An Act to assist in the provision of housing for low- and moderate-income families, and to extend and amend laws relating to housing and urban development.
PL 90-448 (S.3497), enacted 08/01/1968

476 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
August 1,1968 
[S.3497] 
Housing and 
Urban Develop-
mv.it Act of 1968. 
Public Law 90-448 
AN ACT 
To assist in the provision of housing for low and moderate income families, and 
to extend and amend laws relating to housing and urban development. 
Be It enacted hy the JSetiate and House of I?eprexentafhe.S' of the 
I'n'tted States of America hi ('Ongress ansenihJed. That this Act may 
be cited as the ""Housing and Urban Development Act of 1908''. 
63 Stat. 413. 
42 u s e 1441. 
DECLAKATION OF POLICY 
SEC. 2. The (^ongress affirms the national goal, as set forth in sec-
tion 2 of the Housing Act of 1949, of "a decent home and a suitable 
living environment for every American family". 
The Congress finds that this goal has not been fully realized for 
many of the Nation's lower income families; that this is a matter of 
grave national concern; and that there exist in the public and private 
sectors of the economy the resources and capabilities necessary to the 
full realization of this goal. 
The Congress declares that in the administration of those housing 
programs authorized by this Act which are designed to assist families 
with incomes so low that they could not otherwise decently house them-
selves, and of other Government programs designed to assist in the 
provision of housing for such families, the highest priority and 
emphasis should be given to meeting the housing needs of those fam-
ilies for which the national goal has not become a reality; and in the 
carrying out of such programs there should be the fullest practicable 
utilization of the resources and capabilities of private enteri)rise and 
of individual self-help techniques. 
Post, pp. 477, 
498. 
75 Stat. 150. 
12 u s e 1715^. 
50 Stat. 888. 
42 u s e 1430. 
79 Stat. 451. 
12 u s e 1749aa 
note. 
V 
JOBS IN HOUSING; EMPLOYMENT OPPORTUNITIES FOR LOWER INCOME PER-
SONS I N CONNECrriON W I T H ASSISIT.D PROJECTS 
SEC. 3. In the administration of the programs authorized by sec-
tions 235 and 236 of the National Housing Act, the below-market 
interest rate program under section 221(d) (3) of such Act, the low-
rent public housing program under the United States Housing Act 
of 1937, and the rent supplement program under section 101 of the 
Housing and Urban Development Act of 1965, the Secretary of Hous-
ing and LTrban Development shall— 
(1) require, in consultation with the Secretary of Labor, that 
to the greatest extent feasible opportunities for training and 
employment arising in connection with the planning, construc-
tion, rehabilitation, and operation of housing assisted under such 
programs be given to lower income persons residing in the area 
of such housing; and 
(2) require, in consultation with the Administrator of the 
Small Business Administration, that to the greatest extent feasi-
ble contracts for work to be performed pursuant to such programs 
shall, where appropriate, be awarded to business concerns, includ-
ing but not limited to individuals or firms doing business in the 
fields of design, architecture, building construction, rehabilita-
tion, maintenance, or repair, located in or owned in substantial 
part by persons residing in the area of such housing. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
477 
IMPROVED ARCHITECTURAL DESIGN I N GOVERNMENT ITOUSIN(} PROGRAMS 
SEC, 4. The Congress finds tliat Federal aids to housing liave not 
(•ontribiited fully to improvement in architectural standards. This 
objective has been contemplated in Federal housing legislation since 
the establishment of mortgage insurance through tlie Federal Hous-
ing Administration, 
The Congress commends the Department of Housing and Urban 
Development for its recent efforts to impix)ve architectural standards 
through competitive design awards and in otlier ways but at the same 
time recogiiizes that this important objective requires high priority if 
Federal aid is to make its full connnunitywide contribution toward 
improving our urban environment. 
The Congress further finds that even within the necessary budget 
limitations on housing for low and moderate income families architec-
tural design could be improved not only to make the housing more 
attractive, but to make it better suited to the needs of occupants. 
The Congress declares that in the administration of housing pro-
grams which assist in the provision of housing for IOAV and moderate 
nicome families, emphasis should be given to encouraging good design 
as an essential component of such housing and to developing housing 
which will be of such quality as to reflect its important relationship to 
the architectural standards of the neighborhood and community in 
which it is situated, consistent with prudent budgeting. 
ANNUAL REPORT ON AREAS OK PRCKJRAM ADMINISTRATION 
AND 
MANAGEMENT W H I C H REQUIRE 
IMPROVEMENT 
SEC, 5. The Secretary shall, as early as practicable in the calendar 
Rep°" \° con-
year 1969 and in the calendar year 19 rO, make a report to the mittees. 
respective Committees on Banking and Currency of the House of 
Kei)resentatives and the Senate identifying specific areas of program 
administration 
and 
management 
which 
require 
improvement, 
describing actions taken and proposed for the purpose of making such 
improvements, and recommending such legislation as may be neces-
sary to accomplish such improvements. Each such report shall include, 
but not be limited to, the following areas of program administration 
and management: uniformity antl standardization in program re-
quirements, simplification of program procedures, ways and means 
of expediting consideration of proposed projects and applications for 
assistance, the provision of more useful and specific assistance to com-
munities, organizations and individuals seeking to utilize the Depart-
ment's programs, and ways and means of combining or otherwise 
ada})ting the Department's programs to increase their usefulness in 
meeting the individual needs of applicants. 
TITLE I—LOWER INCOME HOUSING 
HOMEOWNERSHIP FOR LOWER INCOME 
FAMILIES 
SEC, 101. (a) Title I I of the National Housing Act is amended by \ 52 stat. 9. 
adding at the end thereof the following: new section: 
xl^,^^^ ^^°^' 
JIOMEOWNERSHIP FOR LOWER INCOME 
FAMILIES 
"SEC. 235. (a) For the purpose of assisting lower income families in ; 
acquiring homeownership or in acquiring membership in a cooperative i 
association operating a housing project, the Secretary is authorized / 
to make, and to contract to make, periodic assistance payments on be- ' 
half of such homeowners and cooperative members. The assistance shall 
'15y. 
Post, 
p. 485. 
478 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
I be accomplished through payments to moitgagees holding mortgages 
meeting the special requirements specified in this section. 
"(b) To qualify for assistance payments, the homeowner or the 
cooperative member shall be of lower income and satisfy eligibility 
requirements prescribed by the Secretary, and— 
"(1) the homeowner shall be a mortgagor under a mortgage 
which meets the requirements of and is insured under subsection 
(i) or (j)(4) of this section: Provided, That a mortgage meeting 
the requirements of subsection (i) (3) (A) of this section but 
insured under section 237 may qualify for assistance payments if 
such mortgage was executed by a mortgagor who is determined 
not to be an acceptable credit risk for mortgage insurance pur-
poses (but otherwise eligible) under subsection (j)(4) of this 
Ts^star^e^o^^' 
section or under section 221(d) (2) or 234(c) and accepted as a 
12 use 1715^, 
reasonably satisfactory credit risk under section 237; or 
^7i5y. 
"(2) the cooperative association of which the family is a mem-
ber shall operate a housing project the construction or substantial 
rehabilitation of which has been financed with a mortgage insured 
12 u^c nise. 
under section 213 and which has been completed within two years 
prior to the filing of the application for assistance payments and 
the dwelling unit has had no previous occupant other than the 
,/ 
I f'^imi\y[]Proolded, That if the initial cooperative member receiv-
(y^^'^' 
I ing assistance payments transfers his membership and occupancy 
•' I A \ 
I rights to another person who satisfies the eligibility requirements 
,.. \ ^ ^ 
\ prescribed by the Secretary, such new cooperative member may 
\ 
I qualify for assistance payments upon the filing of an application 
L with respect to the dwelling unit involved to be occupied by himT] 
Provided further. That assistance payments may be made witlii 
respect to a dwelling unit in an existing cooperative project 
which meets such standards as the Secretary may prescribe, if 
the family qualifies as a displaced family as defined in section 
80^8131^*13^1^7^' 
^21 (f), or a family which includes five or more minor persons, 
or a family occupying low-rent public housing: Provided 
further. 
That the amount of the mortgage attributable to the dwelling unit 
shall involve a principal obligation not in excess of $15,000 
($17,500 in any geographical area where the Secretary authorizes 
an increase on the basis of a finding that cost levels so require), 
except that with respect to any family with five or more persons 
the foregoing limits shall be $17,500 and $20,000, respectively. 
"(c) The assistance payments to a mortgagee by the Secretary on 
behalf of a mortgagor shall be made during such time as the mortgagor 
shall continue to occupy the property which secures the mortgage: 
Provided, That assistance payments may be made on behalf of a 
homeowner who assumes a mortgage insured under subsection (j) (4) 
with respect to which assistance payments have been made on behalf 
of the previous owner, if the homeowner is approved by the Secretary 
as eligible for receiving such assistance. The payment shall be in an 
amount not exceeding the lesser of— 
"(1) the balance of the monthly payment for principal, inter-
est, taxes, insurance, and mortgage insurance premium due under 
the mortgage remaining unpaid after applying 20 per centum of 
the mortgagor's income; or 
"(2) the difference between the amount of the monthly pay-
ment for principal, interest, and mortgage insurance premium 
which the mortgagor is obligated to pay under the mortgage and 
the monthly payment for principal and interest which the mort-
gagor would be obligated to pay if the mortgage were to bear 
interest at the rate of 1 per centum per annum. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
479 
Appropriation. 
"(d) Assistance payments to a mortgagee by the Secretary on be-
half of a family holding membership in a cooperative association op-
erating a housing project shall be made only during such time as the 
family is an occupant of such project and shall be in amounts com-
puted on the basis of the formula set forth in subsection (c) applying 
the cooperative member's proportionate share of the obligations under 
the project mortgage to the items specified in the formula. 
"(e) The Secretary may include in the payment to the mortgagee 
such amount, in addition to the amount computed under subsection 
(c), (d), or (j) (7), as he deems appropriate to reimburse the mort-
gagee for its expenses in handling the mortgage. 
"(f) Procedures shall be adopted by the Secretary for recertifica-
tions of the mortgagor's (or cooperative member's) income at intervals 
of two years (or at shorter intervals where the Secretary deems it 
desirable) for the purpose of adjusting the amount of such assistance 
payments within the limits of the formula described in subsection (c). 
"(g) The Secretary shall prescribe such regulations as he deems 
necessary to assure that the sales price of, or other consideration paid 
in connection with, the purchase by a homeowner of the property with 
respect to which assistance payments are to be made is not increased 
above the appraised value on which the maximum mortgage which the 
Secretary will insure is computed. 
"(h) (1) There are authorized to be appropriated such sums as may 
be necessary to carry out the provisions of this section, including such 
sums as may be necessary to make the assistance payments under con-
tracts entered into under this section. The aggregate amount of con-
tracts to make such payments shall not exceed amounts approved in 
appropriation Acts, and payments pursuant to such contracts shall 
not exceed $75,000,000 per annum prior to July 1, 1969, which maxi-
mum dollar amount shall be increased by $100,000,000 on July 1, 1969, 
and by $125,000,000 on July 1,1970. 
" (2) Not more than 20 per centum of the total amount of assistance 
payments authorized to be contracted to be made pui-suant to appro-
priation Acts shall be contracted to be made on behalf of families 
whose incomes at the time of their initial occupancy exceed 135 per 
centum of the maximum income limits which can be established in 
the area, pursuant to the limitations prescribed in sections 2(2) and 
15(7) (b) (ii) of the United States Housing Act of 1987, for initial 
79 stat. 457; 
occupancy in public housing dAvellings, but the incomes of such fam- ^^42*usc ^1402, 
ilies at the time of their initial occupancy shall in no case exceed 90 i4is. 
l>er centum of the limits prescribed by the Secretary for occupants of 
projects financed with mortgages insured under section 221(d)(3) 
which bear interest at the below-market interest rate prescribed in the 
proviso of section 221(d) (5). The limitations prescribed in this para-
graph shall be administered by the Secreta-ry so as to accord a prefer-
ence to those families whose incomes are within the lowest practicable 
limits for achieving homeownership with assistance under this section. 
The Secretary shall report annually to the respective Committees on 
Banking and Currency of the Senate and House of Representatives 
with respect to the income levels of families on behalf of which assist-
ance payments have been made under this section. 
"(3) Notwithstanding the provisions of subsections (b)(2) and 
(i) (3) (A) with respect to the prior construction or rehabilitation 
of a dwelling, or of the project in which there is a dwelling unit, for 
which assistance payments may be made, and notwithstanding the 
provisions of subsection (j)(l) authorizing the purchase of hous-
ing which is neither deteriorating nor substandard, not more than— 
"(A) 25 per centum of the total amount of contracts for as-
75 Stat. 150. 
12 use 1715^ 
75 Stat. 152; 
79 Stat. 454. 
Report to con-
gressional com-
mittees. 
480 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
sistaiice payments authorized by appropriation Acts to be made 
prior to July 1, 1969, 
"(B) 15 per centum of the total additional amount of con-
tracts for assistance payments authorized by appropriation Acts 
to be made prior to July 1, 1970, and 
"'(C) 10 per centum of the total additional amount of contracts 
for assistance i)ayments authorized by appropriations Acts to be 
made prior to July 1,1971, 
may be nnide with respect to existing dwellings, or dwelling units in 
existing projects. 
"(i) (1) The Secretary is authorized, upon application by the mort-
gagee, to insure a mortgage executed by a mortgagor who meets the 
eligibility requirements for assistance payments prescribed by the 
Secretary under subsection (b). Commitments for the insurance of 
such mortgages may be issued by the Secretary prior to the date of 
their execution or disbursement thereon, upon such terms and con-
ditions as the Secretary may prescribe. 
"(2) To be eligible for insurance under this subsection, a moi-tgage 
75*'star\6o^^' 
sball meet the requirements of section 221(d) (2) or 2:M(c), except as 
\2 use 1715^, 
such requirements are modified by this subsection. 
'7'5y. 
"(3) X mortgage to be insured under this subsection shall— 
" (A) invol ve a single-family dwelling which has been approved 
by the Secretary prior to the beginning of construction or sub-
stantial rehabilitation, or a two-family dwelling one of the units 
of which is to be occupied by the owner if the dwelling is pur-
chased with the assistance of a nonprofit organization and is 
approved by the Secretary prior to the beginning of substantial 
rehabilitation, or a one-family unit in a condominium project 
(together with an undivided interest in the common areas and 
facilities serving the project) which is released from a multi-
family project, the construction or substantial rehabilitation of 
which has been completed within two years prior to the filing of 
the application for assistance payments with respect to such fam-
ily unit and the unit has had no previous occupant other than the 
mortgagor: Provided, That the mortgage may involve an existing 
dwelling or a family unit in an existing condominium project 
which meets such standards as the Secretary may prescribe, if the 
mortgagor qualifies as a displaced family as denned in section 
68 Stat. 599; 
221(f), Or a family which includes five or more minor persons, 
80 Stat. 1317. 
^^ ,^ family occupying low-rent public housing: Provided 
further. 
That the mortgage may involve an existing dwelling or a family 
unit in an existing condominium project if assistance payments 
have been made on behalf of the previous owner of the dwelling 
or family unit with respect to a mortgage insured under subsection 
(j)(4): Provided 
further, 
That the mortgage may involve a 
dwelling unit in an existing project covered by a mortgage in-
Post, p. 498. 
sured under section 236 or in an existing project receiving the ben-
efits of financial assistance under section 101 of the Housing and 
;9 st^^^-45\- 
Urban Development Act of 1965; 
"(B) where it is to cover a one-family unit in a condominium 
project, have a principal obligation not exceeding $15,000 ($17,-
500 in any geographical area wdiere the Secretary authorizes an 
increase on the basis of a finding that cost levels so require), except 
that with respect to any family wuth five or more persons the 
foregoing limits shall be $17,500 and $20,000, respectively; and 
"(C) l
:
>
e executed by a mortgagor who shall have paid (i) in 
the case of any family whose income is not in excess of 135 per 
centum of the maximum income limits which can be established 
12 use 1701s. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
481 
in the area, pursuant to the limitations prescribed in sections 2(2) 
and 15(7) (b) (ii) of the United States Housing Act of 1987, for 
Jl^ll%'^''' 
initial occupancy in public housing dwellings, at least $200, or 
42 use 1402, 
(ii) in the case of any other family, at least 3 per centum (or such 1415. 
larger amount as the Secretary may require) of the Secretary's 
estimate of the cost of acquisition, which amount (in cash or its 
equivalent) in either instance may be applied for the payment 
of settlement costs and initial payments for taxes, hazard insur-
ance, mortgage insurance premiums, and other prepaid expenses, 
"(j) (1) In addition to mortgages insured under the provisions of 
subsection (i), the Secretary is authorized, upon application by the 
mortgagee, to insure a mortgage (including advances under such 
mortgage during rehabilitation) which is executed by a nonprofit orga-
nization or public body or agency to finance the purchase of housing, 
and the rehabilitation of such housing if it is deteriorating or sub-
standard, for subsequent resale to lower income home purchasers who 
meet the eligibility requirements for assistance payments prescribed by 
the Secretary under subsection (b). Commitments for the insurance of 
such mortgages may be issued by the Secretary prior to the date of 
their execution or disbursement thereon, upon such terms and condi-
tions as the Secretary may prescribe. 
"(2) To be eligible for insurance under paragraph (1) of this sub-
section, a mortgage shall— 
" (A) be executed by a private nonprofit organization or public 
body or agency, approved by the Secretary, for the purpose of 
financing the purchase (with the intention of subsequent resale), 
and rehabilitation where the housing involved is deteriorating or 
substandard, of property comprising one or more tracts or par-
cels, whether or not contiguous, consisting of (i) four or more 
single-family dw^ellings of detached, semidetached, or row con-
struction, or (ii) four or more one-family units in a structure or 
structures for w^liich a plan of family unit ownership approved 
by the Secretary is established; except that in a case not involving 
the rehabilitation of deteriorating or substandard housing the 
property purchased may consist of one or more such dwellings 
or units ; 
"(B) be in a principal amount not exceeding the appraised 
value of the property at the time of its purchase under the mort-
gage plus the estimated cost of any rehabilitation; 
'•(C) bear interest (exclusive of premium charges for insurance 
and service charge, if any) at not to exceed such per centum per 
annum (not in excess of 6 per centum), on the amount of the 
princij)al obligation outstanding at any time, as the Secretary 
finds necessary to meet the mortgage market ; 
"(D) provide for complete amortization (subject to para-
graph (4)(E)) by periodic payments within such term as the 
Secretary may prescribe; and 
"(E) provide for the release of individual single-family dwell-
ings from the lien of the mortgage upon their sale in accordance 
wnth paragraph (4). 
"(3) No mortgage shall be insured under paragraph (1) unless the 
mortgagor shall have demonstrated to the satisfaction of the Secre-
tary that (A) the property involved is located in a neighborhood 
which is sufficiently stable and contains sufficient public facilities and 
amenities to support long-term values, or (B) the purchase or reha-
bilitation of such property plus the mortgagor's related activities and 
the activities of other owners of housing in the neighborhood, together 
with actions to be taken by public authorities, will be of such scope 
482 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
and quality as to give reasonable promise that a stable enviroiinieut 
will be created in the neighborhood. 
"(4) (A) No mortgage shall be insured under paragraph (1) un-
less the mortgagor enters into an agreement, satisfactory to the Secre-
tary, that it will oft'er to sell the dwellings involved, after purchase 
and upon completion of any rehabilitation, to lower income individ-
uals or families meeting the eligibility requirements established by 
the Secretary under sul)section (b). 
"(B) The Secretary is authorized to insure under this paragraph 
moi"tgages executed to tinance tlie sale of individual dwellings to lower 
income purchasers as provided in subparagraph (A). Any such mort-
gage shall— 
"(i) be in a principal amount not in excess of that ix>rtion of 
the unpaid principal balance of the blanket mortgage covering 
the property which is allocable to the individual dwelling 
involved; 
•'(ii) l)ear interest at the same rate as tlie blanket mortgage; 
and 
"(iii) provide for complete amortization by periodic ]>ayments 
within a term equal to the remaining term (determinecl without 
regard to subparagraph (E)) of sucli blanket mortgage. 
''(C) The price for which any individual dwelling is sold under this 
paragraph shall be in an amount eqvuil to that portion of the unpaid 
principal balance of the blanket mortgage covering the property which 
is allocable to the dwelling plus such additional amount, not less than 
$200 (which may be applied in whole or in part toward closing costs 
and may be paid in cash or its equivalent), as the Secretary may 
determine to be reasonable. 
"'(D) Upon the sale under this paragraph of any individual dwell-
ing, such dwelling shall be released from the lien of the blanket mort-
gage. I'ntil all of the individual dwellings in the property covered by 
the blanket mortgage have been sold, the mortgagor shall hold and 
operate the dwellings remaining unsold at any given time, in such 
manner and under such terms as the Secretary may prescribe, as 
though they constituted rental units. 
'"(E) Upon the sale under this paragraph of all the individual 
dwellings in the property covered by the blanket mortgage and the 
release of all individual dwellings from the lien of the blanket mort-
gage, the insurance of the blanket mortgage shall be terminated and 
no adjusted i)remium charge shall be charged by the Secretary upon 
such termination. 
"(5) Where the Secretary has approved a plan of family unit own-
ership the terms 'single-family dwelling-, 'single-family dwellings', 
'individual dwelling', and 'individual dwellings" shall mean a family 
unit or family units, together with the undivided interest (or inter-
ests) in the common areas and facilities. 
"(6) For purposes of this subsection, the terms 'single-family 
dwelling' and 'single-family dwellings' (except for purj>oses of para-
graph (5)) shall include a two-family dwelling which has been 
approved by the Secretary if one of the units is to be occupied by the 
owner. 
"(7) In addition to the assistance payments authorized under sub-
section (b), the Secretary may make such payments to a mortgagee on 
behalf of a nonprofit organization or public body or agency which is a 
mortgagor under the provisions of paragraph (1) in an amount not 
exceeding the difference between the monthly payment for principal, 
interest, and mortgage insurance premium which the mortgagor is 
obligated to pay under the mortgage and the monthly payment for 
Definitions. 
82 STAT. ] • 
PUBLIC LAW 90-448-AUG. 1, 1968 
483 
principal and interest such mortgagor would be obligated to pay if 
tlie mortgage were to bear interest at the rate of 1 per centum per 
annum. 
"(8) A mortgage covering property which is not deteriorating or 
substandard may be insured under this subsection only if it is situated 
in an area in which mortgages may be insured under section 221(h). 
^"^'•«-
'"(k) The Secretary shall from time to time allocate and transfer 
to the Secretary of Agriculture, for use (in accordance with the terms 
and conditions of this section) in rural areas and small towns, a rea-
sonable portion of the total authority to contract to make assistance 
payments as approved in appropriation Acts under subsection (h) (1). 
"(l) In determining the income of any person for the purposes of 
this section, there shall be deducted an amount equal to $800 for each 
minor person who is a member of the immediate family of such person 
and living with such family, and the earnings of any such minor person 
shall not be included in the income of such person or his family." 
(b)(1) Section 221(d)(2)(A) of the National Housing Act is 
75 stat. i49; 
1 1 
80 Stat. 1268. 
amended— 
.
.
. 
1
2 use 1715^. 
(A) by striking out "not to exceed (i) $12,500" and inserting in 
lieu thereof "not to exceed (i) $15,000 (or $17,500, if the mort-
gagor's family includes five or more persons)"'; and 
(B) by striking out "not to exceed $15,0(M)" in the second 
proviso and inserting in lieu thereof "not to exceed $17,500 (or 
$20,000 if the mortgagor's family includes five or more persons)". 
(2) Section 221(d) (2) (B) of such Act is amended— 
(A) by inserting ", in cash or its equivalent" before the semi-
colon after "acquisition cost" in the first proviso; and 
(B) by inserting before the semicolon after "appraised value" 
at the end thereof the following: ": Provided further, That, if 
the mortgagor is the owner and an occupant of the property, such 
mortgagor shall to the maximum extent feasible be given the op-
portunity to contribute the value of his labor as equity in such 
dwelling". 
(c) (1) Section 221(h) (5) (B) (ii) of such Act is amended to read 
8° ^tat. 1269. 
as follows: 
"(ii) bear interest at the same rate as the principal mort-
gage or such lower rate, not less than 1 per centum, as the 
Secretary may prescribe if in his judgment the purchaser's 
income is sufficiently low to justify the lower rate, and pro-
vide for complete amortization within a term equal to the re-
maining term (determined without regard to subparagra})!! 
(E)) of such principal mortgage: Provided, That, if the 
rate of interest mitially prescribed is less than the rate borne 
by the principal mortgage and the purchaser's income (as 
determined on the basis of periodic review) subsequently 
rises, the rate of interest so prescribed shall be increased (but 
not above the rate borne by such principal mortgage), under 
regulations of the Secretary, to the extent appropriate to re-
flect the increase in such income, and the mortgage shall so 
provide." 
"(2) Section 221(h)(4) of such Act is amended by striking out 
"$20,000,000" and inserting in lieu thereof "$50,000,000". 
(3) Section 221(h) of such Act is further amended by adding at 
the end thereof the following new paragraph: 
" (6) In addition to the mortgages that may be insured under para-
graphs (1) and (5), the Secretary is authorized to insure under this 
subsection at any time within one year after the date of the enactment 
of this paragraph, upon such terms and conditions as he may prescribe, 
(484 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
inortgages which are executed by individuals or families that meet the 
income criteria prescribed in paragraph (5) (A) and are executed for 
the purj:)ose of financing the rehabilitation or improvement of single-
family dwellings of detached, semidetached, or row construction that 
are owned and occupied in each instance by a mortgagor who has 
purchased the dwelling from a nonprofit organization of the tyj>e 
described in this subsection. To be eligible for such insurance, a mort-
gage shall— 
" (A) be in a principal amount not exceeding the lesser of $15,-
000 or the sum of the estimated cost of repair and rehabilitation 
and the Secretary's estimate of the value of the property before 
repair and rehabilitation, except that in no case involving re-
financing shall such mortgage exceed such estimated cost of repair 
and rehabilitation and the amount (as determined by the Secre-
tary) required to refinance existing indebtedness secured by the 
property; 
"(B) bear interest (exclusive of premium charges for insurance 
and service charge, if any) at 3 per centum per annum or such 
lower rate, not less than 1 per centum, as the Secretary may 
prescribe if in his judgment the mortgagor's income is sufficiently 
low to justify the lower rate: Provided^ That, if the rate of interest 
initially prescribed is less than 3 per centum per annum and the 
mortgagor's income (as determined on the basis of periodic 
review) subsequently rises, the rate shall be increased (but not 
above 3 per centum), under regulations of the Secretary, to the 
extent appropriate to reflect the increase in such income, and the 
mortgage shall so provide; 
"(C) involve a mortgagor that shall have paid on account of 
the property at the time of the rehabilitation such amount (which 
shall not be less than $200 in cash or its equivalent, but which may 
be applied in whole or in part toward closing costs) as the Secre-
tary may determine to be reasonable and appropriate under the 
circumstances; and 
"(D) contain a provision that, if the low-income mortgagor 
does not continue to occupy the property, the interest rate shall 
increase to the highest rate permissible under this section and the 
regulations of the Secretary effective at the time the commitment 
was issued for insurance of the mortgage; except that the 
increase in interest rate shall not be applicable if the property is 
sold and the purchaser is (i) a nonprofit organization which has 
been engaged in purchasing and rehabilitating deteriorating and 
substandard housing with financing under a mortgage insured 
under paragraph (1) of this subsection, (ii) a public housing 
agency having jurisdiction under the United States Housing Act 
42 u'sc f ^^0 
^^^"^ ^^®^ ^ 
^^^^ where the dwelling is located, or (iii) a low-
income purchaser approved for the purposes of this paragraph 
by the Secretary." 
(4) The purchase of any individual dwelling, sold by a nonprofit 
organization pursuant to the provisions of section 221(h) (5) of the 
80 Stat. 1
2
6
9
^
. 
National Housing Act after the date of enactment of this section, may 
be financed with a mortgage insured under the provisions of section 
Ante, p. 477. 
235(j) (4) of such Act, but such mortgage shall bear interest at the 
rate provided in section 235 (j )(2)(C) of such Act. 
53 Stat. 807; 
(,^) Sectioii 212(a) of such Act is amended by inserting "or section 
^ iruscV7i5c. 
235(j)(l)" after "subsection (h)(1)" each place it appears. 
Counseling 
(e) The Secretary of Housing and Urban Development is author-
° 
" 
ized to provide, or contract w^ith public or private organizations to 
provide, such budget, debt management, and related counseling 
services. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
485 
Ante, 
p. 477. 
services to mortgagors whose mortgages are insured under section 
235(i) or 235(j) (4) of the National Housing Act as he determines to 
be necessary to assist such mortgagors in meeting the responsibilities 
of homeownership. There are authorized to be appropriated such sums 
Appropriation. 
as may be necessary to carry out the provisions of this subsection. 
CREDIT ASSISTANCE 
SEC. 102. (a) Title I I of the National Housing Act is amended by 
1
2 use 1707-
adding after section 236 (as added by section 201 of this Act) the fol- ^^^^^ 
lowing new section: 
"SPECIAL MORTGAGE INSURANCE ASSISTANCE 
"SEC. 237. (a) The purpose of this section is to help provide ade-
quate housing for families of low and moderate income, including those 
who, for reasons of credit history, irregular income patterns caused by 
seasonal employment, or other factors, are unable to meet tlie credit 
requirements of the Secretary for the purchase of a single-family 
home financed by a mortgage insured under section 203, 220, 221, 234, 
or 235(j) (4), but who, through the incentive of homeownership and 
12 use 17^09, 
counseling assistance, appear to be able to achieve homeownership. 
msy- Ante,'p. 
"(b) The Secretary is authorized upon application by the mort- ^77. 
gagee to insure under this section any mortgage meeting the require-
ments of this section. 
