is amended by inserting before 
the period at the end thereof "or such additional amount as the Com-
missioner has by regulation prescribed in any geographical area where 
he finds cost levels so require pursuant to the authority vested in him by 
the proviso in paragraph (2) (i) of this subsection". 
LARGER INSURED MORTGAGES FOR SERVICEMEN 
71 Stat. 296; 
§£(.. 212. Sectiou 222(b) of the National Housing Act is amended— 
1
2 use V7"i5m. 
(1) by stHking out "$20,000" in paragraph (2) and inserting 
in lieu thereof "$30,000"; and 
(2) by striking out paragraph (3) and inserting in lieu thereof 
the following: 
"(3) have a principal obligation not in excess of the sum of (i) 
97 per centum of $15,000 of the appraised value of the property 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST 10, 1965 
471 
as of the date the mortgage is accepted for insurance, (ii) 90 per 
centum of such value in excess of $15,000 but not in excess of 
$20,000, and (iii) 85 per centum of such value in excess of 
$20,000; and". 
REFINANCING OF INSURED MORTGAGES 
SEC. 213. Section 223 (a) (7) of the National Housing Act is amended 
^
^ use i7i5n. 
by striking out "section 608 of title VI prior to the effective date of 
the Housing Act of 1954 or under section 220, 221, 903, or section 908" 
and inserting in lieu thereof "this Act". 
CONSOLIDATION OF FHA INSURANCE FUNDS 
SEC. 214. Title V of the National Housing Act is amended by i735b"^^ ^^^^^" 
adding at the end thereof the following new section: 
" E S T A B L I S H M E N T O F G E N E R A L INSURANCE FUND 
"SEC. 519. (a) There is hereby created a General Insurance Fund 
which shall be used by the Commissioner, on and after the date of the 
enactment of the Housing and Urban Development Act of 1965, as a 
revolving fund for carrying out all the insurance provisions of this 
Act with the exception of those specified in subsection (e). All mort-
gages or loans insured under this Act pursuant to commitments issued 
on or after the date of the enactment of the Housing and Urban 
Development Act of 1965, except those specified in subsection (e), and 
all loans reported for insurance under section 2 on or after the date 
of the enactment of the Housing and Urban Development Act of 1965, 
shall be insured under the General Insurance Fund. The Commis-
sioner shall transfer to the General Insurance Fund— 
"(1) the assets and liabilities of all insurance accounts and 
funds, except the Mutual Mortgage Insurance Fund, existing 
under this Act immediately prior to the enactment of the Housing 
and Urban Development Act of 1965; 
"(2) all outstanding commitments for insurance issued prior to 
the date of the enactment of the Housing and Urban Development 
Act of 1965, except those specified in subsection (e) ; 
"(3) the insurance on all mortgages and loans insured prior 
to the date of the enactment of the Housing and Urban Develop-
ment Act of 1965, except insurance specified in subse-ction (e) ; 
and 
"(4) the insurance of all loans made by approved financial 
institutions pursuant to section 2 prior to the date of the enact-
ment of the Housing and Urban Development Act of 1965. 
"(b) The general expenses of the operations of the Federal Housing 
Administration relating to mortgages and loans w^hich are the obliga-
tion of the General Insurance Fund may be charged to the General 
Insurance Fund. 
"(c) Moneys in the General Insurance Fund not needed for the 
current operations of the Federal Housing Administration with respect 
to mortgages a,nd loans which are the obligation of the General Insur-
ance Fund shall be deposited with the Treasurer of the United States 
to the credit of such Fund, or invested in bonds or other obligations 
of, or in bonds or other obligations guaranteed as to principal and 
interest by, the United States. The Commissioner may, with the 
approval of the Secretary of the Treasury, purchase in the open 
market debentures issued as obligations of the General Insurance 
Fund or issued prior to the enactment of the Housing and Urban 
472 
PUBLIC LAW 89-117-AUGUST 10, 1965 
[79 STAT. 
Development Act of 1965 under other provisions of this Act, except 
debentures issued under the Mutual Mortgage Insurance Fund. 
Such 
purchases shall be made at a price which will provide an investment 
y,ield of not less than the yield obtainable from other investments 
authorized by this section. Debentures so purchased shall be canceled 
and not reissued. 
"(d) Premium charges, adjusted premium charges, and appraisal 
and other fees received on account of the insurance of any mortgage 
or loan which is the obligation of the General Insurance Fund, the 
receipts derived from the property covered by such mortgages and 
loans and from the claims, debts, contracts, property, and security 
assigned to the Commissioner in connection therewith, and all earn-
ings on the assets of the Fund shall be credited to the General Insur-
ance Fund. The principal of, and interest paid and to be paid on, 
debentures which are the obligation of such Fund, cash insurance 
payments and adjustments, and expenses incurred in the handling, 
management, renovation, and disposal of properties acquired, in 
connection with mortgages and loans which are the obligation of 
such Fund, shall be charged to such Fund. 
"(e) The General Insurance Fund shall not be used for carrying out 
^2 use 1709, 
the provisions of sections 208 (b), 203 (h), and 203(i), or the provisions 
of section 213 to the extent that they involve mortgages the insurance 
for which is the obligation of the Cooperative Management Housing 
Ante, p. 468. 
Insurance Fund created by section 213 (k) ; and nothing in this section 
shall apply to or affect any mortgages, loans, commitments, or insur-
ance under such provisions." 
OPTIONAL CASH PAYMENT OF INSURANCE 
BENEiFITS 
SEC. 215. Title V of the National Housing Act is amended by adding 
at the end thereof (after the new section added by section 214 of this 
Act) the following new section: 
u 
OPTIONAL 
CASH 
PAYMENT 
OF INSURANCE 
BENEFITS 
"SEC. 520. (a) Notwithstanding any other provisions of this Act 
with respect to the payment of insurance benefits, the Commissioner is 
authorized, in his discretion, to pay in cash or in debentures any insur-
ance claim or part thereof which is paid on or after the date of the 
enactment of the Housing and Urban Development Act of 1965 on a 
mortgage or a loan wiiicli was insured under any section of this Act 
either before or after such date. 
If payment is made in cash, it shall 
be in an amount equivalent to the face amount of the debentures that 
would otherwise be issued plus an amount equivalent to the interest 
which the debentures would have earned, computed to a date to be 
established pursuant to regulations issued by the Commissioner. 
"(b) The Commissioner is authorized to borrow from the Treasury 
from time to time such amounts as the Commissioner shall determine 
are necessary to make payments in cash (in lieu of issuing debentures 
guaranteed by the United States, as provided in this Act) pursuant to 
the provisions of this section. 
Notes or other obligations issued by the 
Commissioner in borrovv^ing under this subsection shall be subject to 
such terms and conditions as the Secretary of the Treasury may pre-
scribe. Each sum borrowed pursuant to this subsection shall bear 
interest at a rate determined by the Secretary of the Treasury, taking 
into consideration the average market yield on outstanding marketable 
obligations of the United States of comparable maturities during the 
month preceding the issuance of such notes or other obligations." 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST 10, 1965 
473 
APPROVAL OF TECHNICALLY SUITABLE MATERIALS 
SEC. 216. Title V of the National Housing Act is amended by insert-
ing after section 520 (added by section 215 of this Act) a new section 
as follows: 
" A P P R O V A L OF TECHNICALLY SUITABLE MATERIALS 
"SEC. 521. The Commissioner shall adopt a uniform procedure for 
the acceptance of materials and products to be used in structures 
approved for mortgages or loans insured under this Act. 
Lender such 
procedure any material or product which the Commissioner finds is 
technically suitable for the use proposed shall be accepted. 
Accept-
ance of a material or product as technically suitable shall not be 
deemed to restrict the discretion of the Commissioner to determine 
that a structure, with respect to which a mortgage is executed, is 
economically sound or an acceptable risk." 
W^\TER AND SEWER FACILIITES IN CONNECTION WITH CERTAIN 
FEDERALLY ASSISTED HOUSING 
SEC. 217. (a) Title V of the National Housing Act is amended by 
inserting after section 521 (added by section 216 of this Act) a new 
section as follows: 
"W^ATER AND 
S E W E R FACILITIES 
"SEC. 522. Notwithstanding any other provision of this Act, no 
mortgage which covers new construction shall be approved for insur-
ance under this Act (except pursuant to a commitment made prior to 
the date of the enactment of the Housing and Urban Development 
Act of 1966) if the mortgaged property includes housing which is 
not served by a public or adequate community water and sewerage 
system: Provided^ That this limitation shall be applicable only to 
property which is not served b j a system approved oy the Commis-
sioner pursuant to title X of this Act and which is situated in an area 
^"'^' P- '*^'^-
certified by appropriate local officials to be an area where the establish-
ment of public or adequate community water and sewerage systems 
is economically feasible: Provided further^^ That for purposes of this 
section the economic feasibility of establishing such public or adequate 
community water and sewerage systems shall be determined without 
regard to whether such establishment is authorized by law or is subject 
to approval by one or more local governments or public bodies." 
(b) Section 1804 of title 38, United States Code, is amended by add- 
^^ stat. 1206. 
ing at the end thereof a new subsection as follows: 
"(e) No loan for the purchase or construction of new residential 
]:>roperty (other than property served by a water and sewerage system 
approved by the Federal Housing Commissioner pursuant to title X 
of the National Housing Act) shall be financed through the assistance 
of this chapter, except pursuant to a commitment made prior to the 
date of the enactment of the Housing and Urban Development Act of 
1965, if such property is not served by a public or adequate community 
Avater and sewerage system and is located in an area where the appro-
priate local officials certify that the establishment of such systems is 
economically feasible. For purposes of this subsection, the economic 
feasibility of establishing public or adequate community water and 
sew^erage syctems shall be determined without regard to whether such 
establishment is authorized by law or is subject to approval by one or 
more local governments or public bodies." 
49-850 0-66—33 
474 
PUBLIC LAW 89-117-AUGUST 10, 1965 
[79 STAT. 
TITLE III—URBAN RENEWAL 
BTUDY OF HOUSTXG AND BUILDING CODES, ZONING, TAX POLICIES, AND 
DEVELOPMENT STANDARDS 
SEC. 301. (a) The Congress finds that the general welfare of the 
Nation requires that local authorities be encouraged and aided to pre-
vent slums, blight, and sprawl, preserve natural beauty, and provide 
for decent, durable housing so that the goal of a decent home and a 
suitable living environment for every American family may be realized 
as soon as feasible. The Congress further finds that there is a need 
to study housing and building codes, zoning, tax policies, and develop-
ment standards in order to determine how (1) local property owners 
and private enterprise can be encouraged to serve as large a part as 
they can of the total housing and building need, and (2) Federal, 
State, and local governmental assistance can be so directed as to place 
greater reliance on local property owners and private enterprise and 
enable them to serve a greater share of the total housing and building 
need. The Housing and Home Finance Administrator is therefore 
directed to study the structure of (1) State and local urban and sub-
urban housing and building laws, standards, codes, and regulations 
and their impact on housing and building costs, how they can be sim-
plified, improved, and enforced, at the local level, and what methods 
might be adopted to promote more uniform building codes and the 
acceptance of technical innovations including new building practices 
and materials; (2) State and local zoning and land use laws, codes, 
and regulations, to find ways by w^hich States and localities may 
improve and utilize them in order to obtain further growth and devel-
opment; and (3) Federal, State, and local tax policies with respect to 
their effect on land and property cost and on incentives to build hous-
ing and make improvements in existing structures. 
Report to Presi- 
(^y^j -pj^g Administrator shall submit a report based on such study to 
ongress. ^^^^ President and to the Congress within 18 months after the date of 
the enactment of the Housing and Urban Development Act of 1965 or 
the appropriation of funds for the study, whichever is later. 
(c) There are authorized to be appropriated such funds as may be 
necessary to carry out the purposes of this section. Any funds so 
appropriated shall remain available until expended. 
WORKABLE PROGRAM REQUIREMENT 
42uscf45i 
SEC. 302. (a)(1) Section 101 of the Housing Act of 1949 is amended 
by adding at the end thereof the following new subsection: 
"(e) No loan or grant contract may be entered into by the Admin-
istrator for an urban renewal project unless he determines that (1) the 
workable program for community improvement presented by the 
locality pursuant to subsection (c) is of sufficient scope and content to 
furnish a basis for evaluation of the need for the urban renewal 
project; and (2) such project is in accord with the program." 
(2) The requirements imposed by the amendment made by para-
graph (1) shall not be applicable to any project which received Fed-
eral recognition prior to the date of the enactment of this Act. 
(b) Section 101(c) of such Act is amended by adding at the end 
thereof the following new sentence: "Notwithstanding any other pro-
vision of law, in the case of a contract with an Indian tribe, band, or 
nation (or a public housing or other public agency for such tribe, 
band, or nation established under State or tribal law), the workable 
program and minimum standards housing code, referred to in the 
preceding sentence, may be presented to the Administrator by such 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST 10, 1965 
475 
tribe, band, or nation, and it shall be subject to the requirements of law 
Avith respect to such program and code only to the extent that such 
tribe, band, or nation has the legal jurisdiction and power to carry out 
such requirements." 
GENERAL NEIGHBORHOOD RENEWAL, PLANS 
SEC. 303. Section 102(d) of the Housing Act of 1949 is amended— 
Jo Jta^- ^'o^g. 
(1) by striking out the tirst sentence of the second paragraph and 
inserting in lieu thereof the following: 
"In order to facilitate proper preliminary planning for the attain-
ment of the urban renewal objectives of this title, the Administrator 
may also make advances of funds (in addition to those authorized 
above) to local public agencies for the preparation of General Neigh-
borhood Kenewal Plans (as herein defined). 
A General Neighbor-
hood Renewal Plan may be prepared for an area consisting of an 
urban renewal area or areas, together with any adjoining areas having 
specially related problems, and which is of such size that the urban 
renewal activities in the urban renewal area or areas may have to be 
initiated in stages, consistent w4th the capacity and resources of the 
respective local public agency or agencies, over an estimated period of 
not more than ei^ht years."; and 
(2) by striking out the first numbered paragraph and inserting 
in lieu thereof the following: 
" (1) in the interest of sound community planning, it is desirable 
that the urban renewal activities proposed for the area be planned 
in their entirety;". 
INCREASE I N AUTHORIZATION FOR CAPITAL GRANTS 
SEC. 304. (a) The first sentence of section 103(b) of the Housing 
Act of 1949 is amended by striking out "$4,725,000,000" and inserting 
in lieu thereof "$4,700,000,000, which amount shall be increased by 
$675,000,000 on the date of the enactment of the Housing and Urban 
Development Act of 1965, by $725,000,000 on July 1, 1966, and by 
$750,000,000 on July 1 in eacli of the years 1967 and 1968". 
(b) The proviso in the first sentence of section 103(b) of such Act, 
Repeals 
and the second sentence of section 6(b) of the Urban Mass Transpor-
tation Act of 1964, are repealed. 
If f
,
*
f
!
,
- f£f: 
RELOCATION OF DISPLACEES FROM URBAN RENEWAL 
AREAS 
78 Stat. 785. 
42 u s e 1453. 
SEC. 305. (a) Section 105 (c) of the Housing Act of 1949 is amended 
63 stat. 4i7. 
4. 
