An Act to assist in the provision of housing for moderate and low income families, to promote orderly urban development, to extend and amend laws relating to housing, urban renewal, and community facilities, and for other purposes.
PL 87-70 (S.1922), enacted 06/30/1961

75 STAT.] 
PUBLIC L
A
W 87-70-JUNE 30, 1961 
149 
Public Law 87-70 
AN ACT 
June 30. ,1961 
To asisist in. the provision of housing for moderate and low income families, 
[S. 192:!] 
to promote orderly urban development, to extend and amend laws relating to 
housing, urban renewal, and community facilities, and for other purposes. 
Be it eriacted hy the Senate and House of Representatives of the 
United States of America in Congress assembled, That this Act may 19"°"*^"*^ '^'^^ "' 
be cited as the "Housing Act of 1961". 
TITLE I—NEW HOUSING PKOGKAMS 
HOUSING FOR MODERATE INCX)ME FAMILIES 
SEC. 101. (a) Section 221 of the National Housing Act is amended 
ff gs*.- jS?'j|-^ 
by— 
(1) inserting before the text of such section a section heading 
as follows: 
"HOUSING FOR MODERATE INCOME AND DISPLACED FAMILIES"; 
(2) striking out subsection (a) and inserting in lieu thereof the 
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following: 
"(a) This section is designed to assist private industry in provid-
ing housing for low and moderate income families and families dis-
placed from urban renewal areas or as a result of governmental 
action."; 
(3) inserting in subsection (b) after "any mortgage" the fol-
lowing: "(including advances during construction on mortgages 
covering property of the character described in paragraphs (3) 
and (4) of subsection (d) of this section)"; 
(4) striking out in subsection (d) (2) "(A) not to exceed" and 
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all that follows down through "other prepaid expenses" and 
inserting in lieu thereof the following: (A) not to exceed (i) siffilil^^.""^^°'^'*' 
$11,000 in the case of a property upon which there is located 1.^^° "'^ ^*^°"*' 
a dwelling designed principally for a single-family residence, " ^' 
(ii) $18,000 in the case of a property upon which there is located 
a d.welling designed principally for a two-family residence, (iii) 
$27,000 in the case of a property upon which there is located a 
dwelling designed principally tor a three-family residence, or 
(iv) $33,000 in the case of a property upon which there is located 
a dwelling designed principally for a four-family residence: 
Provided,That a mortgage secured by property upon which there 
is located a dwelling designed principally for a two-, three-, or 
four-family residence shall not be insured under this section 
except in the case of a dwelling for occupancy by a family dis-
placed from an urban renewal area or as a result of governmental 
action: Provided further, That the Commissioner may increase 
the foregoing amounts to not to exceed $15,000, $25,000, $32,000, 
and $38,000, respectively, in any geographical area where he finds 
that cost levels so require; and (B) not to exceed the appraised 
value of the property (as of the date the mortgage is accepted 
for insurance): Provided, That (i) if the mortgagor is the owner 
and an occupant of the property at the time of insurance, (1) in 
the case of a family displaced from an urban renewal area or as 
a result of Government action, he shall have paid on account of 
the property at least $200 in the case of a single-family dwelling, 
$400 in the case of a two-family dwelling, $600 in the case of a 
three-family dwelling, and $800 in the case of a four-family 
dwelling, or (2) in the case of any other family, he shall have paid 
150 
PUBLIC LAW 87-70-JUNE 30, 1961 
[75 STAT. 
on account of the property at least 3 per centum of the Commis-
sioner's estimate of its acquisition cost; which amount in either 
instance may include amounts to cover settlement costs and initial 
payments for taxes, hazard insurance, mortgage insurance pre-
mium, and other prepaid expenses; or (ii) in the case of repair 
and rehabilitation, the amount of the mortgage shall not exceed 
the sum of the estimated cost of rfepair and rehabilitation and the 
Commissioner's estimate of the value of the property before 
repair and rehabilitation, except that in no case involving refinanc-
ing shall such mortgage exceed such estimated cost of repair and 
rehabilitation and the amount (as determined by the Commis-
sioner) required to refinance existing indebtedness secured by the 
property"; 
1
2 use 1715^ 
(5\ striking out the last proviso in subsection (d) (2); 
(6) striking out subsection (d) (3) and inserting in lieu thereof 
the following: 
"(3) if executed by a mortgagor which is a public body or 
agency (and which certifies that it is not receiving financial 
assistance from the United States exclusively pursuant to the 
42us^c f«6 
United States Housing Act of 1937), a cooperative (including 
an investor-sponsor who meets such requirements as the Commis-
sioner may impose to assure that the consumer interest is pro-
tected) , or a limited dividend corporation (as defined by the Cfom-
missioner), or a private nonprofit corporation or association 
regulated or supervised under Federal or State laws or by politi-
cal subdivisions of States, or agencies thereof, or by the Commis-
sioner under a regulatory agreement or otherwise, as to rents, 
charges, and methods of operation, in such form and in such 
manner as in the opinion of the Commissioner will effectuate the 
purposes of this section— 
" (i) not exceed $12,500,000; 
" (ii) not exceed for such part of such property or project as 
may be attributable to dwelling use (excluding exterior land 
improvements as defined by the Commissioner), $2,250 per 
room (or $8,500 per family unit if the number of rooms in 
such property or project is less than four per family unit), 
except that the Commissioner may in his discretion mcrease 
the dollar amount limitation of $2,250 per room to not to 
exceed $2,750 per room, and the dollar amount limitation of 
$8,500 per family unit to not to exceed $9,000 per family unit, 
as the case may be, to compensate for higher costs incident 
to the construction of elevator-type structures of sound 
standards of construction and design, and except that the 
Commissioner may increase any of the foregoing dollar 
amount limitations contained in this paragraph by not to 
exceed $1,000 per room without regard to the number of 
rooms being less than four, or four or more, in any geo-
graphical area where he finds that cost levels so require; 
and 
"(iii) not exceed (1) in the case of new construction, the 
amount which the Commissioner estimates will be the replace-
ment cost of the property or project when the proposed im-
provements are completed (the replacement cost may include 
the land, the proposed physical improvements, utilities with-
in the boundaries of the land, architect's fees, taxes, interest 
during construction, and other miscellaneous charges incident 
to construction and approved by the Commissioner), or (2) 
in the case of repair and rehabilitation, the sum of the esti-
mated cost of repair and rehalbilitation and the Commis-
75 S T A T . ] 
PUBLIC LAW 87-70-JUNE 30, 1961 
151 
sioner's estimate of the value of the property before repair 
and rehabilitation: Provided^ That in no case involving 
Refinancing, 
refinancing shall such mortgage exceed such estimated cost 
of repair and rehabilitation and the amount (as determined 
by the Commissioner) required to refinance existing indebted-
ness secured by the property or project: Promded 
further^ 
That such property or project, when constructed, or repaired 
and rehabilitated, shall be for use as a rental or cooperative 
project, and low and moderate income families or families 
displaced by urban renewal or other governmental action 
shall be eligible for occupancy in accordance with such regu-
lations ana procedures as may be prescribed by the Commis-
sioner and the Commissioner may adopt such requirements 
as he determines to be desirable regardmg consultation with 
local public officials where such consultation is appropriate 
by reason of the relationship of such project to projects under 
other local programs; or"; 
(7) striking out in subsection (d) (4) "which is not a nonprofit 
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organization" and inserting in lieu thereof "other than a mort-
gagor referred to in subsection (d)(3)"; 
(8) striking out subsection (d) (4) (ii) and inserting in lieu 
thereof the following: 
"(ii) not exceed, for such part of the property or project 
as may be attributable to dwelling use (excluding exterior 
land improvements as defined by the Commissioner), $2,260 
per room (or $8,500 per family unit if the number of rooms 
in such property or project is less than four per family 
unit), except that the Commissioner may in his discretion 
increase the dollar amount limitation of $2,250 per room to not 
to exceed $2,750 per room, and the dollar amount limitation 
of $8,500 per family unit to not to exceed $9,000 per family 
unit, as the case may be, to compensate for higher costs in-
cident to the construction of elevator type structures of 
sound standards of construction and design, and except that 
the Commissioner"^ay increase any of the foregoing dollar 
amount limitations contained in this paragraph by not to 
exceed $1,000 per room without regard to the number of 
rooms being less than four, or four or more, in any geo-
graphical area where he finds that'^ost levels so require;"; 
(9) striking out in subsection (d) (4) (iv) all that follows 
"(iv)" down through '"''And provided further'''' and inserting in 
lieu thereof the following: "not exceed 90 per centum of the sum 
of the estimated cost of repair and rehabilitation and the Com-
missioner's estimate of the value of the property before repair 
and rehabilitation if the proceeds of the mortgage are to be used 
for the repair and rehabilitation of a property or project: 
Provided^ That in no case involving refinancing shall such mort-
gage exceed such estimated cost of repair and rehabilitation and 
the amount (as determined by the Commissioner) required to 
refinance existing indebtedness secured by the property or project: 
Provided 
further''''; 
(10) striking out "and" at the end of subsection (d) (4), strik-
ing out in subsection (d) (5) "provide for complete amortization" 
^^ use nisi. 
and all that follows down through "lesser;", striking out the 
period at the end of subsection (d) (5) and inserting in lieu 
thereof "; and", and adding after 
subsection 
(d)(5) 
the 
following: 
"(6) provide for complete amortization by periodic payments 
within such terms as the Commissioner may prescribe, but as to 
152 
PUBLIC LAW 87-70-JUNE 30, 1961 
[75 STAT. 
1
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mortgages coming within the provisions of subsection (d) (2) not 
to exceed from the date of the beginning of amortization of the 
mortgage (i) 40 years in the case of a family displaced from an 
urban renewal area or as a result of governmental action, (ii) 35 
years in the case of any other family if the mortgage is approved 
for insurance prior to construction, except that the period m such 
case may be increased to not more than 40 years where the 
mortgagor is an owner-occupant of the property and is not able, 
as determined by the Commissioner, to make the req^uired pay-
ments under a mortgage having a shorter amortization period, 
and (iii) 30 years in the case of any other family where the 
mortgage is not approved for insurance prior to construction: 
Provided^ That no mortgage insured under subsection (d) (2) 
shall have a maturity exceeding three-quarters of the Commis-
sioner's estimate of the remaining economic life of the building 
improvements." 
(11) inserting before the period at the end of subsection (d)(5) 
Interest rate. 
the followiug: ": Pvovided^ That a mortgage insured under the 
provisions of subsection (d) (3) shall bear interest (exclusive 
of any premium charges for insurance and service charge, if 
any) at not less than the annual rate of interest determined, from 
time to time by the Secretary of the Treasury at the request of the 
Commissioner, by estimating the average market yield to maturity 
on all outstanding marketable obligations of the United States, 
and by adjusting such yield to the nearest one-eighth of 1 per 
centum, and there shall be no differentiation in the rate of interest 
charged under this proviso as between mortgagors under subsec-
tion (d) (3) on the basis of differences in the types or classes of 
such mortgagors"; 
(12) inserting the following at the end of subsection (f) : "A 
property or project covered by a mortgage insured under the pro-
visions of subsection (d)(3) or (d)(4) shall include five or more 
family units. The Commissioner is authorized to adopt such pro-
cedures and requirements as he determines are desirable to assure 
that the dwelling accommodations provided under this section are 
available to families displaced from urban renewal areas or as a 
Premium charges. 
result of governmental action. 
Notwithstanding any provision 
of this Act, the Commissioner, in order to assist further the pro-
vision of housing for low and moderate income families, in his 
discretion and under such conditions as he may prescribe, may 
insure a mortgage which meets the requirements of subsection 
(d) (3) of this section as in effect after the date of enactment of 
the Housing Act of 1961, with no premium charge, with a reduced 
premium charge, or with a premium charge for such period or 
periods during the time the insurance is in effect as the Commis-
sioner may determine, and there is hereby authorized to be appro-
priated, out of any money in the Treasury not otherwise appro-
priated, such amounts as may be necessary to reimburse the 
1
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Section 221 Housing Insurance Fund for any net losses in con-
nection with such insurance. 
No mortgage shall be insured under 
subsection (d) (2) or (d) (4) after July 1, 1963, or under subsec-
tion (d) (3) after July 1, 1965, except pursuant to a commitment 
to insure before that date, or except a mortgage covering prop-
erty which the Commissioner finds will assist in the provision of 
housing for families displaced from urban renewal areas or as a 
result of governmental action."; 
(13) redesignating paragraph (3) of subsection (g) as para-
graph (4) and inserting after paragraph (2) of subsection (g) 
a new paragraph as follows: 
76 S T A T . ] 
P U B U C L A W 8 7 - 7 0 - J U N E 30, 1961 
168 
"(3) as to mortgages meeting the requirements of this section 
debentures, 
which are insured or initially endorsed for insurance on or after 
the date of enactment of the Housing Act of 1961, notwithstand-
ing the provisions of paragraphs (1) and (2) of this subsection, 
the Commissioner in his discretion, in accordance with such 
regulations as he may prescribe, may make payments pursuant to 
such paragraphs in cash or in debentures (as provided in the 
mortgage insurance contract), or may acquire a mortgage loan 
that is in default and the security therefor upon payment to the 
mortgagee in cash or in debentures (as provided in the mortgage 
insurance contract) of a total amount equal to the unpaid prin-
cipal balance of the loan plus any accrued interest and any ad-
vances approved by the Commissioner and made previously by 
the mortgagee under the provisions of the mortgage, and after 
the acquisition of any such mortgage by the Commissioner the 
mortgagee shall have no further rights, liabilities, or obligations 
with respect to the loan or the security tor the loan. The appro-
priate provisions of sections 204 and 207 relating to the issuance ^
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of debentures shall apply with respect to debentures issued under 
this paragraph, and the appropriate provisions of sections 204 
and 207 relating to the rights, liabilities, and obligations of a 
mortgagee shall apply with respect to the Commissioner when he 
has acquired an insured mortgage under this paragraph, in ac-
cordance with and subject to regulations (modifying such provi-
sions to the extent necessary to render their application for such 
purposes appropriate and effective) which shall be prescribed by 
the Commissioner, except that as applied to mortgages so acquired 
(A) all references in section 204 to the Mutual Mortgage Insur-
ance Fund or the Fund shall be construed to refer to the Section 
221 Housing Insurance Fund, (B) all references in section 204 to 
1
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section 203 shall be construed to refer to this section, and (C) all 
references in section 207 to the Housing Insurance Fund, the 
Housing Fund, or the Fund shall be construed to refer to the 
Section 221 Housing Insurance Fund; or"; 
(14) striking out in paragraph (4) of subsection (g) (as re-
designated by the preceding paragraph) the phrase "this para-
graph (3)", each place it appears, and inserting in lieu thereof 
"this paragraph"; and 
(16) inserting in the last sentence of subsection (h) after "cash 
adjustments," the following: "cash payments,". 
(b) Section 101(c) of the Housing Act of 1949 is amended by— 
js sm. 62|. 
(1) striking out "under section 220 or 221" and inserting in lieu 
thereof "under section 220 or section 221 (d)(3)"; 
(2) striking out "of section 220(d), or under section 221 of the 
National Housing Act, as amended, if the mortgaged property is 
in an area descried in clause (3) of section 221 (a) of said Act, or 
in a community referred to in clause (2) (B) of said section" and 
inserting in lieu thereof "of section 220(d) of the National Hous-
ing Act"; and 
(3) striking out clause (iii) and renumbering clause (iv) as 
clause (iii). 
(c) Section 305 of the National Housing Act is amended by adding 
^8 sm. e^us. 
at the end thereof a new subsection as follows: 
"(h) Notwithstanding clause (2) of section 302(b) and any provi- 
1
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sion of this Act which is inconsistent with this subsection, the Associa-
tion is authorized (subject to Presidential action as provided in sub-
section (a), as limited by subsection (c)) to purchase pursuant to com-
mitments or otherwise, and to service, sell, or otherwise deal in, mort-
gages insured under the provisions of section 221(d) (3) of this Act." 
"*"'*' P- ^^'^• 
64207 0-62—13 
154 
PUBLIC LAW 87.70-JUNE 30, 1961 
[75 ST 
A T . 
?2 us°c fnsn. 
(^) Section 223 of the National Housing Act is amended by redesig-
nating subsection (b) as subsection (c), and by inserting after sub-
section (a) the following new subsection: 
" (b) Notwithstanding any of the provisions of this title and without 
regard to limitations upon eligibility contained in section 221, the 
Ante, p. 150. 
Commissiouer may in his discretion insure under section 221(d) (3) 
any rnortgage executed by a mortgagor of the character described 
therein where such mortgage is given to refinance a mortgage covering 
an existing property or project (other than a one- to four-family 
structure) located in an urban renewal area, if the Commissioner finds 
that such insurance will facilitate the occupancy of dwelling units in 
the property or project by families of low or moderate income or 
families displaced from an urban renewal area or displaced as a result 
of governmental action." 
