An Act to extend and amend laws relating to the provision and improvement of housing and the renewal of urban communities, and for other purposes.
PL 86-372 (S.2654), enacted 09/23/1959

654 
PUBLIC LAW 86-373-8EPT. 23, 1969 
[73 STAT. 
Rublic Law 86-372 
September 23, 1959 
AN A C T 
[s. 2654] 
xo extend and amend laws relating to the provision and improvement of housing 
and the renewal of urban communities, and for other purposes. 
Be it enacted &y the SeTiate and House of Representatives 
of the 
19^9"*^"* ^
*
^
* *
*
' 27mj(e<il States of America in Congress assenwled^ That this Act may 
be cited as the "Housing Act of 1959". 
TITLE I—FHA INSURANCE PROGRAMS 
PROPERTY IMPROVEMENT LOANS 
1
2 tree liot 
^^^- ^^^- Section 2(a) of the National Housing Act is amended by 
striking out "Septejmber 30, 1959" and inserting in lieu thereof 
"October 1,1960". 
!? y^^ \!^^' 
SECTION 203 RESIDENTIAL HOUSING INSURANCE 
71 Stat. 294. 
SEC. 102. (a) (1) Section 203(b) (2) of the National Housing Act is 
amended by striking out all that precedes the first semicolon and 
, 
inserting in lieu thereof the following: 
ti^?"*'^*'** **''"'*' 
"(^) Involve a principal obligation (including such initial service 
charges, appraisal, inspection, and other fees as the Commissioner 
shall approve) in an amount not to exceed $22,500 in the case of 
property upon which there is located a dwelling designed principally 
for a one-familv residence; or $25,000 in the case of a two-family 
residence (whether or not such one- or two-family residence may be 
intended to be rented temporarily for school purposes)". 
(2) Section 203(b) (2) of such Act is further amended— 
(A) by striking out "85 per centum" and inserting in lieu 
thereof "90 per centum"; and 
(B) by striking out "$16,000" each place it appears and insert-
ing in lieu thereof "$18,000". 
(3) Section 203(b) (2) of such Act is further amended by inserting 
after "unless the construction of the dwelling was completed more 
than one year prior to the application for mortgage insurance" the 
following: "or the dwelling was approved for guaranty, insurance, or 
antl, p.SVe. ^^°^' direct loan-under chapter 37 of title 38, United States Code, prior to 
the beginning of construction". 
71 Stat. 295. 
(b) Sectiou 203(b) (8) of such Act is amended by striking out the 
period at the end thereof and inserting in lieu thereof a colon and the 
following: '•'•Provided, That such 85 per centum limitation shall not 
be applicable if the mortgagor and mortgagee assume responsibility 
in a manner satisfactory to the Commissioner for the reduction of the 
mortgage by an amount not less than 15 per centum of the outstanding 
principal amount thereof 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." 
LOW-COST HOUSING IN OUTLYING AREAS 
71 Stat. 295. 
^^^ 
^Q^ Section 203(i) of the National Housing Act is amended— 
(1) by striking out "$8,000" and inserting in lieu thereof 
"$9,000"; ^ 
^ 
(2) by inserting after "97 per centum" the following: "(or, 
in any case where the dwelling is not approved for mortgage 
ITSSTATJ 
PUBLIC LAW ae^ia^-sEPT. aA^usfi 
66S 
insurance prior to the beginning of construction, unless the con-
struction of the dwelling was completed more than one year 
prior to the application K>r mortgage insurance or the dwelling 
was approved for guaranty, insurance, or direct loan under chap-
ter 37 of title 38, United States Code, prior to the beginning of 
72 sta^tj_ 1203; 
construction, 90 per centum)"; 
• 
ante, p. 
(3) by striking out ", and which is approved for mortgage 
insurance prior to the beginning of construction" and "the con-
struction of"; and 
-
(4) by striking out the comma following the word "highway" 
and everything that follows and inserting a period in lieu 
thereof. 
SECTION 207 RENTAL HOUSING INSURANCE 
12 USC 1713. 
SEC. 104. (a) Section 207(c)(1) of the National Housing Act is 
69 stat. 635. 
amended by striking out "$12,500,000" and inserting in lieu thereof 
"$20,000,000". 
(b) Section 207(c) (3) of such Act is amended by striking out— 
^o stat. 1092. 
(1) "$2,250" each place it appears and inserting in lieu thereof 
"$2,500".; 
(2) "$8,100" each place it appears and inserting in lieu thereof 
"$9,000"; 
(3) "$2,700" and inserting in lieu thereof "$3,000"; 
4) "$8,400" and inserting in lieu thereof "$9,400"; 
[6) "$1,000 per room" and inserting in lieu thereof "$1,250 
per room"; 
(6) "$1,000 per space" and inserting in lieu thereof "$1,500 per 
space"; and 
(7) "$300,000" and inserting in lieu thereof "$500,000". 
(c) The last paragraph of section 207(c) of such Act is amended 
^3 stat. 807. 
by striking out "41/^ per centum per annum" and inserting in lieu 
thereof "5i^ per centum per annum". 
(d) Section 207 of such Act is further amended by adding at the 
^° ^*"** ^°^^* 
end thereof the following new subsection: 
"(r) Notwithstanding any other provision of this Act, the Com-
missioner is authorized to include in any mortgage insured under 
any title of this Act after the effective date of the Housing Act of 
1959 a provision requiring the mortgagor to pay a service charge to 
the Commissioner in the event such mortgage is assigned to and held 
by the Commissioner. Such service charge shall not exceed the amount 
prescribed by the Commissioner for mortgage insurance premiums 
applicable to such mortgage." 
(e) Section 207 of such Act is further amended— 
7o stat. 1092. 
(1) by striking out "(except provisions relating to housing for 
elderly persons)" and "(except with respect to housing designed 
for elderly persons, with occupancy preference therefor, as pro-
vided in the paragraph following paragraph (3) of subsection 
(c))" in subsection (b); 
(2) by striking out in subsection (c) the unnumbered paragraph 
^7 stat. 123. 
following paragraph (3); and 
(3) by striking out "section 210 and section 213" in both places 
^^ stat. 53. 
where it appears in subsection (f) and inserting in lieu thereof 
the following: "sections 210, 213, 231, and 232". 
COOPERATIVE HOUSING INSTTRANCE 
12 USC 1715e. 
SEC. 105. (a) Section 213(b) (1) of the National Housing Act is 
^^stat. 635. 
amended by striking out "$12,500,000" and inserting in lieu thereof 
"$20,000,000". 
666 
PUBLIC LAW 86-873-SEPT. 23, 1959 
[73 STAT. 
(b) Section 213(b) (2) of such Act is amended to read as follows. 
68 Stat. 595. 
"^2) not to cxceed, for such part of the property or project as may 
be attributable to dwelling use, $2,500 per room (or $9,000 per family 
unit if the number of rooms in such property or project is less than 
four per family unit), and not to exceed 97 per centum of the amount 
which the Commissioner estimates will be the replacement cost of the 
property or project when the proposed physical improvements are 
completed: Provided^ That as to projects which consist of elevator-
type structures the Commissioner may, in his discretion, increase 
the dollar amount limitation of $2,500 per room to not to exceed $3,000 
per room and the dollar amount limitation of $9,000 per family unit 
to not to exceed $9,400 per family unit, as the case may be, to compen-
sate for the higher costs incident to the construction of elevator-type 
structures of sound standards of construction and design: Provided 
further^ That the Commissioner may, by regulation, increase any of 
the foregoing dollar amount limitations by not to exceed $1,250 per 
room, without regard to the number of rooms being less than four, 
or four or more, in any geographical area where he finds that cost 
levels so require: Provided further^ That in the case of a mortgagor" 
of the character described in paragraph (3) of subsection (a) the 
mortgage shall involve a principal obligation in an amount not to 
exceed 90 per centum of the amount which the Commissioner estimates 
will be the replacement cost of the property or project when the pro-
posed physical improvements are completed: And provided 
further^ 
That upon the sale of a property or project by a mortgagor of the 
character described in paragraph (3) of subsection (a) to a nonprofit 
cooperative ownership housing corporation or trust within two years 
after the completion of such property or project the mortgage given to 
finance such sale shall involve a principal obligation in an amount 
not to exceed the maximum amount computed in accordance with this 
subsection without regard to the preceding proviso." 
64 Stat. 56. 
^c) Sectiou 213(d) of such Act is amended by adding at the end 
thereof a new^ sentence as follows: "Property held by a corporation 
or trust of the character described in paragraph numbered (2) of 
subsection (a) of this section which is covered by a mortgage insured 
under this section may include such community facilities, and prop-
erty held by a mortgagor of the character described in paragraph 
numbered (3) of subsection (a) of this section which is covered by a 
mortgage insured under this section may include such commercial and 
community facilities, as the Commissioner deems adequate to serve 
the occupants." 
67 Stat. 123. 
^^^ fpj^^ ^^^ seuteuce of section 213(d) of such Act is amended 
(1) by striking out "41/^ per centum" and inserting in lieu thereof 
"514 per centum", and (2) by striking out "5 per centum" and insert-
ing in lieu thereof " 5 % per centum". 
(e) Section 213 of such Act is further amended by adding at the 
end thereof the following new subsection: 
"(i) Nothing in this Act shall be construed to prevent the insur-
ance of a mortgage executed by a mortgagor of the character described 
in paragraph (1) of subsection (a) of this section covering property 
upon which dwelling units and related facilities have been constructed 
prior to the filing of the application for mortgage insurance here-
under: Provided, That the Commissioner determines that the con-
sumer interest is protected and that the mortgagor will be a consumer 
cooperative. In the case of properties other than new construction, 
the limitations in this section upon the amount of the mortgage shall 
be based upon the appraised value of the property for continued use 
as a cooperative rather than upon the Commissioner's estimate of the 
replacement cost. As to any project on which construction was com-
ta S T A T . ] 
PUBLIC LAW 86-372-SEPT. 23, 1969 
667 
menced after the effective date of this subsection, the mortgage on 
such project shall be eligible for insurance under this section only in 
those cases where the construction was subject to inspection by the 
Commissioner and where there was compliance with the provisions of 
section 212 of this title. As to any project on which construction was 
1
2 use i7i5c. 
commenced prior to the effective date of this subsection, such inspec-
tion, and compliance with the provisions of section 212 of this title, 
shall not be a prerequisite." 
INCREASED MORTGAGE AMOUNTS IN ALASKA, GUAM, AND HAWAII 
SEC. 106. The first sentence of section 214 of the National Housing ^^^3 stat. 57; 66 
Act is amended by inserting after "maximum or maxima otherwise 
1
2
" use i7i5d. 
applicable" the following: "(including increased mortgage amounts 
in geographical areas where cost levels so require)". 
FHA MORTGAGE INSURANCE AUTHORIZATION 
12 USC 17l5h. 
SEC. 107. (a) Section 217 of the N"ational Housing Act is amended 
^2 stat. i76. 
by striking out "$7,000,000,000" and inserting in lieu thereof 
"$15,000,000,000". 
(b) Section 217 of such Act is further amended by adding at the 
''^ s*«*' ^o^^-
end thereof a new paragraph as follows: 
"It is further the intent and purpose of this section to limit by law 
the aggregate amount of the balances of insured mortgages and the 
principal amount of all commitments to insure which may be outstand-
ing under this Act (except section 2 and section 803). In the 
administration of this Act the Commissioner shall not hereafter enter 
into any type of agreement or other undertaking to insure a mortgage 
if a commitment to insure such mortgage would oe unlawful under the 
limit so established." 
REPEAL o r OBSOLETE PROVISIONS 
SEC. 108. Section 218 of the National Housing Act is repealed, 
ff ^^^ fJfj^ 
SECTION 220 MORTGAGE INSURANCE 
12 USe 1715k. 
SEC. 109. (a)(1) Clause (i) of subsection (d)(3)(A) of section 
220 of the National Housing Act is amended by striking out all that gj^f |^^*- 296; 72 
precedes the second semicolon and inserting in lieu thereof the 
following: 
"(A) (i) involve a principal obligation (including such initial 
service charges, appraisal, inspection, and other fees as the 
Commissioner shall approve) in an amount not to exceed $22,500 
in the case of property upon which there is located a dwelling 
designed principally lor a one-family residence; or $25,000 in 
the case of a two-family residence; or $30,000 in the case of a 
three-family residence". 
(2) Clause (i) of subsection (d) (3) (A) of section 220 of such Act 
is further amended— 
(A) by striking out "85 per centum" and inserting in lieu there-
of "90 per centum"; and 
(B) by striking out "$16,000" each place it appears and insert-
ing in lieu thereof "$18,000". 
(3) Subsection (d)(3)(A)(ii) of section 220 of such Act is amended 
by inserting before the semicolon at the end thereof a colon and the 
following: ''''Provided^ That such 85 per centum limitation shall not 
be applicable if the mortgagor and mortgagee assume responsibility 
in a manner satisfactory to the Commissioner for the reduction of the 
668 
PUBLIC LAW 86-87a«SEPT. 38, 1969 
[78 STATJ 
mortgage by an amount not less than 15 per centum of the outstanding 
principal amount thereof 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 th6 occupant of the property and who assumes and agrees to pay the 
mortgage indebtedness". 
69 Stat. 635. 
(^j Subscction (d) (3) (B) (i) of section 220 of such Act is amended 
by striking out '^$12,500,000^' and inserting in lieu thereof "$20,-
000,000". 
68 Stat. 598. 
(-^j ^ubsectiou (d) (3) (B) (iii) of section 220 of such Act is 
amended— 
(1) by striking out "$2,250" each place it appears and inserting 
in lieu thereof "$2,500"; 
(2) by striking out "$8,100" each place it appears and inserting 
in lieu thereof "$9,000"; 
(3) by striking out "$2,700" and inserting in lieu thereof 
"$3,000"; 
(4) by striking out "$8,400" and inserting in lieu thereof 
"$9,400"; and 
(5) by striking out "$1,000" and inserting in lieu thereof 
"$1,250". 