"(c) To be eligible for insurance under this section, a mortgage 
shall— 
"(1) meet the requirements of section 203 (except subsection 
(m)), 220(d) (3) (A), .221(d) (2), 221(h) (5), 221 (i), 234(c), or 
235(j) (4), except as such requirements are modified by this 
section; 
"(2) involve a principal obligation (including such initial serv-
ice charges, and such appraisal, inspection, and other fees, as the 
Secretary shall approve) in an amount not to exceed $15,000: 
Provided, 
That the Secretary may increase the amount to not 
exceed $17,500 in any geographical area where he finds that cost 
levels so require: Provided further, That no mortgage meeting 
the requirements of section 203(h) or 203(i) shall be eligible for 
insurance under this section if its principal obligation is in excess 
of the maximum limits prescribed in such section; 
"(3) be executed by a mortgagor who the Secretary has deter-
mined, after a full and complete study of the case, would not be 
an acceptable credit risk for mortgage insurance purposes under 
sections 203, 220, 221, 234, or 235(j) (4), because of his credit 
standing, debt obligations, total annual income, or income char-
acteristics, but who the Secretary is satisfied would be a reason-
ably satisfactory credit risk, consistent with the objectives stated 
in subsection (a), if he were to receive budget, debt management, 
and related counseling: Provided, That, in determining whether 
the mortgagor is a reasonably satisfactory credit risk, the Secre-
tary shall review the credit history of the applicant giving special 
consideration to those delinquent accounts which were ultimately 
paid by the applicant and to extenuating factors which may have 
caused credit accounts of the applicant to become delinquent; and 
the Secretary shall also give special consideration to income char-
acteristics of applicants whose total income over the two yeai's 
prior to their applications has remained at levels of eligibility 
(as required under paragraph (4) of this subsection), but who, 
486 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
Application 
preferences. 
Counseling 
services. 
Appropriation. 
68 Stat. 607. 
12 u s e 1715q. 
because of the character of their seasonal employment or for other 
reasons, have not maintained continuous employment under one 
employer during that time; and 
"(4) require monthly payments which, in combination with 
local real estate taxes on the property involved, do not exceed 25 
per centum of the applicant's income, based on his average 
monthly income during the year prior to his application or the 
average monthly income during the three years prior to his 
application, whichever is higher. 
"(d) The Secretary shall give preference in approving mortgage 
insurance applications under this section to families living in public 
housing units, especially those families required to leave public hous-
ing because their incomes have risen beyond the maximum prescribed 
income limits, and families eligible for residence in public housing 
who have been displaced from federally assisted urban renewal areas. 
"(e) The Secretary is authorized to provide, or contract with pub-
lic or private organizations to provide, such budget, debt manage-
ment, and rehited counseling services to mortgagors whose mortgages 
are insured under this section as he determines to be necessary to meet 
the objectives of this section. The Secretary may also provide such 
counseling to otherwise eligible families who lack sufficient funds to 
supply a down payment to help them to save an amount necessary for 
that purpose. 
"(f) The aggregate principal balance of all mortgages insured 
under this section and outstanding at one time shall not exceed 
$200,000,000. 
"(g) There are authorized to be appropriated such sums as may be 
necessary to carry out the provisions or subsection (e) of this section." 
(b) Section 226 of the National Housing Act is amended by in-
serting "235(i), 237," after "234,". 
68 Stat. 605. 
12 u s e 1715n. 
53 Stat. 807. 
12 u s e 1715c. 
Repeal. 
80 Stat. 1266. 
12 u s e 1709. 
12 u s e 1707-
1715y. 
RELAXATION 
OF 
MORTGAGE 
INSURANCE 
REQUIREMENTS 
IN 
CERTAIN 
URBAN NEIGHBORHOODS 
SEC. 103. (a) Section 223 of the National Housing Act is amended 
by adding at the end thereof a new subsection as follows: 
" (e) Notwithstanding any of the provisions of this title except sec-
tion 212, and without regard to limitations upon eligibility contained 
in any section of this title, the Secretary is authorized, upon applica-
tion by the mortgagee, to insure under any section of this title a 
mortgage executed in connection with the repair, rehabilitation, con-
struction, or purchase of property located in an older, declining urban 
area in which the conditions are such that one or more of the eligibility 
requirements applicable to the section of this title under which insur-
ance is sought could not be met, if the Secretary finds that (1) the area 
is reasonably viable, giving consideration to the need for providing 
adequate housing for families of low and moderate income in such 
area, and (2) the property is an acceptable risk in view of such con-
sideration. The insurance of a mortgage pursuant to this subsection 
shall be the obligation of the Special Risk Insurance Fund." 
(b) Section 203(1) of such Act is repealed. 
SPEX:;iAL. RISK INSURANCE FUND 
SEC. 104. (a) Title I I of the National Housing Act is amended by 
adding after section 237 (as added by section 102 of this Act) the fol-
lowing new section: 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
487 
u 
12 u s e 1713. 
P A Y M E N T OF INSURANCE—SPECIAL RISK INSURANCE F U N D 
"SEC. 238. (a) (1) Any mortgagee under a mortgage insured under 
section 235(i), 235(j) (4), or 237 shall be entitled to receive the bene- ^g^"'*' ^^- ^^^' 
fits of the insurance as provided in section 204(a) with respect to 
12 use 1710. 
mortgages insured. under section 203. The provisions of subsections 
^2 use 1709. 
(b), (c), (d), (g), (j), and (k) of section 204 shall be applicable to 
mortgages insurm under section 235 (i), 235 (j) (4), or 237, except that 
all references therein to the 'Mutual Mortgage Insurance Fund' shall 
be construed to refer to the 'Special Risk Insurance Fund', and all 
references therein to section 203 shall be construed to refer to section 
235 (i), 235 (j) (4), or 237, as may be appropriate. 
"(2) Any mortgagee under a mortgage insured under section 235 
(j) (1) or 236 shall be entitled to receive the benefits of insurance as 
^°®'' P- '^^^• 
provided in section 207(g) with respect to mortgages insured under 
section 207. The provisions of subsections (d), (e), (h), (i), (j), (k), 
52 stat. 9 
(1), and (n) of section 207 shall be applicable to mortgages insured 
under section 235 (j) (1) or 236, except that all references therein to the 
'General Insurance Fund' shall be construed to refer to the 'Special 
Risk Insurance Fund' and the premium charge provided in section 
207(d) shall be payable only in cash or debentures of the Special Risk 
Insurance Fund. 
" (3) In lieu of the amount of insurance benefits computed pursuant 
to paragraph (1) or (2) of this subsection the Secretary, in his discre-
tion and in accordance with such regulations as he may prescribe, may 
(with respect to any mortgage loan acquired by him) compute and 
pay insurance benefits to the mortgagee in a total amount equal to the 
unpaid principal balance of the loan plus any accrued interest and 
any advances approved by the Secretary and made previously by the 
mortgagee under the provisions of the mortgage. 
"(b) There is hereby created a Special Risk Insurance Fund (here-
inafter referred to as the 'fund') which shall be used by the Secretary 
as a revolving fund for carrying out the mortgage insurance obliga-
tions of sections 223(e), 233(a) (2), 235, 236, and 237, and the Secre-
tary is hereby authorized to advance to the fund the sum of $5,000,000 
from the General Insurance Fund established pursuant to the provi-
sions of section 519. Such advance shall be repayable at such times and 
79 stat. 471. 
a;t such rates of interest as the Secretary deems appropriate. Premium 
" """ "" 
charges, adjusted premium charges, inspection and other fees, service 
charges, and any other income received by the Secretary under sec-
tions 223(e), 233(a) (2), 235, 236, and 237, together with all earnings 
on the assets of the fund, shall be credited to the fund. All payments 
made pursuant to claims of mortgagees with respect to mortgages 
insured under sections 233(a) (2), 235, 236, and 237 or pursuant to sec-
tion 223(e), cash adjustments, the principal of and interest paid on 
debentures which are the obligation of the fund, expenses incurred in 
connection with or as a consequence of the acquisition and disposal of 
property acquired under such sections, and all administrative expenses 
in connection with the mortgage insurance operations under such sec-
tions shall be paid out of the fund. There is authorized to be appro-
priated such sums as may be needed from time to time to cover losses 
sustained by the fund in carrying out the mortgage insurance obliga-
tions of sections 223(e), 233(a) (2), 235, 236, and 237. Moneys in the 
fund not needed for current operations of the fund shall be deposited 
with the Treasurer of the United States to the credit of the fund or 
invested in bonds or other obligations of, or in bonds or other obliga-
tions guaranteed by, the United States. The Secretary, with the 
approval of the Secretary of the Treasury, may purchase in the open 
Ante, 
p. 486; 
Post, 
p. 496. 
12 use 1735c. 
-600 O - 69 - 34 
12 u s e 1715^. 
488 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
market debei-itures which are the obligation of the fund. Such pur-
chases shall be made at a price which will provide an investment yield 
of not less than the yield obtained from other investments authorized 
by this section. Debentures so purchased shall be canceled and not 
reissued." 
68 Stat. 606. 
(b) Seotiou 224 of such Act is amended by striking out "or section 
1
2 use 17150. 
233" and inserting in lieu thereof "section 233, or section 238-'. 
1^ us°c ^^^ 
^'^^ Section 519 (e) of such Act is amended by inserting after "section 
^^''' 
213(k)" the following: ", or the provisions of sections 223(e), 233 (a) 
(2), 235, 236 and 237". 
CONDOMINIUM AND CCX)PERATIVE OWNERSHIP FOR LOW AND MODERATE 
INCOME FAMILIES 
68 stait. 599^^ 
SEC. 105. (a) Sectiou 221 of the National Housing Act is amended 
by adding at the end thereof two new subsections as follows: 
"(i) (1) The Secretary is authorized, with respect to any project 
involving a mortgage insured under subsection (d) (3) which beai-s 
interest at the below-market interest rate prescribed in the proviso 
of subsection (d) (5), to permit a conversion of the ownership of such 
project to a plan of family unit ownership. Under such plan, each 
family unit shall be eligible for individual ownership and provision 
shall be included for the sale of the family units, together with an 
undivided interest in the common areas and facilities which serve the 
project, to low or moderate income purchasers. The Secretary shall 
obtain such agreements as he determines to be necessary to assure con-
tinued maintenance of the common areas and facilities. Upon such 
sale, the family unit and the undivided interest in the common areas 
shall be released from the lien of the project mortgage. 
" (2) (A) The Secretary is authorized, upon application by the mort-
gagee, to insure under this subsection mortgages financing the pur-
chase of individual family units under the plan prescribed in para-
graph (1). Commitments may be issued by the Secretary for the 
insurance of such mortgages prior to the date of their execution or 
disbursement thereon, upon such terms and conditions as the Secretary 
may prescribe. To be eligible for such insurance, the mortgage shall— 
"(i) be executed by a mortgagor having an income within the 
limits prescribed by the Secretary for occupants of projects 
financed with a mortgage insured under subsection (d) (3) which 
bears interest at the below-market rate prescribed in the proviso 
of subsection (d) (5); 
" (ii) involve a principal obligation (including such initial serv-
ice charges, and such appraisal, inspection, and other fees, as the 
Secretary shall approve) in an amount not to exceed the Secre-
tary's estimate of the appraised value of the family unit, including 
the mortgagor's interest in the common areas and facilities, as of 
the date the mortgage is accepted for insurance; 
" (iii) bear interest at a rate determined by the Secretary (which 
may vary in accordance with the regulations of the Secretary 
promulgated pursuant to the last sentence of paragraph (4) of 
this subsection) but not less than the below-market rate in effect 
under the proviso of subsection (d) (5) at the date of the commit-
ment for insurance; and 
"(iv) provide for complete amortization by periodic payments 
within such term as the Secretary may prescribe, but not to exceed 
the lesser of forty years from the beginning of amortization of the 
mortgage or three-quarters of the Secretary's estimate of the re-
maining economic life of the building improvements. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
489 
"(B) The price for which the individual family unit is sold to the 
low or moderate income purchaser shall not exceed the appraised 
value of the property, as determined under subparagraph (A)(ii), 
except that the purchaser shall be required to pay on account of the 
l^roperty at the time of purchase at least such amount, in cash or its 
equivalent (which shall be not less than 3 per centum of such price, 
but which may be applied in whole or in part toward closing costs), 
as the Secretary may determine to be reasonable and appropriate. 
"(3) Upon the sale of all of the family units covered by the project 
mortgage, and the release of all of the family units (including the 
undivided interest allocable to each unit in the common areas and facil-
ities) from the lien of the project mortgage, the insurance of the proj-
ect mortgage shall be terminated and no adjusted premium charge 
shall be collected by the Secretary upon such termination. 
"(4) Any mortgage covering an individual family unit insured 
interest rate, 
under this subsection shall contain a provision that, if the original ^"'''•^^^^• 
mortgagor does not continue to occupy the property, the interest rate 
sliall increase to the highest rate permissible under this section and the 
regulations of the Secretary effective at the time the commitment was 
issued for the insurance of the project mortgage; except that the 
I'equirement for an increase in interest rate shall not be applicable if 
the property is sold and the purchaser is (i) a nonprofit purchaser 
approved by the Secretary, or (ii) a low or moderate income purchaser 
A\'ho has an income within the limits prescribed by the Secretary for 
occupants of projects financed with a mortgage insured under sub-
section (d) (3) which bears interest at the beloAv-market rate pre-
scribed in the proviso of subsection (d) (5). The mortgage shall also 
contain a provision that, if the Secretary determines that the annual 
income of the original mortgagor (or a purchaser described in clause 
(ii) of the preceding sentence) has increased to an amount enabling 
payment of a greater rate of interest, the interest rate of the individual 
mortgage may be increased up to the highest rate permissible under 
the regulations of the Secretary for mortgages insured under this sec-
tion, effective at the time the commitment was issued for the insurance 
of the mortgage. 
" (5) For the purpose of this subsection— 
"(i) the term 'mortgage', when used in relation to a mortgage 
"Mortgage." 
insured under paragraph (2) of this subsection, includes a first 
mortgage given to secure the unpaid purchase price of a fee inter-
est in, or a long-term lease-hold interest in, a one-family unit in 
a multifamily project and an undivided interest in the common 
areas and facilities which serve the project; and 
"(ii) the term 'common areas and facilities' includes the land 
"common areas 
and such commercial, community, and other facilities as are ^"'^ facilities." 
approved by the Secretary. 
"<'])(!) The Secretary is authorized, with respect to any rental ^ ^""^^ff'^"^ 
project involving a mortgage insured under subsection (d) (3) which 
bears interest at the below-market interest rate prescribed in the pro-
viso of subsection (d) (5), to permit a conversion of the ownership of 
such project to a cooperative approved by the Secretary. Membership 
in such cooperative shall be made available only to those families hav-
ing an income within the limits prescribed by the Secretary for 
occupants of projects financed with a mortgage insured under subsec-
tion (d) (3) which bears interest at such below-market rate: Provided, 
That families residing in the rental project at the time of its conver-
sion to a cooperative who do not meet such income limits may be 
permitted to become members in the cooperative under such special 
terms and conditions as the Secretary may prescribe. 
ownership, con-
version. 
490 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
Cooperative 
"(2) The Secretary is authorized, upon application by the mort-
Turlncf*^' " 
g^g66, to insure under this subsection cooperative mortgages financing 
the purchase of projects meeting the requirements of paragraph (1). 
Commitments may be issued by the Secretary for the insurance of such 
mortgages prior to the date of their execution or disbursement thereon, 
upon such terms and conditions as the Secretary may prescribe. To be 
eligible for such insurance, the mortgage shall— 
"(i) involve a principal obligation (including such initial serv-
ice charges and appraisal, inspection, and other fees as the Secre-
tary shall approve) in an amount not exceeding the appraised 
value of the property for continued use as a cooperative, which 
value shall be based uix>n a mortgage amount on which the debt 
service can be met from the income of the pro|>erty when operated 
on a nonprofit basis, after the payment of all operating expenses, 
taxes, and required reserves; 
'*(ii) bear interest at the below-market rate prescribed in the 
proviso of subsection (d) (5); and 
"(iii) provide for complete amortization within such term as 
the Secretary may prescribe." 
68 Stat. 599.^ 
^b) Sectiou 221 (g) (1) of such Act is amended by striking out "or 
paragraph (5) of subsection (h) of this section" and inserting in lieu 
thereof "paragraph (5) of subsection (h) of this section, or paragraph 
(2) of subsection (i) of this section". 
(c) Section 221(g) (2) of such Act is amended by striking out "or 
paragraph (1) of subsection (h)" and inserting in lieu thereof 
"paragraph (1) of subsection (h) of this section, or paragraph (2) of 
subsection (j).". 
(d) Section 221(f) of such Act is amended by inserting after "sub-
section (h)" in the third sentence of the second paragraph the 
following: ", (i), or (j)". 
ASSISTANCE TO NONPROFIT 
SPONSORS OF LOW 
AND MODERATE 
INCOME 
HOUSING 
SEC. 106. (a) The Secretary of Housing and Urban Development is 
authorized to provide, or contract with public or private organizations 
to provide, information, advice, and technical assistance with respect 
to the construction, rehabilitation, and operation by nonprofit orga-
nizations of housing for low^ or moderate income families. Assistance 
by the Secretary may include— 
(1) the assembly, correlation, publication, and dissemination of 
information with respect to the construction, rehabilitation, and 
operation of low and moderate income housing, and 
(2) the provision of advice and technical assistance with respect 
to the construction, rehabilitation, and operation of low and 
moderate income housing. 
(b)(1) The Secretary is authorized to make loans to nonprofit 
organizations for the necessary expenses, prior to construction, in 
planning, and obtaining financing for, the rehabilitation or construc-
tion of housing for low or moderate income families under any fed-
erally assisted program. Such loans shall be made without interest and 
shall not exceed 80 per centum of the reasonable costs expected to be 
incurred in planning, and in obtaining financing for, such housing prior 
to the availability of financing, including, but not limited to, prelimi-
nary surveys and analyses of market needs, preliminary site engineer-
ing and architectual fees, site acquisition, application and mortgage 
commitment fees, and construction loan fees and discounts. The Secre-
tary shall require repayment of loans made under this subsection, under 
Loans. 
82 STAT. ] 
PUBLIC LAW 90-44S-A\]G. I, 196ff 
491 
such terms and conditions as lie may require, upon completion of the 
project or sooner, and may cancel any part or all of a loan if he deter-
mines that it cannot be recovered from the proceeds of any permanent 
loan made to finance the rehabilitation or construction of the housing. 
(2) The Secretary shall determine prior to the making of any loan 
that the nonprofit organization meets such requirements with respect 
to financial responsibility and stability jvs he may prescribe. 
(3) There are authorized to be appropriated for the purposes of this 
Appropriation, 
subsection not to exceed $7,500,000 for the fiscal year ending June 80, 
1969, and not to exceed $10,000,000 for the fiscal year ending June 30, 
1970. Any amounts so appropriated shall remain available until 
expended, and any amounts authorized for any fiscal year under this 
paragraph but not appropriated may be appropriated for any suc-
ceeding fiscal year. 
(4) All funds appropriated for the purposes of this subsection shall 
LOW and Mod-
l>e deposited in a fund which shall be known as the IJOW and Modemte sponso^'^Fund. 
Income Sponsor Fund, and which shall be available without fiscal 
year limitation and be administered by the Secretary as a revolving 
fund for carrying out the purfjoses of this subsection. Sums received 
in repayment of loans made under this subsection shall be deposited 
in such fund. 
NATIONAL IIOMEOWNERSIIIP 
FOUNDATION 
S/r^x^ 
SEC. 107. (a)(1) There is hereby created a body corporate to be 
known as the "National Homeownei'ship Foundation" (hereinafter 
referred to as the ''Foundation") to carry out a continuing program of 
encouraging private and ]>ublic organizations at the national, com-
munity, and neighborhood levels to provide increased homeownership 
and housing oppoi-tunities in urban and rural areas for lower income 
families through such means as— 
(A) encoui'aging the investment in, and spcmsoring of, hous-
ing for lower income families; 
(B) encouraging the establisihment of programs of assistance 
and counseling to lower income families to enable them better to 
achieve and afford adequate housing; 
(C) providing a broad range of technical assistance through 
publications and advisory services to public and private orga-
nizations which are carrynig out, or are desirous of carrying out, 
programs to expand homeownership and housing opportunities 
for lower income families; and 
(D) providing grants and loans to public and private orga-
nizations carrying out homeownership and housing opportunity 
programs for lower income families to help cover some of the 
expenses of such programs. 
(2) The Foundation shall be deemed to be a corporation without 
members organized and established under the provisions of the Dis-
trict of C^olumbia Nonprofit Corporation Act, with all the rights, 
powers, and responsibilities thereof except as limited by this section looi 
and any amendments thereto. This section shall constitute the articles 
of incorporation and charter of the Foundation, which shall not be an 
ngency or instrumentality of the United States Government. The 
(^ongress expressly reserves the exclusive right to alter or amend this 
charter. The Foundation shall have succession until dissolved by Act 
of Congress. The Foundation shall maintain its principal office in the 
District of Columbia. 
(3) No part of the net earnings of the Foundation shall inure to the 
Administration 
benefit of any private person, and no substantial part of its activities and^educati^o^nai 
shall be devoted to attempting to influence legislation. The Founda- foundation. 
76 Stat. 265. 
D.C. Code 29-
492 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
Contract au-
thority. 
Acceptance 
of grants, etc. 
Board of 
Directors. 
Terms of 
office. 
Compensation, 
travel expenses. 
80 Stat. 499. 
Executive 
Director. 
tion shall not participjDte or intervene in any political campaign on 
behalf of any candidate for public office. The Foundation shall be 
operated and administered at all times as a charitable and educational 
foundation. 
(4) No employee or officer of the Foundation shall receive compen-
sation in excess of that received by or hereafter prescribed by law for 
heads of executive departments. 
(5) The Foundation shall make maximum use of existing public and 
private agencies and programs, and in carrying out its functions the 
Foundation is authorized to contract with individuals, private corpo-
rations, organizations, and associations, and with agencies of the Fed-
eral, State, and local governments. 
(6) The Foundation is authorized to receive donations and grants 
from individuals and from public and private organizations, founda-
tions, and agencies. 
(7) The Foundation may use only donated funds, or funds derived 
from payment of interest on loans made by it, for the principal and 
interest payments on any borrowings. 
(b) (1) The Foundation shall have a Board of Directors consisting 
of eighteen members, fifteen of whom shall be appointed by the Presi-
dent of the United States, with the advice and consent of the Senate. 
The other three members shall be, ex officio, the Secretary of Housing 
and Urban Development, the Secretary of Agriculture, and the Direc-
tor of the Office of Economic Opportunity. The President shall appoint 
one of the fifteen appointed members to serve as Chairman of the Board 
during his term of office as a member. 
(2) Within thirty days after the date of enactment of this Act, 
the President shall appoint the fifteen appointed members of the 
Board. Not more than five of such members shall, at the time of their 
appointment, be serving full time as officers or employees of the 
Federal Government, or as officers or employees of any State or local 
government. Each appointed member of the Board shall hold office 
for a term of three years, except that (A) any member appointed to 
fill a vacancy prior to the expiration of the term for which his 
predecessor was appointed shall be appointed for the remainder of 
such term, and (B) the terms of the members first taking office shall 
expire, as designated by the President at the time of appointment, 
five at the end of the first year, five at the end of the second year, 
and five at the end of the third year after the date of appointment. 
Members of the Board, however appointed, shall be eligible for 
reappointment, but at no time shall there be more than five members 
of the Board who at the time of their appointment or reappointment 
were full-time officers or employees of the Federal Government or 
of any State or local government. 
(3) Appointed members of the Board who are not employees of the 
Federal Government, while attending meetings or conferences of the 
Board or otherwise serving on business of the Board, shall be entitled 
to receive compensation at rates fixed by the President, but not exceed-
ing $100 per day, including travel time, and while so serving away 
from their homes or regular places of business they may be allowed 
travel expenses, including per diem in lieu of subsistence, as author-
ized by section 5703 of title 5, United States Code, for persons in the 
Government service employed intermittently. 
(4) The Board shall appoint an Executive Director of the Founda-
tion. The Executive Director shall be the chief executive officer of 
tlie Foundation and shall serve at the pleasure of the Board, and 
all other executive officers and employees of the Board shall be respon-
sible to him. The Board shall also cause to be appointed a secretary, 
a treasurer, and such other officers as may be necessary to conduct 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
493 
properly the business of the Foundation, and shall provide for fillini^ 
vacancies in such offices, 
(5) The Board shall adopt bylaws for the Foundation which shall 
be made available for public inspection upon request. 
(c)(1) The Foundation shall assist public and private organiza- 
Functions. 
tions, at their request, in initiatin;[^, developing, and conducting pro-
grams to expand homeownership and housing opportunities for lower 
income families. To provide such assistance and to carry out the pui-
])oses of this section, the Foundation is authorized to— 
(A) carry out a continuing program of encouraging private 
and public organizations at the national, community, and neigli-
borhood levels in the establishment of such programs; 
(B) assist in the formation of organizations the purpose of 
which is the development and carrying out of such programs, 
including the establishment of local development funds for financ-
ing housing for lower income families through the pooling of 
moneys from private sources; 
{C) identify and arrange for the technical and managerial 
assistance and personnel needed for the successful operation of 
such programs by public and private organizations; 
(I)) assist public and private organizations in obtaining the 
mortgage financing, insurance, and other requirements or aids 
necessary for conducting programs of housing construction, 
rehabilitation, or improvement for lower income families; 
(E) arrange for, or provide on a limited basis, training for 
jjersons in the skills needed in administering programs of home-
ownership and housing opportunity for lower income families; 
(F) encourage research and innovation, and collect and make 
available such information as may be desirable to further the pur-
poses of this section, including but not limited to such activities 
as the sponsoring of seminars, conferences, and meetings and the 
establishment of a continuing informatioii 2)rogram to acquaint 
lower income families with the means they can use to improve the 
quality of their housing and the homeownership and housing 
opportunities available to them; 
(G) assist private and public organizations in establishing, in 
connection with their homeownership and housing opportunity 
programs for lower income families, counseling and similar activ-
ities designed to advise lower income families of the means avail-
able to better themselves economically through job training and 
manpower development programs; and 
(H) perform other similar services in order to further the pur-
poses of this section. 
(2) The Foundation may, if it deems it appropriate, charge a rea- 
f'ees. 
sonable fee for any assistance or service provided under this subsection. 
(d)(1) In order to assist public and private organizations which 
Grant and loan 
are carrying out homeownership and housing opportunity programs 
for lower income families to fill unmet needs, initiate exceptional 
programs, and experiment with new approaches and programs, the 
Foundation is authorized, subject to such terms and conditions as it 
may prescribe, to make grants and loans to such organizations to help 
defray the following expenses : 
(A) organizational and administrative expenses incurred in 
commencing the operation of a program, or in expanding an exist-
ing program, to the extent that the activities are related to provid-
ing homeownership and housing opportunities for lower income 
families; 
(B) necessary preconstruction costs incurred for architectural 
assistance, land options, application fees, and similar items; and 
authority. 
494 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
Report to 
President and 
Congress. 
Contents. 
GAO audit. 
Access to 
records, etc. 
(C) the cost of carrying- out programs providing counseling 
or similar services to lower income families for whom housing 
is being provided, in order to enable those families better to achieve 
and afford adequate housing, in such matters as home manage-
ment, budget management, and home maintenance. 
(2) In order to be eligible for a grant or loan under this sub-
section, the organization seeking such assistance shall demonstrate to 
the satisfaction of the Foundation that the funds requested are not 
otherwise available from Federal sources: Provided^ That a grant or 
loan under this subsection may be provided to help cover that portion 
of the cost of an eligible activity not covered by Federal funds. 
(3) The Foundation shall encourage cooperation between public 
and private organizations carrying out programs of homeownership 
and housing opportunity for lower income families and the neighbor-
hoods and communities affected by such programs. To help assure 
such cooperation and in order to coordinate, to the maximum extent 
feasible, any construction or rehabilitation activities with the de-
velopment goals of the neighborhood or community affected, no appli-
cation for a loan or grant under this subsection shall be considered 
unless such application has been submitted to the governing body of 
the community affected, or to such other entity of local government 
as may be designated by the governing body, for such recommenda-
tions as the local governing body or its designee may desire to make. 
Any recommendations so made shall be given careful consideration 
by the Foundation before taking final action on any such application. 
If, upon the expiration of thirty days after any such application has 
been submitted to such governing body or its designee, such body or 
designee fails to provide such recommendations, the application may 
be considered without the benefit of such recommendations. 
(e) The Foundation shall coordinate its activities and consult 
with the Department of Housing and Urban Development and other 
Federal departments and agencies engaged in providing homeowner-
ship and housing opportunities for lower income families. 
(f) (1) Not later than one hundred and twenty days after the close 
of each fiscal year, the Foundation shall prepare and submit to the 
President and to the Congress a full report of its activities during 
such year. Such report shall include an account of the Foundation's 
experiences with the efforts of private and public organizations to 
expand homeownership and housing opportunities for lower income 
families, together with such recommendations as it deems appropriate. 
(2) Whenever in its judgment the general unavailability of mort-
gage funds is sufficiently serious to deter the Foundation from carry-
ing out its objective of expanding homeownership and housing oppor-
tunities for lower income families, the Foundation shall, in its annual 
report or in a separate report to the President and the Congress, state 
its findings and make such recommendations for alternate means of 
financing housing for such families as it deems appropriate. 