HOME IMPROVEMENT AND REHABILITATION LOANS 
1
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(^) Section 220 of the National Housing Act is amended 
(1) striking out the provisos in subsections (d)(3)(A)(i) and 
(d)(3)(B)(ii) and inserting in lieu thereof in each subsection the 
following: ": Provided, That in the case of properties other than 
new construction, the foregoing limitations upon the amount of 
the mortgage shall be based upon the sum of the estimated cost of 
repair and rehabilitation and the Commissioner's estimate of the 
value of the property before repair and rehabilitation rather 
than upon the Commissioner's estimate of the replacement cost: 
Provided further, That in no case involving refinancing shall such 
mortgage exceed such estimated cost of repair and rehabilitation 
and the amount (as determined by the Commissioner) required to 
refinance existing indebtedness secured by the property or 
project"; 
(2) striking out "mortgage insurance" in subsection (a) and 
inserting in lieu thereof "loan and mortgage insurance"; and 
(3) adding at the end thereof the following subsection: 
"(h) (1) To assist further in the conservation, improvement, repair, 
and rehabilitation of property located in the area of an urban renewal 
project, as provided in paragraph (1) of subsection (d) of this section, 
the Commissioner is authorized upon such terms and conditions as he 
may prescribe to make commitments to insure and to insure home im-
provement loans (including advances during construction or improve-
ment) made by financial institutions on and after the date of enactment 
of the Housing Act of 1961. As used in this subsection, 'home 
improvement loan' means a loan, advance of credit, or purchase of an 
obligation representing a loan or advance of credit made for the pur-
pose of financing the improvement of an existing structure (or in 
connection with an existing structure) which was constructed not less 
than ten years prior to the making of such loan, advance, or purchase, 
and which is used or will be used primarily for residential purposes: 
Provided, That a home improvement loan shall incude a loan, advance, 
or purchase with respect to the improvement of a structure which was 
constructed less than ten years prior to the making of such loan, 
advance, or purchase if the proceeds are or will be used primarily for 
major structural improvements, or to correct defects which were not 
known at the time of the completion of the structure or which were 
caused by fire, flood, windstorm, or other casualty; 'improvement' 
means conservation, repair, restoration, rehabilitation, conversion, 
alteration, enlargement, or remodeling; and 'financial institution' 
means a lender approved by the Commissioner as eligible for insurance 
1
2 u s e 1703. under section 2 or a mortgagee approved under section 203(b) (1). 
75 S T A T . ] 
PUBLIC LAW 87-70-JUNE30, 1961 
166 
"(2) To be eligible for insurance under this subsection, a home 
improvement loan shall— 
"(i) not exceed the Commissioner's estimate of the cost of 
improvement, or $10,000 per family unit, whichever is the lesser; 
(ii) be limited to an amount which when added to any out-
standing indebtedness related to the property (as determined by 
the Commissioner) creates a total outstanding indebtedness which 
does not exceed the limits provided in subsection (d) (3) for 
properties (of the same type) other than new construction; 
"(iii) bear interest at not to exceed a rate prescribed by the 
Commissioner, but not in excess of 6 per centum per annum 
of the amount of the principal obligation outstanding at any 
time, and such other charges (including such service charges, 
appraisal, inspection, and other fees) as may be approved by the 
Commissioner; 
" (iv) have a maturity satisfactory to the Commissioner, but not 
to exceed twenty years from the beginning of amortization of the 
loan or three-quarters of the remaining economic life of the struc-
ture, whichever is the lesser; 
"(v) comply with such other terms, conditions, and restric-
tions as the Commissioner may prescribe; and 
"(vi) represent the obligation of a borrower who is the owner 
of the property improved, or a lessee of the property under a 
lease for not less than 99 years which is renewable or under a lease 
having a period of not less than 50 years to run from the date of 
the loan. 
"(3) Any home improvement loan insured under this subsection 
may be refinanced and extended in accordance with such terms and 
conditions as the Commissioner may prescribe, but in no event for an 
additional amount or term in excess of the maximum provided for in 
this subsection. 
" (4) There is hereby created a separate Section 220 Home Improve-
ment Account to be maintained under the Section 220 Housing Insur- 
^^ use irisk. 
ance Fund and to be used by the Commissioner as a revolving fund for 
carrying out the provisions of this subsection. 
The Commissioner is 
authorized to transfer to such Account the sum of $1,000,000 from the 
War Housing Insurance Fund established pursuant to the provisions 
of section 602 of this Act. 
Any premium charges, and appraisal and 
other fees received on account of the insurance of any home improve-
ment loan accepted for insurance under this subsection, and the 
receipts derived from the sale, collection, deposit, or compromise of 
any evidence of debt, contract, claim, property, or security assigned 
to or held by the Commissioner in connection with the payment of 
insurance under this subsection, shall be credited to the Section 220 
Home Improvement Account. 
Insurance claims under this subsec-
tion and expenses incurred in the handling, management, renovation, 
and disposal of any properties acquired by the Commissioner under 
this subsection shall be charged to the Section 220 Home Improve-
ment Account. 
General expenses of operation of the Federal Hous-
ing Administration and other expenses incurred under this subsection 
may be charged to the Section 220 Home Improvement Account. 
Moneys in the Account not needed for the current operation of the 
Federal Housing Administration under this subsection shall be de-
posited with the Treasurer of the United States to the credit of the 
Account, or invested in bonds or other obligations of, or in bonds or 
other obligations guaranteed as to principal and interest by, the 
United States. In order to protect the solvency of the Section 220 
Home Improvement Account, adequate security shall be taken in con-
nection with loans insured under this subsection in such manner as the 
Commissioner may require. 
12 use 1737. 
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PUBLIC LAW 87-70-JUNE 30, 1961 
[76 ST A T . 
Premium charge. 
12 u s e 171Sk. 
Defaults. 
Debentures. 
68 Stat. 606. 
12 u s e 17150. 
12 u s e 1713. 
"(5) The Commissioner is authorized to fix a premium charge for 
the insurance of home improvement loans under this subsection but 
in the case of any such loan such charge shall not be less than an 
amount equivalent to one-half of 1 per centum per annum nor more 
than an amount equivalent to 1 per centum per annum of the amount 
of the principal obligation of the loan outstanding at any time, with-
out taking into account delinquent payments or prepayments. 
Such 
premium charges shall be payable by the financial institution either 
in cash or in debentures (at par plus accrued interest) issued by the 
Commissioner as obligations of the Section 220 Home Improvement 
Account, in such manner as may be prescribed by the Commissioner, 
and the Commissioner may require the payment of one or more such 
premium charges at the time the loan is insured, at such discount rate 
as he may prescribe not in excess of the interest rate specified in the 
loan. 
If the Commissioner finds upon presentation of a loan for 
insurance and the tender of the initial premium charge or charges so 
required that the loan complies with the provisions of this subsection, 
such loan may be accepted for insurance by endorsement or otherwise 
as the Commissioner may prescribe. In the event the principal obli-
gation of any loan accepted for insurance under this subsection is paid 
in full prior to the maturity date, the Commissioner is authorized to 
refund to the financial institution for the account of the borrower all, 
or such portions as he shall determine to be equitable, of the current 
unearned premium charges theretofore paid. 
"(6) In cases of defaults on loans insured under this subsection, 
upon receiving notice of default, the Commissioner, in accordance 
with such regulations as he may prescribe, may acquire the loan 
and any security therefor upon payment to the financial institution 
in cash or in debentures (as provided in the loan insurance contract) 
of a total amount equal to the unpaid principal balance of the loan, 
plus any accrued interest, .any advances approved by the Commis-
sioner made previously by the financial institution under the provi-
sions of the loan instruments, and reimbursement for such collection 
costs, court costs, and attorney fees as may be approved by the 
Commissioner. 
" (7) Debentures issued under this subsection shall be executed in the 
name of the Section 220 Home Improvement Account as obligor, shall 
be signed by the Commissioner, by either his written or engraved 
signature, shall be negotiable, and shall be dated as of the date the 
loan is assigned to the Commissioner and shall bear interest from that 
date. 
They shall bear interest at a rate established by the Commis-
sioner pursuant to section 224, payable semiannually on the 1st day of 
January and the 1st day of July of each year, and shall mature ten 
years after their date of issuance. They shall be exempt from taxa-
tion as provided in section 207(i) with respect to debentures issued 
under that section. 
They shall be paid out of the Section 220 Home 
Improvement Account which shall be primarily liable therefor and 
they shall be fully and unconditionally guaranteed as to principal and 
interest by the United States, and the guarantv shall be expressed on 
the face of the debentures. 
In the event {he Section 220 Home 
Improvement Account fails to pay upon demand, when due, the 
principal of or interest on any debentures so guaranteed, the Secre-
tary of the Treasury shall pay to the holders the amount thereof which 
is hereby authorized to be appropriated, out of any money in the 
Treasury not otherwise appropriated, and thereupon, to the extent 
of the amount so paid, the Secretary of the Treasury shall succeed to 
all the rights of the holders of such debentures. 
Debentures issued 
under this subsection shall be in such form and denominations in 
multiples of $50, shall be subject to such terms and conditions, and 
76 S T A T . ] 
PUBUCLAW 87-70-JUNE 30, 1961 
157 
shall include such provisions for redemption, if any, as may be pre-
scribed by the Commissioner with the approval of the Secretary of the 
Treasury, and they may be in coupon or registered form. Anv differ-
ence between the amount of the debentures to which the financial 
institution is entitled, and the aggregate face value of the debentures 
issued, not to exceed $50, shall be adjusted by the payment of cash by 
the Commissioner to the financial institution from the Section 220 
Home Improvement Account. 
"(8) The provisions of subsections (c), (d), and (h) of section 2 
shall apply to home improvement loans insured under this subsection, 
and for the purposes of this subsection references in subsections (c), 
(d), and (h) of section 2 to 'this section' or 'this title' shall be con-
strued to refer to this subsection. 
" (9) (A) Notwithstanding any other provisions of this Act, no home 
improvement loan executed m connection with the improvement of a 
structure for use as rental accommodations for five or more families 
shall be insured under this subsection unless the borrower has agreed 
(i) to certify, upon completion of the improvement and prior to final 
endorsement of the loan, either that the actual cost of improvement 
equal'id or exceeded the proceeds of the home improvement loan, or the 
amount by which the proceeds of the loan exceed the actual cost, as the 
case may be, and (ii) to pay forthwith to the financial institution, for 
application to the reduction of the principal of the loan, the amount, if 
any, certified to be in excess of the actual cost of improvement. Upon 
the Commissioner's approval of the borrower's certification as required 
under this paragraph, the certification shall be final and incontestable, 
except for fraud or material misrepresentation on the part of the 
borrower. 
"(B) As used in subparagraph (A), the term 'actual cost' means 
the cost to the borrower of the improvement, including the amounts 
paid for labor, materials, construction contracts, off-site public utilities, 
streets, organization and legal expenses, such allocations of general 
overhead items as are acceptable to the Commissioner, and other items 
of expense approved by the Commissioner, plus a reasonable allowance 
for builder's profit if the borrower is also the builder, as defined by 
the Commissioner, and excluding the amount of any kickbacks, rebates, 
or trade discounts received in connection with the improvement. 
" (10) Notwithstanding any other provision of this Act, the Commis-
sioner is authorized and empowered (i) to make expenditures and 
advances out of funds made available by this Act to preserve and 
protect his interest in any security for, or the lien or priority of the 
lien securing, any loan or other indebtedness owing to, insured by, or 
acquired by the Commissioner or by the United States under this 
subsection, or section 2 or 203(k); and (ii) to bid for and to purchase 
at any foreclosure or other sale or otherwise acquire property pledged, 
mortgaged, conveyed, attached, or levied upon to secure the payment 
of any loan or other indebtedness owing to or acquired by the Commis-
sioner or by the United States under this subsection or section 2 or 
203 (k). The authority conferred by this paragraph may be exercised 
as provided in the last sentence of section 204 (g)." 
(b) Section 203 of the National Housing Act is amended by— 
(1) striking out in subsection (e) "of the mortgage" and insert-
ing in lieu thereof "of the loan or mortgage"; 
(2) striking out in subsection (e) ''approved mortgagee" each 
place it appears and inserting in lieu thereof "approved financial 
institution or approved mortgagee"; and 
(3) adding at the end thereof the following subsection: 
"(k) To supplement the mortgage insurance provisions of this 
section in order to assist the conservation, improvement, and alteration 
12 u s e 1703. 
Exception, 
"Actual cost". 
Authority. 
12 u s e 17110. 
12 u s e 1709. 
Ante, p. 154. 
168 
PUBLIC LAW 87-70~JUNE 30, 1961 
[75 S T A T . 
of housing, the Commissioner is authorized to make commitments to 
insure and to insure a home improvement loan (including advances 
during construction or improvement) under this subsection in ac-
cordance with the provisions of section 220(h), except that (1) the 
structures improved shall be designed for occupancy by not more 
than four families and shall not be required to be located in the area 
of an urban renewal project, (2) the Commissioner shall find that 
the project with respect to which the loan is executed is economically 
sound, (3) all funds received and all disbursements made shall be 
credited or charged, as appropriate, to a separate Section 203 Home 
Improvement Account to be maintained as hereinafter provided 
under the Mutual Mortgage Insurance Fund, and (4) insurance 
benefits shall be paid in debentures executed in the name of the Sec-
tion 203 Home Improvement Account. 
For the purposes of this 
subsection, the Commissioner shall have all the authority provided 
in section 220(h). Debentures issued with respect to loans insured 
under this subsection shall be issued in accordance with sections 
220(h) (6) and 220(h) (7), except that as applied to those loans ref-
erences in section 220(h) to 'this subsection' shall be construed to 
refer to this section 203 (k), references to the Section 220 Home Im-
provement Account shall be construed to refer to the Section 203 
Home Improvement Account, and references to the Section 220 Hous-
ing Insurance Fund shall be construed to refer to the Mutual Mort-
gage Insurance Fund. 
All of the provisions in section 220(h) (4) 
relative to the Section 220 Home Improvement Account shall be 
equally applicable to the Section 203 Home Improvement Account. 
There is hereby created a separate Section 203 Home Improvement 
Account under the Mutual Mortgage Insurance Fund which shall be 
used by the Commissioner as a revolving fund for carrying out 
the provisions of this subsection, and the Commissioner is authorized 
to transfer to such Account the sum of $1,000,000 from the War 
Housing Insurance Fund established pursuant to the provisions of 
1
2 u s e 1737, section 602 of this Act. The provisions of section 205(c) shall not 
be applicable to loans insured under this subsection." 
12USC f7?7. 
(^ Section 302(b) of the National Housing Act is amended by 
adding at the end thereof the following new sentence: "For the pur-
poses of this title, the term 'mortgages' shall be inclusive of any 
mortgages or other loans insured under any of the provisions of the 
National Housing Act." 
EXPERIMENTAL HOUSING MORTGAGE INSURANCE 
i7\5w" ® ^ '^°'" 
^^^' ^^^' "^^^^^ ^^ of'the National Housing Act is amended by add-
ing at the end thereof the following section: 
1711 
(( 
EXPERIMENTAL HOUSING 
"SEC. 233. (a) In order to assist in lowering housing costs and 
improving housing standards, quality, livability, or durability or 
neighborhood design through the utilization of advanced housing 
technology, or experimental property standards, the Commissioner is 
authorized to insure and to make commitments to insure, under this 
section, mortgages (including, in the case of mortgages insured under 
subsection (b) (2) of this section, advances on such mortgages during 
construction) secured by properties including dwellings involving the 
utilization and testing of advanced technology in housing design, 
materials, or construction, or experimental property standards for 
neighborhood design if the Commissioner determines that (1) the 
pronerty is an acceptable risk, 2:iving consideration to the need for 
testing advanced housing technology or experimental property stand-
Eligibility. 
12 use 1709. 
12 use 1713. 
75 S T A T . ] 
PUBLIC LAW 87-70-JUNE 30, 1961 
159 
ards, (2) the utilization and testing of the advanced technology or 
experimental property standards involved will provide data or experi-
ence which the Commissioner deems to be significant in reducing hous-
ing costs or improving housing standards, quality, livability, or du-
rability, or improving neighborhood design, and (3) the mortgages 
are eligible for insurance under the provisions of this section and 
under any further terms and conditions which may be prescribed by 
the Commissioner to establish the acceptability of the mortgages for 
insurance. 
"(b) To be eligible for insurance under this section a mortgage 
shall— 
"(1) meet the requirements of section 203(b), except that the 
maximum principal obligation of the mortgage as computed 
under clauses (i), (ii), and (iii) of section 203(b)(2) shall be 
determined on the basis of the Commissioner's estimate of the 
cost of replacing the property using comparable conventional 
design, materials, and construction rather than value, and the 
proviso in section 203(b) (8) shall not be applicable to mortgages 
insured under this section; or 
"(2) meet the requirements of section 207(b) and section 207 
(c), except that the maximum principal obligation of the mort-
gage as computed under section 207(c) (2) shall be determined on 
the basis of the Commissioner's estimate of the cost of replacing 
the property using comparable conventional design, materials, 
and construction rather than value. 
"(c) The Commissioner may enter into such contracts, agreements, 
and financial undertakings with the mortgagor and others as he deems 
necessary or desirable to carry out the purposes of this section, and 
may expend available funds for such purposes, including the correc-
tion (when he determines it necessary to protect the occupants), at 
any time subsequent to insurance of a mortgage, of defects or failures 
in the dwellings which the Commissioner finds are caused by or related 
to the advanced housing technology utilized in their design or con-
struction or experimental property standards. 
"(d) The Commissioner may make such investigations and analyses 
of data, and publish and distribute such reports, as he determines to 
be necessary or desirable to assure the most beneficial use of the data 
and information to be acquired as a result of this section. 
"(e) Any mortgagee under a mortgage insured under subsection 
(b) (1) of this section shall be entitled to the benefits of the insurance 
as provided in section 204(a) with respect to mortgages insured under 
1
2 use 1710 
section 203, and the provisions of subsections (b), (c), (d), (e), (f), 
is)i 
Wi 
(1)5 ^i^d (k) of section 204 shall apply to the mortgages 
insured under subsection (b)(1), except that as applied to those 
mortgages (1) all references therein to the Mutual Mortgage Insur-
ance Fund or the Fund shall be construed to refer to the Experimental 
Housing Insurance Fund, and (2) all references therein to section 203 
shall be construed to refer to this section. 
"(f) Any mortgagee under a mortgage insured under subsection 
(b) (2) of this section shall be entitled to the benefits of the insurance 
as provided in section 207(g) with respect to mortgages insured under 
section 207, and the provisions of subsections (d), (e), (h), (i), (j), 
(k), (1), (m), (n), and (p) of section 207 shall apply to the mort-
gages insured under subsection (b) (2) of this section, except that as 
applied to those mortgages (1) all references therein to the Housing 
Insurance Fund, the Housing Fund, or the Fund shall be construed 
to refer to the Experimental Housing Insurance Fund, and (2) all 
references therein to 'this section' shall be construed to refer to this 
section 233. 
wo 
PUBLIC LAW 87-70-JUNE 30, 1961 
[75 STAT. 