(d) Subsection (d)(3)(B)(iii) of section 220 of such Act is fur-
ther amended by inserting after "dwelling use" the following: 
"(excluding exterior land improvements as defined by the Commis-
sioner) ". 
(e) Subsection (d) (3) (B) of section 220 of such Act is further 
amended by striking out "and" at the end of clause (ii), by striking out 
the period at the end of clause (iii) and inserting in lieu thereof "; 
and", and by adding at the end thereof the following new clause: 
"(iv) include such nondwelling facilities as the Commissioner 
deems adequate to serve the needs of the occupants of the property 
and of other housing in the neighborhood." 
1
2 use nisi. 
SEcnoN 221 RELOCATION HOUSING MORTGAGE INSURANCE 
SEC. 110. (a) (1) The first paragraph of section 221(a) of the Na-
68 Stat. 599. 
tional Housing Act is amended to read as follows: 
"This section is designed to supplement systems of mortgage insur-
I2 u#c i^of.' 
ance under other provisions of the National Housing Act in order to 
assist (1) in relocating families from urban renewal areas, (2) in 
relocating families to be displaced as the result of governmental action 
I 
in a community respecting which (A) the Housing and Home Finance 
Administrator has made the certification to the Commissioner pro-
42 use 1451. 
vided for by subsection 101(c) of the Housing Act of 1949, as 
amended, or (B) there is being carried out a project covered by a 
Federal aid contract executed, or prior approval granted, by the Hous-
ing and Home Finance Administrator under title I of the Housing Act 
42 vie ^45*1 et ^^ 1949, as amended, before the effective date of the Housing Act of 
aeq. 
1954, Or (C) there is being carried out an urban renewal project 
1
2 use ino. 
assisted under section 111 of the Housing Act of 1949, as amended, and 
42 use 1462. 
(3) in relocating families residing in the environs of a community 
described in clause (2) which are to be displaced as the result of gov-
ernmental action." 
68 Stat. 599. 
(2) The secoud paragraph of section 221(a) of such Act is 
amended— 
(A) by striking out all that precedes the first colon and insert-
ing in lieu thereof the following: "Mortgage insurance under this 
section shall be available only in those localities, communities, or 
environs of communities, which shall have requested such 
mortgage insurance to be provided"; 
73 S T A T . ] 
P U B U C LAW 86-3T2-SEPr. 23. 1959 
659 
(B) by striking out "in any such community" in the second 
proviso and inserting in lieu thereof "in or near any such 
community"; 
(C) by striking out" (1)" in the third proviso and inserting in 
lieu thereof " (2) (A)"; and 
(D) by strikmg out "(1)", "(2)", and "(3)", wherever they 
appear in the last proviso, and inserting in lieu thereof respec-
tively "(2) (A)", "(2) (B)", and "(2) (C)". 
(3) Section 101(c) of the Housing Act of 1949 is amended by 
'»2 use usi. 
striking out "if the mortgaged property is in a community referred 
to in clause (2) of section 221(a) of said Act", and inserting in lieu 
thereof "if the mortgaged property is in an area described in clause 
(3) of section 221(a) of said Act, or in a community referred to in 
clause (2) (B) of said section". 
(4) Section 101(c) of the Housing Act of 1949 is further amended 
by striking out "in a community" in clause (iii) of the last proviso. 
(b) Section 221(d) (2) of the National Housing Act is amended to 
t! use* insi. 
read as follows: 
"(2) be secured by property upon which there is located a 
dwelling conforming to applicable standards prescribed by the 
Commissioner under subsection (f) of this section, and meeting 
the requirements of all State laws, or local ordinances or regu-
lations, relating to the public health or safety, zoning, or other-
wise, which may be applicable thereto, and shall involve a prin-
cipal obligation (including such initial service charges, appraisal, 
inspection, and other fees as the Commissioner shall approve) in 
an amount (A) not to exceed (i) $9,000 in the case of a property 
upon which there is located a dwelling designed principally for 
a single-family residence, except that the Commissioner may by 
regulation increase this amount to not to exceed $12,000 in any 
geographical area where he finds that cost levels so require, 
(ii) $18,000 in the case of a property upon which there is located 
a dwelling designed principally for a two-family residence, ex-
cept that the Commissioner may by regulation increase this 
amount to not to exceed $20,000 in any geographical area where 
he finds that cost levels so require, (iii) $25,000 in the case of a 
property upon which there is located a dwelling designed prin-
cipally for a three-family residence, except that the Commis-
sioner may by regulation increase this amount to not to exceed 
$27,500 in any geographical area where he finds that cost levels 
so require, (iv) $32,000 in the case of a property upon which 
there is located a dwelling designed principally for a four-family 
residence, except that the Commissioner may by regulation in-
crease this amount to not to exceed $35,000 in any geographical, 
area where he finds that cost levels so require; and (B) not to 
exceed the appraised value (as of the date the mortgage is 
accepted for insurance) of any such property, less such amount, 
in the case of any mortgagor, as may be necessary to comply with 
the succeeding provisos: Provided, That if the mortgagor is the 
owner and an occupant of the property at the time of the insur-
ance, he shall have paid on account of the property at least (i) 
$200 in the case of a single-family dwelling, (ii) $400 in the case 
of a two-family dwelling, (iii) $600 in the case of a three-family 
dwellingj and (iv) $800 in the case of a four-family dwelling, in 
cash or its equivalent, which amount may include amounts to 
cover settlement costs and initial payments for taxes, hazard in-
surance, mortgage insurance premium, and other prepaid ex-
penses: Provided further, 
That nothing contained herein shall 
preclude the Commissioner from issuing a commitment to insure. 
bility 
660 
PUBLIC LAW 86-372-8EPT. 28, 1969 
[73 STAT. 
and insuring a mortgage pursuant thereto, Mhere the mort-
gagor is not the owner and an occupant of the property, if the 
property is to be built or acquired and repaired or rehabilitated 
for sale, and the insured mortgage financing is required to facili-
tate the construction, or the repair or rehabilitation, of the dwell-
ing and to provide financing pending the subsequent sale thereof 
to a qualified owner who is also an occupant thereof, but in such 
instances the mortgage shall not exceed 85 per centum of the 
appraised value: And provided further, That the Commissioner 
shall prescribe such procedures as in his judgment are necessary 
to secure to families, referred to in subsection (a) above, priori-
ties in occupancy of the remaining units of two-, three-, and four-
family dwellings after occupancy of one unit by the owner; or". 
Insurance eUgi- 
(c) Section 221 (d) of sucli Act is further amended— 
vo^stat. 1094. 
(1) by striking out "$10,000" in paragraph (3) and inserting in 
1
2 use 1715Z. 
lieu thereof "$12,000"; 
(2) by striking out of paragraph (3) "not in excess of the Com-
missioner's estimate of the value of the property or project when 
constructed, or repaired and rehabilitated, for use as rental accom-
modations for ten or more families eligible for occupancy as pro-
vided in this section; and", and inserting in lieu thereof "not in 
excess of (1) in the case of new construction, the amount which 
the Commissioner estimates will be the replacement cost of the 
property or project when the proposed improvements are com-
pleted (the replacement cost may include the land, the proposed 
physical improvements, utilities witliiti the boundaries of the 
land, architect's fees, taxes, interest during construction, and other 
miscellaneous charges incident to construction and approved by 
the Commissioner), or (2) in the case of repair and rehabilitation, 
the Commissioner's estimate of the value of the property when 
the proposed repair and rehabilitation is completed: 
Provided, 
That such property or project, when constructed, or repaired and 
rehabilitated, shall be for use as rental accommodations for ten 
or more families eligible for occupancy as provided in this section; 
or"; and 
(3) by redesignating paragraph (4) as paragraph (5) and 
inserting after paragraph (3) the following new paragraph: 
" (4) if executed by a mortgagor which is not a nonprofit organ-
ization, and which is approved by the Commissioner— 
"(i) not exceed $12,500,000; 
"(ii) not exceed $9,000 per family unit for such part of 
such property or project as may be attributable to dwelling 
use, except that the Commissioner may by regulation increase 
this amount to not to exceed $12,000 in any geographical area 
where he finds that cost levels so require; 
"(iii) not exceed (in the case of a property or i)roject 
approved for mortgage insurance prior to the beginning of 
construction) 90 per centum of the amount which the Com-
missioner estimates will be the replacement cost of the prop-
erty or project when the proposed improvements are com-
pleted (the replacement cost may include the land, the 
proposed 
physical 
improvements, 
utilities 
within 
the 
boundaries of the land, architect's fees, taxes, interest during 
construction, and other miscellaneous charges incident to 
construction and approved by the Commissioner, and shall 
include an allowance for builder's and sponsor's profit and 
risk of 10 per centum of all of the foregoing items, except the 
land, unless the Commissioner, after certification that such 
allowance is unreasonable, shall by regulation prescribe a 
lesser percentage); and 
73 S T A T . ] 
PUBLIC LAW 8 6 - 3 7 2 - S E P T . 23, 1969 
661 
"(iv) not exceed 90 per centum of the Commissioner's 
estimate of the value of the property or project when the 
proposed repair and rehabilitation is completed if the pro-
ceeds of the mortgage are to be used for the repair and 
rehabilitation of a property or project: 
Provided^ That such property or project when constructed, or 
repaired and rehabilitated, shall be for use as rental accommoda-
tions for ten or more families eligible for occupancy as provided 
in this section: And provided further^ That the Commissioner 
may, in his discretion, require the mortgagor to be regulated or 
restricted as to rents or sales, charges, capital structure, rate of 
return, and methods of operation, and for such purpose the Com-
missioner may make such contracts with and acquire for not to 
exceed $100 such stock or interest in any such mortgagor as the 
Commissioner may deem necessary to render effective such restric-
tions or regulations, with such stock or interest being paid for 
out of the Section 221 Housing Insurance Fund and being 
1
2 use i7is/. 
required to be redeemed by the mortgagor at par upon the ter-
mination of all obligations of the Commissioner under the insur-
ance; and*'. 
(d) Section 221(f) of such Act is amended by inserting the fol-
lowing before the period at the end thereof: "and may include such 
commercial and community facilities as the Commissioner deems ade-
quate to serve the occupants". 
(e) Section 221(g)(2) of such Act is amended by striking out 
"paragraph (3)" and inserting in lieu thereof "paragraph (3) or (4)". 
(f) Section 212(a) of such Act is amended by addmg at the end 
^
^ ^^^ i7i5c. 
thereof the following new sentence: "The provisions of this section 
shall apply to the insurance under section 221 of any mortgage 
described in subsection (d) (4) thereof." 
SERVICEMEN'S HOUSING MORTGAGE INSURANCE 
SEC. 111. Section 222 (b) of the National Housing Act is amended— 
^ 1 stat. 295. 
(1) by inserting "or 203(i)" after "203(b)" in paragraph (1) ; 
'^ "^^ ^^'^""• 
and 
(2) by striking out "$17,100" in paragraph (2) and inserting 
in lieu thereof the following: "$20,000, except that in the case of a 
mortgage meeting the requirements of section 203 (i) such prin-
cipal obligation shall not exceed $9,000". 
BUILDER'S COST CERTIFICATION 
SEC. 112. (a) Section 227(a) of the National Housing Act is 
W^il: tjUt. 
amended by striking out clause (iv') and all that follows and insert-
ing in lieu thereof the following: "(iv) under section 221 if the mort-
gage meets the requirements of paragraph (3) or paragraph (4) of 
subsection (d) thereof, (v) under section 231, or (vi) under section 
810 if the mortgage meets the requirements of subsection (f)". 
(b) The last two sentences of section 227(c) of such Act are each 
amended by striking out "under section 220" and inserting in lieu 
thereof "under section 220, section 221 if the mortgage meets the re-
quirements of paragraph (4) of subsection (d) thereof, or section 
231,". 
662 
PUBUC LAW 86-375J-8EPT. 23, 1969 
[73 STAT. 
VOLUNTARY TERMINATION OF INSURANCE 
i7\5r,Mo2a/'°^" 
^EC. 113. Title I I of the National Housing Act is further amended 
by adding at the end thereof the following new section: 
"VOLUNTARY TERMINATION or INSURANCE 
"SEC. 229. Notwithstanding any other provision of this Act and 
with respect to any mortgage covering a one-, two-, three-, or four-
family residence heretofore or hereafter insured under this Act, the 
Commissioner is authorized to terminate any mortgage insurance con-
tract upon request by the mortgagor and mortgagee and upon pay-
ment of such termination charge as the Commissioner determines to be 
equitable, taking into consideration the necessity of protecting the 
various insurance funds. 
Upon such termination mortgagors and 
mortgagees shall be entitled to the rights, if any, to which they would 
be entitled under this Act if the insurance contract were terminated by 
payment in full of the insured mortgage." 
AVOIDANCE OF FORECLOSURE 
SEC. 114. (a) Title I I of the National Housing Act is further 
amended by adding after section 229 (as added by section 113 of this 
Act) the following new section: 
"ACQUISITION OF MORTGAGES TO AVOID FORECLOSURE 
"SEC. 230. Upon receiving notice of the default of any mortgage 
covering a one-, two-, three-, or four-family residence heretofore or 
hereafter insured under this Act, the Commissioner, in his discretion 
and for the purpose of avoiding foreclosure of the mortgage, may 
acquire the loan and the security therefor upon issuance to the mort-
gagee of debentures having a total face value equal to the unpaid 
principal balance of the loan plus any accrued interest and any proper 
advances theretofore made by the mortgagee under the provisions of 
the mortgage; and after the acquisition of such mortgage by the Com-
missioner such mortgagee shall have no further rights, liabilities, or 
obligations with respect thereto. The provisions of section 204 relat-
ing to the issuance of debentures incident to the acquisition of fore-
closed properties shall apply with respect to debentures issued under 
this subsection, and the provisions of section 204 relating to the rights, 
liabilities, and obligations of a mortgagee shall apply with respect 
to the Commissioner when he has acquired an insured mortgage under 
this section, in accordance with and subject to regulations (modifying 
such provisions to the extent necessary to render their application for 
such purposes appropriate and effective) which shall be prescribed by 
the Commissioner." 