(g)(1) The financial transactions of the Foundation shall be 
audited by the General Accounting Office in accordance with the prin-
ciples and procedures applicable to commercial corporate transactions 
and under such rules and regulations as may be presc^ribed by the 
Comptroller General of the ITnited States. The representatives of the 
General Accounting Office shall have access to all books, accounts, fi-
nancial records, reports, files, and all other papers, things, or property 
l>elonging to or in use by the Foundation and necessary to facilitate the 
audit, and they shall be afforded full facilities for verifying transac-
tions with the balances or securities held by depositories, fiscal agents, 
and custodians. The audit shall cover the fiscal yeiir corresponding to 
tliat of the United States Government. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
495 
(2) A report of each such audit shall be made by the Comptroller gresT°and p^eTi-
General to the Congress not later than January 15 following the close dent. 
of the fiscal year for which the audit was made. The report shall set 
forth the scope of the audit and shall include a statement of assets and 
liabilities, capital, and surplus or deficit; a statement of sources and 
application of funds; and such comments and information as may be 
deemed necessary to keep the (\mgress informed of the operations and 
financial condition of the Foundation, together with such recom-
mendations with respect thereto as the Comptroller General may deem 
advisable. The report shall also show specifically any program, ex-
penditure, or other financial transaction or undertaking, observed in 
the course of the audit, which, in the opinion of the Comptroller Gen-
eral, has been carried on or made without authority of law. A copy of 
each report shall be furnished to the President and to the Foundation 
at the time submitted to the Congress. 
(h) Funds of the Foundation shall be deposited, to the extent prac-
ticable, in accounts with financial institutions which are actively 
engaged in making loans or are otherwise carrying on activities in 
furtherance of homeownership and housing opportunities for lower 
income families. 
(i) Tliere is authorized to be appropriated to the Foundation not to 
Appropriation. 
exceed $10,000,000 to carry out the purposes of this section. Appropri- 
, 
ations made hereunder shall remain available until expended. 
I 
N E W 
TECHNOLOGIES 
I N 
T H E 
DEVFXOPMENT 
O r 
HOUSING 
FOR 
LOWER 
INCOME 
FAMILIES 
SEC. 108. (a) In order to encourage the use of new housing tech-
nologies in providing decent, safe, and sanitary housing for lower 
income families; to encourage large-scale experimentation in the use 
of such technologies; to provide a basis for comparison of such tech-
nologies with existing housing technologies in providing such hous-
ing; and to evaluate the effect of local housing codes and zoning 
regulations on the lar^e-scale use of new housing technologies in the 
provision of such housing, the Secretary of Housing and LTrban Devel-
opment (hereinafter referred to as the "Secretary") shall institute a 
program under which qualified organizations, public and private, will 
submit plans for the development of housing for lower income families, 
using new and advanced technologies, on Federal land which has been 
made available by the Secretary for the purposes of this section, or on 
other land where (1) local building regulations permit the construction 
of experimental housing, or (2) State or local law permits variances 
from building regulations in the construction of experimental housing 
for the purpose of testing and developing new building technologies. 
(b) The Secretary shall approve not more than five plans utilizing consideration7^^' 
new housing t^echnologies which are submitted to him pursuant to the 
" ' ^
"
^ ^ "^ 
program referred to in subsection (a) and which he determines are 
most promising in furtherance of the purposes of this section. In 
making such determination the Secretary shall consider— 
(1) the potential of the technology employed for producing 
housing for lower income families on a large scale at a moderate 
cost; 
(2) the extent to which the plan envisages environmental 
quality; 
(3) the possibility of mass production of the technology; and 
(4) the financial soundness of the organization submitting the 
plan, and the ability of such organization, alone or in combination 
with other organizations, to produce at least one thousand dwelling 
units a year utilizing the technology proposed. 
496 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
Surplus prop-
erty. 
63 Stat. 377. 
40 u s e 471 
note. 
Report of find-
ings, legislative 
recommendations. 
75 Stat. 158. 
12 u s e 1715X. 
Ante, p. 495. 
(c) In approving projects for mortgage insurance under section 233 
(a) (2) of the National Housing Act (as added by subsection (f) of 
this section), the Secretary shall seek to achieve the construction of at 
least one thousand dwelling units a year over a five-year period for 
each of the various types of technologies proposed in approved plans 
under subsection (b). The Secretary shall evaluate each project with 
respect to which assistance is extended pursuant to this section with 
a view to determining (1) the detailed cost breakdown per dwelling 
unit, (2) the environmental quality achieved in each such unit, and 
(3) the etfect which local housing codes and zoning regulations have, 
or would have if applicable, on the cost per dwelling unit. 
(d) Notwithstanding the provisions of the Federal Property and 
Administrative Services Act of 1949, any land which is excess prop-
erty within the meaning of such Act and which is determined by the 
Secretary to be suitable in furtherance of the purposes of this section 
may be transferred to the Secretary upon his request. 
(e) The Secretary shall, at the earliest practicable date, report his 
lindings with respect to projects assisted pursuant to this section 
(including evaluations of each such project in accordance with subsec-
tion (c)), together with such recommendations for additional legisla-
tion as he determines to be necessary or desirable to expand the avail-
able supply of decent, safe, and sanitary housing for lower income 
families through the use of technologies the efficacy of which has been 
demonstrated under this section. 
(f) (1) Section 233(a) of the National Housing Act is amended— 
(A) by inserting "(1)'' after "(a)", 
(B) by redesignating clauses (1), (2), and (3) as clauses (A), 
(B), and (C), respectively, and 
(C) by adding at the end thereof the following new paragraph : 
"(2) The Secretary is further authorized to insure and to make 
commitments to insure, under this section, mortgages (including 
advances on mortgages during construction) secured by properties in 
projects to be carried out in accordance with plans approved by the 
Secretary under section 108 of the Housing and Urban Development 
Act of 1968.". 
(2) Section 233(c) of such Act is amended by inserting at the end 
thereof the following new sentence: "Any authority which the Secre-
tary may exercise in connection with a mortgage, or property covered 
by a mortgage, insured under any other section of this title (including 
payments to reduce rentals for, or to facilitate homeownership by, 
lower income families) may be exercised in connection with a mort-
gage, or property covered by a mortgage, meeting the requirements of 
such other section (except as specified in subsection (b)), which is 
insured under this section to the same extent and in the same manner 
as if the mortgage insured under this section was insured under such 
other section." 
INSURANCE PROTECTION FOR HOMEOWNERS 
SEC. 109. (a) The Secretary of Housing and Urban Development is 
authorized, in cooperation with the private insurance industry, to 
develop a plan for the establishment at the earliest practicable date of 
an insurance program to help homeowners in meeting mortgage pay-
ments in times of personal economic adversity. Such insurance pro-
gram shall be designed to protect mortgagors against foreclosure due 
to curtailment of income resulting from factors beyond their effective 
control, including such factors as death, disability, illness, and unem-
ployment. Such insurance program shall also be designed to be actu-
arially sound through the use of premiums, fees, extended or increased 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
497 
payment schedules, or other simihir methods, in conjunction with such 
Federal participation as may be necessary. 
(b) Within six months following the date of enactment of this 
Report to con-
Act, the Secretary shall report to the Congress on his actions under fJcommt^ndalfors^ 
this section, and shall recommend to the Congress such legislation 
as he deems appropriate to authorize him to enter into agreements 
with any insurance company, or any corporation or joint enterprise 
formed to provide home mortgage insurance protection, for the pur-
pose of reinsuring insurance reserve funds, subsidizing premium pay-
ments (m l)ehalf of lower income mortgagors, or otherwise making 
possible the insurance protection of homeowners in accordance with 
subsection (a). In preparing such recommendations the Secretary 
shall consult with other agencies or instrumentalities of the United 
States which insure or guarantee home mortgages iii order that such 
legislation as may he recommended atl'oi'ds equal benefits to mortga-
gors participating in their programs. 
NATIONAL ADVISORY COMMISSION ON LOW INCOMP: HOUSING 
SEC. 110. (a) (1) There is hereby established the National Advisory 
(\)mmissioii on Low Income Housing (hereinafter referred to as the 
''Commission'"). The Commission shall be composed of twenty-one 
Membership. 
members as follows: 
(A) Four members appointed by the President of the Senate, 
two from the majority party and two from the minority party; 
(B) Four members appointed by the Speaker of the House of 
Representatives, two from the majority party and two from the 
minority party; and 
(C) Thirteen members appointed by the President, not more 
than three of whom shall be from the Federal Government, and 
of whom four shall berepresentative of £^^ 
^ -f 
^4-"^ 
i iicome~TiotlEfi^ 
M'h^nevSFpracncable, after consultation with the ranking major-
ity and minority members of the Housing Subcommittees of the 
Committees on Banking and Currency of the Senate and House 
of Representatives. 
(2) Any vacancy in the Commission shall not affect its powers, but 
shall be filled in the same manner in which the original appointment 
w as made. 
(3) Eleven members of the Commission shall constitute a quorum, 
but a lesser number may conduct hearings. 
(4) The members of the Commission shall elect a Chairman and a 
Vice Chairman from the membership of the Commission. 
(b)(1) The Commission shall undertake a comprehensive study and ^ commission 
investigation, to further the policy set forth in section 2 of this Act, of 
practicable and effective ways of bringing decent, safe, and sanitary 
housing Avithin the reach of low income families. Such study shall 
evaluate existing housing programs designed to assist such families, 
and explore new ways by which public and private resources may be 
more effectively utilized in meeting the housing needs of such families. 
In the carrying out of such studj, the Commission may, where neces-
sary or desirable, utilize the services of private research orga,nizations, 
and shall, insofar as is practicable, seek to coordinate its investigation 
with studies undertaken, or being undertaken by the Banking and 
Currency Committees of the Senate and House of Representatives. 
(2) The Commission shall be organized and begin its functions at „'^^?°''l^° 
the earliest possible date, and shall submit to the President and to ° 
^ 
the Congress an interim report with respect to its findings and recom-
mendations not later than July 1, 1969. A final report of its findings 
functions. 
President and 
Congress. 
498 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
Hearings, etc. 
80 Stat. 443, 
467. 
5 use 5101, 
5331. 
5 u s e 5332 
note. 
Experts and 
consultants. 
80 Stat. 416. 
Compensation, 
travel expenses. 
Appropriation. 
Termination. 
and recommendations shall be submitted to the President and the 
Congress not later than July 1, 1970. 
(c)(1) The Commission or, on the authorization of the Commission, 
any subcommittee or members thereof, may, for the purpose of carry-
ing out the provisions of this section, hold such hearings, take such 
testimony, and sit and act at such times and places as the Commission 
deems advisable. Any member authorized by the Commission may 
administer oaths or affirmations to witnesses appearing before the Com-
mission or any subcommittee or members thereof. 
(2) Each department, agency, and instrumentality of the executive 
branch of the Government is authorized and directed to furnish to the 
Commission, upon request made by the Chairman or Vice Chairman, 
such information as the Commission deems necessary to carry out its 
functions under this section. 
(3) Subject to such rules and regulations as may be adopted by the 
Commission, the Chairman, without regard to the provisions of title 5, 
LTnited States Code, governing appointments in the competitive serv-
ice, and without regard to the provisions of chapter 51 and subchapter 
I I I of chapter 53 of such title relating to classification and General 
Schedule pay rates, shall have the power— 
(1) to appoint and fix the compensation of such staff personnel 
as he deems necessary, and 
(2) to procure temporary and intermittent services to the same 
extent as is authorized by section 3109 of title 5, United States 
Code, but at rates not to exceed $50 a day for individuals. 
(d) (1) Any member of the Commission who is appointed from the 
executive or legislative branch of the Government shall serve without 
compensation in addition to that received in his regular employment, 
but shall be entitled to reimbursement for travel, subsistence, and 
other necessary expenses incurred by him in the performance of duties 
vested in the Commission. 
(2) Members of the Commission, other than those referred to in 
paragraph (1), shall receive compensation at the rate of $75 per day 
for each day they are engaged in the performance of their duties as 
menibers of the Commission and sihall be entitled to reimbursement for 
travel, subsistence, and other necessary expenses incurred by them in 
the performance of their duties as members of the Commission. 
(e) There are authorized to be appropriated, out of any money in 
the Treasury not otherwise appropriated, such sums as may be neces-
sary to carry out this section. 
(f) The Commission shall cease to exist thirty days after the sub-
mission of its final report. 
TITLE 
II—RENTAL 
HOUSING 
FOR 
LOWER 
INCOME 
FAMILIES 
PART A—PRIVATE HOUSING 
RENTAL A N D COOPERATIVE HOUSING FOR LOWER INCOME FAMILIES 
12 use 1707-
1715y. 
SEC. 201. (a) Title I I of the National Housing Act is amended by 
adding after section 235 (as added by section 101 of this Act) the 
f 
ollowinff new^ section: 
" R E N T A L AND COOPERATIVE HOUSING FOR LOWER INCOME FAMILIES 
"SEC. 236. (a) For the purpose of reducing rentals for lower income 
families, the Secretary is authorized to make, and to contract to make, 
periodic interest reduction payments on behalf of the owner of a 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
499 
rental housing project designed for occupancy by lower income fami-
lies, Avliich shall be accomplished through payments to morgagees 
holding mortgages meeting the sj^ecial requirements specified in this 
section. 
" (b) Interest reduction payments with respect to a project shall only 
be made during such time as the project is operated as a rental housing 
project and is subject to a mortgage which meets the mjuirements of,,„^ 
and is insured under, subsection (j) of this section-^Provided, 
That 
interest reduction payments may be made with respect to a rental or 
cooperative housing project owned by a private nonprofit corporation- 
"^ 
-2 <V\ 
or other private nonprofit entity, a limited dividend corporation or 
. c 
other limited dividend entity, or a cooperative housing corporation, 
which is financed under a State or local program providing assistance 
through loans, loan insurance, or tax abatementsTj^id which prior to 
/ ^ r> 4, • 
completion of construction or rehabilitation is approved for receiving 
*
" 
the benefits of this section?^ 
"(c) The interest reducfion payments to a mortgagee by the Secre-
tary on behalf of a project owner shall l)e in an amount not exceeding 
the difference between the monthly payment for principal, interest, and 
mortgage insurance premium which the project owner as a mortgagor 
is obligated to pay under the mortgage and the monthly payment for 
principal and interest such project owner would be obligated to pay 
if the mortgage were to bear interest at the rate of 1 per centum per 
annum. 
"(d) The Secretary may include in the payment to the mortgagee 
Mortgage 
such amount, in addition to the amount computed under subsection ^" ^"^ expenses. 
.(c), as he deems appropriate to reimburse the mortgagee for its 
expenses in handling the mortgage. 
"(e) As a condition for receiving the benefits of interest reduction 
payments, the project owner shall operate the project in accordance 
with such requirements with respect to tenant eligibility and rents as 
the Secretary may prescribe. Procedures shall be adopted by the Sec-
retary for review of tenant incomes at intervals of two years (or at 
shorter intervals where the Secretary deems it desirable). 
"(f) For each dwelling unit there shall be established with the ap-
proval of the Secretary (1) a basic rental charge determined on the 
basis of operating the project with payments of principal and interest 
due under a mortgage bearing interest at the rate of 1 per centum per 
annum; and (2) a fair market rental charge determined on the basis 
of operating the project with payments of principal, interest, and 
mortgage insurance premium which the mortgagor is obligated to pay 
under the mortgage covering the project. The rental for each dwelling 
unit shall be at tlie basic rental charge or such greater amount, not 
exceeding the fair market rental charge, as represents 25 per centum 
of the tenant's income. 
"(g) The project owner shall, as required by the Secretary, ac- char^s^^co^Uec^-
cumulate, safeguard, and periodically pay to the Secretary all rental tion and deposit, 
charges collected in excess of the basic rental charges. Such excess 
charges shall be deposited by the Secretary in a fund which may be 
used by him as a revolving fund for the purpose of making interest 
reduction payments with respect to any rental housing project receiv-
ing assistance under this section, subject to limits approved in appro-
priation Acts pursuant to subsection (i). Moneys in such fund not 
investment of 
needed for current operations may be invested in bonds or other obli-
gations of the United States or in bonds or other obligations guaran-
teed as to principal and interest by the United States. 
"(h) In addition to establishing the requirements specified in sub-
section (e), the Secretary is authorized to make such rules and regula-
tions, to enter into such agreements, and to adopt such procedures as 
500 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
he may deem necessary or desirable to carry out the provisions of this 
section. 
Appropriation. 
"(i) (1) Thcrc are authorized to be appropriated such sums as may 
l)e necessary to carry out the provisions of this section, includinjr such 
sums as may be necessary to make interest reduction payments under 
contracts entered into under this section. The a<rgregate amount of 
contracts to make such payments shall not exceed amounts approved 
in appropriation Acts, and payments pursuant to such contracts shall 
not exceed $75,000,000 per annum prior to July 1, 1969, which maxi-
mum dollar amount shall be increased bv $100,000,000 on July 1, 1969, 
and by $125,000,000 on July 1,1970. 
"(2) Not more than 20 per centum of tlie total amount of interest 
reduction payments authorized to be contracted to l)e made pursuant to 
appropriation Acts shall he contracted to l)e made with respect to 
families, occupying rental housing projects assisted under this section, 
whose incomes at the time of the initial renting of the projects exceed 
1J')5 per centum of the maxinunn income limits which can l)e estab-
lished in the area, pursuant to the limitations prescribed in sections 
g379^stat^^457; 
.2(2) aud 15(7) (b) (ii) of the United States Housing Act of 1987, for 
42 use 1402, 
initial occupancy in public housing dwellings, but the income of such 
1415. 
families at the time of the initial i-enting of the projects shall in no 
case exceed 90 per centum of the limits prescribed by the Secretary 
for (x^cupants of projects financed with mortgages insured under sec-
75 Stat. 150, 
tion 221(d) (3) which bear interest at the below-market interest nite 
^^^2 u^sc'1715'r 
prescribed in the proviso of section 221(d) (5). The limitations pre-
scribed in this paragraph shall be administered by the Secretary so 
as to accord a preference to those families whose incomes are within 
the lowest practicable limits for obtaining rental accommodations in 
T^s^°''^ai ""^ 
pi"ojects assisted under this section. The Secretary shall report annually 
raurees"^ '^°" 
to the respective (^ommittees on Banking and Currency of the Senate 
and House of Representatives with I'espex't to the income levels of 
families living in pn)jects assisted under this section. 
"(j) (1) The Secretary is authorized, upon applicaticm by the mort-
gagee, to insure a mortgage (including advances on such mortgage 
during construction) which meets the reijuirements of this subsection. 
Commitments for the insurance of such mortgages may he issued by 
the Secretary prior to the date of their execution or disbursment 
tliereon, upon such tenns and conditions as he may prescribe. 
Definitions. 
i4(2) As used lu this subsectiou— 
''(A) the terms 'family' and 'families' shall have the same 
68 Stat 599. 
meaning as in section 221; 
"(B) the term 'elderly or handicapped families' shall have the 
73 Stat. 667. 
same meaning as in section 202 of the Housing Act of 1959: and 
12 use* 17ma 
1 
"(C) the terms 'mortgage', 'mortgagee', and 'mortgagor shall 
48 Stat. 1247. 
have the same meaning as in section 201. 
"(3) To be eligible for insurance under this subsection, a mortgage 
shall meet the requirements specified in subsections (d) (1) and (d) (o) 
of section 221, except as such requirements are modified by this sub-
section. In the case of a project financed with a mortgage insured 
under this subsection which involves a mortgagor other than a cooper-
ative or a private nonprofit corporation or association and which is 
sold to a cooperative or a nonprofit corporation or association, the Sec-
retary is further authorized to insure under this subsection a mortgage 
given by such purchaser in an amount not exceeding the appraised 
value of the property at the time of purchase, which value shall be 
based upon a mortgage amount on which the debt service can be met 
from the income of the property when operated on a nonprofit basis, 
aft«r payment of all operating expenses, taxes, and required reserves. 
"(4) A mortgage to be insured under this subsection shall— 
12 u s e 1707. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
501 
" (A) be executed by a private mort<:^ag'or eligible under subsec-
tion (d) (8) or (e) of section 221: 
75 stat. 150; 
"(B) bear interest (exclusiveof premium charges for insurance 
12 use 1715^ 
and service charges, if any) at not to exceed such per centum per 
annum (not in excess of 0 per centum), on the amount of the 
principal obligation outstanding at any time, as the Secretary 
finds necessary to meet the mortgage market; and 
"(C) provide for complete amortization by periodic payments 
within such term as the Secretary may prescribe. 
"(5) The property or project shall— 
"(A) comply with such standards and conditioiis as the Secre 
tary may prescribe to establish the acceptability of the property 
for mortgage insurance and may include sucli nondwelling facili-
ties as the Secretary deems adequate and appropriate to serve the 
occupants and the surrounding neighborhood: Provided^ That the 
project shall be predominantly residential and any nondwelling 
facility included in the mortgage shall be found by the Secretary 
to contribute to the economic feasibility of the project, and the 
Secretary shall give due consideration to the possible eii'ect of the 
]:)roject on other business enterprises in the community : Provided 
further^ That, in the case of a project designed i)rimaril3' for 
occupancy by elderly or handicapped families, the project may in-
clude related facilities for use by elderly or handicapped families, 
including cafeterias or dining halls, community rooms, workshops, 
intirmaries, or other inpatient or outpatient health facilities, and 
other essential service facilities: 
"(B) include five or more dwelling units; and 
"(C) be designed primarily for use as a rental project to be 
occupied by lower income families or by elderly or handicapped 
families: Provided. That lower income persons who are less than 
sixty-two years of age shall be eligible for occupancy in such a 
project, but not more than 10 j)er centum of the dwelling units 
in any such project shall be available for occupancy by such 
persons. 
"(6) With the approval of the Secretary, the mortgagor may sell 
the individual dwelling units to lower income or elderly or handi-
capped ])urchasers. Tlie Secretary may consent to the release of the 
mortgagor from his liability under the mortgage and the credit instru-
ment secured thereby, or consent to the release of parts of the mort-
gaged property from the lien of the mortgage, upon such terms and 
conditions as he may prescribe, aiid the mortgage may provide for such 
release. 
"(k) As used in this section the term 'tenant' includes a member of 
"Tenant." 
a cooperative; the term 'rental housing project' includes a cooperative 
housing project; and the terms 'rental' and 'rental charge' mean, with 
respect to menibers of a cooperative, the charges under the (x;cupancy 
agreements between such members and the cooperative. 
"(1) The Secretary shall from time to time allocate and transfer to 
the Secretary of Agriculture, for use (in accordance with the terms 
and conditions of this section) in rural areas and small towns, a rea-
sonable portion of the total authority to contract to miake peri<><Uc 
interest reduction payments as approved m approj)riation Acts under 
subsection (i). 
"(m) In determining the income of any person for the |)urposes of 
tliis section, there shall be deducted an amount equal to $300 for each 
minor person who is a member of the immediate family of such person 
and living wath such family, and the earnings of any sucli minor per-
son shall not be included in the income of sucli person or iiis family."' 
(b) (1) Section 212(a) of the National ITousiui^ Act is amended bv 
S3 stat. 807. 
' ^ ' 
'• ' 
^ 
-' 
12 u s e 1715C. 
502 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
striking out "or 232'' in the first sentence of the second paragraph and 
inserting in lieu thereof ", 232, or 236". 
12 use msr 
(^) Section 227(a) of such Act is amended by striking out "or 
(viii) under section 234 (d)" and inserting in lieu thereof " (viii) under 
section 234(d), or (ix) under section 236". 
(3) Section 227(c) of such Act is amended by striking out "or sec-
tion 233(b)(2)" each place it appears and inserting in lieu thereof 
"section 233, or section 236". 
(c) The Secretary of Housing and Urban Development is author-
ized, upon such terms and conditions as he may prescribe, to transfer 
Ante, p. 500. 
^Q gectiou 236 (j) of the National Housing Act the insurance of a mort-
gage which has not be finally endorsed for insurance under section 
1
5
2
^
- 79^8131^454 
221(d) (3) of sucli Act and which has been approved for the below-
12 use 1715^ 
market interest rate prescribed in the proviso of section 221(d)(5) 
of such Act. 
(d) The Secretary of Housing and Urban Development is author-
ized, upon such terms and conditions as he may prescribe, to insure 
under section 236(j) of the National Housing Act a mortgage meeting 
the requirements of such section which is given to refinance a mortgage 
1^ use ^^^ 
^^^^ made under section 202 of the Housing Act of 1959: Provided, 
That the application for such insurance is filed with the Secretary on 
or before the date of project completion, or within such reasonable time 
thereafter as the Secretary may permit. 
(e) (1) Section 101(d) of the Housing and Urban Development Act 
1
2 use ^
7
^
0
1 s 
^^ ^ ^ ^ ^^ amended by adding at the end thereof the following: "In 
determining the income of any tenant for the purposes of this section, 
there shall be deducted an amount equal to $300 for each minor person 
who is a member of the immediate family of such tenant and living 
with such tenant, and the earnings of any such minor person shall not 
be included in the income of such tenant." 
(2) Section 101(g) of such Act is amended by striking out "or 
section 231(c) (3)" and inserting in lieu thereof ", section 231(c) (3), 
or section 236". 
(3) Section 101 (j) (1) of such Act is amended— 
(A) by striking out "and" at the end of subparagraph (B) ; 
(B) by striking out the period at the end of subparagraph (C) 
and inserting in lieu thereof "; and"; and 
(C) by inserting after subparagraph (C) a new subparagraph 
as follows: 
"(D) a private nonprofit corporation or other private nonprofit 
legal entity, a limited dividend corporation or other limited 
divided legal entity, or a cooperative housing corporation, which 
is assisted under section 236 of the National Housing Act and 
which has been approved for receiving the benefits of this section: 
Provided, That payments shall not be made with respect to more 
than 20 per centum of the dwelling units in any property so 
financed." 
(f) Section 207 of the Appalachian Regional Development Act of 
8ism.26i. 
1965 is amended— 
207. 
^^^' 
(1) by inserting in the heading "AND SECTION 236" immediately 
after "SECTION 221"; 
(2) by inserting "or section 236" after "section 221" each place 
it appears; 
(3) by inserting "or 'section 236' " after " 'section 221' " in sub-
section (a);and 
(4) by inserting ", GoA^ernment National Mortgage Associa-
tion," immediately after "Federal Housing Administration" in 
subsection (c). 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
503 
(s) The first sentence of section 305(i) of the National Housing 
so stat. i285. 
Act is amended- 
'' "'^ 
''''• 
(1) by striking out "or (3)" and inserting in lieu thereof " (3)"; 
and 
(2) by inserting after "221(e)" the following: ", or (4) a 
mortgage insured under section 236". 
^"'«' P-498. 
RENT SUPPLEMENT PKO(}KAM 
SEC. 202. (a) Section 101(a) of the Housing and Urban Develop-
ment Act of 1965 is amended by striking out everything after the word 
"exceed" the second time the word appears in the third sentence and 
inserting in lieu thereof the following: "$150,000,000 per annum prior 
to July 1, 1969, which maximum dollar amount shall l>e increased by 
$40,000,000, on July 1,1969, and by $100,000,000 on July 1, 1970." 
_ 
(b) Section 101(b) of such Act is amended by inserting after the 
first sentence the following: "Such term also includes a private non-
profit corporation or other private nonprofit legal entity, a limited 
dividend corjwration or other limited dividend legal entity, or a coop-
erativ'e housing corporation, which is the owner of a rental or coopera-
tive housing projecit financed under a State or local program providing 
assistance through loans, loan insurance, or tax abatement and which i 
prior to completion of construction or rehabilitation is approved for i 
receiving the oenefits of this section." 
| 
PART B—^LOW-REXT PUBLIC HOUSING 
INCREASED LOW-RENT PUBLIC HOUSING AUTHORIZATION 
79 Stat. 451. 
12 u s e 1701s. 
~i.. I*^ X-
SEC. 203. (a) Section 10(e) of the United States Housing Act of 
1937 is amended by striking out "$366,250,000 per annum, which limit 
shall be increased by $47,000,000 on the date of enactment of the Hous-
ing and Urban Development Act of 1965, and by further amounts of 
$47,000,000 on July 1 in each of the years 1966,1,967, and 1968, respec-
tively," in the first sentence and inserting in lieu thereof the following: 
"$554,250,000 per annum, which limit shall be increased by $100,000,000 
on the date of enactment of the Housing and Urban Development Act 
of 1968 and by further amounts of $150,000,000 on July 1 in each of 
the years 1969 and 1970,". 
(b) Section 20 of such Act is amended— 
(1) by striking out "not to exceed $1,500,000,000" in the firet 
sentence and inserting in lieu thereof "which shall not, unless 
authorized by the President, exceed $1,500,000,000"; and 
(2) by inserting after the first sentence the following: "For the 
purpose of determining obligations incurred to make loans pur-
suant to this Act against any limitation otherwise applicable with 
respect to such loans, the Secretary shall estimate the maximum 
amount to be loaned at any one time pursuant to loan agreements 
then outstanding with public housing agencies." 
52 Stat. 820; 
78 Stat. 795; 
79 Stat. 487. 
42 u s e 1410. 
63 Stat. 427. 
42 u s e 1420. 
UPGRADING MANAGEMENT AND SERVICES I N PUBLIC HOUSING 
PROJECTS 
SEC. 204. Section 15 of the United States Housing Act of 1937 is 
amended by adding at the end thereof the following new paragraph: 
"(10) The Secretary is authorized to enter into contracts to make 
grants to public housing agencies to assist, where necessary, in financ-
ing tenant services for families living in low-rent housing projects. 
In making such contracts and grants, the Secretary shall give pref-
erence to programs providing for the maximum feasible participation 
of the tenants in the development and operation of such tenant services. 
Contracts and 
grants. 
50 Stat. 895. 
42 u s e 1415. 
96-600 O -
504 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
xces 
Tenant serv- 
p^j.. pyrposes of tlils paragraph the term 'tenant services' inckides the 
following services and activities for families living in low-rent housing 
projects: counseling on household management, housekeeping, budget-
ing, money management, child care, and similar matters; advice as to 
resources for job training and placement, education, welfare, health, 
and other community services; services which are directly related to 
meeting tenant needs and providing a wholesome living environment; 
and referral to appropriate ag'encies when necessary for the provision 
of such services. To the maxnnum extent available and appropriate, 
existing public and private agencies in the community shall be \ised for 
the provision of such services. There are authorized to be appropriated 
for the purposes of this paragraph not to exceed $15,000,000 for the 
fiscal year ending June 80,1969, and not to exceed $30,000,000 for the 
fiscal year ending June 30, 1970. Any amounts so appropriated shall 
remain available until expended, and any amounts authorized for any 
fiscal year under this paragraph but not appropriated may be appro-
priated for any succeeding fiscal year commencing prior to July 1, 
1970.'' 