°*'*"^*" 
"(g) Notwithstanding the provisions of subsections (e) and (f) 
of this section, in the case of default on any mortgage insured under 
this section, the Commissioner in his discretion, in accordance with 
such regulations as he may prescribe, may make payments pursuant 
to such subsections in cash or in debentures (as provided in tne mort-
gage insurance contract), or may acquire the mortgage loan and the 
security therefor upon payment to the mortgagee in cash or in deben-
tures (as provided in the mortgage insurance contract) of a total 
amount equal to the unpaid principal balance of the loan plus any 
accrued interest and any advances approved by the Commissioner 
made previously by the mortgagee under the provisions of the mort-
gage. After the acquisition of the mortgage by the Commissioner the 
mortgagee shall have no further rights, liabilities, or obligations with 
respect to the mortgage. 
The appropriate provisions of sections 204 
and 20T relating to the issuance of debentures shall apply with respect 
to debentures issued under this subsection, and the appropriate provi-
1713 " ^ ^ ^'^°' sio^s of sections 204 and 207 relating to the rights, liabilities, and 
obligations of a mortgagee shall apply with respect to the Commis-
sioner when he has acquired an insured mortgage under this subsec-
tion, in accordance with and subject to regulations (modifying such 
provisions to the extent necessary to render their application for such 
purposes appropriate and effective) which shall be prescribed by the 
Commissioner, excepi. that as applied to mortgages insured unuer this 
section (1) all references in section 204 to the Mutual Mortgage Insur-
ance Fund or the Fund shall be construed to refer to the Experimental 
Housing Insurance Fund, (2) all references in section 204 to section 
203 shall be construed to refer to this section, and (3) all references 
in section 207 to the Housing Insurance Fund, the Housing Fundj or 
the Fund shall be construed to refer to the Experimental Housing 
Insurance Fund. 
"(h) There is hereby created an Experimental Housing Insurance 
Fund to be used by the Commissioner as a revolving fund to carry 
out the provisions of this section, and the Commissioner is directed 
to transfer the sum of $1,000,000 to the Fund from the War Housing 
1
2 use 1737. 
Insurance Fund created by section 602 of this Act. 
General expenses 
of operation of the Federal Housing Administration and other 
expenses incurred under this section may be charged to the Experi-
mental Housing Insurance Fund." 
INDIVIDUALLY OWNED UNITS IN MULTIFAMILY STRUCTURES 
1
2 use 
170 7- 
gEc. 104. Title I I of the National Housing Act is amended by adding 
^'^^^'"- 
after section 233 (as added by section 103 of this Act) the following 
section: 
"MORTGAGE I N S U R A N C E FOR INDIVIDUALLY OWNED UNITS IN 
MULTIFAMILY STRUCTURES 
"SEC. 234. (a) The purpose of this section is to provide an additional 
means of increasing the supply of privately owned dwelling units 
where, under the laws of the State in which the property is located, 
real property title and ownership are established with respect to a 
one-family unit which is part of a multifamily structure. 
Definitions. 
«(jj) The tcrms 'mortgage', 'mortgagee', 'mortgagor', 'maturity date', 
and 'State' shall have the meanings respectively set forth in section 
1
2 use 
1707. 201, except that the term 'mortgage' for the purposes of this section 
may include a first mortgage given to secure the unpaid purchase price 
of a fee interest in, or a long-term leasehold interest in, a one-family 
unit in a multifamily structure and an undivided interest in the 
75 S T A T . ] 
PUBLIC LAW 87-70-JXJNE 30, 1961 
161 
common areas and facilities which serve the structure where the mort-
gage is determined by the Conmiissioner to be eligible for insurance 
under this section. 
The term 'common areas and facilities' as used 
in this section shall be deemed to include the land and such com-
mercial, community, and other facilities as are approved by the Com-
missioner. 
" (c) The Commissioner is authorized, in his discretion and under 
Authority, 
such terms and conditions as he may prescribe (including the mini-
mum number of family units in the structure which shall be offered 
for sale and provisions for the protection of the consumer and the 
public interest), to insure any mortgage covering a one-family unit 
in a multifamily structure and an undivided interest in the common 
areas and facilities which serve the structure, if (1) the mortgage 
meets the requirements of this section and of section 203(b), except 
^^ ^^^ ^^''^• 
as that section is modified by this sec'.ion, (2) the structure is or has 
been covered by a mortgage insured under another section (except 
section 213) of this Act, notwithstanding any requirements in any 
12 u^'inse. 
such section that the structure be constructed or rehabilitated for the 
purpose of providing rental housing, and (3) the mortgagor is ac-
quiring, or has acquired, a family unit covered by a mortgage insured 
under this section for his own use and occupancy and will not own 
more than four one-family units covered by mortgages insured under 
this section. Any project proposed to be constructed or rehabilitated 
after the date of enactment of the Housing Act of 1961 with the 
assistance of mortgage insurance under this Act, where the sale of 
family units is to be assisted with mortgage insurance under this sec-
tion, shall be subject to such requirements as the Commissioner may 
prescribe,. To be eligible for insurance pursuant to this section a 
mortgage shall (A) involve a principal obligation in an amount not 
to exceed the limits per room and per family dwelling unit provided 
by section 207(c) (3), and not to exceed the sum of (i) 97 per centum 
12 use 1713. 
of $13,500 of the amount which the Commissioner estimates will be 
the appraised value of the family unit including common areas and 
facilities as of the date the mortgage is accepted for insurance, (ii) 
90 per centum of such value in excess of $13,500 but not in excess of 
$18,000, and (iii) 70 per centum of such value in excess of $18,000, 
and (B) have a maturity satisfactory to the Commissioner but not 
to exceed, in any event, thirty years from the date of the beginning 
of amortization of the mortgage or three-fourths of the Commissioner's 
estimate of the remaining economic life of the structure, whichever is 
the lesser. 
In determining the amount of a mortgage in the case of a 
nonoccupant mortgagor the reference to paragraph (2) of section 
203(b) m section 203(b) (8) shall be construed to refer to the preced-
ing sentence in this section. 
The mortgage shall contain such provi-
sions as the Commissioner determines to be necessary for the 
maintenance of common areas and facilities and the multifamily struc-
ture. 
The mortgagor shall have exclusive right to the use of the ,1 ^t° ' * ^ * *
= ° '• 
one-family unit covered by the mortgage and, together with the owners 
of other units in the multif amily structure, shall have the right to the 
use of the common areas and facilities serving the structure and the 
obligation of maintaining all such common areas and facilities. 
The 
Commissioner may require that the rights and obligations of the 
mortgagor and the owners of other dwelling units in the structure 
shall be subject to such controls as he determines to be necessary and 
feasible to promote and protect individual owners, the multifamily 
structure, and its occupants. 
For the purposes of this section, the 
Commissioner is authorized in his discretion and under such terms and 
conditions as he may prescribe to permit one-family units and inter-
ests in common areas and facilities in multifamily structures covered 
162 
PUBLIC LAW 87-70-JUNE 30, 1961 
[75 STAT. 
by mortgages insured under any section of this Aci: (other than section 
1
2 use i7i5e, 
213) to be released from the liens of those mortgages. 
" (d) Any mortgagee under a mortgage insured under this section is 
entitled to receive the benefits of the insurance as provided in section 
1
2 use 1710. 
204(a) of this Act with respect to mortgages insured under section 203, 
and the provisions of subsections (b), (c), (d), (e), (f), (g), (h), (j), 
and (k) of section 204 shall be applicable to the mortgages insured 
under this section, except that (1) all references in section 204 to the 
Mutual Mortgage Insurance Fund or the Fund shall be construed to 
refer to the Apartment Unit Insurance Fund, (2) all references 
1
2 use 1709. 
therein to section 203 shall be construed to refer to this section, and 
(3) the excess remaining, referred to in section 204(f)(1), shall be 
retained by the Commissioner and credited to the Apartment Unit 
Insurance Fund. 
ins'^lntT^*"!!-u^d! 
"(e) There is hereby created the Apartment Unit Insurance Fund 
creation. 
which shall be used by the Commissioner as a revolving fund for car-
rying out the provisions of this section. 
The Commissioner is author-
ized to transfer to the Fund the sum of $1,000,000 from the War 
Housing Insurance Fund established pursuant to the provisions of 
1
2 use 1737. 
section 602 of this Act. 
General expenses of operation of the Federal 
Housing Administration under this section may be charged to the 
Apartment Unit Insurance Fund. 
The provisions of the second and 
1
2 use 1715k. 
third paragraphs of section 220(g) shall be applicable to the Apart-
ment Unit Insurance Fund and to this section, all references therein 
to the Section 220 Housing Insurance Fund or the Fund shall be con-
strued to refer to the Apartment Unit Insurance Fund, and all ref-
erences therein to 'this section' shall be construed to refer to this 
section 234. 
stSfel: ^°^' ^^ 
"(f) The provisions of sections 225, 229, and 230 shall be applicable 
1
2 u s c i7i5p, to the mortgages insured under this section." 
171St, 1715U. 
*
= *
= 
TITLE II—HOUSING FOE ELDERLY PERSONS AND LOW 
INCOME FAMILIES 
HOUSING FOR THE ELDERLY 
DIRECT LOANS 
U f^iX' ?
,
^
«
^
- 
SEC. 201. (a) Section 202 of the Housing Act of 1959 is amended 
12 u s e 170 Iq. 
-
1 
^ ' 
*
-
" 
by— 
(1) inserting in subsection (a) (1) after the words "private 
nonprofit corporations" the following: ", consumer cooperatives, 
or public bodies or agencies"; 
(2) striking out subsection (a) (2) and inserting in lieu thereof 
the following: 
"(2) In order to carry out the purpose of this section, the Admin-
istrator may make loans to any corporation (as defined in subsection 
(d)(2)), to any consumer cooperative, or to any public body or 
agency for the provision of rental or cooperative housing and related 
facilities for elderly families and elderly persons, except that (A) 
no such loan shall be made unless the applicant shows that it is unable 
to secure the necessary funds from other sources upon terms and 
conditions equally as favorable as the terms and conditions applica-
ble to loans under this section, (B) no such loan shall be made unless 
the Administrator finds that the construction will be undertaken 
in an economical manner and that it will not be of elaborate or 
extravagant design or materials, and (C) no such loan shall be made 
to a public body or agency unless it certifies that it is not receiving 
financial assistance from the United States exclusively pursuant to 
42 us^c iflo. 
the United States Housing Act of 1937."; 
75 S T A T . ] 
P U B U C LAW 87-70-JUNE 30, 1961 
163 
(3) striking out in subsection (a) (3) "A loan to a corporation 
H use ^Ivbiq. 
under this section" and inserting in lieu thereof "A loan under 
this section"; and 
(4) striking out in subsection (c) (3) "corporation undertak-
ing" and inserting in lieu thereof "corporation, cooperative, or 
public body or agency undertaking". 
(b) Section 202(a)(3) of such Act is amended by striking out 
"98 per centum of". 
(c) Section 202(a)(4) of such Act is amended by striking out 
"$50,000,000" and inserting in lieu thereof "$125,000,000", and by 
striking out the second sentence. 
(d) Section 202 of such Act is further amended by adding at the 
end thereof the following new subsection: 
"(e) Nothing in this section or in regulations promulgated under 
Exception, 
this section shall prevent a corporation or consumer cooperative from 
obtaining a loan under this section for the provision of housing and 
related facilities for elderly families and elderly persons, notwith-
standing the fact that such corporation or cooperative has theretofore 
obtained a commitment from the Federal Housing Administration 
for mortgage insurance under section 231 of the National Housing 
Act with respect to the housing involved, if (1) such corporation or 
^^ ^^^ ivisv. 
cooperative is otherwise eligible for such loan under this section, (2) 
such commitment was obtained prior to the date of enactment of the 
Housing Act of 1961, and (3) the Administrator determines that the 
financing of such housing through a loan under this section rather 
than through mortgage insurance under such section 231 is necessary or 
desirable in order to avoid hardship for the elderly families and 
elderly persons who are the prospective tenants of such housing." 
LOW-RENT PUBLIC HOUSING 
ELIGIBILITY REQUIREMENT FOR DISABLED PERSONS 
SEC. 202. Section 2 of the United States Housing Act of 1937 is 
H us^c uai. 
amended by striking out the words "has attained the age of fifty and" 
in the second and third sentences of paragraph (2), and by striking 
out paragraph (14) and renumbering paragraph (15) as paragraph 
(14). 
ADDITIONAL SUBSIDY FOR ELDERLY TENANTS 
SEC. 203. Section 10(a) of the United States Housing Act of 1937 
^2 use i4io. 
is amended by inserting the following proviso before the period at the 
end of the third sentence thereof: '^: Provided, That the Authority 
may, in addition to the payments guaranteed under the contract, pay 
not to exceed $120 per annum per dwelling unit occupied by an elderly 
family on the last day of the project fiscal year where such amount, 
in the determination of the Authority, was necessary to enable the 
public housing agency to lease the dwelling unit to the elderly family 
at a rental it could afford and to operate the project on a solvent basis". 
DWELLING UNIT AUTHORIZATION 
SEC. 204. (a) Section 10(e) of the United States Housing Act of 
1937 is amended by striking out the first three sentences and inserting 
in lieu thereof the following: "The Authority is authorized to enter 
into contracts for annual contributions aggregating not more than 
$336,000,000 per annum, but any such contracts for additional units 
for any one State shall not, after the date of enactment of the Housing 
Act of 1961, be entered into for more than 15 per centum of the aggre-
gate amount not already guaranteed under contracts for annual con-
es Stat. 4:!7. 
184 
PUBLIC L
A
W 87-70-JUNE 30, 1961 
[75 STAT. 
tributions on such date: Provided^ That no such new contract for 
additional units shall be entered into after the date of enactment of 
the Housing Act of 1961 except with respect to low-rent housing for 
a locality respecting which the Administrator has made the deter-
mination and certification relating to a workable program as pre-
42 u^* tUi. 
scribed in section 101 (c) of the Housing Act of 1949, and the Author-
ity shall enter ^nto only such new contracts for preliminary loans as 
are consistent with the number of dwelling units for which contracts 
for annual contributions may be entered into." 
73St^rt. eVi!' 
(b) Section 10(i) of such Act is repealed; and section 15(10) of 
42 use i4i5. 
such Act is redesignated as section 10(i) and transferred (as so re-
designated) to the place heretofore occupied by the section so repealed. 
42 use 1421. 
(J5 Section 21(d) of such Act is repealed. 
GREATER LOCAL RESPONSIBILITY FOR ADMISSION POMCIES 
SEC. 205. (a) Section 10(g) of the United States Housing Act of 
42 use wfo. 
1^^'^ ^^ amended to read as follows: 
"(^) Every contract for annual contributions for any low-rent 
housing project shall provide that— 
"(1) the maximum income limits fixed by the public housing 
agency shall be subject to the prior approval of the Authority and 
the Authority may require the agency to review and revise such 
limits if the Authority determines that changed conditions in the 
locality make such revisions necessary in achieving the purposes 
of the Act; 
"(2) the public housing agency shall adopt and promulgate 
regulations establishing admission policies which shall give full 
consideration to its responsibilitv for the rehousing of those dis-
placed by urban renewal or other governmental action, to the 
applicant's status as a serviceman or veteran or relationship to a 
serviceman or veteran or to a disabled serviceman or veteran, and 
to the applicant's age or disability, housing conditions, urgency 
of housing need, and source of income; and 
"(3) the public housing agency shall determine, and so certify 
to the Authority, that each family in the project was admitted 
in accordance with duly adopted regulations and approved in-
come limits; and the public housing agency shall make periodic 
reexaminations of the incomes of families living in the project 
and shall require any family whose income has increased beyond 
the approved maximum income limits for continued occupancy 
to move from the project unless the public housing agency deter-
mines that, due to special circumstances, the family is unable to 
find decent, safe and sanitary housing within its financial reach 
although making every reasonable effort to do so, in which event 
such family may be permitted to remain for the duration of such 
a situation if it pays an increased rent consistent with such 
family's increased income." 
42^u%'c 1
4
1
0 
('^) Sections 10 (m) and 15(8) of such Act are repealed. 
1415. 
MISCELLANEOUS PUBLIC HOUSING 
AMENDMENTS 
SEC. 206. (a) Section 15 of the United States Housing Act of 1937 
is amended by— 
(1) inserting in paragraph (5) after the second parenthetical 
clause the following: "on which the computation of any annual 
contributions under this Act may be based''; 
(2) striking out in paragraph (5) "($2,500 per room in the 
case of Alaska or in the case of accommodations designed spe-
cifically for elderly families)", and inserting in lieu thereof 
76 ST AT. ] 
PUBLIC LAW 87-70-JUNE 30,1961 
166 
"($3,000 per room in the case of Alaska, or in the case of accom-
modations designed specifically for elderly families $3,000 per 
room and $3,500 per room in the case of Alaska)"; 
(3) striking out paragraph (6), redesignating paragraph (9) 
as paragraph (6), and transferring paragraph (9), as so redes-
ignated, to the place heretofore occupied by the paragraph so 
stricken out; and 
(4) striking out "or 5 per centum in the case of any family 
entitled to a first preference as provided in section 10 (^)" in 
paragraph (7) (b) and inserting in lieu thereof "except in the 
case of a family displaced by urban renewal or other govern-
mental action or an elderly family". 
(b) Section 10(h) of such Act is amended by inserting the follow- 
H u^c md. 
ing after the word "project" the third time it appears therein: 
"(exclusive of any portion thereof which is not assisted by annual 
contributions under this Act)". 
