Housing and Community Development Act
PL 95-128 (H.R.6655), enacted 10/12/1977

PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1111 
Public Law 95-128 
. 
v 
95th Congress 
An Act 
To amend certain Federal laws pertaining to community development, housing, 
Uct. Iz, 
and related programs. 
[H.R. 6655] 
Be it enacted hy the Senate and House of Representatwes of the 
United States of America in Congress assembled^ 
Housing and 
SECTION 1. This Act may be cited as the "Housing and Community Community 
Development Act of 1977". 
Development Act 
42 use 5301 
TITLE I—COMMUNITY DEVELOPMENT 
note. 
OBJECTIVES AND PURPOSES OF COMMUNITY DEVELOPMENT ACTIVITIES 
SEC. 101. (a) Section 101(c) of the Housing and Community Devel-
opment Act of 1974 is amended— 
42 USC 5301. 
(1) by striking out "and" at the end of paragraph (6) ; 
(2) by striking out the period at the end of paragraph (7) and 
inserting in lieu thereof "; and"; and 
(3) by adding the following new paragraph after paragraph 
"(8) the alleviation of physical and economic distress through 
the stimulation of private investment and community revitaliza-
tion in areas with population outmigration or a stagnating or 
declining tax base." 
(b) Section 101(d)(4) of such Act is amended by inserting the 
following before the period at the end thereof: "by Federal agencies 
and programs, as well as by communities". 
DEFINITIONS 
SEC. 102. (a) Section 102(a) of the Housing and Community Devel-
opment Act of 1974 is amended— 
42 USC 5302. 
(1) by striking out "the Trust Territory of the Pacific Islands; 
and Indian tribes, bands, groups, and nations, including Alaska 
Indians, Aleuts, and Eskimos, of the United States" in paragraph 
' * 
(1) and inserting in lieu thereof "and the Trust Territory of the 
Pacific Islands"; 
(2) by inserting before the period at the end of paragraph (4) 
the following: "; except that any city which has been classified as 
a metropolitan city under clause (B) of this paragraph shall 
continue to be so classified until the decennial census indicates that 
the population of such city is less than fifty thousand"; 
(3) by inserting the following before the period at the end of 
paragraph (5) : "which have not entered into cooperation agree-
ments with such town or township to undertake or to assist in 
the undertaking of essential community development and housing 
assistance activities"; 
(4) by inserting in paragraph (6) "either" before "(B)" and 
by inserting before the period at the end thereof the following: 
"or (C) has a population in excess of one hundred thousand, a 
91 STAT. 1112 
PUBLIC LAW 95-128—OCT. 12, 1977 
' . i .< 
25 u s e 450 note. 
31 u s e 1221 
note. 
Local 
governments, 
exclusion from 
urban county 
population. 
Notice. 
42 u s e 5302. 
population density of at least five thousand persons per square 
mile, and contains within its boundaries no incorporated places as 
defined by the United States Bureau of Census"; 
(5) by redesignating paragraphs (10), (11), (12), and (13) as 
paragraphs (17), (18), (19), and (20), respectively; and 
(6) by inserting after paragraph (9) the following new para-
graphs : 
"(10) The term 'age of housing' means the number of existing 
housing units constructed in 1939 or earlier based on data com-
piled by the United States Bureau of the Census and referable to 
the same point or period in time. 
"(11) The term 'extent of growth lag' means the number of 
persons who would have been residents in a metropolitan city or 
urban county, in excess of the current population of such metro-
politan city or urban county, if such metropolitan city or urban 
county had had a population growth rate between 1960 and the 
date of the most recent population count referable to the same 
point or period in time equal to the population growth rate for 
such period of all metropolitan cities. 
"(12) The term 'housing stock' means the number of existing 
housing units based on data compiled by the United States Bureau 
of the Census and referable to the same point or period in time. 
"(13) The term 'adjustment factor' means the ratio between 
the age of housing in the metropolitan city or urban county and 
the predicted age of housing in such city or county. 
"(14) The term 'predicted age of housing' means the arith-
metic product of the housing stock in the metropolitan city or 
urban county multiplied times the ratio between the age of hous-
ing in all metropolitan areas and the housing stock in all metro-
politan areas. 
"(15) The term 'adjusted age of housing' means the arithmetic 
product of the age of housing in the metropolitan city or urban 
county multiplied times the adjustment factor. 
"(16) The term 'Indian tribe' means any Indian tribe, band, 
group, and nation, including Alaska Indians, Aleuts, and Eski-
mos, and any Alaskan Native Village, of the United States, which 
is considered an eligible recipient under the Indian Self-Deter-
mination and Education Assistance Act (Public Law 93-638) or 
under the State and Local Fiscal Assistance Act of 1972 (Public 
Law 92-512).". 
(b) Section 102 of such Act is amended by adding the following new 
subsection at the end thereof: 
"(d) An urban countj^ designated under subsection (a)(6)(B)(i) 
of this section shall notify, prior to a date set by the Secretary for 
each year, all incorporated units of general local government th& 
populations of which are included in the population of such urban 
county for purposes of this section of their opportunity to exclude 
their population from such urban county. Any unit of general local 
government which has not elected to have its population so excluded 
shall have its population included within the population of such urban 
county for purposes of this section until it, on its own initiative, elects 
to exclude its population by notifying the urban county on or before 
a date set by the Secretary.". 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1113 
AUTHORIZATIONS 
SEC. 103. (a) The first sentence of section 103(a) (1) of the Housing 
and Community Development Act of 1974 is amended by inserting 42 USC 5303. 
"and Indian tribes" after "units of general local government". 
(b) Section 103(a)(1) of such Act is amended by striking out 
everything after the first sentence and inserting in lieu thereof the 
following: "There are authorized to be appropriated for these pur-
poses not to exceed $3,500,000,000 for the fiscal year 1978, not to 
exceed $3,650,000,000 for the fiscal year 1979, and not to exceed 
$3,800,000,000 for the fiscal year 1980. Any amount authorized for 
any fiscal year under this section but not appropriated for such year 
• 
may be appropriated for any succeeding fiscal year.". 
(c) Section 103(a) (2) of such Act is amended to read as follows: 
"(2) Of the amounts approved in appropriations Acts pursuant to 
paragraph (1), $50,000,000 for each of the fiscal years 1975 and 1976, 
$200,000,000 for the fiscal year 1977 (not more than 50 per centum of 
which amount may be used under section 106(d) (1)), $350,000,000 for 42 USC 5306. 
the fiscal year 1978 (of which not more than $175,000,000 may be used 
under such section), $265,000,000 for the fiscal year 1979 (of which 
not more than $25,000,000 may be used under such section), and 
$250,000,000 for the fiscal year 1980 (none of which may be used 
under such section) shall be added to the amount available for alloca-
tion under section 106(d) and shall not be subject to the provisions 
of section 107." 
' 
Post, pp- 1118, 
(d) Section 103(b) of such Act is amended— 
42^USC 5303 
(1) by striking out "for the fiscal year 1977," and inserting 
in lieu thereof "for each of the fiscal years 1977, 1978, 1979, and 
1980,"; 
(2) by striking out "to units of general local government hav-
ing urgent community development needs which cannot be met" 
and inserting in lieu thereof "for the financial settlement and, to 
the extent feasible, the completion of projects and programs 
assisted under the categorical programs terminated in section 
116 (a), primarily urban renewal projects assisted under the Hous- ^^ USC 5316. 
ing Act of 1949, to units of general local government which require 42 USC 1441 
supplemental assistance which cannot be provided"; and 
^^^^' 
(3) by adding at the end thereof the following new sentence: 
"No funds shall be made available under this subsection (1) for 
fiscal year 1978 unless the amount appropriated under subsection 
(a) for fiscal year 1978 is at least $3,500,000,000; (2) for fiscal 
year 1979 unless the amount appropriated under subsection (a) 
for fiscal year 1979 is at least $3,650,000,000; or (3) for fiscal year 
1980 unless the amount appropriated under subsection (a) for 
fiscal year 1980 is at least $3,800,000,000.". 
(e) Section 103 of such Act is amended by redesignating subsections 42 USC 5303. 
(c) and (d) as subsections (d) and (e), respectively, and by adding 
the following new subsection after subsection (b) : 
"(c) There is authorized to be appropriated a sum not in excess of 
$400,000,000 for supplemental grant assistance under section 119 for Post, p. 1125. 
each of the fiscal years 1978,1979, and 1980, except that no funds shall 
be made available for such purpose (1) for fiscal year 1978 unless the 
amount appropriated under subsections (a) and (b) for fiscal year 
1978 is at least $3,600,000,000; (2) for fiscal year 1979 unless the 
amount appropriated under subsections (a) and (b) for fiscal year 
1979 is at least $3,750,000,000; or (3) for fiscal year 1980 unless the 
amount appropriated under subsections (a) and (b) for fiscal year 
1980 is at least $3,900,000,000.". 
91 STAT. 1114 
PUBLIC LAW 95-128—OCT. 12, 1977 
APPIJCATION REQUIREMENTS 
SEC. 104. (a) Section 104(a) of the Housing and Community Devel-
42 use 5304. 
opment Act of 1974 is amended— 
(1) by inserting "and housing" in paragraph (1) after "which 
identifies community development"; 
(2) by inserting after "needs" in paragraph (2) (B) the fol-
lowing: ", including activities designed to revitalize neighbor-
hoods for the benefit of low^- and moderate-income persons,"; 
(3) by striking out "and" at the end of paragraph (3) (A); by 
striking out the semicolon at the end of paragraph (3) (B) and 
inserting in lieu thereof "and in a manner to insure fully oppor-
tunity for participation by, and benefits to, the handicapped; 
and"; and by inserting the following new subparagraph after 
paragraph (3) (B): 
"(C) improve conditions for low- and moderate-income 
persons residing in or expected to reside in the community 
««: r- 
;' 
and foster neighborhood development in order to induce 
higher-income persons to remain in, or return to, the 
community;"; 
Housing 
(4) by striking out paragraph (4) and inserting in lieu thereof 
assistance 
the following: 
P^^"- 
"(4) submits a housing assistance plan which— 
"(A) accurately surveys the condition of the housing stock 
; 
in the community and assesses the housing assistance needs of 
lower-income persons (including elderly and handicapped 
• 
persons, large families, and persons displaced or to be dis-
placed) residing in or expected to reside in the community 
and identifies housing stock which is in a deteriorated 
condition, 
"(B) specifies a realistic annual goal for the number of 
dwelling units or lower-income persons to be assisted, includ-
ing (i) the relative proportion of new, rehabilitated, and 
existing dwelling units, (ii) the sizes and types of housing 
projects and assistance best suited to the needs of lower-
's 
..^ 
income persons in the community, and (iii) in the case of 
subsidized rehabilitation, adequate provisions to assure that 
a preponderance of persons assisted should be of low- and 
moderate-income, and 
"(C) indicates the general locations of proposed housing 
for lower-income persons, with the objective of (i) furthering 
the revitalization of the community, including the restoration 
and rehabilitation of stable neighborhoods to the maximum 
extent possible, and the reclamation of the housing stock 
where feasible through the use of a broad range of techniques 
,. 
, 
for housing restoration by local government, the private sec-
'
" 
tor, or community organizations, including provision of a 
reasonable opportunity for tenants displaced as a result of 
such activities to relocate in their immediate neighborhood, 
(ii) promoting greater choice of housing opportunities and 
avoiding undue concentrations of assisted persons in areas 
containing a high proportion of low-income persons, and 
(iii) assuring the availability of public facilities and services 
adequate to serve proposed housing projects;"; and 
(5) by striking out paragraph (6) and inserting in lieu thereof 
the followina:: 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1115 
•'^ 
"(6) provides satisfactory assurances that, prior to submission Citizen 
' 
of its application, it has (A) prepared and followed a written participation 
citizen participation plan which provides citizens an opportunity P^^"-
to participate in the development of the application, encourages 
the submission of views and proposals, particularly by residents 
of blighted neighborhoods and citizens of low- and moderate-
income, provides for timely responses to the proposals submitted, 
and schedules hearings at times and locations which permit broad 
participation; (B) provided citizens with adequate information 
concerning the amount of funds available for proposed community 
development activities and housing activities, the range of activ-
ities that may be undertaken, and other important requirements; 
(C) held puijlic hearings to obtain the views of citizens on com-
munity development and housing needs; and (D) provided citi-
zens with an opportunity to submit comments concerning the 
community development performance of the applicant; but noth-
ing in this paragraph shall be construed to restrict the responsi-
bility and authority of the applicant for the development of the 
application and the execution of its community development 
program.". 
(b) Section 104 (b) (2) of such Act is amended— 
42 USC 5304. 
(1) by striking out "low- or moderate-income" in the first 
sentence and inserting in lieu thereof "low- and moderate-
income"; and 
(2) by striking out all after "urgency" in the second sentence 
and inserting in lieu thereof "because existing conditions pose a 
serious and immediate threat to the health or welfare of the com-
munity, and other financial resources are not available.". 
(c) Section 104(b) (3) of such Act is amended— 
(1) by striking out clauses (B) and (C) and inserting in lieu 
thereof "(B) the application does not involve a comprehensive 
community development program, as determined by the Secre-
tary, and"; and 
(2) by redesignating clause (D) as clause (C). 
(d) Section 104(c) (3) of such Act is amended by inserting after 
'*the requirements of this title" the following: ", with specific regard 
to the primary purposes of principally benefiting persons of low- and 
moderate-income or aiding in the prevention or elimination of slums 
or blight or meeting other community development needs having a 
particular urgency,". 
(e) Section 104(d) of such Act is amended— 
(1) by inserting after the first sentence the following: "The 
performance report shall include any citizen comments submitted 
pursuant to subsection (a) (6) (D) and the Secretary shall con-
sider such comments, together with the views of other citizens and 
such other information as may be available, in carrying out the 
provisions of this subsection."; and 
(2) by adding at the end thereof the following: "With respect Grants. 
to grants made pursuant to sections 106(d) (2) and 106(f) (1) (B), Post, p. 1118. 
the Secretary may adjust, reduce, or withdraw grant funds, or 
take other action as appropriate in accordance with such reviews 
and audits, except that funds already expended on eligible activi-
ties under this title shall not be recaptured or deducted from 
future grants made to the recipient.". 
(f) Section 104(e) of such Act is amended by adding the following 
new sentence at the end thereof: "In addition, the Secretary may pro-
vide an opportunity for the State, in which a grant is to be made to 
91 STAT. 1116 
PUBLIC LAW 95-128—OCT. 12, 1977 
42 use 5306. 
42 use 5304. 
Payments, 
standards. 