PURCHASE OF UNITS BY TENANTS 
Appropriation. 
79 Stat. 488. 
42 u s e 1415. 
SEC. 205. Section 15(9) of the Ignited States Housing Act of 1937 
is amended by striking out "which is suitable by reason of its detached 
or semidetached construction" and inserting in lieu thereof '', if the 
property to be acquired is sufficiently separable from other property 
retained by the public housing agency to make it suitable". 
PUBLIC HOUSING I N INDIAN 
AREAS 
5o^st^t^2^g88; 
SEC. 206. (a) Section 1 of the United States Housing Act of 1937 
42 use 1401. 
is amended by striking out "urban and rural nonfarm'" in the first 
sentence and inserting in lieu thereof "urban, rural nonfarm, and 
Indian". 
42 use ui°o 
(^^ Section 10(a) of such Act is amended by inserting "or Indian" 
after "nonfarm" in the fourth proviso. 
LIMITATION ON HKJll-RISE STRUCTURES I N LOW-RENT PUBLIC 
HOUSING 
PROJECTS 
SEC 207. Section 15 of the United States Housing Act of 1937 
is amended by adding at the end thereof (after the new paragraf>h 
added by section 204 of this Act) the following new^ paragraph: 
"(11) Except in the case of housing predominantly for the elderly, 
upon enactment of this paragraph, the Secretary shall not approve 
high-rise elevator projects for families with children unless he makes 
a determination that there is no practical alternative." 
SALE TO TENANTS OF LOW-RENT HOUSING I N PRIVATE 
ACCOMMODATIONS 
SEC. 208. (a) Section 23(f) of the United States Housing Act of 
^2 u'sc M2ib 
^*^'^^ ^^ amended by inserting "(1)" after "sliall not apply to", and by 
inserting l)efore the period at the end thereof the following: ", or (2) 
housing purchased (or in the process of purchase) by the public hous-
ing agency for resale to tenants as provided in subsection (g)". 
(b) Section 23 of such Act is further amended by adding at the end 
thereof the following new subsection: 
"(g) To the extent authorized in contracts entered into by the 
Authority with a public housing agency, such agency may purchase 
any structure containing one or more dwelling units leased to provide 
low-rent housing in private ac-commodations under this section for the 
purpose of reselling the structure to the tenant or tenants of the struc-
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
505 
ture or to a group of such tenants occupying units aggregating in 
value at least 80 per centum of the structure's total value. Any such 
resale shall be made subject to such terms and conditions (including 
provision for deferment of the required downpayment and for elimi-
nation of or adjustments in the required interest payments during a 
temporary period) as may be necessary to enable the tenants involved 
to make the purchase without undue financial hardship." 
ADDITIONAL SUBSIDY FOR LARGE FAMILIES AND FAMILIES OF F N U S U A L L Y 
LOW INCOME 
SEC. 209. (a) Section 2 (2) of the United States Housing Act of 1937 
^g^"Sf 
Ts^y 
is amended by inserting at the end thereof the following new sen- 
42 us^c 1402. 
tences: "The term 'large families' means families which include four or 
more minors. The term 'families of unusually low income' means fami-
lies with incomes below the income level established by the public 
housing agency, as approved by the Authority, who could not be 
housed without the additional subsidy authorized under section 10 
(b) The first proviso in section 10(a) of such Act is amended— 
^s stat. 794. 
(1) by inserting after "an elderly family," the following: "or 
a large lamily, or a family of unusually low income,"; 
(2) by striking out "to lease the dwelling unit to an elderly or 
displaced family at a rental it could afford and"; and 
(3) by striking out ", and, in the case of displaced families, if 
and to the extent that the average or estimated average rental 
for units so occupied by such families was less than the rental 
which the Authority determines, on the basis of the average or 
estimated average project rentals, would have been established 
in leasing the units to families which were neither elderly nor 
similarly displaced". 
r R O H I B m O N AGAINST CERTAIN LIMITATIONS ON TYPES OR CATEGORIES OF 
LOW-RENT HOUSING I N PRR^iTE ACCOMMODATIONS 
SEC. 210. The first sentence of section 23(d) of the United States 
Housing Act of 1937 is amended by inserting before the period at the 
^^ ^'^' '•^e. 
end thereof the following: "(and no limitation not specifically pro- 
'*^ 
vided for in this section shall be imposed by regulations of the Author-
ity on the types or categories of structures or dwelling units, qualify-
ing under subsection (a) (3) and approved under subsection (c), which 
may be so used in any community)". 
TITLE III—FEDERAL HOUSING ADMINISTRATION 
INSURANCE OPERATIONS 
MORTGAGE INSURANCE PREMIUMS FOR SERVICE3IEN AND THEIR 
WIDOWS 
SEC. 301. Section 222 of the National Housing Act is amended— 
J^ ^*|^ tu'm 
(1) by striking out "Secretary of the Treasury" each place it 
^'"' 
appears and inserting in lieu thereof "Secretary of Transporta-
tion"; and 
(2) by adding at the end thereof two new subsections as follows: 
"(f) The Secretary is authorized to transfer to this section the 
insurance on any mortgage covering a single-family dwelling or a one-
family unit in a condominium project insured under this Act, if the 
mortgage indebtedness thereof has been assumed by a serviceman who 
at the tmie of assumption is the owner of the property and either occu-
pies the property or certifies that his failure to do so is the result of his 
506 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
military assignment, or, in the case of the United States Coast Guard, 
other assignment. 
"(g) Where a serviceman dies while on active duty in the Armed 
Forces of the United States or in the United States Coast Guard, leav-
ing a surviving widow as owner of the property, the period of owner-
ship by the serviceman (within the meaning of subsection (c) of this 
section) shall extend for two years beyond the date of the serviceman's 
death or until the date the widow disposes of the property, whichever 
date occurs first. The Secretary of Defense or the Secretary of Trans-
portation, as the case may be, shall notify such widow promptly fol-
lowing the serviceman's death of the additional costs to be borne by 
the mortgagor following termination of the two-year period." 
MOninCATIONS IN TKRMS OF INSURED MORTGAGES COVERING MULTIFAMILY 
PROJECTS 
17^5 "^^ ^^°' 
^^^' '^^^' Title I I of the National Housing Act is amended by add-
^ 
ing after section 238 (as added by section 104 of this Act) the follow-
ing new section : 
" M O D I F I C A T I O N S I N TERMS OF INSURED MORTGAGES COVERING MULTI-
FAMILY PROJECTS 
''SEC. 289. (a) The Secretary shall not consent to any request for an 
extension of the time for curing a default under any mortgage cover-
ing multifamily housing, as defined in the regulations of the Secretary, 
or for a modification of the terms of such mortgage, except in con-
formity with regulations prescribed by the Secretary in accordance 
with the provisions of this section. Such regulations shall require, as a 
condition to the granting of any such request, that, during the period 
of such extension or modification, any part of the rents or other funds 
derived by the mortgagor from the property covered by the mortgage 
which is not required to meet actual and necessary expenses arising in 
connection with the operation of such ])ropei'ty, including amortiza-
tion charges under the mortgage, be held in trust by the mortgagor 
and distributed only with the consent of the Secretary; except that 
the Secretary may provide for the granting of consent to any request 
for an extension of the time for curing a default under any mortgage 
cov'erlng multifamily housing, or for a modification of the terms of 
such mortgage, without regard to the foregoing requirement, in any 
case or class of cases in which an exemption from such requirement 
does not (as determined by th-e Secretary) jeopardize the interests of 
the ITnited States. 
"(b) Whoever, as an owner of a property which is security for a 
mortgage described in subsection (a), or as a stockholder of a corj)ora-
tion owning such property, or as a beneficial owner under any business 
organization or trust owning such property, or as an officer, director, 
or agent of any such owner, (1) willfully uses or authorizes the use of 
any part of the rents or other funds derived from property covered 
by such mortgage in violation of a regula-tion prescribed by the Secre-
tary under subsection (a), or (2) if such mortgage is determined, as 
provided in subsection (a), to be exempt from the requirement of any 
such regulation or is not otherwise covered by such regulation, will-
fully and knowingly uses or authorizes the use, while such mortgage 
is in default, of any part of the rents or other funds derived from 
the propei'ty covered by such mortgage for any purpose other than to 
meet actual and necessary expenses arising in connection with such 
oroner^y (including amor-Hzation charges under the mortgage), shall 
be fined not more than $5,000 or imprisoned not more than three years, 
or both." 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
507 
CONDOMINIUMS 
SEC. 303 (a) Seotion 234 (c) of the National Housing Act is amended 
^s stat. leo; 
by striking out "rental housing, and (3)" in the first sentence and ^^2*usc^m5y. 
inserting m lieu thereof the following: "rental housing: 
Provided, 
That a one-family unit in a multifamily project involving eleven or 
less units ^hall be eligible for insurance without having been covered 
by a project mortgage, and (3)". 
(b) Section 234(c) of such Act is further amended by striking out 
" (iii) 75 per centum" in the third sentence and inserting m lieu thereof 
" (iii) 80 per centum". 
(c) Section 234(f) of such Act is amended by striking "five" and 
^^ ^***- '^^^• 
inserting in lieu thereof "four". 
INSURANCE OF LOANS FOR PURCHASE OF FEE SIMPLE TITLE FROM LESSORS 
SEC. 304. (a) Title I I of the National Housing Act is amended by 
1
2 use 1707-
adding after section 239 (as added by section 302 of this Act) the ^^^^y-
following new section: 
u 
PURCHASE OF FEE SIMPLE TITLE FROM LESSORS 
"SEC. 240. (a) The Secretary is authorized, upon such terms and 
conditions as he may prescribe, to make commitments to insure and 
to insure loans made by financial institutions for the purpose of financ-
ing purchasers by homeowners of the fee simple title to property on 
which their homes are located. 
"(b) As used in this section—-
"(1) the term 'financial institution' means a lender approved stituu^n""'^^'" 
by the Secretary as eligible for insurance under section 2 or a 
1
2 use 1703. 
mortgagee approved under section 203(b) (1); and 
52 stat. 10. 
"(2) the term 'homeowner' means a lessee under a long-term 
"Homeowner!' 
ground lease. 
"(c) To be eligible for insurance under this section, a loan shall— 
"(1) relate to property on which there is located a dwelling 
designed principally for a one-, two-, three-, or four-family 
residence; 
"(2) not exceed the cost of purchasing the fee simple title, or 
$10,000 per family unit, whichever is the lesser; 
"(3) be limited to an amount which when added to any out-
standing indebtedness related to the property (as determined by 
the Secretary) creates a total outstanding indebtedness which does 
not exceed the applicable mortgage limit prescribed in section 
203(b); 
"(4) bear interest at not to exceed such per centum per annum 
(not in excess of 6 per centum), on the amount of the prmcipal ob-
ligation outstanding at any time, as the Secretary finds necessary 
to meet market conditions, and such other charges (including 
service charges and appraisal, inspection, and other fees) as may 
be approved by the Secretary; 
"(5) have a maturity satisfactory to the Secretary, but not to 
exceed twenty years from the beginning of amortization of the 
loan or three-quarters of the remaining economic life of the home, 
whichever is the lesser; and 
" (6) comply with such other terms, conditions, and restrictions 
as the Secretarj^ may prescribe. 
"(d) The provisions of paragraphs (3), (5), (6), (7), (8), and 
(10) of section 220(h) shall be applicable to loans insured under this 
section and, as applied to loans insured under this section, references 
75 Stat. 155. 
12 u s e 1715k. 
508 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
in those paragraphs to 'home imporvement loans' and 'this subsection' 
shall be construed to refer to loans under this section." 
(b) Section 5 (c) of the Home Owners' Loan Act of 1933 (12 U.S.C. 
48 Stat. 132; 
1464(c)) is amended by adding immediately after the next to the last 
79 Stat. 465. 
paragraph the following new paragraph: 
"Notwithstanding any other i)rovision of this subsection, an associa-
tion may invest in loans or obligations, or interests therein, as to which 
the association has the benefit of insurance under section 240 of the 
Ante, p. 5 07. 
National Housing Act, or of a commitment or agreement therefor, and 
such investments shall not l)e included in any percentage of assets or 
other percentage referred to in this subsection.'' 
EXTENSION o r SECTION 2 2 1 ( d ) ( 2 ) 
SALES HOUSING PROGRAM FOR TWO-, 
THREE-, AND FOUR-FAMILY RESIDENCES TO ALL LOW AND MODERA'IT-: 
INCOME 
FAMILIES 
73 Stat. 659. 
SEC. 305. Sectiou 221(d)(2) of the National Housing Act is 
1
2 use 1715 
amended by striking out "a displaced family" at the end of the first 
proviso and inserting in lieu thereof "the morigagor". 
REMOVAL OF DIVIDEND RESTRICTION 
FOR NONDWELLING 
FACILITIES 
I N 
SECrnON 2 2 1 PROJECl^S 
68 Stat. 599. 
SEC. 306. Section 221(f) of the National Housing Act is amended 
by striking out in the first sentence all that follows the word 
"mortgage" in the proviso and inserting in lieu thereof ": Provided 
further, That, in the case of a mortgage which bears interest at the 
below-market interest rate prescribed in the proviso of subsection 
73 Stat. 658.^ 
((J) (5), the pTovisioiis of section 220(d) (3) (B) (iv) shall only apply 
,o T
T
c
r
^ ,mri, 
^^ ^^^^ mortgagor waives the right to receive dividends on its equity 
investment in the portion thereof devoted to commercial facilities." 
12 u s e 1715k. 
SUPPLEMENTAL LOAN PROGRAM FOR PROJECTS FINANCED W I T H FEDFJtAL 
HOUSING ADMINISTRATION INSURED MORTGAGES 
12 use 1707- 
SEC 307. Title I I of the National Housing Act is amended by add-
^"^^^y- 
ing after section 240 (as added by section 304 of this Act) the follow-
ing new section: 
" S U P P L E M E N T A L 
L O A N S FOR MULTIFAMILY 
PROJECTS 
"SEC. 241. (a) With respect to a multifamily project or group prac-
tice facility covered by a mortgage insured under any section or title 
of this Act, the Secretary is authorized, upon such terms and condi-
tions as he may prescribe, to made commitments to insure, and to in-
sure, supplemental loans (including advances during construction or 
improvement) made by financial institutions approved by the Secre-
tary. As used in this section, 'supplemental loan' means a loan, ad-
vance of credit, or purchase of an obligation representing a loan or 
advance of credit made for the purpose of financing improvements 
or additions to such project or facility: Provided, That a loan involv-
73 Stat. 663. 
ij^nr a iiursiug home covered by a mortgage insured under section 232 
1715W. 
^j. ^ loan involving a group practice facility covered by a mortgage 
80 Stat. 1274. 
insured under title X I may also be made for the purpose of financing 
e/f "^^ i749aaa gq^ipj^^gj^^ j^o be used in the operation of such nursing home or facility. 
" (b) To be eligible for insurance under this section, a supplemental 
loan shall— 
"(1) be limited to 90 per centum of the amount which the Sec-
retary estimates will be the value of such improvements, addi-
tions, and equipment, except that such amount when added to the 
53 Stat. 807. 
12 u s e 1715c. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
509 
outstanding balance of the mortgage covering the project or facil-
ity, shall not exceed the maximum mortgage amount insurable 
under the section or title pursuant to which the mortgage cover-
ing such project of facility is insured; 
"(2) have a maturity satisfactory to the Secretary but not to 
exceed the remaining term of the mortgage; 
"(3) bear interest (exclusive of premium charges for insur-
ance and service charges, if any) at not to exceed such per centum 
per annum (not in excess of 6 per centum), on the amount of the 
principal obligation outstanding at any time, as the Secretary 
finds necessary to meet market conditions ; 
"(4) be secured in such manner as the Secretary may require; 
"(5) be governed by the labor standards provisions of section 
212 that are applicable to the section or title pursuant to which the 
mortgage covering the project or facility is insured; and 
"(6) contain such other terms, conditions, and restrictions as 
the Secretary may prescribe. 
"(c) The provisions of subsections (d), (e), (g), (h), (i), (j), (k), 
(1), and (n) of section 207 shall be applicable to loans insured under 
52 stat. is. 
this section, except that (1) all references to the term 'mortgage' shall 
be construed to refer to the term 'loan' as used in this section, (2) loans 
involving projects covered by a mortgage insured under section 218 
^'* ^'^t- ^^-^ 
that is the obligation of the Cooperative Management Housing Insur- 
^ ^''^' 
ance Fund shall be insured under and shall be the obligation of such 
fund, and (3) loans involving projects covered by a mortgage insured 
under section 236 shall be insured under and shall be the obligation of 
^"^''' P- '^^^• 
the Special Risk Insurance Fund." 
HOME IMPROVEMENT LOANS 
INCREASE I N MAXIMUM 
MATURITY, 
r i N A N C E CHARGE, AND LOAN AMOUNT 
SEC. 308. Section 2(b) of the National Housing Act is amended— 7o^stat^''o9°i^' 
(1) by striking out "$3,600" and insertnig in lieu thereof 
1
2 use 1703 
"$5,000"; 
(2) by striking out "five years'" and inserting in lieu thereof 
"seven years"; 
(3) by striking out "$5 discount" and inserting in lieu thereof 
"$5.50 discount"; and 
(4) by striking out "$1 discount" and inserting in lieu thereof 
"$4.50 discount". 
EXPERIMENTAL HOUSING 
PROGRAM 
SEC. 309. Section 233 of the National Housing Act is amended— 
H ^'^^ //^^^ 
(1) by striking out "of this title" immediately before the semi-
colon in subsection (b) and inserting in lieu thereof "or titles of 
this Act"; and 
(2) by striking out "of this title" in subsection (e) and insert-
ing in lieu thereof "or title of this Act", 
TERM OF FEDERAL HOUSING ADMINISTRATION MORTGAGES FOR LAND 
DEVELOPMENT 
12 u s e 1749bb. 
SEC. 310. Section 1002(d)(1) of the National Housing Act is 
]lf'i^:t^^a, 
amended— 
(1) by striking out "seven" and inserting in lieu thereof "ten"; 
and 
(2) by striking out tlie semicolon and inserting in lieu thereof 
the following: ": Provided, That the Secretary may agree to a 
reasonable extension of the term of a mortgage, the maturity of 
510 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
which is limited by this paragraph to not more than ten years, if 
he determines that unusual or unforeseen circumstances make 
such extension necessary to avoid undue hardship to the 
mortgagor;". 
REHABILITATED MULTIFAMILY PROJECTS I N URBAN RENEWAL AREAS 
SEC. 311. (a) Section 220(d) (3) (B) (ii) of the National Housing 
68 Stat. 596. 
^.ct is amended by inserting immediately before the semicolon at the 
end thereof ": Provided further^ That the mortgage may involve the 
financing of the purchase of property which has been rehabilitated by 
a local public agency with Federal assistance pursuant to section 
70 Stat. 1097; 
110(c) (8) of the Housing Act of 1949, and, in such case the foregoing 
42*usc 1460. 
limitations upon the amount of the mortgage shall be based upon the 
appraised value of the property as of the date the mortgage is accepted 
for insurance''. 
1
2 use \i\si 
^^^ Section 221 (d) (3) (iii) of such Act is amended by inserting im-
mediately before the colon at the end of the first proviso ": Provided 
further. That the mortgage may involve the financing of the purchase 
of property which has been rehabilited by a local public agency 
with Federal assistance pursuant to section 110(c) (8) of the Housing 
Act of 1949, and, in such case, the amount of the mortgage shall not 
exceed the appraised value of the property as of the date the mortgage 
is accepted for insurance". 
MISCELLANEOUS HOUSING 
INSURANCE 
SEC. 312. (a) Section 223 of the National Housing Act is amended— 
(1) by striking out so much of subsection (a) as precedes para-
graph (1) and inserting in lieu thereof the following: 
"(a) Notwithstanding any of the provisions of this Act and 
without regard to limitations upon eligibility contained in any 
section or title of this Act, the Secretary is authorized, upon applica-
tion by the mortgagee, to insure or make commitments to insure under 
any section or title of this Act any mortgage—"; 
(2) by striking out "applicable to loans insured under section 
203, 207, 213, 220, 221, 222, 231, 232, or 233, as the case may be" 
69^stat^48^4°^' 
^^ ^^^^ ^'^^^ ^^^ secoud provisos of subsection (a) (7) and insert-
ing in lieu thereof "prescribed under the applicable section or 
title of this Act"; 
(3) by striking out "this title" each time it appears in sub-
•^L^!^Vc^^°^' 
section (c) and inserting in lieu thereof "this Act"; 
^ S t a t . 
( S 4 - 
, . s . 
,^ 
^ 
. • • • 
,*P • 
.. 
--- 
. 
, 
-^-^ 
. 
« 
^ - « - ^ 
• 
1 
-r-^-w-w- 
. • 
-• 
(4) by striking out "title I, title II, title VI, title VII, title 
VIII, or title I X " in subsection (c) and inserting in lieu thereof 
"any section or title of this Act"; and 
(5) by striking out "(except that in any case the payment of 
insurance shall be in debentures)" at the end of subsection (c). 
(b) Section 223(d) of such Act is amended by striking out all 
that follows "as he may prescribe," and inserting m lieu thereof the 
following: "insure under the same section as the original mortgage 
a loan by the mortgagee in an amount not exceeding the excess of 
the foregoing expenses over the project income. Such loan shall (1) 
bear interest (exclusive of premium charges for insurance) at not to 
exceed the per centum per annum currently permitted for mortgages 
insured under the section under which it is to be insured, (2) be 
secured in such manner as the Secretary shall require, and (3) be 
limited to a term not exceeding the unexpired term of the original 
mortgage. The Secretary is authorized to collect a premium charge 
for insurance of loans pursuant to this subsection in an amount com-
puted at the same premium rate as is applicable to the original mort-
68 Stat. 605. 
12 u s e 1715n. 
75 Stat. 154. 
75 Stat. 182. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
511 
gage. This premium shall be payable in cash or in debentures of the 
insurance fund under which the loan is insured at par plus accrued 
interest. In the event of a failure of the borrower to make any pay-
ment due under such loan or under the original mortgage, both the 
loan and original mortgage shall be considered in default, and if such 
default contmues for a period of thirty days, the lender shall be en-
titled to insurance benefits, computed in the same manner as for tlie 
original mortgage, except that in determining the interest rate under 
section 224 for the debentures representing the portion of the claim 
es stat. eoe; 
applicable to the loan, the date of the commitment to insure the ^^f^usc^mso 
loan and the insurance date of the loan shall be taken into considera-
tion rather than the commitment or insurance date for the original 
mortgage." 
SUPPLEMENTARY LOANS FOR COOPERATIVE HOUSING PURCHASED FROM T H E 
FEDERAL (JOVERNMENT 
SEC. 313. Section 213(j) of the National Housing Act is amended— 
75 stat. 179. 
(1) by inserting after the first sentence of paragraph (1) the 
^^ ^^^ i7i5e. 
following sentence: "The Secretary is further authorized to make 
commitments to insure and to insure supplementary cooperative 
loans (including advances during construction or improvement) 
with respect to any property purchased from the Federal Govern-
ment by a nonprofit corporation or trust of the character de-
scribed in paragraph (1) of subsection (a), if the property is 
64 stat. 54. 
covered by an uninsured mortgage representing a part of the 
purchase price."; and 
(2) by adding before the semicolon at the end of paragraph 
(2) (B) the following: "; except that, in the case of repairs or 
improvements to a property covered by an uninsured mortgage 
dated more than twenty years prior to the date of the commit-
ment to insure, of such magnitude that the Secretary deems them 
to be a major rehabilitation or modernization of such property, 
the loan may have a maturity date up to ten years in excess of 
the remaining term of the uninsured mortgage"'. 
EQUIPMENT IN NURSING 
HOMES 
SEC. 314. Section 232 of the National Housing Act is amended— 
J3 stat. 663.^ 
(1) by striking out subsection (b)(2) and inserting in lieu 
^^^"'' 
thereof the following: 
"(2) the term 'mortgage' means a first mortgage on real estate 
in fee simple, or on the interest of either the lessor or lessee there-
of (A) under a lease for not less than ninety-nine years which is 
renewable, or (B) under a lease having a period of not less than 
fifty years to run from the date the mortgage was executed. Tlie 
term 'first mortgage' means such classes of first liens as are com-
monly given to secure advances (including but not limited to 
advances during construction) on, or the unpaid purchase price 
of, real estate under the laws of the State in which the real estate 
is located, together with the credit instrument or instruments, if 
any, secured thereby, and any mortgage may be in the form of one 
or more trust mortgages or mortgage indentures or deeds of trust, 
securing notes, bonds, or other credit instruments, and, by the 
same instrument or by a separate instrument, may create a secu-
rity interest in initial equipment, whether or not attached to the 
realty. The term 'mortgagor' shall have the meaning set forth in 
section 207 (a) of this Act."; 
52 stat. le. 
(2) by striking out so much of subsection (d) as precedes para- 
^ '^^ 
graph (1) and inserting in lieu thereof the following: 
Ante, 
p. 113. 
512 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
" (d) In order to carry out the purposes of this section, the Secretary 
is authorized to insure any mortgage which covers a new or rehabil-
itated nursing home, including equipment to be used in its operation, 
subject to the following conditions:"; and 
(3) by striking out "when the proposed improvements are com-
pleted" before the period at the end of subsection (d) (2) and 
inserting in lieu thereof the following: ", including equipment to 
be used in the operation of the nursing home, when the proposed 
improvements are completed and the equipment is installed". 
FLEXIBLE INTEREST RATES FOR CERTAIN F H A INSURANCE PROGRAMS 
SEC. 315. Section 3 (a) of the Act entitled "An Act to amend chapter 
37 of title 38 of the United States Code with respect to the veterans' 
home loan program, to amend the National Housing Act w^ith respect 
to interest rates on insured mortgages, and for other purposes", 
approved May 7, 1968, is amended by inserting "235(3) (2) (C), 236 
U)(4)(B), 240(c)(4), 241(b)(3), 242(d)(3)(B)," after "234(f),". 
F H A SECTION 2 2 1 ( h ) 
PROGRAM 
80 Stat. 1268^. 
QEC. 316. (a) Scctiou 221(h) (2) (A) of the National Housing Act 
1715. 
is amended to read as follows: 
"(A) be executed by a private nonprofit corporation or asso-
ciation, approved by the Secretary, for financing the purchase 
and rehabilitation (with the intention of subsequent resale) of 
property comprising one or more tracts or parcels, whether or not 
contiguous, upon which there is located deteriorating or sub-
standard housing consisting of (i) four or more single-family 
dw^ellings of detached, semidetached, or row construction, or (ii) 
four or more one-family units in a structure or structures for 
which a plan of family unit ownership approved by the Secretary 
is established;", 
(b) Section 221(h) of such Act is amended by adding at the end 
thereof (after the new paragraph added by section 101(c) (3) of this 
Act) two new paragraphs as follows: 
"(7) Where the Secretary has approved a plan of family unit 
ownership, the terms 'single-family dwelling', 'single-family dwell-
ings', 'individual dwelling', an 'individual dwellings' shall mean a 
family unit or family units, together with the undivided interest (or 
interests) in the common areas and facilities. 
"(8) For purposes of this subsection, the terms 'single-family 
dwelling' and 'single-family dwellings' (except for purposes of para-
graph (7)) shall include a two-family dwelling which has been 
approved by the Secretary if one of the units is to be occupied by the 
owner." 
HOUSING I N 
OUTLYING AREAS 
JltTu^eV^' 
?^?- ^^'^- Section 203(i) of the National Housing Act is amended by 
1
2 use 1709 
striking out "not in excess of $12,500" and inserting in lieu thereof 
"not in excess of $13,500". 
,', 
SEASONAL HOMES 
80^stat^\266' 
'^^*^" ^^^' ^ectiou 203 of the National Housing Act is amended by 
adding at the end thereof the following new subsection: 
"(m) The Secretary is authorized to insure under this section any 
mortgage meeting the requirements of subsection (b) of this section, 
except as modified by this subsection. To be eligible, the mortgage 
shall involve a principal obligation not in excess of $15,000 and not 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
513 
in excess of 75 per centum of the appraised value of the property, as 
of the date the mortgage is accepted for insurance. The mortgage shall 
cover a dwelling for single-family occupancy which is approved for 
mortgage insurance prior to the beginning of construction. The dwell-
ing need not be designed for year-round occupancy, but it shall (1) 
meet standards prescribed by the Secretary, and (2) be located in an 
area where the Secretary finds it is not practicable to obtain conform-
ity with many of the requirements essential to the insuring of mort-
gages on housing in built-up urban areas. The development of the 
property with respect to which the mortgage is executed shall be 
consistent with the conservation of water and other natural resources 
of the area, and such property shall be an acceptable risk, giving con-
sideration to the economic potential of the area in which the dw^elling 
is located and the contribution that the housing will make toward 
improving the area. The Secretary may suspend the issuance of com-
mitments under this subsection for the msurance of mortgages secured 
by properties situated in any area, whenever he determines that (i) 
there is a serious and unusual shortage of mortgage funds for resi-
dential construction in such area, (ii) such insurance would affect 
materially and adversely the availability of mortgage funds for resi-
dential construction in such area, and (iii) such suspension would not 
have an adverse impact upon the balanced economic development of 
the area." 
TITLE IV—GUARANTEES FOR FINANCING NEW 
COMMUNITY LAND DEVELOPMENT 
CITATION 
SEC. 401. This title may be referred to as the "New Communities 
citation o
f title. 
Act of 1968''. 