(c) Section 10 (j) of such Act is repealed. 
Repeal, 
31 u s e 529. 
DEMONSTRATION PROGRAMS 
SEC. 207. The Housing and Home Finance Administrator is author-
ized to enter into contracts to make grants, not exceeding $5,000,000, 
to public or private bodies or agencies, subject to such terms and 
conditions as ne shall prescribe, for the purposes of developing and 
demonstrating new or improved means of providing housing for low 
income persons and families. 
Advances and progress payments may 
be made, under any contract to make grants under this section, with-
out regard to the provisions of section 3648 of the Revised Statutes. 
TITLE III—URBAN RENEWAL AND PLANNING 
INCREASED FEDERAL AID FOR SMALL COMMUNITIES ; POOLING GRANTS-IN-AID 
BETWEEN PROJECTS 
SEC. 301. (a) Section 103 (a) of the Housing Act of 1949 is amended 
H ^^' ^^f^^ 
by inserting "(1)" after "(a)", by striking out the last two sentences, 
and by inserting at the end thereof the following : 
"(2) The aggregate of such capital grants with respect to all of the 
projects of a local public agency for of two or more local public 
agencies in the same municipality) on which contracts for capital 
grants have been made under this title shall not exceed the total of— 
"(A) two-thirds of the aggregate net project costs of all such 
projects to which neither subparagraph (B) nor subparagraph 
(C) applies, and 
"(B) three-fourths of the aggregate net project costs of any of 
such projects which are located in a municipality having a popu-
lation of fifty thousand or less (one hundred fifty thousand or 
less in the case of a municipality situated in an area which, at 
the time the contract or contracts involved are entered into or 
at such earlier time as the Administrator may specify in order 
to avoid hardship, is designated as a redevelopment area under 
the second sentence of section 5(a) of the Area Redevelopment 
Act) according to the most recent decennial census, and 
Ante, p. 48. 
"(C) three-fourths of the aggregate net project costs of any 
of such projects (not falling within subparagraph (B)) which 
the Administrator, upon request, may approve on a three-fourths 
capital grant basis. 
" (3) A capital grant with respect to any individual project shall not 
exceed the difference between the net project cost and the local grants-
in-aid actually made with respect to the project." 
166 
PUBLIC LAW 87.70-JUNE 30, 1961 
[75 STAT. 
42 use 1
4
5
4
V 
(^) Section 104 of such Act is amended by striking out the second 
sentence and inserting in lieu thereof the following: "Such local 
grants-in-aid, together with the local grants-in-aid to be provided 
m connection with all other projects of the local public agency (or 
two or more local public agencies in the same municipality) on which 
contracts for capital grants have theretofore been made, shall be at 
least equal to the total of one-third of the aggregate net project costs 
of such projects undertaken on a two-thirds capital grant basis and 
one-fourth of the aggregate net project costs of such projects under-
taken on a three-fourths capital grant basis." 
42 use 1460. 
^(.^ -pj^g third and fourth sentences of section 110(e) of such Act 
are each amended by striking out "pursuant to the proviso in the 
second sentence of section 103(a)" and inserting in lieu thereof "pur-
suant to section 103(a) (2) (C)". 
INCONTESTABLE FEDERAL OBLIGATION I N PRIVATE FINANCING OF PROJECTS 
42 use 1452. 
gEC. 302. (a) Section 102(c) of the Housing Act of 1949 is amended 
by adding at the end thereof the following: "In connection with any 
such pledge of a loan contract, including loan payments thereunder, 
as security for the repayment of obligations of the local public agency 
held by other than the Federal Government, the Administrator is 
authorized to agree to pay, through operations of a paying agent or 
agents, and to pay or cause to be paid when due, from funds obtained 
pursuant to subsection (e) of this section, to the holders of such obli-
gations (or to their agents or designees) the principal of and the 
interest on such obligations, subject to such conditions as the Admin-
istrator may determine but without regard to any other condition or 
requirement. 
Notwithstanding any other provision of law, any con-
tract or other instrument executed by the Administrator which, by its 
terms, includes an obligation of the Administrator to make payment 
pursuant to this subsection shall be construed by all officers of the 
United States separate and apart from the loan contract and shall be 
incontestable in the hands of a bearer and the full faith and credit of 
the United States is pledged to the payment of all amounts agreed to 
be paid by the Administrator pursuant to this subsection." 
(b) Section 22 of the United States Housing Act of 1937 is amended 
by inserting the following new subsection at the end thereof: 
"(c) Obligations of a public housing agency which (1) are secured 
either (A) by a pledge of a loan under an agreement between such 
public housing agency and the Authority, or (B) by a pledge of 
annual contributions under an annual contributions contract between 
such public housing agency and the Authority, and (2) bear, or are 
accompanied by, a certificate of the Authority that such obligations 
are so secured, shall be incontestable in the hands of a bearer, and 
the full faith and credit of the United States is pledged to the payment 
of all amounts agreed to be paid by the Authority as security for such 
obligations." 
GRANT AUTHORIZATION 
71 sm. 299. 
SEC. 303. Section 103(b) of the Housing Act of 1949 is amended 
42 
1453. 
i^y g^pjjjjjjg Q^^ ij^Q f^YQi sentence and inserting in lieu thereof the 
following: "The Administrator may, with the approval of the Presi-
dent, contract to make grants under this title aggregating not to exceed 
$4,000,000,000: Provided, That of such sum the Administrator may, 
without regard to other provisions of this title, contract to make 
grants aggregating not to exceed $25,000,000 for mass transportation 
demonstration projects which he determines will assist in carrj^ing 
out urban transportation plans and research, including but not limited 
to the development of data and information of general applicability 
63 Stat. 424. 
42 u s e 1421a. 
75 S T A T . ] 
PUBLIC LAW 87-70-JUNE 30, 1961 
1*7 
on the reduction of urban transportation needs, the improvement of 
mass transportation service, and the contribution of such service 
toward meeting total urban transportation needs at minimum cost. 
Such grants shall not be used for major long-term capital improve-
ment; shall not exceed two-thirds of the cost, as determined or 
estimated by the Administrator, of the project for which the grant is 
made; and shall be subject to such other terms and conditions as 
he may prescribe. 
The Administrator is authorized, notwithstanding 
the provisions of section 3648 of the Revised Statutes, as amended, to 
^i use 529. 
make advance or progress payments on account of any grant con-
tracted to be made pursuant to this section." 
RELOCATION 
PAYMENTS 
SEC. 304. Section 106(f)(2) 
of the Housing Act of 1949 is 
7istat. 300. 
amended- 
^^ "^^ '"''-
(1) by striking out "and business concerns*' in the first sentence 
and inserting in lieu thereof the following: "business concerns, 
and nonprofit organizations"; 
(2) by striking out "business concern." in the second sentence 
and inserting in lieu thereof the following: "business concern or 
nonprofit organization." 
(3) by inserting after "$3,000" the following: "(or, if greater, 
the total certified actual moving expenses)"; and 
(4) by inserting "and actual direct losses of property" before 
the period at the end of the last sentence. 
FINANCIAL ASSISTANCE FOR DISPLACED BUSINESS CONCERNS 
SEC. 305. Section 7(b) of the Small Business Act is amended— 
'2 st|*,-187-
(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"; 
(3) by adding after paragraph (2) a new paragraph as follows: 
"(3) to make such loans (either directly or in cooperation with 
banks or other lending institutions through agreements to partici-
pate on an immediate or deferred basis) as the Administration 
may determine to be necessary or appropriate to assist any small-
business concern in reestablishing its business, if the Administra-
tion determines that such concern has suffered substantial eco-
nomic injury as a result of its displacement by a federally aided 
urban renewal or highway construction program or by any other 
construction conducted by or with funds provided by the Federal 
Government."; and 
(4) by adding immediately before the period at the end of the 
third sentence the following: ", except that in the case of a loan 
made pursuant to paragraph (3), the rate of interest on the Ad-
ministration's share of such loan shall not be more than the higher 
of (A) 2% per centum per annum; or (B) the average annual 
interest rate on all interest-bearing obligations of the United 
States then forming a part of the public debt as computed at the 
end of the fiscal year next preceding the date of the loan and 
adjusted to the nearest one-eighth of 1 per centum, plus one-
quarter of 1 per centum per annum." 
(b) Section 2(b) of such Act is amended by inserting before the 
is use 631. 
period at the end thereof the following: ", and small-business concerns 
which are displaced as a result of federally aided construction pro-
grams". 
(c) Section 4(c) of such Act is amended— 
" stat. «47. 
168 
PUBLIC L
A
W 87-70-JUNE 80, 1961 
[76 STAT. 
(1) by striking out "$&76,000,000" each place it appears and 
inserting in lieu thereof "$1,000,000,000"; and 
(2) bv striking out "$125,000,000" in the sixth sentence and in-
serting in lieu thereof "$160,000,000". 
RESALE o r PROPERTY IN URBAN RENEWAL AREAS FOR HOUSING FOR 
MODERATE INCOME FAMILIES 
42 vtc 14S7 
^^^' ^^^' (^) Section 107 of the Housing Act of 1949 is amended 
by— 
(1) changing the title thereof to read "PROPERTY TO BE USED FOR 
PUBLIC H O U S I N G OR HOUSING FOR MODERATE INCOME FAMILIES"; 
(2) inserting "(a)" before the first sentence and striking out 
the words "to be" in such sentence; 
(3) striking out "is incorporated" and inserting in lieu thereof 
"was incorporated on or after September 23,1959,"; and 
(4) adding at the end thereof the following new subsection: 
"(b) Upon approval of the Administrator and subject to such con-
ditions as he may determine to be in the public interest, any real 
property held as part of an urban renewal project may be made avail-
able to (1) a limited dividend corporation, nonprofit corporation or 
association, cooperative, or public body or agency, or (2) a purchaser 
who would be eligible for a mortgage insured under section 221 (d) (4) 
1
2 use 1715/. 
of the National Housing Act, for purchase at fair value for use by such 
E
urchaser in the provision of new or rehabilitated rental or cooperative 
ousing for occupancv by families of moderate income." 
(h) Clause (4) of the second sentence of section 110 (c) of the Hous-
42 us*c u6o' 
^^^ ^^^ ^^ ^^^^ ^
® amended by inserting before the semicolon at the 
end thereof the following: "or as provided in section 107". 
REHABILITATION 
SEC 307. (a) The second sentence of section 110(c) of the Housing 
42 use 1460. 
Act of 1949 is amended by— 
(1) striking out "and" at the end of paragraph (5); 
(2) striking out the period at the end of paragraph (6) and 
inserting in lieu thereof "; and"; and 
(3) addino; after paragraph (6) a new paragraph as follows: 
" (7) acquisition and repair or rehabilitation for guidance pur-
poses, and resale by the local public agency, of structures which 
are located in the urban renewal area and which, under the urban 
renewal plan, are to be repaired or rehabilitated for dwelling use 
or related facilities: Provided^ That the local public agency shall 
not acquire for such purj^oses, in any urban renewal area, struc-
tures which contain or will contain more than (A) one hundred 
dwelling units, or (B) 5 per centum of the total number of dwell-
ing units in such area which, under the urban renewal plan, are to 
be repaired or rehabilitated, whichever is the lesser." 
(b) The third sentence of section 110(c) of such Act is amended by 
inserting after "include" the following: '' (except as provided in para-
graph (J) above)". 
(c) Clause (i) of section 110(e) of such Act is amended by striking 
out "and (6)" and inserting in lieu thereof "(6), and (7)". 
INCREASE IN NONRESIDENTIAL EXCEPTION 
SEC. 308. The fifth sentence of section 110(c) of the Housing Act 
of 1949 is amended by striking out "20 per centum" in the second pro-
viso and inserting in lieu thereof "30 per centum". 
76 S T A T . ] 
PUBLIC LAW 87-70-JUNE 30, 1961 
169 
UHBAN RENEWAL AREAS INVOLVING COLLEGES, UNIVERSITIES, OR HOSPITALS 
SEC. 309. Section 112 of the Housing Act of 1949 is amended to 
ja stmu 677. 
read as follows: 
"*^' 
" U R B A N R E N E W A L AREAS INVOLVING COLLEGES, UNIVERSITIES, OR 
HOSPITALS 
"SEC. 112. (a) In any case where an educational institution or a 
hospital is located in or near an urban renewal project area and the 
governing body of the locality determines that, in addition to the elim-
ihfttion of slums and blight from such area, the undertaking of an 
urban renewal project in such area will further promote the public 
welfare and the proper development of the community (1) by mak-
ing land in such area available for disposition, for uses in accordance 
with the urban renewal plan, to such educational institution or hospi-
tal for redevelopment in accordance with the use or uses specified in 
the urban renewal plan, (2) by providing, through the redevelopment 
of the area in accordance with the urban renewal plan, a cohesive 
neighborhood environment compatible with the functions and needs 
of such educational institution or hospital, or (3) by any combination 
of the foregoing, the Administrator is authorized to extend financial 
assistance under this title for an urban renewal project in such area 
without regard to the requirements in section 110 hereof with respect 
to the predominantly residential character or predominantly residen-
tial reuse of urban renewal areas. The aggregate expenditures made 
by any such institution or hospital (directly or through a private re-
development corporation or municipal or other public corporation) 
for the acquisition within, adjacent to, or in the immediate vicinity 
of the project area, of land, buildings, and structures to be redeveloped 
or rehabilitated by such institution for educational uses or by such 
hospital for hospital uses in accordance with the urban renewal plan 
(or with a development plan proposed by such institution, hospital, 
or corporation, found acceptable by the Administrator after consider-
ing the standards specified in section 110(b), and approved under 
42 ui^'M6O. 
State or local law after public hearing) and for the demolition of 
such buildings and structures if, pursuant to such urban renewal or 
development plan, the land is to be cleared and redeveloped, and for 
the relocation of occupants from buildings and structures to be de-
molished or rehabilitated, as certified by such institution or hospital 
to the local public agency and approved by the Administrator, shall 
be a local grant-in-aid in connection with such urban renewal project: 
Provided, Thsit no such expenditure shall be eligible as a local grant-
in-aid in any case where the property involved is acquired by such 
educational institution or hospital from a local public agency which, 
in connection with its acquisition or disposition of such property, has 
received, or contracted to receive, a capital grant pursuant to this 
title. 
"(b) No expenditure made by any educational institution or lios-
{)ital, as provided in subsection (a), shall be deemed ineligible as a 
ocal grant-in-aid (1) in connection with any urban renewal project 
if made not more than seven years prior to the authorization by the 
Administrator of a contract for a loan or capital grant for such proj-
ect, or (2) in connection with any such project for which the Adminis-
trator, prior to September 25, 1963, has authorized a loan or capital 
grant contract if made not more than five years prior to the submission 
of an application for financial assistance under this title for such 
urban renewal project. 
"(c) The aggregate expenditures made by an;5^ public authority, 
established by any State, for acquisition, demolition, and relocation 
64207 0-62—14 
170 
PUBLIC LAW 87.70-JUNE 30, 1961 
[75 STAT. 
in connection with land, buildings, and structures acquired by such 
public authority and leased to an educational institution for educa-
tional uses or to a hospital for hospital uses shall be deemed a local 
grant-in-aid to the same extent as if such expenditures had been made 
directly by such educational institution or hospital. 
"(d) As used in this section— 
"(1) the term 'educational institution' means any educational 
institution of higher learning, including any public educational 
institution or any private educational institution, no part of the 
net earnings of which inures to the benefit of any private share-
holder or individual; and 
"(2) the term 'hospital' means any hospital licensed by the 
State in which such hospital is located, including any public hos-
pital or any nonprofit hospital, no part of the net earnings of 
which inures to the benefit of any private shareholder or individ-
ual." 
URBAN PLANNING ASiSISTANCE 
40 us1:"46f* 
SEC. 310. (a) Section 701 of the Housing Act of 1954 is amended 
by— 
(1) striking out "50 per centum" in the first sentence of sub-
section (b) and inserting in lieu thereof "two-thirds"; 
(2) striking out "20,000,000" in the last sentence of subsection 
(b) and inserting in lieu thereof "$75,000,000"; 
(3) inserting after "public facilities" in clause (1) of subsec-
tion (d) ", including transportation facilities"; and 
(4) adding at the end thereof the following new subsection: 
"(f) The consent of the Congress is hereby given to any two or 
more States to enter into agreements or compacts, not in conflict with 
any law of the United States, for cooperative efforts and mutual 
assistance in the comprehensive planning for the physical growth and 
development of interstate, metropolitan, or other urban areas, and 
to establish such agencies, joint or otherwise, as they may deem desir-
able for making effective such agreements and compacts." 
(b) Section 701 of such Act is further amended by— 
(1) striking out the matter preceding paragraph (1) of sub-
section (a) and inserting in lieu thereof the following: 
"SEC. 701. (a) In order to assist State and local governments in 
solving planning problems resulting from the increasing concentra-
tion of population in metropolitan and other urban areas, including 
smaller communities; to facilitate comprehensive planning for urban 
development, including coordinated transportation systems, on a con-
tinuing basis by such governments; and to encourage such govern-
ments to establish and improve planning staffs, the Administrator 
is authorized to make planning grants to—•'; 
(2) inserting the following after "agencies" in paragraph 
(2) of subsection (a): ", or other agencies and instrumentalities 
designated by the Governor (or Governors in the case of inter-
state planning) and acceptable to the Administrator,"; 
(3) adding the following at the end of subsection (a) : "The 
Administrator shall encourage cooperation in preparing and 
carrying out plans amon^ all interested municipalities, political 
subdivisions, public agencies, and other parties in order to achieve 
coordinated development of entire areas. 