Agreements, 
review and 
approval. 
a unit of general local government under section 106(d)(2) or 106 
(f)(1)(B), to participate in the selection process for funding such 
grants. Such participation may include, as determined practicable by 
the Secretary, the incorporation of State growth and resource coordi-
nation policies in funding decisions on such grants, or such other 
arrangements, excluding administration of the grants referred to in 
the preceding sentence, as the Secretary deems appropriate.". 
(g) Section 104 of such Act is amended by adding the following 
new subsection at the end thereof: 
" (i) (1) The Secretary shall, in making funds available to the recipi-
ents of grants under this title, permit any such recipient to receive 
funds, in one payment, in an amount not to exceed the total amount 
designated in the recipient's application, and approved by the Secre-
tary pursuant to this section, for use by the recipient for establishing 
a revolving loan fund which is to be established in a private financial 
institution and which is to be used to finance rehabilitation activities 
that are part of the recipient's community development program. The 
Secretary may, as a condition of making such payment, require that 
the revolving loan fund be utilized for the making of loans to finance 
rehabilitation activities in a manner consistent with this title. Reha-
bilitation activities authorized under this section shall begin within 
forty-five days after the Secretary has made such payment. 
"(2) The Secretary shall establish standards for such cash pay-
ments which will insure that the deposits result in appropriate benefits 
in support of the recipient's rehabilitation program. These standards 
shall be designed to assure that the benefits to be derived from the 
local program include, at a minimum, one or more of the following 
elements, or such other criteria as determined by the Secretary— 
"(A) leverage of community development block grant funds 
so that participating financial institutions commit private funds 
for loans in the rehabilitation program in amounts substantially 
in excess of deposit of community development funds; 
"(B) commitment of private funds for rehabilitation loans at 
below-market interest rates or with repayment periods lengthened 
or at higher risk than would normally be taken; 
"(C) provision of administrative services in support of the 
rehabilitation program by the participating lending institutions; 
and 
"(D) interest earned on such cash deposits shall be used in a 
manner which supports the community rehabilitation program. 
At the time of application, the Secretary shall review and approve all 
agreements with lending institutions which receive funds for com-
munity rehabilitation programs. Such approval shall be made on a 
case-by-case basis, and upon a determination by the Secretary that the 
agreement with the lending institution meets minimum benefit stand-
ards as listed in this paragraph.". 
ELIGIBLE ACTIVITIES 
42 use 5305. 
SEC. 105. (a) Section 105(a) of the Housing and Community Devel-
^ 
opment Act of 1974 is amended by inserting the following after "under 
this title" the first time it appears therein: "shall consist of activities 
which assist in carrying out a comprehensive strategy for meeting 
the community development and housing needs and priorities identi-
fied pursuant to section 104, giving primary attention to activities 
benefiting low- and moderate-income persons and neighborhoods, aid-
ing in the prevention or elimination of slums or blight, or meeting 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1117 
other community development needs having a particular urgency. 
These activities". 
(b) The parenthetical expression in section 105(a) (4) of such Act 42 USC 5305. 
is amended to read as follows: "(including interim assistance, and 
financing public or private acquisition for rehabilitation, and reha-
bilitation, of privately owned properties)". 
(c) Section 105(a) (8) of such Act is amended by striking out "eco- 
" 
'" 
nomic development,", and by inserting before the semicolon at the end 
thereof the following: ", and if such services have not been provided 
by the unit of general local government (through funds raised by such 
unit, or received by such unit from the State in which it is located) 
during any part of the twelve-month period immediately preceding 
the date of application submission for funds which are to be made avail-
able under this title, and which are to be utilized for such services, 
unless the Secretary finds that the discontinuation of such services was 
the result of events not within the control of the applicant". 
(d) Section 105(a) of such Act is amended— 
(1) by striking out "and" at the end of paragraph (12); 
(2) by striking out the period at the end of paragraph (13) and 
inserting in lieu thereof "; and"; and 
(3) by adding at the end thereof the following new paragraphs: 
- K
i "(14) activities which are carried out by public or private non-
profit entities when such activities are necessary or appropriate to 
meeting the needs and objectives of the community development 
plan described in section 104(a) (1), including (A) acquisition of 42 USC 5304. 
real property; (B) acquisition, construction, reconstruction, reha-
bilitation, or installation of (i) public facilities, site improve-
ments, and utilities, and (ii) commercial or industrial buildings or 
structures and other commercial or industrial real property 
improvements; and (C) planning; and 
"(15) grants to neighborhood-based nonprofit organizations, 
local development corporations, or entities organized under sec-
tion 301 (d) of the Small Business Investment Act of 1958 to carry 15 U
S
C 681. 
out a neighborhood revitalization or community economic develop-
ment project in furtherance of the objectives of section 101(c).". 42 USC 5301. 
ALLOCATION AND DISTRIBUTION OF FUNDS 
SEC. 106. (a) Section 106(a) of the Housing and Community Devel-
opment Act of 1974 is amended by striking out "(2) or (3)'" in the 42 USC 5306. 
second sentence and inserting in lieu thereof "(1) or (2)". 
(b) Section 106(b) of such Act is amended by striking out para- Metropolitan 
graphs (1) through (4) and inserting in lieu thereof the following: 
"ty. 
" (b) (1) The Secretary shall determine the amount to be allocated to 
each metropolitan city which shall be the greater of an amount that 
bears the same ratio to the allocation for all metropolitan areas as 
either— 
" (A) the average of the ratios between— 
Ratios, average, 
"(i) the population of that city and the population of all 
^ i 
metropolitan areas; 
"(ii) the extent of poverty in that city and the extent of 
poverty in all metropolitan areas; and 
"(iii) the extent of housing overcrowding in that city and 
the extent of housing overcrowding in all metropolitan areas; 
or 
"(B) the average of the ratios between— 
91 STAT. 1118 
PUBLIC LAW 95-128—OCT. 12, 1977 
"(i) the extent of growth lag in that city and the extent 
of growth lag in a41 metropolitan cities; 
"(ii) the extent of poverty in that city and the extent of 
poverty in all metropolitan areas; and 
"(iii) the age of housing in that city and the age of hous-
ing in all metropolitan areas. 
Urban county. 
"(2) The Secretary shall determine the amount to be allocated to 
each urban county, which shall be the greater of an amount that bears 
the same ratio to the allocation for all metropolitan areas as either— 
Ratios, average. 
" (A) the average of the ratios between— 
"(i) the population of that urban county and the popula-
tion of all metropolitan areas ; 
"(ii) the extent of poverty in that urban county and the 
extent of poverty in all metropolitan areas; and 
"(iii) the extent of housing overcrowding in that urban 
county and the extent of housing overcrowding in all metro-
politan areas; or 
"(B) the average of the ratios between— 
" (i) the extent of growth lag in that urban county and the 
extent of growth lag in all metropolitan cities and urban 
counties; 
"(ii) the extent of poverty in that urban county and the 
extent of poverty in all metropolitan areas; and 
"(iii) the age of housing in that urban county and the age 
of housing in all metropolitan areas. 
"(3) In determining the average of ratios under paragraphs (1) 
(A) and (2) (A), the ratio involving the extent of poverty shall be 
counted twice, and each of the other ratios shall be counted once; and 
in determining the average of ratios under paragraphs (1) (B) and 
(2) (B), the ratio involving the extent of growth lag shall be counted 
once, the ratio involving the extent of poverty shall be counted one 
and one-half times, and the ratio involving the age of housing shall be 
counted two and one-half times.". 
Ante, p. 1117. 
(c) Section 106(b) (5) of such Act is amended— 
(1) by striking out "(5)" and inserting in lieu thereof "(4)"; 
and 
(2) bv striking out "receive" and inserting in lieu thereof "are 
entitled to". 
(d) Section 106(c) of such Act is amended— 
^ . 
(1) by striking out "Durin.Qr the jfirst three years for which 
funds are approved for distribution to a metropolitan city or 
urban county under this section" in the first sentence and insert-
ing in lieu thereof "With respect to funds approved for distribu-
tion to a metropolitan citv or urbnn county under this section 
during fiscal years 1975,1976, and 1977"; and 
(2) by inserting "onlv for such funds approved for distribution 
in fiscal years 1975, 1976, and 1977" after "adjusted" in the first 
sentence. 
'*•' "" 
(e) Section 106(d) of such Act is amended to read as follows: 
"(d) (1) Any portion of the amount allocated to metroDoliton areas 
under the first sentence of subsection^ (a) which remains after the allo-
cation of grants to metropolitan cities and urban cotmties in accord-
ance with subsection (b) and any amounts added in accordance with 
the provisions of section 103(a) (2) shall be allocated by the Secretary, 
first, for grants to metropolitan cities, urban counties, and other units 
of general local government within metropolitan areas to meet their 
hold-harmless needs as determined under subsections (g) and (h), and, 
second, in accordance with the provisions of paragraph (2). 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1119 
Ratios, average. 
."(2) Any portion of siicli amounts wliicli remains afters ai)p]yin^ 
the provisions of paia^raph (1) shall be utilized by the Secretary for 
ojrants to units of ^enei'al local government within metropolitan areas 
(other than metropolitan cities and urban counties), and States for 
use within metropolitan areas, allocatino; for the metropolitan areas 
of each State the o:reater of an amount that bears the same ratio to 
the allocation for such areas of all States available under this pai-a-
graph as either— 
'' (A) the average of the ratios between— 
"(i) the poi^ulation of the metropolitan areas in that State 
and the population of the metropolitan areas of all States; 
"(ii) the extent of poverty in the metropolitan areas in that 
State and the extent of poverty in the metropolitan areas of 
all States; and 
"(iii) the extent of housing overciowding in the metro-
politan areas in that State and the extent of housing over-
crowding in the metropolitan aieas of all States; or 
''(B) the average of the ratios between— 
"(i) the age of housing in the metropolitan areas in that 
State and the age of housing in the metropolitan areas of 
all States; 
"(ii) the extent of poverty in the metropolitan areas in 
that State and the extent of poverty in the metroj)olitan ai'eas 
of all States; and 
"(iii) the ])0]ndation of the metrojiolitan areas in that 
State and the population of the metropolitan areas of all 
States. 
In determining the average of the ratios under subparagraph (A), the 
ratio involving the extent of poverty shall be counted twice and each 
of the other ratios shall be counted once; and in determining the aver-
age of the ratios undei" subparagraph (B), the ratio involving the age 
of housing shall be counted two and one-half times, the ratio involving 
the extent of poverty shall be counted one and one-half times, and the 
ratio involving population shall be counted once. The Secretary shall, 
in order to compensate for the discrepancy between the total of the 
amounts to be allocated under this paragraph and the total of the 
amounts available under such paragraph, make a pro rata reduction 
of each amount allocated to the metropolitan areas in each State under 
such paragraph so that the metropolitan areas in each State wall receive 
an amount which represents the same percentage of the total amount 
available under such paragraph as the percentage which the metro-
politan areas of the same State would have received imder such para-
graph if the total amount available under that paragraph had equaled 
the total amount which was allocated under that paragraph. 
"(3) If the Secretary approves a grant under paragraph (2) to a 
unit of general local government which has a comprehensive commu-
nity development program with provision for hnver-income housing, 
the Secretary may make a multiyear commitment, up to three years, to 
any such unit of general local government for specified grant amounts, 
subject to the availability of appro])riations. In determining whether 
to make such a commitment to a unit of general local government, the 
Secretary shall give special consideration to those comnninities pres-
ently carrying out comprehensive comnnniity development programs, 
which are subject to the provisions of subsection (h) (2), before nuik-
ing new commitments. In making grants under paragraph (2), the Annual grant. 
Secretary shall establish for each participating unit of general local 
government an annual grant at an amount meaningful to the size of 
Pro rata 
reduction. 
Multiyear 
commitment. 
91 STAT. 1120 
PUBLIC LAW 95-128—OCT. 12, 1977 
the unit and the program identified, and shall consider such factors as 
the unit's engaging in economic redevelopment activities, past per-
formance of the unit in community development activities, prior and 
present funding levels under this title, the function of the unit as a 
regional center of economic development and activity, impact on the 
unit's growth of national policy or direct Federal program decisions, 
the potential for having increased employment within such unit as a 
result of community development activity, the physical and economic 
deterioration within the unit, the age of housing stock and the extent 
of poverty within the unit, the extent to which the unit's activity or 
program of activities is necessary to alleviate a serious threat to health 
or safety, the capacity of the unit to carry out such programs, and any 
other factors deemed, by the Secretary, to be relevant to carrying out 
the purposes of this title. The Secretary shall make grants under para-
graph (2) in such a manner as to insure that a reasonable proportion 
of grants is available to applicants which are not seeking funding for 
Limitation. 
comprehensive community development programs. The Secretary may 
accept and approve commitments for annual grants based on compre-
hensive community development programs commencing in future fiscal 
years subject only to the availability of appropriations. In computing 
amounts under paragraph (2), there shall be excluded metropolitan 
cities, urban counties, Indian tribes, and units of general local govern-
ment which are entitled to hold-harmless grants pursuant to 
subsection (h).". 
42 use 5306. 
(f) Section 106(e) of such Act is amended— 
(1) by striking out "during such program period" in the first 
sentence and inserting in lieu thereof "within a reasonable time"; 
and 
(2) by striking out "during the same period" in the first 
sentence. 
(g) Section 106 (f) of such Act is amended— 
(1) by striking out paragraph (1) and inserting in lieu thereof 
the following: 
"(f)(1) Of the amount approved in an appropriation Act under 
42 use 5303. 
section 103(a) for grants in any year (excluding the amount provided 
for use in accordance with sections 103 (a) (2) and 107), 20 per centum 
shall be allocated by the Secretary— 
"(A) first, for grants to units of general local government out-
side of metropolitan areas to meet their hold-harmless needs as 
determined under subsection (h); and 
"(B) second, any portion of such amount which remains after 
applying the provisions of subparagraph (A) shall be utilized by 
the Secretary for grants to units of general local government out-
side of metropolitan areas and States for use outside the metro-
politan areas, allocating for the nonmetropolitan areas of each 
State the greater of an amount that bears the same ratio to the 
allocation for such areas of all States available under this sub-
paragraph as either— 
Ratios, average. 
"(i) the average of the ratios between— 
"(I) the population of the nonmetropolitan areas in 
that State and the population of the nonmetropolitan 
areas of all States; 
"(II) the extent of poverty in the nonmetropolitan 
areas in that State and the extent of poverty in the non-
metropolitan areas of all States; and 
"(III) the extent of housing overcrowding in the 
nonmetropolitan areas in that State and the extent of 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1121 
Pro rata 
reduction. 
housing overcrowding in the nonmetropolitan areas of all 
States; or 
" (ii) the average of the ratios between— 
"(I) the age of housing in the nonmetropolitan areas 
in that State and the age of housing in the nonmetropoli-
tan areas of all States; 
"(II) the extent of poverty in the nonmetropolitan 
areas in that State and the extent of poverty in the non-
metropolitan areas of all States; and 
"(III) the population of the nonmetropolitan areas 
in that State and the population of the nonmetropolitan 
areas of all States. 