"tree'mo. 
(^) Section 204(a) of the National Housing Act is amended by 
hiserting immediately before the last proviso the following: ": And 
provided further^ That with respect to any mortgage covering a one-, 
two-, three-, or four-family residence insured under this Act, if the 
Commissioner finds, after notice of default, that the default was due 
to circumstances beyond the control of the mortgagor and it is prob-
able that the mortgage will be restored to good standing within a 
reasonable period of time, he may, under such regulations and condi-
tions as he may prescribe, extend the time for curing default and 
enter into an agreement with the mortgagee providing that if the 
mortgage is subsequently foreclosed, any interest accruing after the 
date of the agreement which is not paid by the mortgagor may be 
included in the debentures". 
73 S T A T . ] 
PUBLIC LAW 86-372H3EPT. 23, 1»6« 
668 
MORTGAGE INSURANCE FOR NURSING HOMES 
SEC. 115. Title I I of the National Housing Act is amended by add-
ing after section 231 (as added by section 201 of this Act) the follow- 
Post, p. ees. 
ing new section: 
"MORTGAGE INSURANCE FOR NURSING HOMES 
"SEC. 232. (a) The purpose of this section is to assist the provision 
of urgently needed nursing homes for the care and treatment of con-
valescents and other persons who are not acutely ill and do not need 
hospital care but who require skilled nursing care and related medical 
services. 
"(b) For the purposes of this section— 
"(1) the term 'nursing home' means a proprietary facility, 
licensed or regulated by the State (or, if there is no State law pro-
viding for such licensing and regulation by the State, by the 
municipality or other political subdivision in which the facility 
is located), for the accommodation of convalescents or other per-
sons who are not acutely ill and not in need of hospital care but 
who require skilled nursing care and related medical services, in 
which such nursing care and medical services are prescribed by, 
or are performed under the general direction of, persons licensed 
to provide such care or services in accordance with the laws of the 
State where the facility is located; and 
" (2) the terms 'mortgage' and 'mortgagor' shall have the mean-
ings respectively set forth m section 207(a) of this Act. 
1
2 use 1713. 
"(c) The Commissioner is authorized to insure any mortgage 
(including advances on such mortgage during construction) in accord-
ance with the provisions of this section upon such terms and conditions 
as he may prescribe and to make commitments for insurance of such 
mortgage prior to the date of its execution or disbursement thereon. 
" (d) In order to carry out the purpose of this section, the Commis-
sioner is authorized to insure any mortgage which covers a new or 
rehabilitated nursing home, subject to the following conditions: 
"(1) The mortgage shall be executed by a mortgagor approved by 
the Commissioner. The Commissioner may in his discretion require 
any such mortgagor to be regulated or restricted as to charges and 
methods of financing, and, in addition thereto, if the mortgagor is 
a corporate entity, as to capital structure and rate of return. As an 
aid to the regulation or restriction of any mortgagor with respect to 
any of the foregoing matters, the Commissioner may make such 
contracts with and acquire for not to exceed $100 such stock or interest 
in such mortgagor as he may deem necessary. 
Any stock or interest 
so purchased shall be paid for out of the Section 207 Housing Insur- 
52 stat. is. 
ance Fund, and shall be redeemed by the mortgagor at par upon the 
termination of all obligations of the Commissioner under tne insurance. 
" (2) The mortgage shall involve a principal obligation in an amount 
not to exceed $12,500,000, and not to exceed 75 per centum of the 
estimated value of the property or project when the proposed improve-
ments are completed. 
"(3) The mortgage shall— 
"(A) provide for complete amortization by periodic payments 
within such terms as the Commissioner shall prescribe; and 
"(B) bear interest (exclusive of premium charges for insur-
ance) at not to exceed 5 per centum per annum of the amount 
of the principal obligation outstanding at any time, or not to 
exceed such per centum per annum not in excess of 6 per centum 
as the Commissioner finds necessary to meet the mortgage market. 
664 
PUBLIC LAW 86-37a-8EPT. 23, 1969 
[73 ST A T . 
60 Stat. 104 I. 
42 u s e 29 lb. 
12 u s e 1713. 
"(4) The Commissioner shall not insure any mortgage under this 
section unless he has received, from the State agency designated in 
accordance with section 612(a) (1) of the Public Health Service Act 
for the State in which is located the nursing home covered by the 
mortgage, a certification that (1) there is a need for such nursing 
home, and (2) there are in force in such State or other political 
subdivision of the State in which the proposed nursing home would 
be located reasonable minimum standards of licensure and methods 
of operation for nursing homes. No such mortgage shall be insured 
under this section unless the Commissioner has received such assurance 
as he may deem satisfactory from the State agency that such standards 
will be applied and enforced with respect to anj nursing home located 
in the State for which mortgage insurance is provided under this 
section. 
" (e) The Commissioner may consent to the release of a part or parts 
of the mortgaged property or project from the lien of any mortgage 
insured under this section upon such terms and conditions as he may 
prescribe. 
"(f) The provisions of subsections (d), (e), (f), (g), (h), (i), (j), 
(k), (1), (m), (n), and (p) of section 207 shall apply to mortgages 
insured under this section and all references therein to section 207 
shall refer to this section." 
64 Stat. 48. 
12 u s e 1706c. 
12 u s e 
171Se, 
17lSk-m, 1748h-l. 
TECHNICAL AMENDMENTS 
SEC. 116. (a) Section 8(g) of the National Housing Act is amended 
by striking out "and (h) of section 204" and inserting in lieu thereof 
"(h), (j), and (k) of section 204". 
(b) Sections 213(e), 220(f) (1), 221(g) (1), 222(e), and 809(e) of 
such Act are each amended by striking out "and (j) of section 204" 
and inserting in lieu thereof " (j), and (k) of section 204". 
71 Stat. 297. 
12 u s e 1710. 
Ante, p. 662. 
INCLUSION OF CONVEYANCE COSTS I N DEBENTURES 
SEC. 117. Section 204 (k) of the National Housing Act is amended 
to read as follows: 
"(k) Notwithstanding any other provision of this section or of sec-
tion 604 or 904 and with respect to any debentures issued in exchange 
for properties conveyed to and accepted by the Commissioner after 
the effective date of the Housing Act of 1959 in accordance with such 
sections, the Commissioner may (1) include in debentures reasonable 
payments made bv the mortgagee with the approval of the Commis-
sioner for the purpose of protecting, operating, or preserving the 
property, and taxes imposed upon any deed or any other instrument 
by which the property was acquired by the mortgagee and transferred 
or conveyed to the Commissioner; (2) include in debentures as a por-
tion of foreclosure costs (to the extent that foreclosure costs may be 
included in such debentures by any other provision of this Act) pay-
ments made by the mortgagee for the cost of acquiring the property 
and conveying and evidencing title to the property to the Commis-
sioner; and (3) terminate the mortgagee's obligation to pay mortgage 
insurance premiums upon receipt of an application for debentures 
filed by the mortgagee, or in the event the contract of insurance is 
terminated pursuant to section 229." 
52 Stat. 1276. 
12 u s e 1747. 
INVESTMENT INSURANCE 
SEC. 118. Section 701 of the National Housing Act is amended by 
striking out the colon at the end of the first proviso and everything 
that follows and inserting a period in lieu thereof. 
73 S T A T . ] 
PUBLIC LAW 86-372-SEPT. 23, 1969 
665 
LEGAL NOTIFICATION 
SEC. 119. Section 512 of the National Housing Act is amended by 
6| stat_. MO.^ 
adding the following at the end thereof: "For the purposes of com-
pliance with this section the Commissioner's notice of a proposed 
determination under this section shall be considered to have been 
received by the interested person or firm if the notice is properly 
mailed to the last known address of such person or firm." 
TITLE II—HOUSING FOR T H E ELDERLY 
MORTGAGE INSURANCE PROGRAM 
SEC. 201. (a) Title I I of the National Housing Act is amended by 
^"'e. P- 662. 
adding after section 230 (as added by section 114) the following new 
section: 
a HOUSING FOR ELDERLY PERSONS 
"SEC. 231. (a) The purpose of this section is to assist in relieving the 
shortage of housing for elderly persons and to increase the supply of 
rental housing for elderly persons. 
"For the purposes of this section— 
"" 
"(1) the term 'housing' means eight or more new or rehabili-
tated living units, not less than 50 per centum of which are spe-
cially designed for the use and occupancy of elderly persons; 
" (2) the term 'elderly person' means any person, married or 
single, who is sixty-two years of age or over; and 
"(3) the terms 'mortgage', 'mortgagee', 'mortgagor', 
and 
'maturity date' shall have the meanings respectively set forth in 
section 207 of this Act. 
1
2 use 1713. 
"(b) The Commissioner is authorized to insure any mortgage 
(including advances on mortgages during construction) in accordance 
with the provisions of this section upon such terms and conditions as 
he may prescribe and to make commitments for insurance of such 
mortgages prior to the date of their execution or disbursement thereon. 
"(c) To be eligible for insurance under this section, a mortgage 
to provide housing for elderly persons shall— 
"(1) involve a principal obligation in an amount not to exceed 
$12,500,000 or, if executed by Federal or State instrumentalities, 
municipal corporate instrumentalities of one or more States, or 
nonprofit development or housing corporations restricted by Fed-
eral or State laws or regulations of State banking or insurance 
departments as to rents, charges, capital structure, rate of return, 
or methods of operation, not to exceed $50,000,000; 
" (2) not exceed, for such part of such property or project as may 
be attributable to dwelling use, $9,000 per dwelling unit: Pro-
vided, That the Commissioner may, in his discretion, increase the 
dollar amount limitation of $9,000 per unit to not to exceed $9,400 
per unit to compensate for the higher costs incident to the con-
struction of elevator-type structures and may increase each of the 
foregoing dollar amount limitations by not to exceed $1,250 per 
room in any geographical area where he finds that cost levels so 
require; 
"(3) if executed by a mortgagor which is a public instrumen-
tality or a private nonprofit corporation or association or other 
acceptable private nonprofit organization regulated or supervised 
under Federal or State laws or by political subdivisions of States, 
or agencies thereof, or by the Commissioner under a regulatory 
agreement or otherwise, as to rents, charges, and methods of oper-
ation, in such form and in such manner as, in the opinion of the 
PUBUC LAW 86-372-.SEPT. 23, 1969 
[ T 3 STAT. 
Commissioner, will effectuate the purpose of this section, involve 
a principal obligation not in excess of the amount which the 
Commissioner estimates will be the replacement cost of the 
property or project when the proposed improvements are com-
pleted (the replacement cost may include the land, the proposed 
physical improvements, utilities within the boundaries of the land, 
architect's fees, taxes, interest during construction, and other 
miscellaneous charges incident to construction and approved by 
the Commissioner) : Provided^ That in the case of properties other 
than new construction, the principal obligation shall not exceed 
the appraised value rather than the Commissioner's estimate of 
the replacement cost; 
"(4) if executed by a mortgagor which is approved by the 
Comissioner but is not a public instrumentality or a private non-
profit organization, involve a principal obligation not in excess 
(in the case of a property or project approved for mortgage 
insurance prior to the beginning of construction) of 90 per centum 
of the amount which the Commissioner estimates will be the 
replacement cost of the property or project when the proposed 
improvements are completed (the replacement costs may include 
the land, the proposed physical improvements, utilities within the 
boundaries of the land, architect's fees, taxes, interest during 
construction, and other miscellaneous charges incident to con-
struction and approved by the Commissioner, and shall include 
an allowance for builder's and sponsor's profit and risk of 10 
per centum of all of the foregoing items except the land unless 
the Commissioner, after certification that such allowance is unrea-
sonable, shall by regulation prescribe a lesser percentage) : Pro-
vided^ That in the case of properties other than new construction 
the principal obligation shall not exceed 90 per centum of the 
Commissioner's estimate of the value of the property or project: 
And provided further^ That the Commissioner may in his discre-
tion require such mortgagor to be regulated or restricted as to 
rents or sales, charges, capital structure, rate of return, and 
methods of operation, and for such purpose the Commissioner 
may make contracts with and acquire for not to exceed $100 such 
stock or interest in any such mortgagor as the Commissioner may 
deem necessary to render effective such restrictions or regula-
tions; such stock or interest shall be paid for out of the Section 
1
2 use 1713. 
207 Housing Insurance Fund and shall be redeemed by the 
mortgagor at par upon the termination of all obligations of the 
Commissioner under the insurance; 
"(5) provide for a complete amortization by periodic pay-
ments within such terms as the Commissioner shall prescribe; 
"(6) bear interest (exclusive of premium charges for insur-
ance) at not to exceed 5 per centum per annum on the amount 
of the principal obligation outstanding at any time, or not to 
exceed such per centum per annum not in excess of 5i/^ per 
centum as the Commissioner finds necessary to meet the mort-
gage market; and 
"(7) cover a property or project which is approved for mort-
gage insurance prior to the beginning of construction or rehabil-
itation, with 50 per centum or more of the units therein specially 
designed for the use and occupancy of elderly persons in accord-
ance with standards established by the Commissioner, and which 
may include such commercial and special facilities as the Com-
missioner deems adequate to serve the occupants. 
"(d) The Commissioner may consent to the release of a part or 
parts of the mortgaged property or project from the lien of any 
73 STAT.] 
PUBLIC LAW 86-3T2-SEPT. 23, 1969 
667 
mortgage insured under this section upon such terms and conditions 
as he may prescribe, and shall prescribe such procedures as in his 
judgment are necessary to secure to elderly persons a preference or 
priority of opportunity to rent the dwellings included m such prop-
erty or project. 
'^(e) The provisions of subsections (d), (e), (f), (g), (h), (i), 
»2 use i7i3. 
(j), (k), (1), (m), (n), and (p) of section 207 shall apply to mort-
gages insured under this section and all references therein to section 
207 shall refer to this section." 