To the maximum 
extent feasible, pertinent plans and studies already made for 
areas shall be utilized so as to avoid unnecessary repetition of 
effort and expense. Planning which may be assisted under this 
section includes the preparation of comprehensive urban trans-
portation surveys, studies, and plans to aid in solving problems 
of traffic congestion, facilitating the circulation of people and 
75 S T A T . ] 
PUBLIC LAW 87-70-JUNE 30, 1961 
171 
goods in metropolitan and other urban areas and reducing 
transportation needs. Funds available under this section shall 
be in addition to and may be used jointly with funds available 
for planning surveys and investigations under other Federally-
aided programs, and nothing contained in this section shall be 
construed as affecting the authority of the Secretary of Com-
merce under section 807 of title 23, United States Code.''^; and 
72 stat. 913. 
(4) striking out the first sentence of subsection (d) and insert- 
40 use 4
^
6
f
.
* 
ing in lieu thereof the following: "It is the further intent of this 
section to encourage comprehensive planning, including trans-
portation planning, for States, cities, counties, metropolitan areas, 
and urban regions and the establishment and development of 
the organizational units needed therefor. 
The Administrator is 
authorized to provide technical assistance to State and local 
governments and their agencies and instrumentalities undertak-
ing such planning and, by contract or otherwise, to make studies 
and publish information on related problems." 
HISTORICAL SITE I N URBAN RENEWAL AREA 
SEC. 311. (a) Notwithstanding section 110(c)(4) of the Housing 
Act of 1949, as amended, or any other provision of law, the urban 
7° ^^^' ^^97. 
renewal project in Knoxville, Tennessee, known as the Kiverfront- 
'*2 use i46o. 
Willow Street redevelopment project, may include the donation by the 
Knoxville Housing Authority to the James White's Fort Association, 
by a suitable instrument of conveyance, of all right, title, and interest 
of the authority in and to the following described tract of land, consti-
tuting a portion of tract T-2 of the said project and containing 0.985 
acres more or less: 
Beginning at an iron pin located at the intersection of the east prop-
erty line of Collins Alley and the south property line of Rouser Alley; 
thence in a northerly direction, north 32 degrees 35 minutes west, 111.0 
feet to an iron pin located in the east property line of Collins Alley; 
thence in a westerly direction, south 55 degrees 20 minutes west, 207.0 
feet to an iron pin; thence in a southwesterly direction, south 35 
degrees 05 minutes west, 80 feet to an iron pin; thence in a southerly 
direction south 27 degrees 25 minutes east, 193.40 feet to an iron pin 
located in the north property line of Hill Avenue; thence in an 
easterly direction, north 67 degrees 43 minutes east, 33.54 feet to an 
iron pin; thence in an easterly direction, north 60 degrees 02 minutes 
east, 31.64 feet to an iron pin; thence in an easterly direction, north 58 
degrees 30 minutes 30 seconds east, 53 feet to an iron pin located in the 
north property line of Hill Avenue; thence in a northerly direction, 
north 30 degrees 22 minutes 30 seconds west, 134.03 feet to an iron pin; 
thence in an easterly direction, north 59 degrees 21 minutes 30 seconds 
east, 175.61 feet to the point of beginning. 
(b) The conveyance authorized to be included in the Riverfront-
Willow Street redevelopment project under subsection (a) of this sec-
tion shall be made only if the James White's Fort Association repre-
sents, and furnishes such assurances as may be required by the Knox-
ville Housing Authority, that such Association (1) will undertake the 
reconstruction on the site conveyed of General James White's cabin 
and fort, and (2) will develop, preserve, and operate such property 
on a nonprofit basis as a historical site or monument. 
CREDIT FOR COST OF SCHOOL CONSTRUCTION 
SEC. 312. No public facility, the provision of which is otherwise 
eligible as a local grant-in-aid for any urban renewal project receiv-
ing assistance under title I of the Housing Act of 1949 in the city of 
^3 ^^j^l'^^'^i^j-^jo. 
1463. 
172 
PUBLIC LAW 87-70-JUNE 30, 1961 
[76 S T A T . 
Roanoke, Virginia, and the construction of which was commenced 
prior to January 1, 1961, shall be deemed to be ineligible as a local 
grant-in-aid because of any change in the urban renewal plan for such 
project which is determined by the Housing and Home Finance Ad-
ministrator to have resulted from the proposed location within the 
urban renewal area in which such project was undertaken of a Fed-
erally-aided highway. 
For the purpose of computing the portion of 
the cost of any such facility which may be allowed as a local grant-in-
aid, the degree of benefit of the facility to such urban renewal area 
shall be based on the latest estimate of benefit submitted by the local 
public agency and accepted by the Administrator prior to such change 
in the urban renewal plan. 
68 Stat. 629. 
42 
u s e 
1450 
note. 
42 u s e 1460. 
Ante, p. 169. 
ELIGIBILITY OF CERTAIN LOCAL GRANTS-IN-AID 
SEC. 313. Notwithstanding the provisions of section 312 of the Hous-
ing Act of 1954 or anv request previously made pursuant to such 
section, upon request of the local public agency the eligibility of the 
local grants-in-aid for any project in the city oi Norfolk, Virginia, in 
connection with which the final capital grant payment has not been 
made, shall be determined in accordance with the provisions of 
sections 110(d) and 112 of the Housing Act of 1949. 
68 Stat. 623. 
42 u s e 145 1. 
42 u s e 1452. 
42 u s e 1460. 
TECHNICAL AMENDMENTS 
SEC. 314. (a) Section 101(c) of the Housing Act of 1949 is amended 
by inserting in clause (1) after "workable program" the words "for 
community improvement". 
(b) Section 102(a) of such Act is amended by inserting in the 
second proviso after "demolition and removal" the first place it ap-
pears the following: ", together with administrative, relocation, and 
other related costs and payments,". 
(c) Clause (4) of the second sentence of section 110(c) of such 
Act is amended by striking out "initial". 
42 u s e 1455. 
PARKS AND RECREATIONAL FACILITIES 
SEC. 315. Section 105(a) of the Housing Act of 1949 is amended by 
striking out "and" preceding clause (iii), and by adding at the end 
thereof the following: "and (iv) the urban renewal plan gives due con-
sideration to the provision of adequate park and recreational areas 
and facilities, as may be desirable for neighborhood improvement, 
with special consideration for the health, safety, and welfare or 
children residing in the general vicinity of the site covered by the 
plan;". 
TITLE IV—COLLEGE HOUSING 
73 Stat. 681. 
12 u s e 1749. 
71 Stat. 304. 
12 u s e 1749c. 
LOAN ATJTHORIZATION 
SEC. 401. Section 401(d) of the Housing Act of 1950 is amended by 
striking out the first colon and all that follows and inserting in lieu 
thereof the following: ", which amount shall be increased by 
$300,000,000 on July 1 in each of the years 1961 through 1964: Pro-
vided, That the amount outstanding for other educational facilities, 
as defined herein, shall not exceed $175,000,000, which limit shall be 
increased by $30,000,000 on July 1 in each of the years 1961 through 
1964: Provided further, That the amount outstanding for hospitals, 
referred to in clause (2) of section 404(b) of this title, shall not 
exceed $100,000,000, which limit shall be increased by $30,000,000 on 
July 1 in each of the years 1961 through 1964." 
75 STAT.] 
PUBLIC L
A
W 87-70-JUNE 30, 1961 
173 
APPORTIONMENT BY STATES 
SEC. 402. Section 403 of the Housing Act of 1950 is amended by 
e* st^t. so. 
striking out "10 per centum" and inserting in lieu thereof "121/^ per 
centunr'. 
HOUSING PROVIDED BY NONPROFIT CORPORATIONS 
SEC. 403. (a) Clause (3) of section 404(b) of the Housing Act of 
1950 is amended— 
J[ fj^. 3
0
4
^
^ 
(1) by striking out "established by any institution included in 
clause (1) of this subsection for the sole purpose" and inserting 
in lieu thereof "established for the sole purpose"; and 
(2) by striking out "such institution" where it first appears 
and inserting in lieu thereof "one or more institutions included 
in clause (1) of this subsection". 
(b) Clause (i) of section 404(b) of such Act is further amended 
by striking out "will pass to such institution" and inserting in lieu 
tnereof "will pass to such institution (or to any one or more of such 
institutions) unless it is shown to the satisfaction of the Adminis-
trator that such property or the proceeds from its sale will be used 
for some other nonprofit educational purpose". 
(c) Section 404(b) of such Act is further amended by adding at the 
end thereof the following new sentence: "In the case of any loan made 
under section 401 to a corporation described in clause (3) of this sub- 
Jf ®
g
^
^
" fw. 
section which was not established by the institution or institutions 
for whose students or students and faculty it would provide housing, 
the Administrator shall require that the note securing such loan 
be cosi^ned by such institution (or by any one or more of such 
institutions)." 
TITLE V—COMMUNITY FACILITIES 
PTJBLIO FACILITY LOANS 
SEC. 501. (a) (1) The second paragraph of section 201 of the Hous-
ing Amendments of 1956 is amended oy inserting after "public works 
69 st^. 642. 
or facilities" the following: "(including mass transportation facil- 
'*^" 
^'^ ' 
ities and equij)ment)". 
(2) The third paragraph of section 201 of such Amendments is 
amended by inserting after "title" the following: "(subject to the 
limitations contained herein)". 
(b) The first sentence of section 202(a) of such Amendments is 
42 use 1492. 
amended to read as follows: "The Housing and Home Finance Ad-
ministrator is authorized (1) to purchase the securities and obliga-
tions of, or make loans to, municipalities and other political subdi-
visions and instrumentalities of States (including public agencies 
and instrumentalities of one or more municipalities or other political 
subdivisions in the same State), to finance specific projects for public 
works or facilities under State, municipal, or other applicable law, 
and (2) to purchase the securities and obligations of, or make loans 
to, States, municipalities and other political subdivisions of States, 
public agencies and instrumentalities of one or more States, mu-
nicipalities and political subdivisions of States, and public corpora-
tions, boards, and commissions established under the laws of any 
State, to finance the acquisition, construction, reconstruction, and 
improvement of facilities and equipment for use, by operation or 
lease or otherwise, in mass transportation service in urban areas, 
and for use in coordinating highway, bus, surface-rail, underground, 
parking and other transportation facilities in such areas. The facil-
ities and equipment referred to in clause (2) may include land, but 
174 
PUBLIC LAW 87-70-JUNE 30, 1961 
[75 STAT. 
not public highways, and any other real or personal property needed 
for an economic, efficient, and coordinated mass transportation 
system." 
42 use 1492. 
^^^ Section 202(b) (2) of such Amendments is amended by adding 
at the end thereof the following new sentence: "Subject to such max-
imum maturity, the Administrator in his discretion may provide for 
the postponement of the payment of interest on not more than 50 per 
centum of any financial assistance extended to an applicant under this 
section for a period up to ten years where (A) such assistance does 
not exceed 50 per centum of the development cost of the project in-
volved, and (B) it is determined by the Administrator that such 
applicant will experience above-average population growth and the 
project would contribute to orderly community development, econ-
omy, and efficiency; and any amounts so postponed shall be payable 
with interest in annual installments during the remaining maturity 
of such assistance." 
(d)(1) Section 202(b) of such Amendments is further amended 
by adding at the end thereof the following new paragraph : 
"(3) Financial assistance extended under this section shall bear 
interest at a rate determined by the Administrator which shall be not 
more than the higher of (A) 3 per centum per annum, or (B) the 
total of one-half of 1 per centum per annum added to the rate of in-
terest paid by the Administrator on funds obtained from the Secre-
stl?. ^uf28.*'*^' '"* t^^y of th^ Treasury as provided in section 203 (a)." 
42 use 1493. 
(2) The third sentence of section 203(a) of such Amendments is 
amended to read as follows: "Such notes or other obligations shall 
bear interest at a rate determined by the Secretary of the Treasury 
which shall be not more than the higher of (1) 2^^ per centum per 
annum, or (2) the average annual interest rate on all interest-bearing 
obligations of the United States then forming a part of the public 
debt as computed at the end of the fiscal year next preceding the 
issuance by the Administrator and adjusted to the nearest one-eighth 
of 1 per centum." 
42 use 1492. 
^g^ Section 202(b) of such Amendments is further amended by 
adding at the end thereof (after the paragraph added by subsection 
(d) (1) of this section) the following new paragraph: 
"(4) No financial assistance shall be extended under clause (1) 
of subsection (a) of this section to any municipality or other political 
subdivision having a population of fifty thousand or more (one 
hundred fifty thousand or more in the case of a community situated 
in an area designated as a redevelopment area under the second 
Ante, p. 48. 
seuteuce of section 5(a) of the Area Redevelopment Act) according 
to the most recent decennial census, or to any public agency or instru-
mentality of one or more municipalities or other political subdivisions 
having a population (or an aggregate population) equal to or 
exceeding that figure according to such census." 
42 use 1492. 
^£^ Section 202 (c) of such Amendments is amended by striking out 
"this section" and inserting in lieu thereof "clause (1) of subsection 
(a) of this section". 
(g) Section 202 of such Amendments is further amended by adding 
at the end thereof the following new subsection: 
"(d) No loans may be made for transportation facilities or equip-
ment, pursuant to clause (2) of subsection (a) of this section, unless 
the Administrator determines (1) that there is being actively developed 
(or has been developed) for the urban or other metropolitan area 
served by the applicant a program, meeting criteria established by 
him, for the development of a comprehensive and coordinated mass 
transportation system; (2) that the proposed facilities or equipment 
can reasonably be expected to be required for such a system; and (3) 
75 S T A T . ] 
PUBLIC LAW 87-70-JUNE 30, 1961 
175 
if such program has not been completed, that there is an urgent need 
for the provision of the facilities or equipment to be commenced prior 
to the time that the program could reasonably be expected to be 
completed: Provided, That no such loan shall be made, except under 
a prior commitment, after December 31,1962." 
(h) Section 203(a) of such Amendments is amended by striking 
42 use'HQ^I" 
out the words "in an amount not exceeding $150,000,000, notes and 
other obligations" in the first sentence and inserting in lieu thereof 
the following: "notes and other obligations in an amount not to 
exceed $650,000,000: Provided, That, of the funds obtained through 
the issuance of such notes and other obligations, $600,000,000 shall be 
available only for purchases and loans pursuant to clause (1) of 
section 202(a) of this title and $50,000,000 shall be available only for 
purchases and loans pursuant to clause (2) of such section". 
(i) Title I I of such Amendments is further amended by adding at i^g^^y^^ 1491-
the end thereof the following new section: 
"SEC. 207. The Administrator is authorized to establish technical 
advisory services to assist municipalities and other political subdivi-
sions and instrumentalities in the budgeting, financing, planning, and 
construction of community facilities. 
There are hereby authorized 
to be appropriated such sums as may be necessary, together with any 
fees that may be charged, to cover the cost of such services." 
(j) Section 203(b) of such Amendments is amended by inserting 
''^ ^^^ ^*^3-
"be" immediately after "which may". 
69 Stat. 641. 
40 u s e 4(52. 
ADVANCES rOR PUBLIC WORKS PLANNING 
SEC. 502. Section 702 of the Housing Act of 1954 is amended by— 
(1) striking out in subsection (a) "10" and inserting in lieu 
thereof "I21/2"; 
(2) striking out the first sentence of subsection (b) and insert-
ing in lieu thereof the following: "No advance shall be made here-
under with respect to any individual project, including a regional 
or metropolitan or other area-wide project, unless (1) it is 
planned to be constructed within or over a reasonable period of 
time considering the nature of the project, (2) it conforms to an 
overall State, local, or regional plan approved by a competent 
State, local, or regional authority, and (3) the public agency 
formally contracts with the Federal Government to complete the 
plan preparation promptly and to repay such advance or part 
thereof when due."; 
(3) inserting after "1958;" in subsection (e) the following: 
"$10,000,000 which may be made available to such fund on or after 
July 1,1961;"; and 
(4) striking out in subsection (e) "$48,000,000" and inserting 
in lieu thereof "$58,000,000". 
TITLE VI—AMENDMENTS TO T H E NATIONAL HOUSING 
ACT 
FEDERAL NATIONAL MORTGAGE ASSOCIATION 
SPECIAL ASSISTANCE AUTHORIZATION 
SEC. 601. (a) Section 305(c) of the National Housing Act is gtLl fa"** ^®''" 
amended to read as follows: 
12' use 1720. 
"(c) The total amount of purchases and commitments authorized 
by the President pursuant to subsection (a) of this section shall not 
exceed $1,700,000,000 outstanding at any one time." 
176 
PUBLIC LAW 87-70-JUNE 3p, 1961 
[75 ST A T , 
72 Stat. 74. 
12 u s e 1720. 
Ante. p. 175. 
68 Stat. 618. 
12 u s e 1721. 
(b) Section 305 (g) of such Act is amended by adding before the 
period at the end thereof the following: ": Provided fwr-ther^ That the 
authority of the Association to make purchases and commitments 
under this subsection shall terminate on the date of enactment of the 
Housing Act of 1961, and any portion of the total amount of such 
authority as specified in the first proviso in this subsection which on 
such date would otherwise be available for making such purchases 
and commitments shall be transferred to and merged with the author-
ity granted by subsection (a) and added to the amount of such 
authority as specified in subsection (c)". 
(c) Section 306 of such Act is amended by adding at the end 
thereof the following new subsection: 
"(f) Notwithstanding any of the provisions of this Act or of any 
other law, an amount equal to the net decrease for the preceding 
fiscal year in the aggregate principal amount of all mortgages owned 
by the Association under this section shall, as of July 1 of each of the 
years 1961 through 1964, be transferred to and merged with the au-
thority provided under section 305(a), and the amount of such au-
thority as specified in section 305(c) shall be increased by any 
amounts so transferred." 
73 Stat. 669. 
12 u s e 1717. 
12 u s e 
1748-
1748g. 
12 u s e 171Se. 
LIMITATION ON MORTGAGE AMOUNT 
SEC. 602. (a) Section .302(b) of the National Housing Act is 
amended by striking out "or 803" and inserting in lieu thereof "or 
title VIII". 