J 
Jt u 
42 u s e 1455. 
to read as loilows: 
"(c) (1) There shall be a feasible method for the temporary reloca-
tion of individuals and families displaced from the urban renewal 
area, and there are or are being provided, in the urban renewal area 
or in other areas not generally less desirable in regard to public 
utilities and public and commercial facilities and at rents or prices 
within the financial means of the individuals and families displaced 
from the urban renewal area, decent, safe, and sanitary dwellings 
equal in number to the number of and available to such displaced 
individuals and families and reasonably accessible to their places of 
employment. 
The Administrator shall issue rules and regulations to 
aid in implementing the requirements of this subsection and in other-
wise achieving the objectives of this title. 
Such rules and regulations 
shall require that there be established, at the earliest practicable time, 
for each urban renewal project involving the displacement of individ-
uals, families, and business concerns occupying property in the urban 
476 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
renewal area, a relocation assistance program wliicli sliall include 
such measures, facilities, and services as may be necessary or appro-
priate in order (A) to determine the needs of such individuals, fam-
ilies, and business concerns for relocation assistance; (B) to provide 
information and assistance to aid in relocation and otherwise minimize 
the hardships of displacement, including information as to real estate 
agencies, brokers, and boards in or near the urban renewal area which 
deal in residential or business property that might be appropriate for 
the relocating of displaced individuals, families, and business con-
cerns; and (C) to assure the necessary coordination of relocation 
activities Avith other project activities and other planned or proposed 
governmental actions in the community which may affect the carrying 
out of the relocation program, particularly planned or proposed low-
rent housing projects to be constructed in or near the urban renewal 
area. 
"(2) As a condition to further assistance after the enactment of 
this paragraph with respect to each urban renewal project involving 
the displacement of individuals and families, the Administrator shall 
require, within a reasonable time prior to actual displacement, satis-
factory assurance by the local public agency that decent, safe, and 
sanitary dwellings as required by the first sentence of this subsection 
are available for the relocation of each such individual or family," 
^s ^^^Vc^^^' 
(b) Clause (iii) in the second proviso of section 101(c) of such Act 
42 use 1451. 
is amended by striking out "section 105(c)" and inserting in lieu 
thereof "section 105(c)(1)". 
(c) The requirements imposed by the amendment made by subsec-
tion (a) of this section shall not be applicable to any project which 
received Federal recognition prior to the date of the enactment of this 
Act. 
REDEVELOPMENT I N ACCORDANCE W I T H URBAN RENEWAL PLAN 
J3 uS;' tise 
^^^' ^^^- S^c^io^^ ^^^ of the Housing Act of 1949 is amended by add-
ing at the end thereof the following new subsection: 
"(h) Notwithstanding any other provision of this title, no contract 
shall be entered into for any loan or capital grant under this title with 
any local public agency unless the local public agency establishes, by 
evidence satisfactory to the Administrator, that any urban renewal 
project with respect to which such local public agency has received a 
loan or capital grant under this title has been, or will be, undertaken 
and carried out; in substantial accordance with the urban renewal 
plan, and any amendments thereto, approved with respect to such 
project, and the terms of the contract for loan or capital grant cover-
u\g such project." 
TTSE o r GRANT OR LOAN FUNDS I N CODE ENFORCEMENT AND REHABILITATION 
PROJECTS 
42 u s e 1460. 
SEC. 307. The first unnumbered paragraph following the numbered 
78 Stat. 787. 
i)i\ragraphs in section 110 (c) of the Housing Act of 1949 is amended— 
(1) by inserting 
(A) ' before no contracr'; and 
(2) by inserting before the period at the end of the paragraph 
the following: ", and (B) not less than 10 per centum of the ag-
gregate amount of (i) grants authorized to be contracted for under 
this title by the Housing and Urban Development Act of 1965 and 
subsequent Acts, and (ii^ loans authorized to be made under sec-
lo T^^n II^^u 
t^o^ ^12 of the Housing Act of 1964, shall be available for projects 
assisted with such grants or loans which involve primarily code 
enforcement and rehabilitation". 
42 u s e 1452b. 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST10, 1965 
477 
INCREASE I N NONRESIDENTIAL EXCEPTION 
SEC, 308. The third unnumbered paragraph following the numbered 
paragraphs in section 110(c) of the Housing Act of 1949 is amended 
H ^^^ J'J|^ 
by striking out the period and inserting in lieu thereof the following: 
": And provided further, That the aggregate amount of capital grants 
made available under this title with respect to such projects after the 
date of the enactment of the Housing and Urban Development Act of 
1965 may be in an amount not to exceed (in addition to amounts previ-
ousl;^ available for such projects) 35 per centum of the amount of 
additional capital grants authorized under this title by such Act." 
PRESERVATION 
OF HISTORIC 
STRUCTURES 
SEC. 309. (a) Section 110(c) of the Housing Act of 1949 is 
amended—• 
(1) by striking out "and" at the end of paragraph (7); 
(2) by striking out the period at the end of paragraph (8) and 
inserting in lieu thereof "; and"; 
(3) by inserting a new paragraph (9) as follows: 
"(9) relocating within the project area a structure which the 
local public agency determines to be of historic value and which 
will be disposed of to a public body or a private nonprofit organi-
zation which will renovate and maintain such structure for his-
toric purposes."; and 
(4) by striking out "paragraphs (7) and (8)" in the second 
unnumbered paragraph following the numbered paragraphs and 
inserting in lieu thereof "paragraphs (7), (8), and (9)". 
(b) Section 110(e) of such Act is amended by striking out "and 
(8)" in clause (i) and inserting in lieu thereof "(8), and (9)". 
ELIGIBILITY OF CERTAIN EXPENSES OF PROJECTS FINANCED ON THREE-
FOURTHS GRANT 
BASIS 
SEC. 310. (a) Clause (i) of the third sentence of section 110(e) of the 
Housing Act of 1949 is amended by (1) inserting "staff services in con-
nection with programs of code enforcement and voluntary rehabilita-
tion and repair (including community organization)," after "disposi-
tion of land,"; and (2) inserting "(5)," after "(4),". 
(b) Any contract for a capital grant under title I of the Housing 
Act of 1949, executed prior to the date of the enactment of this Act, ^
^
"
^
2 use i45o-
may be amended to incorporate the provisions of subsection (a) as to 
costs incurred on or after the date of the enactment of this Act. 
DEMOLITION 
OF 
UNSAFE 
STRUCTURES; 
CODE 
ENFORCEMENT 
SEC. 311. (a) Title I of the Housing Act of 1949 is amended by in-
serting after section 115 (added by section 106 of this Act) two new 
sections as follows: 
"DEMOLITION 
"SEC. 116. (a) Notwitlistanding any other provision of this title, 
the Administrator is authorized to enter into contracts to make, and to 
make, grants as provided in this section (payable from any grant 
funds provided under section 103(b)) t,o cities, other municipalities, 
^^ stat. 4ji6^ 
and counties to assist in financing the cost of demolishing structures 
which under State or local law have been determined to be structur-
ally unsound or unfit for human habitation, and which such city, 
municipality, or county has authority to demolish. The amount of 
42 u s e 1453. 
478 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
any grant under this section shall not exceed two-thirds of the cost of 
the demolition of such structures. 
"(b) No grant shall be made under this section unless the struc-
tures to be demolished are located in an urban renewal area, pr, in the 
case of structures outside an urban renewal area, (1) the locality 
involved has an approved workable program for community improve-
42 use f
4
5
^
i 
nient in accordance with the requirements of section 101(c), as deter-
mined by the Administrator, (2) the demolition to be assisted will be 
on a planned neighborhood basis and will further the over-all renewal 
objectives of such locality, (3) there is in such locality a program of 
enforcement of existing local housing and related codes, (4) the 
structures to be demolished constitute a public nuisance and a serious 
hazard to the public health or welfare, and (5) the governing body 
of such locality has determined that other available legal procedures 
have been exhausted to secure remedial action by the owner of the 
structures involved and that demolition by governmental action is 
required. 
"CODE ENFORCEMENT 
"SEC. 117. Notwithstanding any other provision of this title, the 
Administrator is authorized to enter into contracts to make, and to 
make, grants as provided in this section (payable from any grant 
42 us^c M
5
^
3 
funds provided under section 103(b)) to cities, other municipalities, 
and counties for the purpose of assisting such localities in carrying 
out programs of concentrated code enforcement in deteriorated or 
deteriorating areas in which such enforcement, together with those 
public improvements to be provided by the locality, may be expected 
to arrest the decline of the area. Such grants shall not exceed two-
thirds (or three-fourths in the case of any city, other municipality, 
or county having a population of 50,000 or less according to the most 
recent decennial census) of the cost of planning and carrying out 
such programs which may include the provision and repair of necessary 
streets, curbs, sidewalks, street lighting, tree planting, and similar 
improvements within such areas. The Administrator shall not make 
any grant under this section unless he has obtained adequate assurances 
(1) that the locality will maintain during the period of the contract, 
in addition to its expenditures for planning and carrying out any 
program assisted under this section, a level of expenditures for code 
enforcement activities at not less than its normal expenditures for such 
activities prior to the execution of such contract, and (2) that the 
locality has a satisfactory program for the provision of all necessary 
public improvements for such areas. The provisions of sections 101 (c), 
I4^65-"A'^ ^^^^45 
^^^' ^^'^' '^^^^ ^^^ shall be applicable to activities and undertakings 
' " ' ^' 
• assisted under this section to the same extent as if such activities and 
undertakings were being carried out in an urban renewal area as part 
of an urban renewal project." 
42 u^c i
^
-
f
e
o 
(^^ Section 110(c) of such Act is amended by— 
(1) striking out "or a program of code enforcement in an urban 
renewal area," in the first sentence; and 
(2) striking out the proviso in paragraph (5). 
1
2 vie !iik 
^^) Section 220 (d) (1) (A) of the National Housing Act is amended 
by inserting before the first proviso the following: ", or (iv) an area 
in which a program of concentrated code enforcement activities is 
being carried out pursuant to section 117 of the Housing Act of 1949". 
75 Stat. 154. 
(J) Sectiou 220(h) (1) of the National Housing Act is amended by 
inserting after "virban renewal project" in the first sentence the follow-
ing : "or in an area in which a program of concentrated code enforce-
79 STAT.] 
PUBLIC LAW 89-117-AUGUST 10, 1965 
479 
ment activities is being carried out pursuant to section 117 of the 
Housing Act of 1949". 
(e) Section 312(a) of the Housing Act of 1964 is amended by insert-
ing after "urban renewal area" in the first sentence the following: "or 
an area in which a program of concentrated code enforcement activi-
ties is being carried out pursuant to section 117 of the Housing Act 
of 1949". 
REHABILITATION LOANS 
78 Stat. 790. 
42 u s e 1452b. 
Ante, p. 478. 
SEC. 312. (a) Section 312(a) of the Housing Act of 1964 is aniended 
by striking out "reasonable" in the second sentence and inserting in 
lieu thereof "comparable". 
(b) Section 312(d) of such Act is amended by striking out 
"$50,000,000" and inserting in lieu thereof "$100,000,000 for each 
fiscal year", and by adding at the end thereof a new sentence as 
follows: "All moneys in such revolving fund shall be available for 
necessary expenses of servicing loans made pursuant to this section, 
including reimbursement or payment for services and facilities of 
the Federal National Mortgage Association and of any public or 
private agency for the servicing of such loans." 
(c) Section 312 of such Act is further amended by adding at the 
end thereof the following new subsection: 
" (h) No loan shall be made under the authority of this section after 
October 1, 1969, except pursuant to a contract, commitment, or other 
obligation entered into pursuant to this section before that date." 
ELIGIBILITY OF COMMUNITIES I N DEPRESSED AREAS FOR URBAN RENEWAL 
ASSISTANCE 
SEC. 313. (a) Subparagraph (B) of section 103(a) (2) of the Hous-
ing Act of 1949 is amended to read as follows: 
J2 ijsc i^h 
"(B) three-fourths of the aggregate net project costs of any 
such projects which are located in (i) a municipality having a 
population of fifty thousand or less according to the most recent 
decennial census, or (ii) a municipality situated in a labor market 
area which, at the time the contract or contracts involved are 
entered into or at such earlier time as the Administrator may 
specify in order to avoid hardship, is designated as a redevelop-
ment area under the second sentence of section 5(a) of the Area 
Eedevelopment Act or any other legislation enacted after the date 
^ ^^^' ^^^^ 
of the enactment of the Housing and Urban Development Act of 
1965 containing standards for designation as a redev^opment area 
generally comparable to those set forth in the second sentence of 
section 5(a) of the Area Redevelopment Act, and", 
(b) The amendment made by subsection (a) shall apply only with 
respect to urban renewal projects placed under contract for capital 
grant on or after the date of the enactment of this Act, except that 
such amendment shall apply with respect to all urban renewal projects 
in the city of Providence, Rhode Island, placed under contract for 
capital grant during the period Providence was designated as a rede-
velopment area under section 5(a) of the Area Redevelopment Act 
(or at such earlier time as the Administrator may specify m order to 
avoid hardship) and not completed prior to the date of the enactment 
of this Act. 
LOCAL GRANT-IN-AID CREDIT FOR CERTAIN COAL ROYALTIES 
SEC. 314. (a) Section 110(d) of the Housing Act of 1949 is 
tl 1%' 1?^^ 
amended by adding at the end thereof the following new paragraph: 
42 u s e 1450-
1465. 
480 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
"Where a project in any municipality includes an area affected by 
an underground mine fire or by a coal mine subsidence and where it is 
necessary in such project to remove any underlying coal deposits in 
order to stabilize the soil or to control the underground mine fire, then 
any royalties received by the project from the removal and sale oi such 
coal deposits shall be credited to the project as a local grant-in-aid 
made by such municipality." 
(b) Any contract under title I of the Housing Act of 1949 executed 
prior to the date of the enactment of this Act shall, at the request of the 
municipality involved, be amended to reflect the amendment made by 
subsection (a). 
SPECIFIC URBAX RENEWAL PROJECTS 
SEC. 315. (a)(1) Notwithstanding the date of the commencement of 
construction of the Tanyard Creek collector sanitary sewer in Jasper, 
Alabama, local expenditures made in connection with this collector 
sanitary sewer system shall, to the extent otherwise eligible, be counted 
as a local grant-in-aid to the downtown urban renewal project (Ala-
bama R-49) in accordance with the provisions of title I of the Housing 
Act of 1949. 
(2) Notwithstanding the date of the commencement of construction 
of the East Side High School and the start of construction of the im-
provements to Hickory Creek in Joliet, Illinois, expenditures made in 
connections with such high school and such creek improvements shall, 
to the extent otherwise eligible, be counted as a local grant-in-aid to the 
proposed south central urban renewal project in accordance with the 
provisions of title I of the Housing Act of 1949. 
(3) Notwithstanding the date of commencement of the installation 
of certain underground electrical wiring in Johnson City, Tennessee, 
expenditures made in connection with such installation shall, to the 
extent otherwise eligible, be counted as a local grant-in-aid to Johnson 
(^ity's proposed downtown urban renewal project (Tennessee R-80) 
in accordance with the provisions of title I of the Housing Act of 1949. 