In determining the average of the ratios under clause (i) of subpara-
graph (B) the ratio involving the extent of poverty shall be counted 
twice and each of the other ratios shall be counted once; and in deter-
mining the average of the ratios under clause (ii) of subparagraph 
(B), the ratio involving the age of housing shall be counted two and 
one-half times, the ratio involving the extent of poverty shall be 
counted one and one-half times, and the ratio involving population 
shall be counted once. The Secretary shall, in order to compensate for 
the discrepancy between the total of the amounts to be allocated under 
subparagraph (B) and the total of the amounts available under such 
subparagraph, make a pro rata reduction of each amount allocated to 
the nonmetropolitan areas in each State under such subparag?:aph so 
that the nonmetropolitan areas in each State wdll receive an amoimt 
which represents the same percentage of the total amount available 
under such subparagraph as the percentage which the nonmetropoli-
tan areas of the same State would have received under such subpara-
graph if the total amount available under such subparagraph had 
equaled 
the 
total 
amount 
w^hich was allocated 
under 
such 
subparagraph. 
"(2) If the Secretary approves a grant under paragraph (1) (B) 
to a unit of general local government which has a comprehensive com-
munity development program with provision for lower-income 
housing, the Secretary may make a multiyear commitment, up to three 
years, to any such unit of general local government for specified grant 
amounts, subject to the availability of appropriations. In determining 
whether to make such a commitment to a unit of general local 
government, the Secretary shall give special consideration to those 
communities presently carrying out comprehensive community devel-
opment programs, which are subject to the provisions of subsection 
(h)(2), before making new commitments. In making grants under Annual grant, 
paragraph (1) (B), the Secretary shall establish for each participating 
unit of general local government an annual grant at an amount mean-
ingful to the size of the unit and the program identified, and shall 
consider such factors as the unit's engaging in economic redevelopment 
activities, past performance of the unit in community development 
activities, prior and present funding levels under this title, the func-
tion of the unit as a regional center of economic development and 
activity, impact on the unit's growth of national policy or direct Fed-
eral program decisions, the potential for having increased employment 
within such unit as a result of community development activity, the 
physical and economic deterioration within the unit, the age of housing 
stock and the extent of poverty within the unit, the extent to which 
the unit's activity or program activities is necessary to alleviate a 
serious threat to health or safety, the capacity of the unit to carry 
out such programs, and any other factors deemed, by the Secretary, 
Multiyear 
commitment. 
91 STAT. 1122 
PUBLIC LAW 95-128—OCT. 12, 1977 
Limitation. 
42 use 5306. 
Funds 
allocation 
formula, 
adequacy. 
Report to 
Congress. 
"Impaction. 
Deficiency. 
to be relevant to carrying out the purposes of this title. The Secretary 
shall make grants under paragraph (1) (B) in such a manner as to 
insure that a reasonable proportion of grants is available to applicants 
which are not seeking funding for comprehensive community develop-
ment programs. The Secretary may accept and approve commitments 
for annual grants based on comprehensive community development 
programs commencing in future fiscal years subject only to the avail-
ability of appropriations. In computing amounts under paragraph 
(1)(B), three shall be excluded units of general local government 
which are entitled to hold-harmless grants pursuant to subsection 
(h) and Indian tribes."; 
(2) by redesignating paragraph (2) as paragraph (3); 
(3) by striking out "during such period" in paragraph (3), as 
redesignated, and inserting in lieu thereof "within a reasonable 
time"; and 
(4) by striking "during the same period" in such paragraph, 
(h) Section 106(g) (2) of such Act is amended— 
(1) by striking out "(b) (2) or (3)" and inserting in lieu 
thereof "(b) (1) (A) or (B), or (2) (A) or (B)"; and 
(2) by inserting ", as computed under subsection (b) (1) (A) or 
(B), or (2) (A) or (B)," immediately before "shall" in clauses 
(i) and (ii). 
(i) Section 106(i) of such Act is amended— 
(1) by striking out "population, poverty, and housing over-
crowding" ; 
(2) by striking out "receive" and inserting in lieu thereof "are 
entitled to"; and 
(3) by striking out "(b)(5)" and inserting in lieu thereof 
"(b)(4)"". 
(j) Section 106 (i) of such Act is amended— 
(1) by striking out "not later than thirty days prior to the 
beginning of any program period" in the first sentence and insert-
ing in lieu thereof "by such date as the Secretary shall determine"; 
(2) by inserting "for a hold-harmless grant for a single year" 
after "eligibility" in the first sentence; and 
(3) by striking out "(b) (5)" in the second sentence and insert-
ing in lieu thereof "(b) (4)". 
(k) Section 106(1) of such Act is amended to read as follows: 
" (1) Not later than September 30, 1978, the Secretary shall report 
to the Congress with respect to the adequacy, effectiveness, and equity 
of the formula used for allocation of funds under this title, with spe-
cific analysis and recommendation as to the feasibility of utilizing 
factors of impaction (such as adjusted age of housing and extent of 
poverty) as a measurement consideration, and the feasibility of utiliz-
ing a single formula based on the current factors or others, including 
regional or area differences in income and cost of living. As used in this 
subsection, the term 'impaction' means the intensity, measured in terms 
of absolute numbers and proportions of each needs factor.". 
(1) Section 106 of such Act is amended by adding the following new 
subsection at the end thereof: 
"(m) In the event that the total amount available for distribution 
under this section in fiscal year 1978 or fiscal year 1979 is insufficient 
to meet all basic grant and hold-harmless entitlement needs as pro-
vided pursuant to this section, and funds are not otherwise appropri-
ated to meet such deficiency, the Secretary shall meet the deficiency 
through a pro rata reduction of (1) all basic grant and hold-harmless 
entitlement amounts, and (2) funds available under section 106(d) (2) 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1123 
(including amounts provided for use under section 103(a)(2)) and 
section 106(f)(1)(B).". 
DISCRETIONARY 
FUND 
SEC. 107. Section 107 of the Housing and Community Development 
Act of 1974 is amended— 
42 USC 5307. 
(1) by striking out "and 1977," in subsection (a) and inserting 
in lieu thereof "1977,1978,1979, and 1980,"; 
(2) by striking out "2 per centum" in subsection (a) and insert-
ing in lieu thereof "3 per centum"; 
(3) by striking out "and units of general local government" in 
subsection (a) (5) and inserting in lieu thereof ", units of general 
local government, and Indian tribes"; 
(4) by striking out "and" at the end of subsection (a) (5), by 
striking out the period at the end of subsection (a) (6) and insert-
ing in lieu thereof a semicolon, and by adding the following after 
subsection (a) (6) ;^ 
" (7) to Indian tribes; and 
"(8) to States, units of general local government, Indian tribes, 
or areawide planning organizations for the purpose of providing 
technical assistance in planning, developing, and administering 
assistance under this title. The Secretary may also provide such 
technical assistance under this paragraph directly or through 
contracts."; 
(5) by striking out "one-fourth" in subsection (b) and insert-
ing in lieu thereof "15 per centum"; and 
(6) by adding the following new subsection at the end thereof: 
"(d) No grant may be made to an Indian tribe unless the applicant Assurances, 
provides satisfactory assurances that its program will be conducted 
and administered in conformity with title II of Public Law 90-284. 25 USC 1301. 
The Secretary may waive, in connection with such grants, the provi- Waiver, 
sions of section 109 and section 110." 
Technical 
assistance. 
GUARANTEE OF LOANS' FOR ACQUISITION OF PROPERTY 
SEC. 108. Section 108 of the Housing and Community Development 
Act of 1974 is amended— 
(1) by striking out subsections (a) and (b); 
(2) by redesignating subsections (c), (d), (e), (f), and (g) 
as subsections (f), (g), (h), (i), and (j), respectively; 
(3) by inserting before subsection (f), as redesignated, the 
following: 
"(a) The Secretary is authorized, upon such terms and conditions as 
the Secretary may prescribe, to guarantee and make commitments to 
guarantee the notes or other obligations issued by units of general 
local government, or by public agencies designated by such units of 
general local government, for the purposes of financing acquisition of 
real property or the rehabilitation of real property owned by the 
unit of general local government (including such related expenses as 
the Secretary may permit by regulation). Notes or other obligations 
guaranteed pursuant to this section shall be in such form and denomi-
nations, have such maturities, and be subject to such conditions as may 
be prescribed by regulations issued by the Secretary. 
"(b) No guarantee or commitment to guarantee shall be made with 
respect to any note or other obligation if the issuer's total outstanding 
notes or obligations guaranteed under this section would thereby 
42 
USC 
5308. 
42 
USC 
5308, 
31 
USC 
711. 
42 
USC 
5308. 
Prerequisites. 
91 STAT. 1124 
PUBLIC LAW 95-128—OCT. 12, 1977 
Securities. 
Repayment 
contract. 
Grants. 
Outstanding 
obligations, 
limitation. 
exceed an amount equal to three times the amount of the grant 
approval for the issuer pursuant to section 106. 
"(c) Notwithstanding any other provision of this title, grants allo-
cated to an issuer pursuant to this title (including program income 
derived therefrom) are authorized for use in the payment of principal 
and interest due (including such servicing, underwriting, or other 
costs as may be specified in regulations of the Secretary) on the notes 
or other obligations guaranteed pursuant to this section. 
"(d) To assure the repayment of notes or other obligations and 
charges incurred under this section and as a condition for receiving 
such guarantees, the Secretary shall require the issuer to— 
" (1) enter into a contract, in a form acceptable to the Secretary, 
for repayment of notes or other obligations guaranteed hereunder; 
"(2) pledge any grant approved or for which the issuer may 
become eligible under this title; and 
"(3) furnish, at the discretion of the Secretary, such other 
security as may be deemed appropriate by the Secretary in mak-
ing such guarantees, including increments in local tax receipts 
generated by the activities assisted under this title or dispositions 
proceeds from the sale of land or rehabilitated property. 
"(e) The Secretary is authorized, notwithstanding any other pro-
vision of this title, to apply grants pledged pursuant to subsection 
(d) (2) to any repayments due the United States as a result of such 
guarantees."; 
(4) by striking out, in the first sentence of subsection (h), as 
redesignated, the following: "may, at the option of the issuing 
unit of general local government or designated agency," and 
inserting in lieu thereof "shall"; 
(5) by striking out, in the second sentence of subsection (h), 
as redesignated, the following: "In the event that taxable obliga-
tions are issued and guaranteed, the Secretary is authorized to 
make, and to contract to make, grants" and inserting in lieu 
thereof "The Secretary is authorized to make, and to contract to 
make, grants, in such amounts as may be approved in appropria-
tions Acts,"; 
(6) by striking out "such unit or agency has elected to issue 
as a taxable obligation pursuant to subsection (e) of" in subsec-
tion (j), as redesignated, and inserting in lieu thereof "is guaran-
teed pursuant to"; and 
(7) by adding at the end thereof the following: 
"(k) Notwithstanding any other provision of this section, the total 
amount of outstanding obligations guaranteed on a cumulative basis 
by the Secretary pursuant to subsection (a) shall not at any time 
exceed $3,500,000,000 or such higher amount as may be authorized 
to be appropriated for sections 106 and 107 for any fiscal year.". 
REPORTING REQUIREMENTS 
SEC. 109. Section 113(a) of the Housing and Community Develop-
42 use 5313. 
ment Act of 1974 is amended— 
(1) by striking out "and" at the end of paragraph (1). 
(2) by striking out the period at the end of paragraph (2) and 
inserting in lieu thereof:"; and"; and 
(3) by adding the following new paragraph after paragraph 
(2) : 
"(3) with respect to the action grants authorized under section 
119, a listing of each unit of general local government receiving 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1125 
funds and the amount of such grants, as well as a brief summary 
of the projects funded for each such unit, the extent of financial 
participation by other public or private entities, and the impact 
on employment and economic activity of such projects during the 
previous fiscal year.". 
URBAN DEVELOPMENT ACTION GRANTS 
SEC. 110. (a) Section 104(a) of the Housing and Community Devel-
opment Act of 1974 is amended by inserting "or section 119" after 42 U
S
C 5304. 
"106". 
(b) Title I of such Act is amended by adding the following new 
sectioil at the end thereof: 
" U R B A N DEVELOPMENT ACTION GRANTS 
"SEC. 119. (a) In order to promote the primary objective of this 42 USC 5318. 
title of the development of viable urban communities, of the total 
amount of authority approved in appropriation Acts under section 
103(c), the Secretary is authorized to make urban development action 
grants to severely distressed cities and urban counties to help allevi-
ate physical and economic deterioration through reclamation of neigh- 
., . i^, 
borhoods having excessive housing abandonment or deterioration, and 
through community revitalization in areas with population outmigra-
tion or a stagnating or declining tax base. Grants made under this 
section shall be for the support of severely distressed cities and urban 
counties that require increased public and private assistance in addi-
tion to the assistance otherwise made available under this title and 
other forms of Federal assistance. 
"(b) L^rban development action grants shall be made only to cities 
and urban counties that have, in the determination of the Secretary, 
demonstrated results in providing housing for persons of low- and 
moderate-income and in providing equal opportunity in housing and 
employment for low- and moderate-income persons and members of 
minority groups. The Secretary shall issue regulations establishing Criteria and 
standards, 
regulations. 
criteria in accordance with the preceding sentence and setting forth 
minimum standards for determining the level of physical and eco-
nomic distress of cities and urban counties for eligibility for such 
grants, which standards shall take into account factors such as the age 
and condition of housing stock, including residential abandonment; 
average income; population outmigration; and stagnating or declining 
tax base. 
" (c) Applications for assistance under this section shall— 
Applications. 
"(1) include documentation of eligibility for grants in accord-
ance with the standards described in subsection (b) ; 
"(2) describe a concentrated urban development action pro-
gram setting forth a comprehensive action plan and strategy to 
alleviate physical and economic distress through systematic 
change, which program shall be consistent with the community 
development program described in section 104(a) (2) and the 
housing assistance plan described in section 104(a)(4), and, 
where it exists and is in effect, the overall economic development 
plan as provided for in section 202(b) (10) of the Public Works 
and Economic Development Act of 1965, but only in the event and 42 U
S
C 3142. 
after such time as such plans are required by law or administra-
tive action to be consistent with community development pro-
grams. Such program shall be developed as to take advantage of 
91 STAT. 1126 
PUBLIC LAW 95-128—OCT. 12, 1977 
Citizen 
participation 
plan. 