PURPOSE 
SEC. 402. It is the purpose of this title, by facilitating the enlistment 
of private capital in new community development, to encourage the 
development of new communities that— 
(1) contribute to the general betterment of living conditions 
through the improved quality of community development made 
possible by a consistent design for the provision of homes, com-
mercial and industrial facilities, public and community facilities, 
and open spaces; 
(2) make substantial contributions to the sound and economic 
growth of the areas in which they are located; 
(3) provide needed additions to the general housing supply; 
(4) provide opportunities for innovation in housing and com-
munity development technology and in land use planning; 
(5) enlarge housing and employment opportunities by increas-
ing the range of housing choice and providing new investment 
opportunities for industry and commerce; 
(6) encourage the maintenance and growth of a diversified 
local homebuilding industry; and 
(7) include, to the greatest extent feasible, the employment of 
new and imj)roved technology, techniques, materials, and meth-
ods in housing construction, rehabilitation, and maintenance 
under programs administered by the Department of Housing and 
Urban Development with a view to reducing the cost of such con-
struction, rehabilitation, and maintenance, and stimulating the 
increased and sustained production of housing under such 
programs. 
514 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
GUARANTEE AUTHORITY 
SEC. 403. To carry out the purposes of this title the Secretary is 
authorized to guarantee, and enter into commitments to j*;uarantee, the 
bonds, debentures, notes, and other obligations issued by new com-
munity developers to help finance new community development proj-
ects. The Secretary may make such guarantees and enter into such 
commitments, subject to the limitations contained in sections 404 and 
405, upon such terms and conditions as he may prescribe, taking into 
account (1) the large initial capital investment required to finance 
sound new communities, (2) the extended period before initial returns 
on this type of investment can be expected, (8) the irregular 
pattern of cash returns characteristic of such investment, and (4) the 
financial and security interests of the United States in connection with 
guarantees made under this title. 
ELIGIBLE N E W 
COMMUNITY 
DEVEIvOPMENT 
SEC. 404. No guarantee or commitment to guarantee may be made 
under this title unless the Secretary has determined that— 
(1) the proposed new community (A) will be economically 
feasible in terms of economic base or potential for growth, and 
(B) will contribute to the orderly growth and development of the 
area of which it is a part; 
(2) there is a practicable plan (including appropriate time 
schedules) for financing the land acquisition and land develop-
ment costs of the proposed new community and for improving and 
marketing the land which, giving due consideration to the public 
purposes of this title and the special problems involved in financ-
ing new communities, represents an acceptable financial risk to the 
United States; 
(3) there is a sound internal development plan for the new com-
munity which (A) has received all governmental approvals 
required by State or local law or by the Secretary; and (B) is 
'acceptable to the Secretary as providing reasonable assurance that 
the development will contribute to good living conditions in the 
area being developed, wdll be characterized by sound land use pat-
terns, will include a proper balance of housing for families of low 
and moderate income, and will include or be served by such shop-
ping, school, recreational, transporta.tion, and other facilities as 
the Secretary deems satisfactory; and 
(4) the internal development plan is consistent with a compre-
hensive plan which covers, or with, comprehensive planning being 
carried on for, the area in w^hich the land is situated, and which 
meets criteria established by the Secretary for such comprehensive 
plans or planning. 
ELIGIBI>E OBLIGATIONS 
SEC. 405. (a) Any bond, debenture, note or other obligation guar-
anteed under this title shall— 
(1) be issued by a new community developer, other than a pub-
lic body, approved by the Secretary on the basis of 
financial, 
technical and administrative ability which demonstrates his ca-
pacity to carry out the proposed project; 
(2) be issued to and held by investors approved by, or meeting 
requirements prescribed by, the Secretary, or if an offering to 
the public is contemplated, be underwritten upon terms and con-
ditions approved by the Secretary; 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
515 
(3) be issued to finance a program of land development (in-
cluding acquisition or use of land) approved by the Secretary: 
Provided, 
That the Secretary shall, through cost certification 
procedures, escrow or trusteeship requirements, or other means, 
insure that all proceeds from the sale of obligations guaranteed 
under this title are expended pursuant to such program; 
(4) involve a principal obligation in an amount not to exceed 
the lesser of (A) 80 per centum of the Secretary's estimate of 
the value of the property upon completion of the land develop-
ment or (B) the sum of 75 per centum of the Secretary's estimate 
of the value of the land before development and 90 per centum 
of his estimate of the actual cost of the land development; 
(5) bear interest at a rate satisfactory to the Secretary, such 
interest to be exclusive of any service charges and fees that may 
be approved by the Secretary ; 
(6) contain repayment and maturity provisions satisfactory to 
the Secretary; and 
(7) contain provisions which the Secretary shall prescribe with 
respect to the protection of the security interests of the United 
States (includnig subrogation provisions), liens and releases of 
liens, payment of taxes, and such other matters as the Secretary 
may, in his discretion, prescribe. 
(b) The outstanding principal obligations guaranteed under this 
title with respect to a single new community development project 
shall at no time exceed $50,000,000. 
FEES AND CHARGES 
SEC. 406. The Secretary is authorized to establish and collect fees 
for guarantees made under this title and may make such charges as 
he considers reasonable for the analysis of development and financing 
plans and for appraisals and inspections related to new community 
development projects. On or before January 1, 1970, the Secretary ^^^1°^^'° *^°"' 
shall make a report to the Congress concerning the fees and other 
charges under this title that he estimates will be adequate to provide 
income sufficient for a self-supporting program. 
GUARANTEE F U N D 
SEC. 407. (a) To provide for the payment of any liabilities incurred 
as a result of guarantees made under this title, the Secretary is author-
ized to establish a revolving fund which shall be comprised of 
(1) receipts from fees and charges; (2) recoveries under security or 
subrogation rights or other rights, and any other receipts obtained 
in connection with such guarantees; and (3) such sums, which are 
hereby authorized to be appropriated, as may be required for pro-
gram operations and nonadministrative expenses and to make any 
and all payments guaranteed under this title. 
(b) The full faith and credit of the United States is pledged to 
the payment of all guarantees made under this title with respect to 
both principal and interest, including (1) interest, as may be provided 
for in the guarantee, accruing between the date of default under a 
guaranteed obligation and the payment in full of the guarantee, and 
(2) principal and interest due under any debentures issued by the 
Secretary toward payment of guarantees made under this title. 
(c) Notwithstanding any other provision of law relating to the 
acquisition, handling, improvement, or disposal of real and other 
I)roperty by the United States, the Secretary shall have power, for 
the protection of the interests of the guarantee fund authorized under 
this section, to pay out of such fund all expenses or charges in con-
gress. 
516 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
nection with the acquisition, handling, improvement, or disposal of 
any property acquired by him under this title; and notwithstanding 
any other provision of law, the Secretary shall also have power to pur-
sue to final collection by way of compromise or otherwise all claims 
acquired by him in connection with any security, subrogaticm, or 
other rights obtained by him in carrying out this title. 
(d) The aggregate of the outstanding principal obligations guar-
anteed under this title shall at no time exceed $250,0()0,()00. 
INCONTESTABILITY 
SEC. 408. Any guarantee made by the Secretary under this title shall 
be conclusive evidence of the eligibility of the obligations for such 
guarantee, and the validity of any guarantee so made shall be incon-
testable in the hands of a qualified holder of the guaranteed obliga-
tion except for fraud or material misrepresentation on the pail of 
such holder. 
ENCOURAGEMENT 
OF SMALL 
BUILDERS 
SEC. 409. The Secretary shall adopt such requirements as he deems 
necessary to assure that new community construction assisted under 
this title will encourage the maintenance of a diversified local home-
building industry and broad participation by builders, particularly 
small builders. 
LABOR 
SEC. 410. All laborers and mechanics employed by contractors or 
subcontractors in land development assisted under section 403 shall be 
paid wages at rates not less than those prevailing on similar construc-
tion in the locality as determined by the Secretary of Labor in accord-
ance with the Davis-Bacon Act, as amended (40 U.S.C. 276a^— 
49 Stat. 1011; 
276a-5). No assistance shall be extended under section 408 for land 
development without first obtaining adequate assurance that these 
labor standards will be maintained upon the construction work 
involved in such development. The Secretary of Labor shall have, 
with respect to the labor standards specified in this section, the author-
ity and functions set forth in Reorganization Plan Numbered 14 of 
1950 (64 Stat. 1267), and section 2 of the Act of June 13, 1934 (40 
63 Stat. 108. 
U.S.C. 276c). 
REAL PROPERTY TAXATION 
SEC. 411. Nothing in this title shall be construed to exempt any real 
property that may be acquired and held by the Secretary as a result 
of the exercise of lien or subrogation rights from real property taxa-
tion to the same extent, according to its value, as other real property 
is taxed. 
SUPPLEMENTARY GRANTS 
SEC. 412. (a) The Secretary is authorized to make supplementary 
grants to State and local public bodies and agencies carrying out new 
community assistance projects, as defined in section 415(c), if the 
Secretary determines that such grants are necessary or desirable for 
carrying out a new community development project approved for 
assistance under section 403, and that a substantial number of housing 
units for low and moderate income persons is to be made available 
through such development project. 
(b) In no case shall any grant under this section exceed 20 per 
centum of the cost of the new community assistance project for which 
the grant is made; and in no case shall the total Federal contributions 
to the cost of such project be more than 80 per centum. 
Federal contri-
bution. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
517 
(c) In carrying out his authority under this section the Secretary 
shall consult with the Secretary oi Agriculture with respect to new 
community assistance projects assisted by that Department, and he 
shall, for the purpose of subsection (b), accept that Department's 
certifications as to the cost of such projects. 
(d) There are authorized to be appropriated for grants under this Appropriations. 
section not to exceed $5,000,000 for the fiscal year ending June 30, 
1969, and not to exceed $25,000,000 for the fiscal year ending June 30, 
1970. Any amounts so appropriated shall remain available until ex-
l^ended, and any amounts authorized for any fiscal year under this 
subsection but not appropriated may be appropriated for any succeed-
ing fiscal year commencing prior to July 1, 1970. 
(lENEKAL PROVISIONS AND RULES AND REGULATIONS 
SEC. 413. In the performance of, and with respect to, the functions, 
powers, and duties vested in him by this title, the Secretary shall 
(in addition to any authority otherwise vested in him) have the 
functions, powers, and duties (including the authority to issue rules 
and regulations) set forth in section 402, except subsections (c) (2), 
(d), and (f), of the Housing Act of 1950: Provided, That subsection 
^^ stat. 78; 
(a)(1) of section 402 shall not apply with respect to functions, powers, ^^Tusc V749a. 
and duties under section 412 of this title. 
AUDIT BY G E N E R A L ACCOUNTING 
OFFICE 
SEC. 414. Insofar as they relate to any grants or guarantees made 
pursuant to this title, the financial transactions of recipients of Fed-
eral grants or of developers whose obligations are guaranteed by the 
United States pursuant to this title may be audited by the General 
Accounting Office under such rules and regulations as may be 
prescribed by the Comptroller General of the United States. The 
°^° access to 
representatives of the General Accounting Office shall have access to all '^^""'^ ^' ^'''' 
books, account, records, reports, files, and all other papers, things, or 
property belonging to or m use by such developers or recipients of 
grants pertainnig to such financial transactions and necessary to 
facilitate the audit. 
DEFINITIONS 
SEC. 415. As used in this title— 
(a) The term "land development" means the process of grading 
land, making, installing, or constructing water lines and water supply 
installations, sewer lines and sewage disposal installations, steam, gas, 
and electric lines and installations, roads, streets, curbs, gutters, side-
walks, storm drainage facilities, and other installations or work, 
whether on or off the site, which the Secretary deems necessary or 
desirable to prepare land for residential, commercial, industrial, or 
other uses, or to provide facilities for public or common use. The term 
"land development" shall not include any building unless it is (1) a 
building which is needed in connection with a water supply or sewage 
disposal installation or a steam, gas, or electric line or installation, or 
(2) a building, other than a school, which is to be owned and main-
tained jointly by the residents of the new community or is to be trans-
ferred to public ownership, but not prior to its completion. 
(b) The term "actual costs" means the costs (exclusive of rebaites 
or discounts) incurred by a new community developer in carrying out 
the land development assisted under this title. These costs may include 
amounts paid for labor, materials, construction contracts, land plan-
ning, engineers' and architects' fees, surveys, taxes, and interest during 
development, organizational and legal expenses, such allocation of gen-
69 Stat. 633. 
12 u s e 371. 
79 Stat. 461. 
12 u s e 1749aa. 
518 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
eral overhead expenses as are acceptable to the Secretary, and other 
items of expense incidental to development which may be approved 
by the Secretary. If the Secretary determines that there is an identity 
of interest between the new community developer and a contractor, 
there may be included as a part of actual costs an allowance for the 
contractor's profit in an amount deemed reasonable by the Secretary, 
(c) The term "new community assistance projects" means projects 
assisted by grants made under section 70^ of the Housing and Urban 
11 vTc 3
^
^
o
2 
I^velopment Act of 1965, section 306 (a) (2) of the Consolidated Farm-
79 Stat. 931. 
^rs' Home Administration Act, or title VII of the Housing Act of 
7 use 1926. 
1961. 
7S Stat 1 8"^* 
79 Stat. 494 
CONFORMING 
AMENDMENTS 
42 u s e 1500-
isooe. 
SEC. 416. (a) Section 202(b)(4) of the Housing Amendments of 
75 Stat. 174; 
1955 is amended by adding before the period at the end of the second 
^°42*usc^i492 
sentence "or under title IV of the Housing and Ur'ban Development 
Act of 1968". 
(b) The first paragraph of section 24 of the Federal Reserve Act 
is amended by striking out all that follows "national banking associa-
tion" in the fourth sentence and adding "may make loans or purchase 
obligations for land development which are secured by mortgages 
insured under title X of the National Housing Act or guaranteed 
under title IV of the Housing and Urban Development Act of 1968.". 
(c) The paragraph which, prior to the amendments made by this 
Act, was the next to last paragraph of section 5(c) of the Home 
12 us^c 1
^
^
^ 
Owners' I^an Act of 1933 is amended by adding at the end thereof the 
following new sentence: "Without regard to any other provision of 
this subsection, an association may invest in loans or obligations, or 
interests therein, as to which the association has the benefit of any 
guaranty under title IV of the Housing and Urban Development Act 
of 19()8, as now or hereafter in effect, or of a commitment or agree-
ment therefor, and such investments shall not be included in any per-
centage of assets or other percentage referred to in this subsection." 
TITLE V—URBAN RENEWAL 
NEIGHBORHOOD DEVELOPMENT PROGRAMS 
79^star45V^477 
^ ^ - ^^^' ^^^ ^^^^^ ^ ^^ ^^^ Houslug Act of 1949 is amended by add-
42 use 1450- 
ing after the title heading the following new subheading: 
1468. 
"PART A—URBAN RENEWAL PROJECTS, DEMOLITION PROGRAMS, 
A
N
D CODE ENFORCEMENT PROGRAMS" 
(b) Title I of such Act is further amended by adding at the end 
thereof the following new part: 
"PART B—NEIGHBORHOOD DEVELOPMENT PROGRAMS 
"PURPOSE AND AUTHORITY 
"SEC. 131. (a) To facilitate more rapid renewal and development of 
urban areas on an effective scale, and to encourage more efficient and 
flexible utilization of public and private development opportunities 
by local communities in such areas, the Secretary is authorized to make 
financial assistance available under this title to local public agencies 
for undertakings and activities which are carried out under a neigh-
borhood development program approved by him pursuant to this part. 
"(b) A neighborhood development program shall consist of urban 
renewal project undertakings and activities in one or more urban re-
82 STAT. J 
PUBLIC LAW 90-448-AUG. 1, 1968 
519 
newal areas which are planned and carried out on the basis of annual 
increments in accordance with the provisions of this title for planning 
and carrying out urban renewal projects, except as modified by the 
provisions of this part. 
"(c) No application for financial assistance in planning and carry-
ing out a neighborhood development program shall be approved by tlie 
Secretary unless— 
''(1) the governing body of the locality has, by resolution or 
ordinance, approved the proi>osed program and the annual incre-
ment covered by the application and authorized the filing of the 
application for financial assistance; and 
"(2) the Secretary has concluded that there is the necessary 
capacity to carry out the undertakings and activities included 
under the program. 
"FINANCIAL PROVISIONS 
"SEC. le^2. (a) Upon the approval of a neighborhood de\elopment 
program by the Secretary, the cost of any undertakings and activities 
authorized as part of the program shall be financed in accordance witli 
the loan, capital grant, and project cost provisions of part A, excej)t 
^2 use 1450-
• 1 
j_ 
* 
1 4 6 8 . 
1 hat— 
"(1) net project cost may be calculated on the basis of costs 
incurred and proceeds derived for the account of the program 
during a specified twelve-month period, and may be recalculated 
for succeeding periods of twelve months to reflect additional costs 
and additional proceeds since the date of the last computation or 
recomputation; and 
"(2) if property has been acquired but not disposed of prior 
to the computation or recomputation of net project cost, tem-
porary loans made or secured under this title to finance under-
takings or activities included in the program may remain out-
standing until the property has been disposed of and the 
proceeds thereof together with additional funds becoming avail-
able to the program, are sufficient to permit repayment of the loans. 
"(b) In the event that gross project cost as computed for a speci-
fied twelve-month period is exceeded, with respect to that period, by 
the sum of (1) the sales price of land or other property sold, and (2) 
the imputed capital value of land or other proj^erty leased or retained 
by the local public agency in accordance with the provisions of the 
urban renewal plan, the local public agency shall pay to the Secretary 
two-thirds of the excess (or three-fourths in the case of a program on 
a three-fourths grant basis), which amount shall be available to the 
Secretary for grant payments under section 103. 
63 stat. 416; 
-^ 
'^ 
^ '' 
73 Stat. 672. 
42 u s e 1453. 
LOCAL GRANTS-IN-AID 
"SEC. 133. (a) For the purpose of determining the eligibility of 
local grants-in-aid in connection with undertakings and activities car-
ried out under a neighborhood development pi-ogram, the tliree-year 
period referred to in the second paragraph of section 110(d) shall be 
^^ ^g^'- ^
^
^
^
_ 
deemed to be a period of three years prior to the authorization by the 
Secretary of the first contract for financial assistance under the pro-
gram which includes the urban i-enewal area which is benefited by the 
public improvement or facility for which credit is claimed; and the 
seven-year iperiod referred to m clause (1) of section 112(b) shall be 
35 stat. 169. 
deemed to be a period of seven years prior to the date of authorization 
"" 
by the Secretary of the first contract for financial assistance under the 
program which includes the urban renewal area which is benefited by 
the expenditures for which credit is claimed. 
42 use 1463. 
S-600 O - 69 - 36 
520 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
" (b) No portion of the cost of a public improvement or public facil-
ity (to the extent otherwise eligible) may be included as a local 
grant-in-aid in computing the gross project cost of an approved pro-
gram for any twelve-month period— 
"(1) prior to commencement of construction of the improve-
ment or facility, or 
" (2) in excess of the amount actually expended or obligated by 
contract. 
42 use U5°4. 
"(<^) The provisions of section 104 with respect to the pooling of 
local grants-m-aid among the various projects undertaken by a local 
public agency shall not be applicable with respect to any excess local 
grants-in-aid resulting from the urban renewal projects contained in 
a neighborhood development program. 
71 Stat. 301. 
(( 
GENERAL PROVISIONS 
"SEC. 134. (a) For purposes of this part— 
^2 u^* ^^^ 
'^i^) ^^® workable program requirement in section 101(c) shall 
apply to the authorization, rather than the execution, of any con-
tract for loans or capital grants; 
"(2) capital grants on a three-fourths basis may only be made 
II use U53 
"^^^^^«^^ti«^ 10^(^) (2) (B).; 
79 Stat. 475. 
"(3) the relocatiou requirements specified in section 105(c) 
42 use 1455. 
shall apply to each annual increment of an approved program; 
42 us^c i^^e 
"(^) section 106(g) (relating to transient housing) shall apply 
to activities undertaken under approved programs, except that 
the determination as to need for transient housing shall be made 
with respect to any sale or lease of land for construction of such 
housing prior to such sale or lease; and 
"(5) the requirement concerning demolition and removal of 
buildings and improvements stated in clause (A) of the sentence 
42 us^c 1
4
^
6
^
0
' 
following paragraph (10) of section 110(c) shall apply to each 
annual increment of an approved program. 
"(b) The approval by the Secretary of financial assistance for one 
or more annual increments of a neighborhood development program 
shall not be considered as obligating him to provide financial assistance 
for any subsequent annual increments. 
"(c) The urban renewal plan referred to in section 110(b) may 
cover one or more of the urban renewal areas covered by a neighbor-
hood development program and such plan may be modified from time 
to time to cover additional urban renewal areas added to the program. 
The Secretary may establish such requirements as he deems appro-
priate prescribing the scope and content of such plan, taking into con-
sideration, among other matters, the degree of detail needed in the 
plan to properly and expeditiously carry out the activities and under-
takings proposed in any annual increment of a neighborhood develop-
ment program." 
(c) Notwithstanding any requirement or condition to the contrary 
in section 6 or 20(i) of the District of Columbia Redevelopment Act 
of 1945 or in any other provision of law, the District of Columbia 
D^c". coX 5- 
Redevelopment Land Agency may plan and undertake neighborhood 
705,5-717a. 
development programs under part B of title I of the Housing Act 
of 1949 (as added by this section), subject to all of the provisions of 
such Act of 1945 to the extent not inconsistent with such part B, and 
any such program shall be regarded as complying with the require-
ments of such sections 6 and 20(i) and of such other provision of law 
if it meets the applicable requirements established under such part B. 
60 Stat. 794 
68 Stat. 630 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
521 
INCREASED 
AUTHORIZATION 
SEC. 502. (a) Section 103(b) of the Housing Act of 1949 is amended 
63 stat. 4i6; 
by striking out everything in the first sentence after "exceed" and in- 
42 use 1453. 
serting in lieu thereof "$7,600,000,000, which amount shall be increased 
by $1,400,000,000 on July 1, 1969". 
(b) Section 103(b) of such Act is further amended by striking out 
^° ^*°'- ^26o. 
"$250,000,000" in the second sentence and inserting in lieu thereof 
rt^p Q 
"$600,000,000". 
REHABILITATION 
GRANTS 
hJ^^ 
SEC. 503. (a) The second sentence of section 115(a) of the Housing 
Act of 1949 is amended by striking out the words "a structure" and 
^^ ^^^- '*57 
"such structure" and inserting in lieu thereof "real property" and 
^'*^^' 
"such real property", respectively. 
(b) Section 115 (b) of such Act is amended by striking out "$1,500" 
and inserting in lieu thereof "$3,000". 
(c) Section 115(a) of such Act is amended by inserting "(1)" after 
"(a)", and by adding at the end thereof a new paragraph as follows: 
"(2) In addition to the authority conferred by paragraph (1), and 
notwithstanding any other provision of this title, the Secretary is 
authorized, through the utilization of local public agencies where 
feasible, to make grants (payable from any grant funds provided 
under section 103(b)) to an individual or family, as described in 
subsection (b), to cover the cost of repairs and improvements neces-
sary to make real property owned and occupied by such individual or 
family conform to public standards for decent, safe, and sanitary 
housing. No grants shall be made under this paragraph in the case 
of any property, unless (A) such property is in an area within a 
locality (other than an urban renewal or code enforcement area) which 
the governing body of the localitj^ has determined, and so certifies to 
the Secretary, contains a substantial number of structures in need of 
such repairs and improvements, (B) there is in effect for the locality a 
workable program meeting the requirements of section 101 (c), and (C) 
^^ stat. 623. 
the area is definitely planned for rehabilitation or concentrated code 
^'*^^ 
enforcement within a reasonable time, and such repairs and improve-
ments to such property are consistent with the plan for rehabilitation 
or concentrated code enforcement." 
(d) Section 115 of such Act is further amended— 
(1) by redesignating subsection (b) as su})section (c) and 
inserting after subsection (a) a new subsection (b) as follows: 
"(b) The Secretary is authorized to make grants (payable from 
any grant funds provided under section 103(b)), through the utiliza-
tion of local public and private agencies where feasible, to an individ-
ual or family, as described in subsection (c), who owns and occupies 
real property which has been determined to be uninsurable because of 
physical hazards after an inspection pursuant to a statewide property 
insurance plan approved by the Secretary under title X I I or the 
National Housing Act. Such grants may only be made to rehabilitate 
^°^'' P- sse. 
such property to the extent which the Secretary determines to be neces-
sary to make it meet reasonable underwriting standards imposed by 
such plan."; and 
(2) by striking out "subsection (b)" in subsection (a) and 
inserting in lieu thereof "subsection (c)". 
\ 
REHABILITATION I N URBAN RENEWAL AREAS 
SEC. 504. Section 110(c) (8) of the Housing Act of 1949 is amended 
7o stat. 1097; 
by striking out (1) "guidance purposes, and", and (2) the proviso at 
42 use ueo. 
the end thereof. 
522 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
DISPOSITION OF PROPERTY FOR LOW AND MODERATE INCOME HOUSING 
78 Stat. 786. 
SEC. 505. Section 107(a) of the Housing Act of 1949 is amended— 
(1) by inserting after "public body or agency, the following: 
"or other approved purchaser or lessee,"; 
(2) by inserting ", section 221(h)(1), section 235(j)(l), or 
section 286" after "or (d) (4)"; 
(3) by inserting "or lessee'* after "a purchaser" and after "such 
purchaser", and "or lease" after "purchase"; 
(4) by striking out "rental or cooperative"; 
(5) by striking out "moderate" and inserting in lieu thereof 
"low or moderate"; and 
(6) by inserting before the period at the end thereof the fol-
lowing: ": Provided, That when property is made available under 
clause (1) to an approved purchaser or lessee other than a limited 
dividend corporation, nonprofit corporation or association, coop-
erative, or public body or agency, the Secretary shall assure that 
the benefits of this subsection will go to the occupant of the prop-
erty rather than to such purchaser or lessee". 
(JRANTS FOR LOW AND MODERATE INCOME HOUSING IN OPEN LAND PROJECTS 
^^63 stat^.^416; 
gpy. 506. Sectiou 103(a) (1) of the Housing Act of 1949 is amended 
42 use 1453. 
by inserting before the period at the end thereof the following: ", 
except that he may contract for a grant in an amount not to exceed 
two-thirds of the difference between the proceeds from any land dis-
posed of pursuant to section 107 and the fair value of the land without 
regard to such section". 
URBAN RENEWAL IX)AN CONTRACTS 
63 Stat. 414. 
gjx^, 507. (a) Scctiou 102(c) of the Housing Act of 1949 is 
42 u s e 1452.1 
J J 
^ 
amended— 
(1) by striking out "at interest rates lower than provided in 
the loan contract" in the first sentence; and 
(2) by inserting before the period at the end of the first sen-
tence the following: ": Provided^ That, if at any time during the 
undertaking of the project, the interest rate on such a loan from 
a source other than the Federal Government is greater than the 
rate at which funds could be made available under the Federal 
loan contract, the Secretary may make a supplemental grant to 
the local public agency in the amount of the difference between 
the interest cost from such sources and the interest cost at the con-
tract rate, and no part of the amount of any such grant shall be 
required to be contributed as a part of the local grant-in-aid". 
(b) Loan contracts outstanding on the date of enactment of this 
section may be amended to incorporate the provisions authorized by 
the amendment contained in subsection (a) without regard to the pro-
viso in section 110(g) of the Housing Act of 1949. 
68 Stat. 626. 
42 use 1460 
63 Stat. 417. 
42 u s e 1456. 
PROJECT COMPLETION PRIOR TO DISPOSITION OF CERTAIN PROPERTY 
SEC. 508. (a) Section 106 of the Housing Act of 1949 is amended 
by adding at the end thereof the following new subsection: 
"(i) Upon a determination by the Secretary that (1) not more than 
5 per centum of the total area of land acquired as part of an urban 
renewal project remains to be disposed of, (2) the local public agency 
does not expect to be able, due to circumstances beyond its control, to 
dispose of such land in the near future, (3) all other project activities 
are completed, and (4) the local public agency has agreed to dispose 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
523 
of or retain such land for uses in accordance witli the urban renewal 
plan, the urban renewal project may be deemed completed, and the 
net project cost may be computed and the capital grant paid." 
(b) Section 110(f) of such Act is amended by inserting before the 
^^ ^^^^- f^^^ 
period at the end thereof the following: "or for subsequent disposition 
or retention as provided under section 106 (i)". 
42 u s e 1460. 
REHABILITATION 
LOANS 
SEC. 509, (a) The first sentence of section 812(d) of the Housing 
Act of 1964 is amended to read as follows: ''There is authorized to be 7/5131^479^°' 
appropriated not to exceed $150,000,000 for each fiscal year which 
42 use 1452b. 
shall constitute a revolving fund to be used by the Secretary in carry-
ing out this section." 
(b) Section 312(h) of such Act is amended by striking out "Octo-
ber 1,1969" and inserting in lieu thereof ''June 30,1973". 
(c) Section 312(a) of such Act is amended to read as follows: 
"(a) The Secretary is authorized, through the utilization of local 
public and private agencies where feasible, to make loans as herein 
provided to the owners and tenants of property to finance the rehabili-
tation of such property. No loan shall be made under this section 
unless— 
"(1) (A) the property is situated in an urban renewal area or 
an area in which a program of concentrated code enforcement 
activity is being carried out pursuant to section 117 of the Housing 
Act of 1949, and the rehabilitation is required to make the prop- 
^^ us^c iles 
erty conform to applicable code requirements or to carry out the 
objectives of the urban renewal plan for the area and, in addition, 
to generally improve the condition of the property; or 
"(B) (i) the property is in an area (other than an area 
described in subparagraph (A) which the governing body of the 
locality has determined, and so certifies to the Secretary, contains 
a substantial number of structures in need of rehabilitation, (ii) 
there is in effect for the locality a workable program meeting the 
requirements of section 101(c) of the Housing Act of 1949, (iii) 
^^usc' ''^^ 
the property is residential and owner-occupied, (iv) the property 
^^ 
is in need of rehabilitation and is in violation of the local mini-
mum housing or similar code, and (v) the area is definitely 
planned for rehabilitation or concentrated code enforcement 
within a reasonable time, and the rehabilitation of such property 
is consistent with the plan for rehabilitation or code enforcement; 
" (2) the applicant is unable to secure the necessary funds from 
other sources upon comparable terms and conditions; and 
" (3) the loan is an acceptable risk taking into consideration the 
need for the rehabilitation, the security available for the loan, and 
the ability of the applicant to repay the loan." 