(4) Notwithstanding the provisions of section 312 of the Housing 
42 use uso 
*^^^' ^^ ^^^'^ or any request previously made pursuant to such section, 
note. 
upon request of the local public agency the eligibility of the local 
grants-in-aid for any project in the city of New Brunswick, New 
Jersey, in connection with which the final capital grant payment has 
not been made, shall be determined in accordance with the provisions 
^A f
x
e
^
A
- fi^l- 
of section 110(d) of the Housing Act of 1949. 
(5) Two-thirds of all expenditures by the city of Saint Louis, Mis-
souri, in connection with its Downtown Sports Stadium project, to the 
extent such expenditures would have been eligible under the provisions 
of section 110(d) of the Housing Act of 1949 to be counted as non-cash 
grants-in-aid toward such project if it had received Federal assistance 
as an urban renewal project pursuant to the provisions of title I of 
such Act, shall be eligible to be counted as a s:rant-in-aid toward any 
federallv-assisted urban renewal projects in Saint Louis. 
(6) Notwithstanding the extent to which the cultural and conven-
tion center proposed to be built adjacent to Urban Renewal Project 
Colorado R-15 (Skyline) in Denver, Colorado, may benefit areas other 
than the urban renewal area, expenses incurred by the city of Denver 
in constructing such center shall, to the extent otherwise eligible, be 
counted as a grant-in-aid toward such project. 
(7) Notwithstanding the extent to which the cultural and conven-
tion center proposed to be built within Urban Renewal Project R-8 
in Norfolk, Virginia, may benefit areas other than the urban renewal 
42 use 1460. 
75 Stat. 169. 
42 u s e 1463. 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST 10, 1965 
481 
area, expenses incurred by the city of Norfolk in constructing such 
center shall, to the extent otherwise eligible, be counted as a grant-in-
aid toward such project. 
(8) Expenses incurred in the construction of the Glenn Duncan 
Elementary School and the Fred W. Traner Junior High School in 
Keno, Nevada, shall not be deemed to be ineligible as a local grant-in-
aid in connection with the Northeast Urban Renewal Project (Nevada 
R-2) because of any change in the urban renewal plan for such project 
which is determined by the Housing and Home Finance Administrator 
to have resulted from the proposed location of a federally-aided high-
way within or adjacent to the urban renewal area in which such project 
v;as undertaken. 
For the purpose of computing the portion of the 
cost of such schools which may be allowed as a local grant-in-aid, the 
degree of benefit of the schools to such urban renewal area shall be 
based on the latest estimate of benefit submitted by the local public 
agency and accepted by the Administrator prior to such change in the 
urban renewal plan. 
(9) Notwithstanding the provisions of section 112(a) of the Hous-
ing Act of 1949, expenditures in the amount of $600,000 made by the 
Memorial Hospital of Michigan City Foundation, Incorporated, for 
the purchase of certain land and buildings on or about July 24, 1963, 
from Doctors Hospital Realty Corporation shall, if otherwise eligible, 
be counted as local grants-in-aid to the community center numbered 
1 urban renewal project (Indiana R-46) in Michigan City, Indiana, 
in accordance with the remaining provisions of title I of that Act. 
(10) The provisions of section 113(c) of the Housing Act of 1949 
^^ ^^^ ^^^^ 
shall be applicable to the Hobo Jungle Urban Renewal Project in 
Texarkana, Arkansas (Arkansas R-3). 
(11) Notwithstanding the date of commencement of construction 
of the Pulaski, Showalter, and Smedley Junior High Schools, and the 
William Penn and Stetser Elementary Schools in Chester, Pennsyl-
vania, local expenditures made in connection with such schools shall, 
to the extent otherwise eligible, be counted as local grants-in-aid for 
federally-assisted urban renewal projects in Chester that will be 
served by such schools. 
(12) Notwithstanding any other provision of law, moneys here-
tofore expended by the University of Pennsylvania and Wilkes Col-
lege for land (and related expenditures for demolition and reloca-
tion) included in the overall development plans proposed by such 
institutions and utilized, or to be utilized, in connection with new 
facilities of such institutions within one mile of urban renewal projects 
Pennsylvana 5-3 (University City) and Pennsylvania R-149 (Wright 
Street), respectively, shall, if otherwise eligible, be allowed as local 
grants-in-aid for such projects. 
(13) Notwithstanding the June, 1956, commencement of certain 
flood control work in Ottumwa, Iowa, local expenditures in connection 
with such flood control work shall, to the extent otherwise eligible, be 
counted as a local grant-in-aid to the Marina Gateway urban renewal 
project (Iowa R-12) in accordance with the provisions of Title I of 
theHousing Act of 1949. 
^^\\ use uso-
(b)(1) Notwithstanding the provisions of title I of the Housing 
Act of 1949 and the United States Housing Act of 1937, the Housing 
^ l'^^ f 
^^^ 
and Home Finance Administrator and the Public Housing Commis-
sioner are authorized and directed to consent to the transfer by the 
Housing Authority of the City of Macon, Georgia, to the Urban Re-
newal Department of the City of Macon, Georgia, of all property 
acquired by the Housing Authority for low-rent housing project num-
bered Georgia 7-8, on condition that (A) an amount which, together 
482 
PUBLIC LAW 89-117-AUGUST 10, 1965 
[79 STAT. 
with any funds of the Housing Authority available for the purpose, is 
sufficient to pay and discharge all obligations incurred by the Housing 
Authority in connection with such low-rent housing project and owing 
at the time of transfer, will be paid by the Urban Renewal Depart-
ment of the City of Macon to the Public Housing Administration to 
be applied in satisfaction of the Housing Authority's obligations 
which it cannot meet with its own funds available for the purpose, and 
(B) the total amount so paid by the Urban Renewal Department of 
the City of Macon will be included in the gross project cost of its 
Coliseum Urban Renewal Project, Georgia R-95. 
(2) The Housing and Home Finance Administrator and the Public 
Housing Commissioner are authorized to modify any contracts here-
tofore entered into and to take any other appropriate action necessary 
to carry out the provisions of paragraph (1). 
42 use M^" 
(^) (1) Notwithstanding any provision of the Housing Act of 1949 
note. 
or any other provision of law, the urban renewal project in Savannah, 
Georgia, known as Project " J " in the General Neighborhood Renewal 
Plan for the Broad Street-Canal Urban Renewal Area adopted by reso-
lution of the Mayor and Aldermen of the City of Savannah on Novem-
ber 18, 1958, may include the donation by Housing Authority of Sa-
vannah, by a suitable instrument of conveyance, of the right, title, and 
interest of the Authority in and to all or any portion of the land in-
cluded within the boundaries of such Project " J " in the City of Sa-
vannah, Chatham County, Georgia, the area of such Project " J " being 
generally bounded on the North by properties of the Central of Georgia 
Railway Company, on the East by West Broad Street, on the South by 
the right-of-way for Interstate Highway No. 1-16, and on the West 
by the Savannah and Ogeechee Canal and West Boundary Street. 
(2) The conveyance authorized to be included in the urban renewal 
project under paragraph (1) shall be made only if the donee rep-
resents, and furnishes such assurances as may be required by Housing 
Authority of Savannah, that such donee will develop, preserve, and op-
erate such property on a nonprofit basis as a historical site or 
monument. 
LEASE GUARANTEES FOR CERTAIN SMALL BUSINESS CONCERNS 
;2stat_.689. 
SEC. 316. (a) The Small Business Investment Act of 1958 is 
note. 
amended by adding after title I I I a new title as follows: 
75 Stat. 756. 
"TITLE IV—LEASE GUARANTEES 
"AUTHORITY or THE ADMINISTRATION 
"SEC. 401. (a) The Administration may, whenever it determines 
such action to be necessary or desirable, and upon such terms and 
conditions as it may prescribe, guarantee the payment of rentals under 
leases of commercial and industrial property entered into by small 
business concerns that are (1) eligible for loans under section 7(b) (3) 
1
5 use 63^^' 
^^ ^^® Small Business Act, or (2) eligible for loans under title IV of 
78 Stat. 526. 
the Ecouomic Opportunity Act of 1964, to enable such concerns to ob-
42 use 2901- 
tain such leases. Any such guarantee may be made or effected either 
directly or m cooperation with any qualified surety company or other 
qualified company through a participation agreement with such com-
pany. The foregoing powers shall be subject, however, to the follow-
ing restrictions and limitations: 
"(1) No guarantee shall be issued by the Administration (A) 
if a guarantee meeting the requirements of the applicant is other-
79 STAT.] 
PUBLIC LAW 89-117-AUGUST 10, 1965 
483 
wise available on reasonable terms, and (B) unless the Admin-
istration determines that there exists a reasonable expectation that 
the small business concern in behalf of which the guarantee is is-
sued will perform the covenants and conditions of the lease. 
"(2) The Administration shall, to the greatest extent practi-
cable, exercise the powers conferred by this section in cooperation 
with qualified surety or other companies on a participation basis. 
"(b) The Administration shall fix a uniform annual fee for its share 
of any guarantee under this section which shall be payable in advance 
at such time as may be prescribed by the Administrator. 
The amount 
of any such fee shall be determined in accordance with sound actuarial 
practices and procedures, to the extent practicable, but in no case shall 
such amount exceed, on the Administration's share of any guarantee 
made under this title, 2i/^ per centum per annum of the minimum an-
nual guaranteed rental payable under any guaranteed lease: Provided^ 
That the Administration shall fix the lowest fee that experience under 
the program established hereby has shown to be justified. 
The Ad-
ministration may also fix such uniform fees for the processing of 
applications for guarantees under this section as the Administrator 
determines are reasonable and necessary to pay the administrative 
expenses that are incurred in connection therewith. 
"(c) In connection with the guarantee of rentals under any lease 
pursuant to authority conferred by this section, the Administrator may 
require, in order to minimize the financial risk assumed under such 
guarantee— 
"(1) that the lessee pay an amount, not to exceed one-fourth of 
the minimum guaranteed annual rental required under the lease, 
which shall be held in escrow and shall be available (A) to meet 
rental charges accruing in any month for which the lessee is in 
default, or (B) if no default occurs during the term of the lease, 
for application (with accrued interest) toward final payments of 
rental charges under the lease; 
"(2) that upon occurrence of a default under the lease, the 
lessor shall, as a condition precedent to enforcing any claim under 
the lease guarantee, utilize the entire period, for which there are 
funds available in escrow for payment of rentals, in reasonably 
diligent efforts to eliminate or minimize losses, by releasing the 
commercial or industrial property covered by the lease to another 
qualified tenant, and no claim shall be made or paid under the 
guarantee until such effort has been made and such escrow funds 
have been exhausted; 
"(3) that any guarantor of the lease will become a successor 
of the lessor for the purpose of collecting from a lessee in default 
rentals which are in arrears and with respect to which the lessor 
has received payment under a guarantee made pursuant to this 
section; and 
"(4) such other provisions, not inconsistent with the purposes 
of this title, as the Administrator may in his discretion require. 
u 
POWERS 
"SEC. 402. Without limiting the authority conferred upon the Ad-
ministrator and the Administration by section 201 of this Act, the Ad- 
1
5 use' 57 ?; 
ministrator and the Administration shall have, in the performance of 
and with respect to the functions, powers, and duties conferred by this 
title, all the authority and be subject to the same conditions prescribed 
in section 5(b) of the Small Business Act with respect to loans, in- 
J5 usc 63^^.' 
eluding the authority to execute subleases, assignments of lease and 
484 
PUBLIC LAW 89-117-AUGUST 10, 1965 
[79 STAT. 
new leases with any person, firm, organization, or other entity, in 
order to aid in the liquidation of obligations of the Administration 
hereunder. 
"FUND 
"SEC. 403. There is hereby established a revolving fund for use by 
the Administration in carrying out the provisions of this title. 
Ini-
tial capital for such fund shall consist of not to exceed $5,000,000 trans-
ferred from the fund established under section 4(c) of the Small Busi-
ness Act: Provided^ That the last sentence of such section 4(c) shall 
not apply to any amounts so transferred. 
Into the fund established 
by this section there shall be deposited all receipts from the guarantee 
program authorized by this title. Moneys in such fund not needed 
for the payment of current operating expenses or for the payment of 
claims arising under such program may be invested in bonds or other 
obligations ot, or bonds or other obligations guaranteed as to principal 
and interest by, the United States; except that moneys provided as 
initial capital for such fund shall be returned to the fund established 
by section 4(c) of the Small Business Act, in such amounts and at such 
times as the Administration determines to be appropriate, whenever the 
level of the fund herein established is sufficiently high to permit the 
return of such moneys without danger to the solvency of the program 
under this title." 
15 u*sc 6^71°" 
(^) Section 201 of such Act is amended by striking out the third 
sentence and inserting in lieu thereof the following: "The powers con-
ferred by this Act upon the Administration and upon the Adminis-
trator, with the exception of those conferred by titles IV and V hereof, 
shall be exercised through the Small Business Investment Division and 
through the DejDuty Administrator appointed hereunder. 
The powers 
conferred by this Act upon the Administration and upon the Admin-
7 2^"!^' 6 T^' 
istrator by titles IV and V hereof shall be exercised through such di-
1
5 use 695. 
vision, section, or other personnel as the Administrator in his discre-
tion shall determine." 
(c) The table of contents of such Act is amended by inserting after 
the analysis of title I I I the following: 
"TITLE IV—LEASE GUARANTEES 
"Sec. 
401. Authority of the Administration. 
"Sec. 
402. Powers. 
••Sec. 403. Fund." 
Ante, p. 207. 
(^(j) Scctiou 4(c) of the Small Business Act is amended— 
(1) by striking out "$1,716,000,000" and inserting in lieu thereof 
"$1,721,000,000,"; and 
(2) by striking out the period at the end of the fifth sentence 
and inserting in lieu thereof the following: ": Provided^ That 
such limitation shall not apply to functions under title IV 
thereof." 
AMENDMENT OF SECTION 316 OF T H E HOUSING ACT OF 1 9 5 4 
68 Stat. 630. 
D.C. Code 5-
SEC. 317. The first full paragraph of section 316(2) of the Housing 
^.^. ^„^. .- 
-^^^ ^^ l^O'i: is amended by striking out the first parenthetical clause 
717a. 
and inserting in lieu thereof the following: " (as such projects are now 
1
4
^
6
5 ^^*^ ^^^° 
^^ "^^y hereafter be defined in title I of the Housing Act of 1949, 
including but not limited to projects authorized without regard to the 
residential or nonresidential character or reuse of the urban renewal 
area)". 
Post, p„ 489. 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST10, 1965 
485 
TITLE IV—COMPENSATION OF CONDEMXEES 
DEFINITIONS 
SEC. 401. For the purposes of this title— 
(1) the term "development program" means any program estab-
lished by or conducted under any of the following provisions of 
law: 
(A) the United States Housing Act of 1937; 
"' "^"^ '•''°-
(B) title I of the Housing Act of 1949; 
42 use i45o-i465. 
(C) the Urban Mass Transportation Act of 1964; 
49 use leoi note. 
(D) title I I of the Housing Amendments of 1955; 
42 use 1491-1497. 
(E) title VII of the Housing Act of 1961; and 
^2 use isoo-isooe. 