(b) Section 212(a) of such Act is amended by adding at the end 
'^ use i7i5c. 
thereof (after the sentence added by section 110(f) of this Act) the 
following: "The provisions of this section shall also apply to the 
insurance of any mortgage under section 231 or 232 except that 
compliance with such provisions may be waived by the Commissioner 
in cases or classes of cases where laborers or mechanics, not otherwise 
employed at any time on the project, voluntarily donate their serv-
ices without full compensation for the purpose of lowering the costs 
of construction and the Commissioner determines that any amounts 
thereby saved are fully credited to the nonprofit corporation, asso-
ciation, or other organization undertaking the construction." 
LOAN PROGRAM 
SEC. 202. (a) (1) The purpose of this section is to assist private 
nonprofit corporations to provide housing and related facilities for 
elderly families and elderly persons. 
(2) In order to carry out the purpose of this section, the Adminis-
trator may make loans to any corporation (as defined in subsection 
(d)(2)) for the provision of rental housing and related facilities 
for elderly families and elderly persons, except that (A) no such 
loan shall be made unless the corporation shows that it is unable to 
secure the necessary funds from other sources upon terms and condi-
tions equally as favorable as the terms and conditions applicable to 
loans under this section, and (B) no such loan shall be made unless 
the Administrator finds that the construction will be undertaken in 
an economical manner, and that it will not be of elaborate or extrav-
agant design or materials. 
(3) A loan to a corporation under this section may be in an amount 
not exceeding 98 per centum of the total development cost (as defined 
in subsection (d) (3)), as determined by the Administrator; shall be 
secured in such manner and be repaid within such period, not exceed-
ing fifty years, as may be determined by him; and shall bear interest 
at a rate determined by him which shall be not more than the higher 
of (A) 2% per centum per annum, or (B) the total of one-quarter 
of 1 per centum added to the average annual interest rate on all 
interest-bearing obligations of the United States then forming a part 
of the public debt as computed at the end of the fiscal year next 
preceding the date on which the loan is made and adjusted to the 
nearest one-eighth of 1 per centum. 
(4) There is authorized to be appropriated not to exceed $50,000,000, 
Revolving tund) 
which shall constitute a revolving fund to be used by the Administra-
tor in carrying out this section. 
The amount outstanding from such 
fund at any one time for related facilities (as defined in subsection 
(d)(8)) shall not exceed $5,000,000. 
(b) In the performance of, and with respect to, the functions, 
powers, and duties vested in him by this section the Administrator 
shall (in addition to any authority otherwise vested in him) have 
the functions, powers, and duties set forth in section 402 (except 
subsection (c) (2)) of the Housing Act of 1950. 
\t !?#^- ^^9^. 
32716 O-60—45 
668 
PUBLIC LAW 86-37a>SEPT. ad» 1959 
[73 8T A T , 
68 Stat. 610. 
12 u s e 1731b. 
Prevailing wage 
rates. 
49 Stat. 1011. 
40 U S C 276a-
276a-5. 
Definitions. 
(c) (1) Housing constructed with a loan made under this section 
shall not be used for transient or hotel purposes while such loan is 
outstanding. 
(2) As used in paragraph (1), the term "transient or hotel pur-
poses" shall have such meaning as may be prescribed by the Admmis-
trator, but rental for any period less than thirty days shall in any event 
constitute use for such purposes. 
The provisions of subsections (f) 
through (j) of section 513 of the National Housing Act (as added by 
section 132 of the Housing Act of 1954) shall apply in the case of 
violations of paragraph (1) as though the housing described in such 
subsection were multifamily housing (as defined in section 513(e) (2) 
of the National Housing Act) with respect to which a mortgage is 
insured under such Act, except that for purposes of this subsection the 
Administrator shall perform the functions vested in the Commissioner 
by such section 513. 
(3) The Administrator shall take such action as may be necessary 
to insure that all laborers and mechanics employed by contractors and 
subcontractors in the construction of housing assisted under this sec-
tion shall be paid wages at rates not less than those prevailing in the 
locality involved for the corresponding classes of laborers and 
mechanics employed on construction of a similar character, as deter-
mined by the Secretary of Labor in accordance with the Act of 
March 3, 1931, as amended (the Davis-Bacon Act) ; but the Adminis-
trator may waive the application of this paragraph in cases or classes 
of cases where laborers or mechanics, not otherwise employed at any 
time in the construction of such housing, voluntarily donate their serv-
ices without full compensation for the purpose of lowering the costs 
of construction and the Administrator determines that any amounts 
saved thereby are fully credited to the corporation undertaking the 
construction. 
(d) As used in this section— 
(1) The term "housing" means (A) new structures suitable for 
dwelling use by elderly families and new structures suitable for 
such use by one or more elderly persons, and (B) dwelling facil-
ities provided by rehabilitation, alteration, conversion, or improve-
ment of existing structures Avliich are otherwise inadequate for 
proposed dwelling use by such families and persons. 
(2) The term "corporation" means any incorporated private 
institution or foundation no part of the net earnings of which 
inures to the benefit of any private shareholder, contributor, or 
individual, if such institution or foundation is approved by the 
Administrator as to linancial responsibility. 
(3) The term "development cost" means costs of construction 
of housing and of other related facilities, and of the land on 
which it is located, including necessary site improvement. 
(4) The term "elderly families" means families the head of 
which (or his spouse) is sixty-two years of age or over; and the 
term "elderly persons" means persons who are sixty-two years of 
age or over. The Administrator shall prescribe such regulations 
as may be necessary to prevent abuses m determining, under the 
definitions contained in this paragraph, the eligibility of families 
and persons for admission to and occupancy of housing con-
structed with assistance under this section. 
(5) The term "State" includes the several States, the District 
of Columbia, the Commonwealth of Puerto Rico, and the pos-
sessions of the United States. 
(6) The term "Administrator" means the Housing and Home 
Finance Administrator. 
78 S T A T . ] 
P U B U C LAW 86-8T2-SEPT. 28, 1»59 
869 
(7) The term "construction" means erection of new structures, 
or rehabilitation, alteration, conversion, or improvement of exist-
ing structures. 
(8) The term "related facilities" means (A) new structures 
suitable for use as cafeterias or dining halls, community rooms 
or buildings, or infirmaries or other inpatient or outpatient health 
facilities, or for other essential service facilities, and (B) struc-
tures suitable for the above uses provided hj 
rehabilitation, 
alteration, conversion, or improvement of existing structures 
which are otherwise inadequate for such uses. 
TITLE III—FEDERAL NATIONAL MORTGAGE 
ASSOCIATION 
SEC. 301. Clause (3) of section 302(b) of the National Housing Act 
is amended to read as follows: "(3) the Association may not purchase 
any mortgage, except a mortgage insured under section 220 or 803, or 
a mortgage covering property located in Alaska, Guam, or Hawaii, if 
the original principal obligation thereof exceeds or exceeded $17,500 
for each family residence or dwelling unit covered by the mortgage: 
Provided, That with respect to mortgages purchased under section 
304 the principal obligation shall not exceed $20,000". 
SEC. 302. The last sentence of section 304(a) of the National Hous-
ing Act is amended by striking out "advance planning of home con-
struction" and inserting in lieu thereof "home financing". 
SEC. 303. (a) Section 305(b) of the National Housing Act is 
amended by striking out everything following the first sentence and 
inserting in lieu thereof the following: "Subject to the provisions of 
this section, the prices to be paid by the Association for mortgages pur-
chased in its operations under this section shall be established from 
time to time by the Association. The Association shall impose charges 
or fees for its services undei this section with the objective that all 
costs and expenses of its operations under this section should be 
within its income derived from such operations and that such opera-
tions should be fully self-supporting." 
(b) When the holder of a commitment contract entered into by 
the Federal National Mortgage Association prior to August 27, 1958, 
pursuant to section 305 of the National Housing Act, cannot deliver 
the mortgages covered thereby within the original commitment period, 
and establishes that hardship to such holder will result therefrom and 
that such inability to deliver the mortgages is a consequence of cir-
cumstances beyond the control of such holder, the Association shall 
reissue or extend such commitment for a reasonable additional period 
or periods, according to the circumstances, on terms not less favorable 
than were the terms of the original commitment. 
SEC. 304. Section 305(e) of the National Housing Act is amendeid 
by adding at the end thereof the following new sentence: "On and 
after the date of enactment of the Housing Act of 1959, the Association 
is authorized to enter into advance commitment contracts and pur-
chase transactions (in addition to those authorized by the preceding 
sentence) relating to mortgages with respect to which the Federal 
Housing Commissioner shall have issued pursuant to section 213 a 
commitment to insure or a statement of eligibility, without regard to 
any of the limitations contained in the preceding sentence; except that 
the total amount of the additional advance commitment contracts and 
purchase transactions authorized by this sentence which may be out-
standing at'any one time shall not exceed $25,000,000, of which the 
amount of $12,500,000 shall be available solely for commitments or 
purchases of mortgages where the management or sales-type coopera-
P u r c h a s e and 
sale of mortgages. 
70 Stat. 1096. 
12 u s e 
17 17, 
1715k, 1748b. 
68 Stat. 615. 
12 u s e 1720. 
A d v a n c e com-
mitments. 
71 Stat. 299. 
12 u s e 1720. 
12 u s e 17l5e. 
670 
PUBUC LAW 86-372-8EPT. 23, 1969 
[73 STAT, 
tive involved is certified by the Federal Housing Commissioner as a 
consumer cooperative and the amount of $12,500,000 shall be available 
solely for commitments or purchases of mortgages where the coopera-
tive involved is a builder-sponsor cooperative." 
js^^^-jf i5./^»8. 
SEC. 305. (a) Sections 304(b) and 306(b) of the National Housing 
1721. 
' Act are amended by striking out "and bonds or other obligations of, 
or bonds or other obligations guaranteed as to principal and interest 
by, the United States" and inserting in lieu thereof "and obligations 
of the United States or guaranteed thereby, or obligations which are 
lawful investments for fiduciary, trust, or public funds". 
1
2 u#c mib. 
(b) Section 310 of such Act is amended by striking out "in bonds 
or other obligations of, or in bonds or other obligations guaranteed as 
to principal and interest by, the United States" and inserting in lieu 
thereof "in obligations of the United States or guaranteed thereby, 
or in obligations which are lawful investments for fiduciary, trust, or 
public funds". 
1
2 vie m u 
SEC. 306. (a) Section 306 of the National Housing Act is amended 
by adding at the end thereof the following subsection: 
"(e) Notwithstanding any of the provisions of this Act or of any 
other law, the Association is authorized, under the aforesaid separate 
accountability, to make commitments to purchase and to purchase, 
service, or sell any mortgages offered to it oy the Housing and Home 
Finance Administrator or the Housing and Home Finance Agency, or 
by such Agency's constituent units or agencies or the heads thereof, 
after such Administrator has found the acquisition thereof by the 
Association to be in the interest of the efficient management and liqui-
dation of the mortgages. 
There shall be excluded from the total 
amounts set forth in subsection (c) hereof the amounts of any mort-
gages purchased by the Association pursuant to this subsection." 
(b) In connection with the sale of any mortgages to the Federal 
12USC f72^i. 
National Mortgage Association pursuant to section 306(e) of the 
Federal National Mortgage Association Charter Act, the Housing and 
Home Finance Administrator is authorized, and any other official, 
unit, or agency selling such mortgages thereunder is directed, to trans-
fer to the Association from time to time, from authorizations, limita-
tions, and funds available for administrative expenses of such official, 
unit, or agency in connection with the same mortgages, such amounts 
thereof as said Administrator determines to be required for adminis-
trative expenses of the Association in connection with the purchase, 
servicing, and sale of such, mortgages: Provided, That no such transfer 
shall be made after a budget estimate of the Association with respect 
to the same mortgages has been submitted to and finally acted upon by 
the Congress. 
TITLE IV—UKBAN RENEWAL 
STATEWIDE PLANNING 
68 stau 623. 
SEC. 401. Section 101 (b) of the Housing Act of 1949 is amended by 
>
t
o Ttcn A 
adding at the end thereof the following new sentence: "The Adminis-
trator shall particularly encourage the utilization of local public agen-
cies established by the States to operate on a statewide basis in behalf 
of smaller communities within the State which are undertaking or 
propose to undertake urban renewal programs whenever that arrange-
ment facilitates the undertaking of an urban renewal program by any 
such community, or provides an effective solution to community devel-
opment or redevelopment problems in such communities, and is 
approved by resolution or ordinance of the governing bodies of the 
affected communities." 
42 use 1451. 
73 STAT.] 
P U B U C L
A
W 86-372-SEPT. 23, 1959 
671 
CLARIFYING AMENDMENTS 
SEC. 402. (a) Section 102(a) of the Housing Act of 1949 is amended 
63 ^at_. 4u^ 
by striking out in the second sentence the words "as part of the gross 
project cost" and inserting in lieu thereof "for such purposes". 
(b) Section 102(c) of such Act is amended by striking out "repay-
ment of" and inserting in lieu thereof "repayment of the principal of 
and the interest on". 
EARLY LAND ACQUISITION 
SEC. 403. Section 102(a) of the Housing Act of 1949 is amended by 
42 use 1452. 
adding at the end thereof the following new sentence: "In any case 
where, in connection with its undertaking and carrying out of an 
urban renewal project, a local public agency is authorized (under the 
circumstances in which the temporary loan herein provided is re-
quested) to acquire real property in the urban renewal area, the Ad-
ministrator, in addition to all other authority under this title and not-
withstanding any other provisions of this title, regardless of the stage 
of development of the urban renewal plan and whether before or after 
the approval thereof, may make a temporary loan or loans to any such 
local public agency to finance the acquisition of such real property: 
Provided^ That no loan for such purpose shall be made unless (1) the 
governing body of the locality involved shall have approved by reso-
lution or ordinance the acquisition of real property in the urban re-
newal area, and (2) either (A) the Administrator shall have deter-
mined that such loan is reasonably secured by a first mortgage or 
other prior lien upon such real property or is otherwise reasonably 
secured, or (B) the governing body of the locality shall have assumed 
the responsibility to bear any loss that may arise as the result of such 
acquisition in the event that the property so acquired is not used for 
urban renewal purposes because the urban renewal plan for the 
project is not approved, or is amended to omit any of the acquired 
property, or is abandoned for any reason: Provided further^ That 
the Administrator may, in his discretion and subject to such condi-
tions as he may impose, permit any structure so acquired to be de-
molished and removed, and may include in any loan authorized by 
this section the cost of such demolition and removal if the approval 
of the local governing body extends to such demolition and removal: 
And provided further^ That the loan contract shall provide that the 
local public agency shall not dispose of such real property (except 
in lieu of foreclosure) until the local governing body of the locality 
involved shall have either approved the urban renewal plan for the 
project or consented to the disposal of such real property." 