Public hearings. 
Ante, p. 1114. 
42 u s e 5306. 
Selection 
criteria. 
Consultation 
and coordination. 
unique opportunities to attract private investment, stimulate 
investment in restoration of deteriorated or abandoned housing 
stock, or solve critical problems resulting from population out-
migration or a stagnating or declining taxl)ase; 
(3) include the activities to be undertaken in the urban devel-
opment action program, together with the estimated costs and 
general locations of such activities; 
"(4) indicate public and private resources which are expected 
to be made available toward achieving the action plan and strategy 
described in paragraph (2); and 
"(5) provide satisfactory assurances that, prior to submission 
of its application, it has (A) prepared and followed a written 
citizen participation plan, which plan provides the opportunity 
for citizens to participate in the development of the application, 
with special attention to measures to encourage the statement of 
views and the submission of proposals by low- and moderate-
income people and residents of blighted neighborhoods, and to 
scheduling hearings at times and locations which are convenient 
to all citizens, (B) provided citizens with adequate information 
concerning the amount of funds available for proposed activities 
under this section, the range of activities that may be undertaken, 
and other important program requirements, and (C) held public 
hearings to obtain the views of citizens on needs which may be 
dealt with under this section. 
"(d) To the extent that the application requirements of section 
104(a) (4) have been satisfied in connection with a grant made pur-
suant to section 106, such requirements shall be determined to have been 
met for purposes of this section. 
"(e) In establishing criteria for the purpose of making grants 
imder this section the Secretary shall establish selection criteria which 
must include (1) as the primary criterion, the comparative degree 
of phj^sical and economic distress among applicants, as measured (in 
the case of a metropolitan city or urban county) by the differences 
in the extent of growth lag, the extent of poverty, and the adjusted 
age of housing in the metropolitan city or urban county; (2) other 
factors determined to be relevant by the Secretary in assessing the 
comparative degree of physical and economic deterioration in cities 
and urban counties; and (3) at least the following other criteria: 
demonstrated performance of the city or urban county in housing and 
community development programs; impact of the proposed urban 
development action program on the special problems of low- and 
moderate-income persons and minorities; extent of financial partici-
pation by other public or by private entities; extent of assistance to be 
made available by the State; impact on the physical, fiscal, or economic 
deterioration of the city or urban county; extent to which the program 
describes activities representing a special or unique opportunity to 
meet local priority needs or the objectives of this title; and feasibility 
of accomplishing the program in a timely fashion within the grant 
amount available. 
"(f) In addition to activities authorized under section 105(a), an 
urban development action program may also include such additional 
community development and neighborhood development and conser-
vation activities as the Secretary may determine to be consistent with 
the purposes of this section. 
" (g) No assistance shall be provided for business loans or industrial 
development under this section unless the Secretary shall first consult 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1127 
Annual reviews 
and audits. 
with and coordinate such assistance with other Federal agencies which 
make available funds for similar activities. 
"(h) The Secretary shall, at least on an annual basis, make reviews 
and audits of recipients of grants pursuant to this section as necessary 
to determine the progress made in carrying out activities substantially 
in accordance with approved plans and timetables. The Secretary 
may adjust, reduce, or withdraw grant funds, or take other action as 
appropriate in accordance with the findings of such review and audits, 
except that fimds already expended on eligible activities under this 
title shall not be recaptured or deducted from future grants made 
to the recipient. 
"(i) No assistance may be provided under this section for projects Relocation, 
intended to facilitate the relocation of industrial or commercial plants 
or facilities from one area to another, unless the Secretary finds that 
Kuch relocation does not significantly and adversely affect the unem-
ployment or economic base of the area from which such industrial 
or commercial plant or facility is to be relocated. 
"'(j) The Secretary shall allocate the amounts available for grants 
under this section in a manner which achieves a reasonable balance 
among programs that are designed primarily (1) to restore seriously 
deteriorated neighborhoods, (2) to reclaim for industrial purposes 
underutilized real property, and (3) to renew commercial employment 
centers. 
"(k) Not less than 25 per centum of the funds made available for 
grants under this section shall be used for cities under fifty thousand 
population which are not central cities of a standard metropolitan 
statistical area.". 
REHABILITATION LOANS 
SEC. 111. (a) Section 312(c)(4)(A) of the Housing Act of 1964 
is amended— 
42 USC 1452b, 
(1) by striking out "the amount of a loan which could be 
insured by the Secretary of Housing and Urban Development 
under section 220(h) of the National Housing Act" and inserting 
in lieu thereof "$27,000 per dwelling unit"; and 
(2) by striking out "under such section". 
(b) Section 312(d) of such Act is amended by striking out "and 
not to exceed $100,000,000 for the fiscal vear beginning on October 1, 
1976" and inserting in lieu thereof "not to exceed $100,000,000 for 
the fiscal year beginning on October 1, 1976, and not to exceed 
$60,000,000 for the fiscal year beginning on October 1, 1977". 
(c) Section 312(h) of such Act is amended by striking out "1977" 
each place it appears and inserting in lieu thereof "1979". 
COMPREHENSIVE 
PLANNING 
SEC. 112. The second sentence of section 701(e) of the Housing 
Act of 1954 is amended by striking "and not to exceed $100,000,000 40 USC 461. 
for the fiscal year 1977" and inserting in lieu thereof "not to exceed 
$100,000,000 for the fiscal year 1977, and not to exceed $75,000,000 
for the fiscal year 1978". 
STUDY ON SMALL CITIES 
SEC. 113. The Secretary of Housing and Urban Development shall 
conduct a study and, not later than one year after the date of enact-
Report to 
President and 
Congress. 
42 USC 5313 
note. 
91 STAT. 1128 
PUBLIC LAW 95-128—OCT. 12, 1977 
Alternative 
formulae. 
42 use 5301. 
ment of this Act, report to the President and to the Congress recom-
mendations on the formation of a national policy on the developmental 
needs of small cities. In carrying out such study, the Secretary shall 
(1) take steps to improve the data available about small cities, (2) 
suggest means of reducing the duplication in government programs 
in jurisdictions which affect small cities, and (3) consider all of the 
relevant differences and similarities between small and large cities, 
particularly in the area of housing, growth, development patterns, 
infrastructure, education, energy needs, and social development. In 
addition, the Secretary shall include in the report alternative verifiable 
formulae to be used in the distribution of discretionary balance funds 
available for allocation to small cities under title I of the Housing 
and Community Development Act of 1974. 
42 u s e 5301 
note. 
EFFECTIVE DATE 
SEC. 114. The amendments made by this title shall become effective 
October 1, 1977. 
TITLE II—HOUSING ASSISTANCE AND RELATED 
PROGRAMS 
Annual 
contributions. 
42 u s e 1437c. 
42 u s e 1440. 
Post, p. 1129. 
42 u s e 1437f. 
LOW-INCOME HOUSING 
SEC. 201. (a) The first sentence of section 5(c) of the United States 
Housing Act of 1937 is amended— 
(1) by striking out "and" immediately following "July 1, 
1975," the first time it appears; and 
(2) by inserting immediately after "on October 1, 1976," the 
following: "and by $1,159,995,000 on October 1, 1977,". 
(b) Section 5 (c) of such Act is amended by inserting after the third 
sentence the following: "Of the additional authority to enter into 
contracts for annual contributions provided on October 1, 1977, and 
approved in appropriation Acts, the Secretary shall make available 
not less than $42,500,000 for modernization of low-income housing 
projects, not less than $197,139,200 for low-income housing projects 
permanently financed by loans from State housing finance or State 
development agencies, as defined in section 802(b)(2)(A) of the 
Housing and Community Development Act of 1974, and not less than 
$120,000,000 for low-income housing projects permanently financed by 
loans pursuant to section 202 of the Housing Act of 1959." 
(c) Section 8(c)(1) of such Act is amended by adding the following 
new sentence at the end thereof: "Notwithstanding any other provision 
of this section, after the date of enactment of the Housing and 
Community Development Act of 1977, the Secretary shall prohibit 
high-rise elevator projects for families with children unless there is 
no practical alternative.". 
(d) Section 8(c) (4) of such Act is amended by striking out the 
following: "(i) if the unoccupied unit is in a project insured under 
the National Housing Act, except pursuant to section 244 of such Act, 
or (ii)". 
(e) (1) Section 8(d) of such Act is amended by adding the follow-
ing new paragraph at the end thereof: 
" (3) Notwithstanding any other provision of law, with the approval 
of the Secretary the public housing agency administering a contract 
under this section with respect to existing housing units may exercise 
all management and maintenance responsibilities with respect to those 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1129 
units pursuant to a contract between such agency and the owner of 
such units.". 
(2) Section 8(e) (2) of such Act is amended by adding the follow-
ing new sentence at the end thereof: "In approving any public housing 
agency to assume all the management and maintenance responsibilities 
of any dwelling unit under the preceding sentence, the Secretary may 
do so without regard to whether such agency administers the housing 
assistance payment contract for that unit.". 
(f) Section 9(c) of such Act is amended— 
(1) by striking out "and" immediately following "on or after 
July 1, 1976,"; and 
(2) by inserting immediately before the period at the end 
thereof the following: ", and not to exceed $685,000,000 on or 
after October 1,1977". 
(g) The Secretary of Housing and Urban Development shall con-
duct a study of payments in lieu of taxes made under section 6(d) of 
the United States Housing Act of 1937 and report to the Congress 
on the status and adequacy of such payments not later than twelve 
months after the date of enactment of this section. 
(h) Section 208 of the Housing and Community Development Act 
of 1974 is amended by inserting ", including the right to renewal of 
such lease to the maximum term permitted by law," after "United 
States Housing Act of 1937". 
42 u s e 1437f. 
Annual 
contributions. 
42 u s e 1437g. 
Study. 
Report to 
eongress. 
42 u s e 1437d. 
42 u s e 1421b 
note. 
SECTION 202 HOUSING FOR THE ELDERLY 
SEC. 202. (a) Section 202(d) (3) of the Housing Act of 1959 is 12 USe 1701q 
amended by inserting the following before the period at the end 
thereof: ", which cost shall be determined without regard to mortgage 
limits applicable to housing projects subject to mortgages insured 
under section 231 of the National Housing Act". 
(b) Section 202 of such Act is amended by adding at the end thereof 
the following new subsection: 
"(g) In carrying out the provisions of this section and section 8 
of the United States Housing Act of 1937, the Secretary shall issue 
and implement regulations, as soon as practicable after the date of 
enactment of Housing and Community Development Act of 1977, 
which shall provide that the processing of any application for a loan 
for a project under this section and the processing of any application 
for assistance under such section 8 with respect to housing units in 
the same such project shall be coordinated in an economical and 
efficient manner.". 
12 use 1715v. 
Applications 
processing, 
regulations. 
42 use 1437f.. 
URBAN HOMESTEADING DEMONSTRATION 
SEC. 203. Section 810(g) of the Housing and Community Develop-
ment Act of 1974 is amended by striking out "and not to exceed 12 USe 1706e. 
$5,000,000 for the fiscal year 1978" and inserting in lieu thereof "and 
not to exceed $15,000,000 for the fiscal year 1978", 
RESEARCH AUTHORIZATION 
SEC. 204. The second sentence of section 501 of the Housing and 
Urban Development Act of 1970 is amended by inserting before the 12 USe 1701z-l. 
period at the end thereof the following: ", and not to exceed 
$60,000,000 for the fiscal year 1978". 
91 STAT. 1130 
PUBLIC LAW 95-128—OCT. 12, 1977 
SECTION 235 ASSISTANCE FOR COOPERATIVES 
12 use I7l5z. 
SEC. 205. Section 235(b) (2) (A) of the National Housing Act is 
amended by inserting "or section 221(d)(3)" immediately after 
"financed with a mortgage insured under section 213". 
Monthly 
assistance 
payment. 
Contracts. 
12 u s e 1715Z-1. 
Effective 
date. 
12 u s e 1715Z-1 
note. 
SECTION 230 OPERATING SUBSIDIES 
SEC. 206. (a) Section 236(f)(3) of the National Housing Act is 
amended by striking out the second and third sentences and inserting 
in lieu thereof the following: "The Secretary is authorized to make, 
and shall contract to make to the extent of the moneys in the reserve 
fund established under subsection (g) and to the further extent of 
funds authorized in appropriation Acts, an additional monthly 
assistance payment to the project owner up to the amount by which 
the sum of the cost of utilities and local property taxes exceeds the 
initial operating expense level. Such payment shall be used by the 
project owner solely to effect, and there shall be, a reduction in the 
basic rental charges established for the project. Any contract to make 
additional monthly assistance payments shall be for a one-year period 
and shall be adjusted periodically to provide, to the extent approved 
in appropriation Acts, for continuation of the payments and for an 
appropriate adjustment in the amount of the assistance payments.". 
(b) Section 236(f) (3) of such Act is further amended by striking 
out "only if the Secretary finds that the increase in the cost of utili-
ties or local property taxes is reasonable and is" in the last sentence 
and inserting in lieu thereof "unless the Secretary finds that the 
increase in the cost of utilities or local property taxes is not reason-
able or not". 
(c) Section 236(g) of such Act is amended by striking out "1974" 
in the fourth sentence and inserting in lieu thereof "1977". 
(d) The amendments made by this section shall become effective 
on October 1, 1977, and shall apply to assistance payments pursuant 
to section 236(f) (3) of the National Housing Act with respect only 
to periods commencing on or after such date. 
Funds, 
allocation and 
reservation. 
42 u s e 1439. 
Ante, p. 1114. 
HOUSING ASSISTANCE PLANS 
SEC. 207. Section 213(d)(1) of the Housing and Community 
Development Act of 1974 is amended by inserting after the first 
sentence the following new sentence: "The Secretary shall assure, to 
the maximum extent practicable in carrying out the national housing 
and community development objectives, that funds available for each 
housing assistance program referred to in subsection (a) shall be 
allocated or reserved in accordance with goals described in local, 
State, or other housing assistance plans approved by the Secretary 
pursuant to section 104, and shall be utilized to meet needs reflected 
in data referred to in the preceding sentence.". 
NEW COMMUNITIES 
SEC. 208. Section 720(a) of the Housing and Urban Development 
42 use 4521. 
Act of 1970 is amended by striking out "October 1, 1977" and insert-
ing in lieu thereof "October 1, 1978". 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1131 
TREASURY DRAW AUTHORITY 
SEC. 209. Section 14(b) of the Federal Reserve Act is amended by 12 USC 355. 
striking out "November 1, 1978" and inserting in lieu thereof "Octo-
ber 1, 1977"; and by striking out "October 31, 1978" and inserting in 
lieu thereof "September 30, 1977". 