(F) title VII of the Housing and Urban Development Act of 
1965; 
(2) the term "Federal assistance" means a grant, loan, contract 
of guaranty, annual contribution, or other assistance provided by 
the United States; 
(3) the term "applicant'' means any public body or other agency 
authorized to receive Federal assistance under a development 
program; 
(4) the term "real property" means any land, or any interest 
in land, and (A) any building, structure, or other improvements 
embedded in or affixed to land, and any article so affixed or at-
tached to such building, structure, or improvement as to be an 
essential or integral part thereof; (B) any article affixed or at-
tached to such real property in such manner that it cannot be 
removed without mat'erial injury to itself or the real property; 
and (C) any article so designed, constructed, or specially adapted 
to the purpose for which such real property is used that (i) it is 
an essential accessory or part of such real property, (ii) it is not 
capable of use elsewhere, and (iii) it would lose substantially all 
its value if removed from the real property; and 
(5) the term "Administrator" means the Housing and Home 
Finance Administrator. 
LAND ACQUISITION 
POLICY 
SEC. 402. As a condition of eligibility for Federal assistance pur-
suant to a development program, each applicant for such assistance 
shall satisfy the Administrator that the following policies will be 
followed in connection with the acquisition of real property by emi-
nent domain in the course of such program— 
(1) the applicant shall make every reasonable effort to acquire 
the real property by negotiated purchase; 
(2) no owner shall be required to surrender possession of real 
property before the applicant pays to the owner (A) the agreed 
purchase price arrived at by negotiation, or (B) in any case where 
only the amount of the payment to the owner is in dispute, not 
less than 75 per centum of the appraised fair value of such prop-
erty as approved by the applicant; and 
(3) the construction or development of any public improve-
ments shall be so scheduled that no person lawnilly occupying the 
real property shall be required to surrender possession on account 
of such construction or development without at least 90 days' 
written notice from the applicant of the date on which such con-
struction or development is scheduled to begin. 
4S6 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
FUNDS FOR CERTAIN PAYMENTS I N E M I N E N T DOMAIN 
SEC. 403. N'otwitJistanding any other provision of law, financial 
assistance under any federally assisted development program may 
include amounts necessary for financing, in the same manner that other 
costs of a project assisted under such program are financed, the pay-
ments described in paragraph (2) (B) of section 402 of this Act. 
RELOCATION PAYMENTS UNDER FEDERALLY ASSISTED DEVELOPMENT 
PROGRAMS 
SEC. 404. (a) To the extent not otherwise authorized under any 
Federal law, financial assistance extended to an applicant under any 
federally assisted development program may include grants for re-
location payments, as herein defined. 
Such grants may be in addition 
to other financial assistance under such federally assisted development 
programs, and may cover the full amount of such relocation payments. 
Any funds available for any such program may be used for such 
grants. 
The term "relocation payments" means payments by the 
applicant, to a displaced individual, family, business concern, or non-
profit organization, which are made on such terms and conditions and 
subject to such limitations (to the extent applicable, but not including 
the date of displacement) as are provided for relocation payments, at 
the time such payments are approved, by sections 114(b), (c), and (d) 
42 us^c M65 
^^ ^^^^ Housing Act of 1949 with respect to projects assisted under 
title I thereof. 
Relocation payments authorized by this subsection 
shall be made subject to such rules and regulations as may be pre-
scribed by the Administrator. 
(b) Section 114(b) (2) of the Housing Act of 1949 is amended by 
striking out "$1,500" and inserting in lieu thereof "$2,500". 
(c) (1) Section 114 of such Act is further amended by redesignat-
ing subsection (d) as subsection (e) and by inserting after subsection 
(c) the following new subsection: 
"(d) In addition to payments authorized to be made under subsec-
tions (b) and (c), a local public agency may pay to any displaced 
individual, family, business concern, or nonprofit organization reason-
able and necessary expenses incurred for (1) recording fees, transfer 
taxes, and similar expenses incidental to conveying real property to 
a project assisted under this title, (2) penalty cosits for prepayment 
of any mortgage encumbering such real property, and (3) the pro 
rata portion of real property taxes allocable to a period subsequent 
to the date of vesting of title or the effective date of the acquisition of 
such real property by such agency, whichever is earlier." 
lllTcUis 
(2) Section 15(8) of the United States Housing Act of 1937 is 
amended by striking out "section 114 (b) or (c)" and inserting in lieu 
thereof "section 114 (b), (c),and (d)". 
(cl) Subsection (a) shall not be applicable with respect to any dis-
placement occurring prior to the date of the enactment of this Act (or 
prior to March 4, 1965, in the case of the programs specified in sub-
paragraphs (C) and (E) of section 401(1)). 
T I T L E V—LOW-RENT PUBLIC HOUSING 
ACCEPTANCE OF LOCAL CERTIFICATION OF EQUIVALENT ELIMINATION 
SEC. 501. The fourth sentence of section 10(a) of the United States 
42 u'sc M?' 
Housing Act of 1937 is amended by inserting immediately after "elim-
ination", where it first appears, the following: ", as certified by the 
local governing body". 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST 10, 1965 
487 
GREATER USE OF EXISTING HOUSING 
SEC. 502. Section 10(c) of the United States Housing Act of 1937 
so stau 892^ 
is amended by striking out '•''And provided''' and inserting in lieu there-
of '•''Provided''\ and by inserting before the period at the end thereof 
the following: " : And provided further. That the amount of the fixed 
annual contribution which would be established under this Act for a 
newly constructed project by a public housing agency designed to ac-
commodate a number of families of a given size and kind may be 
established, as a maximum annual contribution in lieu of any Other 
guaranteed contribution authorized under this section, for a project 
by such public housing agency which would provide housing for the 
comparable number, sizes, and kinds of families through the acquisi-
tion, acquisition and rehabilitation, or use under lease of existing 
structures which are suitable for low-rent housing use and obtainable 
in the local market". 
I N C R E A S E I N AUTHORIZATION FOR ANNUAL CONTRIBUTIONS 
SEC. 503. (a) Section 10(e) of the United States Housing Act of 
1937 is amended by inserting immediately following "per annum" the nl\f^^\f^l'^'' 
following: ", which limit shall be increased by $47,000,000 on the date 
of the enactment of the Housing and LTrban Development Act of 1965, 
and by further amounts of $47,000,000 on July 1 in each of the years 
1966,1967, and 1968, respectively". 
REALLOCATION OF UNITS 
SEC. 504. Section 10(e) of the United States Housing Act of 1937 
is amended by striking out ^''Provided^'' and inserting in lieu thereof 
the following: ''''Provided, That subject to any contractual obligation 
outstanding on the date of the enactment of the Housing and Urban 
Development Act of 1965, any units not under construction within 
five years from the date they were reserved to a public housing 
agency may be reserved, allocated, or placed under contract for 
annual contributions in any State without limitation as to the aggre-
gate amount of units which may be placed under contract for annual 
contributions in any one State: Provided 
furtlier,^\ 
SALE OF FEDERALLY-OWNED PROJECTS T
O PRIVATE PURCHASERS 
SEC. 505. The first sentence of section 12(c) of the United States 
Housing Act of 1937 is amended to read as follows: "The Authority 
4° us^c f41*2. 
may sell a Federal project only to a public housing agency or to a 
nonprofit body for use as low-rent housing." 
INCREASE IN PER ROOM LIMITATIONS 
SEC. 506. Paragraph (5) of section 15 of the United States Hous-
ing Act of 1937 is amended— 
yil^X'iS^'' 
(1) by striking out "$2,000" and inserting in lieu thereof 
42 use 1
4
*
1
5
. 
"$2,400"; 
(2) by striking out "$3,000", each place it appears, and in-
serting in lieu thereof "$3,500"; and 
(3) by striking out "$3,500" and inserting in lieu thereof 
"$4,000". 
488 
PUBLIC LAW 89-117-AUGUST 10, 1965 
[79 STAT. 
PURCHASE OF UNITS BY TENANTS 
50 Stat. 895.^ 
SE^. 507. (a) SectioH 15 of the United States Housing Act is 
amended by adding after paragraph (8) a new paragraph as follows: 
"(9) Notwithstanding any other provision of this Act, but subject 
to the provisions of any contract with the Authority, any public 
housing agency may permit any member of a tenant family to enter 
into a contract (either individually or as a member of a group) for 
the acquisition of a dwelling unit in any project of the public housing 
agency which is suitable by reason of its detached or semidetached 
construction for sale and for occupancy by such purchaser or a 
member or members of his family, upon the following terms: 
"(A) The purchaser shall pay at least (i) a pro rata share cost of 
any services furnished him by the public agency, including but not 
limited to, administration, maintenance, repairs, utilities, insurance, 
l)rovision of reserves, and other expenses, (ii) local taxes on his 
dwelling unit, and (iii) monthly payments of interest and principal 
sufficient to amortize a sales price, equal to the greater of the un-
amortized debt or the appraised value (at the time such purchase 
contract is entered into) of the dwelling unit, in not more than forty 
years: Pi'ovided, That the public housing agency may, under terms 
and conditions to be prescribed by it, permit a purchaser to apply an 
amount equal to the net rent paid for his dwelling unit, over a period 
not exceeding three years prior to the entering into of any such con-
tract, toward the purchase price of such unit; 
"(B) The interest rate shall be fixed at not less than the average 
interest cost of loans outstanding on the project, except that in the 
case of a project on which bonds are not outstanding the interest rate 
shall be fixed at not less tlian the going Federal rate applicable to 
such project; 
"(C) The principal payments shall be not less than one-half of 1 
])er centum per annum of the sales price during the first five years 
after purchase, 1 per centum per annum during the next five years, 
11/^ per centum per annum during the third five years, and thereafter 
not less than the principal payments resulting from a level debt 
service of interest and principal over the balance of the payment 
period; and 
"(D) If at any time (i) a purchaser fails to carry out his contract 
with the public housing agency and if no member of his family w^ho 
resides in the dwelling assumes such contract, or (ii) the purchaser or a 
member of his family who assumes the contract does not reside in the 
dwelling, the public housing agency shall have an option to acquire 
his interest under such contract upon payment to him or his estate of 
an amount equal to his aggregate principal payments plus the value to 
the public housing agency of any improvements made by him, less an 
amount equal to 21^ per centum of the sales price." 
(b) Such Act is further amended— 
(1) by inserting in the parenthetical phrase in section 10(h) 
after the words "exclusive of" the following: "any part thereof 
covered by a contract or conveyed pursuant to paragraph (9) of 
section 15, and exclusive of"; 
(2) by inserting after "may be made" in section 10(1) the fol-
lowing : ", subject to any outstanding contracts made pursuant to 
paragraph (9) of section 15,"; 
(3) by inserting after "acquisition", the first place it appears in 
paragraphs (1), (2), and (3) of section 15, the following:" (except 
pursuant to paragraph (9) of section 15)"; and 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST 10, 1965 
489 
(4) by inserting before the semicolon at the end of paragraph 
(1) of section 22(a) a colon and the following: ''Provided, That 
^ ^^'^ ^^^4.^ 
such conveyance or delivery of title shall be subject to the rights of 
third parties vested pursuant to paragraph (9) of section 15". 
TITLE VI—COLLEGE HOUSING 
INCREASE I N AUTHORIZATION FOR COLLEGE HOUSING LOANS 
SEC. 601. Section 401(d) of the Housing Act of 1950 is amended by yJl^H^^^f^' 
striking out "through 1964'', each place it appears, and inserting in lieu 
1
2 use 1749. 
thereof "through 1968". 
INTEREST RATE ON COLLEGE HOUSING LOANS 
SEC. 602. (a) Effective with respect to loan contracts entered into 
after the date of the enactment of this Act, section 401 (c) of the Hous-
ing Act of 1950 is amended by striking out "the higher of (1) 2% per 
^9 stat. 644. 
centum per annum, or" and inserting m lieu thereof "the lower of (1) 
8 per centum per annum, or". 
(b) Effective with respect to notes or other obligations financing loan 
contracts entered into after the date of the enactment of this Act, sec-
tion 401(e) of such Act is amended by striking out "the higher of (1) 
21/^ per centum per annum, or" and inserting in lieu thereof "the lower 
of (1) 2% per centum per annum, or". 
PARTICIPATION 
BY N E W COLLEGES 
AND CERTAIN 
PUBLIC 
VOCATIONAL 
AND TECHNICAL INSTITUTIONS 
S E C 603. Clause (1) of section 404(b) of the Housing Act of 1950 is 
Ji stan 304^^ 
amended to read as follows: "(1)(A) any educational institution 
which offers, or provides satisfactory assurance to the Administrator 
that it will offer within a reasonable time after completion of a facility 
for which assistance is requested under this title, at least a two-year 
program acceptable for full credit toward a baccalaureate degree 
(including any public educational institution, or any private educa-
tional institution no part of the net earnings of which inures to the 
benefit of any private shareholder or individual), or (B) any public 
educational institution which (i) is administered by a college or uni-
versity which is accredited by a nationally recognized accrediting 
agency or association, (ii) offers technical or vocational instruction, 
and (iii) provides residential facilities for some or all of the students 
receiving such instruction,". 
TECHNICAL 
AMENDMENTS 
SEC. 604. (a) The second paragraph of section 404(b) of the Hous-
ing Act of 1950 is amendfed by inserting after "would provide 
^^ ^*^*- ^''^• 
housing," the following: "or to a student housing cooperative corpora-
tion described in clause (5) of this subsection,". 
(b) Section 401 (g) of such Act is amended by striking out "In the 
"^^ ^*^*- ''^2. 
case" and inserting in lieu thereof "Except as otherwise provided in 
the second paragraph of section 404(b), in the case". 
TITLE YII—COMMUNITY FACILITIES 
PURPOSE 
SEC. 701. The purpose of this title is to assist and encourage the 
communities of the Nation fully to meet the needs of their citizens by 
49-850 0-66—34 
490 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
making it possible, with Federal grant assistance, for their govern-
mental bodies (1) to construct adequate basic water and sewer facili-
ties needed to promote the efficient and orderly growth and develop-
ment of our communities, (2) to construct neighborhood facilities 
needed to enable them to carry on programs of necessary social services, 
and (3) to acquire, in a planned and orderly fashion, land to be utilized 
in connection with the future construction of public works and 
facilities. 
GRANTS FOR BASIC WATER AND SEWER FACILITIES 
SEC. 702. (a) The Housing and Home Finance Administrator 
(hereinafter in this title referred to as the "Administrator") is au-
thorized to make grants to local public bodies and agencies to finance 
specific projects for basic public water facilities (including works for 
the storage, treatment, purification, and distribution of water), and 
for basic public sewer facilities (other than "treatment works" as de-
33 u?c 466^' 
^^^^^ i^ ^^^^ Federal Water Pollution Control Act) : Provided, That 
no grant shall be made under this section for any sewer facilities 
unless the Secretary of Health, Education, and Welfare certifies to 
the Administrator that any w-aste material carried by such facilities 
will be adequately treated before it is discharged mto any public 
waterway so as to meet applicable Federal, State, interstate, or local 
w^ater quality standards. 