LOANS 
SEC. 404. Section 102(e) of the Housing Act of 1949 is amended 
^^ "sc 1452. 
to read as follows: 
"(e) The total amount of loan contracts outstanding at any one 
time under this title shall not exceed the aggregate of the estimated 
expenditures to be made by local public agencies as part of the gross 
project cost of the projects assisted by such contracts. To obtain 
funds for advance and loan disbursements under this title, the 
Administrator may issue and have outstanding at any one time notes 
and obligations for purchase by the Secretary of the Treasury in an 
amount which shall not, unless authorized by the President exceed 
$1,000,000,000. For the purpose of establishing unpaid obligations as 
of a given date against the authorization contained in the preceding 
sentence, the Administrator shall estimate the maximum amount to 
be required to be borrowed from the Treasury and outstanding at 
any one time with respect to loan commitments in effect on such date." 
672 
PUBLIC LAW 86-372-8EPT. 23, 1969 
[73 STAT. 
GRANTS 
42 vie Hsi 
^^^- ^^^- Section 103 of the Housing Act of 1949 is amended— 
(1) by amending the first sentence of subsection (b) to read 
as follows: "The Administrator, on and after July 1, 1949, may, 
with the approval of the President, contract to make grants under 
this title aggregating not to exceed $1,350,000,000, which limit 
shall be increased by $350,000,000 on the date of enactment of 
the Housing Act of 1959, and by $300,000,000 on July 1, I960."; 
(2) by striking out the period at the end of the second sentence 
of subsection (b) and inserting in lieu thereof a colon and the 
following: '^Provided, That any amounts so appropriated shall 
also be available for repaying to the Secretary of the Treasury, 
for application to notes of the Administrator, the principal 
amounts of any funds advanced to local public agencies under 
this title which the Administrator determines to be uncollectible 
because of the termination of activities for which such advances 
were made, together with the interest paid or accrued to the 
Secretary (as determined by him) attributable to notes given 
by the Administrator in connection with such advances, but all 
such repayments shall constitute a charge against the authoriza-
tion to make contracts for grants contained in this section: 
Provided further, 
That no such determination of the Adminis-
trator shall be construed to prejudice the rights of the United 
States with respect to any such advance."; and 
(3) by adding at the end thereof the following new subsections: 
"(c) Notwithstanding any other provision of this or any other Act, 
if financial assistance authorized by this title to be made available to 
a locality or local public agency may be made available to any locality 
or local public agency within the limitations provided in sections 
42 u s c 1452, 102(e), 103(b), and 106(e), and the second paragraph following the 
1453, 1456, 1460. paragraph numbered (6) of section 110(c), the amount of such finan-
cial assistance made available to any locality or local public agency 
upon submission and processing of proper application therefor shall 
not otherwise be restricted except on the basis of (1) urgency of need, 
and (2) feasibility, as determined by the Administrator. 
"(d) The Administrator may contract to make grants for the prepa-
ration or completion of community renewal programs, which may 
include, without beiiig limited to, (1) the identification of slum areas 
or blighted, deteriorated, or deteriorating areas in the community, (2) 
the measurement of the nature and degree of blight and blighting 
factors within such areas, (3) determination of the financial, reloca-
tion, and other resources needed and available to renew such areas, 
(4) the identification of potential project areas and, where feasible, 
types of urban renewal action contemplated within such areas, and 
(5) scheduling or programing of urban renewal activities. Such pro-
grams shall conform, in the determination of the governing body of 
the locality, to the general plan of the locality as a whole. The Admin-
istrator may establish reasonable requirements respecting the scope 
and content of such programs. No contract for a grant pursuant to 
this subsection shall be made unless the governing body of the locality 
involved has approved the preparation or completion of the com-
munity renewal program and the submission by the local public agency 
42 use 1460. 
j^£ ^^ application for such a grant. Notwithstanding section 110(h) 
or the use in any other provision of this title of the term 'local public 
agency' or 'local public agencies', the Administrator may make grants 
pursuant to this subsection for the preparation or completion of a 
community renewal program to a single local public body authorized 
to perform the planning work necessary to such preparation or com-
pletion. No grant made pursuant to this subsection shall exceed two-
73 S T A T . ] 
PUBLIC LAW 86-372-SEPT. 23, 1959 
673 
thirds of the cost (as such cost is determined or estimated by the 
Administrator) of the preparation or completion of the community 
renewal program for which such grant is made." 
PUBLIC IMPROVEMENTS BY FEDERAL AGENCIES I N URBAN RENEWAL AREAS 
SEC. 406. Section 105(b) of the Housing Act of 1949 is amended by 68 stat. 625. 
adding the following before the semicolon at the end thereof: ": And 
'^^ ^^^ '^^ " 
provided further, That, with respect to any improvements of a type 
which it is otherwise authorized to undertake, any Federal agency (as 
defined in section 3(b) of the Federal Property and Administrative 
Services Act of 1949, as amended, and also including the District of |3 st^t^. 378. 
Columbia or any agency thereof) is hereby authorized to become 
obligated in accordance with this subsection, except that clause (ii) 
of this subsection shall apply to such Federal agency only to the 
extent that it is authorized (and funds have been made available) to 
make the improvements involved". 
PUBLIC DISCLOSURE BY REDEVELOPERS 
SEC. 407. Section 105 of the Housing Act of 1949 is amended by ^2 use HSS. 
adding at the end thereof the following new subsection: 
"(e) No understanding with respect to, or contract for, the disposi-
tion of land within an urban renewal area shall be entered into by a 
local public agency unless the local public agency shall have first made 
public, in such form and manner as may be prescribed by the Admin-
istrator, (1) the name of the redeveloper, together with the names 
of its officers and principal members, shareholders and investors, and 
other interested parties, (2) the redeveloper's estimate of the cost 
of any residential redevelopment and rehabilitation, and (3) the rede-
veloper's estimate of rentals and sales prices of any proposed housing 
involved in such redevelopment and rehabilitation: Provided, That 
nothing in this subsection shall constitute a basis for contesting the 
conveyance of, or title to, such land.". 
S T A T E LOAN CEILING 
SEC. 408. Section 106(e) of the Housing Act of 1949 is amended by Ji st|^ 30o^ 
striking out all of the text before the proviso and inserting in lieu 
thereof the following: "Not more than 121/^ per centum of the grant 
funds provided for in this title shall be expended in any one State". 
RELOCATION PAYMENTS 
SEC. 409. (a)(1) The first sentence of section 106(f)(2) of the 7istat. soo. 
Housing Act of 1949 is amended to read as follows: "As used in this 
^^ ^^^ *'*^^-
subsection, the term 'relocation payments' means payments by a local 
public agency to individuals, families, and business concerns for their 
reasonable and necessary moving expenses and any actual direct losses 
of property except goodwill or profit (which are incurred on and 
after August 7, 1956, and for which reimbursement or compensation 
is not otherwise made) resulting from their displacement from an 
urban renewal area made necessary by (i) the acquisition of real 
property by a local jjublic agency or by any other public body, (ii) 
code enforcement activities undertaken in connection with an urban 
renewal project, or (iii) a program of voluntary rehabilitation of 
buildings or other improvements in accordance with an urban renewal 
plan: Provided, That such payments shall not be made after comple-
tion of the project or if completion is deferred solely for the purpose 
of obtaining further relocation payments." 
674 
PUBLIC LAW 86-372-8EPT. 23, 1959 
[73 STAT. 
42 use 1456. 
(2) No relocation payments under section 106(f) of the Housing 
Act of 1949 shall be made for expenses or losses incurred prior to the 
date of the enactment of the Housing Act of 1959, except to the extent 
that such payments were authorized by such section as it existed prior 
to such date. 
42 vie fis^e. 
(b) Section 106(f) (2) of such Act is further amended by striking 
out "$100" each place it appears and inserting in lieu thereof "S200", 
and by striking out "$2,500" and inserting in lieu thereof "$3,000". 
42 use 1456. 
HOTELS AND OTHER TRANSIENT HOUSING 
SEC. 410. Section 106 of the Housing Act of 1949 is further 
amended by adding at the end thereof the following new subsection: 
"(g) No provision permitting the new construction of hotels or 
other housing for transient use in the redevelopment of any urban 
renewal area under this title shall be included in the urban renewal 
plan unless the community in which the project is located, under reg-
ulations prescribed by the Administrator, has caused to be made a 
competent independent analysis of the local supply of transient hous-
ing and as a result thereof has determined that there exists in the area 
a need for additional units of such housing." 
LOW-RENT HOUSING IN URBAN RENEWAL AREAS 
63 Stat. 419. 
SEC. 411. Sectiou 107 of the Housing Act of 1949 is amended to read 
42 u s e 1457. 
<
• 11 
as loUows: 
"PAYMENT FOR LAND USED FOR LOW-RENT PUBLIC HOUSING 
"SEC. 107. When it appears in the public interest that land to be 
acquired as part of an urban renewal project should be used in whole 
or in part as a site for a low-rent housing project assisted under the 
42 u
*
&
c
' MIO. 
United States Housing Act of 1937, as amended, or under a State or 
local program found by the Administrator to have the same general 
purposes as the Federal program under such Act, the site shall be made 
available to the public housing agency undertaking the low-rent hous-
ing project at a price equal to the fair value of land to a private rede-
veloper who wants to buy a site in the community for private rental 
housing with physical characteristics similar to those of the proposed 
low-rent housing project, and such amount shall be included as part 
of the development cost of such low-rent housing project: Provided, 
That the local contribution in the form of tax exemption or tax remis-
sion required by section 10(h) of such Act, or by analogous provisions 
in legislation authorizing such State or local program, with respect 
to the low-rent housing project into which such land is incorporated 
shall (if covered by a contract which, in the determination of the 
Public Housing Commissioner, and without regard to the require-
ments of the first proviso of such section 10(h), will assure that such 
local contribution will be made during the entire period that the 
project is used as low-rent housing within the meaning of such Act, 
or by provisions found by the Administrator to give equivalent assur-
ance in the case of State or local programs), be accepted as a local 
grant-in-aid equal in amount, as determined by the Administrator, 
to one-half (or one-third in the case of an urban renewal project on 
a three-fourths capital grant basis) of the difference between the cost 
of such site (including costs of land, clearance, site improvements, and 
a share, prorated on an area basis, of administrative, interest, and 
other project costs) and its sales price, and shall be considered a local 
grant-in-aid furnished in a form other than cash within the meaning 
42 use 1460. 
of section 110(d) of this Act." 
42 use 1410. 
73 STAT.] 
PUBLIC L
A
W 86-372-SEPT. 23, 1959 
675 
REQUIREMENTS FOR URBAN RENEWAL* PLAN 
SEC. 412. Section 110(b) of the Housing Act of 1949 is amended 
J^ f^at. 3
0
^
1
. 
by inserting after "to indicate" in clause (2) the following: ", to the 
extent required by the Administrator for the making of loans and 
grants under this title,". 
NONRESIDENTIAL REDEVELOPMENT 
SEC. 413. Section 110(c) of the Housing Act of 1949 is amended 
Jo sm. ^
1
0
9
7
. 
by striking out the second paragraph following the paragraph num-
bered (6) and inserting in lieu thereof the following: 
"Financial assistance shall not be extended under this title with 
respect to any urban renewal area which is not predominantly resi-
dential in character and which, under the urban renewal plan there-
for, is not to be redeveloped for predominantly residential uses: Pro-
vided, That, if the governing body of the local public agency deter-
mines that the redevelopment of such an area for predominantly 
nonresidential uses is necessary for the proper development of the 
community, the Administrator may extend financial assistance under 
this title for such a project: Provided further, That the aggregate 
amount of capital grants contracted to be made pursuant to this title 
with respect to sudi projects after the date of the enactment of the 
Housing Act of 1959 shall not exceed 20 per centum of the aggregate 
amount of grants authorized by this title to be contracted for after 
such date." 
LOCAL GRANTS 
SEC. 414. (a) Section 110(d) of the Housing Act of 1949 is $^ ggl:'i^lo. 
amended by adding at the end thereof the following new paragraph: 
"Notwithstanding any other provision of this subsection, no dona-
tion or provision of a public improvement or public facility of a type 
falling within the purview of this subsection shall be deemed to be 
ineligible as a local grant-in-aid for any project solely on the basis 
that the construction of such improvement or facility was commenced 
without notification to the Administrator or prior to Federal recog-
nition of such project, if such construction was commenced not more 
than three years prior to the authorization by the Administrator of 
a contract tor loan or capital grant for the project." 
(b) The requirement in section 110(d) of the Housing Act of 1949 
that the assistance provided by a State, municipality, or other public 
body under that sectioUj in order to qualify as a local grant-in-aid, 
shall be in connection with a project on which a contract for capital 
grant has been made under title I of that Act, shall not apply to 
" stat^ ^i^-
assistance provided during the period from July 1, 1957, through et seq. 
December 31,1957, in connection with urban renewal activities which 
were extended Federal recognition within sixty days after the provi-
sion of such assistance was initiated. 
