An Act to increase the availability of Mortgage credit for the financing of urgently needed housing, and for other purposes
PL 91-351 (S.3685), enacted 07/24/1970

450 
PUBLIC LAW 91-351-JULY 24, 1970 
[84 STAT. 
July 24,1970 
[S. 3685] 
Public Law 91-351 
AN ACT 
To increase the availability of mortgage credit for the financing of urgently 
needed housing, and for other purposes. 
Be it enacted hy the Senate and House of Representatives 
of the 
Emergency 
United States of America in Congress assembled. That this Act may 
Home Finance Act 
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f 1970. 
be cited as the Lmergency Home h inance Act ot 1970 . 
TITLE 
I—REDUCTION OF INTEREST 
CHARGES FOR 
MEMBERS OF T H E FEDERAL 
HOME 
LOAN 
BANK 
SYSTEM 
Appropriation. 
52 Stat. 10, 16; 
83 Stat. 383. 
12 u s e 1709, 
1713. 
SEC. 101. (a) There is authorized to be appropriated not to exceed 
$250,000,000, without fiscal year limitation, to be used by the Federal 
Home Loan Bank Board for disbursement to Federal home loan banks 
for the purpose of adjusting the effective interest charged by such 
banks on short-term and long-term borrowing to promote an orderly 
flow of funds into residential construction. The disbursement of sums 
appropriated hereunder shall be made under such terms and conditions 
as may be prescribed by the Board to assure that such sums are used 
to assist in the provision of housing for low- and middle-income fam-
ilies, and that such families share fully in the benefits resulting from 
the disbursement of such sums. No member of a Federal home loan 
bank shall use funds the interest charges on which have been adjusted 
pursuant to the provisions of this section to make any loan, if— 
(1) the effective rate of interest on such loan exceeds the effec-
tive rate of interest on such funds payable by such member by a 
percentile amount w^hich is in excess of such amount as the Board 
determines to be appropriate in furtherance of the purposes of 
this section; or 
(2) the principal obligation of any such loan which is secured 
by a mortgage on a residential structure exceeds the dollar limi-
tations on the maximum mortgage amount, in effect on the date 
the mortgage was originated, which would be applicable if the 
mortgage was insured by the Secretary of Housing and Urban 
Development under section 203 (b) or 207 of the National Housing 
Act. 
(b) Not more than 20 per centum of the sums appropriated pursuant 
to subsection (a) shall be disbursed in any one Federal home loan bank 
district. 
68 Stat. 613; 
J3 Stat. 385. 
12 u s e 1717. 
TITLE II—AUTHORITY FOR T H E FEDERAL NATIONAL 
MORTGAGE ASSOCIATION TO PROVIDE A SECONDARY 
MARKET FOR CONVENTIONAL MORTGAGES 
SEC. 201. (a) Section 302(b) of the National Housing Act is 
amended— 
(1) by in?erting "(1)" immediately following "(b)"; and 
(2) by adding at the end thereof the following new paragraph: 
"(2) For the purposes set forth in section 301(a), and with the 
approval of the Secretary of Housing and Urban Development, the 
corporation is authorized, pursuant to commitments or otherwise, to 
purchase, service, sell, lend on the security of, or otherwise deal in 
mortgages which are not insured or guaranteed as provided in para-
graph (1) (such mortgages referred to hereinafter as 'conventional 
mortgages'). No such purchase of a conventional mortgage shall be 
84 STAT. ] 
PUBLIC LAW 91-351-JULY 24, 1970 
451 
made if the outstanding principal balance of the mortgage at the time 
of purchase exceeds 75 per centum of the value of the property securing 
the mortgage, unless (A) the seller retains a participation of not less 
than 10 per centum in the mortgage; (B) for such period and under 
such circumstances as the corporation may require, the seller agrees to 
repurchase or replace the mortgage upon demand of the corporation 
in the event that the mortgage is in default; or (C) that portion of the 
unpaid principal balance of the mortgage which is in excess of such 7.5 
per centum is guaranteed or insured by a qualified private insurer as 
determined by the corporation. The corporation shall not issue a com-
mitment to purchase a conventional mortgage prior to the date the 
mortgage is originated, if such mortgage is eligible for purchase under 
tlie preceding sentence only by reason of compliance with the require-
ments of clause (A) of such sentence. The corporation may purchase 
a conventional mortgage which was originated more than one year 
prior to the purdhase date only if the seller is currently engaged in 
mortgage lending or investing activities and if, as a result thereof, the 
cumulative aggregate of the principal balances of all conventional 
mortgages purchased by the corporation which were originated more 
than one year prior to the date of purchase does not exceed 10 per 
centum of the cumulative aggregate of the principal balances of all 
conventional mortgages purchased by the corporation. The corpora-
tion shall establish limitations governing the maximum principal 
obligation of conventional mortgages purchased by it which are com-
parable to the limitations w^hich would be applicable if the mortgage 
Avere insured by the Secretary of Housing and Urban Development 
under section 203 (b) or 207 of the National Housing Act." 
83%lu'i83^' ^^'' 
(b) Section 5202 of the Revised Statutes (12 U.S.C. 82) is amended 
1
2 use 1709, 
by adding at the end thereof the following: 
^^^3-
"Eleventh. Liabilities incurred in connection with sales of mort-
gages, or participations therein, to the Federal National Mortgage 
Association or the Federal Home I^oan Mortgage Corporation.". 
TITLE 
III—FEDERAL 
HOME 
LOAN MORTGAGE 
CORPORATION 
SHORT TITLE 
SEC. 301. This title may be cited as the "Federal Home Loan 
citation o
f titie. 
Mortgage Corporation Act". 
DEFINITIONS 
SEC. 302. As used in this title— 
(a) The term "Board of Directors" means the Board of Directors of 
the Corporation. 
(b) The term "Corporation" means the Federal Home Loan 
Mortgage Corporation created by this title. 
(c) The term "law" includes any law of the L'nited States or of any 
State (including any rule of law or of equity). 
(d) The term "mortgage" includes such classes of liens as are com-
monly given or are legally effective to secure advances on, or the unpaid 
purchase price of, real estate under the laws of the State in which the 
real estate is located, together with the credit instruments, if any, 
secured thereby, and includes interests in mortgages. 