(b) Section 302(b) of such Act is further amended by inserting 
berore "or a mortgage covering property" the following: "or in-
sured under section 213 and covering property located in an urban 
renewal area,". 
12 u s e 1719. 
48 Stat. 1246. 
12 u s e 1701. 
58 Stat, 284; 72 
Stat. 1273. 
12 u s e 1718. 
12 u s e 1719. 
FEDERAL NATIONAL MORTGAGE ASSOCIATION LENDING AUTHORITY 
SEC. 603. (a) Section 302(b) of the National Housing Act is 
amended by striking out "to make commitments" and all that fol-
lows down through the first colon and inserting in lieu thereof the 
following: ", pursuant to commitments or otherwise, to purchase, 
lend (under section 304) on the security of, service, sell, or otherwise 
deal in any mortgages which are insured under the National Hous-
ing Act, or which are insured or guaranteed under the Servicemen's 
Readjustment Act of 1944 or chapter 37 of title 38, United States 
Code:". 
(b) The first sentence of section 303(b) of such Act is amended by 
inserting immediately before the period at the end thereof the fol-
lowing: "; and by requiring each Dorrower to make such payments, 
equal to not more than one-half of 1 per centum of the amount lent 
by the Association to such borrower under section 304". 
(c) Section 303(c) of such Act is amended by striking out the 
first sentence and by inserting in lieu thereof the following: "The 
Association shall issue from time to time, to each mortgage seller or 
borrower, its common stock (only in denominations of $100 or mul-
tiples thereof) evidencing any capital contributions (adjusted by 
reason of any payments into surplus required by the Association) 
made by such seller or borrower pursuant to subsection (b) of this 
section." 
(d) Section 304 (a^ of such Act is amended by inserting "(1)" 
beiore "To carry out", and by adding at the end thereof the following 
new paragraph: 
"(2) In the further interest of assuring sound operation, any loan 
made by the Association in its secondary market operations under 
76 S T A T . ] 
PUBLIC LAW 87-70~JUNE 30, 1961 
177 
this section, and any extension or renewal thereof, shall not exceed 
80 per centum of the unpaid principal balances of the mortgages 
securing the loan, and shall bear interest at a rate consistent with 
general loan policies established from time to time by the Associa-
tion's board of directors. Any such loan shall mature in not more 
than twelve months and the term of any extension or renewal shall 
not exceed twelve months. The volume of the Association's lending 
activities and the establishment of its loan ratios, interest rates, 
maturities, and charges or fees, in its secondary market operations 
under this section, should be determined by the Association from time 
to time; and such determinations, in conjunction with determinations 
made under paragraph (1), should be consistent with the objectives 
that the lendmg activities should be conducted on such terms as will 
reasonably prevent excessive use of the Association's facilities, and 
that the operations of the Association under this section should be 
within its income derived from such operations and that such opera-
tions should be fully self-supporting. 
Notwithstanding any Federal, 
State, or other law to the contrary, the Association is hereby empow-
ered, in connection with any loan under this section, whether before 
or after any default, to provide by contract with the borrower for 
the settlement or extinguishment, upon default, of any redemption, 
equitable, legal, or other right, title, or interest of the borrower in 
any mortgage or mortgages that constitute the security for the loan; 
and with respect to any such loan, in the event of default and pur-
suant otherwise to the terms of the contract, the mortgages that 
constitute such security shall become the absolute property of the 
Association." 
(e) Section 304(b), section 309(c) and section 310 of such Act are 
each amended by inserting "or other security holdings" after 
"mortgages". 
F H A 
INSURANCE PROGRAMS 
12 u s e 1719, 
1723a, 1723b. 
LIMITATIONS ON INSURANCE AUTHORIZATIONS 
SEC. 604. (a) Section 2(a) of the National Housing Act is amended 
1
2 us^c ml.' 
by striking out in the first sentence "1961" and inserting in lieu 
thereof "1965". 
(b) Section 203(a) of such Act is amended by striking out the 1
2 uVc ml." 
colon and all that follows the colon and inserting in lieu thereof a 
period. 
(c) Section 217 of such Act is amended to read as follows: 
l^ stet. esj. 
^ ' 
12 u s e 1 / 15n. 
" G E N E R A L MORTGAGE INSURANCE AUTHORIZATION 
"SEC. 217. Except with respect to the insurance of a loan or mort-
gage pursuant to section 2, section 221, or title VIII of this Act 17^5^,^748:17481.' 
(subject to any limitations thereunder on the time of such insurance), 
no loan or mortgage shall be insured under any provision of this Act 
after October 1, 1965, except pursuant to a commitment to insure 
before that date." 
(d) Section 803 (a) of such Act is amended by striking out "1961" 
H ^^^' 322^1,. 
and inserting in lieu thereof "1962", and by striking out "twenty-five 
thousand" and inserting in lieu thereof "twenty-eight thousand". 
SECTION 203 RESIDENTIAL HOUSING INSURANCE 
SEC. 605. (a) Section 203 (b) (2) of such act is amended— 
^i stat_. 294^ 
(1) by striking out "$13,500" each place it appears and in-
serting in lieu thereof "$15,000"; 
(2) by striking out "$18,000" each place it appears and insert-
ing in lieu thereof "$20,000"; and 
178 
PUBLIC L
A
W 87-70-JUNE 30, 1961 
[75 STAT. 
(3) by striking out "70 per centum" and inserting in lieu 
thereof "75 per centum". 
i" use'1709' 
(b) Section 203(b)(2) of such Act is amended (1) by striking 
out "$22,500" and inserting in lieu thereof "$25,000", and (2) by 
striking out "or $25,000" and inserting in lieu thereof "or $27,500". 
1
2 us^c m9. 
(c) Section 203(b)(3) of such Act is amended by striking out 
"thirty years" and inserting in lieu thereof "thirty-five years (or 
thirty years if such mortgage is not approved for insurance prior to 
construction)". 
AUTHORITY TO REDUCE PREMIUM CHARGES 
52 Stat. 11. 
12 use 1709. 
SEC. 606. The first sentence of section 203 (c) of the National Hous-
ing Act is amended to read as follows: "The Commissioner is author-
ized to fix premium charges for the insurance of mortgages under the 
separate sections of this title but in the case of any mortgage such 
charge shall be not less than an amount equivalent to one-fourth of 1 
per centum per annum nor more than an amount equivalent to 1 per 
centum per annum of the amount of the principal obligation of the 
mortgage outstanding at any time, without taking into account delin-
quent payments or prepayments: Provided^ That any reduced pre-
mium charge so fixed and computed may, in the discretion of the 
Commissioner, also be made applicable in such manner as the Com-
missioner shall prescribe to each insured mortgage outstanding under 
the section or sections involved at the time the reduced premium 
charge is fixed." 
SECTION 207 RENTAL HOUSING INSURANCE 
W us°c Ihz. 
SEC. 607. Section 207 of the National Housing Act is amended by— 
(1) striking out the first paragraph of subsection (b) (2) and 
inserting in lieu thereof the following: 
"(2) any other mortgagor approved by the Commissioner which, 
until the termination of all obligations of the Commissioner under 
the insurance and during such further period of time as the Commis-
sioner shall be the owner, holder, or reinsurer of the mortgage, is 
regulated or restricted by the Commissioner as to rents or sales, 
charges, capital structure, rate of return, and methods of operation 
to such extent and in such manner as to provide reasonable rentals 
to tenants and a reasonable return on the investment. The Com-
missioner may make such contracts with and acquire, for not to 
exceed $100, such stock or interest in the mortgagor as he may deem 
necessary to render effective the regulations or restrictions. The 
stock or interest acquired by the Commissioner shall be paid for out 
of the Housing Fund, and snail be redeemed by the mortgagor at par 
upon the termination of all obligations of the Commissioner under 
the insurance."; 
(2) inserting in subsection (c) (3) after the words "attributable 
to dwelling use" the following: "(excluding exterior land 
improvements as defined by the Commissioner)"; 
(3) striking out "$1,500 per space" in subsection (c) (3) and 
inserting in lieu thereof "$1,800 per space"; and 
(4) inserting in the first sentence of subsection (i) after the 
words "of this section" the following: ", except that debentures 
1715Z." ^ ^ 1715k, 
issued pursuant to the provisions of section 220(f), 221(g), and 
section 233 may be dated as of the date the mortgage is assigned 
(or the property is conveyed) to the Commissioner'. 
Ante, p. 158. 
12 use 1713. 
75 S T A T . ] 
PUBLIC LAW 87-70-JUNE 30, 1961 
179 
SECTION 213 COOPERATIVE HOUSING INSURANCE 
SEC. 608. (a) Section 213 of the National Housing Act is amended 
^4 stat. S4.^^ 
by— 
(1) inserting in paragraph (2) of subsection (b) after the 
^^ ^***' ^'^^• 
words "as may be attributable to dwelling use" the following: 
"(excluding exterior land improvements as defined by the Com-
missioner)"; 
(2) striking out "eight or more family units" in subsection (d) 
^^ ^*^*' ^^s. 
and inserting in lieu thereof "five or more family units"; and 
(3) striking out in subsection (h) "such mortgagor shall not 
^o stat. io94. 
thereafter be eligible by reason of such paragraph (3) for insur-
ance of any additional mortgage loans pursuant to this section" 
and inserting in lieu thereof the following: "the Commissioner is 
authorized to refuse, for such period of time as he shall deem 
appropriate under the circumstances, to insure under this section 
any additional investor-sponsor type mortgage loans made to 
such mortgagor or to any other investor-sponsor mortgagor 
where, in the determination of the Commissioner, any of its stock-
holders were identified with such mortgagor", 
(b) Section 213 of such Act is further amended by adding at the 
end thereof the following new subsection: 
"(j) (1) With respect to any property covered by a mortgage in-
sured under this section (or any cooperative housing project covered 
by a mortgage insured under section 207 as in effect prior to the enact-
ment of the Housing Act of 1950), the Commissioner is authorized, 
^^ ^u°s'c**i7oik 
upon such terms and conditions as he may prescribe, to make commit- note, 
ments to insure and to insure supplementary cooperative loans (in-
cluding advances during construction or improvement) made by fi-
nancial institutions approved by the Commissioner. 
As used in this 
subsection, 'supplementary cooperative loan' means a loan, advance 
of credit, or purchase of an obligation representing a loan or advance 
of credit made for the purpose of financing any of the following: 
"(A) Improvements or repairs of the property covered by 
such mortgage; or 
"(B) Community facilities necessary to serve the occupants of 
the propertjr. 
"(2) To be eligible for insurance under this subsection, a supple-
mentary cooperative loan shall— 
"(A) be limited to an amount which, when added to the out-
standing mortgage indebtedness on the property, creates a total 
outstanding indebtedness which does not exceed the original prin-
cipal obligation of the mortgage; 
"(B) have a maturity satisfactory to the Commissioner but not 
to exceed the remaining term of the mortgage; 
"(C) be secured in such manner as the Commissioner may re-
quire ; 
"(D) contain such other terms, conditions, and restrictions as 
the Commissioner may prescribe; and 
"(E) represent the obligation of a borrower of the character 
described in paragraph (1) of subsection (a)." 
SECTION 220 SALES HOUSING MORTGAGE INSURANCE 
SEC. 609. (a) Section 220(d) (3) (A) (i) of the National Housing 
Act is amended— 
II f}j^i' «'57. 
(1) by striking out "$13,500" each place it appears and insert-
ing in heu thereof "$15,000"; 
(2) by striking out "$18,000" each place it appears and insert-
ing in lieu thereof "$20,000"; and 
12 u s e 1715k, 
180 
PUBLIC LAW 87-70-JUNE 30, 1961 
[75 STAT. 
(3) by striking out "70 per centum" and inserting in lieu 
thereof 75 per centum". 
riusc'msk 
(b) Section 220(d) (3) (A) of such Act is amended (1) by striking 
out "$22,500" and inserting in lieu thereof "$26,000", and (2) by 
striking out "or $25,000" and inserting in lieu thereof "or $27,500'\ 
NURSING HOMES 
1
2 vie fy^sw. 
SEC. 610. Section 232 (d) (2) of the National Housing Act is amended 
by striking out the words following the comma and inserting in lieu 
thereof the following: "and not to exceed 90 per centum of the esti-
mated value of the property or project when the proposed improve-
ments are completed." 
HOUSING FOR DEFENSE-IMPACTED AREAS 
12 us^c i748h.2. 
^ ^ - ^^^' (^) (^) .Section 810(b) of the National Housing Act is 
amended (A) by striking out "the Secretary of Defense or his designee 
shall have certified to the Commissioner that", and (B) by striking out 
the last sentence. 
(2) Section 810(d) of such Act is amended (A) by striking out 
"until advised by the Secretary of Defense or his designee" and insert-
ing in lieu thereof "until he finds", and (B) by striking out ", as 
evidenced by certification" and all that follows and inserting in lieu 
thereof a period. 
'R«p««i- 
(3) Section 810 (1) of such Act is repealed. 
42 use i¥94i. 
(b) Section 406(a) of the Act of August 30, 1957 (71 Stat. 556), 
is amended by striking out ", and no certificates with respect to any 
family housing units shall be issued by the Secretary of Defense or 
12 use i748h-2. j^jg designee under section 810 of the National Housing Act, as 
amended,". 
MISCELLANEOUS FHA AMENDMENTS 
52 Stat. 11. 
12 use 1709. 
S E C 612. (a) Section 203 of the National Housing Act is amended 
(1) striking out in subsection (b) (3) the words "insurance 
of the mortgage" and inserting in lieu thereof "beginning of 
amortization of the mortgage", and 
(2) striking out in the first proviso of the second sentence of 
subsection (c) the words "particular insurance fund" and insert-
ing in lieu thereof "particular insurance fund or account". 
12 use 1710. 
^1)) The second sentence of section 204(d) of such Act is amended 
by inserting after "mortgagee after default," the following: "except 
12 use 1715k. 
^^g^|. debentures issued pursuant to the provisions of section 220(f), 
j^tif%Msa!' 
section 221(g), and section 233 may be dated as of the date the mort-
gage is assigned (or the property is conveyed) to the Commissioner,". 
12 use 1710. 
^^^ rpj^^ Yast sentence of section 204(g) of such Act is amended to 
read as follows: "The power to convey and to execute in the name of 
the Commissioner deeds of conveyance, deeds of release, assignments 
and satisfactions of mortgages, and any other written instrument 
relating to real or personal property or any interest therein heretofore 
or hereafter acquired by the Commissioner pursuant to the provisions 
of this Act, may be exercised by the Commissioner or by any Assistant 
Commissioner appointed by him, without the execution of any express 
delegation of power or power of attorney: Provided, That nothing 
in this subsection shall be construed to prevent the Commissioner from 
delegating such power by order or by power of attorney, in his 
discretion, to any officer, agent, or employee he may appoint: And 
provided further, 
That a conveyance or transfer of title to real or 
personal property or an interest therein to the Federal Housing Com-
76 S T A T . ] 
PUBLIC LAW 8 7 - 7 0 - J U N E 30, 1961 
181 
missioner, his successors and assigns, without identifying the Com-
missioner therein, shall be deemed a proper conveyance or transfer to 
the same extent and of like effect as if the Commissioner were per-
sonally named in such conveyance or transfer." 
(d) Section 209 of such Act is amended by striking out in the second 
^^ "®^ ^^ ^*• 
sentence "shall be charged as a general expense of the Fund, the Hous-
ing Fund, and the Defense Housing Insurance Fund in such propor-
tion as the Commissioner shall determine" and inserting in lieu thereof 
"shall be charged as a general expense of such insurance fund or funds, 
or account or accounts, as the Commissioner shall determine". 
(e) Section 212 of such Act is amended by— 
^^ use irisc 
(1) striking out in the second sentence of subsection (a) "any 
mortgage under section 220" and inserting in lieu thereof "any 
^^ use i7i5k. 
loan or mortgage under section 220 or section 233"; and 
^*n'®' ?• i''8. 
(2) striking out in the third sentence of subsection (a) "in sub-
section (d) (4)" and inserting in lieu thereof "in subsection (d) 
(3) in the case of a cooperative or a limited profit mortgagor, or 
in subsection (d) (4)". 
(f) Section 219 of such Act is amended to read as follows: 
^^ use i7i5j. 
"SEC. 219. Notwithstanding any limitations contained in other sec-
tions of this Act as to the use of moneys credited to the Title I Insur-
ance Account, the Title I Housing Insurance Fund, the Section 203 
^^ ^^^ ^^°®' 
Home Improvement Account, the Housing Insurance Fund, the War 
Housing Insurance Fund, the Housing Investment Insurance Fund, 
the Armed Services Housing Mortgage Insurance Fund, the National 
Defense Housing Insurance Fund, the Section 220 Housing Insur- 
*
^ ^®^ '^'*''' 
ance Fund, the Section 220 Home Improvement Account, the Section 
221 Housing Insurance Fund, the Experimental Housing Insurance 
*
2 use i7isz. 
Fund, the Apartment Unit Insurance Fund, or the Servicemen's Mort-
gage Insurance Fund, the Commissioner is hereby authorized to trans-
fer funds from any one or more of such insurance funds or accounts 
to any other such fund or account in such amounts and at such times 
as the Commissioner may determine, taking into consideration the 
requirements of such funds or accounts, separately and jointly to carry 
out effectively the insurance programs for which such funds or ac-
counts were established." 
(g) Section 220 (f) of such Act is amended by— 
12 use i? isk. 