TITLE III—FEDERAL HOUSING ADMINISTRATION MORT-
GAGE INSURANCE AND RELATED PROGRAMS 
EXTENSION OF FEDERAL HOUSING ADMINISTRATION MORTGAGE INSURANCE 
PROGRAMS 
SEC. 301. (a) Section 2(a) of the National Housing Act is amended 
by striking out "October 1,1977" in the first sentence and inserting in 
lieu thereof "October 1,1978". 
(b) Section 217 of such Act is amended by striking out "Septem-
ber 30,1977" and inserting in lieu thereof "September 30, 1978". 
(c) Section 221(f) of such Act is amended by striking out "Septem-
ber 30, 1977" in the fifth sentence and inserting in lieu thereof 
"September 30,1978". 
(d) Section 235 (m) of such Act is amended by striking out "Sep-
tember 30, 1977" and inserting in lieu thereof "September 30, 1978". 
(e) Section 236 (n) of such Act is amended by striking out "Sep-
tember 30, 1977" and inserting in lieu thereof "September 30, 1978". 
(f) Section 244(d) of such Act is amended— 
(1) by striking out "September 30, 1977" in the first sentence 
and inserting in lieu thereof "September 30, 1978"; and 
(2) by striking out "October 1,1977" in the second sentence and 
inserting in lieu thereof "October 1,1978". 
(g) Section 245 of such Act is amended by striking out "Septem-
ber 30, 1977" where it appears and inserting in lieu thereof 
"September 30,1978". 
(h) Section 809(f) of such Act is amended by striking out "Sep-
tember 30, 1977" in the second sentence and inserting in lieu thereof 
"September 30,1978". 
(i) Section 810(k) of such Act is amended by striking out "Sep-
tember 30, 1977" in the second sentence and inserting in lieu thereof 
"September 30,1978". 
(j) Section 1002(a) of such Act is amended by striking out "Sep-
tember 30, 1977" in the second sentence and inserting in lieu thereof 
"September 30,1978". 
(k) Section 1101(a) of such Act is amended by striking out "Sep-
tember 30, 1977" in the second sentence and inserting in lieu thereof 
"September 30,1978". 
12 USC 1703. 
12 USC 1715h,. 
12 USC 1715/. 
12 USC 1715z 
12 USC 1715Z-1. 
12 USC 1715Z-9. 
12 USC 
1715Z-10. 
12 USC 
1748h-l. 
12 USC 
1748h-2. 
12 USC 1749bb. 
12 USC 1749aaa. 
EXTENSION OF FLEXIBLE INTEREST RATE AUTHORITY 
SEC. 302. Section 3(a) of the Act entitled "An Act to amend 12 USC 1709-1. 
chapter 37 of title 38 of the United States Code with respect to the 
veterans' home loan program, to amend the National Housing Act 
with respect to interest rates on insured mortgages, and for other pur-
poses", approved May 7, 1968, as amended (12 U.S.C. 1709-1), is 
amended by striking out "October 1,1977" and inserting in lieu thereof 
"October l', 1978". 
91 STAT. 1132 
PUBLIC LAW 95-128—OCT. 12, 1977 
12 u s e 1709. 
12 u s e 1715k. 
12 u s e 1715/. 
12 u s e 1715m. 
12 u s e 1715y. 
Home-
ownership 
or membership 
in cooperative 
association for 
lower income 
families. 
12 u s e 1715z. 
INCREASE I N MAXIMUM MORTGAGE AMOUNTS UNDER FEDERAL HOUSING 
ADMINISTRATION MORTGAGE INSURANCE PROGRAMS 
SEC. 303. (a) Section 203(b)(2) of the National Housing Act is 
amended by striking out "$45,000", "$48,750", and "$56,000" wherever 
they appear and inserting in lieu thereof, "$60,000", "$65,000", and 
"$75,000", respectively. 
(b) Section 220(d) (3) (A) of such Act is amended by striking out 
"$45,000", "$48,750", and "$56,000" wherever they appear and insert-
ing in lieu thereof "$60,000", "$65,000", and "$75,000", respectively, 
(c) Section 221(d) (2) (A) of such Act is amended by— 
(1) striking out "$25,000", "$29,000", and "$33,000" each place 
they appear and inserting in lieu thereof "$31,000", "$36,000", 
and "$42,000", respectively; and 
(2) striking out "$28,000", "$38,880", "$47,520", "$36,000", 
"$46,080", and "$54,720", and inserting in lieu thereof "$35,000", 
"$48,600", "$59,400", "$45,000", "$57,600", and "$68,400", respec-
tively. 
(d) Section 222(b)(2) of such Act is amended by striking out 
"$45,000" and inserting in lieu thereof "$60,000". 
(e) Clause (A) of the third sentence of section 234(c) of such Act 
is amended by striking out "$45,000" and inserting in lieu thereof 
"$60,000". 
(f) Section 235 of such Act is amended— 
(1) by striking out, in the last proviso in subsection (b)(2), 
"$25,000", "$29,000", "$29,000", and "$33,000," and inserting in 
lieu thereof "$32,000", "$38,000", "$38,000", and "$44,000", 
respectively; 
(2) by striking out, in subsection 
(i) (3) (B) "$25,000", 
"$29,000", "$29,000", and "$33,000" and inserting in lieu thereof 
"$32,000", "$38,000", "$38,000", and "$44,000", respectively; 
(3) by striking out "and" at the end of subparagraph (B) of 
subsection (i) (3); 
(4) by redesignating subparagraph (C) of subsection (i) (3) 
as subparagraph (E) and inserting immediately following sub-
paragraph (B) the following new subparagraphs: 
"(C) involve, in the case of a dwelling unit other than a 
condominium or cooperative unit, a principal obligation 
including such initial service charges, appraisal, inspection, 
and other fees as the Secretary shall approve) in an amount 
not to exceed $32,000 ($38,000 in any geographical area 
where the Seretary authorizes an increase on the basis of a 
finding that cost levels so require), except that with respect 
to any family with five or more persons the foregoing limits 
shall be $38,000 and $44,000, respectively ; 
"(D) involve, in the case of a two-family dwelling, a 
principal obligation (including such initial service charges, 
appraisal, inspection, and other fees as the Secretary shall 
approve) in an amount not to exceed $44,000 ($49,000 in any 
geographical area where the Secretary authorizes an increase 
on the basis of a finding that cost levels so require) ; and"; 
and 
(5) by adding the following new subsection at the end thereof: 
"(n) No mortgage may be insured under this section on a unit in a 
subdivision, after the effective date of enactment of this subsection, 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1133 
which, when added to any other mortgages insured under this section 
in that subdivision after such date, represents more than 40 per centum 
of the total number of units in the subdivision, except that the preced-
ing limitation shall not apply with regard to any rehabilitated unit, 
or to any unit or subdivision located or to be located in an established 
urban neighborhood or area, where a sound proposal is involved and 
where an aggregation of subsidized units is essential to a community 
sponsored overall redevelopment 
plan, as determined 
by the 
• 
Secretary.". 
(g) Section 203 (i) of such Act is amended bv striking out "$16,200" 12 USC 1709. 
and inserting in lieu thereof "75 per centum of the limit on the princi-
pal obligation applicable to a one-family residence under subsection 
(b) of this section". 
DECREASE IN" DOWNPAYMENT REQUIREMENTS 
SEC. 304. (a) Section 203(b)(2) of the National Housing Act is 
amended— 
(1) by striking out, in clause (i) of the first sentence, all the 
parenthetical language which begins "(but, in any case"; 
(2) by striking out clauses (ii) and (iii) in the first and second 
sentences and inserting in lieu thereof in each sentence "and (ii) 
95 per centum of such value in excess of $25,000."; and 
(3) by inserting immediately after the second sentence the 
'.»;»: 
following: "Notwithstanding any other provision of this section, 
in any case where the dwelling is not approved for mortgage 
insurance prior to the beginning of construction, such mortgage 
shall not exceed 90 per centum of the entire appraised value of the 
property as of the date the mortgage is accepted for insurance, 
unless the dwelling was completed more than one year prior to the 
^ 
application for mortgage insurance, or the dwelling was approved 
for guaranty, insurance, or a direct loan under chapter 37 of 
title 38, United States Code, prior to the beginning of construe- 38 USC 1801 et 
tion.". 
se?-
(b) Section 220(d) (3) (A) (i) of such Act is amended— 
12 USC 1715k. 
(1) by striking out the comma at the end of clause (1) and 
all of clauses (2) and (3) in the matter preceding the first proviso 
and inserting in lieu thereof "and (2) 95 per centum of such value 
in excess of $25,000"; and 
(2) by striking out in the second proviso the comma at the end 
of clause (1) and all of clauses (2) and (3) and inserting in lieu 
thereof "and (2) 95 per centum of such value in excess of $25,000". 
(c) Section 222(b)(3) of such Act is amended by striking out 12 USC 1715m. 
clauses (ii) and (iii) and inserting in lieu thereof "and (ii) 95 per 
centum of such value in excess of $25,000;". 
(d) The third sentence of section 234(c) of such Act is amended 12 USC 1715y. 
by striking out clauses (A) (ii) and (A) (iii) and insertina: in lieu 
thereof "and (ii) 95 per centum of such value in excess of $25,000,". 
AUTHORITY TO INCREASE MORTGAGE INSURANCE PREMIUM FOR 
SECTION 203 (U) 
SEC. 305. Section 203(c) of the National Housing Act is amended 12 USC 1709. 
by inserting the following before the colon preceding the first proviso: 
^^Provided, That premium charges fixed for insurance under sub-
section (n) is not required to be the same as the premium charges for 
mortgages insured under the other provisions of this section, but in 
91 STAT. 1134 
PUBLIC LAW 95-128—OCT. 12, 1977 
no case shall premium charges under subsection (n) exceed 1 per 
centum per annum", 
MAXIMUM MORTGAGE AMOUNT AND MATURITY UNDER TITLE I OF THE 
NATIONAL HOUSING ACT 
SEC. 306. (a) The first sentence of section 2(b) of the National 
12 use 1703. 
Housing Act is amended— 
(1) by striking out "$10,000" the first time it appears in 
clause (1) and inserting in lieu thereof "$15,000"; and 
(2) by striking out "twelve years" in clause (2) and inserting 
in lieu thereof "fifteen years". 
(b) Section 2(b) of such Act is amended by striking out "$12,500 
($20,000" in clause (1) and inserting in'lieu thereof "$16,000 
($24,000"; and by inserting the following before the semicolon at the 
end of the proviso in clause (2) : "(twenty-three years and thirty-two 
days in the case of a mobile home composed of two or more modules)". 
(c) Subparagraph (B) of the second paragraph of section 2(b) of 
such Act and subparagraph (B) of the third paragraph of such sec-
tion 2(b) are each amended by striking out "twenty years" and insert-
ing in lieu thereof in each case "twenty-three years". 
(d) Section 2(b) of such Act is amended by adding at the end 
thereof the following new undesignated paragraph: 
Increase, 
"Because of prevailing higher costs, the Secretary may, by regula-
regulation. 
{[QYI, jn Alaska, Guam, or Hawaii, increase any dollar amount limita-
tion on mobile homes or mobile home lot loans contained in this 
subsection by not to exceed 40 per centum.". 
SECTION 203 INSURANCE I N CERTAIN COMMUNITIES 
12 use 1709. 
SEC. 307. Section 203 of the National Housing Act is amended by 
adding at the end thereof the following: 
"(o)(l) Notwithstanding anv other provision of this section or 
any other section of this title, the Secretary is authorized to insure, 
and to commit to insure, under subsection (b) of this section as modi-
fied by this subsection a mortgage which meets both the requirements 
of this subsection and such criteria as the Secretary by regulation may 
prescribe to further the purpose of this subsection, in any community 
where the Secretary determines that— 
"(A) temporary adverse economic conditions exist throughout 
the community as a direct and primary result of outstanding 
claims to ownership of land in the community by an American 
Indian tribe, band, or Nation; 
"(B) such ownership claims are reasonably likely to be settled, 
by court action or otherwise; 
"(C) as a direct result of the community's temporarily impaired 
economic condition, owner occupants of homes in the community 
have been involuntarilv unemployed or underemployed and have 
thus incurred substantial reductions in income which significantly 
impair their ability to continue timely payment of their 
mortgages; 
"(D) as a result, widespread mortgage foreclosures and dis-
tress sales of homes are like! v in the community; and 
" (E) fifty or more individual homeowners were joined as parties 
defendant or were members of a defendant class prior to Decem-
ber 31, 1976, in litigation involving claims to ownership of land 
in the community by an American Indian tribe, band, or Nation. 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1135 
" (2) A mortgage shall be eligible for insurance under subsection (b) Mortgage 
of this section as modified by this subsection without regard to limita- eligibility, 
tions in this title relating to a mortgagor's reasonable ability to pay, 
economic soundness, marketability of title, or any other statutory 
restriction which the Secretary determines is contrary to the purpose 
of this subsection, but only if the mortgagor is an owner occupant of a 
home in a community specified in paragraph (1) who, as a direct 
result of the community's temporarily impaired economic condition, 
has been involuntarily unemployed or underemployed and has thus 
incurred a substantial reduction in income which significantly impairs 
the owner's ability to continue timely payment of the mortgage. The 
Secretary is authorized to encourage or afford directly to or on behalf 
of mortgagors whose mortgages are insured under subsection (b) as 
modified by this subsection forebearance, assignment of mortgages to 
the Secretary, or such other relief as the Secretary deems appropriate 
and consistent with the purpose of this subsection. The Secretary, in 
. 
connection with any mortgage insured under subsection (b) as modified 
by this subsection, shall have all statutory powers, authority, and 
responsibilities which the Secretary has with respect to other mort-
gages insured under subsection (b), except that the Secretary may 
modify such powers, authority, or responsibilities where the Secre-
tary deems such action to be necessary because of the special nature of 
the mortgage involved. Notwithstanding section 202 of this title, the 12 USC 1708. 
insurance of a mortgage under subsection (b) of this section as modi-
fied by this subsection shall be the obligation of the Special Risk Insur-
ance iFund created pursuant to section 238 of this title.". 
12 USC 1715z;-3. 
MISCELLANEOUS MORTGAGE INSURANCE 
SEC. 308. (a) Sections 232(d)(4) and 242(d)(4) of the National 
Housing Act are amended by inserting "or section 1521" after "section 12 USC 1715w, 
604(a)(1)';. 
• 
1715Z-7. 