(b) The amount of any grant made under the authority of this 
section shall not exceed 50 per centum of the development cost of the 
project: Provided, That in the case of a community having a popula-
tion of less than ten thousand, according to the most recent decennial 
census, which is situated within a metropolitan area, the Administra-
tor may increase the amount of a grant for a basic public sewer fapility 
assisted under this section to not more than 90 per centum of the 
development cost of such facility, if the community is unable to 
finance the construction of such facility without the increased grant 
authorized under this subsection, and if in such community (1) there 
does not exist a public or other adequate sewer facility which serves a 
substantial portion of the inhabitants of the community, and (2) the 
rate of unemployment is, and has been continuously for the preceding 
calendar year, 100 per centum above the national average: And pro-
vided further, That the limitations and restrictions contained in sub-
section (c) of this section shall not be applicable to any community 
applying for an increased grant under this subsection. 
(c) No grant shall be made under this section in connection with any 
project unless the Administrator determines that the project is neces-
sary to provide adequate water or sewer facilities for, and will contri-
bute to the improvement of the health or living standards of, the people 
in the community to be served, and that the project is (1) designed so 
that an adequate capacity will be available to serve the reasonably fore-
seeable growth needs of the area; (2) consistent with a program meet-
ing criteria, established by the Administrator, for a unified or officially 
coordinated areawide water or sewer facilities system as part of the 
comprehensively planned development of the area, except that prior to 
July 1, 1968, grants may, in the discretion of the Administrator, be 
made under this section when such a program for an areawide water 
and sewer facilities system is under active preparation, although not 
yet completed, if the facility or facilities for which assistance is sought 
can reasonably be expected to be required as a part of such program, 
and there is urgent need for the facility or facilities; and (3) necessary 
to orderly community development. 
75 Stat. 47. 
42 u s e 2501 
79 STAT.] 
PUBLIC LAW 8 9 - 1 1 7 - A U G U S T 10, 1965 
491 
GRANTS FOR NEIGHBORHOOD FACILITIES 
SEC. 703. (a) In accordance with the provisions of this section, the 
Administrator is authorized to make grants to any local public body or 
agency to assist in financing specific projects for neighborhood facili-
ties. Any such project may be undertaken by such body or agency di-
rectly or through a nonprofit organization approved by it: Provided, 
That no grant shall be provided under this section for any project to 
be undertaken through a nonprofit organization unless the Administra-
tor determines (1) that such organization has or will have the legal, 
financial, and technical capacity to carry out the project, and (2) that 
the public body or agency to which the grant is made will have satis-
factory continuing control over the use of the proposed facilities. 
(b) The amount of any grant made under the authority of this sec-
tion shall not exceed 66% per centum of the development cost of the 
project for which the grant is made (or 75 per centum of such cost in 
the case of a project located in an area which at the time the grant 
is made is designated as a redevelopment area under the Area Redevel-
opment Act or any Act supplementary thereto). 
(c) No grant shall be made under this section for any project unless note." 
the Administrator determines that the project will provide a neigh-
borhood facility which is (1) necessary for carrying out a program of 
health, recreational, social, or similar community service (including a 
community action program approved under title I I of the Economic 
Opportunity Act of 1964) in the area, (2) consistent with comprehen- 
^ use 2
7
3
^
1 et 
sive planning for the development of the community, and (3) so seq. 
located as to be available for use by a significant portion (or number 
in the case of large urban places) of the area's low- or moderate-income 
residents. 
(d) For a period of twenty years after a grant has been made un-
der this section for a neighborhood facility, such facility shall not, 
without the approval of the Administrator, be converted to uses other 
than those proposed by the applicant in its application for a grant. 
The Administrator shall not approve any conversion in the use of such 
a neighborhood facility during such twenty-year period unless he finds 
that such conversion is in accordance with the then applicable program 
of health, recreational, social, or similar community services in the 
area and consistent with comprehensive planning for the development 
of the community in which the facility is located. In approving any 
such conversion, the Administrator may impose such additional con-
ditions and requirements as he deems necessary. 
(e) The Administrator shall give priority to applications for proj-
ects designed primarily to benefit members of low-income families or 
otherwise substantially further the objectives of a community action 
program approved under title I I of the Economic Opportunity Act of 
1964. 
ADVANCE ACQUISITION OF LAND 
SEC. 704. (a) In order to encourage and assist in the timely acqui-
sition of land planned to be utilized in connection with the future con-
struction of public works or facilities, the Administrator is authorized 
to make grants to local public bodies and agencies to assist in financing 
the acquisition of a fee simple estate or other interest in such land. 
(b) The amount of any grant made under the authority of this 
section shall not exceed tlie aggregate amount of reasonable interest 
charges on the loan or other financial obligation incurred to finance 
tlie acquisition of such land for a period not exceeding the lesser of 
(1) five years from the date such loan was made or such financial 
obligation was incurred, or (2) the period of time between the date 
492 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
such loan was made or such financial obligation was incurred and the 
date construction is begun on the public work or facility for which the 
land acquired was planned to be utilized. 
(c) No grant shall be made under this section for any project for 
the acquisition of land unless the Administrator determines that the 
public work or facility for which such land is to be utilized is planned 
to be constructed or initiated within a reasonable period of time (not 
to exceed five years after a contract to make such grant is entered into) 
and that construction of such public work or facility will contribute to 
economy, efficiency, and the comprehensively planned development of 
the area. 
(d) As a condition to providing assistance under this section, the 
Administrator may, under terms and conditions prescribed by him, 
require an applicant to agree to repay such assistance, if (1) the land 
purchased with such assistance is not utilized within five years after the 
agreement is entered into in connection with the construction of the 
])ublic work or facility for which such land was acquired, or (2) such 
land is diverted to other uses. 
GENERAL PROVISIONS 
SEC. 705. (a) In the performance of, and with respect to, the func-
tions, powers, and duties vested in him by this title, the Administrator 
i*hall (in addition to any authority otherwise vested in him) have the 
functions, powers, and duties set forth in section 402, except subsec-
Ts^stat^yu' 
tions (a), (c) (2), and (f )_of the Housing Act of 1950. 
1
2 use 1749a. 
(b) The Administrator is authorized, notwithstanding the provisions 
31 use 529. 
^-f section 3648 of the Revised Statutes, to make advance or progress 
payments on account of any grant made pursuant to this title. 
No 
])art of any grant authorized to be made by the provisions of this title 
shall be used for the payment of ordinary goA^ernmental operating 
expenses. 
DEFINITIONS 
SEC. 706. As used in this title— 
(a) The term "State" means the several States, the District of 
Columbia, the Commonwealth of Puerto Rico, and the territories and 
possessions of the LTnited States. 
(b) The term "local public bodies and agencies" includes public 
corporate bodies or political subdivisions; public agencies or instru-
mentalities of one or more States, municipalities, or political subdivi-
sions of one or more States (including public agencies and instru-
mentalities of one or more municipalities or other political subdivi-
sions of one or more States); Indian tribes; and boards or commis-
sions established under the laws of any State to finance specific capital 
improvement projects. 
(c) The term "development cost'' means the cost of constructing the 
facility and of acquiring the land on which it is located, including 
necessary site improvements to permit its use as a site for the facility. 
LABOR STANDARDS 
SEC. 707. All laborers and mechanics employed by contractors or 
subcontractors on projects assisted under sections 702 and 703 shall be 
paid wages at rates not less than those prevailing on similar construc-
tion in the locality as determined by the Secretary of I^abor in accord-
49 Stat. 1011. 
j^nce with the Davis-Bacon Act, as amended (40 U.S.C. 276a—276a-5). 
No such project shall be approved without first obtaining adequate 
assurance that these labor standards will be maintained upon the 
79 STAT. ] 
PUBLIC LAW 89-117-AUGUST 10, 1965 
493 
construction work. The Secretary of Labor sliall liave, with respect 
to the labor standards specified in this section, the authority and func-
tions set forth in Reorganization Plan Numbered 14 of 1950 (15 F.R. 
3176; 64 Stat. 1267; 5 U.S.C. 133z-15), and section 2 of the Act of 
June 13, 1934, as amended (48 Stat. 948; 40 U.S.C. 276c). 
" stat. los. 
APPROPRIATIONS 
SEC. 708. (a) There are authorized to be appropriated for each fiscal 
year commencing after June 30,1965, and ending prior to July 1,1969, 
not to exceed (1) $200,000,000 for grants under section 702, (2) 
$50,000,000 for grants under section 703, and (3) $25,000,000 for grants 
under section 704. 
(b) Any amounts appropriated under this section shall remain 
available until expended, and any amounts authorized for any fiscal 
year under this section but not appropriated may be appropriated for 
any succeeding fiscal year commencing prior to July 1, 1969. 
TITLE VIII—FEDERAL NATIONAL MORTGAGE 
ASSOCIATION 
INCREASE I N SPECIAL ASSISTANCE 
AUTHORITY 
75 Stat. 175. 
12 u s e 1.720. 
SEC. 801. (a) Section 305(c) of the National Housing Act is 
amended by inserting before the period at the end thereof the fol-
lowing: ", which limit shall be increased by $100,000,000 on the date 
of the enactment of the Housing and Urban Development Act of 1965, 
by $450,000,000 on July 1, 1966, by $550,000,000 on July 1, 1967, and 
by $525,000,000 on July 1, 1968". 
(b) Section 305(f) of such Act is amended by inserting before the 
^^ ^*^*- '^^^• 
period at the end thereof the following: " : Provided further. That any 
portion of the total amount of authority set forth in the first proviso 
of this subsection, which (1) is not required under the second proviso 
of this subsection to be kept available for purchases and commitments 
with respect to mortgages insured under section 809, and (2), on the 
^° ^^^ xj^ih 
date of enactment of the Housing and Urban Development Act of 1965 
and on each July 1 thereafter, would otherwise be available for making 
new purchases and commitments pursuant to this subsection, shall be 
transferred to and merged with the authority granted by subsection 
(a) and added to the amount of such authority w^hich is available, as 
of the date of the transfer, for purchases and commitments under sub-
section (c) ; and the total amount of authority as set forth in the first 
proviso of this subsection shall progressively be reduced by the amount 
of each such transfer". 
PURCHASE OF MORTGAGES HELD BY FEDERAL INSTRUMENTALITIES 
SEC. 802. (a) Section 302 of the National Housing Act is amended 
\\ l'^^ ^j^^ 
by— 
(1) striking out "Federal," in clause (2) in subsection (b); 
(2) inserting before "first mortgages" in the first sentence of 
subsection (c) the following: "obligations offered to it by the 
78 stat. soo. 
Housing and Home Finance Agency or its Administrator, or by 
such Agency's constituent units or agencies or the heads thereof, or 
any"; and 
(3) inserting "and other obligations" after "mortgages" in the 
last sentence of subsection (c). 
494 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
1
2 use m i 
(^) Section 306(6) of such Act is amended to read as follows: 
" (e) Notwithstanding any other provision of law, the Association is 
authorized, under the aforesaid separate accountability, to make com-
mitments to purchase, and to purchase, service, or sell any obligations 
offered to it by the Housing and Home Finance Agency or its Admin-
istrator, or by such Agency's constituent units or agencies or the heads 
thereof, or any mortgages covering residential property offered to it 
by any Federal instrumentality, or the head thereof. There shall be 
excluded from the total amounts set forth in subsection (c) the 
amounts of any obligations or mortgages purchased by the Association 
pursuant to this subsection." 
PURCHASE OF BELOW-MARKET INTEREST RATE MORTGAGES 
73^stat^*66l^^' 
^^^' ^^^- ^ectiou 302 (b) of the National Housing Act is amended by 
1
2 use 1717. 
inserting after the first sentence the following new sentence: "Not-
withstanding the provisions of clause (3) in the preceding sentence, 
1
2 use 1720. 
^\^Q Association may purchase a mortgage under section 305 with an 
original principal obligation that exceeds $17,500 per dwelling unit 
if the mortgage (1) is a below-market interest rate mortgage insured 
llijscinsi 
under section 221(d)(3), and (2) covers property which has the 
benefit of local tax abatement in an amount determined by the Federal 
Housing Commissioner to be sufficient to make possible rentals not 
in excess of those that w'ould be approved by the Commissioner if the 
mortgage amount did not exceed $17,500 per dwelling unit and if local 
tax abatement were not provided." 
INCREASE I N LIMITATION ON MORTGAGES FOR DWELLING U N I T S 
HAVING 
FOUR OR MORE BEDROOMS 
SEC. 804. Section 302(b) of the National Housing Act is amended by 
inserting before the period at the end of the first sentence the following: 
" (plus an additional $2,500 for each such family residence or dwelling 
unit which has four or more bedrooms)". 
TITLE IX—OPEN-SPACE LAND AND URBAN 
BEAUTIFICATION AND IMPROVEMENT 
75 Stat. 183 
42 u s e 1500' 
CHANGE I N NAME OF PROGRAM; FINDINGS AND PURPOSE 
SEC. 901. (a) The heading of title VII of the Housing Act of 1961 
isooe. 
is amended to read as follows: 
"TITLE VII—OPEN-SPACE LAND AND URBAN 
BEAUTIFICATION AND IMPROVEMENT" 
(b) Section 701 of such Act is amended by redesignating subsection 
(b) as subsection (c) and inserting after subsection (a) a new subsec-
tion as follows: 
"(b) The Congress further finds that there is an urgent need both 
for the additional provision of parks and other open-space areas in the 
developed portions of the Nation's urban areas and for greater and 
better coordinated local efforts to beautify and improve open space and 
other public land throughout urban areas to facilitate their increased 
use and enjoyment by the Nation's urban population." 
(c) Section 701(c) of such Act (as redesignated by subsection (b) 
of this section) is amended— 
(1) by striking out "preserve" and inserting in lieu thereof 
"(1) provide, preserve, and develop"; and 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST 10, 1965 
495 
(2) by striking out "purposes." and inserting in lieu thereof 
"uses, and (2) beautify and improve open space and other public 
urban land, in accordance with programs to encourage and co-
ordinate local public and private efforts toward this end." 
DEVELOPMENT GRANTS FOR OPEN-SPACE USES 
75 Stat. 184. 
42 u s e 1500a. 
SEC. 902. (a) The first sentence of section 702(a) of the Housing 
Act of 1961 is amended— 
(1) by inserting "and development" after "acquisition" the first 
place it appears; and 
(2) by inserting before the period the following: ", and the de-
velopment, for open-space uses, of land acquired under this title". 
(b) Section 702 (c) of such Act is amended by striking out "develop-
ment costs or". 
(c) Section 709 of such Act (as redesignated by section 906 of this 
Act) is amended by adding at the end thereof the following: 
"(4) The term 'open-space uses' means any use of open-space 
land for (A) park and recreational purposes, (B) conservation of 
land and other natural resources, or (C) historic or scenic 
purposes." 
INCREASED GRANT LEVEL FOR PRESERVATION AND DEVELOPMENT OF 
OPEN-SPACE LAND 
SEC. 903. The second sentence of section 702(a) of the Housing Act 
of 1961 is amended to read as follows: "The amount of any such grant 
shall not exceed 50 per centum of the total cost, as approved by the Ad-
ministrator, of such acquisition and development." 
CONTRACT 
AUTHORIZATION 
SEC. 904. Section 702(b) of the Housing Act of 1961 is amended by 
^s stat. soe. 
striking out "$75,000,000" and inserting in lieu thereof the following: 
"$310,000,000: Provided^ That of such sum the Administrator may 
contract to make grants under section 705 aggregating not to exceed 
$64,000,000, and grants under section 706 aggregating not to exceed 
$36,000,000". 