(e) The term "organization" means any corporation, partnership, 
association, business trust, or business entity. 
(f) The term "prescribe" means to prescribe by regulations or other-
wise. 
452 
PUBLIC LAW 91-351-JULY 24, 1970 
[84 STAT. 
48 Stat. 74, 905. 
15 u s e 77b. 
(g) The term "property" includes any property, whether real, 
personal, mixed, or otherwise, including without limitation on the 
generality of the foregoing choses in action and mortgages, and includes 
any interest in any of the foregoing. 
(h) The term "residential mortgage" means a mortgage which (1) 
is a mortgage on real estate, in fee simple or under a leasehold having 
such term as may be prescribed by the Corporation, upon which there is 
located a structure or structures designed in whole or in part for resi-
dential use, or which comprises or includes one or more condominium 
units or dwelling units (as defined by the Corporation) and (2) has 
such characteristics and meets such requirements as to amount, term, 
repayment provisions, number of families, status as a first lien on such 
real estate, and otherwise, as may be prescribed by the Corporation. 
(i) The term "conventional mortgage" means a mortgage other than 
a mortgage as to which the Corporation has the benefit of any 
guaranty, insurance or other obligation by the United States or a State 
or an agency or instrumentality of either. 
(j) The term "security" has the meaning ascribed to it by section 2 
of the Securities Act of 1933. 
(k) The term "State", whether used as a noun or otherwise, includes 
the several States, the District of Columbia, the Commonwealth of 
Puerto Rico, and the territories and possessions of the United States. 
Federal Home 
Loan Mortgage 
Corporation. 
47 Stat. 725; 
49 Stat. 294. 
12 u s e 1421-
1428a. 
Powers. 
ESTABLISHMENT OF T H E 
CORPORATION 
SEC. 303. (a) There is created the Federal Home Loan Mortgage 
Corporation, which shall be a body corporate and shall be under the 
direction of a Board of Directors composed of the members of the 
Federal Home Loan Bank Board, who shall serve as such without 
additional compensation. The Chairman of the Federal Home Loan 
Bank Board shall be the Chairman of the Board of Directors. The 
principal office of the Corporation shall be in the District of Columbia 
or at such other place as the Corporation may from time to time pre-
scribe. The Corporation shall be a member of each Federal home loan 
bank and, except as otherwise provided by the Federal Home Loan 
Bank Board, shall have all the benefits, powers, and privileges, and 
in the exercise thereof shall be subject to all liabilities, conditions, and 
limitations (except those relating to Federal home loan bank stock 
and subscriptions thereto and those under provisions of the Federal 
Home Loan Bank Act preceding section 9) which are provided by 
the terms of such Act or other Federal statute for members of any 
such bank. 
(b) The Corporation shall have power (1) to adopt, alter, and use a 
corporate seal; (2) to have succession until dissolved by Act of 
Congress; (3) to make and enforce such bylaws, rules, and regulations 
as may be necessary or appropriate to carry out the purposes or provi-
sions of this title; (4) to make and perform contracts, agreements, and 
commitments; (5) to prescribe and impose fees and charges for serv 
ices by the Corporation; (6) to settle, adjust, and compromise, and with 
or without consideration or benefit to the Corporation to release or 
waive in whole or in part, in advance or otherwise, any claim, demand, 
or right of, by, or against the Corporation; (7) to sue and be sued, com-
plain and defend, in any State, Federal, or other court; (8) to acquire, 
take, hold, and own, and to deal with and dispose of any property; and 
(9) to determine its necessary expenditures and the manner in whicli 
the same shall be incurred, allowed, and paid, and appoint, employ,, 
and fix and provide for the compensation and benefits of office: s, 
employees, attorneys, and agents, all without regard to any other law 
except as may be provided by the Corporation or by laws hereafter 
84 STAT. ] 
PUBLIC LAW 91-351-JULY 24, 1970 
453 
enacted by the Congress expressly in limitation of this sentence. 
Nothing in this title or any other law shall be construed to prevent 
the appointment, employment, and provision for compensation and 
benefits, as an oflicer, employee, attorney, or agent of the Corporation, 
of any officer, employee, attorney, or agent of any department, estab-
lishment, or corporate or other instrumentality of the Government, 
including any Federal home loan bank or member thereof. The Corpo-
ration, with the consent of any such department, establishment, or 
instrumentality, including any field services thereof, may utilize and 
act through any such department, establishment, or instrumentality 
and may avail itself of the use of information, services, facilities, and 
personnel thereof, and may pay compensation therefor, and all of the 
foregoing are hereby authorized to provide the same to the Corpora-
tion as it may request. 
(c) Funds of the Corporation may be invested in such investments as 
Fun^s, invest-
the Board of Directors may prescribe. Any Federal Reserve bank or 
Federal home loan bank, or any bank as to which at the time of its 
designation by the Corporation there is outstanding a designation by 
the Secretary of the Treasury as a general or other depositary of public 
money, may be designated by the Corporation as a depositary or 
custodian or as a fiscal or other agent of the Corporation, and is hereby 
authorized to act as such depositary, custodian, or agent. When desig-
nated for that purpose by the Secretary of the Treasury, the Corpora-
tion shall be a depositary of public money, under such regulations as 
may be prescribed by the Secretary of the Treasury, and may also be 
employed as fiscal or other agent of the United States, and it shall 
perform all such reasonable duties as such depositary or agent as may 
be required of it. 
(d) The Corporation, including its franchise, activities, capital, 
corporation, tax 
1 
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exempt status. 
reserves, surplus, and mcome, shall be exempt from all taxation now 
or hereafter imposed by the United States, by any territory, depend-
ency, or possession thereof, or by any State, county, municipality, or 
local taxing authority, except that any real property of the Corpora-
tion shall be subject to State, territorial, county, municipal, or local 
taxation to the same extent according to its value as other real property 
is taxed. The provisions of this subsection shall be applicable without 
regard to any other law, including without limitation on the generality 
of the foregoing section 3301 of the Internal Revenue Code of 1954, ^/l^j^*^*" '*^^' 
except laws hereafter enacted by Congress expressly in limitation of 
26 use 3301. 
this subsection. 