(d) Section 312 of such Act is further amended— 
(1) by inserting "or" after the semicolon at the end of para-
graph (1)(B) in subsection (a) (as amended by subsection (c) 
of this section), and by inserting after such paragraph (1) (B) 
the following new subparagraph: 
"(C) (i) the property has been determined to be uninsurable 
because of physical hazards after an inspection pursuant to a 
statewide property insurance plan approved by the Secretary 
under title X I I of the National Housing Act, and (ii) the loan 
is made to the owner or tenant of the property to finance rehabili-
tation which the Secretary determines to be necessary to make the 
property meet reasonable underwriting standards: "; and 
Post, 
p. 556. 
524 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
(2) by striking out "or" after "applicable codes" in subsection 
(b) (1) and inserting in lieu thereof a comma, and by inserting 
after "urban renewal plan" in such subsection ", or a statewide 
property insurance plan". 
(e) Section 312(a) of such Act (as amended by the preceding pro-
visions of this section) is amended by adding at the end thereof the 
following new sentence: "Notwithstanding tne preceding provisions 
of this subsection, no loan with respect to residential property shall 
be made under this section to any person w^hose annual income, as 
determined pursuant to criteria and procedures established by the 
Secretary, exceeds the limits prescribed by the Secretary for occupants 
of projects financed with below-market interest rate mortgages in-
sured (in the area involved) under section 221(d) (3) of the National 
1
2 \jsc 17151. Housing Act: Provided, 
That the provisions of this sentence shall 
not apply to property in the area of an urban renewal project or a code 
enforcement project for which the city or other local public body or 
agency is receiving financial assistance under title I of the Housing 
i468-"Anti^^° 
Act of 1949 if, prior to the date of enactment of the Housing and 
518.' " ^' 
Urban Development Act of 1968, such local public body or agency 
specifically developed plans for such project in reliance upon the 
availability of loans under this section." 
DEMOLITION GRANTS 
SEC. 510. (a) The first sentence of section 116(a) of the Housing Act 
42 use 1
*
^
7 
^^ ^^^^ ^^ amended by inserting after "unsound" the following: ", a 
harborage or potential harborage of rats,". 
(b) Section 116(b) of such Act is amended by inserting after the 
comma at the end of clause (2) the following: "or will be consistent 
with a systematic rodent control program being undertaken in the 
neighborhood,". 
AIR RIGHTS SITES IN URBAN RENEWAL AREAS 
sJ sfaTu^r' 
^^'^- '^11- (^) .Section 110(c) (1) (iy) of the Housing Act of 1949 is 
42 use 1460. 
amended by striking out "for use for industrial development" and 
inserting in lieu thereof "for use for the development of industrial or 
educational facilities". 
(b) Section 110(c) (7) of such Act is amended by striking out "for 
industrial development" and inserting in lieu thereof "for the develop-
ment of industrial or educational facilities". 
LOW^ AND MODERAlTi INCOME HOUSING IN RESIDENTIAL URBAN RENEWAL 
AREAS 
80 Stat. 1281. 
SJ-C. 512. Sectiou 105(f) of the Housing Act of 1949 is amended to 
42 use 1455. 
1 
» n, 
read as lolmws: 
"(f) A majority of the housing units provided in each community's 
total of such approved urban renewal projects as will be redeveloped 
for predominantly residential uses and which receive Federal recogni-
tion after the date of enactment of the Housing and Urban Develop-
ment Act of 1968 shall be standard housing units for low and moderate 
income families or individuals: Provided, That the units in each com-
munity's total of such approved urban renewal projects which are for 
low-income families or individuals shall constitute at least 20 per cen-
Report o
f waiver ^ ^ j ^ Qf ^j^g uuits iu such pi'ojects, except that the Secretary may 
to congressional 
• 
. i 
• 
j. 
j: j.i * 
• 
• 
•• 
• 
.t 
^ \_ 
committees. 
waive the requirement oi this proviso in any community to the extent 
that units for low-income families and individuals are not needed. 
The Secretary shall promptly report any w^aiver under the proviso in 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
525 
the preceding sentence to the Committees on Banking and Currency 
of the Senate and the House of Representatives." 
WORKABLE PROGRAM REQUIREMENT IN CASE OF INDIAN TRIBES 
SEC. 513. Section 101(c) of the Housing Act of 1949 is amended by 
^^ f'Jf* '^8^. 
• 
• 
"^ 
• 
• 
42 use 14^1 
inserting after "1964" in the second proviso the following: "or, in the 
case of an Indian tribe, band, or nation, commencing January 1, 1970". 
42 u s e 1450-
468. 
INTERIM ASSISTANCE FOR BLIGH'I'EI) AREAS 
SEC. 514. Title I of the Housing Act of 1949 is amended by adding 
after section 117 a new section as follows: 
" I N T E R I M ASSISTANCE FOR BLIGHTED AREAS 
"SEC. 118. Notwithstanding any other provision of this title, the 
Secretary is authorized to enter into contracts (in an aggregate amount 
not to exceed $15,000,000 in any fiscal year) to make, and to make, 
grants as provided in this section (payable from any grant funds pro-
vided under section 108 (b)) to cities, other municipalities, and counties 
^^ sm. 4i6^ 
for the purpose of assisting such localities in carrying our programs to 
alleviate harmful conditions in slum and blighted areas which are 
planned for substantial clearance, rehabilitation, or federally assisted 
code enforcement in the near future but in which some immediate pub-
lic action is needed until clearance, rehabilitation, or code enforcement 
activities can be undertaken. Such grants shall not exceed two-thirds 
(or three-fourths in the case of any city, other municipality, or county 
having a population of fifty thousand or less according to the most 
recent decennial census) of the cost of planning and carrying out pro-
grams which may include (1) the repair of streets, sidewalks, parks, 
playgrounds, publicly owned utilities, and public buildings to meet 
needs consistent with the short-term continued use of the area prior 
to the undertaking of the contemplated clearance or upgrading activ-
ities, (2) the improvement of private properties to the extent needed 
to eliminate the most immediate dangers to public health and safety, 
(3) the demolition of structures determined to be stiTicturally unsound 
or unfit for human habitation and which constitute a public nuisance 
and serious hazard to the public health and safety, (4) the establish-
ment of temporary public playgrounds on vacant land within the area, 
and (5) the improvement of garbage and trash collection, street clean-
ing, and similar activities. The Secretary shall encourage, wherever 
feasible, the employment of otherwise unemployed or underemployed 
residents of the area in carrying out the activities and undertakings 
assisted under this section. The provisions of sections 101(c), 106, and 
114 shall be applicable to activities and undertakings assisted under 
^^ ^*^'- ^2^' 
this section to the same extent as if such activities and undertakings 73 stat! 788.' 
were being carried out in an urban renewal area as part of an urban 
tl^f^^}'*^^' 
renewal project." 
1456, 1465. 
UTILIZATION OF LOCAL PRIVATE NONPROFIT AGENCIES FOR REHABILITATION 
GRANTS IN CODE ENFORCEMENT AREAS 
SEC. 515. Section 117 of the Housing Act of 1949 is amended by 
^^ ^*^^ '•^s. 
inserting the following before the period at the end thereof: ": Pro- 
"^^ ^^^ ^^*'* 
tuded, That the Secretary may, in addition to authorizing a local 
public agency to make grants as prescribed in section 115, make such 
'^^ "^^ ^''^^ 
grants through the utilization of local private nonprofit agencies". 
526 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
RELOCATION PAYMENTS 
78 sm- 788^ 
SEC. 516. Section 114(c) of the Housing Act of 1949 is amended— 
(1) by striking out the first sentence of paragraph (2) and 
inserting in lieu thereof the following: ''In addition to any 
amount under paragraph (1), a local public agency may pay to 
or on behalf of any displaced family, displaced individual sixty-
two years of age or over, or displaced handicapped individual, 
monthly payments over a period not to exceed twenty-four months 
in an amount not to exceed $500 in the first twelve months and 
$500 in the second twelve months to assist such displaced family 
or individual to secure a decent, safe, and sanitary dwelling."; 
(2) by striking out "relocation adjustment" in the second sen-
tence of paragraph (2) and inserting in lieu thereof "additional"'; 
(8) by striking out the second proviso in paragraph (2) and 
inserting in lieu thereof the following: " : Provided further^ That 
additional payments under this paragraph may be paid on a lump 
sum or other than monthly basis in cases in which the small size 
of the payments that would otherwise be required do not warrant 
a number of separate payments or in other cases in which other 
than monthly payments are determined warranted by the Secre-
tary: And proi'ided further. 
That no payment received under 
this paragraph shall be considered as income for the purpose of 
determining the eligibility or the extent of eligibility of any per-
^^ Tsr ^^° 
^^^ ^^^ assistance under the Social Security Act or any other 
Fedei'al Act"; and 
(4) by inserting a new paragraph (8) as follows: 
"(3) In addition to any amount under paragraph (1), a local public 
agency may make a payment to a displaced family or individual, who 
does not receive the additional payment authorized under paragraph 
(2) and who is the owner of real property which is acquired for a 
project assisted under this title and which is improved by a single- or 
two-family dwelling occupied by the owner for a }>eriod of not less 
than one year prior to the initiation of negotiations for the acquisition 
of such pi^operty. Such payment, not to exceed $5,000, shall be an 
amount which, when added to the acquisition payment, equals the aver-
age price required for a decent, safe, and sanitary dwelling of modest 
standards adequate in size to accommodate the displaced owner, rea-
sonably accessible to public services and places of employment and 
available on the private market: Provided^ That such payment may 
be made only to a displaced owner who purchases and occupies a dwell-
ing within one year subsequent to the date on which he is required to 
move from the dwelling acquired for the project: Provided 
further^ 
That no such payment may be made if the owner-occupant receives a 
payment required by the State law of eminent domain which is deter-
mined by the Secretary to have substantially the same purpose and 
effect as this j^aragraph and to be part of the cost of the project for 
which Federal financial assistance is available." 
TITLE VI—URBAN PLANNING AND FACILITIES 
COMPREHENSIVE PLANNING 
73 Stat. 678. 
SRC. 601. Section 701 of the Housing Act of 1954 is amended to read 
40 use 461. 
j ; n 
'^ 
as follows: 
" C O M P R E H E N S I V E PLANNING 
"SEC. 701. (a) In order to assist State and local governments in 
solving planning problems, including those resulting from the increas-
ing concentration of population in metropolitan and other urban areas 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1068 
527 
and the out-migration from and lack of coordinated development of 
resources and services in rural areas; to facilitate comprehensive 
planning for urban and rural development, including coordinated 
transportation systems, on a continuing basis by such governments; 
and to encourage such governments to establish and improve planning 
staffs and techniques on an area 
wide basis, and to engage private con-
sultants where their professional services are deemed appropriate by 
the assisted governments, the Secretary is authorized to make plan-
ning grants to— 
"(1) State planning agencies for the provision of planning 
assistance to (A) cities and other municipalities having a popula-
tion of less than 50,000 according to the latest decennial census, 
and counties without regard to population: Provided^ That grants 
shall be made under this paragraph for planning assistance to 
counties having a population of 50,000 or more, according to the 
latest decennial census, which are within metropolitan areas, only 
if (i) the Secreftary finds that planning and plans for such county 
will be coordinated with the program of comprehensive planning, 
if any, which is being carried out for the metropolitan area of 
which the county is a part, and (ii) the aggregate amount of the 
grants made subject to this proviso does not exceed 15 per centum 
of the aggregate amount appropriated, after September 2, 1964, 
for the purposes of this section, (B) any group of adjacent com-
munities, either incorporated or unincorporated, having a total 
population of less than 50,000 according to the latest decennial 
census and having common or related urban planning problems, 
(C) cities, other municipalities, and coimties referred to in para-
graph (3) of this subsection, and areas referred to in paragraph 
(4) of this subsection, and (D) Indian reservations; 
"(2) State, metropolitan, and regional planning agencies for 
metropolitan or regional planning, and to cities, within metropol-
itan areas, for planning which is part of comprehensive metropol-
itan planning and which shall supplement and be coordinated 
with State, metropolitan, and regional planning; 
" (3) (A) economic development districts designated by the Sec-
retary of Commerce under title IV of the Public Works and Eco-
nomic Development Act of 1965, and 
^^ s*^'- s^o-
"(B) cities, other municipalities, and counties which (i) are am ancfnote.^ 
situated in redevelopment areas or economic development districts 
desigriated by the Secretarj^ of Commerce under title IV of the 
Public Works and Economic Development Act of 1965, or (ii) 
have suffered substantial damage as a result of catastrophe which 
the President, pursuant to section 2(a) of the Act entitled 'An 
Act to authorize Federal assistance to States and local govern-
ments in major disasters, and for other purposes', approved Sep-
tember 30, 1950, as amended (42 U.S.C. 1855a), has determined 
^4 stat. 1109. 
to be a major disaster; 
"(4) official governmental planning agencies for areas where 
rapid urbanization has resulted or is expected to result from the 
establishment or rapid and substantial expansion of a Federal 
installation, or for areas where rapid urbanization is expected to 
result on land developed or to be developed as a new community 
approved under section 1004 of the National Housing Act or title 
^° s*^*- 1271. 
IV of the Housing and Urban Development Act of 1968; 
in/^^^.Vu""^' 
"(5) States for State and interstate comprehensive planning 
and for research and coordination activity related thereto, includ-
ing technical and other assistance for the establishment and opera-
tion of intrastate and interstate planning agencies; 
note 
528 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
" (6) State planning agencies for assistance to district planning, 
or planning for areas within districts, carried on by or for district 
planning agencies; 
"(7) metropolitan and regional planning agencies, with the 
approval of the State planning agency or (in States where no such 
planning agency exists) of the Governor of the State, for the 
provision of planning assistance within the metropolitan area or 
region to cities, other municipalities, counties, groups of adjacent 
communities, or Indian reservations described in clauses (A), 
(B), (C), and (D) of paragraph (1) of this subsection; 
" (8) official governmental planning agencies for any area where 
there has occurred a substantial reduction in employment oppor-
tunities as the result of (A) the closing (in whole or in part) of a 
Federal installation, or (B) a decline in the volume of Govern-
ment orders for the procurement of articles or materials produced 
or manufactured in such area; 
"(9) tribal planning councils or other tribal bodies designated 
by the Secretary of the Interior for planning for an Indian 
reservation; 
"(10) the various regional commissions established by the 
40 use I p 1 
Appalachian Regional Development Act of 1965 or under the 
79 Stat. 55 2. 
Public Woi'ks and Economic Development Act of 1965 for com-
42 use 3121 
prehensive planning for the regions established under such Acts 
(or State agencies or instrumentalities participating in such 
planning); and 
"(11) local development districts, certified under section 801 
of the Appalachian Regional Development Act of 1965, for com-
prehensive planning for their entire areas, or for metropolitan 
planning, urban planning, county planning, or small munici-
pality planning within such areas in the Appalachian region, and 
for planning for Appalachian regional programs. 
Planning assisted under this section shall, to the maximum extent 
feasible, cover entire areas having common or related development 
problems. The Secretary shall encourage cooperation in preparing 
and carrying out plans among 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 prep-
aration of comprehensive transportation surveys, studies, and plans 
to aid in solving problems of traffic congestion, facilitating the circu-
lation of people and goods in metropolitan and other areas and reduc-
ing transportation needs. Planning carried out with assistance under 
this section shall also include a housing element as part of the prep-
aration of comprehensive land use plans, and this consideration of 
the housing needs and land use requirements for housing in each 
comprehensive plan shall take into account all available evidence of 
the assumptions and statistical bases upon which the projection of 
zoning, community facilities, and population growth is based, so that 
the housing needs of both the region and the local communities 
studied in the planning will be adequately covered in terms of existing 
and prospective in-migrant population growth. 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 fed-
erally aided programs, and nothing contained in this section shall be 
construed as affecting the authority of the Secretary of Transporta-
72 Stat. 913. 
^j^^j^ under section 307 of title 23, United States Code. 
82 STAT.] 
PUBLIC LAW 90-448-AUG. 1, 1968 
529 
"(b) A planning grant made under subsection (a) shall not exceed 
two-thirds of the estimated cost of the work for which the grant is 
made: Provided^ That such a grant may be made for up to 75 per 
centum of such estimated cost when made for planning primarily for 
(1) redevelopment areas, local development districts, or economic 
development districts, or portions thereof, described in paragraph (8) 
(A) and (B)(i) and paragraph (11) of subsection (a), (2) areas 
described in subsection (a)(8), and (3) the various regions, as 
described in subsection (a) (10). All grants made under this section 
shall be subject to terms and conditions prescribed by the Secretary. 
No portion of any grant made under this section shall be used for the 
preparation of plans for specific public works. Tlie Secretary is author-
ized, notwithstanding the provisions of section 3648 of the Revised 
Statutes, as amended, to make advance or progress payments on 
account of any grant made under this section. There are authorized to 
be appropriated for the purposes of this section not to exceed $265,-
000,000 prior to July 1, 1969, and not to exceed $;^90.000,fX)0 prior to 
July 1,1970. Of the amount available prior to July 1,1969, $20,000,000 
may be used only for district planning gi-^nts under subsection (a)(6), 
which amount shall be increased by $10,000,000 on July 1, 1969. Any 
amounts appropriated under this section shall remain available until 
expended: Provided. That, of any funds appropriated under this sec-
tion, not to exceed an aggregate of $10,000,(X)0 plus 5 per centum of the 
funds so appropriated may be used by the Secretary for studies, 
research, and demonstration projects, undertaken independently or by 
contract, for the development and improvement of techniques and 
methods for comprehensive planning and for the advancement of the 
purposes of this section, and for grants to assist in the conduct of 
studies and research relating to needed revisions in State statutes which 
create, govern, or control local governments and local governmental 
operations. 
"(c) The Secretary is authorized, in areas embracing several munici-
palities or other political subdivisions, to encourage planning on a 
unified regional, district, or metropolitan basis and to provide technical 
assistance for such planning and the solution of problems relating 
thereto. 
"(d) It is the further intent of this section to encourage compre-
hensive planning, including transportation plaiming, for States, cities, 
counties, metropolitan areas, districts, regions, and Indian reserva-
tions and the establishment and development of the organizational 
units needed therefor. In extending financial assistance under this 
section, the Secretary may require such assurances as he deems ade-
quate that the appropriate State and local agencies are making reason-
able progress in the development of the elements of comprehensive 
planning. The Secretary is authorized to provide technical assistance 
to State and local governments and their agencies and instrumentali-
ties, and to Indian tribal bodies, undertaking such planning and, by 
contract or otherwise, to make studies and publish information on 
related problems. 
"(e) In the exercise of his responsibilities under this section, the 
Secretary shall consult with those officials of the Federal Government 
responsible for the administration of programs of Federal assistance 
to the States and municipalities for various categories of public facili-
ties and other comprehensively planned activities. He shall, particu-
larly, consult with the Secretary of Agriculture prior to his approval 
of any district planning grants under subsections (a)(6) and (g), 
and with the Secretary of Commerce prior to his approval of any 
planning grants which include any part of an economic development 
district as defined and designated under the Public Works and Eco-
31 use 529. 
Appropriation. 
Consultation 
with other Govern-
ment officials. 
530 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
79 Stat. 552. 
42 u s e 3121 
note. 
Interstate com-
pacts. 
Historical sites 
and structures, 
study. 
80 Stat. 915. 
16 u s e 470a. 
Definitions. 
iiomic Development Act of 1965. The Secretary of Agriculture and 
the Secretary of Commerce, as appropriate, may provide technical 
assistance, with or without reimbursement, in connection with the 
establishment of districts by the Secretary of Housing and Urban 
Development and the carrying out of planning by such districts. 
"(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 effort and mutual 
assistance in the comprehensive planning for the growth and develop-
ment of interstate, metropolitan, or other urban areas, and to establish 
such agencies, joint or otherwise, as they may deem desirable for mak-
ing effective such agreements and compacts. 
"(g) In addition to the planning grants authorized by subsection 
(a), the Secretary is further authorized to make grants to organiza-
tions composed of public officials representative of the political juris-
dictions within the metropolitan area, region, or district for the 
purpose of assisting such organizations to undertake studies, collect 
data, develop metropolitan, regional, and district plans and programs, 
and engage m such other activities, including implementation of such 
plans, as the Secretary finds necessary or desirable for the solution of 
the metropolitan, regional, or district problems in such areas, regions, 
or districts. To the maximum extent feasible, all grants under this sub-
section shall be for activities relating to all the developmental aspects 
of the total metropolitan area, region, or district including, but not 
limited to, land use, transportation, housing, economic development, 
natural resources development, community facilities, and the general 
improvement of living environments. A grant under this subsection 
shall not exceed two-thirds of the estimated cost of the work for which 
the grant is made. 
"(h) In addition to the other grants authorized by this section, 
the Secretary is authorized to make grants to assist any city, other 
municipality, or county in making a survey of the structures and 
sites in such locality which are determined by its appropriate author-
ities to be of historic or architectural value. Any such survey shall be 
designed to identify the historic structures and sites in the locality, 
determine the cost of their rehabilitation or restoration, and provide 
such other information as may be necessary or appropriate to serve 
as a foundation for a balanced and effective program of historic 
preservation in such locality. The aspects of any such survey which 
relate to the identification of historic and architectural values shall 
be conducted in accordance w^ith criteria found by the Secretary to be 
comparable to those used in establishing the national register main-
tained by the Secretary of the Interior under other provisions of law; 
and the results of each such survey shall be made available to the 
Secretary of the Interior. A grant under this subsection shall not 
exceed two-thirds of the cost of the survey for which it is made, and 
shall be made to the appropriate agency or entity specified in para-
graphs (1) through (11) of subsection (a) or, if there is no such 
agency or entity which is qualified and willing to receive the grant 
and provide for its utilization in accordance with this subsection, 
directly to the city, other municipality, or county involved. 
"(i) As used in this section— 
" (1) The term 'metropolitan area' means a standard metropolitan 
statistical area, as established by the Bureau of the Budget, subject, 
however, to such modifications or extensions as the Secretary deems 
to be apnropriate for the purposes of this section. 
"(2) The term 'region' includes (A) all or part of the area of juris-
diction of one or more units of general local government, and (B) one 
or more metropolitan areas. 
82 STAT. ] 
PUBLIC LAW 90-44S-AUG. 1, 1968 
531 
"(3) The term 'district' includes all or part of the area of juris-
diction of (A) one or more counties, and (B) one or more other units 
of g-eneral local government, but does not include any portion of a 
metropolitan area. 
''(4) The term 'comprehensive planning' includes the following: 
"(A) preparation, as a guide for governmental policies and 
action, or general plans with respect to (i) the pattern and inten-
sity of land use, (ii) the provision of public facilities (including 
transportation facilities) and other government services, and 
(iii) the effective development and utilization of human and 
natural resources; 
"(B) long-range physical and fiscal plans for such action; 
"(C) programing of capital improvements and other major 
expenditures, based on a determination of relative urgency, 
together with definite financing plans for such expenditures in 
the earlier years of the program; 
"(I)) coordination of all related plans and activities of the 
State and local governments and agencies concerned; and 
"(E) preparation of regulatory and administrative measur-es 
in support of the foregoing. 
(Comprehensive planning for the purpose of districts shall not 
include planning for or assistance to establishments in relocating 
from one area to another or assist subcontractors whose purpose is to 
divest, or whose economic success is dependent upon divesting, other 
contractors or subcontractors of contracts theretofore customarily per-
formed by them: Provided^ That this limitation shall not be construed 
to prohibit assistance for the expansion of an existing business entity 
through the establishment of a new branch, affiliate, or subsidiary of 
such entity, if the Secretary finds that the establishment of such 
branch, affiliate, or subsidiary will not result in an increase in unem-
ployment in the area of original location or in any other area where 
such entity conducts business operations, unless the Secretary has 
reason to believe that such branch, affiliate, or subsidiary is being 
established with the intention of closing down the operations of the 
existing business entity in the area of its original location or in any 
other area where it conducts such operations. 
"(5) The term 'State planning agencies' includes official State 
planning agencies and (in States where no such planning agency 
exists) agencies or instrumentalities of State government designated 
by the Governor of the State and acceptable to the Secretary. 
"(6) The terms 'metropolitan planning agencies', 'regional plan-
ning agencies', and 'district planning agencies' mean official metro-
politan, regional, and district planning agencies, or other agencies and 
instrumentalities designated by the Governor (or Governors in the 
case of interstate planning), and acceptable to the Secretary, empow-
ered under State or local law or interstate compact to perform metro-
])olitan, regional, or district planning, respectively: Provided^ That 
such agencies and instrumentalities shall, to the greatest practicable 
extent, be composed of or responsible to the elected officials of the unit 
or units of general local government for whose jur'isdictions they are 
empowered to engage in planning." 
PLANNED AREA 
WIDE DEVELOPMENT 
SEC. 602. (a) The heading of title II of the Demonstration Cities 
and Metropolitan Development Act of 1966 is amended to read as 
follows: 
"TITLE 
II—PLANNED 
AREAWIDE 
DEVELOP-
MENT". 
(b) Section 201 of such Act is amended to read as follows: 
?? E*f'- ^^^^ 
^ ' 
42 use 3331. 
532 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
"FINDINGS AND DECLARATION OF PURPOSE 
"SEC. 201. (a) The Congress hereby finds that the welfare of the 
Xation and of its people is directly dependent upon the sound and 
orderly development and the effective organization and functioning of 
our State and local governments. 
"It further finds that it is essential that our State and local govern-
ments prepare, keep current, and carry out comprehensive plans and 
jirograms for their orderly physical development with a view to meet-
ing efficiently all their economic and social needs. 
"It further finds that our State and local governments are especially 
handicapped in this task by the complexity and scope of governmental 
services required, the multiplicity of political jurisdictions and agen-
cies involved, and the inadequacy of the operational and administra-
tive arrangements available for cooperation among them. 
"It further finds that present requirements for areawide planning 
and programing in connection with various Federal programs have 
materially assisted in the solution of areawide problems, but that 
greater coordination of Federal programs and additional participa-
tion and cooperation are needed from the States and localities in per-
fecting and carrying out such efforts. 
"(b) It is the purpose of this title to provide through greater coor-
dination of Federal programs, and through supplementary grants 
for certain federally assisted development projects, additional encour-
agement and assistance to States and localities for making compre-
hensive areawide planning and programing effective."" 
(c) Section 202 of such Act is amended by striking out "metropoli-
tan'* each place it appears and inserting in lieu thereof "areawide". 
(d) (1) Section 205 of such Act is amended by striking out "metro-
politan development" each pla(^ it appears and inserting in lieu 
thereof "areawide develo))ment''. 
(2) Such section is further amended by striking out "metropolitan 
areas'' and "metropolitan area'' and inserting in lieu thereof "areas'' 
and "area", respectively. 
(B) Such section is further amended by striking out "metropolitan-
wide" each place it ap})ears, and inserting in lieu thereof "areawide''. 
(4) Such section is further amended by striking out "metropolitan 
planning" each place it appears and inserting in lieu thereof "area-
wide planning''. 
(5) Such section is further amended by inserting "where appropri-
ate,'' after " ( B ) " in subsection (c)(1). 
(6) Such section is further amended by striking out "within the 
metropolitanwide area" in subsection (f). 
(e)(1) Paragraphs (1) and (2) of section 208 of such Act are 
amended by striking out "Metropolitan'' and inserting in lieu thereof 
"Areawide''. 
(2) Paragraph (7) of such sectitm is amended— 
(A) by striking out "or metropolitan or regional'' and inserting 
in lieu thereof ", metropolitan, regional, or district''; and 
(B) by striking out "metropolitan"' in the parenthetical phrase, 
(f) Section 206(b) of such Act is amended by striking out the sec-
ond sentence and inserting in lieu thereof the following: "Any 
amounts appropriated under this section shall remain available untd 
expended, and any amounts authorized for any fiscal year under this 
section but not appropriated may be appropriated for any succeeding 
fiscal year commencing prior to July 1,1970." 
80 
Stat. 1261. 
42 
use 3332. 
42 
use 3335. 
42 
use 3338. 
42 
use 3336. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. I, 1968 
533 
ADVAXCE ACQUISITION OF LAND 
SEC. 603. (a) Section 701 of the Housing and Urban Development 
Act of 1965 is amended by striking out "in connection with the future 
^^ s*^*- ^^^-
construction of public works and facilities'' in clause (3) and inserting 
in lieu thereof "m the future for public purposes". 
(b) Section 704 of such Act is amended to read as follows: 
''2 use 3104. 
" A D V A N C E ACQUISITION OF LAND 
"SEC. 704. (a) In order to encourage and assist the timely acquisi-
tion of land planned to be utilized in the future for public purposes, 
the Secretary is authorized to make grants to States and local public 
bodies and agencies to assist in financing the acquisition of a fee simple 
estate or other interest in such land. 
"(b) The amount of any grant made under this section shall not 
exceed the aggregate amount of reasonable intei'est charges on the 
loans or other financial obligations incurred to finance the acquisition 
of such land for a period not in excess of the lesser of (1) five years 
from the date of acquisition of such land or (2) the period of time 
between the date on which the land was acquired and the date its use 
began for the purpose for which it was acquired: Provided. That where 
all or any portion of the cost of such land is not financed through -bor-
rowings, the amount of the grant shall be computed on the basis of the 
aggregate amount of reasonable interest charges that the Secretary 
, 
determines would have been required. 