O P E N - S P A C E P L A N N I N G AND PROGRAM 
REQUIREMENTS 
SEC. 905. Section 703(a) of the Housing Act of 1961 is amended to 
42 use isoob. 
read as follows: 
"(a) The Administrator shall enter into contracts to make grants 
under sections 702 and 705 of this title only if he finds that such as-
sistance is needed for carrying out a unified or officially coordinated 
program, meeting criteria established by him, for the provision and 
development of open-space land as part of the comprehensively planned 
development of the urban area." 
GRANTS FOR PROVISION OF OPEN-SPACE LAND I N BUILT-UP URBAN AREAS 
AND FOR URBAN BEAUTIFICATION AND IMPROVEMENT 
SEC. 906. Title VII of the Housing Act of 1961 is amended by re-
designating sections 705 and 706 as sections 708 and 709, respectively, 
^^ ^*^*- y'^-
and by inserting after section 704 two new sections as follows: 
i5ooe. 
496 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
u 
GRANTS FOR PROVISION OF OPEN-SPACE LAND I N BUILT-UP URBAN AREAS 
"SEC. 705. The Administrator is further authorized to enter into 
contracts to make grants to States and local public bodies to help 
finance the acquisition of title to, or other permanent interests in, de-
veloped land in built-up portions of urban areas to be cleared and used 
as permanent open-space land. The Administrator shall make such 
grants only where the local governing body determines that adequate 
open-space land cannot effectively be provided through the use of ex-
isting undeveloped or predominantly undeveloped land. Grants under 
this section shall not exceed 50 per centum of the cost of acquiring 
such interests and of necessary demolition and removal of improve-
ments. 
"GRANTS FOR URBAN BEAUTIFICATION AND IMPROVEMENT 
"SEC. 706. The Administrator is authorized to enter into contracts 
to make grants, as herein provided, to States and local public bodies 
to assist in carrying out local programs for the greater use and enjoy-
ment of open-space and other public land in urban areas. The Admin-
istrator shall establish criteria for such programs to assure that each 
program (1) represents significant and effective efforts, involving all 
available public and private resources, for the beautification of such 
land and its improvement for open-space uses; and (2) is important 
to the comprehensively planned development of the locality. 
Grants 
made under this section shall not exceed 50 per centum of the amount 
by which the cost of the activities carried on by an applicant during 
a fiscal year under an approved program exceeds its usual expendi-
tures for comparable activities: Provided, That, notwithstanding any 
other provision of this section, the Administrator may use not to ex-
ceed $5,000,000 of the sum authorized for contracts under this section 
for the purpose of entering into contracts to make grants in amounts 
not to exceed 90 per centum of the cost of activities which he deter-
mines have special value in developing and demonstrating new and 
improved methods and materials for use in carrying out the purposes 
of this section." 
LABOR STANDARDS 
SEC. 907. Title V I I of the Housing Act of 1961 is further amended 
by inserting after section 706 (as added b}' section 906 of this Act) the 
following new section: 
(( 
LABOR STANDARDS 
"SEC. 707. (a) The Administrator shall take such action as may be 
necessary to insure that all laborers and mechanics employed by con-
tractors or subcontractors in the performance of construction work 
financed with the assistance of grants under this title shall be paid 
Avages at rates not less than those prevailing on similar construction 
in the locality as determined by the Secretary of Labor in accordance 
T use 27*6^' 
^^^^^ ^^^ Davis-Bacon Act, as amended. The Administrator shall not 
276a-5. 
^' 
approve any such grant without first obtaining adequate assurance 
that these labor standards will be maintained upon the construction 
work. 
" (b) The Secretary of Labor shall have, with respect to the labor 
standards specified in subsection (a), the authority and functions set 
forth in Reorganization Plan Numbered 14 of 1950 (15 F.R. 3176; 
64 Stat. 1267; 5 U.S.C. 133z-15), and section 2 of the Act of June 13, 
63 Stat. 108. 
1934^ as amended (48 Stat. 948; 40 U.S.C. 276c)." 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST 10, 1965 
497 
USE OF FUNDS FOR STUDIES AND PUBLICATION 
SEC. 908. The second sentence of section 708 of the Housing Act of 
1961 (as redesignated by section 906 of this Act) is amended to read 
as follows: "The Administrator is authorized to use. during any fiscal 
year not to exceed $50,000 of the funds available for grants under this 
title to undertake such studies and publish such information." 
CONFORMING AMEND3IENTS 
SEC. 909. (a) The heading of section 702 of the Housing Act of 1961 
js stau ^i84.^^ 
is amended to read as follows: "GRANTS FOR PRESERVATION AND DEVEL-
OPMENT OF OPEN-SPACE LAND". 
(b) Section 702(a) of such Act is amended by striking out "accept-
able to the Administrator as capable of carrying out the provisions of 
this title". 
(c) Section 702(e) of such Act is amended by striking out in the 
second sentence "served by the open-space land acquired" and inserting 
in lieu thereof "assisted". 
(d) Section 704 of such Act is amended by striking out in the first '^^ use isooc. 
sentence "for which" and inserting in lieu thereof "for the acquisition 
of which". 
TITLE X—RURAL HOUSIXG 
LOANS FOR PREVIOUSLY OCCUPIED BUILDINGS AND M I N I M U M SITE 
ACQUISITION 
SEC. 1001. (a) Section 501(a) of the Housing Act of 1949 is ,/i^*^\-„"2; 
, 
, 
^ ' 
^ ' 
" 
75 Stat. 186. 
amended— 
42 use uyi. 
(1) by inserting after "their farms," in clause (1) the follow-
ing: "and to purchase previously occupied buildings and land 
constituting a minimum adequate site, in order"; and 
(2) by inserting after "rural areas" in clause (2) the follow-
ing: "for the construction, improvement, alteration, or repair of 
dwellings, related facilities, and farm buildings and to rural resi-
dents for such purposes and for the purchase of previously occu-
pied buildings and the purchase of land constituting a minimum 
adequate site, in order". 
(b) Section 501(c) of such Act is amended by inserting "or a rural 
resident" in clause (1) after "or that he is the owner of other real 
estate in a rural area". 
INTEREST RATE OX DIRECT RURAL HOUSING LOANS 
SEC. 1002. Section .502(a) of the Housing Act of 1949 is amended 
^^ use 1472. 
by striking out "with interest at a rate not to exceed 4 per centum per 
annum on the unpaid balance of principal" and inserting in lieu there-
of the following: "with interest, in the case of applicants described in 
clauses (1) and (2) of section 501(a), at a rate not to exceed 5 per 
centum per annum on the unpaid balance of principal, and, in the case 
of applicants described in clause (3) of section 501(a) and applicants 
^^ ^*^*- ''''°-
under sections 503 and 504, at a rate not to exceed 4 per centum per 
" us^c MJI 
annum on such unpaid balance. Loans made or insured under this 1473, 1474. 
title shall be conditioned on the borrower paying such fees and other 
charges as the Secretary may require". 
498 
PUBLIC LAW 89-117-AUGUST 10, 1965 
[79 STAT. 
INSURED RURAL. HOUSING 
LOANS 
63 Stat. 432. 
42 u s e 1471 et 
seq. 
SEC. 1003. (a) Title V of the Housing Act of 1949 is amended by 
adding at the end thereof the following new sections: 
a INSURED RURAL. HOUSING LOANS 
52 Stat. 10; 
Ante, p. 466. 
12 u s e 1709. 
75 Stat. 186; 
76 Stat. 671. 
42 u s e 1484, 
1485. 
Rural Housing 
Insurance Fund. 
"SEC. 517. (a) The Secretary may insure loans meeting the re-
quirements of section 502, and may make loans in accordance with 
the requirements of such section to be sold and insured; except that 
such loans shall— 
" (1) if the borrowers are persons of low or moderate income (as 
defined by the Secretary), (A) not exceed amounts necessary to 
provide adequate housing, modest in size, design, and cost (as 
determined by the Secretary), (B) bear interest at a rate not to 
exceed 5 per centum per annum, and (C) not exceed in the aggre-
gate $300,000,000 of new loans made or insured in any one fiscal 
year; and 
"(2) if the borrowers are persons other than those described in 
clause (1), bear interest and provide for insurance or service 
charges at rates comparable to the combined rate of interest and 
premium charges in effect under section 203 of the National Hous-
ing Act, as determined by the Secretary. 
"(b) The Secretary may insure loans in accordance with the require-
ments of sections 514 (exclusive of subsections (a)(3), (a)(5), and 
(b)) and 515 (exclusive of subsections (a) and (b)(4)), and may 
make loans meeting such requirements to be sold and insured. 
Upon 
the expiration of ninety days after the original capitalization of the 
Rural Housing Insurance Fund, created by subsection (e) of this 
section, no new loans shall be made or insured under section 514 or 
515 (b), except in conformity with this section. 
"(c) The Secretary may use the Rural Housing Insurance Fund for 
the purpose of making loans to be sold and insured under this section, 
but the aggregate of such loans which are held by the Secretary at 
any one time shall not exceed $100,000,000. 
"(d) The Secretary may, in conformity with subsections (a) and 
(b), insure the payment of principal and interest as it becomes due on 
loans made by lenders other than the United States, and on loans made 
from the Rural Housing Insurance Fund which are sold by the Secre-
tary. 
Any contract of insurance executed by the Secretary hereunder 
shall be an obligation supported by the full faith and credit of the 
United States, and shall be incontestable except for fraud or material 
misrepresentation of which the holder has actual knowledge. 
In con-
nection with loans insured under this section, the Secretary may take 
liens running to the United States notwithstanding the fact that the 
notes evidencing such loans may be held by lenders other than the 
United States. 
Notes evidencing such loans shall be freely assignable, 
but the Secretary sliall not be bound by any such assignment until 
notice thereof is given to and acknowledged by him. 
"(e) There is hereby created the Rural Housing Insurance Fund 
(hereinafter referred to as the 'Fund') which shall be used by the Sec-
retary as a revolving fund for carrying out the provisions of this 
section. 
There are authorized to be appropriated to the Secretary 
such sums as may be necessary for the purposes of the Fund. 
"(f) Money in the Fund not needed for current operations shall be 
invested in direct obligations of the United States or obligations guar-
anteed by the United States. 
"(g) All funds, claims, notes, mortgages, contracts, and property 
acquired by the Secretary under this section, and all collections and 
79 STAT.} 
PUBLIC LAW 89-117-AUGUST10, 1965 
499 
proceeds therefrom, shall constitute assets of the Fund; and all liabili-
ties and obligations of such assets shall be liabilities and obligations of 
the Fund. 
Loans may be held in the Fund and collected in accordance 
with their terms or may be sold by the Secretary with or without agree-
ments for insurance thereof. 
The Secretary is authorized to make 
agreements with respect to servicing loans held or insured by him 
under this section and purchasing such insured loans on such terms 
and conditions as he may prescribe. 
"(h) The Secretary is authorized to issue notes to the Secretary of 
the Treasury to obtain funds necessary for discharging obligations 
under this section and for authorized expenditures out of the Fund, 
but, except as may be authorized in appropriation Acts, not for the 
original or any additional capital of the Fund. 
Such notes shall be 
in such form and denominations and have such maturities and be sub-
ject to such terms and conditions as may be prescribed by the Secre-
tary with the approval of the Secretary of the Treasury. 
Each note 
shall bear interest at the average rate, as determined by the Secretary 
of the Treasury, payable by the Treasury upon its marketable public 
obligations outstanding at the beginning of the fiscal year in which 
such note is issued, which are neither due nor callable for redemption 
for fifteen years from their date of issue. The Secretary of the Treas-
ury is authorized and directed to purchase any notes of the Secretary 
issued hereunder, and for that purpose the Secretary of the Treasury 
is authorized to use as a public debt transaction the proceeds from the 
sale of any securities issued under the Second Liberty Bond Act, as 
3° ^QQ ^f^-
amended, and the purposes for which such securities may be issued 
under such Act are extended to include purchases of notes issued by 
the Secretary. 
All redemptions, purchases, and sales by the Secretary 
of the Treasury of such notes shall be treated as public debt transac-
tions of the LTnited States. The notes issued by the Secretary to the 
Secretary of the Treasury shall constitute obligations of the Fund. 
"(i) The Secretary may retain out of interest payments by the 
borrower an annual charge in an amount specified in the insurance 
or sale agreement applicable to the loan. 
Of the charges retained 
by the Secretary, if any, not to exceed 1 per centum per annum of the 
unpaid balance of the loan shall be deposited in the Fund. Any re-
tained charges not deposited in the Fund shall be available for ad-
ministrative expenses in carrying out the provisions of this title, to 
be transferred annually, and become merged with any appropriation 
for administrative expenses of the Farmers Home Administration, 
when and in such amounts as may be authorized in appropriation 
Acts. 
" (j) The Secretary may also utilize the Fund— 
"(1) to pay amounts to which the holder of the note is en-
titled in accordance with an insurance or sale agreement under 
this section accruing between the date of any prepayment by the 
borrower to the Secretary and the date of transmittal of any such 
prepayments to the holder of the note; and in the discretion of 
the Secretary, prepayments other than final payments need not 
be remitted to the holder until due; 
"(2) to pay the holder of any note insured under this section 
any defaulted installment or, upon assignment of the note to the 
Secretary at the Secretary's request, or pursuant to a purchase 
agreement, the entire balance outstanding on the note; and 
"(3) to pay taxes, insurance, prior liens, expenses necessary 
to make fiscal adjustments in connection with the application 
and transmittal of collections, and other expenses and advances 
to protect the security for loans which are insured under this 
500 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
section or held in the Fund, and to acquire such security prop-
erty at foreclosure sale or otherwise. 
(( 
RURAL HOUSING DIRECT LOAN ACCOUNT 
D ^ S Lo^n Ac- 
"^^^- ^^^- (^) There is hereby created the Rural Housing Direct 
count. 
Loan Account (hereinafter referred to as the 'Account') which shall 
be used by the Secretary for carrying out the provisions of this sec-
tion. There are authorized to be appropriated to the Secretary such 
sums as may be necessary for the purposes of the Account. 
"(b) There are transferred to the Account (1) all funds, claims, 
notes, mortgages, contracts, and property, and all collections and pro-
ceeds therefrom, held by the Secretary under the direct loan provisions 
of this title, including those securing notes issued by the Secretary 
to the Secretary of the Treasury under section 511 and any unex-
pended balance of amounts borrowed upon such notes, and (2) all 
unexpended balances of appropriations for direct loans under this 
title, including the fund authorized by section 515(a). All amounts 
hereafter borrowed by the Secretary from the Secretary of the Treas-
ury under section 511 shall be deposited in the Account. All collec-
tions and proceeds from assets acquired by the Account shall be 
deposited in the Account. 
"(c) When and in such amounts as may be authorized in appropria-
tion Acts, the Secretary may issue notes to the Secretary of the Treas-
ury to obtain funds to be deposited in the Account. 
The form, de-
nominations, maturities, and other terms and conditions of such notes 
shall be prescribed by the Secretary with the approval of the Secretary 
of the Treasury. 