(1) striking out "or" at the end of paragraph (1), 
(2) striking out the period at the end of paragraph (2) and 
inserting in lieu thereof "; or", and 
(3) adding at the end thereof the following: 
"(3) as to mortgages meeting the requirements of this section 
that are insured or initially endorsed for insurance on or after 
the date of enactment of the Housing Act of 1961, notwithstanding 
the provisions of paragraphs (1) and (2) of this subsection, the 
Commissioner in his discretion, in accordance with such regula-
tions as he may prescribe, may make payments pursuant to such 
paragraphs in cash or in debentures (as provided in the mortgage 
msurance contract), or may acquire a mortgage loan that is in 
default and the security therefor upon payment to the mortgagee 
in cash or in debentures (as provided in the mortgage insurance 
contract) of a total amount e<][ual to the unpaid principal balance 
of the loan plus any accrued interest and any advances approved 
by the Commissioner and made previously by the mortgagee 
under the provisions of the mortgage. 
After the acquisition of 
the mortgage by the Commissioner the mortgagee shall have no 
further rights, liabilities, or obligations with respect to the loan 
or the security for the loan. The appropriate provisions of sec-
tions 204 and 207 relating to the rights, liabilities, and obligations j ^ ^ ^ u s e 1710, 
12 use 1710. 
12 u s e 1715n, 
1715e. 
182 
PUBLIC LAW 87-70-JUNE 30, 1961 
[75 STAT. 
of a mortgagee shall apply with respect to the Commissioner when 
he has acquired an insured mortgage under this paragraph, in 
accordance with and subject to regulations (modifying such pro-
visions to the extent necessary to render their application for 
such purposes appropriate and effective) which shall be pre-
scribed by the Commissioner, except that as applied to mortgages 
so acquired (A) all references in section 204 to the Mutual Mort-
gage Insurance Fund or the Fund shall be construed to refer to 
12 use i7isk. 
^YiQ Section 220 Housing Insurance Fund, (B) all references in 
1
2 use 1709. 
section 204 to section 203 shall be construed to refer to this section, 
1
2 use 1713. 
and (C) all references in section 207 to the Housing Insurance 
Fund, the Housing Fund, or the Fund shall be construed to refer 
to the Section 220 Housing Insurance Fund." 
(h) (1) Section 223(a) of such Act is amended by striking out "213, 
or 222" each place it appears and inserting in lieu thereof "213, 220, 
12 use 1715Z, 221, 222, 231, 232, or 233". 
^Vsw™' ^ ^ ^ ^''' 
(2) Section 223 (a) (7) of such Act is amended— 
"^"'us^c \^7soc 
^-^l ^y. striking out "section 903 or section 908 of title I X " and 
lyiog. 
''' 
inserting in lieu thereof "section 220, 221, 903, or 908"; and 
1
2 use 1743. 
(B) by striking out "insured under section 608 or 908". 
(3) Section 223 of such Act is further amended by adding at the 
end thereof the following new subsection: 
"(d) With respect to any mortgage, other than a mortgage cover-
ing a one- to four-family structure, heretofore or hereafter insured 
by the Commissioner, and notwithstanding any other provision of this 
Act, when the taxes, interest on the mortgage debt, mortgage insur-
ance premiums, hazard insurance premiums, and the expense of main-
tenance and operation of the project covered by such mortgage during 
the first two years following the date of completion of the project, as 
determined by the Commissioner, exceed the project income, the Com-
missioner may, in his discretion and upon such terms and conditions 
as he may prescribe, permit the excess of the foregoing expenses over 
the project income to be added to the amount of such mortgage, and 
extend the coverage of the mortgage insurance thereto, and such addi-
tional amount shall be deemed to be part of the original face amount 
of the mortgage." 
12 use 17ISO. 
(j^ 'pj^e gps^ sentence of section 224 of such Act is amended to read 
as follows: "Notwithstanding any other provisions of this Act, de-
bentures issued under any section of this Act with respect to a loan or 
mortgage accepted for insurance on or after thirty days following the 
12 ^ifs c^°i703 effective date of the Housing Act of 1954 (except debentures issued 
"**i2'use 171SI 
pursuant to paragraph (4) of section 221(g)) shall bear interest at 
the rate in effect on the date the commitment to insure the loan or 
mortgage was issued, or the date the loan or mortgage was endorsed 
for insurance, or (when there are two or more insurance endorse-
ments) the date the loan or mortgage was initially endorsed for in-
surance, whichever rate is the hi^est, except that debentures issued 
pursuant to section 220(f), section 220(h) (7), section 221(g), or sec-
tion 233 may, at the discretion of the Commissioner, bear interest at the 
rate in effect on the date they are issued." 
12 use 1
7 isq. 
Q ^ Section 226 of such Act is amended by— 
1
2 use 1715m. 
(1) striking out in the first sentence "222, or" and inserting 
Ante.pp. 158.160. 
in Heu thereof "222,233,234, or"; and 
(2) striking out in the third sentence the words "that a writ-
ten statement setting forth such estimate" and inserting in lieu 
thereof the following: "or on the basis of any other estimates of 
the Commissioner, that a written statement setting forth such 
estimate or estimates, as the case may be,". 
75 S T A T . ] 
PUBLIC LAW 87-70-JUNE 30, 1961 
183 
(k) Section 227 of such Act is amended by— 
1
2 use vnsr. 
(1) striking out in subsection (a) "or (vi) under section 810 
12 use i748h-2. 
if the mortgage meets the requirements of subsection (f)" and 
inserting in lieu thereof "(vi) under section 233 if the mortgage 
^"'«' P* i^s. 
meets the requirements of subsection (b) (2), or (vii) under sec-
tion 810 if the mortgage meets the requirements of subsection 
(2) striking out in subsection (b) the word "value" and insert-
ing in lieu thereof "value, cost,"; and 
(3) striking out in the second and third sentences of subsection 
(c) "section 221 if the mortgage meets the requirements of para- 
^2 use irisi. 
graph (4) of subsection (d) thereof, or section 231," and insert- 
^2 use i7i5v. 
ing in lieu thereof "section 221(d)(3), section 221(d)(4), sec-
tion 231, or section 233 (b) (2),". 
(1) Section 229 of such Act is amended to read as follows: 
H ^^^ vnit. 
a 
VOLUNTARY TERMINATION 
OF 
INSURANCE 
"SEC. 229. Notwithstanding any other provision of this Act and 
with respect to any loan or mortgage heretofore or hereafter insured 
under this Act, except under section 2, the Commissioner is author- 
^2 use 1703. 
ized to terminate any insurance contract upon request by the borrower 
or mortgagor and the financial institution or mortgagee and upon 
payment of such termination charge as the Commissioner determines 
to be equitable, taking into consideration the necessity of protecting 
the various insurance Funds and Accounts. Upon such termination, 
borrowers and mortgagors and financial institutions and mortgagees 
shall be entitled to the rights, if any, to which they would be entitled 
under this Act if the insurance contract were terminated by payment 
in full of the insured loan or mortgage." 
(m) Section 231(c) (2) of such Act is amended to read as follows: 
^2 use i7i5v. 
"(2) not exceed, for such part of such property or project 
as may be attributable to dwelling use (excluding exterior land 
improvements as defined by the Commissioner), $2,250 per room 
(or $9,000 per family unit if the number of rooms in such prop-
erty or project is less than four per family unit) : Provided, That 
as to projects to consist of elevator-type structures, the Commis-
sioner may, in his discretion, increase the dollar amount limitation 
of $2,250 per room to not to exceed $2,750 per room and the dollar 
amount limitation of $9,000 per family unit to not to exceed 
$9,400 per family unit, as the case may be, to compensate for the 
higher costs incident to the construction of elevator-type struc-
tures of sound standards of construction and design; except that 
the Commissioner may, by regulation, increase any of the fore-
going dollar amount limitations contained in this paragraph by 
not to exceed $1,250 per room, without regard to the number of 
rooms being less than four, or four or more, in any geographical 
area where he finds that cost levels so require;". 
TITLE VII—OPEN SPACE LAND 
FINDINGS AND 
PURPOSE 
SEC. 701. (a) The Congress finds that a combination of economic, 
social, governmental, and technological forces have caused a rapid 
expansion of the Nation's urban areas, which has created critical 
problems of service and finance for all levels of government and which, 
combined with a rapid population growth in such areas, threatens 
severe problems of urban and suburban living, including the loss of 
184 
PUBLIC LAW 87-70-JUNE 30, 1961 
[76 ST A T . 
valuable open-space land in such areas, for the preponderant majority 
of the Nation's present and future population. 
(b) It is the purpose of this title to help curb urban sprawl and 
prevent the spread of urban blight and deterioration, to encourage 
more economic and desirable urban development, and to help provide 
necessary recreational, conservation, and scenic areas by assisting 
State and local governments in taking prompt action to preserve open-
space land which is essential to the proper long-range development 
and welfare of the Nation's urban areas, in accordance with plans for 
the allocation of such land for open-space purposes. 
Limitation. 
Appropriation. 
Restrictions. 
Review of appli-
cations. 
FEDERAL GRANTS 
SEC. 702. (a) In order to encourage and assist in the timely ac-
quisition of land to be used as permanent open-space land, as deiEined 
herein, the Housing and Home Finance Administrator (hereinafter 
referred to as the "Administrator") is authorized to enter into con-
tracts to make grants to States and local public bodies acceptable 
to the Administrator as capable of carrying out the provisions of this 
title to help finance the acquisition of title to, or other permanent 
interests in, such land. The amount of any such grant shall not 
exceed 20 per centum of the total cost, as approved by the Ad-
ministrator, of acquiring such interests: Provided^ That this limita-
tion may be increased to not to exceed 30 per centum in the case of a 
grant extended to a public body which (1) exercises responsibilities 
consistent with the purposes of this title for an urban area as a whole, 
or (2) exercises or participates in the exercise of such responsibilities 
for all or a substantial portion of an urban area pursuant to an inter-
state or other intergovernmental compact or agreement. The faith 
of the United States is pledged to the payment of all grants contracted 
for imder this title. 
(b) The Administrator may enter into contracts to make grants 
under this title aggregating not to exceed $50,000,000. There are 
hereby authorized to be appropriated, out of any moneys in the 
Treasury not otherwise appropriated, the amounts necessary to pro-
vide for the payment of such grants as well as to carry out all other 
purposes of tnis title. 
(c) No grants under this title shall be used to defray develop-
ment costs or ordinarjr State or local governmental expenses, or to 
help finance the acquisition by a public body of land located outside 
the urban area for which it exercises (or participates in the exercise 
of) responsibilities consistent with the purpose of this title. 
(d) The Administrator may set such further terms and conditions 
for assistance under this title as he determines to be desirable. 
(e) The Administrator shall consult with the Secretary of the In-
terior on the general policies to be followed in reviewing applications 
for grants. To assist the Administrator in such review, the Secretary 
of the Interior shall furnish him appropriate information on the status 
of recreational planning for the areas to be served by the open-space 
land acquired with the grants. The Administrator shall provide cur-
rent information to the Secretary from time to time on significant pro-
gram developments. 
PLANNING REQUIREMENTS 
SEC. 703. (a) The Administrator shall enter into contracts to make 
grants for the acquisition of land under this title only if he finds that 
(1) the proposed use of the land for permanent open space is impor-
tant to the execution of a comprehensive plan for the urban area meet-
ing criteria he has established for such plans, and (2) a program of 
75 STAT.] 
PUBUCLAW 87-70-JUNE 30, 1961 
186 
comprehensive planning (as defined in section 701(d) of the Housing 
Act of 1954) is being actively carried on for the Urban area. 
^^ stat^ 678. 
(b) In extending financial assistance under this title, the Admin-
istrator shall take such action as he deems appropriate to assure that 
local governing bodies are preserving a maximum of open-space land, 
with a minimum of cost, through the use of existing public land; the 
use of special tax, zoning, and subdivision provisions; and the con-
tinuation of appropriate private use of open-space land through acqui-
sition and leaseback, the acquisition of restrictive easements, and 
other available means. 
CONVERSIONS TO OTHER USES 
SEC. 704. No open-space land for which a grant has been made 
under this title shall, without the approval of the Administrator, 
be converted to uses other than those originally approved by him. 
The Administrator shall approve no conversion of land from open-
space use unless he finds that such conversion is essential to the orderly 
development and growth of the urban area involved and is in accord 
with the then apmicable comprehensive plan, meeting criteria estab-
lished by him. The Administrator shall approve any such conver-
sion only upon such conditions as he deems necessary to assure the 
substitution of other open-space land of at least equal fair market 
value and of as nearly as feasible equivalent usefulness and location. 
TECHNICAL ASSISTANCE, STUDIES, AND PUBLICATION OP INFORMATION 
SEC. 705. In order to carry out the purpose of this title the Ad-
ministrator is authorized to provide technical assistance to State and 
local public bodies and to undertake such studies and publish such 
information, either directly or by contract, as he shall determine to 
be desirable. There are hereby authorized to be appropriated, out of 
any moneys in the Treasury not otherwise appropriated, such amounts 
as may be necessary to provide for such assistance^ studies, and pub-
lication. Nothing contained in this section shall limit any authority 
of the Administrator under any other provision of law. 
DEFINITIONS 
SEC. 706. As used in this title— 
(1) The term "open-space land" means any undeveloped or pre-
dominantly undeveloped land in an urban area which has value for 
(A) park and recreational purposes, (B) conservation of land and 
other natural resources, or (C) nistoric or scenic purposes. 
(2) The term "urban area" means any area which is urban in 
character, including those surrounding areas which, in the judgment 
of the Administrator, form an economic and socially related region, 
taking into consideration such factors as present and future popula-
tion trends and patterns of urban growth, location of transportation 
facilities and systems, and distribution of industrial, commercial, 
residential, governmental, institutional, and other activities. 
(3) The term "State" means any of the several States, the District 
of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, 
and Guam. 
64207 0-62—15 
186 
PUBLIC LAW 87-70-JUNE 30, 1961 
[75 ST A T . 
63 Stat. 432. 
42 use 1471. 
Definitions. 
42 
use 1472. 
42 U s e 
1483. 
1481-
Definitions. 
42 u s e 
et seq. 
1471 
TITLE VIII—FARM HOUSING 
SEO. 801. (a) Section 501(b) of the Housing Act of 1949 is 
amended by inserting "(1)" immediately after '"(b)" and by add-
ing at the end thereof a new paragraph as follows: 
''(2) For the purposes of this title, the terms 'owner', 'farm', and 
'mortgage' shall be deemed to include, respectively, the lessee of, the 
land included in, and other security interest in, any leasehold interest 
which the Secretary determines has an unexpired term (A) in the 
case of a loan, for a period sufficiently beyond the repayment period 
of the loan to provide adequate security and a reasonable probability 
of accomplishing the objectives for which the loan is made, and (B) 
in the case of a grant for a period sufficient to accomplish the objectives 
for which the grant is made." 
(b) Section 502(b) (1) of such Act is amended by striking out "and 
such additional security" and inserting in lieu thereof the words "or 
such other security". 
(c) Sections 511, 512, and 513 of such Act are each amended by 
striking out "1961" and inserting in lieu thereof "1965". 
SEC. 802. The second sentence of section 511 of the Housing Act of 
1949 is amended by striking out "$450,000,000" and inserting in lieu 
thereof "$650,000,000". 
SEC. 803. (a) Section 501(a) of the Housing Act of 1949 is amended 
by inserting "(1)" before "to owners of farms", and by inserting 
before the period at the end thereof the following:", and (2) to owners 
of other real estate in rural areas to enable them to provide dwellings 
and related facilities for their own use and buildings adequate for 
their farming operations". 
(b) Section 501(c) of such Act is amended by inserting before the 
semicolon at the end of clause (1) the following: ", or that he is the 
owner of other real estate in a rural area without an adequate dwelling 
or related facilities for his own use or buildings adequate for his 
farming operations." 
(c) Section 501 of such Act is further amended by adding at the 
end thereof the following new subsection: 
"(d) As used in this title (except in sections 503 and 504(b)), the 
terms 'farm', 'farm dwelling', and 'farm housing' shall include dwell-
ings or other essential buildings of eligible applicants." 
SEC. 804. (a) Title V of the Housing Act of 1949 is further 
amended by adding at the end thereof the following new section: 
42 use 1472. 
"INSURANCE OF LOANS FOR THE PROVISION OF HOUSING AND RELATED 
FACILITIES FOR DOMESTIC FARM LABOR 
"SEC. 514. (a) The Secretary is authorized to insure and make 
commitments to insure loans made by lenders other than the United 
States to the owner of any farm, any association of farmers, any State 
or political subdivision thereof, or any public or private nonprofit 
organization for the purpose of providing housing and related facili-
ties for domestic farm laoor in accordance with terms and conditions 
substantially identical with those specified in section 502; except 
that— 
"(1) no such loan shall be insured in an amount in excess of 
the value of the farm involved less any prior liens in the case 
of a loan to an individual owner of a farm, or the total estimated 
value of the structures and facilities with respect to which the 
loan is made in the case of any other loan; 
"(2) no such loan shall be insured if it bears interest at a rate 
in excess of 5 per centum per annum; 
75 S T A T . ] 
PUBLIC LAW 87-70-JUNE 30, 1961 
187 
"(3) out of interest payments by the borrower the Secretary 
shall retain a charge in an amount not less than one-half of 1 per 
centum per annum of the unpaid principal balance of the loan; 
"(4) the insurance contracts and agreements with respect to 
any loan may contain provisions for servicing the loan by the 
Secretary or by the lender, and for the purchase by the Secre-
tary of the loan if it is not in default, on such terms and condi-
tions as the Secretary may prescribe; and 
"(5) the Secretary may take mortgages creating a lien run-
ning to the United States for the benefit of the insurance fund 
referred to in subsection (b) notwithstanding the fact that the 
note may be held by the lender or his assignee. 