"(c) No grant shall be made under this section unless tlie Secretary 
. determines that the laud will be utilized for a public purpose within a 
reasonable period of time and that such utilization will contribute to 
economy, efficiency, and the comprehensively planned development of 
the area. The Secretary shall in all cases require that land acquired 
with the assistance of a grant under this section be utilized for a public 
purpose within five years after the date on which a contract to make 
such grant is entered into, unless the Secretary (1) determines that due 
to unusual circumstances a longer period of time is necessary and in 
the public interest, and (2) reports such detennination promptly to 
Report to con 
the Committees on Banking and C urrency 01 tne Senate and House of 
Representatives. 
"(d) No land acquired with assistance under tliis section shall, with-
out approval of the Secretary, be diverted from the purpose originally 
approved. The Secretary shall approve no such diversion unless he 
finds that the diversion is in accord with the then applicable compre-
hensive plan for the area. In cases of a diversion of land to other than 
a public purpose, the Secretary may require repayment of the grant, or 
suD^titution of land of approximately equal fair market value, which-
ever he deems appropriate. An interim use of the land for a public or 
private purpose in accordance with standards prescribed by the Secre-
tary, or approved by him, shall not constitute a diversion within the 
meaning of this subsection. 
"(e) Notwithstanding any other provision of law, no project for 
which land is acquired with assistance under this section shall, solely 
as a result of such advance acquisition, be considered ineligible for the 
purpose of any other Federal loan or grant program, and the amount 
of the purchase price paid for the land by the recipient of a grant 
under this section may he considered an eligible cost for the purpose 
of such other Federal loan or grant program."' 
gressional com-
mittees. 
534 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
79 Stat. 490. 
42 u s e 3102. 
ff*^ 
42 u s e 3108. 
WATER AND SEWER FACILITIES PROGRAM 
SEC. 604. (a) Section 702(c) of the Housing and Urban Develop-
ment Act of 1965 is amended by striking out "July 1,1968" and insert-
ing in lieu thereof "October 1,1969". 
(b) Section 702 (b) of such Act is amended— 
(1) by striking out "a basic public sewer facility"' and insert-
ing in lieu thereof "a basic public water or sewer facility"; and 
(2) by striking out "a public or other adequate sewer facility'' 
and inserting in lieu thereof "a public or other adequate water 
or sewer facility". 
(c) Section 702 of such Act is amended by adding at the end thereof 
a new subsection as follows: 
"(d) In the administration of this section the Secretary shall re-
quire that, to the greatest extent practicable, new job opportunities be 
provided for unemployed or underemployed persons in connection 
with projects the financing of which is assisted under this section." 
AUTHORIZATIONS FOR T H E WATER AND SEWER FACILITIES, NEIGHBORIKK)D 
FACILITIES. AND ADVANCE ACQUISITION OF LAND PROGRAMS 
SEC. 605. (a) Section 708(b) of the Housing and Urban Develop-
ment Act of 1965 is amended by striking out "July 1,1969'' and insert-
ing in lieu thereof "July 1, 1970". 
(b) Section 708(a) of such Act is amended— 
(1) by striking out "$200,000,000 for grants under section 702" 
and inserting in lieu thereof "$20<),0(X),000 (or $350,000,000 in the 
case of the fiscal year commencing July 1,1968) for grants under 
sections 702"; and 
(2) by adding at the end thereof the following new sentence: 
"In addition, there is authorized to be appropriated for grants 
under section 702 not to exceed $115,000,000 for the fiscal year 
commencing July 1,1969." 
75 Stat. 184. 
42 u s e 1500a. 
75 Stat. 185; 
79 Stat. 495, 497; 
80 Stat. 1280. 
42 u s e 1500d. 
69 Stat. 641. 
40 u s e 462. 
OPEN-SPACE LAND 
PROGRAM 
SEC. 606. (a) Section 702(b) of the Housing Act of 1961 is amended 
to read as follows: 
"(b) There are authorized to be appropriated, for the purpose of 
making grants under this title, not to exceed $310,000,0(K) prior to 
July 1, 1969, and not to exceed $460,000,000 prior to July 1,1970. Any 
amounts appropriated under this section shall remain available until 
expended." 
(b) Section 708(b) of such Act is amended by striking out "$50,000"' 
and inserting in lieu thereof "$125,000". 
AUTHORIZATION TO MAKE FEASIBILITY STUDIES I N T H E PUBLIC 
WORKS 
P L A N N I N G 
ADVANCr>S PROGRAM 
SEC. 607. Section 702(a) of the Housing Act of 1954 is amended by 
inserting after "to aid in financing the cost o f the following: "feasi-
bility studies,". 
TITLE VII—URBAN MASS TRANSPORTATION 
78 Stat. 304; 
80 Stat. 715. 
49 u s e 1603. 
GRANT AUTHORIZATIONS 
SEC. 701. (a) Section 4(b) of the Urban Mass Transportation Act 
of 1964 is amended (1) by striking out the word "and" where it first 
appears in the first sentence, and (2) by inserting before the period 
at the end of the first sentence "; and $190,000,000 for fiscal year 1970". 
82 STAT.} 
PUBLIC LAW 90-448-AUG. 1, 1968 
535 
(b) Section 6(c) of such Act is amended (1) by striking out "$50,- oJL^l^^j^i'^^'' 
000,000" and inserting in lieu thereof "$56,000,000", and (2) by in- 
49 use 1605. 
serting at the end thereof the following: "On or after July 1, 1969, 
the Secretary may make available to finance projects under this section 
such additional sums out of the grant authorization provided in sec-
tion 4 (b) as he deems appropriate." 
DEFINITION OF MASS TRANSPORTATION 
SEC. 702. Section 12(c) (5) of the Urban Mass Transportation Act 
of 1964 is amended to read as follows: 
y/stlt^^so^r^' 
"(5) the term 'mass transportation' means transportation by go stat. 715.' 
bus, rail, or other conveyance, either publicly or privately owned, 
49 use leos. 
which provides to the public general or special service (but not 
including school buses or charter or sightseeing service) on a 
regular and continuing basis." 
EXTENSION OF EMERGENCY PROGRAM UNDER T H E URBAN MASS 
TRANSPORTATION ACT 
SEC. 708. Section 5 of the Urban Mass Transportation Act of 1964 ^^^l^H^^^^f^' 
is amended by striking out "November 1, 1968" and inserting in lieu 
49 use 1604 
thereof "July 1,1970". 
NON-FEDERAL SHARE OF N E T PROJECT COST 
78 Stat. 304. 
49 u s e 1603. 
SEC. 704. (a) Section 4(a) of the Urban Mass Transportation Act 
of 1964 is amended by striking out the last sentence and inserting in 
lieu thereof of following: "The remainder of the net project cost shall 
be provided, in cash, from sources other than Federal funds. Not more 
than 50 per centum of such remainder may be provided from other 
than public sources, and any public or private transit system funds 
shall be provided solely from undistributed cash surpluses, replace-
ment or depreciation funds or reserves available in cash, or new 
capital; except that in cases of demonstrated fiscal inability of an 
applicant actively engaged in preparing and effectuating a program for 
a unified or officially coordinated urban transportation system as part 
of the comprehensively planned development of the urban area, such 
remainder may be provided from other than public sources. No refund 
or reduction of the remainder of the net project cost shall be made at 
any time unless there is at the same time a refund of a proportional 
amount of the Federal grant." 
(b) Section 5 of such Act is amended by striking out the last sen- 
'^^ ^^^ ^^^^"^ 
tence and inserting in lieu thereof the following: "The remainder of 
the net project cost shall be provided, in cash, from sources other than 
Federal funds. Not more than 50 per centum of such remainder may 
be provided from other than public sources, and any public or private 
transit system funds shall be proyided solely from undistributed cash 
surpluses, replacement or depreciation funds or reserves available in 
cash, or new capital; except that in cases of demonstrated fiscal 
inability of an applicant actively engaged in preparing and effectua-
ting a program for a unified or officiallj^ coordinated urban transpor-
tation system as part of the comprehensively planned development of 
the urban area, such remainder may be provided from other than public 
sources. No refund or reduction of the remainder of the net project 
cost shall be made at any time unless there is at the same time a refund 
of a proportional amount of the Federal grant." 
9B-Knn r> -
536 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
TITLE VIII—SECONDARY MORTGAGE MARKET 
Federal Na-
tional Mortgage 
Association. 
68 Stat. 615. 
12 u s e 1719. 
Government Na-
tional Mortgage 
Association. 
12 u s e 1720, 
1721. 
68 Stat. 612. 
12 use 1716. 
12 u s e 1717. 
PURPOSES 
SEC. 801. The purposes of this title include the partition of the Fed-
eral National Mortgage Association as heretofore existing into two 
separate and distinct corporations, each of which shall have con-
tinuity and corporate succession as a separated portion of the previ-
ously existing corporation. One of such corporations, to be known as 
Federal National Mortgage Association, will be a Government-spon-
sored private corporation, will retain the assets and liabilities of the 
previously existing corporation accounted for under section 304 of the 
Federal National Mortgage Association Charter Act, and will con-
tinue to operate the secondary market operations authorized by such 
section 304. The other, to be known as Government National Mortgage 
Association, will remain in the Government, will retain the assets and 
liabilities of the previously existing corporation accounted for under 
sections 305 and 306 of such Act, and will continue to operate the 
special assistance functions and management and liquidating func-
tions authorized by such sections 305 and 306. 
AMENDMENTS TO THE FEDERAL NATIONAL MORTGAGE ASSOCIATION 
CHARTER ACT 
SEC. 802. (a) The heading of title I I I of the National Housing Act 
is amended by striking out "FEDERAL NATIONAL MORTGAGE 
ASSOCIATION" and inserting in lieu thereof "NATIONAL MORT-
GAGE ASSOCIATIONS". 
(b) Section 301 of such Act is amended— 
(1) by striking out "in the Federal GoveiTiment a"; 
(2) by striking out "facility for" and inserting in lieu thereof 
"facilities for"; 
(3) by striking out "of such facility" and inserting in lieu 
thereof "thereof"; 
(4) by striking out "facility to" and inserting in lieu thereof 
"facilities to"; and 
(5) by striking out "the existing mortgage portfolio of the Fed-
eral National Mortgage Association" and inserting in lieu thereof 
"federally owned mortgage portfolios". 
(c) Section 302(a) of such Act is amended— 
(1) by inserting "(1)" immediately following " ( a ) " ; 
(2) by striking out "(hereinafter referred to as the 'Associa-
tion')"; and 
(3) by adding at the end thereof the following new paragraph: 
" (2) On the effective date established pursuant to section 808 of the 
Housing and Urban Development Act of 1968, the body corporate de-
scribed in the foregoing paragraph shall cease to exist in that form and 
is hereby partitioned into two separate and distinct bodies corporate, 
each of which shall have continuity and corporate succession as a 
separated portion of the previously existing body corporate, as follows: 
" (A) One of such separated portions shall be a body corporate with-
out capital stock to be known as Government National Mortgage Asso-
ciation (hereinater referred to as the 'Association'), which shall be in 
the I>epartment of Housing and Urban Development and which shall 
retain the assets and liabilities acquired and incurred under sections 305 
and 306 prior to such effective date, including any and all liabilities 
incurred pursuant to section 302(c). The Association shall have suc-
cession until dissolved by Act of Congress. It shall maintain its prin-
cipal office in the District of Columbia and shall be deemed, for 
purposes of venue in civil actions, to be a resident thereof. Agencies or 
82 STAT. ] 
PUBLIC LAW 90^48-AUG. 1, 1968 
537 
offices may be established by the Association in such other place or 
places as it may deem necessary or appropriate in the conduct of its 
business. 
"(B) The other such separated portion shall be a body corporate to 
be known as Federal National Mprtgage Association (hereinafter re-
ferred to as the 'corporation'), which shall retain the assets and 
liabilities acquired and incurred under sections 303 and 304 prior to 
^^ ^^^ ^J;^-
such effective date. The corporation shall have succession until dis- 1719. 
solved by Act of Congress. It shall maintain its principal office in the 
District of Columbia and shall be deemed, for purposes of venue in civil 
actions, to be a resident thereof." 
(d) Section 302 (b) of such Act is amended— 
1
2 use 1717. 
(1) b^ striking out "the Association is authorized"' and insert-
ing in lieu thereof "each of the bodies corporate hamed in sub-
section (a) (2) is authorized"; 
(2) by striking out "lend (under section 304) on the security 
(3) by inserting immediately before the colon in the first sen-
tence "; and the corporation is authorized to lend on the security 
of any such mortgages and to purchase, sell, or otherwise deal in 
any securities guaranteed by the Association under section 
306(g)"; and 
(4) by striking out "no mortgage may be purchased" and insert-
ing in lieu thereof "the Association may not purchase any 
mortgage". 
(e) Section 302(c)(1) of such Act is amended by striking out 
78 stat. soo. 
", consistent with section 307,". 
(f) Section 302(c)(2)(C) of such Act is amended to read as 
follows: 
"(C) The Department of Housing and Urban Development." 
(g) Section 302(c)(2) of such Act is amended by striking out 
"incurred by the Federal National Mortgage" and inserting in lieu 
thereof "incurred by the". 
(h) The heading of section 303 of such Act is amended to read as 
follows: "CAPITALIZATION—FEDERAL NATIONAL MORTGAGE ASSOCIATION". 
(i) Section 303(a) of such Act is amended— 
^,0^*0^ ^ih 
(1) by striking out "nonvoting common stock" and inserting in 
'^ ""'^ '"'° 
lieu thereof "common stock, without par value, which shall be 
vested with all voting rights, each share being entitled to one vote 
with rights of cumulative voting at all elections of directors"; 
(2) by striking out "nonvoting preferred stock" and inserting 
in lieu thereof "nonvoting preferred stock, with a par value of 
$100 per share,"; 
(3) by striking out the second and third sentences thereof and 
inserting in lieu thereof "The free transferability of the common 
stock at all times to any person, firm, corporation, or other entity 
shall not be restricted except that, as to the corporation, it shall be 
transferable only on the books of the corporation."; 
(4) by striking out "of the capital surplus and the general sur-
plus accounts"; 
(5) by striking out "retire" and inserting in lieu thereof "retire, 
at par,"; and 
(6) by striking out "the Association shall deem feasible" and 
inserting in lieu thereof "possible subsequent to the effective date 
established pursuant to section 808 of the Housing and Urban 
Development Act of 1968". 
(j) Section 303(b) of such Act is amended— 
(1) by striking out "for its services" and inserting in lieu there-
of ", which may be regarded as elements of pricing,"; and 
12 u s e 1718. 
538 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
(2) by striking out the last sentence. 
12 us^c tns 
(^) Section 303 (c) of such Act is amended— 
(1) by striking out "(only in denominations of $100 or mul-
tiples thereof)"; 
(2) by inserting immediately after the first sentence the follow-
ing : "In addition to the shares of common stock issued under the 
foregoing sentence, the corporation may issue additional shares 
in return for appropriate payments into capital or capital and 
surplus. The corporation shall at all times require each servicer of 
its mortgages to own a minimum amount of common stock of the 
corporation, measured by its stated value. Such minimum amount 
sha;ll not exceed 2 per centum, as determined from time to time 
by the corporation with the approval of the Secretary of Housing 
and LTrban Development, of the aggregate outstanding principal 
balances of all mortgages of the corporation which have been 
purchased subsequent to the effective date established pursuant 
to section 808 of the Housing and Urban Development Act of 
1968 and which are then serviced by such servicer for the corpo-
ration."; and 
(3) by striking out "the general surplus account of the Associ-
ation shall not be reduced through the payment of dividends 
applicable to such common stock which exceed in the aggregate 
5 per centum of the par value of the outstanding common stock 
of the Association" and inserting in lieu thereof "the aggregate 
amount of cash dividends paid on account of any share of such 
stock shall not exceed any rate which may be determined from 
time to time by the Secretary of Housing and Urban Develop-
ment to be a fair rate of return after consideration of the current 
earnings and capital condition of the corporation". 
(1) Section 303(d) of such Act is amended bv striking out "$22-5,-
000,000" and inserting in lieu thereof "$225,000,000; but no such stock 
may be issued subsequent to the effective date established pursuant to 
section 808 of the Housing and Urban Development Act of 1968". 
(m) Section 303(f) of such Act is amended by striking out "contri-
butions, and" inserting in lieu thereof "contributions, to purchase 
additional shares of such stock, and". 
R^p^ai- 
(n) Section 303(g) of such Act is repealed. 
(o) The heading of section 304 of such Act is amended to read as 
follows: "SECONDARY MARKET OPERATIONS 
FEDERAL NATIONAL MORT-
GAGE ASSOCIATION". 
68 Stat. 615; 
(p) Scctlon 304(a) (1) of such Act is amended by striking out "and 
^^2*usc ^m9. 
^1"^^ Association shall not purchase any mortgage insured or guaranteed 
prior to the effective date of the Housing Act of 1954". 
(q) Section 304 (b) of such Act is amended by striking out "earnings 
and in" and inserting in lieu thereof "earnings unless a greater ratio 
shall be fixed at any time or from time to time by the Secretary of 
Housing and Urban Development. In". 
(r) Section 304(c) of such Act is amended by striking out "(1) all 
of the preferred stock of the Association held by the Secretary of the 
Treasury has been retired, or (2)". 
(s) Sections 303 and 304 of such Act, as amended by the foregoing 
subsections of this section, are further amended— 
(1) by striking out "Association" each place it appears and 
inserting in lieu thereof, in each such place, "corporation"; and 
(2) by striking out "Association's each place it appears and 
inserting in lieu thereof, in each such place, "corporation's". 
12 use 1720. 
(t) The heading of section 305 of such Act is amended to read as 
follows: 
"SPECIAL 
ASSISTANCE 
FUNCTIONS 
GOVERNMENT 
NATIONAL 
MORTGAGE ASSOCIATION". 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
539 
(u) The heading of section 306 of such Act is amended to read as 
68 stat. eis. 
f o l l o w s : 
" M A N A G E M E N T 
A N D 
L I Q U I D A T I N G 
F U N C T I O N S 
GOVERNMENT 
12USC1721. 
NATIONAL MORTGAGE ASSOCIATION". 
(v) Subsections (a) and (b) of section 307 of such Act are repealed, 
^^^^i,' 
(vv) Section 307 of such Act is further amended— 
(1) by striking out "SEC. 307." ; 
(2) by striking out "(c) All of the benefits and burdens incident 
to the administration of" and inserting in lieu thereof the follow-
"SEC. 307. All of the benefits and burdens incident to the administra-
tion of"; and 
(3) by striking out "board of directors of the Association" and 
inserting in lieu thereof "Secretary of Housing and Urban Devel-
opment". 
(x) The heading of section 308 of such Act is amended to read as 
follows: "MANAGEMENT". 
(y) Section 308 of such Act is amended— 
12 use 1723. 
(1) by inserting " ( a ) " immediately following "308"; 
(2) by striking out the first two sentences and inserting in lieu 
tliereof "All the powers and duties of the Government National 
Mortgage Association shall be vested in the Secretary of Housing 
and ITpban Development and the Association shall be administered 
under the direction of the Secretary." ; 
(3) by striking out "the board shall determine" and inserting in 
lieu thereof "the Secretary shall determine"; 
(4) by striking out "Association. Tlie chairman of the board" 
and inserting in lieu thereof "Association, and shall have power to 
adopt, amend, and repeal bylaws governing the performance of the 
fKJw ers and duties granted to or imposed upon it by law. The Sec-
retary" ; 
(5) by striking out "by the board of directors," and inserting in 
lieu thereof "by the Secretary,"; 
(6) by striking out the last sentence; and 
(7) by adding at the end thereof the following new subsection: 
FNMA, Board of 
"(b) The JFederal National Mortgage Association shall have a board ^Yl'^us'c 1723. 
of directors which shall consist of fifteen persons, one-third of whom 
shall be appointed annually by the President of the United States, and 
the remainder of whom shall be elected annually by the common 
stockholders. The board shall at all times have as members appointed 
by the President at least one person from the homebuilding industry, 
at least one person from the mortgage lending industry, and at least 
one person from the real estate industry. Each member of the board of 
directors shall be appointed or elected for a term ending on the date of 
the next annual meeting of the stockholders, except that any such mem-
ber may be removed from office by the President for good cause. Any 
elective seat on the board which becomes vacant after the annual elec-
tion of the directors shall be filled by the board, but only for the unex-
pired portion of the term. Any appointive seat which becomes vacant 
shall be filled by appointment of the President, but only for the unex-
pired portion of the term. Within the limitations of law and regulation, 
the board shall determine the general policies which shall govern the 
operations of the corporation, and shall have power to adopt, amend, 
and repeal bylaws governing the performance of the powers and duties 
g r a n t ^ to or imposed upon it by law. The board of directors shall 
select and effect the appointment of qualified persons to fill the offices 
of president and vice president, and such other offices as may be pro-
vided for in the bylaws. Any member of the board who is a full-time 
officer or employee of the Federal Government shall not, as such mem-
ber, receive compensation for his services." 
540 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
68 Stat. 620. 
12 use 1723a. 
FNMA, exemp-
tion from taxation. 
Officers and 
employees. 
Post, p. 546. 
80 Stat. 564. 
5 use 8331-
8348. 
(z) Section 309 (a) of such Act is amended— 
(1) by striking out "The Association" and inserting in lieu 
thereof 
"Each of the bodies corporate named in 
section 
302(a)(2)"; 
(2) by striking out "by its board of directors, to adopt, amend, 
and repeal bylaws governing the performance of the powers and 
duties granted to or imposed upon it by law;"; 
(3) by striking out "conduct its business" and inserting in lieu 
thereof "conduct its business without regard to any qualification 
or similar statute"; 
(4) by striking out "the Association may deem" and inserting 
in lieu thereof "it may deem"; and 
(5) by striking out "the purposes of the Association" and 
inserting in lieu thereof "its purposes". 
(aa) Section 309 (c) of such Act is amended— 
(1) by striking out "(1)"; 
(2) by striking out "The Association" and inserting in lieu 
thereof " (1) The Association"; 
(3) by striking out ", and (2) the Association shall, with 
respect to its secondary market operations under section 304 after 
the cutoff date referred to in section 303(d) of this title, pay 
annually to the Secretary of the Treasury, for covering into mis-
cellaneous receipts, an amount equivalent to the amount of Fed-
eral income taxes for which it would be subject if it were not 
exempt from such taxes with respect to such secondary market 
operations"; and 
(4) by adding at the end thereof the following new paragraph: 
"(2) The corporation, including its franchise, capital, reserves, 
surplus, mortgages or other security holdings, and income, shall be 
exempt from all taxation now or hereafter imposed by any State, ter-
ritory, possession. Commonwealth, or dependency of the United States, 
or by the District of Columbia, or by any county, municipality, or 
local taxing authority, except that any real property of the corpora-
tion shall be subject to State, territorial, county, municipal, or local 
taxation to the same extent as other real property is taxed." 
(bb) Section 309 (d) of such Act is amended— 
(1) by inserting " (1)" immediately following " ( d ) " ; 
(2) by striking out "Chairman of the Board" and inserting in 
lieu thereof "Secretary of Housing and L^rban Development"; 
(3) by striking out "agents," and inserting in lieu thereof 
"agents of the Association,"; and 
(4) by adding at the end thereof 
the following 
new 
paragraph: 
" (2) The board of directors of the corporation shall have the power 
to select and appoint or employ such officers, attorneys, employees, and 
agents, to vest them with such powers and duties, and to fix and to cause 
the corporation to pay such compensation to them for their services, as 
it may determine; and any such action shall be without regard to the 
Federal civil service and classification laws. Appointments, promo-
tions, and separations so made shall be based on merit and efficiency, 
and no political tests or qualifications shall be permitted or given con-
sideration. Each officer and employee of the corporation who is 
employed by the corporation prior to the termination of the transi-
tional period referred to in section 810(b) of the Housing and Urban 
Development Act of 1968 and who on the day previous to the beginning 
of such employment will have been subject to the civil service retire-
ment law (subch. I l l of ch. 83 of title 5, United States Code) shall, 
so lon^ as his employment by the corporation continues without a 
break in continuity of service, continue to be subject to such law; and 
12 use 1723a. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
541 
for the purpose of such law his employment by the corporation with-
out a break in continuity of service shall be deemed to be employ-
ment by the Government of the Ignited States. The corporation shall 
contribute to the Civil Service Retirement and Disability Fund a sum 
as provided by section 8334(a) of title 5, Ignited States Code, except 
so stat. seg. 
that such sum shall be determined by applying to the total basic pav 
(as defined in 5 U.S.C. 8331(3) and except as hereinafter provided) 
^^ s'^'- -'64. 
paid to the employees of the corporation who are covered by the civil 
service retirement law, the per centum rate determined annually by 
the United States Civil Service Commission to be the excess of the 
total normal cost per centum rate of the civil service retirement system 
over the employee deduction rate specified in section 8334(a) oif title 
5, United States Code. The corporation shall also pay into the Civil 
Service Retirement and Disability Fund such portion of the cost of 
administration of the fund as is determined by the United States Civil 
Service Commission to be attributable to its employees. Notwithstand-
ing the foregoing provisions, there shall not be considered for the 
purposes of the civil service retirement law that portion of the basic 
pay in any one year of any officer or employee of the corporation which 
exceeds the basic pay provided for in section 5312 of title 5, United 
States Code, on the last day of such year. Except as provided in this 
8° ^tat. 46o. 
subsection, the corporation shall not be subject to the provisions of 
title 5, United States Code." 
' 
so stat. 378. 
(cc) Section 309(e) of such Act is amended— 
es stat. 620. 
(1) by striking out "body corporate created by section 302 and 
inserting in lieu thereof "bodies corporate named in section 
302(a)(2)"; 
(2) by inserting ", 'Government National Mortgage Associa-
tion'," immediately following " 'Federal National Mortgage Asso-
ciation' "; and 
(3) by striking out the second sentence and inserting in lieu 
thereof the following: "Violations of the foregoing sentence may 
be enjoined by any court of general jurisdiction at the suit of the 
proper body corporate. In any such suit, the plaintiff may recover 
any actual damages flowing from such violation, and, in addition, 
shall be entitled to punitive damages (regardless of the existence 
or nonexistence of actual damages) of not exceeding $100 for each 
day during which such violation is committed or repeated." 
(dd) Section 309 (g) of such Act is amended to read as follows: 
y.Ztt"^!,!^!^^"^^ 
"(g) The Federal Reserve banks are authorized and directed to act 
as depositaries, custodians, and fiscal agents for each of the bodies cor-
porate named in section 302(a) (2), for its own account or as fiduciary, 
and such banks shall be reimbursed for such services in such manner 
as may be agreed upon; and each of such bodies corporate may itself act 
in such capacities, for its own account or as fiduciary, and for the 
account of others." 
(ee) Section 309 of such Act is amended by adding at the end thereof 
the following new subsection: 
"(h) The Secretary of Housing and Urban Development shall have 
general regulatory power over the Federal National Mortgage Asso-
ciation and shall make such rules and regulations as shall be necessary 
and proper to insure that the purj)oses of this title are accomplished. 
No stock, obligation, security, or other instrument shall be issued by 
the corporation without the prior approval of the Secretary. The Sec-
retary may require that a reasonable portion of the corporation's 
mortgage purchases be related to the national goal of providing ade-
quate housing for low and moderate income families, but with reason-
able economic return to the corporation. The Secretary may examine 
and audit the books and financial transactions of the corporation, and 
banks, custodians. 
Ante, p. 536. 
542 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
he may require the corporation to make such reports on its activities 
as he deems advisable." 
68 Stat. 622. 
(ff) Scctiou 311 of such Act is amended— 
(1) by striking out "the Association" and inserting in heu there-
of "either of the bodies corporate named in section 302(a) (2)"; 
and 
(2) by adding at the end thereof the following: "All stock, ob-
ligations, securities, participations, or other instruments issued 
pursuant to this title shall, to the same extent as securities which 
are direct obligations of or obligations guaranteed as to principal 
or interest by the United States, be deemed to be exempt securities 
within the meaning of laws administered by the Securities and 
Exchange Commission; but all such issuances shall be made only 
with the approval of the Secretary of Housing atid Urban 
Development." 
PARTICIPATIONS 
soltlTieT' 
^^^^^- ^^^''^^ .Section 302(c)(5) of the National Housing Act is 
12 use 1717. 
amended by inserting at the end thereof the following: "In the event 
that the insufficiency required by the trustee is on account of principal 
maturities of outstanding beneficial interests or participations author-
ized to be issued pursuant to paragraph (4) of this subsection, or 
pursuant hereto, the trustee is authorized to elect to issue additional 
beneficial interests or participations for refinancing purposes in lieu 
of requiring any trustor or trustors to make payments to the trustee 
from appropriated funds or other sources. Each such issue of beneficial 
interests or participations shall be in an amount determined by the 
trustee but not in excess of the aggregate amount which the trustee 
would otherwise require the trustor or trustors to pay from appropri-
ated funds or other sources, and may be issued without regard to the 
provisions of paragraph (4) of this subsection. All refinancing issues 
of beneficial interests or participations shall be deemed to have been 
issued pursuant to the authority contained in the appropriation Act or 
Acts under which the beneficial interests or participations were 
originally issued." 
MORTGAGE-BACKED 
SECURITIES 
12 u*sc f7^9 
^^^* ^^^' ^^^ Section 304 of the National Housing Act is amended 
by adding at the end thereof the following new^ subsection: 
"(d) To provide a greater degree of liquidity to the mortgage 
investment market and an additional means of financing its operations 
under this section, the corporation is authorized to set aside any mort-
gages held by it under this section, and, upon approval of the Secretary 
of the Treasury, to issue and sell securities based upon the mortgages 
so set aside. Securities issued under this subsection may be in the form 
of debt obligations or trust certificates of beneficial interest, or both. 
Securities issued under this subsection shall have such maturities and 
bear such rate or rates of interest as may be determined by the corpo-
ration with the approval of the Secretary of the Treasury. Securities 
issued by the corporation under this subsection shall, to the same extent 
as securities which are direct obligations of or obligations guaranteed 
as to principal and interest by the United States, be deemed to be 
exempt securities wdthin the meaning of laws administered by the 
Securities and Exchange Commission. Mortgages set aside pursuant 
to this subsection shall at all times be adequate to enable the corpora-
tion to make timely principal and interest payments on the securities 
issued and sold pursuant to this subsection." 