Each note shall bear interest at the average rate 
determined by the Secretary of the Treasury, payable by the Treasury 
upon its marketable public obligations outstanding at the beginning 
of the fiscal year in which such note is issued, which are neither due 
nor callable for redemption for fifteen years from their date of issue. 
The Secretary of the Treasury is authorized and directed to purchase 
any notes of the Secretary issued hereunder, and for that purpose the 
Secretary of the Treasury is authorized to use as a public debt trans-
action the proceeds from the sale of any securities issued under the 
3° u'sc 7
^
7
4 • 
Second Liberty Bond Act, as amended, and the purposes for which 
such securities may be issued under such Act are extended to include 
the purchase of notes issued by the Secretary. 
All redemptions, pur-
chases, and sales by the Secretary of the Treasury of such notes shall 
be treated as public debt transactions of the United States. 
"(d) The Account shall remain available to the Secretary for the 
payment of interest and principal on notes issued by the Secretary to 
the Secretary of the Treasury under section 511 or this section, and for 
direct loans and related advances under this title in such amounts as 
are now authorized by law and in such further amounts as shall be 
authorized in appropriation Acts. Amounts so authorized for such 
loans and advances shall remain available until expended." 
42 use Ssi 
(^) Section 511 of such Act is amended— 
(1) by striking out the first sentence and inserting in lieu there-
of "The Secretary may issue notes and other obligations for pur-
chase by the Secretary of the Treasury for the purpose of making 
direct loans under this title."; 
(2) by striking out the second sentence and inserting in lieu 
thereof "The total principal amount of such notes and obligations 
issued pursuant to this section during the period beginning July 1, 
1956, and ending October 1, 1969, shall not exceed $850,000,000."; 
and 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST 10, 1965 
501 
(3) by striking out the fifth sentence and inserting in lieu there-
of the following "Each such note or other obligation shall bear 
interest at the average rate, as determined hj the Secretary of the 
Treasury, payable by the Treasury upon its marketable public 
obligations outstanding at the beginning of the fiscal year in which 
such note or other obligation is issued, which are neither due nor 
callable for redemption for 15 years from their date of issue." 
FEDERAL NATIONAL MORTGAGE ASSOCIATION SECONDARY MARKET OPERA-
TIONS FOR INSURED RURAL HOUSING LOANS 
42 u s e 1471 et 
seq. 
12 u s e 1718. 
SEC. 1004. (a) Section 302(b) of the National Housing Act is 
^v'scnii 
amended— 
(1) by inserting immediately after "which are insured under 
the National Housing Act" the following: "or title V of the Hous-
ing Act of 1949"; 
(2) by inserting after "any mortgage" in clause (2) of the 
proviso the following: ", except a mortgage insured under title V 
of the Housing Act of 1949,"; and 
(3) by inserting before the period in the last sentence the fol-
lowing : "or title V of the Housing Act of 1949". 
(b) Section 303(b) of such Act is amended by inserting "and other" 
after "private" in the first sentence. 
EXTENSION 
OF RURAL HOUSING 
AUTHORIZATIONS 
SEC. 1005. (a) Section 512 of the Housing Act of 1949 is amended 
^s sta^. ige^ 
by striking out "September 30, 1965" and inserting in lieu thereof 
"October 1, 1969". 
(b) Section 513 of such Act is amended— 
'^^ ^^*^ ^*^^-
(1) by striking out "September 30, 1965" in clause (b) and 
inserting in lieu thereof "October 1,1969"; 
(2) by striking out "$10,000,000" in clause (c) and inserting in 
^s stat. 798. 
lieu thereof "$50,000,000", and by striking out "September 30, 
1965" in the same clause and inserting in lieu thereof "October 1, 
1969"; and 
(3) by striking out "September 30, 1965" in clause (d) and in-
serting m lieu thereof "October 1,1969". 
(c) Section 515 (b) (5) of such Act is amended by striking out "Sep-
tember 30,1965" and inserting in lieu thereof "October 1, 1969". 
(d) Section 506(a) of such Act is amended by striking out "sec- 
42 us^c 1
*
4
7
^
6 
tions 501 to 504, inclusive, and sections 514—516", each place it occurs 
and inserting in lieu thereof "this title". 
SUMS EXCESS TO T H E NEEDS OF T H E RURAL HOUSING INSURANCE F U N D OR 
T H E RURAL HOUSING DIRECT LOAN ACCOUNT 
SEC. 1006. Title V of the Housing Act of 1949 is amended by adding J^^ "sc i47i et 
after section 518 (added by section 1003 of this Act) a new section as 
follows: 
" S U M S E X C E S S T O T H E NEEDS OF T H E RURAL HOUSING INSURANCE FUND 
OR THE RURAL HOUSING DIRECT LOAN ACCOUNT 
"SEC. 519. Any sums in the Rural Housing Insurance Fund or the 
Rural Housing Direct Loan Account which the Secretary determines 
are in excess of amounts needed to meet the obligations and carry out 
the purposes of such Fund or Account shall be returned to miscel-
laneous receipts of the Treasury." 
502 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
DEFINITION OF A RURAL AREA 
seq. "^^ ^
"
^
^
^ "' 
SE<^- 1007. Title V of the Housing Act of 1949 is amended by adding 
at the end thereof (after the new section added by section 1006 of this 
Act) the following new section: 
"DEFINITION OF RURAL AREA 
"SEC. 520. As used in this title, the terms 'rural' and 'rural area' 
mean any open country, or any place, town, village, or city which is 
not part of or associated with an urban area and which (1) has a 
population not in excess of 2,500 inhabitants, or (2) has a population 
in excess of 2,500 but not in excess of 5,500 if it is rural in character." 
TITLE XI—MISCELLANEOUS 
ANNUAL REPORT ON HOUSING AND URBAN DEVELOPMENT PROGRAMS 
1
2 use lioio. 
SEC. 1101. Section 802(a) of the Housing Act of 1954 is amended to 
read as follows: 
"(a) The Housing and Home Finance Administrator shall, as soon 
as practicable during each calendar year, make a report to the Presi-
dent for submission to the Congress on all operations and programs 
(including but not limited to the F H A insurance, urban renewal, pub-
lic housing, and rent supplement programs) under the jurisdiction of 
the Housing and Home Finance Agency during the previous calendar 
year. Such report shall contain recommendations for strengthening 
or improving such programs, or, when necessary to implement more 
effectively Congressional policies and purposes, for establishing new 
or alternative programs." 
URBAN P L A N N I N G GRANTS 
SEC. 1102. (a) The fifth sentence of section 701(b) of the Housing 
_ 73 Stat 678; 
^^^t of 1954 is amended by striking out "$105,000,000" and inserting in 
4ouic46u • lieu thereof "$230,000,000". 
(b) Section 701(b) of such Act is amended by striking out the 
period at the end and inserting in lieu thereof the following: ": Pro-
mded^ That not to exceed 5 per centum of any funds so appropriated 
may be used by the Administrator for studies, research, and demon-
stration projects, undertaken independently or by contract, for the 
development and improvement of techniques and methods for compre-
hensive planning and for the advancement of the purposes of this 
section." 
(c) (1) Section 701 of such Act is amended by adding at the end 
thereof a new subsection as follows: 
"(g) In addition to the planning grants authorized by subsection 
(a), the Administrator is further authorized to make grants to or-
ganizations composed of public officials whom he finds to be represent-
ative of the political jurisdictions within a metropolitan area or urban 
region for the purpose of assisting such organizations to undertake 
studies, collect data, develop regional plans and programs, and engage 
in such other activities as the Administrator finds necessary or desir-
able for the solution of the metropolitan or regional problems in such 
areas or regions. To the maximum extent feasible, all grants under 
this subsection shall be for activities relating to all the developmental 
aspects of the total metropolitan area or urban region, including, but 
not limited to, land use, transportation, housing, economic develop-
ment, natural resources development, community facilities, and the 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST 10, 1965 
503 
general improvement of living environments. A grant under this sub-
section shall not exceed two-thirds of the estimated cost of the work 
for which the grant is made." 
(2) Section 701 (b) of such Act is amended— 
H l'^^- ^^g^; 
(A) by inserting "planning" immediately before "grant" the 
first time it aj)pears in the first sentence, and 
(B) by striking out "planning" in the fourth sentence. 
(d) Section 701 (b) of such Act is amended by inserting after "Area 
Redevelopment Act" the following: "(or under any Act supplemen-
tary thereto)". 
AUTHORIZATION 
FOR FEDERAL-STATE 
TRAINING 
PROGRAMS 
SEC. 1103. (a) Section 802(d) of the Housing Act of 1964 is 
Hl'i^IS2: 
amended by striking out "$10,000,000" and inserting in lieu thereof 
"$30,000,000". 
(b) Section 803 of such Act is amended (1) by striking out "au- 
^o use so3. 
thorized to be", and (2) by striking out "by section 802(d)" and 
inserting in lieu thereof "for the purposes of this part". 
AUTHORIZATION FOR PUBLIC WORKS PLANNING 
ADVANCES 
SEC. 1104. The second sentence of section 702 (e) of the Housing Act 
of 1954 is amended by striking out "$20,000,000" and inserting in lieu 
^s stau ^799. 
thereof "$70,000,000". 
78 Stat. 796. 
42 u s e 1436. 
.AUTHORIZATION FOR LOW-INCOME HOUSING DEMONSTRATION 
PROGRAMS 
SEC. 1105. Section 207 of the Housing Act of 1961 is amended by 
striking out "$10,000,000" and inserting in lieu thereof "$15,000,000". 
ADVISORY COMMITTEES 
TECHNICAL PROVISION 
SEC. 1106. Section 601 of the Housing Act of 1949 is amended by f
^ f}^}: f:*f-
fctrikmg out the second sentence. 
PUBLIC FACILITY LOANS 
SEC. 1107. (a) Section 202 (c) of the Housing Amendments of 1955 is 
^9 sta^ 6«^ 
amended by adding at the end thereof the following new sentence: 
"Notwithstanding any other provision of this title, the Administrator 
may extend financial assistance, as otherwise authorized by clause (1) 
of subsection (a) of this section, to any private nonprofit corporation 
to finance the construction of works for the storage, treatment, purifi-
cation, or distribution of water or the construction of sewage, sewage 
treatment, and sewer facilities, if such works or facilities are needed to 
serve a smaller municipality or rural area, and there is no existing 
public body able to construct and operate such works or facilities." 
(b) Section 202 (_b) (4) of such amendments is amended— 
78^stat^'798'^'*' 
(1) by strikmg out the parenthetical phrase in clause (A) and 
inserting in lieu thereof the following: "(one hundred fifty thou-
sand or more in the case of a community situated in an area desig-
nated as a redevelopment area under the Area Redevelopment 
Act or any Act supplementary thereto)"; and 
42 us^c 25() 1 
(2) by inserting after "public works or facilities" in the sec- note. 
ond sentence the following: " (i) in a community in or near which 
is located a research or development installation of the National 
Aeronautics and Space Administration, or (ii)". 
504 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
FHA CONFORMING AMENDMENTS 
75 Stat. 157. 
12 use 1709. 
12 use 1710. 
12 us^c f7°o^3 
^^^' ^^^^- (^) Section 2(f) of the National Housing Act is amended 
by striking out all that follows the first sentence. 
1
2 use mec 
^^^ Section 8 of such Act is amended— 
(1) by striking out "Title I Housing Insurance Fund" in sub-
section (g) and inserting in lieu thereof "General Insurance 
Fund";and 
(2) by striking out subsections (h) and (i). 
(c) Section 203 (k) of such Act is amended— 
(1) by striking out "a separate section 203 Home Improvement 
Account to be maintained as hereinafter provided under the Mu-
tual Mortgage Insurance Fund" in clause (3) of the first sentence 
and inserting in lieu thereof "the General Insurance Fund"; 
(2) by striking out "the section 203 Home Improvement Ac-
count or in debentures executed in the name of such Account" in 
clause (4) of the first sentence and inserting in lieu thereof "the 
General Insurance Fund or in debentures executed in the name of 
such Fund"; 
(3) by striking out all of the third sentence which follows 
"refer to this section 203 (k)" and inserting in lieu thereof a 
period; and 
(4) by striking out the fourth, fifth, and sixth sentences. 
(d) Section 204 of such Act is amended— 
(1) by striking out "or section 210" in the first sentence of sub-
section (a); 
(2) by striking out all of the second sentence of subsection (c) 
after "the mortgagee" and inserting in lieu thereof "from the 
Mutual Mortgage Insurance Fund."; 
(3) by striking out all of the first sentence of subsection (d) 
after "shall be negotiable" the first place it appears and inserting 
in lieu thereof a period; 
(4) by striking out "the Fund" each place it appears in subsec-
tion (d) and inserting in lieu thereof "the Mutual Mortgage In-
surance Fund"; 
(5) by striking out "or the Housing Fund, as the case may be," 
in the fifth sentence of subsection (d) ^ 
(6) by striking out "or the Housing Fund" in the sixth sen-
tence of subsection (d); and 
(7) by striking out the matter in subsection (f) (1) (i) which 
follows "section 203" and precedes the colon. 
12 u*sc m^ 
(^) Section 207 of such Act is amended— 
(1) by striking out "and section 210" in the first sentence of 
subsection (d); 
(2) by striking out "of the Housing Insurance Fund issued by 
the Commissioner under this title" in the first sentence of subsec-
tion (d) and inserting in lieu thereof the following: "issued by the 
Commissioner under any title and section of this Act, except deben-
tures of the Mutual Mortgage Insurance Fund, or of the Coop-
erative Management Housing Insurance Fund"; 
^3) by striking out subsections (f), (m), and (p); and 
(4) by striking out "the Housing Insurance Fund" and "the 
Housing Fund" each place they appear in subsections (b), (h), 
(i), (j), (k), and (1) and inserting in lieu thereof "the General 
Insurance Fund". 
1
2 use 1715. 
^f ^ Section 209 of such Act is amended by striking out "or account 
or accounts," in the second sentence. 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST10, 1965 
505 
(g) Section 213 of such Act is amended— 
J^ ^^^ ^4.^^ 
(1) by striking out "the Housing Fund" in subsection (a) (3) 
and inserting in heu thereof "the Cooperative Management Hous-
ing Insurance Fund"; and 
(2) by striking out "(1), (m), (n), and (p)" in subsection (e) 
and inserting in lieu thereof " (1), and (n)". 
(h) Section 220 of such Act is amended— 
^ 
^IVsc 
nhk. 
(1) by striking out "the section 220 Housing Insurance Fund" 
each place it appears in subsections (d) (2) and (f) and inserting 
in lieu thereof "the General Insurance Fund"; 
(2) by inserting "and" immediately before " ( B ) " in the second 
full sentence in subsection (f) (3), and by striking out", and (C)" 
and all that follows in such sentence and inserting in lieu 
thereof a period; 
(3) by striking out subsections (g) and (h) (4); and 
(4) by striking out "the section 220 Home Improvement Ac-
count" each place it appears in subsections (h) (5) and (h) (7) 
and inserting in lieu thereof "the General Insurance Fund". 
(i) Section 221 of such Act is amended— 
1
2 use 1
7 i
i 5/. 