(e) Notwithstanding section 1349 of title 28 of the United States 
Code or any other provision of law, (1) the Corporation shall be 
62 stat. 934. 
deemed to be an agenc.y included in sections 1345 and 1442 of such 
title 28; (2) all civil actions to which the Corporation is a partj^ shall 
be deemed to arise under the laws of the United States, and the district 
courts of the United States shall have original jurisdiction of all such 
actions, without regard to amount or value; and (3) any civil or other 
action, case or controversy in a court of a State, or in any court other 
than a district court of the United States, to which the Corporation 
is a party may at any time before the trial thereof be removed by the 
Corporation, without the giving of any bond or security, to the district 
court of the United States for the district and division embracing the 
place where the same is pending, or, if there is no such district court, 
to the district court of the United States for the district in which the 
principal office of the Corporation is located, by following any pro^ 
cedure for removal of causes in effect at the time of such removal. No 
attachment or execution shall be issued against the Corporation or any 
of its property before final judgment in any State, Federal, or other 
court. 
454 
PUBLIC LAW 91-351-JULY 24, 1970 
[84 STAT. 
CAPITAL STOCK 
Transfer. 
Publication in 
Federal Register. 
SEC. 304. (a) The capital stock of the Corporation shall consist of 
nonvoting common stock whicli shall be issued only to Federal home 
loan banks and shall have such par value and such other characteristics 
as the Corporation prescribes. Stock of the Corporation shall be evi-
denced in such manner and shall be transferable only to such extent, to 
such transferees, and in such manner, as the Corporation prescribes. 
(b) The Federal home loan banks shall from time to time subscribe, 
at such price not less than par as the Corporation shall from time to 
time fix, for such amounts of common stock as the Corporation pre-
scribes, and such banks shall pay therefor at such time or times and 
in such amount or amounts as may from time to time be fixed by call 
of the Corporation. The amount of the payments for which such banks 
may be obligated under such subscriptions shall not exceed a cumu-
lative total of $100,000,000. 
(c) Subscriptions of the respective Federal home loan banks to 
such stock shall be allocated by the Corporation. 
(d) The Corporation may retire at any time all or any part of the 
stock of the Corporation, or may call for retirement all or any part 
of the stock of the Corporation by (1) publishing a notice of the 
call in the Federal Register or providing such notice in such other 
manner as the Corporation may determine to be appropriate, and (2) 
depositing with the Treasurer of the United States, for the purpose 
of such retirement, fmids sufficient to effect such retirement. No call 
for the retirement of any stock shall be made, and no stock shall be 
retired without call, if immediately after such action, the total of the 
stock not called for retirement and of the reserves and surplus of the 
Corporation would be less than $100,000,000. The retirement of stock 
shall be at the par value thereof, or at the price at which such stock 
was issued if such price is greater than par value. No declaration of 
any dividend on stock of the Corporation shall be effective with respect 
to stock which at the time of such declaration is the subject of an out-
standing retirement call the effective date of which has arrived. 
MORTGAGE OPERATIONS 
SEC. 305. (a)(1) The Corporation is authorized to purchase, and 
make commitments to purchase, residential mortgages from any Fed-
eral home loan bank, the Federal Savings and I^an Insurance Cor-
poration, any member of a Federal home loan bank, or any other 
financial institution the deposits or accounts of which are insured by an 
agency of the United States, and to hold and deal with, and sell or 
otherwise dispose of, pursuant to commitments or otherwise, any such 
mortgage or interest therein. The operations of the Corporation under 
this section shall be confined so far as practicable to residential mort-
gages which are deemed by the Corporation to be of such quality, type, 
and class as to meet generally the purchase standards imposed by pri-
vate institutional mortgage investors. 
(2) No conventional mortgage shall be purchased under this section 
if the outstanding principal balance of tne mortgage at the time of 
purchase exceeds ^5 per centum of the value of the property securing 
the mortgage, unless (A) the seller retains a participation of not less 
than 10 per centum in the mortgage; (B) for such period and under 
such circumstances as the Corporation may require, the seller agrees to 
repurchase or replace the mortgage upon demand of the Corporation in 
the event that the mortgage is in default; or (C) that portion of the 
unpaid principal balance of the mortgage which is in excess of such 75 
per centum is guaranteed or insured by a qualified private insurer as 
determined by the Corporation. The Corporation shall not issue a com-
84 STAT. ] 
PUBLIC LAW 91-351-JULY 24, 1970 
455 
initment to purchase a conventional mortgage prior to the date the 
mortgage is originated, if such mortgage is eligible for purchase under 
the preceding sentence only by reason of compliance with the require-
ments of clause (A) of such sentence. The Corj>oration may purchase 
a conventional mortgage which was originated more than one year 
prior to the purchase date only if the seller is currentl}^ engaged in 
mortgage lending or investing activities and if, as a result thereof, the 
ciunulative aggregate of the principal balances of all conventional 
mortgages purchased by the Corporation which were originated more 
than one year prior to the date of purchase does not exceed 10 per 
centum of the cumulative aggregate of the principal balances of all 
conventional mortgages purchased by the Corporation. The Corpo-
ration shall establish limitations g;overning the maximum principal 
obligation of conventional mortgages purchased by it which are com-
parable to the limitations which would be applicable if the mortgage 
were insured by the Secretary of Housing and Urban Development 
under section 203(b) or 207 of the National Housing Act. 
sa^stat^^ssa^' ^'^' 
(3) The sale or other disposition by the Corporation of a mortgage 
12 use 1709, 
under this section may be with or without recourse, and shall be upon i7i3, 
such terms and conditions relating to resale, repurchase, guaranty, 
substitution, replacement, or otherwise as the Corporation may pre-
scribe. 
(b) Notwithstanding any other law, authority to enter into and to 
perform and carry out any transactions or matter referred to in this 
section is conferred on any Federal home loan bank, the Federal Sav-
ings and Loan Insurance Corporation, any Federal savings and loan 
association, any Federal home loan bank member, and any other 
financial institution the deposits or accounts of which are insured by 
an agency of the United States to the extent that Congress has the 
poM'er to confer such authority. 