CREDIT FOR LOSS OF INTEREST 
SEC. 415. Section 110(e) of the Housing Act of 1949 is amended J2 tree i^eo 
by striking out the first sentence and inserting in lieu thereof the 
following: "'Gross project cost' shall comprise (1) the amount of 
the expenditures by the local public agency with respect to any and 
all undertakings necessary to carry out tne project (including the 
payment of carrying charges, but not beyond the point where the 
project is completed), and (2) the amount of such local grants-in-aid 
as are furnished in forms other than cash. There may be included 
as part of the gross project cost, under any contract for loan or grant 
676 
PUBLIC LAW 86-372-SEPT. 23, 1959 
[73 STAT. 
heretofore or hereafter executed under this title, with respect to 
moneys of the local public agency which are actually expended and 
outstanding for undertakings (other than in the form of local grants-
in-aid) necessary to carry out the project, in the absence of carrying 
charges on such moneys, an amount in lieu of carrying charges which 
might otherwise have been payable thereon for the period such moneys 
are expended and outstanding but not beyond the point where the-
project is completed, computed for each six-month period or portion 
thereof, at an interest rate to be determined by the Administrator 
after taking into consideration for each preceding six-month period 
the average interest rate borne by any obligations of local public 
agencies for short-term funds obtained from sources other than the 
42 use 1452. 
Federal Government in the manner provided in section 102(c): 
Provided^ That such amount may be computed on the net total of all 
such moneys of the local public agency remaining expended and 
outstanding, less other moneys received from the project undertaken 
in excess of project expenditures, in all projects of the local public 
agency under this title, and allocated, as the Administrator may deter-
mine, to each of such projects. 
With respect to a project for which 
a contract for capital grant has been executed on a three-fourths basis 
42 use 1453. 
pursuant to the proviso in the second sentence of section 103(a), gross 
project cost shall include, in lieu of the amount specified in clausci 
(1) above, the amount of the expenditures by the local public agency 
with respect to the following undertakings and activities necessary 
to carry out such project: 
"(i) acquisition of land (but only to the extent of the considera-
tion paid to the owner and not title, appraisal, negotiating, legal, 
or any other expenditures of the local public agency incidental to 
acquiring land), disposition of land, demolition and removal of 
buildings and improvements, and site preparation and improve-
ments, all as provided in paragraphs (1), (2), (3), (4), and (6) 
of subsection (c) ; and 
"(ii) the payment of carrying charges related to the under-
takings in clause (i) (including amounts in lieu of carrying 
charges as determined above), exclusive of taxes and payments in 
lieu of taxes, but not beyond the point where such project is com-
pleted ; 
but not the cost of any other undertakings and activities (including, 
but without being limited to, the cost of surveys and plans, legal serv-
ices of any kind, and all administrative and overhead expenses of the 
local public agency) with respect to such project." 
UNIFORM DATE FOR INTEREST RATE DETERMINATION 
42 us^c IUQ. 
^^^' 416- Section 110(g) of the Housing Act of 1949 is amended— 
(1) by striking out of the first sentence "is approved" and 
inserting in lieu thereof "for any project under this title is au-
thorized" ; 
(2) by inserting in the second sentence after "Any" the word 
"such"; and 
(3) by striking out of the second sentence "contract is revised 
or superseded by such later contract" and inserting in lieu thereof 
"later contract is authorized". 
CONFORMING AMENDMENTS 
SEC. 417. The Housing Act of 1949 is amended— 
i453.^f4ii6.^ '* ^ °' 
(1) by striking out the word "capital" in section 100, in the sec-
ond sentence of section 103 (b), and in sections 106 (a)(3), 106 (b), 
106(c)(6),106(c)(8),and 106(e); 
73 S T A T . ] 
PUBLIC LAW 86-372-SEPT. 23, 1969 
677 
42 U S C 
1451, 
14 K 3. 
(2) by inserting in section 101(a) after the word "title" in the 
first place where it appears therein "or for grants pursuant to 
section 103 (d)"; and 
(3) by adding at the end of section 110 the following new sub- 
^^ ^^^ ^'*^°' 
section: 
"(k) 'Federal recognition* means execution of any contract for 
financial assistance under this title or concurrence by the Administra-
tor in the commencement, without such assistance, of surveys and 
plans." 
42 
u s e 
1450 
et seq. 
URBAN RENEWAL AREAS INVOLVING COLLEGES OR UNIVERSITIES 
SEC. 418. Title I of the Housing Act of 1949 is amended by adding 
at the end thereof the following new section: 
" U R B A N RENEWAL AREAS INVOLVING COLLEGES OR UNIVERSITIES 
"SEC. 112. In any case where an educational institution is located 
in or near an urban renewal project area and the governing body of 
the locality determines that, in addition to the elimination of slums 
and blight from such area, the undertaking of an urban renewal 
project m such area will further promote the public welfare and the 
proper development of the community (1) by making land in such 
area available for disposition, for uses in accordance with the urban 
renewal plan, to such educational institution for redevelopment in 
accordance with the use or uses specified in the urban renewal plan, 
(2) by providing, through the redevelopment of the area in accordance 
with the urban renewal plan, a cohesive neighborhood environment 
compatible with the functions and needs of such educational institu-
tion, or (3) by any combination of the foregoing, the Administrator 
is authorized to extend financial assistance under this title for an 
urban renewal project in such area without regard to the requirements 
in section 110 hereof with respect to the predominantly residential 
'*2 use i46o. 
character or predominantly residential reuse of urban renewal areas: 
Provided, That the aggregate expenditures made by such institution 
(directly or through a private redevelopment corporation) for the 
acquisition (from others than the local public agency), within, 
adjacent to, or in the immediate vicinity of the project area, of land, 
buildings, and structures to be redeveloped or rehabilitated by such 
institution for educational uses in accordance with the urban renewal 
plan (or with a development plan proposed by such institution or 
corporation, found acceptable by the Administrator after considering 
the standards specified in section 110(b), and approved under State 
or local law after public hearing), and for the demolition of such 
buildings and structures (including expenditures to assist in relocating 
tenants therefrom), if, pursuant to such urban renewal or development 
plan, the land is to be cleared and redeveloped, as certified by such 
institution to the local public agency and approved by the Administra-
tor, shall be a local grant-in-aid in connection with such urban renewal 
project: Provided further, That no such expenditures shall be deemed 
ineligible as a local grant-in-aid in connection with any such project 
if made not more than five years prior to the authorization by the 
Administrator of a contract for a loan or capital grant for such urban 
renewal project: And provided further, 
That the term 'educational 
institution' as used herein shall mean any educational institution of 
higher learning, including any public educational institution or any 
private educational institution, no part of the net earnings of which 
shall inure to the benefit of any private shareholder or individual." 
Educational 
in-
stitution. 
678 
PUBLIC LAW 86-372-SEPT. 23, 1959 
[73 8T A T , 
68 Stat. 640. 
40 u s e 461. 
Grants. 
64 Stat. 1109. 
42 u s e 1855a. 
Restrictions. 
31 u s e 529. 
Appropriation. 
URBAN 
PLANNING 
SEC. 419. Section 701 of the Housing Act of 1954 is amended to read 
as follows: 
"URBAN PLANNING 
"SEC. 701. (a) In order to assist State and local governments in 
solving planning problems resulting from increasing concentration of 
population in metroj)olitan and other urban areas, including smaller 
communities, to facilitate comprehensive planning for urban develop-
ment by State and local governments on a contmuing basis, and to 
encourage State and local governments to establish and develop plan-
ning staffs, the Administrator is authorized to make planning grants 
to— 
"(1) State planning agencies, or (in States where no such plan-
ning agency exists) to agencies or instrumentalities of State gov-
ernment designated by the Governor of the State and acceptable 
to the Administrator as capable of carrying out the planning func-
tions contemplated by this section, for the provision of planning 
assistance to (A) cities, other municipalities, and counties having 
a population of less than 50,000 according to the latest decennial 
census, (B) any group of adjacent communities, either incor-
porated or unincorporated, having a total population of less than 
50,000 according to the latest decennial census and having com-
mon or related urban planning problems resulting from rapid 
urbanization, and (C) cities, other municipalities, and counties 
referred to in paragraph (3) of this subsection and areas referred 
to in paragraph (4) of this subsection; 
"(2) ofi^ial State, metropolitan, and regional planning agencies 
empowered under State or local laws or interstate compact to per-
form metropolitan or regional planning; 
"(3) cities, other municipalities, and counties which have 
suffered substantial damage as a result of a catastrophe which 
the President, pursuant to section 2(a) of 'An Act to authorize 
Federal assistance to States and local governments in major dis-
asters, and for other purposes', has determined to be a major 
disaster; 
"(4) to official governmental planning agencies for areas where 
rapid urbanization has resulted or is expected to result from the 
establishment or rapid and substantial expansion of a Federal 
installation; and 
"(5) State planning agencies for State and interstate compre-
hensive planning (as defined in subsection (d)) and for research 
and coordination activity related thereto. 
Planning assisted under this section shall, to the maximum extent 
feasible, cover entire urban areas having common or related urban 
development problems. 
" (b) A grant made under this section shall not exceed 50 per centum 
of the estimated cost of the work for which the grant is made. All 
grants made under this section shall be subject to terms and conditions 
prescribed by the Administrator. 
No portion of any grant made 
under this section shall be used for the preparation of plans for specific 
public works. The Administrator is authorized, notwithstanding the 
provisions of section 3648 of the Revised Statutes, as amended, to 
make advances or progress payments on account of any planning grant 
made under this section. 
There is hereby authorized to be appro-
priated not exceeding $20,000,000 to carry out the purposes of this 
section, and any amounts so appropriated shall remain available until 
expended. 
I
T
S S T A T . ] 
PUBLIC LAW 8 6 - 3 7 2 - S E P T . 23, 1969 
679 
" (c) The Administrator is authorized, in areas embracing several 
municipalities or other political subdivisions, to encourage planning 
on a unified metropolitan basis and to provide technical assistance for 
such planning and the solution of problems relating thereto. 
"(d) It is the further intent of this section to encourage compre- pi^^JlEig.''*^*"^*''* 
hensive planning for States, cities, counties, metropolitan areas, and 
urban regions and the establishment and development of the organiza-
tional units needed therefor. 
In extending financial assistance under 
this section, the Administrator may require such assurances as he deems 
adequate that the appropriate State and local agencies are making 
reasonable progress in the development of the elements of compre-
hensive planning. 
Comprehensive planning, as used in this section, 
includes the following, to the extent directly related to urban needs: 
(1) preparation, as a guide for long-range development, of general 
physical plans with respect to the pattern and intensity of land use and 
the provision of public facilities, together with long-range fiscal plans 
for such development; f2) programing of capital improvements based 
on a determination oi relative urgency, together with definitive 
financing plans for the improvements to be constructed in the earlier 
years of the program; (3) coordination of all related plans of the 
departments or subdivisions of the government concerned; (4) inter-
governmental coordination of all related planned activities among the 
State and local governmental agencies concerned; and (5) preparation 
of regulatory and administrative measures in support of the foregoing. 
"(e) In the exercise of his function of encouraging comprehensive 
planning by the States, the Administrator shall consult with those 
officials of the Federal Government responsible for the administration 
of programs of Federal assistance to the States and municipalities for 
various categories of public facilities." 
INVESTMENT BY BANKS IN LONG-TEBM OBLIGATIONS OF LOCAL PUBLIC 
AGENCIES 
SEC. 420. The next to the last sentence of paragraph 7 of section 
5136 of the Kevised Statutes, as amended (12 U.S.C. 24), is amended 
by striking out "prior to the maturity of such obligations (which 
obligations shall have a maturity of not more than eighteen months), 
monies in an amount which (together with any other monies irrev-
ocably committed to the payment of interest on such obligations) 
will suffice to pay the principal of such obligations with interest to 
maturity thereon, which monies under the terms of said agreement are 
required to be used for the purpose of paying the principal of and 
the interest on such obligations at their maturity" the first place it 
appears and inserting in lieu thereof the following: "monies in an 
aggregate amount which (together with any other monies irrevocably 
committed to the payment of interest on such obligations) will suffice 
to pay, when due, the interest on and all installments (including the 
final installment) of the principal of such obligations, which monies 
under the terms of said agreement are required to be used for such 
payments". 
TITLE V—LOW-RENT PUBLIC HOUSING 
DECLARATION OF POLICY 
SEC. 501. Section 1 of the United States Housing Act of 1937 is 
so sm. sss. 
amended by adding at the end thereof the following new sentences: 
"In the development of low-rent housing it shall be the policy of the 
United States to make adequate provision for larger families and for 
families consisting of elderly persons. It is the policy of the United 
880 
PUBLIC LAW 86-872-8EPT. 23, 1969 
[78 STAT, 
States to vest in the local public housing agencies the maximum 
amount of responsibility in the administration of the low-rent hous-
ing program, including responsibility for the establishment of rents 
and eligibility requirements (subject to the approval of the Author-
ity), with due consideration to accomplishing the objectives of this 
Act while effecting economies." 
CENTRAL ADMINISTRATIVE OFFICE 
FACILITIES 
SEC. 502. The last sentence of paragraph (5) of section 2 of the 
II vie f402. 
United States Housing Act of 1937 is amended— 
(1) by inserting after "1949" the following:", or in cases where 
the public housing agency and the local public agency for pur-
poses of such title I operate under a combined central administra-
tive office staff,"; and 
(2) by striking out "its functions as such local public agency" 
each place it appears and inserting in lieu thereof "the functions 
of sucli local public agency". 
R E N T S A N D I N C O M E LIMITS 
SEC. 503. (a) Paragraph (1) of section 2 of the United States Hous-
71 Stat. 301. 
ing Act of 1937 is amended to read as follows: 
"(1) The term 'low-rent housing' means decent, safe, and sanitary 
dwellings within the financial reach of families of low income, and 
developed and administered to promote serviceability, efficiency, econ-
omy, and stability, and embraces all necessary appurtenances thereto. 