(1) by striking out "the section 221 Housing Insurance Fund" 
each place it appears in subsections (d)(4), (f), (g)(1), and (g) 
(3) and inserting in lieu thereof "the General Insurance Fund ; 
(2) by striking out all of subsection (g) (2) after "mortgages 
insured under this section" and inserting in lieu thereof "; or"; 
(3) by inserting "and" immediately before " ( B ) " in the first 
full sentence in subsection (g)(3), and by striking out ", and 
(C)" and all that follows in such sentence and inserting in lieu 
thereof a period; and 
(4) by striking out subsection (h). 
(j) Section 222 of such Act is amended— 
1
2 use 171 sm. 
(1) by striking out "Servicemen's Mortgage Insurance Fund" 
in subsection (e) and inserting in lieu thereof "General Insurance 
Fund";and 
(2) by striking out subsection (f), 
(k) Section 229 of such Act is amended by striking out "and Ac-
counts" in the first sentence. 
(1) Section 231 of such Act is amended— 
H ^^^ ^f'^^^ 
(1) by striking out "the section 207 Housing Insurance Fund" 
in subsection (c) (4) and inserting in lieu thereof "the General In-
surance Fund";and 
(2) by striking out "(f), (g), (h),,(i), (j), (k), (1), (m), (n), 
and (p)" in subsection (e) and inserting m lieu thereof "(g), (h), 
( i ) , ( j ) , ( k ) , ( l ) , a n d ( n ) " . 
(m) Section 232 of such Act is amended— 
H ^^^^ f^^^'j^^ 
(1) by striking out "the section 207 Housing Insurance Fund" 
in subsection (d)(1) and inserting in lieu thereof "the General 
Insurance Fund"; and 
(2) by striking out "(f), (g), (h), (1), (j),_ (k), (1), (m), 
(n), and (p)" in subsection (f) and inserting in lieu thereof "(g), 
( h ) , ( i ) , ( ] ) , ( k ) , ( l ) , a n d ( n ) " . 
(n) SeOtion 233 of such Act is amended— 
1
2 use iVisx. 
(1) by striking out "the Experimental Housing Insurance 
Fund" in clause (1) of the third sentence of subsection (f) and 
inserting in lieu thereof "the General Insurance Fund"; 
(2) by inserting "and" immediately before "(2)" in the third 
sentence of subsection (f), and by Striking out ", and (3)" and all 
that follows and inserting in lieu thereof a period; and 
(3) by striking out subsection (g). 
49-850 0-66—35 
506 
PUBLIC LAW 89-117-AUGUST 10, 1965 
[79 STAT. 
75 Stat. 160. 
12 u s e 1715y 
(o) Section 234 of such Act is amended— 
(1) by striking out "the Apartment Unit Insurance Fund" in 
subseotions (d) (2) and (g) and inserting in lieu thereof "the Gen-
eral Insurance Fund"; 
(2) by striking out subsection (h) and inserting in lieu thereof 
the following: 
"(h) The provisions of subsections (d), (e), (g), (h), (i), (j), (k), 
1
2 u^sc m3 
(1)' ^^^ (^) o^ section 207 shall be applicable to mortgages insured 
under subsection (d) of this section."; and 
(3) by striking out subsection (i) and redesignating subsection 
(j) as subsection (i). 
1
2 u*^c f
7
*
3
9 
(P^ Section 604 of such Act is amended by striking out "the War 
Housing Insurance Fund" each place it appears in subsections (c), 
(d), and (f) (1) (i) and inserting in lieu thereof "the General In-
surance Fund". 
1
2 u*sc m i 
(^) Section 608 of such Act is amended— 
(1) by striking out "the War Housing Insurance Fund" each 
place it appears in subseotions (b) (1) and (d) and inserting in 
lieu thereof "the General Insurance Fund"; and 
(2) by striking out subsection (f) and inserting in lieu thereof 
the following: 
"(f) The provisions of section 207 (k) of this Act shall be applicable 
to mortgages insured under this section, except that, as applied to such 
mortgages, the reference therein to subsection (g) shall be construed to 
refer to subsection (c) of this section," 
12 u*sc m4 
(''^) "^^^^ 
fi^'®^' 
sentence of section 609(f) of such Act is amended by 
striking out clause (1) and redesignating clauses (2), (3), and (4) as 
clauses (1), (2), and (3), respectively. 
(s) Section 707 of such Act is amended by striking out "the Housing 
Investment Insurance Fund" and inserting in lieu thereof "the Gen-
eral Insurance Fund". 
1
2 use i747g. 
^^^ Section 708 of such Act is amended by striking out "the Housing 
Investment Insurance Fund" each place it appears in subsections (c), 
(e), (g), and (h) and inserting in lieu thereof "the General Insurance 
Fund". 
52us^cm8b. 
(") Section 803 of such Act is amended— 
(1) by striking out "the Armed Services Housing Mortgage 
Insurance Fund" each place it appears in subsections (b)(1), 
(b) (2), (e), (f), and (g) and inserting in lieu thereof "the Gen-
eral Insurance Fund"; and 
(2) by striking out subsection (h) and inserting in lieu thereof 
the following: 
"(h) The provisions of section 207(k) and section 207(1) of this 
Act shall be applicable to mortgages insured under this title and to 
property acquired by the Commissioner hereunder, except that, as 
applied to such m'ortgages and property, the reference in section 207 
(k) to subsection (g) shall be construed to refer to subsection (d) of 
this section." 
1
2 use msh-i 
^^} Section 809 of such Act is amended by striking out "the Armed 
Services Housing Mortgage Insurance Fund" each place it appears in 
subsections (b), (e), and (g) and inserting in lieu thereof "the Gen-
eral Insurance Fund". 
1
2 u*sc m8h-2 
(^) Section 810 of such Act is amended— 
(1) by striking out "the Armed Services Housing Mortgage 
Insurance Fund" in subsection (e) and inserting in lieu thereof 
"the General Insurance Fund"; 
(2) by striking out "(1), (m), (n), and (p)" in subsection (j) 
n.nd inserting in lieu thereof "(1), and (n)"; and 
62 Stat. 1278. 
12 u s e 1747f, 
12 u s e 1713. 
79 STAT.] 
PUBLIC LAW 89-117-AUGUST10, 1965 
507 
(3) by striking out the proviso in subsection (j) and inserting 
in lieu thereof the following: ": Provided^ That wherever the 
words 'Fund' or 'Mutual Mortgage Insurance Fund' appear in 
section 204, such reference shall refer to the General Insurance 
^2 stat_. u. 
Fund with respect to mortgages insured under this section", 
(x) Section 903 of such Act is amended by striking out "the Na- 
^^ ^*|^- ^
^
^
^
^
^ 
tional Defense Housing Insurance Fund" each place it appears in sub-
section (a) and inserting in lieu thereof "the General Insurance Fund". 
(y) Section 904 of such Act is amended— 
^^ ^'^^ ^I^Q^. 
(1) by striking out "the National Defense Housing Insurance 
Fund" each place it appears in subsections (c) and (d) and insert-
ing in lieu thereof "the General Insurance Fund"; and 
(2) by striking out all of subsection (e) which follows "of this 
Act" and inserting in lieu thereof a period. 
(z) Section 908 of such Act is amended— 
_ 
1
2 use 1750g. 
(1) by^ striking out "the National Defense Housing Insurance 
Fund" m subsection (b)(1) and inserting in lieu thereof "the 
General Insurance Fund"; 
(2) by striking out all of subsection (d) which follows "of this 
Act" and inserting in lieu thereof a period; and 
(3) by striking out subsection (f) and inserting in lieu thereof 
the following: 
"(f) The provisions of section 207(k) and section 207(1) of this Act 
\\ ^'^^ /,^',-
shall be applicable to mortgages insured under this section and to 
property 
acquired by the Commissioner hereunder, except that, as 
applied to such mortgages and property, the reference therein to 
subsection (g) shall be construed to refer to subsection (c) of this 
Section 
(aa) Sections 219, 602, 605, 710, 802, 804, 902, and 905 of such Act 
Repeals. 
are repealed. 
(bb) Section 1 of such Act is amended by striking out "titles II, 
^^ ^^^ ^''°2-
III, VI, VII, VIII, and IX", each place it appeal's, and inserting in 
lieu thereof '^titles II, III, V, VI, VII, VIII, IX^ and X". 
REPEAL OF SPECIAL PROVISION I N URBAN MASS TRANSPORTA'nON ACT 
SEC. 1109. Section 9 of the Urban Mass Transportation Act of 1964 
78 sta^. aoe. 
is amended by striking out subsection (c) and redesignating subsec- 
' ' 
tions (d), (e), and (f) as subsections (c), (d), and (e), respectively. 
SAVINGS AND LOAN 
ASSOCIATIONS 
SEC. 1110. (a) Section 5 (c) of the Home Owners' Loan Act of 1933 
js sta^ m^ 
is amended by adding at the end of the first paragraph a new sentence 
as follows: "Structures or parts thereof designed or used as fraternity 
or sorority houses which include sleeping accommodations for stu-
dents of a college or university, or designed or used principally for the 
provision of living accommodations for persons who are students, 
employees, or members of the staff of a college, university, or hospital, 
shall be considered, subject to such regulations as the Board may 
prescribe, 'other dwelling units' for the purposes of this subsection." 
(b) The ninth paragraph of section 5 (c) of such Act is amended by 
striking out "fifteen years" and inserting in lieu thereof "ten years''. 
(c) Section 5(c) of such Act is further amended by adding at the 
end thereof (after the new paragraph added by section 201(b) (3) of 
this Act) the following new paragraph: 
"N,o building and loan association incorporated under the laws of 
the District of Columbia or organized in such District or doing busi-
ness in such District shall establish any branch or move its principal 
78 Stat. 80 5. 
508 
PUBLIC LAW 89-117-AUGUST10, 1965 
[79 STAT. 
office or any branch without the prior written approval of the Federal 
Home Loan Bank Board, and no other building and loan association 
shall establish any branch in such District or move its principal office 
or any branch in such District without such approval. As used in the 
sentence next preceding, 'branch' means any office, place of business, 
or facility, other than the principal office as defined by the Board, of 
a building and loan association at which accounts are opened or pay-
ments thereon are received or withdrawals therefrom are paid, or any 
other office, place of business, or facility of a building and loan asso-
ciation defined by the Board as a branch within the meaning of such 
sentence, and as used in such sentence and in this sentence 'building 
and loan association' means any incorporated or unincorporated build-
ing, building or loan, building and loan, savings and loan, or homestead 
association or cooperative bank." 
1
2 u*sc ^2^?' 
^^) Section 404 of the National Housing Act is amended by adding 
at the end thereof the following new subsection: 
"(h) (1) Each insured institution shall make such deposits in the 
Corporation as may from time to time be required by call of the 
Federal Home Loan Bank Board. Any such call shall be calculated 
by applying a specified percentage, which shall be the same for all 
insured institutions, to the total amount of all withdrawable pr re-
purchasable shares, investment certificates, and deposits in each 
insured institution. 
No such call shall be made unless such Board 
determines that the total amount of such call, plus the outstanding 
deposits previously made pursuant to such calls, does not exceed 1 per 
centum of the total amount of all withdrawable or repurchasaole 
shares, investment certificates, and deposits in all insured institutions. 
For the purposes of this subsection, the total amounts hereinabove 
referred to shall be determined or estimated by such Board or in such 
manner as it may prescribe. 
"(2) The Corporation, in accordance with such regulations as it 
may prescribe, shall credit as of the close of each calendar year, to 
each deposit outstanding at such close^ a return on the outstanding bal-
ance, as determined by the Corporation, of such deposit during such 
calendar year, at a rate equal to the average annual rate of return, 
as determined by the Corporation, to the Corporation during the 
year ending at the close of November 30 of such calendar year, on the 
investments held by the Corporation in obligations of, or guaranteed 
as to principal and interest by, the United States. 
"(3) The Corporation in its discretion may at any time repay all 
such deposits, or repay pro rata a portion of each of such deposits, 
in such manner and under such procedure as the Corporation may pre-
scribe by regulation or otherwise. Any procedure for such pro rata 
repayment may provide for total repayment of any deposit, if total 
repayment of any and all deposits of equal or smaller amount is like-
wise provided for. 
"(4) The provisions of subsection (f) of this section and of the 
last sentence of subsection (e) of this section shall be applicable to 
deposits under this subsection, and for the purposes of this subsection 
Ihe references in such subsection (f) and such last sentence to the pre-
payments and the pro rata shares therein mentioned shall be deemed 
instead to be references respectively to the deposits under this subsec-
1 ion and the pro rata shares of the holders thereof, and the references 
in such subsection (f) to that subsection (except the last such refer-
ence) and to subsection (d) of this section shall be deemed instead 
to be references to this subsection." 
79 STAT.] 
PUBLIC LAW 89-118-AUGUST11, 1965 
509 
58 Stat. 
50 use 
1671. 
63 Stat. 
40 use 
69 Stat. 
40 use 
76 Stat. 
42 use 
note. 
791. 
app. 
841. 
45 1-458, 
641. 
462. 
541. 
2641 
FEDERAL RESERVE ACT 
SEC. 1111. Section 24 of the Federal Eeserve Act is amended by 
Jjus^ca^?^^' 
striking out "eighteen months", wherever it appears in the third para-
graph, and inserting in lieu thereof "twenty-four months". 
REPAYMENT OP CERTAIN PLANNING GRANTS 
SEC. 1112. Notwithstanding any other provision of law, no advance 
made under section 501 of Public Law 458, Seventy-eighth Congress; 
Public Law 352, Eighty-first Congress; or section 702, Housing Act of 
1954, Public Law 560, Eighty-third Congress, for the planning of any 
public works project shall be required to be repaid if construction of 
such project has been heretofore or is hereafter initiated as a result 
of a grant-in-aid made from an allocation made by the President under 
the Public Works Acceleration Act. 
STUDY CONCERNING RELIEF OF HOMEOWNERS I N PROXIMITY TO AIRPORTS 
SEC. 1113. The Housing and Home Finance Administrator shall 
undertake a study to determine feasible methods of reducing the eco-
nomic loss and hardship sujffered by homeowners as the result of the 
depreciation in the value of their properties following the construction 
of airports in the vicinity of their homes, including a study of feasible 
methods of insulating such homes from the noise of aircraft. 
Find- ident^and^ccn-^^" 
ings and recommendations resulting from such study shall be reported gress. 
to the President for transmission to the Congress at the earliest practi-
cable date, but in no event later than one year after the date of the 
enactment of this Act. 
Approved August 10, 1965. 
Public Law 89-118 
A N A C T 
August 11, 1965 
To expand, extend, and accelerate the saline water conversion program conducted 
^
^
^
' ^
"
^
^ 
by the Secretary of the Interior, and for other purposes. 
Saline water 
conversion pro-
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled, That in order to 
expand, extend, and accelerate the saline water conversion program g
r
a
'
m
.
^ 
conducted by the Secretary of the Interior, the Act of July 3, 1952 
(66 Stat. 328), as amended (42 U.S.C. 1951 et seq.), is hereby further 
^s stat. 628 
amended as follows: 
(1) In section 2(b) add the words ", module, component," after 
the word "laboratory". 
(2) In section 8 substitute "$90,000,000, plus such additional sums 
as the Congress may hereafter authorize and appropriate but not to 
exceed $185,000,000," in lieu of "$75,000,000 in all,^' and substitute 
"1972" for "1967". 
Approved August 11, 1965.