"(b) The Secretary shall utilize the insurance fund created by sec-
tion 11 of the Bankhead-Jones Farm Tenant Act (7 U.S.C. 1005a) 
and the provisions of section 13 (a), (b), and (c^ of such Act (7 
U.S.C. 1005c (a), (b), and (c)) to discharge obligations under insur-
ance contracts made pursuant to this section, and 
" (1) the Secretary may utilize the insurance fund to pay taxes, 
insurance, prior liens, and other expenses to protect the security 
for loans which have been insured hereunder and to acquire such 
security property at foreclosure sale or otherwise; 
"(2) the notes and security therefor acquired by the Secretary 
under insurance contracts made pursuant to this section shall 
become a part of the insurance fund. Loans insured under this 
section may be held in the fund and collected in accordance with 
their terms or may be sold and reinsured. All proceeds from such 
collections, including the liquidation of security and the proceeds 
of sales, shall become a part of the insurance fund; and 
"(3) of the charges retained by the Secretary out of interest 
payments by the borrower, amounts not less than one-half of 1 
per centum per annum of the unpaid principal balance of the 
loan shall be deposited in and become a part of the insurance 
fund. The remainder of such charges shall be deposited in the 
Treasury of the United States and shall be available for adminis-
trative expenses of the Farmers Home Administration, to be 
transferred annually to and become merged with any appropri-
ation for such expenses. 
"(c) Any contract of insurance executed by the Secretary under 
this section shall be an obligation of the United States and incontesta-
ble except for fraud or misrepresentation of which the holder of the 
contract has actual knowledge. 
"(d) The aggregate amount of the principal obligations of the 
loans insured under this section shall not exceed $25,000,000 in any 
one fiscal year. 
"(e) Amounts made available pursuant to section 513 of this Act 
shall be available for administrative expenses incurred under this 
section. 
"(f) As used in this section— 
"(1) the term 'housing' means (A) new structures suitable for 
dwellmg use by domestic farm labor, and (B) existing structures 
which can be made suitable for dwelling use by domestic farm 
labor by rehabilitation, alteration, conversion, or improvement; 
and 
"(2) the term 'related facilities' means (A) new structures 
suitable for use as dining halls, community rooms or buildings, 
or infirmaries, or for other essential services facilities, and (B) 
existing structures which can be made suitable for the above uses 
by rehabilitation, alteration, conversion, or improvement; and 
F a r m 
t e m a n t 
mortgage i n s u i^ 
ance fund. 
60 Stat. i075. 
Instirance 
tract. 
Maximum obliga-
tions. 
42 u s e 1483. 
"Housing, 
"Related facili-
ties.»» 
188 
PUBLIC LAW 87-70-JUNE 30, 1961 
[75 ST A T , 
"Domestic 
labor.»» 
farm 
42 use 
seq. 
1471 et 
R e s e a r c h and 
technical studies. 
42 u s e 1471. 
42 use 1483. 
42 u s e 1478. 
"(3) the term 'domestic farm labor' means citizens of the 
United States who receive a substantial portion (as determined 
by the Secretary) of their income as laborers on farms situated 
in the United States." 
(b) Title V of such Act is further amended— 
(1) by inserting in section 506(a) "and section 514," imme-
diately after "501 to 504, inclusive^" each place it appears; and 
(2) by striking out "under this title" ui section 507 and insert-
ing in lieu thereof "under sections 501 to 504, inclusive". 
(c) The first paragraph of section 24 of the Federal Reserve Act 
(12 U.S.C. 371) IS amended by inserting after "the Act of August 28, 
1937, as amended" the following: ", or title V of the Housing Act of 
1949, as amended". 
SEC. 805. (a) Section 506 of the Housing Act of 1949 is amended— 
(1^ by striking out the last sentence of subsection (a); 
(2) by redesignating subsection (b) as subsection (e); and 
(3) by inserting after subsection (a) the following new 
subsections: 
"(b) The Secretary is further authorized to conduct research and 
technical studies including the development, demonstration, and 
promotion of construction of adequate farm dwellings and other 
buildings for the purpose of stimulating construction, improving the 
architectural design and utility of such dwelling and buildings, and 
utilizing new and native materials, economies in materials and con-
struction methods, and new methods of production, distribution, as-
sembly, and construction, with a view to reducing the cost of farm 
dwellings and buildings and adapting and developing fixtures and 
appurtenances for more efficient and economical farm use. 
"(c) The Secretary is further authorized to carry out a program 
of research, study, and analjrsis of farm housing in the United States 
to develop data and information on— 
" (1) the adequacy of existing farm housing; 
u ^ f ' 
- 
- 
- 
-
(2) the nature and extent of current and prospective needs for 
farm housing, including needs for financing and for improved 
design, utility, and comfort, and the best methods of satisfying 
such needs; 
"(3) problems faced bv farmers and other persons eligible 
under section 501 in purchasing, constructing, improving, alter-
ing, repairing, and replacing farm housing; 
"(4) the interrelation of farm housing problems and the prob-
lems of housing in urban and suburban areas; and 
" (5) an^ other matters bearing upon the provision of adequate 
farm housing. 
"(d) To the extent determined by him to be advisable, the Secretary 
may carry out the research and study programs authorized by sub-
sections (D) and (c) through grants made by him on such terms, con-
ditions, and standards as he may prescribe to land-grant colleges estab-
lished pursuant to the Act of July 2, 1862 (7 U.S.C. 301-308) or 
through such other agencies as he may select." 
(b) Section 513 of such Act is amended bv striking out "and (c)'* 
and inserting in lieu thereof the following:" (c) not to exceed $250,000 
per year for research and study programs pursuant to subsections 
(b), (c), and (d) of section 506 during the period beginning July 1, 
1961, and ending June 30,1965; and (d)". 
SEC. 806. (a) Section 508 of the Housing Act of 1949 is amended 
by striking out "of $5 per day" in subsection (a) and inserting in lieu 
thereof "determined by the Secretary". 
75 S T A T . ] 
PUBLIC LAW 8 7 - 7 0 - J U N E 30, 1961 
189 
(b) Section 508 of such Act is amended by striking out "their 
'•^ use i478. 
opinions of the reasonable values of the farms" in the second sentence 
of subsection (b) and inserting in lieu thereof "as to the amount of 
the loan or grant." 
TITLE IX—MISCELLANEOUS 
HOME O W N E R S ' L O A N ACT OF 
1933 
SEC. 901. (a) Section 5(c) of the Home Owmers' Loan Act of 1933 
1
2 use U64. 
is amended by striking out "in loans insured under title I of the 
National Housing Act, as amended," in the first sentence of the second lyogd^ ^ ^ ^^^^ 
paragraph and inserting in lieu thereof "in loans insured under title I 
of the National Housing Act, in home improvement loans insured 
under title I I of the National Housing Act,". 
^/^I 
j j f^c^^iro?. 
(b) Section 5(c) of such Act is further amended by adding at the 
end thereof the following new paragraph: 
"Without regard to any other provision of this subsection except andlfo^A^ss^^^J! 
the area restriction and the $35,000 limitation, any such association tions. 
may invest an amount not exceeding at any one time 5 per centum of as^s" t^s! ' * "*'"* °^ 
its assets in nonamortized loans which are made on the security of 
first liens upon homes or combinations of homes and business prop-
erty and which (1) are repayable within a period of eighteen months, 
(2) provide that interest payments be made at least semiannually, and 
(3) do not exceed 80 per centum of the appraised value of the property 
involved. 
For the purposes of this paragraph the term 'first liens' 
includes the assignment of the whole of the beneficial interest in a 
trust having a corporate trustee whereunder real estate held in the 
trust can be subjected to the satisfaction of the obligation or obliga-
tions secured with the same priority as a first mortgage, a first deed 
of trust, or a first trust deed in the jurisdiction where the real estate 
is located." 
(c) Section 5(c) of such Act is further amended by adding at the 
end thereof (after the paragraph added by subsection (b) of this 
section) the following new paragraph: 
"Without regard to any other provision of this subsection except the 
area restriction, any such association is authorized to invest an amount 
not exceeding at any one time 5 per centum of its assets in amortized 
loans or participating interests therein which are secured by first liens 
upon improved real estate used to provide housing facilities for the 
aging, subject to the following qualifications: 
"(1) each such loan shall be repayable within a period of 30 
years; 
"(2) no such loan shall exceed 90 per centum of the appraised 
value of the improved real estate given as security therefor; and 
"(3) each such loan— 
"(A) shall be made upon and secured by real estate which 
is improved by housing accommodations, individual or mul-
tiple, designed for the purpose of providing accommodations 
for occupancy by aging persons, or of providing rest homes 
or nursing homes, so constructed or altered as to be suitable 
primarily for the occupancy of persons over fifty-five years of 
age and limited principally to the occupancy of such persons; 
and 
"(B) shall be made for the implementation of the purpose 
described in clause (A)." 
190 
PUBLIC LAW 87-70-JUNE 30, 1961 
[75 ST AT. 
12 use 1464. 
42 use 1460. 
(d) Section 5(c) of such Act is further amended by adding at the 
end thereof (after the paragraph added by subsection (c) of this 
section) the following new paragraph: 
"Without regard to any other provision of this subsection, any such 
association is authorized to invest not more than 5 per centum of its 
assets in certificates of beneficial interest issued by any urban renewal 
investment trust. For the purposes of this paragraph the term 'urban 
renewal investment trust' means an unincorporated trust established 
by written agreement between the authorized officers of two or more 
savings institutions the savings or share accounts of which are insured 
by an agency of the Federal Government, which agreement— 
"(1) expressly limits the purposes of the trust and the invest-' 
ment powers of the trustees to the elimination or prevention of 
the spread of slums and blighted or deteriorated or deteriorating 
areas and the redevelopment, renewal, rehabilitation, or conserva-
tion of such areas by private enterprise through financing the 
purchase or rehabilitation of real property, or the construction of 
improvements thereon, designed or usable for industrial, commer-
cial, or housing purposes within the confines of an urban renewal 
area (as defined in section 110 of the Housing Act of 1949); 
"(2) expressly limits the beneficial ownership of the trust to 
savings and loan associations or banks the savings or share 
accounts of which are insured by an agency of the Federal 
Government; 
"^3) provides that such beneficial ownership be evidenced by 
certificates of beneficial interest, which certificates shall have first 
claim at all times on the assets of the trust without preference 
between the holders thereof, and shall be fully transferable and 
assignable between any such banks and savings and loan associa-
tions at all times; and 
"(4) expressly provides that it shall be effective and binding 
between the parties thereto only upon being approved by the 
board. 
Any association chartered under the provisions of this section may 
Lo^Blnk^Boardf become a party to any urban renewal investment trust. 
The Federal 
lafioJfs^ ^'^ '*^"" Home Loan Bank Board shall prescribe such rules and regulations, 
not inconsistent with the provisions of this paragraph, as it may deem 
necessary for the proper establishment of urban renewal investment 
trusts, for the effective operation thereof, and the participation in 
such operations of eligible institutions either as parties, as trustees, 
or as the holders of certificates of beneficial interest." 
(e) Section 5(c) of such Act is further amended hj adding at the 
end thereof (after the paragraph added by subsection (d) of this 
section) the following new paragraph: 
"Without regard to any other provision of this subsection, any 
such association whose general reserves, surplus, and undivided 
profits ag:gregate a sum in excess of 5 per centum of its withdrawable 
accounts is authorized to invest in, to lend to, or to commit itself to 
lend to any business development credit corporation incorporated in 
the State m which the head office of such association is situated, in 
the same manner and to the same extent as the statutes of such State 
authorize a savings and loan association organized under the laws of 
said State to invest in, to lend to, or to commit itself to lend to such 
business development credit corporation, but the aggregate amount 
of such investments, loans, and commitments of any such association 
outstanding at any time shall not exceed one-half of 1 per centum of 
the total outstanding loans made by such association, or $250,000, 
whichever is the lesser." 
Ante, 
p. 
157, 
154. 
75 S T A T . ] 
PUBLIC LAW 87-70-JUNE 30, 1961 
191 
FEDERAL RESERVE ACT 
SEC. 902. Section 24 of the Federal Reserve Act is amended by 
*2 use 371. 
inserting at the end of the next to the last paragraph a new sentence 
as follows: "Home improvement loans which are insured under the 
provisions of section 203 (k) or 220(h) of the National Housing Act 
may be made without regard to the first lien requirements of this 
section." 
VOLUNTARY HOME MORTGAGE CREDIT PROGRAM 
SEC. 903. Section 610(a) of the Housing Act of 1954 is amended g,^f f^; «^0' " 
by striking out "1961" and inserting in lieu thereof "1965". 
12 use i750jj. 
DISPOSAL o r PASSYUNK WAR HOUSING PROJECT 
SEC. 904. Section 802(a) of the Housing Act of 1959 is amended 
73 stat. 686. 
by striking out "five" in the first sentence and inserting in lieu 
thereof "six". 
DISPOSAL OF N A T H A N A E L GREENE VILLA HOUSING PROJECT 
SEC. 905. Notwithstanding the provisions of section 606 of the Act 
entitled "An Act to expedite the provision of housing in connection 
with national defense, and for other purposes", approved October 
14, 1940, as amended, and any agreements entered into thereunder, 
^4 st^t_. 6
^
5
^
^ 
the Housing and Home Finance Administrator and the Public Hous-
ing Administration are authorized and directed to agree to the sale 
by the Housing Authority of Savannah, Georgia, to the city of 
Savannah, Georgia, of all right, title, and interest in and to Nathanael 
Greene Villa (low-rent Housing project GA-2-8; formerly war hous-
ing project GA-9041), for a total price of $275,000, which shall be 
paid to the Administration and deposited by the Administration in 
the Treasury as miscellaneous receipts in accordance with section 
606(d) of such Act. 
HOSPITAL CONSTRUCTION 
SEC. 906. (a) Section 605(b) of the Housing Act of 1956 is amended J^l " ^ c is92c 
by striking out "1960" and inserting in lieu thereof "1962". 
(b) Section 605(c) of such Act is amended by striking out "and 
June 30, 1961" and inserting in lieu thereof "June 30,1961, and June 
30, 1962". 
PAYMENT I N LIEU OF TAXES BY HOLYOKE HOUSING AUTHORITY 
SEC. 907. Notwithstanding the provisions of any other law or any 
contract or rule of laWj the Public Housing Commissioner shall ap-
prove the payment in lieu of taxes, in the amount of $9,933.47, made 
by the Holyoke Housing Authority to the city of Holyoke, Massachu-
setts, under section 10(h) of the United States Housing Act of 1937, 
^^ use i4io. 
for its fiscal year ended December 31,1956. 
RECORDS AND AUDIT 
SEC. 908. Section 814 of the Housing Act of 1954 is amended to read ^^^ use i434 and 
as follows: 
((' 
RECORDS 
"SEC. 814. Every contract between the Housing and Home Finance 
Agency (or any official or constituent thereof) and any person or 
local body (including any corporation or public or private agency or 
body) for a loan, advance, grant, or contribution under the United 
192 
PUBLIC L
A
W 87-71-JUNE 30, 1961 
[76 STAT. 
42 use 1430. 
42 u s e 
1441 
note. 
States Housing Act of 1937, as amended, the Housing Act of 1949, as 
amended, or any other Act shall provide that such person or local 
body shall keep such records as the Housing and Home Finance 
Agency (or such official or constituent thereof) shall from time to time 
prescribe, including records which permit a speedy and effective audit 
and will fully disclose the amount and the disposition by such person 
or local body of the proceeds of the loan, advance, grant, or contribu-
tion, or any supplement thereto, the capital cost of any construction 
project for which any such loan, advance, grant, or contribution is 
made, and the amount of any private or other non-Federal funds used 
or grants-in-aid made for or in connection with any such project. 
No mortgage covering new or rehabilitated multifamily housing (as 
1
2 use i7i5r. 
defined in section 227 of the National Housing Act, as amended) shall 
be insured unless the mortgagor certifies that he will keep such records 
as are prescribed by the Federal Housing Commissioner at the time 
of the certification and that the^ will be kept in such form as to per-
mit a speedy and effective audit. The Housing and Home Finance 
Agency or any official or constituent agency thereof and the Comp-
troller General of the United States shall have access to and the ri^ht 
to examine and audit such records. This section shall become effective 
on the first day after the first full calendar month following the date 
of approval of the Housing Act of 1961." 
ADMINISTRATIVE 
i" ^ul'e^froic 
SEC. 909. Section 502 of the Housing Act of 1948 is amended by— 
and note. 
(1) Striking out in subsection (c) (3) the first proviso, the colon 
thereafter, and the words ^^And provided further,''^ and inserting 
in lieu thereof ^^Provided,^* and 
(2) adding at the end thereof the following subsection: 
"(d) The Housing and Home Finance Administrator, the Federal 
Housing Commissioner, and the Public Housing Commissioner, re-
spectively, may utilize funds made available to them for salaries and 
expenses for payment in advance for dues or fees for library member-
ships in organizations (or for membership of the individual librarians 
of the respective agencies in organizations which will not accept 
library membership) whose pubUcations are available to members 
only, or to members at a price lower than to the general public, and 
for payment in advance for publications available only upon that 
basis or available at a reduced price on prepublication order." 
Approved June 30, 1961, 12:16 p.m. 
Public Law 87-71 
June 30. 1961 
AN ACT 
[H. R. 5475] 
To transfer a section of Blue Ridge Parkway to the Shenandoah National Park, 
in the State of Virginia, and for other purposes. 
Be it enacted hy the Senate and House of Representatives of the 
Blue Ridge Park- jj^fiit^ States of America in Congress assembled. That, subject to 
w a y , V a . 
_. _ 
, 
. 
. ' . 
. 
, 
, 
,»'. 
. 
, 
', 
i • i 
• 
T r a n s f e r o
f Valid existiug Tights, the lands and interests in lands which comprise 
^*"*^'- 
section 1-A of the Blue Ridge Parkway and lie between the southern 
boundary of the Shenandoah National Park at Jarman Gap and park-
way centerline station 448+00 at Rockfish Gap are excluded from the 
parkway, made a part of the Shenandoah National Park, and shall 
be administered in accordance with the Act of August 25, 1916 (39 
Stat. 535; 16 U.S.C. 1-4), as amended and supplemented. 
Approved June 30, 1961.