OBLIGATIONS AND 
SECURITIES 
SEC^. 306. (a) The Corporation is authorized, upon such terms and 
conditions as it may prescribe, to borrow, to give security, to pay 
interest or other return, and to issue notes, debentures, bonds, or other 
obligations, or other securities, including without limitation mortgage-
backed securities guaranteed by the Government National Mortgage 
Association in the manner provided in section 306(g) of the National 
Housing Act. Any obligation or security of the Corporation shall be 
\l ^^^ ^y^i 
valid and binding notwithstanding that a person or persons pur-
porting to have executed or attested the same may have died, become 
under disability, or ceased to hold office or employment before the 
issuance thereof. 
(b) The Corporation may, by regulation or by writing executed by 
the Corporation, establish prohibitions or restrictions upon the crea-
tion of indebtedness or obligations of the Corporation or of liens or 
charges upon property of the Corporation, including after-acquired 
property, and create liens and charges, which may be floating liens or 
charges, upon all or any part or parts of the property of the Corpora-
tion, including aft«r-acquired property. Such prohibitions, restric-
tions, liens, and charges shall have such effect, including without 
limitation on the generality of the foregoing such rank and priority, as 
may be provided by regulations of the Corporation or by writings 
executed by the Corporation, and shall create causes of action which 
may be enforced by action in the United States District Court for the 
District of Columbia or in the United States district court for any 
judicial district in which any of the property affected is located. 
Process in any such action may run to and be served in any judicial 
47-348 O - 72 - 33 (Pt. 1) 
456 
PUBLIC LAW 91-351-JULY 24, 1970 
[84 STAT. 
Ante, p. 454. 
Corporation, 
rights and reme-
dies, legal 
immunity. 
GAO audit. 
Report to Con-
gress. 
district or any place subject to the jurisdiction of the United States. 
(c) The Federal home loan banks shall, to such extent as the Board 
of Directors may prescribe, guarantee the faithful and timely perform-
ance by the Corporation of any obligation or undertaking of the Cor-
poration on or with respect to any security (which term as used in this 
sentence shall not include the capital stock referred to in section 304 of 
this title). 
(d) The provisions of this section and of any restriction, prohibi-
tion, lien, or charge referred to in subsection (b) shall be fully effective 
notwithstanding any other law, including without limitation on the 
generality of the foregoing any law of or relating to sovereign immu-
nity or priority. 
MISCP:LIiANEOUS PROVISIONS 
SEC. 307. (a) All rights and remedies of the Corporation, including 
without limitation on the generality of the foregoing any rights and 
i-emedies of the Corporation on, under, or with respect to any mortgage 
or any obligation secured thereby, shall be immune from impairment, 
limitation, or restriction by or under (1) any law (except laws enacted 
by the Congress expressly in limitation of this sentence) which 
becomes effective after the acquisition by the Corporation of the sub-
ject or property on, under, or with respect to which such right or 
remedy arises or exists or would so arise or exist in the absence of such 
law, or (2) any administrative or other action which becomes effective 
after such acquisition. The Corporation shall be entitled to all immuni-
ties and priorities, including without limitation on the generality of 
the foregoing all immunities and priorities under any such law or 
action, to which it would be entitled if it were the United States or if 
it were an unincorporated agency of the United States. 
(b) The financial transactions of the Corporation shall be subject 
to audit by the General Accounting Office in accordance with the prin-
ciples and procedures applicable to commercial corporate transactions 
under such rules and regulations as may be prescribed by the Comp-
troller General of the United States. The representatives of the Gen-
eral Accounting Office shall have access to all books, accounts, financial 
records, reports, files and all other papers, things, or property belonging 
to or in use by the Corporation and necessary to facilitate the audit, and 
they shall be afforded full facilities for verifying transactions with the 
balances or securities held by depositaries, fiscal agents, and custo-
dians. A report on each such audit shall be made by the Comptroller 
General to the Congress. The Corporation shall reimburse the Gen-
eral Accounting Office for the full cost of any such audit as billed 
therefor by the Comptroller General. 
PENAL PROVISIONS 
SEC. 308. (a) Except as expressly authorized by statute of the United 
States, no individual or organization (except the Corporation) shall 
use the term "Federal Home Loan Mortgage Corporation", or any 
combination of words including the words "Federal", and "Home 
Ijoan", and "Mortgage", as a name or part thereof under which any 
individual or organization does any business, but this sentence shall 
not make unlawful the use of any name under which business is being 
done on the date of the enactment of this Act. No individual or orga-
nization shall use or display (1) any sign, device, or insigne prescribed 
or approved by the Corporation for use or display by the Corporation 
or by members of the Federal home loan banks, (2) any copy, repro-
duction, or colorable imitation of any such sign, device, or insigne, or 
(3) any sign, device, or insigne reasonably calculated to convey the 
impression that it is a sign, device, or insigne used by the Corporation 
84 STAT. ] 
PUBLIC LAW 91-351-JULY 24, 1970 
457 
or prescribed or approved by the Corporation, contrary to regulations 
of the Corporation prohibiting, or hmitin^ or restricting, such use 
or display by such individual or organization. An organization vio-
lating this subsection shall for each violation be punished by a fine 
of not more than $10,000. An officer or member of an organization par-
ticipating or knowingly acquiescing in any violation of this subsection 
shall be punished by a fine of not more than $5,000 or imprisonment for 
not more than one year, or both. An individual violating this subsection 
shall for each violation be punished as set forth in the sentence next 
preceding this sentence. 
(b) The provisions of sections 215, 607, 658, 1011, and 1014 of title 
18 of the United States Code are extended to apply to and with respect 
62 stat. 694-752; 
to the Corporation, and for the purposes of such section 658 the term l\ |tat* \\l^/ 
"any property mortgaged or pledged", as used therein, shall without 
limitation on its generality include any property subject to mortgage, 
pledge, or lien acquired by the Corporation by assignment or otherwise. 
(c) The term 'T)ank examiner or assistant examiner", as used in sec-
tion 655 of such title 18, shall include any examiner or assistant exam-
iner who is an officer or employee of the Corporation and any person 
who makes or participates in the making of any examination of or for 
the Corporation. 
(d) The term "bank", as used in subsection (f) of section 2113 of 
such title 18, shall be deemed to include the Corporation, and any build- 
64 stat. 395. 
ing used in whole or in part by the Corporation shall be deemed to 
be used in whole or in part as a bank, within the meaning of such sec-
tion 2113. 