The dwellings in low-rent housing shall be available solely for families 
of low income. Income limits for occupancy and rents shall be fixed 
by the public housing agency and approved by the Authority after 
taking into consideration (A) the family size, composition, age, physi-
cal handicaps, and other factors which might affect the rent-paying 
ability of the family, and (B) the economic factors which affect the 
financial stability and solvency of the project." 
42 ulc HIS. 
(^) Paragraph (7) (b) of section 15 of such Act is amended by in-
serting after "a gap of at least 20 per centum" the following " (or 5 
per centum in the case of any family entitled to a first preference as 
42 u#c f4"6. 
provided in section 10(g))". 
M I N I M U M 
A G E F O R ADMISSION OF SINGLE PERSONS AND ELDERLY 
FAMILIES 
TO LOW-RENT 
PROJECTS 
SEC. 504. The second and third sentences of paragraph (2) of sec-
42 u#c fm. 
^^^^ ^ ®^ ^
^
^
® United States Housing Act of 1937 are amended to read 
as follows: "The term 'families' means families consisting of two or 
more persons, a single person who has attained retirement age as 
70 
S t a t . 
815. 
809, defined in section 216(a) of the Social Security Act or who has attained 
42 u s e 416, the age of fifty and is under a disability as defined in section 223 of 
'*^^' 
that Act, or the remaining member of a tenant family. 
The term 
'elderly families' means families the head of which (or his spouse) has 
attained retirement age as defined in section 216(a) of the Social 
Security Act or has attained the age of fifty and is under a disability 
as defined in section 223 of that Act." 
LOW-RENT HOUSING 
AUTHORIZATION 
SEC. 505. (a) Section 10(i) of the United States Housing Act of 
42 use H ?
o
.
* 
^^^"^ ^^ amended by striking out all that precedes the third proviso and 
inserting in lieu thereof the following: 
"(i) Notwithstanding any other provision of law, the Authority 
may enter into new contracts for loans and annual contributions for 
73 S T A T . ] 
PUBLIC LAW 86-372-8EPT. 23, 1969 
68X 
(1) not more than such number of dwelling units as does not exceed 
the number of units which were covered by annual contribution con-
tracts on the date of enactment of the Housing Act of 1959 and are not 
built, the contracts therefor being canceled; and (2) additional dwell-
ing units w^hich, together with the dwelling units covered by new con-
tracts entered into under clause (1), do not exceed thirty-seven thou-
sand units: Provided^ That the Authority may enter into only such 
new contracts for preliminary loans as are consistent with the num-
ber of dwelling units for which contracts for annual contributions 
may be entered into hereunder". 
(b) The last proviso under the heading "Public Housing Admin- 
Partial repeal, 
istration, Annual Contributions" in title I of the First Independent 
Offices Appropriation Act, 1954 (67 Stat. 307), is repealed. 
EXTENSION o r WAIVER I N CASE OF VETERANS AND SERVICEMEN 
SEC. 506. The proviso in section 15(8) (b) of the United States 
Housing Act of 1937 is amended by striking out "March 1, 1959" and 
\\ st|t^-1^4^/5 
inserting in lieu thereof "October 1,1961". 
PAYMENT FOR SERVICES 
SEC. 507. Section 15 of the United States Housing Act of 1937 is so su^. 895^ 
amended by adding at the end thereof the following new paragraph: 
"(10) Notwithstanding any other provision of law or any contract 
or other arrangement made pursuant thereto, any public housing 
agency which utilizes public services and facilities of a municipality 
or other local governmental agency making charges therefor separate 
from real and personal property taxes shall be authorized by the 
Authority (without any amendment to the contract for annual con-
tributions or deductions from payments in lieu of taxes otherwise 
payable) to pay to such municipality or other local governmental 
agency the amount that would be charged private persons or dwell-
ings similarly situated for such facilities and services." 
TITLE VI—COLLEGE HOUSING 
SEC. 601. Section 401(d) of the Housing Act of 1950 is amended 
^^ stat. 645. 
to read as follows: 
"(d) To obtain funds for loans under subsection (a) of this section, 
the Administrator may issue and have outstanding at any one time 
notes and obligations for purchase by the Secretary of the Treasury 
in an amount not to exceed $1,175,000,000: Provided^ That the amount 
outstanding for other educational facilities, as defined herein, shall 
not exceed $125,000,000: Provided 
further^ That the amount out-
standing for hospitals, referred to in clause (2) of section 404(b) of 
'^ ^^^ 1749c. 
this title, shall not exceed $50,000,000." 
SEC. 602. Section 402 of the Housing Act of 1950 is amended by 
\\ us^c m9a. 
adding the following new subsections at the end thereof: 
"(e) The provisions of section 309 of the Independent Offices 
Appropriation Act, 1950 (63 Stat. 662), which are applicable to cor- 
64 ^^^ ^^^ 
porations or agencies subject to the Government Corporation Control 
Act, shall also be applicable to the activities of the Administrator 
\\ 
^ici^inote. 
under this title. 
"(f) The Administrator shall take such action as may be necessary 
to insure that all laborers and mechanics employed by contractors or 
subcontractors on any project assisted under this title, the construction 
or rehabilitation of which was commenced after the date of enactment 
of the Housing Act of 1959, (1) shall be paid wages at rates not less 
than those prevailing on the same type of work on similar construction 
682 
PUBLIC LAW 86-372-8EPT. 23, 1959 
[73 STAT, 
in the immediate locality as determined by the Secretary of Labor in 
Jo^u^s c°276a- '^<^cordance with the Act of March 3, 1931 (Davis-Bacon Act), as 
276a-5. 
°" amended, and (2) shall be employed not more than forty hours in any 
one week unless the employee receives wages for his employment in 
excess of the hours specified above at a rate not less than one and one-
half times the regular rate at which he is employed; but the Adminis-
trator may waive the application of this subsection in cases or classes of 
cases where laborers or mechanics, not otherwise employed at any time 
in the construction of such project, voluntarily donate their services 
without full compensation for the purpose of lowering the costs of 
construction and the Administrator determines that any amounts saved 
thereby are fully credited to the educational institution undertaking 
the construction." 
1
2 vie f749c 
^^^- ^?^' (^) Section 404(b) of the Housing Act of 1950 is amended 
by striking out "and (4)" and inserting in lieu thereof "(4)" and by 
inserting before the period at the end thereof the following: ", and 
(5) any nonprofit student housing cooperative corporation established 
for the purpose of providing housing for students or students and 
faculty of any institution included in clause (1) of this subsection". 
1
2 use 1749. 
(}3) Section 401 of such Act is amended by adding at the end thereof 
the following new subsection: 
"(g) In the case of any loan made under this section to a nonprofit 
student housing cooperative corporation referred to in clause (5) of 
section 404(b), the Administrator shall require that the note securing 
such loan be co-signed by the educational institution (referred to in 
clause (1) of such section) at which such corporation is located; and 
in the event of the dissolution of such corporation, title to the housing 
constructed with such loan shall vest in such educational institution." 
TITLE VII—ARMED SERVICES HOUSING 
f2"use" 1748b. 
SEC. 701. (a) Section 803(a) of the National Housing Act is 
amended by striking out "September 30, 1960" and inserting in lieu 
thereof "October 1, 1961". 
69 Sta^. 648. 
(b) The second sentence of section 803(b)(3) of such Act is 
amended by striking out "have a maturity not to exceed twenty-five 
years" and inserting in lieu thereof "but not to exceed thirty years 
from the beginning of amortization of the mortgage". 
(c) Section 803(b) (3) of such Act is further amended by adding 
at the end thereof the following: "The property or project may include 
such nondwelling facilities as the Commissioner deems adequate to 
serve the occupants." 
(d) Section 803(c) of such Act is amended by adding at the end 
thereof the following new sentence: "The Commissioner is further 
authorized to reduce the amount of the premium charge below one-
half of 1 per centum per annum with respect to any mortgage on prop-
erty acquired by the Secretary of Defense or his designee if the mort-
gage is insured pursuant to the provisions of this title as in effect 
prior to August 11, 1955." 
1
2 use 1748b. 
(e) Section 803 of such Act is further amended by adding at the 
end thereof the following new subsection: 
"(k) The Commissioner shall not insure any mortgage under this 
section unless the principal contractor or contractors engaged in the 
construction of the project involved file a certificate or certificates (at 
such times, in the course of construction or otherwise, as the Commis-
sioner may prescribe) certifying that the laborers and mechanics 
employed m the construction of such project have been paid not less 
than one and one-half times the regular rate of pay for employment 
in excess of eight hours in any one day or in excess of forty hours in 
any one week." 
73 S T A T . ] 
PUBLIC LAW 86-372-SEPT. 23, 1959 
683 
SEC. 702. (a) The first sentence of section 404(a) of the Housing 
Amendments of 1955 is amended to read as follows: "Whenever the 
Secretary of Defense or his designee deems it necessary for the purpose 
of this title, he may acquire, by purchase, donation, condemnation, or 
other means of transfer, any land or (with the approval of the Federal 
Housing Commissioner) (1) any housing financed with mortgages 
insured under title VIII of the National Housing Act as in effect prior 
to August 11, 1955, or (2) any housing situated adjacent to a military 
installation which was (A) completed prior to July 1,1952, (B) certi-
fied by the Department of Defense, prior to construction, as being 
necessary to meet an existing military family housing need and con-
sidered as military housing by the Federal Housing Commissioner, 
and (C) financed with mortgages insured under section 207 of the 
National Housing Act." 
(b) Section 404(b) of the Housing Amendments of 1955 is amended 
to read as follows: 
"(b) Notwithstanding any provision of subsection (a) to the con-
trary, the Secretary of Defense or his designee shall, in the manner 
provided in subsection (a), acquire by purchase, donation, or other 
means of transfer or, if the parties cannot agree upon terms for acqui-
sition by such means, by condemnation, any housing described in clause 
(1) or (2) of subsection (a) of this section which is located at or near 
a military installation where the construction of housing under the 
Armed Services Housing Mortgage Insurance Program has been 
approved by the Secretary." 
(c) Section 407(f) of the Act entitled "An Act to authorize certain 
construction at military installations, and for other purposes", 
approved August 30, 1957, is amended to read as follows: 
"(f) This section shall have no application to any housing described 
in clause (1) or (2) of section 404(a) of the Housing Amendments of 
1955, as amended." 
SEC. 703. The third sentence of section 404(c) (2) of the Housing 
Amendments of 1955 is amended by striking out the matter preceding 
the first colon and inserting in lieu thereof the following: "The amount 
of such deposit in any case where the sponsor or owner has not certified 
the cost of the project to the Federal Housing Commissioner at the 
time of the enactment of the Military Construction Act of 1959 shall 
be determined by the Secretary of Defense, or his designee, in accord-
ance with the Act of February 26, 1931 (46 Stat. 1421), with a view 
toward accurately estimating the equity of the sponsor or owner". 
SEC. 704. (a) Title V I I I of the National Housing Act is amended 
by adding at the end thereof the following new section: 
"SEC. 810. (a) Notwithstanding any other provision of this title, the 
Commissioner may insure and make commitments to insure any mort-
gage under this section which meets the eligibility requirements here-
inafter set forth. 
"(b) No mortgage shall be insured under this section unless the 
Secretary of Defense or his designee shall have certified to the Com-
missioner that (1) the housing w^hich is covered by the insured mort-
gage is necessary in the interest of national defense in order to provide 
adequate housing for military personnel and essential civilian per-
sonnel serving or employed in connection with an installation of one 
of the armed services of the United States, (2) there is no present 
intention to curtail substantially the number of such personnel 
assigned or to be assigned to the installation, (3) adequate housing 
is not available for such personnel at reasonable rentals within reason-
able commuting distances of such installation, and (4) the mortgaged 
property will not so far as can be reasonably foreseen substantially 
curtail occupancy in any existing housing in the vicinity of the instal-
70 Stat. 1111. 
42 u s e 1594a. 
12 u s e 
1 7 4 8-
1748h, 1748g-l. 
12 u s e 1713. 
70 Stat. n i l . 
42 u s e 1594a. 
71 Stat. 556. 
42 u s e 1594J. 
72 Stat. 663. 
42 u s e 1594 a. 
40 U S e 
258a-
258e. 
12 u s e 
1 7 4 8-
1748h, 1748g-l. 
E l i g i b ility re-
quirements. 
32716 O-60—46 
684 
PUBLIC LAW 86-372-SEPT. 23, 1969 
[73 STAT. 
lation which is covered by mortgages insured under this Act. 
Any 
such certificate issued by the Secretary of Defense or his designee 
shall be conclusive evidence to the Commissioner of the eligibility 
of the mortgage for insurance in accordance with the requirements 
of this subsection. 
"(c) The Commissioner may accept any mortgage for insurance 
under this section without regard to any requirement in any other 
section of this Act that the property or project be economically sound. 
"(d) The Commissioner shall require each project covered by a 
mortgage insured under this section to be held for rental for a period 
of not less than five years after the project or dwelling is made avail-
able for initial occupancy or until advised by the Secretary of Defense 
or his designee that the housing may be released from such rental 
condition. 
The Commissioner shall prescribe such procedures as in 
his judgment are necessary to secure reasonable preference or priority 
in the sale or rental of dwellings covered by a mortgage insured 
under this section for military personnel and essential civilian 
employees of the armed services, and employees of contractors for the 
armed services, as evidenced by certification issued by the Secretary 
of Defense or his designee. Such certificate shall be conclusive evi-
dence to the Commissioner of the employment status of the person 
requiring housing and of such person's need for the housing. 
"(e) For the purpose of providing multifamily rental housing 
projects or housing projects consisting of individual single-family 
dwellings for sale, the Commissioner is authorized to insure mortgages 
(including advances on such mortgages during construction) which 
cover property held by a private corporation, association, cooperative 
society, or trust. Any such mortgagor shall possess powers necessary 
therefor and incidental thereto and shall until the termination of all 
obligations of the Commissioner under such insurance be regulated 
or restricted as to rents or sales, charges, capital structure, rate of 
return, and methods of operation to such extent and in such manner 
as to provide reasonable rentals to tenants and a reasonable return 
on the investment. The Commissioner may make such contracts with, 
and acquire for not to exceed $100 such stock or interest in, any such 
corporation, association, cooperative society, or trust as he may deem 
necessary to render effective such restriction or regulation. 