(b) Section 242(c) of such Act is amended by adding the follow-
ing sentence at the end thereof: "No mortgage insurance premium 
shall be charged with respect to the amount of principal and interest 
guaranteed by the Department of Health, Education, and Welfare 
under title VII of the Public Health Service Act.". 
42 USC 292. 
MORTGAGE INSURANCE IN MILITARY IMPACTED AREAS 
SEC. 309. Section 238(c) of the National Housing Act is amended to 12 U
S
C 1715z^3. 
read as follows: 
"(c) (1) Notwithstanding the provisions of this or any other Act, 
and without regard to limitations upon eligibility contained in any 
section of this title, the Secretary is authorized, upon application by 
the mortgagee, to insure under any section of this title a mortgage 
executed in connection with the construction, repair, rehabilitation, or 
purchase of property located near any installation of the Armed 
Forces of the United States in federally impacted areas in which the 
conditions are such that one or more of the eligibility requirements 
applicable to the section under which insurance is sought could not 
be met, if (A) the Secretary finds that the benefits to be derived from 
such use outweigh the risk of probable cost to the Government, and 
(B) the Secretary of Defense certifies that there is no intention inso-
far as can reasonably be foreseen to curtail substantially the personnel 
assigned or to be assigned to such installation. The insurance of a 
> * 
91 STAT. 1136 
PUBLIC LAW 95-128—OCT. 12, 1977 
Premiums 
and other 
charges, 
establishment. 
mortgage pursuant to this subsection shall be the obligation of the 
Special Risk Insurance Fund. 
"(2) The Secretary is authorized (A) to establish such premiums 
and other charges as may be necessary to assure that the mortgage 
insurance program pursuant to this subsection is made available on a 
basis which, in the Secretary's judgment, is designed to be actuarially 
sound and likely to maintain tlie fiscal integrity of such program, and 
(B) to prescribe such terms and conditions relating to insurance 
pursuant to this subsection as may be found by the Secretary to be 
necessary and appropriate, and which are to the maximum extent 
possible, consistent with provisions otherwise applicable to mortgage 
insurance and payment of insurance benefits.". 
12 use 
1715Z-10. 
Principal 
obligation, 
limitation. 
12 u s e 1709. 
Ante, p. 1132. 
Graduated 
mortgage 
provisions. 
. l - : - x f . | : • 
EXPERIMENTAL FINANCING 
SEC. 310. (a) Section 245 of the National Housing Act is amended— 
(1) by striking out "on an experimental basis" in the first 
sentence; 
(2) by striking out the second sentence and inserting in lieu 
thereof the following: "Nothwithstanding any other provision 
of this title the principal obligation (including all interest to be 
deferred and added to principal) of a mortgage insured pursuant 
to this section may not exceed 97 per centum of the appraised 
value of the property covered by the mortgage as of the date the 
mortgage is accepted for insurance, or if the mortgagor is a 
veteran and the mortgage is to be insured in accordance with the 
provisions of section 203 of this title, such higher percentage of 
appraised value as is provided for purposes of determining the 
maximum mortgage amount eligible for insurance under section 
203(b) (2) in the case of veterans,"; and 
(3) by adding at the end thereof the following new sentence: 
"Any mortgage or loan insured pursuant to this section which con-
tains or sets forth any graduated mortgage provisions (including 
but not limited to provisions for adding deferred interest to 
principal) which are authorized under this section and applicable 
regulations, or which have been insured on the basis of their being 
so authorized, shall not be subject to any State constitution, 
statute, court decree, common law, or rule or public policy limiting 
the amount of interest which may be charged, taken, received, or 
reserved, or the manner of calculating such interest (including 
but not limited to prohibitions against the charging of interest 
on interest), if such statute, court decree, common law, or rule 
would not apply to the mortgage or loan in the absence of such 
graduated payment mortgage provisions.". 
(b) The caption of section 245 of such Act is amended to read as 
follows: 
"GRADUATED PAYMENT MORTGAGES". 
T I T L E I V — L E N D I N G P O W E R S O F F E D E R A L 
SAVINGS 
AND LOAN A S S O C I A T I O N S ; SECONDARY 
M A R K E T 
A U T H O R I T I E S 
CONSTRUCTION LOANS 
SEC. 401. The twenty-first undesignated paragraph of section 5(c) 
12 use 1464. 
of the Home Owners' Loan Act of 1933 is amended by striking out "3 
per centum" and inserting in lieu thereof "5 per centum". 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1137 
SINGLE FAMILY DWELLING LIMITATIONS 
I 
SEC. 402. The first undesignated paragraph of section 5(c) of the 
Home Owners' Loan Act of 1933 is amended by striking out ''$55,000'' 12 USC 1464. 
and inserting in lieu thereof "$60,000", and by inserting "but of said 
20 per centum the amount deemed to be loaned in transactions which, 
except for excess in amount, would be eligible for such association 
under provisions of this sentence (other than this exception) or under 
the next following sentence shall be only the outstanding amount of 
such excess," immediately after "improved real estate without regard 
to the foregoing limitations,". 
LENDING AUTHORITY 
SEC. 403. The twenty-second undesignated paragraph of section 5(c) 
of the Home Owners' Loan Act of 1933 is amended by inserting "or 
farm" immediately after "residential". 
PROPERTY IMPROVEMENT LOANS 
SEC. 404. The second and third undesignated paragraphs of section 
5(c) of tlie Home Owners' Loan Act of 1933 are amended by striking 
out "$10,000" and inserting in lieu thereof "$15,000". 
MULTIFAMILY DWELLING LIMITATIONS 
SEC. 405. The first sentence of section 5(c) of the Home Owners' 
Loan Act of 1933 is amended by striking out ", and the Board shall by 
regulation limit to not more than 20 per centum of the assets of the 
association the aggregate amount or amounts of the investments which 
may be made by an association under the foregoing provisions of this 
sentence on the security of property which comprises or includes more 
than four dwelling units or does not constitute homes or combinations 
of homes and business property". 
CONFORMING AMENDMENT TO FEDERAL HOME LOAN BANK ACT 
SEC. 406. Section 10(b) of the Federal Home Loan Bank Act is 12 USC 1430. 
amended by striking out "$55,000 (except that with respect to 
dwellings in Alaska, Guam, and Hawaii the foregoing limitations 
; 
may, by regulation of the Board be increased by not to exceed 50 per 
centum)" and inserting in lieu thereof the following: "the dollar limi-
tation imder the first proviso of the first sentence of section 5(c) of the 
Home Owners' Loan Act of 1933, as amended,". 
Supra. 
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION HOME PURCHASE 
: 
ASSISTANCE 
SEC. 407. (a) Section 313(a)(1) of the National Housing Act is 12 USC I723e. 
amended by adding at the end thereof the following: "To the extent 
feasible and consistent with the primary purpose of this section to 
stabilize housing production, the Secretary may direct the exercise of 
: 
the authority conferred by this section to promote homeownership 
opportunities for moderate-income families.". 
(b) Section 313(a) of such Act is amended by adding at the end 
thereof the following: 
91 STAT. 1138 
PUBLIC LAW 95-128—OCT. 12, 1977 
Regulations. 
12 use 1723e. 
42 use 1437f. 
12 use 1723e 
note. 
"(3) In carrying out the authority conferred by this section, the 
Secretary may require the Association to utilize a part of the authority 
to purchase mortgages under this section for the purchase of mortgages 
executed to finance the rehabilitation or acquisition and rehabilitation 
of housing in older or declining neighborhoods to the extent such 
action is feasible and consistent with the primary purpose of this 
section, and for the purpose of this paragraph, the Secretary is 
authorized to prescribe such regulations as may be appropriate.". 
(c)(1) Section 313(b) (B) of such Act is amended by inserting 
after "$42,000" the following: "($49,000 in the case of any property 
with respect to which assistance payments pursuant to section 8 of 
the United States Housing Act of 1937 are being or will be made and 
which is located in any geographical area where the Secretary author-
izes an increase on the basis of a finding that cost levels so require)". 
(2) Section 313(b) (D) of such Act is amended by inserting after 
"Secretary" the following: "and $55,000 in the case of any property 
with respect to which assistance payments pursuant to section 8 of the 
United States Housing Act of 1937 are being or will be made and 
which is located in any geographical area where the Secretary author-
izes an increase on the basis of a finding that cost levels so require". 
(d) Section 313(g) of such Act is amended by adding at the end 
thereof the following: "The Association's purchases and commit-
ments under this section during fiscal year 1978 may not exceed 
$7,500,000,000.". 
(e) Section 3(b) of the Emergency Home Purchase Assistance Act 
of 1974 is amended by striking out "October 1, 1977" and inserting 
in lieu thereof "October 1, 1978". 
LIMIT ON AMOUNT OF A CONVENTIONAL MORTGAGE WHICH MAY BE PUR-
CHASED BY FEDERAL NATIONAL MORTGAGE ASSOCIATION OR FEDERAL 
HOME LOAN MORTGAGE CORPORATION 
SEC. 408. (a) The last sentence of section 302(b) (2) of the National 
12 use 1717. 
Housing Act is amended by inserting "by more than 25 per centum" 
12 use 1454. 
(b) The last sentence of section 305(a) (2) of the Federal Home 
Loan Mortgage Corporation Act is amended by inserting "by more 
than 25 per centum" after "exceed". 
12 use 1723a. 
(c) Section 309(h) of the National Housing Act is amended by 
Review; study. 
inserting at the end thereof the following: "Pursuant to the authority 
provided in this subsection, the Secretary shall conduct a review of 
the financial operations of the corporation and undertake a study 
of the extent to which the activities of the corporation meet the 
Transmittal 
purposes of this title. Such review and study shall be completed and 
to eongress. 
transmitted to the Congress on or before July 1, 1978.". 
TITLE V—RURAL HOUSING 
AUTHORIZATIONS 
42 use 1483. 
SEC. 501. (a) Section 513 of the Housing Act of 1949 is amended— 
(1) by striking out "September 30, 1977" in clauses (b), (c), 
and (d), and inserting in lieu thereof "September 30, 1978"; and 
(2) by striking out "$80,000,000" in clauses (b) and (c) and 
inserting in lieu thereof "$105,000,000". 
42 use 1485. 
(b) Section 515(b)(5) of such Act is amended by striking out 
"September 30, 1977" and inserting in lieu thereof "September 30, 
1978". 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1139 
(c) Section 517(a)(1) of such Act is amended by striking out 
"September 30, 1977" and inserting in lieu thereof "September 30, 
1978". 
(d) Section 523 (f) of such Act is amended— 
(1) by striking out "October 1, 1977" and inserting in lieu 
thereof "October 1,1978"; and 
(2) by striking out "September 30, 1977" and inserting in lieu 
thereof "September 30,1978". 
42 u s e 1487. 
42 u s e 1490c. 
CHANGES I N THE GUARANTEED HOUSING LOAN PROGRAM 
SEC. 502. (a) Section 502(b)(3) of the Housing Act of 1949 is 
amended by inserting "except for guaranteed loans," after "(3)". 
(b) Section 517(e) of such Act is amended by inserting after the 
first sentence the following new sentence: "The guaranteed loan pro-
gram under this title shall be operated separately from the insured 
k)an program operated under this title and no funds designated for 
one program may be transferred to another program.". 
(c) Section 517 of such Act is amended by adding the following 
new subsection at the end thereof: 
"(n) Loans guaranteed under this section shall be made only to 
borrowers with above-moderate incomes.". 
(d) Section 521 (a) (1) of such Act is amended by adding at the end 
thereof the following: "Any loan guaranteed under this title shall 
bear interest at such rate as may be agreed upon by the borrower and 
the lender.". 
42 u s e 1472,, 
Rural Housing; 
Insurance Fund. 
42 u s e 1487. 
Transfer of 
funds. 
Interest rates. 
42 u s e 1490a. 
PREPAYMENT OF TAXES AND SIMILAR ITEMS BY FARMERS HOME 
ADMINISTRATION BORROWERS 
SEC. 503. Section 501(e) of the Housing Act of 1949 is amended 42 USC 1471. 
by striking out the second sentence and inserting in lieu thereof the 
following: "Such payments shall be disbursed by the Secretary at 
the appropriate time or times for the purposes for which such pay-
ments are made, and after October 1, 1977, if the prepayments made 
by the borrower are not sufficient to pay the amount due, advances 
may be made by the Secretary to pay these costs in full, which 
advances shall be charged to the account of the borrower and bear 
interest and be payable in a timely fashion not to exceed two years, 
as determined by the Secretary.". 
COMPENSATION FOR CONSTRUCTION DEFECTS 
SEC. 504. Section 509 of the Housing Act of 1949 is amended by 42 USe 1479. 
adding at the end thereof the following new subsections: 
"(c) The Secretary is authorized, after October 1, 1977, with 
respect to any unit or dwelling newly constructed during the period 
beginning eighteen months prior to the date of enactment of the 
Housing and Community Development Act of 1977 and purchased 
with financial assistance authorized by this title which he finds to 
have structural defects to make expenditures for (1) correcting such 
defects, (2) paying the claims of the owner of the property arising 
from such defects, or (3) acquiring title to the property, if such 
assistance is requested by the owner of the property within eighteen 
months after financial assistance under this title is rendered to the 
owner of the property or, in the case of property with respect to 
which assistance was made available within eighteen months prior 
to the date of enactment of the Housing and Community Develop-
\ 
91 STAT. 1140 
PUBLIC LAW 95-128—OCT. 12, 1977 
Terms and 
conditions. 
ment Act of 1977, within eighteen months after such date of enact-
ment. Expenditures pursuant to this subsection may be paid from 
the Rural Housing Insurance Fund. Decisions by the Secretary 
regarding such expenditures or payments under this subsection, and 
the terms and conditions under which the same are approved or disap-
proved, shall not be subject to judicial review. 
"(d) The Secretary shall, by regulation, prescribe the terms and 
conditions under which expenditures and payments may be made 
under the provisions of this section.". 
42 use 1484. 
"Domestic 
farm labor." 
FARM LABOR HOUSING LOANS AND GRANTS IN PUERTO RICO AND THE 
VIRGIN ISLANDS 
SEC. 505. Section 514(f) (3) of the Housing Act of 1949 is amended 
to read as follows: 
"(3) the term 'domestic farm labor' means persons who receive 
a substantial portion (as determined by the Secretary) of their 
income as laborers on farms situated in the United States, Puerto 
Rico, or the Virgin Islands and either (A) are citizens of the 
United States, or (B) reside in the United States, Puerto Rico, 
or the Virgin Islands after being legally admitted for permanent 
residence therein.". 