(e) The terms "agency" and "agencies" shall be deemed to include 
the Corporation wherever used with reference to an agency or agencies 
of the United States in sections 201,202,203,205,207,208,209,286,287, 
371, 506, 595, 602, 641, 654, 701, 872,1001,1002,1016,1017,1361,1505, 
and 2073 of such title 18. Any officer or employee of the Corporation gj^st^/^^'gs-Vg''' 
shall be deemed to be a person mentioned in section 602 of such title es stat! 720; 
18 within the meaning of sections 603 and 606 of such title. 
76 stat. 551. 
(f) The terms "obligation or other security" and "obligations or ^^ ^*^*' ^^^' 
other securities", wherever used (with or without the words "of the 
United States") in sections 471 to 476, both inclusive, and section 492 
of such title 18, are extended to include any obligation or other security 
Q^III\^\22^' 
of or issued by the Corporation. Any reference in sections 474,494,495, 
and 642 of such title 18 to the United States Code, except in a territorial 
sense, or to the Secretary of the Treasury is hereby extended to include 
the Corporation. Section 477 of such title 18 is extended to apply with 
respect to section 476 of such title as extended by the first sentence 
of this subsection (f), and for this purpose the term "United States" as 
used in such section 476 shall include the Corporation. 
TERRITORIAL 
APPLICABILITY 
SEC. 309. Notwithstanding any other law, this title shall be appli-
cable to the several States, the District of Columbia, the Common-
wealth of Puerto Rico, and the territories and possessions of the 
United States. 
CONSTRUCTION AND SEPARABILITY 
SEC. 310. Except as otherwise provided in this title, or as otherwise 
provided by the Corporation or by laws hereafter enacted by the 
Congress expressly in limitaition of provisions of this title, the powers 
and functions of the Corporation and of the Board of Directors shall 
be exercisable, and the provisions of this title shall be applicable and 
effective, without regard to any other law. Notwithstanding any other 
evidences of the intention of Congress, it is hereby declared to be the 
458 
PUBLIC LAW 91-351-JULY 24, 1970 
[84 STAT. 
controlling intent of Congress that if any provision of this title, or the 
application thereof to any person or circumstances, is held invalid, the 
remainder of this title, or the application of such provision to persons 
or circumstances other than those as to which it is held invalid, shall 
not be affected thereby. 
TITLE IV—GOVEKNMENT NATIONAL MOETGAGE 
ASSOCIATION SPECIAL ASSISTANCE FUNDS 
75 Stat, 175; 
§^0.401. (a) Scctlon 305 (c) of the National Housing Act is amended 
*\2'usc V720 
by striking out "by $500,000,000 on July 1, 1969" and inserting in lieu 
thereof "bv $2,000,000,000 on July 1, 1969". 
80 Stat. 738; 
(b) Sectlou 305 (g) of such Act is amended— 
®
^ 
^^^- 
(1) by striking out "$2,500,000,000" and inserting in lieu 
thereof "$1,750,000,000"; 
(2) by striking out "at par"; and 
(3) by striking out in the first sentence all that follows the word 
"exceed" and inserting in lieu thereof "the dollar limitation on 
maximum principal obligation that would be applicable to such 
mortgage if insured under section 235 (i) of the National Housing 
82 Stat. 477; 
A c t . " 
*\?usc m5z. 
SEC. 402. The second sentence of section 302(b) (1) of the National 
Ante, p. 450. 
Housiug Act (as redesignated by section 201 of this Act) is amended 
by inserting after "(1)" the following: "is insured under section 236 
or". 
TITLE V—FUNDS FOR FINANCING MIDDLE-INCOME 
HOUSING 
FINDINGS AND PURPOSE 
SEC. 501. The Congress finds that— 
(1) periodic episodes of monetary stringency and high interest 
rates make it extremely difficult for families of middle income to 
obtain mortgage credit at rates which they can afford to pay; 
(2) periods of monetary stringency and high interest rates are 
directly related to the Government's monetary and fiscal policies; 
(3) a disproportionate share of the burden of sustaining these 
anti-inflationary policies of the Government falls on families of 
middle income who are buyers or prospective buyers of homes; and 
(4) the Government has a responsibility to lessen the dispropor-
tionate burden which such families bear as a result of such policies. 
It is the purpose of this title to provide, during periods of high 
mortgage interest rates, a source of mortgage credit for such families 
which is within their financial means. 
MORTGAGE CREDIT FOR MIDDLE-INCOME FAMILIES 
Interest sub- 
g^c. 502. Title I I of the National Housing Act is amended by adding 
^'12 uscTi^oV- 
^ 1
1
6
W section 243 as follows: 
1715Z-7. 
" H O M E O W N E R S H I P 
FOR MIDDLE-INCOME FAMILIES 
"SEC. 243. (a) Whenever he determines such action to be necessary 
in furtherance of the purposes set forth in section 501 of the Emer-
gency Home Finance Act of 1970, the Secretary is authorized to make, 
and to contract to make, periodic assistance payments on behalf of 
families of middle income. The assistance shall be accomplished 
through interest subsidy payments to the Federal National Mortgage 
84 STAT. ] 
PUBLIC LAW 91-351-JULY 24, 1970 
459 
Association or the Federal Home I^an Mortgage Corporation (here-
inafter referred to as 'the investor') with respect to mortgages meeting 
the special requirements specified in this section and made after the 
date of enactment of the Emergency Home Finance Act of 1970. 
"(b) To qualify for assistance payments a middle-income family 
shall be a mortgagor under a mortgage .which is (1) insured under 
subsection (j) of this section, (2) guaranteed under chapter 37 of title 
38, United States Code, or (3) a conventional mortgage meeting the 
72 stat. 1203; 
requirements of subsection (j) (3) of this section. In addition to the 32 stat! ne. 
foregoing requirement, the Secretary may require that the mortgagor 
38 use isoi-
have an income, at the time of acquisition of the property, of not more ^^^^' 
than the median income for the area in which the property is located, 
as determined by the Secretary, with appropriate adjustments for 
smaller and larger families. 
"(c) The interest subsidy payments authorized by this section shall 
cease w^hen (1) the mortgagor no longer occupies the property which 
secures the mortgage, (2) the mortgages are no longer held by the 
investor, or (3) the rate of interest paid by the mortgagor reaches 
the rate of interest specified on the mortgage. 