Such 
stock or interest shall be paid for out of the Armed Services Housing 
Mortgage Insurance Fund, and shall be redeemed by the corporation, 
association, cooperative society, or trust at par upon the termination 
of all obligations of the Commissioner under the insurance. 
"(f) To be eligible for insurance under this section, a mortgage 
on any multifamily rental property or project shall involve a principal 
obligation in an amount (1) not to exceed $5,000,000 or (2) not to 
exceed, for such part of such property or project as may be attributable 
to dwelling use, $2,500 per room (or $9,000 per family unit if the 
number of rooms in such property or project is less than four per 
family unit), and not to exceed 90 per centum of the estimated value 
of the property or project when the proposed physical improvements 
are completed. The Commissioner may increase any of the foregoing 
dollar amount limitations per room contained in this paragraph by 
not to exceed $1,000 per room in any geographical area where he finds 
that cost levels so require. 
"(g) To be eligible for insurance under this section a mortgage on 
any property or project constructed for eventual sale of single-family 
dwellings shall involve a principal obligation in an amount not to 
exceed $5,000,000 and not to exceed a sum computed on the basis of a 
separate mortgage for each single-family dwelling (irrespective of 
whether such dwelling has a party wall or is otherwise physically con-
73 S T A T . ] 
P U B U C LAW 86-372-SEPT. 23, 1959 
686 
nected with another dwelling or dwellings) comprising the property 
or project equal to the total of each of the maximum prmcipal obliga-
tions of such mortgages which would meet the requirements of section 
203(b) (2) of this Act if the mortgagor were the owner and occupant 
who had made the required payment on account of the property pre-
scribed in such paragraph. 
"(h) Any mortgage insured under this section shall provide for 
complete amortization by periodic payments within such terms as the 
Commissioner may prescribe but not to exceed the maximum term ap-
plicable to mortgages under section 207 of this Act and shall bear in-
terest (exclusive of premium charges for insurance) at not to exceed 
the rate applicable to mortgages insured under section 207, except that 
individual mortgages of the character described in subsection (g) 
covering the individual dwellings in the project may have a term not 
in excess of the maximum term applicable to mortgages insured under 
section 203 of this Act or the unexpired term of the project mortgage 
at the time of the release of the mortgaged property from such project 
mortgage, whichever is the greater, and shall bear interest at not to 
exceed the rate applicable to mortgages insured under section 203. 
The Commissioner may consent to the release of a part or parts of the 
mortgaged property from the lien of the mortgage upon such terms 
and conditions as he may prescribe and the mortgage may provide for 
such release, and a mortgage of the character described in subsection 
(g) of this section may provide that, at any time after the release of 
the project from the rental period prescribed by subsection (d), such 
mortgage may be replaced, in whole or in part, by individual^ 
mortgages covering each individual dwelling in the project in amounts 
not to exceed the unpaid balance of the blanket mortgage allocable to 
the individual property. Each such individual mortgage may be in-
sured under this section. Property covered by a mortgage insured un-
der this section msij include eight or more family units and may in-
clude such commercial and community facilities as the Commissioner 
deems adequate to serve the occupants. 
"(i) The aggregate number of dwelling units (including all units 
in multifamily projects or individual dwellings) covered by out-
standing commitments to insure and mortgages insured under this 
section shall at no time exceed five thousand dwelling units. 
"(j) The provisions of subsections (d), (e), (g), (h), (i), (j), 
(k), (1), (m), (n), and (p) of section 207 of this title shall be appli-
cable to mortgages insured under this section except individual mort-
gages of the character described in subsection (g) of this section 
covering the individual dwellings in the project, and as to such in-
dividual mortgages the provisions of subsections (a), (c), (d), (e), 
(f)» (g)) (h), (j), and (k) of section 204 shall be applicable: Pro-
vided. That wherever the words 'Fund', 'Mutual Mortgage Insurance 
Fund, or 'Housing Insurance Fund' appear in section 204 or 207, 
such reference shall refer to the Armed Services Housing Mortgage 
Insurance Fund with respect to mortgages insured under this section, 
"(k) The provisions of sections 801, 802, 803(c), 803(i), 803(j), 
804(a), 804(b), and 807 and the provisions of section 803(a) relating 
to the aggregate amount of all mortgages insured and the expiration 
date of the Commissioner's authority to insure under this title shall 
be applicable to mortgages insured under this section. 
"(1) If the Commissioner determines that insurance of mortgages 
on any housing of the type described in this section is not an accept-
able risk, he may require the Secretary of Defense to guarantee the 
Armed Services Housing Mortgage Insurance Fund from loss with 
respect to mortgages insured pursuant to this section. 
There are 
hereby authorized to be appropriated such sums as may be necessary 
to provide for payment to meet losses arising from such guaranty." 
12 use 1709. 
12 use 1713. 
12 use 1709. 
12 use 1713. 
12 use 1710. 
12 use 17 4 8-
1748c, 1748f. 
Guaranty. 
686 
PUBLIC LAW 86-372-SEPT. 23, 1959 
[73 STAT. 
1
2 use i748g. 
(b) Section 808 of such Act is amended by striking out "The"" and 
inserting in lieu thereof the following: "Except in the case of mort-
gages on multifamily rental housing projects insured under section 
Ante, p. 683. 
810, the". 
12 use 1715c. 
(c) Section 212(a) of such Act is amended by striking out "or 
under title VIII" and inserting in lieu thereof "or under section 803 
or 810 of title VIII". 
TITLE VIII—MISCELLANEOUS 
SURVEYS OF PUBLIC WORKS PLANNING 
40 vie AU' 
^?^' ^^^- Section 702 of the Housing Act of 1954 is amended by 
adding at the end thereof the following new subsection: 
"(f) The Administrator is authorized to use during any fiscal year 
not to exceed $50,000 of the moneys in the revolving fund (established 
under subsection (e)) to conduct surveys of the status and current 
volume of State and local public works planning and surveys of esti-
mated requirements for State and local public works: Provided^ 
That the Administrator, in conducting any such survey, may utilize 
or act through any Federal department or agency with its consent." 
DISPOSAL o r PASSYUNK AND NEWPORT WAR HOUSING PROJECTS 
SEC. 802. (a) The use of projects PA.-36011 and PA-36012 (which 
were conveyed to the Housing Authority of Philadelphia, Pennsyl-
70 Stat. 1106. 
vania, under section 406(c) of the Housing Act of 1956) for the 
housing of military personnel and civilians employed in defense activ-
ities without regard to their income and the giving of a preference in 
respect of 700 dwelling units in such projects for such military per-
sonnel as the Secretary of Defense or his designee prescribes, for a 
period of five years after the date of the conveyance of such projects, 
IS hereby authorized; and such use and the giving of such prefer-* 
ences shall not deprive such projects of their status as "low-rent hous-
ing" as that term is used and defined in the United States Housing 
so Stat. 888. 
Act of 193T and within the meaning of that term as used in section 
42 use 1430, 
606(b) of the Act entitled "An Act to expedite the provision of hous-
ing in connection with national defense, and for other purposes", 
«2 us^c fsse 
approved October 14, 1940, as amended. 
The Housing and Home 
Finance Administrator is authorized and directed to agree to any 
amendments to the instruments of convey^ance which may be required 
to give effect to the purposes of this section. 
(b) Section 406(c) of the Housing Act of 1956 is amended by strik-
ing out "three years" in the first proviso and inserting in lieu thereof 
"five years". 
FARM HOUSING RESEARCH 
71 Stat. 304. 
S E C 803. Section 603(c) of the Housing Act of 1957 is amended to 
ndte. 
read as follows: 
"(c) The authority of the Housing and Home Finance Adminis-
trator to make grants under subsection (b) shall expire June 30,1961. 
The total amount of such grants shall not exceed $300,000 during each 
of the fiscal years ending June 30, 1958, and June 30, 1959, and shall 
not exceed $100,000 during the period beginning July 1, 1959, and 
ending June 30, 1961." 
73 S T A T . ] 
P U B U C LAW 86-372-SEPT. 23, 1959 
687 
HOSPITAL CONSTRUCTION 
SEC. 804. (a) Section 605(b) of the Housing Act of 1956 is 
^o st^at^. ^i114^^^ 
amended by striking out "1958" and inserting in lieu thereof "1960". note. 
(b) Section 605 (c) of the Housing Act of 1956 is amended by insert-
ing before the period at the end thereof the following: ", and the sum 
of $7,500,000 for the purposes of this section for each of the fiscal years 
ending June 30,1960, and June 30,1961". 
SAVINGS AND LOAN ASSOCIATIONS 
SEC. 805. (a) Section 5(c) of the Home Owners JJOSHI Act of 
1933 is amended by inserting before the colon at the end of the first ^^ st^^. m. 
proviso a comma and the following: "and additional sums not exceed-
ing 20 per centum of the assets of an association may be used without 
regard to such area restriction for the making or purchase of partici-
pating interests in first liens on one- to four-family homes, except that 
the aggregate sums invested pursuant to the two exceptions m this 
proviso shall not exceed 30 per centum of the assets of such 
association". 
(b) The second paragraph of section 5(c) of such Act is amended 
by adding at the end thereof the following new sentence: "Partici-
pating interests in loans secured by mortgages which have the benefit 
of insurance or guaranty (or a commitment therefor) under (he 
National Housing Act, the Servicemen's Readjustment Act of 1944, or 
« stat^. me. 
chapter 37 of title 38, United States Code, shall not be taken into 
S8 stat. 284;' 72 
account in determining the amount of loans which an association may g^^V, p.^ile. ^^^^' 
make within any of the percentage limitations contained in the first 
proviso of this subsection." 
(c) Section 5(c) of such Act is further amended by adding at the 
1
2 use i464. 
end thereof the following new paragraph: 
"Without regard to any other provision of this subsection except the 
area restriction, any such association whose general reserves, surplus, 
and undivided profits aggregate a sum in excess of 5 per centum of 
its withdrawable accounts is authorized to invest an amount not ex-
ceeding at any one time 5 per centum of such withdrawable accounts 
in loans to finance the acquisition and development of land for pri-
marily residential usage, subject to such rules and regulations as the 
Board may prescribe." 
VOLUNTARY HOME MORTGAGE CREDIT PROGRAM 
SEC. 806. Section 610(a) of the Housing Act of 1954 is amended by f^ use'1 won 
striking out "September 30, 1959" and inserting in lieu thereof 
"October 1,1961". 
DEFENSE HOUSING PROJECTS 
SEC. 807. Section 606 of the Act of October 14, 1940, as amended 
(42 U.S.C. 1586), is amended— 
64 stat. ee. 
(1) by inserting the following sentence after the first sentence 
of subsection (b) : "If any such project is consolidated under a 
single annual contributions contract with any low-rent project 
being assisted with annual contributions under the said Act, the 
payment of any annual contribution on account of any project 
so assisted shall not be deemed to be a capital grant or annual 
contribution with respect to any project conveyed hereunder."; 
and 
(2) by inserting the following proviso before the semicolon 
at the end of subsection (c) (3): ": Provided, That the provisions 
of this paragraph shall not be applicable to any project which is 
688 
PUBLIC LAW 86-373-8EPT. 23, 1969 
[73 STAT. 
consolidated under a single contract with one or more low-rent 
projects being assisted under the United States Housing Act of 
42 use fflo. 
1937, and all income from any such project convej^ed under this 
section may be commingled with funds of the project or projects 
with which it is consolidated and applied in accordance with the 
requirements of the consolidated contract and the provisions 
of section 10(c) of the said Act". 
42 use 1410. 
DISPOSAL or PROJECT 
SEC. 808. Notwithstanding any other provision of law, the Housing 
and Home Finance Administrator may, whenever he deems it desirable, 
in the public interest, and in the fulfillment of the purposes of title VI 
64 Stat. 70. 
of the Act of October 14, 1940, as amended (42 U.S.C. 1587), with 
respect to a housing project known as the Southmore Mutual Housing 
Corporation Project of South Bend, Indiana, consent to the modifica-
tion, with respect to purchase price, repayment period, rate of interest, 
time of payment of any installment on principal or interest, security, 
or any other term, of any contract, sale, mortgage, or other agreement 
with respect to such project or any part thereof. 
REAL ESTATE LOANS BY NATIONAL BANKS 
u vie liol 
SEC. 809. Section 203 of the National Housing Act is amended by 
adding at the end thereof the following new subsection: 
"(j) Loans secured by mortgages insured under this section shall 
not be taken into account in determining the amount of real estate 
loans which a national bank may make in relation to its capital and 
surplus or its time and savings deposits." 
Approved September 23, 1959. 
Public Law 86-373 
September 23, 1959 
^ ^ ^ 
[s. 2568] 
To amend the Atomic Energy Act of 1954, as amended, with respect to cooperation 
with States. 
Atomic Energy 
Act of 1954, 
Be it enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress assembled^ That the following 
Miendments.' " "' sectiou be added to the Atomic Energy Act of 1954, as amended: 
J! ^u^s 1% 11 
"SEC. 274. 
COOPERATION W I T H STATES.— 
>te- 
,: 
"a. It is the purpose of this section— 
"(1) to recognize the interests of the States in the peaceful uses 
of atomic energy, and to clarify the respective responsibilities 
under this Act of the States and fhe Commission with respect to 
the regulation of byproduct, source, and special nuclear materials; 
"(2) to recognize the need, and establish programs for, coop-
eration between the States and the Commission with respect to 
control of radiation hazards associated with use of 
such 
materials; 
"(3) to promote an orderly regulatory pattern between the 
Commission and State governments with respect to nuclear 
development and use and regulation of byproduct, source, and 
special nuclear materials; 
"(4) to establih procedures and criteria for discontinuance 
of certain of the Commission's regulatory responsibilities with 
respect to byproduct, source, and special nuclear materials, and 
the assumption thereof by the States;