PURPOSES FOR WHICH FUNDS FROM THE RURAL HOUSING INSURANCE FUND 
MAY BE USED 
42 use 1487. 
SEC. 506. Section 517 (j) of the Housing Act of 1949 is amended— 
(1) by striking out "and" at the end of paragraph (3) ; 
(2) by striking out the period at the end of paragraph (4) and 
inserting in lieu thereof a semicolon; and 
(3) by adding at the end thereof the following new para-
graphs : 
"(5) after October 1, 1977, and as approved in appropriations 
Ante, p. 1139. 
Acts, to make advances authorized by section 501(e) ; and 
"(6) after October 1, 1977, and as approved in appropriations 
Ante, p. 1139. 
Acts, to make the expenditures authorized by section 509(c).". 
42 use 1471. 
42 use 1485. 
42 use 1490a. 
HOUSING FOR THE ELDERLY AND HANDICAPPED 
SEC. 507. (a) Title V of the Housing Act of 1949 is amended— 
(1) by striking out "elderly persons" in section 501(a)(3) 
and inserting in lieu thereof "elderly or handicapped persons or 
families"; 
(2) by striking out "that he is an elderly person in a rural area 
without an adequate dwelling or related facilities for his own 
use," in section 501(c) (1) and inserting in lieu thereof "that the 
applicant is an elderly or handicapped person or family in a 
rural area without an adequate dwelling or related facility for 
its own use,"; 
(3) by striking out "elderly persons and elderly families" in 
subsections (a) and (b) of section 515 and inserting in lieu 
thereof "elderly or handicapped persons or families"; 
(4) by striking out "elderly persons and elderly families" in 
section 521(a) (1) and inserting in lieu thereof "elderly or handi-
capped persons or families"; and 
(5) by inserting "or handicapped" after "elderly" in clause (i) 
of the last ^ntence of section 521 (a) (2) (A). 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1141 
persons or 
families." 
(b) Section 501(b) (3) of such Act is amended to read as follows: 42 USC 1471. 
" (3) For the purposes of this title, the term 'elderly or handicapped 
"EWerly or 
persons or families' means families which consist of two or more handicapped 
persons, the head of which (or his or her spouse) is at least sixty-two °^''^°"* °^ 
years of age or is handicapped. Such term also means a single 
person who is at least sixty-two years of age or is handicapped. A 
person shall be considered handicapped if such person is determined, 
pursuant to regulations issued by the Secretary, to have an impair-
ment which (A) is expected to be of long-continued and indefinite 
duration, (B) substantially impedes his ability to live independently, 
and (C) is of such a nature that such ability could be improved by 
more suitable housing conditions, or if such person is a develop-
mentally disabled individual as defined in section 102(7) of the 
Developmental Disabilities Services and Facilities Construction Act. 
The Secretary shall prescribe such regulations as may be necessary to 
prevent abuses in determining, under the definitions contained in this 
paragraph, eligibility of families and persons for admission to and 
occupancy of housing constructed with assistance under this title. 
Notwithstanding the preceding provisions of this paragraph, such 
term also includes two or more elderly (sixty-two years of age or 
over) or handicapped persons living together, one or more such persons 
living with another person who is determined (under regulations 
prescribed by the Secretary) to be essential to the care or well-being 
of such persons, and the surviving member or members of any family 
described in the first sentence of this paragraph who were living, in 
a unit assisted under this title, with the deceased member of the family 
at the time of his or her death.". 
42 U
S
C 6001. 
CONGREGATE HOUSING FOR ELDERLY AND HANDICAPPED 
FAMILIES 
SEC. 508. (a) Section 515(c) of the Housing Act of 1949 is amended 42 USC 1485. 
by adding at the end thereof the following new sentence: "However, 
specifically designed equipment required by elderly or handicapped 
persons or families shall not be considered elaborate or extravagant.". 
(b) Section 515(d) (1) of such Act is amended by adding at the end 
thereof the following: "; and such term also means congregate housing 
facilities for elderly or handicapped persons or families who require 
some supervision and central services but are otherwise able to care for 
themselves; such housing for the handicapped may be utilized in 
conjunction with educational and training facilities;". 
(c) Section 515(d) (3) of such Act is amended to read as follows: 
"(3) the term 'congregate housing' means housing in which "Congregate 
(A) some of the units may not have kitchen facilities, and (B) housing." 
there is a central dining facility to provide wholesome and 
economic meals for elderly or handicapped persons or families.". 
PROVIDING FOR A DIVISION OF INSURED RURAL HOUSING LOANS 
SEC. 509. Section 517 of the Housing Act of 1949 (as amended by 
section 502(c)) is amended by adding at the end thereof the following Ante, p. 1139. 
new subsection: 
" (o) At least 60 per centum of the amount of loans made pursuant to 
sections 502 and 515 shall benefit persons of low income.". 
42 USC 1472, 
1485. 
91 STAT. 1142 
PUBLIC LAW 95-128—OCT. 12, 1977 
42 use 1476. 
Research 
capacity, 
establishment. 
RURAL HOUSING RESEARCH 
SEC. 510. Section 506(d) of the Housing Act of 1949 is amended 
to read as follows: 
"(d) In order to carry out this section, the Secretary shall establish 
a research ^^apacity within the Farmers Home Administration which 
shall have authority to undertake, or to contract with any public or 
private body to undertake, research authorized by this section.". 
RURAL RENTAL ASSISTANCE 
42USC1490a. 
SEC. 511. Section 521(a)(2)(A) of the Housing Act of 1949 is 
amended by striking out "may" wherever it appears, except in clause 
(i), and inserting in lieu thereof "shall". 
42 use 1490h. 
42 use 1490h 
note. 
Supra. 
Effective 
date. 
42 use 1490h 
note. 
42 use 4501 
note. 
TAXATION o r FARMERS HOME ADMINISTRATION-HELD PROPERTY 
SEC. 512. (a) Title V of the Housing Act of 1949 is amended by 
adding the following new section at the end thereof: 
"SEC. 528. All property subject to a lien held by the United States 
or the title to which is acquired or held by the Secretary under this title 
other than property used for administrative purposes shall be subject 
to taxation by a State, Commonwealth, territory, possession, district, 
and local political subdivisions in the same manner and to the same 
extent as other property is taxed: Provided., That no tax shall be 
imposed or collected on or with respect to any instrument if the tax is 
based on— 
"(1) the value of any notes or mortgages or other lien instru-
ments held by or transferred to the Secretary; 
"(2) any notes or lien instruments administered under this title 
which are made, assigned, or held by a person otherwise liable for 
such tax; or 
"(3) the value of any property conveyed or transferred to the 
Secretary, whether as a tax on the instrument, the privilege of 
conveying or transferring, or the recordation thereof; nor shall 
the failure to pay or collect any such tax be a ground for refusal 
to record or file such instruments, or for failure to impart notice, 
or prevent the enforcement of its provisions in any State or 
Federal court.". 
(b) Notwithstanding any other provision of law, no State, Com-
monwealth, territory, possession, district, or local political subdivision 
which has received, prior to the date of enactment of this Act, tax 
payments from the Department of Agriculture based on property held 
by the Farmers Home Administration shall be liable for, or be obli-
gated to refund, the amount of any such payment, which, if it had 
been made after the date of enactment of this Act, would have been 
authorized by the provisions of section 528 of the Housing Act of 1949, 
and no officer or employee of the United States shall incur or be under 
any liability by reason of having made or authorized any such 
payments. 
(c) The amendment made by subsection (a) shall become effective 
as of January 1,1977. 
T I T L E VI—NATIONAL URBAN P O L I C Y 
SEC. 601. (a) Section 701 of the Urban Growth and New Com-
munity Development Act of 1970 is amended— 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1143 
(1) by striking out subsection (a) and inserting in lieu thereof 
the following: 
"(a) This title may be cited as the 'National Urban Policy and New 
Community Development Act of 1970'."; 
(2) by striking out "growth" the first time it appears in sub-
section ( b ) ; 
(3) by inserting "energy and" before "our natural resources" 
in subsection ( b ) ; 
(4) by inserting "and their residents" before "of adequate tax 
base," in subsection ( b ) ; and 
(5) by inserting "good 
housing in" before "well-balanced 
neighborhoods" in subsection (b). 
(b) Section 702 of such Act is amended— 
(1) by striking out subsection (a) and inserting in lieu thereof 
the following: 
"(a) The Congress finds that rapid changes in patterns of urban 
settlement, including change in population distribution and economic 
bases of urban areas, have created an imbalance between the Nation's 
needs and resources and seriously threaten our physical and social 
environment, and the financial viability of our cities, and that the 
economic and social development of the Nation, the proper conservation 
of our energy and other natural resources, and tlie achievement of 
satisfactory living standards depend upon the sound, orderly, and more 
balanced development of all areas of the Nation."; 
(2) by inserting "and redevelopment" before "which adversely 
affect" in subsection (b), by striking out "our" in subsection (b) 
and inserting in lieu thereof "energy and other", and by striking 
out "growth" the last time it appears in subsection (b) ; 
(3) by inserting "energy and other" before "natural resources," 
in the first sentence of subsection (c), by striking out "growth" 
in the first sentence of subsection (c), by striking out "growth" 
the first time it appears in the second sentence of subsection (c) 
and inserting in lieu thereof "development and redevelopment", 
and by striking out "growth and stabilization" in the second sen-
tence of subsection (c) and inserting in lieu thereof "urban"; 
(4) by striking out "growth" the first time it appears in subsec-
tion ( d ) ; 
(5) by striking out "help reverse trends of migration and physi-
cal growth which reinforce" in paragraph (3) of subsection (d) 
and inserting in lieu thereof "encourage patterns of development 
and redevelopment w^hich minimize"; and 
(6) by striking out "growth and stabilization," in paragraph 
(8) of subsection (d) and inserting in lieu thereof "development 
and redevelopment, encourage", by inserting "energy and other" 
before "natural resources" in such paragraph (8), and by striking 
out "the protection" in such paragraph (8) and inserting in lieu 
thereof "protect". 
(c) Section 703 of such Act is amended— 
(1) by striking out the section heading and the material 
preceding paragraph (1) of subsection (a) and inserting in lieu 
thereof the following: 
42 use 4501 
note. 
42 use 4501. 
Congressional 
findings and 
declaration of 
policy. 
42 use 4502. 
42 use 4503. 
NATIONAL URBAN POLICY REPORT 
"SEC. 703. (a) The President shall transmit to the Congress during 
Report to 
February 1978, and during February of every even-numbered year Congress. 
91 STAT. 1144 
PUBLIC LAW 95-128—OCT. 12, 1977 
thereafter, a Report on National Urban Policy which shall contribute 
to the formulation of such a policy, and in addition shall include—"; 
(2) by striking out "and statistics, describing characteristics 
of urban growth and stabilization and identifying significant 
trends and developments" in paragraph (1) of subsection (a) and 
inserting in lieu thereof ", statistics, and significant trends 
relating to the pattern of urban development for the preceding 
two years"; 
(3) by striking out "growth" in paragraph (2) of subsection 
(a), and by inserting "affecting the well-being of urban areas" 
before the semicolon at the end of such paragraph; 
(4) by redesignating paragraphs (3) through (7) as para-
graphs (4) through (8), respectively; 
(5) by inserting after paragraph (2) the following: 
"(3) an examination of the housing and related community 
development problems experienced by cities undergoing a growth 
rate which eq^uals or exceeds the national average;"; 
(6) by striking out "growth" in paragraph (4) of subsection 
(a), as redesignated; 
(7) by striking out "growth" in subsection (b) and inserting in 
lien thereof "policy"; and 
(8) by striking out "Report on Urban Growth" in subsection 
(c) and inserting in lieu thereof "National Urban Policy Report" 
and by striking out "growth" in such subsection and inserting in 
lieu thereof "areas". 
(d) The title heading for such Act is amended by striking out 
"URBAN GROWTH" and inserting in lieu thereof "NATIONAL 
URBAN POLICY". 
(e) The part heading for part A of such Act is amended by striking 
out "GROWTH". 
TITLE VII—FLOOD AND RIOT INSURANCE 
EXTENSION OF NATIONAL ELOOD INSURANCE PROGRAM 
SEC. 701. (a) Section 1319 of the National Flood Insurance Act of 
42 use 4026. 
1968 is amended by striking out "September 30, 1977" and inserting 
in lieu thereof "September 30, 1978". 
42 use 4056. 
(b) Section 1336(a) of such Act is amended by striking out "Sep-
tember 30, 1977" and inserting in lieu thereof "September 30, 1978". 
FLOOD INSURANCE STUDIES 
SEC. 702. Section 1376(c) of the National Flood Insurance Act of 
42 use 4127. 
1968 is amended by inserting the following before the period at the 
end thereof: "and not to exceed $108,000,000 for the fiscal year 1978". 
SANCTIONS 
SEC. 703. (a) Section 202(b) of the Flood Disaster Protection Act of 
42 use 4106. 
1973 is amended to read as follows: 
"(b) In addition to the requirements of section 1364 of the National 
42 use 4104a. 
Flood Insurance Act of 1968, each Federal instrumentality described 
in such section shall by regulation require the institutions described 
in such section to notify (as a condition of making, increasing, extend-
ing, or renewing any loan secured by property described in such sec-
tion) the purchaser or lessee of such property of whether, in the event 
of a disaster caused by flood to such property, Federal disaster relief 
assistance will be available to such property.". 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1145 
(b) Section 3(a)(4) of such Act is amended by striking out all 42 USC 4003. 
after "mortgages or mortgage loans" and inserting in lieu thereof 
the following: "but shall exclude assistance pursuant to the Disaster 
Relief Act of 1974 (other than assistance under such Act in connec- 42 USC 5121 
tion with a 
flood);". 
note. 