"(d) (1) Interest subsidy payments shall be on mortgages on which 
the mortgagor makes monthly payments towards principal and interest 
equal to an amount which would be required if the mortgage bore an 
effective interest rate of 7 per centum per annum including any dis-
counts or charges in the nature of points or otherwise (but not includ-
ing premiums, if any, for mortgage insurance) or such higher rate 
(not to exceed the rate specified in the mortgage), w^hich the mortgagor 
could pay by applying at least 20 per centum of his income towards 
homeownership expenses. As used in this subsection, the term 'monthly 
homeownership expense' includes the monthly payment for principal, 
interest, mortgage insurance premium, insurance, and taxes due under 
the mortgage. 
" (2) In addition to the mortgages eligible for assistance under para-
graph (1) of this subsection, the Secretary is authorized to make 
periodic assistance payments on behalf of cooperative members of 
middle income. Such assistance payments shall be accomplished 
through interest subsidy payments to the investor with respect to 
mortgages insured (subsequent to the effective date of this section) 
under section 213 which are executed by cooperatives, the membersihip 
64 stat. 54; 
in which is limited to middle-income families. For purposes of this 33 stat! 333! 
paragraph— 
uuscirise. 
"(1) the term 'mortgagor', when used in subsection (b) in the 
case of a mortgage covering a cooperative housing project, means 
a member of the cooperative; 
"(2) the term 'acquisition of the property', when used in sub-
section (b), means the family's application for a dwelling unit; 
and 
"(3) in the case of a cooperative mortgagor, subsection (c) 
shall not apply and the interest subsidy payments shall cease when 
the mortsrage is no longer held by the investor or the cooperative 
fails to limit membership to families whose incomes at the time 
of their application for a dwelling unit meets such requirements as 
are laid down by the Secretary pursuant to subsection (b). 
" (e) The interest subsidy pavments shall be in an amount equal to the 
difference, as determined by the Secretary, between the total amount 
of interest per calendar quarter received by the investor on mortgages 
assisted under this section and purchased by it and the total amount of 
interest which the investor would have received if the yield on such 
mortgages was equal to the sum of (1) the average costs (expressed as 
an annual percentage rate) to it of all borrowed funds outstanding in 
460 
PUBLIC LAW 91-351-JULY 24, 1970 
[84 STAT. 
Appropriation, 
Termination 
date. 
Mortgage in-
surance, authori-
zation. 
73 Stat. 659; 
83 Stat. 384. 
12 u s e 1715^ 
75 Stat. 160; 
83 Stat. 380,384. 
12 u s e 1715y. 
the immediately preceding calendar quarter, and (2) such per centum 
per annum as will provide for administrative and other expenses of 
the investor and a reasonable economic return, as determined by the 
Secretary to be necessary and appropriate taking into account the 
purpose of this section to provide additional mortgage credit at reason-
able rates of interest to middle-income families. 
"(f) Procedures shall be adopted by the Secretary for recertifica-
tions of the mortgagor's income at intervals of two years (or at shorter 
intervals where the Secretary deems it desirable) for the purpose of 
adjusting the amount of the mortgagor's payments pursuant to sub-
section (d). 
"(g) The Secretary shall prescribe such regulations as he deems 
necessary to assure that the sales price of, or other consideration paid 
in connection with, the purchase by a homeowner of the property with 
respect to which assistance payments are to be made is not increased 
above the appraised value on which the maximum mortgage which the 
Secretary will insure is computed. 
"(h) (1) There are authorized to be appropriated such sums as may 
be necessary to enable the Secretary to make interest subsidy payments 
under contracts entered into under this section. The aggregate amount 
of contracts to make such payments shall not exceed amounts approved 
in appropriation Acts, and payments pursuant to such contracts shall 
not exceed $105,000,000 during the first year of such contracts prior to 
July 1, 1971, which amount shall be increased by an additional $105,-
000,000 during the first year of an additional number of such contracts 
on July 1 of each of the years 1971 and 1972. 
"(2) No interest subsidy payments under this section shall be made 
after June 30, 1973, except pursuant to contracts entered into on or 
before such date. 
"(i) In determining the income of any family for the purposes of 
this section, income from all sources of each member of the family in 
the household shall be included, except that the Secretary shall exclude 
income earned by any minor person. 
" (j) (1) The Secretary is authorized, upon application by the mort-
gagee, to insure a mortgage executed by a mortgagor who meets the 
eligibility requirements for assistance payments prescribed by the 
Secretary unaer subsection (b). Commitments for the insurance of 
such mortgages may be issued by the Secretary prior to the date of 
their execution or disbursement thereon, upon such terms and condi-
tions as the Secretary may prescribe. 
"(2) To be eligible for insurance under this subsection, a mortgage 
shall meet the requirements of section 221(d) (2) or 234(c), except as 
such requirements are modified by this subsection: Provided^ however^ 
That in the discretion of the Secretary 25 per centum of the authority 
conferred by this section and subject to all the terms thereof may be 
used for mortgages on existing housing. 
"(3) A mortgage to be insured under this section shall— 
"(i) involve a single-family dwelling which has l)een approved 
by the Secretary prior to the beginning of construction, or a one-
family unit in a condominium project (together with an undi-
vided interest in the common areas and facilities serving the 
project) which is released from a multifamily project, the con-
struction of which has been completed within two years prior to 
the filing of the application for assistance payments with respect 
to such family unit and the unit shall have bad no previous occu-
pant other than the mortgagor; 
"(ii) involve a single-family dwelling whose appraised value, 
as determined by the Secretary, is not in excess of $20,000 (which 
84 STAT. ] 
PUBLIC LAW 91-351-JULY 24, 1970 
461 
amount may be- increased by not more than 50 per centum in any 
geographical area where the Secretary authorizes an increase on 
the basis of a finding that the cost level so requires). 
"(iii) be executed by a mortgagor who shall have paid in cash 
or its equivalent on account of the property (A) 3 per centum of 
the first $15,000 of the appraised value of the property, (B) 10 per 
centum of such value in excess of $15,000 but not in excess of 
$25,000, and (C) 20 per centum of such value in excess of $25,000." 
82 Stat. 487. 
12 u s e 17152:-3. 
t^.()NI-^)RMINO AMENDMENTS 
SEC. 503. Section 238 of the National Housing Act is amended by— 
(1) striking out "section 235 (i), 235(j) (4), or 237" each place 
it appears in subsection (a) and inserting in lieu thereof "section 
235 (i), 235 (j) (4), 237, or 243"; and 
(2) striking out "235, 236, and 237" each place it appears in 
subsection (b) and inserting in lieu thereof "235, 236, 237, and 
243". 
AMENDMENT TO T H E FEDERAL NATIONAL MORTGAGE 
ASSOCIATION 
CHARTER 
ACT 
SEC. 504. Section 304(a) (1) of the National Housing Act is amended ys^ltau^nV^' 
by adding at the end thereof the following: "Nothing in this title shall 
12 use 1719. 
prohibit the corporation from purchasing, and making commitments 
to purchase, any mortgage with respect to which the Secretary of 
Housing and Urban Development has entered into a contract with the 
corporation to make interest subsidy payments under section 502 of 
the Emergency Home Finance Act of 1970.". 
^"'^' P* '^SS. 
TITLE VI—FLEXIBLE INTEREST RATE AUTHORITY 
38 u s e 1801-
1827. 
SEC. 601. Section 3(a) of the Act entitled "An Act to amend chapter 
37 of title 38 of the United States Code with respect to the veterans' 
home loan program, to amend the National Housing Act with respect 
to interest rates on insured mortgages, and for other purposes", ap- sa^stftr'agV^' 
proved May 7,1968, is amended by striking out "October 1,1970" and 
12 use 17*09-1. 
inserting in lieu thereof "January 1,1972". 
TITLE VII—MISC^ELLANEOUS 
S E T T I ^ M E N T COSTS I N T H E FINANCING OF FEDERAL HOUSING ADMINISTRA-
TION AND V E T E R A N S ' ADMINISTRATION ASSISTED HOUSING 
SEC. 701. (a) With respect to housing built, rehabilitated, or sold 
with assistance provided under the National Housing Act or under 
j ^ ^*g!,* ^^46. 
chapter 37 of title 38, United States Code, the Secretary of Housing and note, 
and Urban Development and the Administrator of Veterans' Affairs 
are respectively authorized and directed to prescribe standards govern-
ing the amounts of settlement costs allowable in connection with the 
financing of such housing in any such area. Such standards shall— 
(1) be established after consultation between the Secretary and 
the Administrator ; 
(2) be consistent in any area for housing assisted under the 
National Housing Act and housing assisted under chapter 37 of 
title 38, United States Code; and 
(3) be based on the Secretary's and the Administrator's esti-
mates of the reasonable charge for necessary services involved in 
settlements for particular classes of mortgages and loans. 
462 
PUBLIC LAW 91-351-JULY 24, 1970 
[84 STAT. 
Settlement costs 
study, recommen-
dations to Con-
gress, 
(b) The Secretary and the Administrator shall undertake a joint 
study and make recommendations to the Congress not later than one 
year after the date of enactment of this Act with respect to legislative 
and administrative actions which should be taken to reduce mortgage 
settlement costs and to standardize these costs for all geographic areas. 
42 
use 
1450-
1469c. 
42 
use 
1430. 
EMERGENCY RELIEF FROM INTEREST RATE CONFLICT BETWEEN FEDERAL LAW 
AND STATE LAW 
SEC. 702. Notwithstanding any other law, from the date of enact-
ment of this title until July 1,1972, loans to local public agencies under 
title I of the Housing Act of 1949 and to local public housing agencies 
under the United States Housing Act of 1937 may, when determined 
by the Secretary of Housing and Urban Development to be necessary 
because of interest rate limitations of State laws, bear interest at a 
rate less than the applicable going Federal rate but not less than 6 
per centum per annum. 
82 Stat. 515. 
42 u s e 3906. 
40 Stat. 288. 
31 u s e 774. 
TREASURY BORROWING AUTHORITY FOR N E W COMMUNITIES PROGRAM 
SEC. 703. Section 407(a) of the Housing and Urban Development 
Act of 1968 is amended by adding at the end thereof the following: 
"The Secretary may issue obligations to the Secretary of the Treasury 
in an amount outstanding at any one time sufficient to enable the Secre-
tary to carry out his functions with respect to the guarantees author-
ized by this title. The obligations issued under this subsection shall have 
such maturities and bear such rate or rates of interest as shall be 
determined by the Secretary of the Treasury. The Secretary of the 
Treasury is authorized and directed to purchase any obligations of the 
Secretary issued under this subsection, and for such purpose the Sec-
retary of the Treasury is authorized to use as a public debt transaction 
the proceeds from the sale of any securities issued under the Second 
Liberty Bond Act, as now or hereafter in force, and the purposes for 
which securities may be issued under such Act are extended to include 
purchases of the Secretary's obligations hereunder." 
78 Stat. 807; 
!2 Stat. 609. 
REAL ESTATE LOANS BY NATIONAL BANKS 
SEC. 704. Section 24 of the Federal Reserve Act (12 U.S.C. 371) is 
amended— 
(1) by striking out "80 per centum" and "twenty-five years" 
in clause (3) of the third sentence of the first paragraph and 
inserting in lieu thereof "90 per centum" and "thirty years", 
respectively; and 
(2) by striking out "thirty-six months", each place it appears in 
t]ie first sentence of the third paragraph, and inserting in lieu 
thereof "sixty months". 
82 Stat. 8. 
EXTENSION o r T I M E FOR CONTINUANCE OF CERTAIN 
ACTIVITIES 
SEC. 705. Section 408(c) (2) of the National Housing Act (12 U.S.C. 
1730a(c) (2)) is amended by striking "two" and inserting in lieu 
thereof "five". 
76 Stat. 778; 
78 Stat. 805. 
12 u s e 1464. 
STATE-WIDE LENDING FOR FEDERAL SAVINGS AND LOAN ASSOCIATIONS 
SEC. 706. Section 5(c) of the Home Owners' Loan Act of 1933 is 
amended (1) by adding after "their home office" in the first sentence 
84 STAT. ] 
PUBLIC LAW 91-351-JULY 24, 1970 
463 
the following: "or witliin the State in which such home office is 
located"; and (2) by substituting the word "section" for the word 
"proviso" used in the last clause of the second proviso. 