FLOOD INSURANCE PROGRAM IMPROVEMENTS 
SEC. 704. (a) Section 1306(b) of the National Flood Insurance Act 
of 1968 is amended by striking out paragraph (2) and inserting in 42 USC 4013. 
lieu thereof the following: 
"(2) in the case of any residential property for which the risk 
premium rate is determined in accordance with the provisions 
of section 1307(a) (1), additional flood insurance in excess of the 42 USC 4014. 
limits "Specified in clause (i) of subparagraph (A) of paragraph 
(1) shall be made available to every insured upon renewal and 
every applicant for insurance so as to enable such insured or appli-
cant to receive coverage up to an amount of $150,000 under the 
provisions of this clause; 
"(3) in the case of any residential property for which the risk 
premium rate is determined in accordance with the provisions of 
section 1307(a)(1), additional flood insurance in excess of the 
limits specified in clause (ii) of subparagraph (A) of paragraph 
(1) shall be made available to every insured upon renewal and 
every applicant for insurance so as to enable any such insured or 
applicant to receive coverage up to an amount of $50,000 under 
the provisions of this clause; 
"(4) in the case of business property owned, leased, or operated 
by small business concerns for which the risk premium rate is 
determined in accordance with the provisions of section 1307 
(a) (1), additional flood insurance in excess of the limits specified 
in subpargraph (B) of paragraph (1) shall be made available 
to every such owner, lessee, or operator in respect to any single 
structure, including any contents thereof, related to premises of 
small business occupants (as that term is defined by the Secre-
tary), up to an amount equal to (i) $250,000 plus (ii) $200,000 
multiplied by the number of such occupants which coverage shall 
be allocated among such occupants (or among the occupant or 
occupants and the owner) in accordance with the regulations 
prescribed by the Secretary pursuant to such subparagraph (B), 
except that the aggregate liability for the structure itself may in 
no case exceed $250,000; 
"(5) any flood insurance coverage which may be made avail-
able in excess of the limits specified in subparagraph (A), (B), 
or (C) of paragraph (1). shall be based only on chargeable 
premium rates under section 1308 which are not less than the 
estimated premium rates under section 1307(a)(1), and the 
amount of such excess coverage shall not in any case exceed an 
amount equal to the applicable limit so specified (or allocated) 
under paragraph (1) (C), (2), (3), or (4), as applicable; and 
"(6) the flood insurance purchase requirements of section 102 
of the Flood Disaster Protection Act of 1973 do not apply to the 42 USC 4012a. 
additional flood insurance limits made available in excess of 
twice the limits made available under paragraph (1).". 
(b) Section 1362 of such Act is amended— 
42 USC 4103. ^ 
(1) by inserting " ( a ) " after "SEC. 1362."; 
(2) by striking out paragraph (3) and inserting in lieu thereof 
the following: 
91 STAT. 1146 
PUBLIC LAW 95-128—OCT. 12, 1977 
Real property 
purchases. 
Low-interest 
loans for 
single-family 
dwellings. 
Regulations. 
42 use 4104. 
Reimbursement 
of certain 
expenses. 
Appropriation 
authorization. 
42 use 4105. 
Administrative 
procedures, 
establishment. 
Reimbursement 
of certain 
expenses. 
"(3) incurred significant flood damage on not less than three 
previous occasions over a five-year period of time and on each 
occasion the cost of repair, on the average, equaled or exceeded 
25 per centum of the value of the structure at the time of each 
flood event or was damaged substantially beyond repair by flood 
while so covered,"; and 
(3) by adding at the end thereof the following: 
"(b) When any real property referred to in paragraphs (1) and 
(2) of subsection (a) has sustained damage as a result of a single 
casualty of any nature under such circumstances that a statute, ordi-
nance or regulation precludes its repair or restoration or permits 
repair or restoration only at a significantly increased construction 
cost, the Secretary may enter into negotiations with the owner of the 
property or interest therein for the purchase of such property for the 
uses and purposes of this section. 
"(c) "Whenever, as a result of damage from any casualty, the repair, 
reconstruction, or substantial improvement of any 
single-family 
dwelling structure located within a regulatory flood way and insured 
under the flood insurance program is deemed by the Secretary to be 
made more effective from the standpoint of prudent flood plain man-
agement by elevation of the structure so it will not interfere with the 
flow of water from the base flood within such regulatory 
floodway, 
the Secretary is authorized to make a low-interest loan at a rate of 
interest of 2 per centum per annum, repayable in ten years, to the 
owner of any such structure for the purpose of so elevating the struc-
ture. There is authorized to be appropriated for purposes of imple-
menting this subsection not to exceed $4,500,000. 
"(d) The Secretary is authorized to issue such regulations as may 
be necessary to carry out the purposes of this section.". 
(c) Section 13(>3 of such Act is amended— 
(1) by redesignating subsection (f) as subsection (g) ; and 
(2) by inserting after subsection (e) the following: 
"(f) When, incident to any appeal under subsection (b) or (c), the 
owner or lessee of real property or the community, as the case may be, 
incurs expense in connection with the services of surveyors, engineers, 
or similar services, but not including legal services, in the effecting of 
an aijpeal which is successful in whole or part, the Secretary shall 
reimburse such individual or community to an extent measured by 
the ratio of the successful portion of the appeal as compared to the 
entire appeal and applying such ratio to the reasonable value of all 
such services, but no reimbursement shall be made by the Secretary 
in respect to any fee or expense payment, the payment of which was 
agreed to be contingent upon the result of the appeal. There is author-
ized to be ajjpropriated for purposes of implementing this subsection, 
not to exceed $250,000.". 
(d) Section 201 of the Flood Disaster Protection Act of 1973 is 
amended by adding at the end thereof the following: 
"(e) The Secretary is authorized to establish administrative proce-
dures whereby the identification under this section of one or more 
areas in the community as having special flood hazards may be 
appealed to the Secretary by the community or any owner or lessee 
of real property within the conmiunity who believes his property has 
been inadvertently included in a special flood hazard area by the 
identification. When, incident to any appeal under this subsection, the 
owner or lessee of real property or the comnmnity, as the case may 
be, incurs expense in connection with the services of surveyors, engi-
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1147 
neers, or similar services, but not including legal services, in the effect-
ing of an appeal which is successful in whole or part, the Secretary 
shall reimburse such individual or community to an extent measured 
by the ratio of the successful portion of the appeal as compared to 
the entire appeal and applying such ratio to the reasonable value of 
all such services, but no reimbursement shall be made by the Secretary 
in respect to any fee or expense payment, the payment of which was 
agreed to be contingent upon the result of the appeal. There is author-
ized to be appropriated for purposes of implementing this subsection 
not to exceed "$250,000.". 
TITLE VIII—COMMUNITY REINVESTMENT 
SEC. 801. This title may be cited as the "Community Reinvestment 
Act of 1977". 
SEC. 802. (a) The Congress finds that— 
(1) regulated financial institutions are required by law to 
demonstrate that their deposit facilities serve the convenience and 
needs of the communities in which they are chartered to do 
business; 
(2) the convenience and needs of communities include the need 
for credit services as well as deposit services; and 
(3) regulated financial institutions have continuing and affirm-
ative obligation to help meet the credit needs of the local 
comiimnities in which they are chartered. 
(b) It is the purpose of this title to require each appropriate Fed-
eral financial supervisory agency to use its authority when examining 
financial institutions, to encourage such institutions to help meet the 
credit needs of the local communities in which they are chartered 
consistent with the safe and sound operation of such institutions. 
SEC. 803. For the purposes of this title— 
(1) the term "appropriate Federal financial supervisory agency" 
means— 
(A) the Comptroller of the Currency with respect to 
national banks; 
(B) the Board of Governors of the Federal Reserve System 
with respect to State chartered banks which are members of 
the Federal Reserve System and bank holding companies; 
(C) the Federal Deposit Insurance Corporation with 
respect to State chartered banks and savings banks which 
are not members of the Federal Reserve System and the 
deposits of which are insured by the Corporation; and 
(D) the Federal Home Loan Bank Board with respect to 
institutions the deposits of which are insured by the Federal 
Savings and Loan Insurance Corporation and to savings and 
loan holding companies; 
(2) the term "regulated financial institution" means an insured 
bank as defined in section 3 of the Federal Deposit Insurance Act 
or an insured institution as defined in section 401 of the National 
Housing Act; and 
(3) the term "application for a deposit facility" means an appli-
cation to the appropriate Federal financial supervisory agency 
otherwise required under Federal law or regulations thereunder 
for— 
(A) a charter for a national bank or Federal savings and 
loan association; 
Appropriation 
authorization. 
Community 
Reinvestment 
Act of 1977. 
Citation of 
title. 
12 use 2901 
note. 
12 use 2901. 
12 use 2902. 
18 use 709. 
12 use 1724. 
91 STAT. 1148 
PUBLIC LAW 95-128—OCT. 12, 1977 
12 u s e 1828. 
12 u s e 1724. 
12 u s e 1842. 
12 u s e 1730a. 
Financial 
institutions, 
evaluation. 
12 use 2903. 
Report to 
eongress. 
12 u s e 2904. 
Regulations. 
12 u s e 2905. 
(B) deposit insurance in connection with a newly chartered 
State bank, savings bank, savings and loan association or 
similar institution; 
(C) the establishment of a domestic branch or other facility 
with the ability to accept deposits of a regulated financial 
institution; 
(D) the relocation of the home office or a branch office of 
a regulated financial institution; 
(E) the merger or consolidation with, or the acquisition 
of the assets, or the assumption of the liabilities of a regu-
lated financial institution requiring approval under section 
18(c) of the Federal Deposit Insurance Act or under regula-
tion^ issued under the authority of title IV of the National 
Housing Act; or 
(F) the acquisition of shares in, or the assets of, a regu-
lated financial institution requiring approval under section 
3 of the Bank Holding Company Act of 1956 or section 408 
(e) of the National Housing Act. 
SEC. 804. In connection with its examination of a financial institu-
tion, the appropriate Federal financial supervisory agency sliall— 
(1) assess the institution's record of meeting the credit needs 
of its entire community, including low- and moderate-income 
neighborhoods, consistent with the safe and sound operation of 
such institution; and 
(2) take such record into account in its evaluation of an appli-
cation for a deposit facility by such institution. 
SEC. 805. Each appropriate Federal financial supervisory agency 
shall include in its annual report to the Congress a section outlining 
the actions it has taken to carry out its responsibilities under this title. 
SEC. 806. Regulations to carry out the purposes of this title shall be 
published by each appropriate Federal financial supervisory agency, 
and shall take effect no later than 390 days after the date of enactment 
of this title. 
TITLE IX—MISCELLANEOUS 
42 u s e 3533. 
Special 
Assistant for 
Indian and 
Alaska Native 
Programs. 
Report to 
eongress. 
INDIAN AND ALASKA NATIVE HOUSING AND COMMUNITY 
DEVELOrMENT 
SEC. 901. Section 4 of the Department of Housing and Urban Devel-
opment Act is amended by adding at the end thereof the following: 
"(d) (1) There shall be in the Department a Special Assistant for 
Indian and Alaska Native Programs, who shall be responsible for 
coordinating all programs of the Department relating to Indian and 
Alaska Native housing and community development. The Special 
Assistant for Indian and Alaska Native Programs shall be designated 
by the Secretary not later than 60 days after the date of enactment 
of this subsection. 
"(2) The Secretary shall, not later than December 1 of each year, 
submit to Congress an annual report which shall include— 
"(A) a description of his actions during the current year and 
a projection of his activities during the succeeding years; 
"(B) estimates of the cost of the projected activities for suc-
ceeding fiscal years; 
"(C) a statistical report on the conditions of Indian and Alaska 
Native housing; and 
,!-,...• 
•• ,, 
I 
>' 
PUBLIC LAW 95-128—OCT. 12, 1977 
91 STAT. 1149 
"(D) recommendations for such legislative, administrative, 
and other actions, as he deems appropriate,". 
MOBILE HOME SAFETY 
SEC. 902. (a) Section 604 of the Housing and Community Develop-
ment Act of 1974 is amended by adding at the end thereof the 
following: 
" (h) The Secretary shall exclude from the coverage of this title any 
structure which the manufacturer certifies, in a form prescribed by 
the Secretary, to be: 
"(1) designed only for erection or installation on a site-built 
permanent foundation; 
"(2) not designed to be moved once so erected or installed; 
"(3) designed and manufactured to comply with a nationally 
recognized model building code or an equivalent local code, or 
with a State or local modular building code recog;nized as gen-
erally equivalent to building codes for site-built housing, or with 
minimum property standards adopted by the Secretary pursuant 
to title II of the National Housing Act; and 
" (4) to the manufacturer's knowledge is not intended to be used 
other than on a site-built permanent foundation.", 
(b) Section 610 (a) of such Act is amended— 
(1) by striking out "or" at the end of paragraph (4) ; 
(2) by striking out the period at the end of paragraph (5) and 
inserting in lieu thereof "; or"; and 
(3) by adding at the end thereof the following new paragraph: 
"(6) issue a certification pursuant to subsection (h) of section 
604, if such person in the exercise of due care has reason to know 
that such certification is false or misleading in a material respect.". 
42 use 5403. 
Construction 
and safety 
standards 
coverage, 
exclusion. 
12 u s e 1707. 
42 u s e 5409. 
HOMEOWNERSHIP COUNSELING 
SEC. 903. Section 106(a) (2) of the Housing and Urban Develop- 12 USe 1701x. 
ment Act of 1968 is amended by inserting the following immediately 
before the period at the end of the first sentence thereof: "and may 
provide such services for other owners of single family dwelling units 
insured under title II of the National Housing Act". 
PROTOTYPE COSTS 
SEC. 904. (a) Beginning in calendar year 1979, the Secretary of 
Housing and Urban Development shall prepare and publish annually 
prototype housing costs for one- to four-family dwelling units for each 
housing market area in the United States, as determined by the Secre-
tary. Prototype housing costs for an area shall be determined on the 
basis of the Secretary's identification and estimate of reasonable con-
struction and other costs (including reasonable allowances for the cost 
of land and site improvements) for that area of various types and sizes 
of new one- to four-family dwelling units designed for various seg-
ments of the housing market of the area, as determined by the 
Secretary. In determining prototype housing costs, the Secretary is 
authorized to take into account the need for durability required for 
economic maintenance of housing, the need for amenities suitable to 
Prototype 
housing costs, 
annual 
publication. 
42 use 3540. 
91 STAT. 1150 
PUBLIC LAW 95-128—OCT. 12, 1977 
assure a safe and healthy family life and neighborhood environment, 
the application of good design and quality in architecture, and the need 
for maximum conservation of energy, as well as the advice and 
recommendations of local housing producers. 
(b) The Secretary is authorized to take such action as may be neces-
sary to develop, aggregate, and evaluate data and other information 
required for the timely development, implementation, and maintenance 
of the prototype housing cost system referred to in subsection (a). 
Approved October 12, 1977. 
LEGISLATIVE HISTORY: 
HOUSE REPORTS: No. 95-236 (Comm. on Banking, Finance and Urban Affairs) and 
No. 95-634 (Comm. of Conference). 
SENATE REPORT No. 95-175 accompanying S. 1523 (Comm. on Banking, Housing, 
and Urban Affairs). 
CONGRESSIONAL RECORD, Vol. 123 (1977): 
May 6, 10, 11, considered and passed House. 
June 6, 7, considered and passed Senate, amended, in lieu of S. 1523. 
Oct. 1, Senate agreed to conference report. 
Oct. 4, House agreed to conference report. 
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 13, No. 42: 
Oct. 12, Presidential statement.