RESERVKS OF INSURED 
INSTITUTIONS 
SEC. Y07. Section •108(b) of the National Housing Act (12 U.S.C. 
1726(b)) is amended by inserting after '•''Prorided. That" the second 4/8131^*298^^^' 
place the term appears the following: "the Corporation may extend 73 stat". 804! 
the twenty-year limitation hereinabove prescribed by not more than 
ten years in the case of any insured institution if it determines such 
action to be necessary to meet mortgage needs: Provided, 
further, 
lliat". 
SAVIN(JS AND LOAN ASSCXJIATIONS AS PENSION 
ITRUSl'EES 
SEC. 708. Section o(c) of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464(c)) is amended by inserting before the next to the last 
48 stat. 132; 
paragraph a new paragraph as follows: 
^^ ^
*
^
*
* ^'^^' 
"Any such association is authorized to act as trustee of any trust 
created or organized in the I mited States and forming part of a stock 
bonus, pension, or profit-sharing plan which qualifies or qualified for 
specific tax treatment under section 401(d) of the Internal Kevenue 
Code of 1954, if the funds of such trust are invested only in savings 
^^ use 4of' 
accounts or deposits in such association or in obligations or securities 
issued by such association. All funds held in such fiduciary capacity by 
any such association may be commingled for appropriate purposes of 
investment, but individual records shall be kept by the fiduciary for 
each participant and shall show in proper detail all transactions 
engaged in under the authority of this paragraph." 
MAXIMUM 
I/)AN ON SINCJLE-FAMILY 
DWELLING 
SEC. 709. Section 5(c) of the Home Owners' Loan Act of 1933 (12 
U.S.C. 1464(c)) is amended by striking out "$40,000" in the first 78 stat, 804. 
proviso and inserting in lieu thereof "$45,000". 
COLLEGE HOUSIN(} (JRANT AUTHORIZAIION 
SEC. 710. Section 401 (f) (2) of the Housing Act of 1950 is amended 
83 stat. 390. 
by striking out all that follows "increased by" and inserting in lieu 
^^ "^*^ ^^'*^' 
thereof "$6,300,000 on July 1, 1970". 
NATIONAL HOUSING 
PARTNERSHIPS 
SEC. 711. Title I X of the Housing and Urban Development Act of 
1968 is amended by adding after section 911 the followins: new section: 
82 stat. 547. 
*
^ 
'
=
4
2 
u s e 3931-
STATE 
REGULATION 
3940. 
"SEC. 912. Nothing contained in this title shall preclude a State or 
other local jurisdiction from imposing, in accordance with the laws of 
such State or other local jurisdiction, any valid nondiscriminatory tax, 
obligation, or regulation on the partnership as a taxable and or legal 
entity, but no limited partner of the partnership not otherwise subject 
to taxation or regulation by or judicial process of a State or other local 
464 
PUBLIC LAW 91-352-JULY 24, 1970 
[84 STAT. 
jurisdiction shall be subject to taxation or regulation by or subject to 
or denied access to judicial process of such State or other local jurisdic-
tion, or be so subject or denied access to any greater extent, because of 
activities of the corporation or partnership within such State or other 
local jurisdiction." 
Approved July 24, 1970. 
July 24, 1970 
[S. 3430] 
Public Law 91-352 
AN ACT 
To amend the Peace Corps Act to authorize additional appropriations, and for 
other purposes. 
peace Corps 
Act, amendment. 
83 Stat. 166. 
Regulation 
authority. 
75 Stat, 612. 
Readjustment 
allowance. 
77 Stat. 359; 
79 Stat. 549. 
80 Stat. 495. 
Dependents, 
benefits. 
80 Stat. 765. 
Be It enacted hy the Senate and House of Representatives 
of the 
United States of America in Congress a^sembled^ That section 8(b) of 
the Peace Corps Act (22 U.S.C. 2502 (b)), which authorizes aj>propria-
tions to carry out the purposes of that Act, is amended by striking out 
"1970" and "$98,450,000" and inserting in lieu thereof "1971" and 
"$98,800,000", respectively. 
SEC. 2. Section 4(c) of such Act (22 U.S.C. 2503(c)) is amended 
by adding at the end thereof the following new paragraph: 
"(4) The Director of the Peace Corps may prescribe such regula-
tions as may be necessary to assure that no individual performing 
service for the Peace Corps under any authority contained in this Act 
shall engage in any activity determined by the Director to be detri-
mental to the best interests of the United States." 
SEC. 3. (a) Section 5(c) of such Act (22 U.S.C. 2504(c)), which 
relates to a readjustment allowance for volunteers, is amended— 
(1) by inserting immediately before the period at the end of 
the first sentence thereof the following: "; except that, in the cases 
of volunteers who have one or more minor children at the time of 
their entering a period of pre-enrollment training, one parent shall 
be entitled to receive a readjustment allowance at a rate not to 
exceed $125 for each month of satisfactory service as detei-mined 
by the President"; and 
(2) by striking out "the Act of August 3, 1950, chapter 518, 
section 1 (5 U.S.C. 61f)" and inserting in lieu thereof "section 
5582 (b) of title 5, United States Code". 
(b) Section 5 of such Act (5 U.S.C. 2504), which relates to Peace 
Corps volunteers, is amended by adding at the end thereof the follow-
ing new subsections: 
"(m) The minor children of a volunteer living with the volunteer 
may receive— 
"(1) such living, travel, education, and leave allowances, such 
housing, transportation, subsistence, and essential special items of 
clothing as the President may determine; 
"(2) such health care, including health care following the vol-
unteer's service for illness or injury incurred during such service, 
and health and accident insurance, as the President may determine 
and upon such terms as he may determine, including health care in 
any facility referred to in subsection (e) of this section, subject to 
such conditions as the President may prescribe and subject to 
reimbursement of appropriations as provided in such subsec-
tion (e) ; 
"(3) such orientation, language, and other training necessary 
to accomplish the purposes of this Act as the President may 
determine; and 
"(4) the benefits of subsection (1) of this section on the same 
basis as volunteers.