12 use 1721. 
(I3) Section 306 of such Act is amended by adding at the end thereof 
the following new subsection: 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
543 
" (g) The Association is authorized, upon such terms and conditions 
jis it may deem appropriate, to guarantee the timely payment of prin-
cipal of and interest on such trust certificates or other securities as sliall 
(1) be issued by the corporation under section 304(d), or by any other 
^"'e- P- 542. 
issuer approved for the purposes of this subsection by the Association, 
and (2) be based on and backed by a trust or pool composed of mort-
gages which are insured under the National Housing Act or title V of 
^8 stat. me. 
the Housing Act of 1949, or which are insured or guaranteed under the and note. 
Servicemen's Readjustment Act of 1944 or chapter 37 of title 38, 
63 stat. 432. 
United States Code. The Association shall collect from the issuer a 1490."^^ ^^^^ 
reasonable fee for any guaranty under this subsection and shall make , ss stat. 284; 
such charges as it may determine to he reasonable for the analysis of ^^7f*|tat^Y2^63 
any trust or other security arrangement proposed by the issuer. In 
38 use isoi. 
the event the issuer is unable to make any payment of principal of or 
interest on any security guaranteed under this subsection, the Associa-
tion shall make such payment as and when due in cash, and thereupon 
shall be subrogated fully to the rights satisfied by such payment. Any 
Federal, State, or other law to the contrary notwithstanding, the As-
sociation is hereby empowered, in connection with any guaranty under 
tliis subsection, whether before or after any default, to provide by 
contract with the issuer for the extinguishment, upon default by the 
issuer, of any redemption, equitable, legal, or other right, title, or in-
terest of the issuer in any mortgage or mortgages constituting the 
trust or jx)ol against which the guaranteed securities are issued; and 
with respect to any issue of guaranteed securities, in the event of 
default and pursuant otherwise to the terms of the contract, the mort-
gages that constitute such trust or pool shall become the absolute prop-
ert}^ of the Association subject only to the unsatisfied rights of the 
holders of the securities based on and backed by such trust or pool. 
The full faith and credit of the United States is pledged to the pay-
ment of all amounts Avhich may be required to be paid under any 
guaranty under this subsection. There shall be excluded from the total 
amounts set forth in subsection (c) the amounts of any mortgages 
acquired by the Association as a result of its operations under this 
subsection." 
(c) Section 5136 of the Revised Statutes (12 U.S.C. 24) is amended 
by adding at the end thereof the following: 
"Ninth. To issue and sell securities which are guaranteed pursuant 
to section 306(g) of the National Housing Act." 
(d) The first proviso of section 21(aj (1) of the Banking Act of 
1933 (12 U.S.C. 378(a)(1)) is amended by inserting ", or issuing ^g^l^^J^^Jy^'^' 
securities," immediately following "investment securities". 
(e) Section 5(c) of the Home Owners' Loan Act of 1933 (12 U.S.C. 
1464(c)) is amended by adding at the end thereof a new paragraph 
'^^ s*^* ^32. 
as follows: 
"Any such association may issue and sell securities which are guar-
anteed pursuant to section 306 (g) of the National Housing Act." 
SUBORDINATED AND (ONVERTIBLE OBLIGATIONS 
SEC. 805. Section 304 of the National Housing Act is amended by 
^^ stat. eis. 
adding thereto (after subsection (d) as added by section 804 of this 
^^ "^^ ^^^^' 
Act) the following new subsection: 
"(e) For the purposes of this section, the corporation is authorized 
to issue, upon the approval of the Secretary of the Treasury, obliga-
tions which are subordinated to any or all other obligations of the cor-
poration, including subsequent obligations. The obligations issued 
under this subsection shall have such maturities and bear such rate or 
rates of interest as may be determined by the corporation with the 
approvaf of the Secretary of the Treasury and may be made redeem-
544 
PUBLIC LAW 90-448-AUG. 1,JL968 
\&2 SmL 
able at the option of the corporation before maturity in such manner 
as may be stipulated in such obligations. Any of such obligations may 
be made convertible into shares of common stock in such manner, at 
such price or prices, and at such time or times as may be stipulated 
therein. The total principal amount of such subordinated obligations 
which may be outstanding at any one time shall not exceed two times 
the sum of (1) the capital of the corporation represented by its out-
standing common stock and (2) its surplus and undistributed earnings 
at such time. The outstanding total principal amount of such obliga-
tions, w^hich are entirely subordinated to the obligations of the corpora-
tion issued or to be issued under subsection (b), shall be deemed to be 
capital of the corporation for the purpose of determining the aggregate 
amount of obligations issued under subsection (b) which may be out-
standing at any one time. Obligations issued by the corporation under 
this subsection shall, to the same extent as securities which are direct 
obligations of or obligations guaranteed as to.principal or interest by 
the United States, be deemed to be exempt securities within the mean-
ing of laws administered by the Securities and Exchange Commission. 
The corporation shall insert appropriate language in all of its obliga-
tions issued under this subsection clearly indicating that such obliga-
tions, together with the interest thereon, are not guaranteed by the 
United States and do not constitute a debt or obligation of the United 
States or of any agency or instrumentality thereof other than the cor-
poration. The corporation is authorized to purchase in the open market 
any of its obligations outstanding under this subsection at any time 
and at any price." 
SPECIAL ASSISTANCE 
AUTHORIZATION 
79^stat°493^^' 
^^^- ^^^- Sectiou 305(c) of the National Housing Act is amended— 
12 use 1720. 
(1) by striking out "and" after "July 1, 1967,"; and 
(2) by striking out the period and inserting in lieu thereof ", 
and by $500,000,000 on July 1, 1969." 
AMENDMENTS TO OTHER LAWS 
u us^c f72^i 
^^^- ^P"^- (^) Section 306 (b) of the Housing Act of 1959 is amended 
note. 
by striking out "Federal National Mortgage Association pursuant" 
and inserting in lieu thereof "Government National Mortgage Associ-
ation pursuant". 
jJltVt^^'^' 
(^) Section 312 (d) of the Housing Act of 1964 is amended by strik-
42 use 1452b. 
ing out "Federal" and inserting in lieu thereof "Government". 
(c) Section 5(b) of the Department of Housing and Urban Devel-
opment Act is amended— 
(1) by striking out "The Federal" and inserting in lieu thereof 
"The Government"; and 
(2) by striking out ", and the position of the President of said 
Association is hereby allocated among the positions referred to in 
section 7(c) hereof". 
^2^^sc 
(^^ Section 7(b) of the Department of Housing and Urban Devel-
opment Act is repealed. 
31 u^c 8
4
6
^ 
(^) Section 101 of the Government Corporation Control Act is 
amended by striking out "Federal National Mortgage Association" 
and inserting in lieu thereof "Government National 
Mortgage 
73sta^482. 
(f) Scctiou 13(4) (F) of the Public Buildings Act of 1959 is 
amended by striking out "Federal" and inserting in lieu thereof 
"Government". 
79 Stat. 669. 
42 u s e 3534. 
82 STAT. J 
PUBLIC LAW 90H48-AUG. 1,1968 
545 
(g) Section '6 (b) of the Participation Sales Act of 1966 is amended 
»« sta^ le?. 
by striking out "secondary market operations carried on by the Fed- note. 
*^^^ 
eral" and inserting in lieu thereof "the Government". 
(h) Section 1820(e) of title 38, United States Code, is amended by 
78 stat. soo. 
striking out "Federal National" in three places and inserting in lieu 
thereof, in each such place, "Government National". 
(i) Section 709 of title 18, United States Code, is amended by strik- 
es stat. 609. 
ing out "Federal National Mortgage Association" each place it appears 
and inserting in lieu thereof, in each such place, "Government National 
Mortgage Association". 
(j) Section 5136 of the Revised Statutes is amended by inserting 
1
2 use 24. 
"or the Government National Mortgage Association" immediately fol-
lowing "Federal National Mortgage Association". 
(k) Section 11 (h) of the Federal Home Ix)an Bank Act is amended 6o'*star622^^' 
by inserting "or the Government National Mortgage Association, in 
1
2 use 1431. 
the stock of the Federal National Mortgage Association" immediately 
following "Federal National Mortgage Association". 
(1) Section 16 of the Federal Home Tx>an Bank Act is amended by 
inserting "or the Government National Mortgage Association" imme-
diately following "Federal National Mortgage Association". 
(m) Section 5(c) of the Home Owners' I^an Act of 1933 is amended 
"^^ ^ta^ 132. 
by inserting "or the Government National Mortgage Association," 
immediately following "Federal National Mortgage Association" and 
by inserting "or the stock of the Federal National Mortgage Associa-
tion" immediately after "any other agency of the United States". 
(n) Section 8(8) (E) of the Federal Credit Union Act is amended g/gtaj^n""' 
by inserting "or the Government National Mortgage Association" 
1
2 use 1757. 
immediately following "Federal National Mortgage Association". 
EFFECTIVE DATE 
SEC. 808. The amendments made by this title shall be effective from 
and after a date, no more than one hundred and twenty days follow-
ing the date of enactment of this Act, as established by the Secretary 
of Housing and Urban Development. Notice of the establishment of 
such effective date shall be published in the Federal Register at least 
thirty days prior thereto. 
Publication in 
Federal Register. 
SAVINGS PROVISIONS 
SEC. 809. (a) No cause of action by or against the Federal National 
Mortgage Association existing prior to the effective date established 
pursuant to section 808 shall abate by reason of the enactment of this 
title. Any such cause of action may thereafter be asserted by or against 
the appropriate corporate body named in section 302(a)(2) of the 
National Housing Act. 
^"'e- p- 536. 
(b) No suit, action, or other proceeding commenced by or against 
the Federal National Mortgage Association, or any officer thereof in 
his official capacity, prior to the effective date established pursuant to 
section 808 shall abate by reason of the enactment of this title. A court 
may at any time thereafter during the pendency of any such litigation, 
on its own motion or that of any party, order that the litigation may 
be maintained by or against the appropriate corporate body named in 
section 302(a) (2) of the National Housing Act or the appropriate cor-
responding officer thereof. 
TRANSITIONAL 
PROVISIONS 
SEC. 810. (a) On the effective date established pursuant to section 
808 of this Act, each share of outstanding nonvoting common stock, 
with a par value of $100 per share, of the Federal National Mortgage 
546 
PUBLIC LAW 90-448-:AUG. 1, 1968 
[82 STAT-
Ante, p. 539. 
FNMA, Board of 
Directors. 
Transitional 
period. 
59 Stat. 597. 
31 u s e 841 
note. 
GAO audit. 
Association shall be changed into and shall become one share of voting 
common stock, without par value, of such corporation. 
(b) (1) The provisions of section 308(b) of the National Housing 
Act (as added by section 802(y) (7) of this Act) shall be applicable 
only to the extent that its provisions do not conflict with this subsection. 
(2) For a transitional period after the effective date established 
pursuant to section 808 of this Act, the board of directors of the 
Federal National Mortgage Association shall consist of nine persons. 
For a term expiring on the date of the first annual meeting of the 
corporation's stockholders, all members of the board shall be appointed 
by the Secretary of Housing and Urban Development. For a term 
beginning on such date, seven members of the board shall be appointed 
by the Secretary, and two members shall be elected by the common 
stockholdei^s. For subsequent terms beginning prior to the termination 
of the transitional period, five members shall be appointed by the 
Secretary, and four members shall be elected by the common stock-
holders. For each term beginning prior to the termination of the 
transitional period, the Secretary shall appoint as a member of the 
board the president of the corporation. During the transitional period, 
the president of the corporation shall be appointed by the President, 
by and with the advice and consent of the Senate, and may be removed 
from office by the President for good cause. 
(3) The transitional period referred to in paragraph (2) shall come 
to an end at such time as the board of directors shall find, with the 
approval of the Secretary, that not less than one-third of the corpora-
tion's common stock is owned by persons or institutions in the mort-
gage lending, homebuilding, real estate, or related businesses; but in 
no event shall it end sooner than May 1,1970, or later than May 1,1973. 
(c) From the effective date established pursuant to section 808 and 
until the retirement of the last of the outstanding shares of its pre-
ferred stock, the Federal National Mortgage Association shall be 
deemed to be a wholly owned corporation for the purposes of the 
Government Corporation Control Act. Notwithstanding the foregoing 
provisions of this paragraph, the financial transactions of the Federal 
National Mortgage Association shall continue to be subject to audit 
by the General Accounting Office for such period as there may be out-
standing obligations of the Federal National Mortgage Association 
which are guaranteed as to principal or interest by the Government 
National Mortgage Association. 
(d) Those persons who are the officers and employees of the Fed-
eral National Mortgage Association immediately prior to the effective 
date established pursuant to section 808 shall become the officers and 
employees of the Government National Mortgage Association on such 
date. The Federal National Mortgage Association and the Government 
National Mortgage Association shall provide by contract for the condi-
tions and methods under which and by which the Federal National 
Mortgage Association during the transitional period may employ those 
individuals who are employees of the Government National Mortgage 
Association on such effective date; and may provide by contract for the 
operation by either of such corporations of anv of the functions of the 
other. The Secretary of Housing and Urban Development shall make 
every reasonable effort to place in other comparable Federal positions 
any individuals w^ho are career or career-conditional employees of the 
Government National Mortgage Association on such effective date and 
who are subsequently during the transitional period neither employed 
by the Federal National Mortgage Association nor retained by the 
Government National Mortgage Association. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
547 
TITLE IX—NATIONAL HOUSING PARTNERSHIPS 
STATEMENT OF PURPOSE 
SEC. 90L The Congress finds that the vi)lume of housing being pro-
duced for families and individuals of low or moderate income must 
be increased to meet the national goal of a decent home and a suitable 
living environment for every American family, and declares that it is 
the policy of the United States to encourage the widest possible par-
ticipation by private enterprise in the provision of housing for low 
or moderate income families. The Congress has therefore determined 
that one or more private organizations should be created to encourage 
maximum participation by private investors in programs and projects 
to provide low and moderate income housing. 
CREATION OF CORPORATIONS 
SEC. 902. (a) There is hereby authorized to be created a private cor-
poration for profit (hereinafter in this title referred to as the "cor-
poration"). The corporation will not be an agency or establishment 
of the United States Government. The corporation shall be subject to 
the provisions of this title and, to the extent consistent with this title, 
to the District of Columbia Business Corporation Act (D.C. Code, sec. 
29-901 etseq.). 
.
.
.
. 
es stat. 179. 
(b) Whenever the President finds it in the national interest to do 
so, he may cause the creation of an additional corporation or addi-
tional corporations to carry out the purposes of this title. All the pro-
visions of this title shall thereupon become applicable to each such 
corporation, and to the limited partnership formed by it pursuant to 
section 907. 
(c) Nothing in this title shall be construed to preclude private per-
sons from creating other corporations and organizing other partner-
ships, joint ventures, or associations for the purposes set forth in this 
1 itle as the purposes of the corporation and the partnership described 
in section 907. 
PROCESS OF ORGANIZATION 
SEC. 908. (a) The President of the United States shall appoint, by 
and with the advice and consent of the Senate, incorporators of the 
corporation, one of whom shall be designated by the President to serve 
as chairman. The incorporators shall serve as the initial board of 
directors until the first annual meeting of stockholders or until their 
successors are elected and have qualified. 
(b) The incorporators shall take whatever actions are necessary or 
appropriate to establish the corporation, including the filing of articles 
of incorporation as approved by the President. 
(c) The incorporators shall also arrange for an initial offering of 
shares of stock in the corporation and of interests in the partnership 
described in section 907 of this title. If the incorporators deem it advis-
able in order to carry out the purposes of this title, the initial offering 
may be made upon terms which require the purchase of other securi 
ties of the corporation or of interests in such partnership. 
DIRECTORS 
SEC. 904. The corporation shall have a board of directoi-s (herein-
after in this section referred to as the "board"), consisting of fifteen 
members. Three members of the board shall be appointed by the 
President of the United States, by and with the advice and consent of 
the Senate, effective on the date on which the other members are 
548 
PUBLIC LAW 90-448^UG. 1, 1968 
[82 STAT. 
elected, and for terms of three years or until their successors have been 
appointed and have qualified, except that the first three members of the 
board so appointed shall continue in office for terms of one, two, and 
three years, respectively, and any memlber so appointed to fill a va-
cancy shall be appointed only for the unexpired term of the director 
whom he succeeds. Twelve members of the board shall be elected by 
the stockholders. 
FINANCING THE CORPORATION 
SEC. 905. The corporation shall have the power to create and issue 
the number of shares stated in its articles of incorporation. Such 
shares may be divided into one or more classes, any or all of which 
classes may consist of shares with par value or shares without par 
value, with such designations, preferences, voting powers, and special 
or relative rights and such limitations, restrictions, or qualifications 
thereof as shall be stated in the articles of incorporation. The articles 
of incorporation may limit or deny the voting power of the shares of 
any class. 
PURPOSES AND POWERS OF THE CORPORATION 
SEC. 906. (a) In order to achieve the objectives and carry out the 
purposes of this title, the corporation is authorized to— 
(1) plan, initiate, and carry out, pursuant to Federal programs 
or otherwise, the building or rehabilitation of housing and related 
facilities primarily for the benefit of families and individuals of 
low or moderate income; 
(2) buy, own, manage, lease, or otherwise acquire or dispose 
of property in connection with the developments, projects, or 
undertakings referred to in paragraph (1); and 
(3) provide such funds as may be necessary to accomplish the 
developments, projects, or undertakings referred to m para-
graph (1). 
(b) Included in the activities authorized to the corporation for 
the accomplishment of the purposes indicated in subsection (a) of 
this action are, among^ others not specifically named— 
(1) to enter nito partnerships, limited partnerships, joint 
ventures, and other associations with individuals, corporations, 
and private and governmental agencies, organizations, and 
institutions; 
(2) to act as manager or general partner of any such partner-
ship, venture, or association; 
(3) to conduct or contract for research and studies related to 
the development, demonstration, and evaluation of improved tech-
niques and methods of constructing, rehabilitating, and maintain-
ing housing; 
(4) to provide technical assistance to nonprofit corporations, 
limited dividend corporations, and others with respect to the 
planning, financing, construction, rehabilitation, maintenance, 
and management of housing for low and moderate income families 
and individuals; 
Loans or grants. 
(5) ^Q make loans or gTauts including grants of interests in 
housing and related facilities, to nonprofit corporations, limited 
dividend corporations, and others, in carrying out its activities 
under subsection (a) of this section; and 
(6) to hire or accept the voluntary services of consultants, 
experts, advisory boards, and panels to aid the corporation in 
carrying out the purposes of this title. 
(c) To carry out the foregoing purposes and engage in the fore-
going activities, the corporation shall have the usual powers conferred 
Research con 
tracts. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
549 
upon a stock corporation by the District of Columbia Business Cor-
poration Act. 
(d) Nothing in this title shall have the effect of waiving or other-
wise affecting the applicability of the provisions of the Davis-Bacon 
Act (40 r.S.C. 267a—276a-5), or any other law rec^uiring compliance 
49 stat. lou; 
with labor standards, in the case of any construction to which such ^* ^'^*' ^^*' 
provisions would otherwise apply. 
NATIONAL HOUSING 
PARTNERSHIP 
SEC. 907. (a) The corporation is authorized to arrange for the 
formation, as a separate organization, of a limited partnership (here-
inafter in this title referred to as the "partnership") under the Dis-
trict of Columbia Uniform Limited Partnership Act (D.C. Code, 
sec. 41-401 et seq.) for the purpose of engaging in any of the activities 
76 stat. ess. 
authorized for the corporation under section 906 of this title, and 
to enter into a partnership agreement governing the affairs of such 
limited partnership. 
(b) The partnership shall be subject to the provisions, to the extent 
consistent with this title, of (1) the District of Columbia Uniform 
Limited Partnership Act and (2) those provisions of the District of 
Columbia Uniform Partnership Act (D.C. Code, sec. 41-301 et seq.) 
76 stat. 636. 
made applicable by section 6(2) of that Act (D.C. Code, sec. 41-
305(2)). Notwithstanding any inconsistency between the provisions 
of such Acts, or of any other law, and the provisions of this section, 
the partnership organized pursuant to this section shall be deemed 
to have the legal status of a limited partnership. 
(c) The partnership is authorized to enter into partnerships, lim-
ited partnerships, or joint ventures organized under applicable State 
or local law for the purpose of engaging in low and moderate income 
housing developments, projects, or undertakings 
in 
particular 
localities. 
(d) The corporation shall be the general partner in the partner-
ship. The capital of the partnership and the contributions of the 
partners shall be in such amounts and at such times as are set forth 
in or pursuant to the partnership agreement. 
(e) The partnership agreement shall include provisions designed 
to assure that (1) the partnership shall participate in low and moderate 
income housing developments, projects, or undertakings in a manner 
designed to encourage the participation therein of local interests, and 
(2) in any such development, project, or undertaking the partnership 
shall not subscribe to more than 25 per centum (including equity 
investments made in services or property) of the aggregate initial 
equity investment unless, in the judgment of the corporation as general 
partner, the balance of the required equity investment is not readily 
obtainable from other responsible investors residing or doing business 
in the local community. 
(f) The partnership agreement may without limitation (1) permit 
each of the stockholders of the corporation to become a member of the 
partnership as a limited partner, (2) authorize the inclusion of other 
limited partners in addition to the stockholders of the corporation, 
(3) provide that the assignee of the partnership interest of a limited 
partner of the partnership who is also a stockholder of the corporation 
may not become a substituted limited partner unless he also acquires 
the assignor's stock of the corporation, and (4) include provisions 
requiring that the corporation as a general partner approve the substi-
tution or addition of a member of the partnership. 
(g) A corporation which is a limited partner in the partnership 
shall not become liable as a general partner by reason of the fact that 
550 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
(1) such corporation is a holder of shares of voting stock of the cor-
poration constituting not more than 5 per centum of the total number 
of outstanding shares of such stock and exercises any of the rights 
(including voting rights) of a holder of such shares, and/or (2) a 
person who is an officer or director of such corporation (or of another 
corporation which controls or is subject to the control of, or is under 
common control with, such corporation) is a director of the corpora-
tion and performs the duties of that office. The interest of a limited 
partner in the partnership shall not be treated as a stock interest in the 
corporation, notwithstanding that such interest of a limited partner 
may be proportionate to his stock interest in the corporation. 
(h) The certificate of the partnership and any amendment thereof 
required by the District of Columbia Uniform Limited Partnership 
rf c
^
* c*ode^4i- 
'^^^ shall be executed and acknowledged by the corporation as member 
401. 
° ^ 
and by each other member of the partnership or his attorney-in-fact 
duly authorized by power of attorney in writing. The corporation may 
execute and acknowledge the certificate and any amendment thereof 
as attorney-in-fact for any member, member to be substituted or added, 
or assigning member, by whom the certificate or amendment is required 
to be executed and acknowledged and who has appointed the corpora-
tion as such attorney. 
REPORT TO CONGRESS AND RECORDS 
SEC. 908. (a) The corporation shall submit an annual report to the 
President for transmittal to the Congress within six months after the 
end of its fiscal year. The report shall include a comprehensive and 
detailed report of the operations, activities, and financial condition of 
the corporation and the partnership under this title. 
(b) The accounts of the corporation and of the partnership shall 
be audited annually in accordance with generally accepted auditing 
standards by independent certified public accountants or independent 
licensed public accountants certified or licensed by a regulatory author-
ity of a State or other political subdivision of the United States. 
ANTITRUST LAWS 
SEC. 909. Nothing contained herein shall affect the applicability 
38 Stat. 730. 
^f ^\^Q Federal antitrust laws to the activities of the corporation and 
^^' 
the partnership created under this title and of the persons participat-
ing therein or in partnerships, limited partnerships, or joint ventures 
with either of them. 
RIGHT TO REPEAL, ALTER, OR AMEND 
SEC. 910. The right to repeal, alter, or amend this title at any time 
is expressly reserved. 
A M E N D M E N T TO BANKING LAWS 
SEC. 911. Paragraph "Seventh" of section 5136 of the Revised Stat-
utes (12 U.S.C. 24) is amended by adding at the end thereof the fol-
lowing : "Notwithstanding any other provision in this paragraph, the 
association may purchase for its own account shares of stock issued by 
a corporation authorized to be created pursuant to title I X of the 
Ante, p. 547. 
Housiiig and Urban Development Act of 1968, and may make invest-
ments in a partnership, limited partnership, or joint venture formed 
l>ursuant to section 907 (a) or 907 (c) of that Act." 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
551 
TITLE X—RUEAL HOUSING 
HOUSING FOR LOW AND MODERATE INCOME PERSONS AND 
FAMILIES 
SEC. 1001. Title V of the Housinsr Act of 1949 is amended by addiiis: 63 stat. 432. 
1490. 
at the end thereof the following new section: 
^^ "^^ ^ '
*
'
^ ^" 
' ' L O A N S T O PROVIDE OCCUPANT-OWNED, RENTAL, AND COOPERATIVE 
HOUSING 
FOR LOW AND MODERATE INCOME PERSONS AND 
FAMILIES 
"SEC. 521. (a) Notwithstanding the provisions of sections 502, 517 
(a) and 515, loans to persons of low or moderate income under section 
42 use 1472, 
502 or 517(a)(1), and loans under section 515 to provide rental or ^'*^^' ^^^^' 
cooperative housing and related facilities for persons and families of 
low or moderate income or elderly persons and elderly families, shall 
bear interest at a rate prescribed by the Secretary at not less than a 
rate determined annually by the Secretary of the Treasury taking into 
consideration the current average market yield on outstanding market-
able obligations of the United States with remaining periods to ma-
turity comparable to the average maturities of such loans, adjusted to 
the nearest one-eighth of 1 per centum, less not to exceed the difference 
between the adjusted rat^. determined by the Secretary of the Treasury 
and 1 per centum per annum: Provided, That such a loan may be 
made only when the Secretary determines that the needs of the appli-
cant for necessary housing cannot be met with financial assistance 
from other sources including assistance under section 235 or 236 of the 
National Housing Act: Provided further, That interest on loans under 
Ante, v>p. ^n, 
section 502 or 517(a) to victims of natural disaster shall not exceed ^'^^' 
the rate which would be applicable to such loans under section 502 
without regard to this section. 
"(b) Housing and related facilities provided with loans described 
in subsection (a) shall be located in rural areas; and applicants eli-
gible for such loans under section 502 or 517(a) (1), or for occupancy ^^^^^f^^l^'^'^' 
of housing provided with such loans under section 515, shall include 
otherwise qualified nonrural residents who will become rural residents. 
"(c) There shall be reimbursed to the Rural Housing Insurance 
Fund by annual appropriations the amounts by which nonprincipal 
payments made from the fund during each fiscal year to the holders 
of insured loans described in subsection (a) exceed interest due from 
the borrowers during each year; and the Secretary from time to time 
may issue notes to the Secretary of the Treasury under section 517(h) 
to obtain amounts equal to such unreimbursed excess payments, pend-
ing the annual reimbursement by appropriation," 
HOUSING 
FOR RURAL 
TRAINEES 
SEC. 1002. Title V of the Housing Act of 1949 is amended by adding 
after section 521 (as added by section 1001 of this Act) the following 
new section: 
" H O U S I N G FOR R U R A L TRAINEES 
"SEC. 522, (a) Upon the application of any State or political sub-
division thereof, or any public or private nonprofit organization, the 
Secretary is authorized, after consultation with the Secretary of 
Labor, the Secretary of Health, Education, and Welfare, the Secre-
tary of Housing and Urban Development, and the Di^e<^tor of the 
Office of Economic Opportunity, and after the Secretary determines 
that the housing and related facilities cannot reasonably be provided 
in any other way, to provide financial and technical assistance for 
1487, 1485. 
-600 O - 69 - 38 
552 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
the establishment, in rural areas, of housing and related facilities for 
trainees and their families who are residents of a rural area and have 
a rural background, while such trainees are enrolled and participating 
in training courses designed to improve their employment capability. 
The selection of training sites and location of housing shall be made 
with due regard to the economic viability of the area, and only after 
consideration of a labor area survey and full coordination among all 
(xovernment agencies having primary responsibility for administer-
ing related programs. 
'•(b) Housing and related facilities assisted under this section shall 
be safe and sanitary, constructed in the most economical manner, and 
of modest design, giving due consideration to the ])urposes to be served 
and the needs of the occupants, and may, in the discretion of the Sec-
retary, include mobile family quarters. I)esign and location shall be 
such as to facilitate, as feasible, the use of such housing and related 
facilities for other purposes when no longer needed for the primary 
purpose. 
"(c) The applicant shall contribute the necessary land, or funds to 
acquire such land, from its own resources, including land acquired by 
donation or from funds repayable under subsection (e) or borrowed 
from other sources. 
"(d) No financial assistance shall be made available under this sec-
tion unless, to the extent and for the periods required by the Secretary, 
the applicant agrees that^— 
"(1) such housing will be maintained at all times in a safe and 
sanitary condition m accordance with standards prescribed by 
State or local law, or, in the absence of such standards, with 
requirements prescribed by the Secretary; 
"(2) priority shall be given at all times, in granting occupancy 
of such housing and facilities, to the trainees and their families 
described in subsection (a); and 
"(3) rentals charged them shall not exceed amounts approved 
by the Secretary after considering the portion of the actual total 
family income which the family can afford to pay for rent while 
meeting its other immediate needs during occupancy. 
"(e) The Secretary may make advances pursuant to any contract 
for financial assistance under this section at such times and in such 
manner as may be specified in the contract. Such advances for the pur-
chase of land shall be repayable with interest and within a period not 
to exceed thirty-three years and may be made upon such security, if 
any, as the Secretary requires. Advances for other purposes may bo 
made repayable with or without interest or nonrepayable, as deter-
mined by the Secretary on the basis of the anticipated income and cost 
of operation of the housing and related facilities and the ability of 
each applicant to finance such facilities. Any advances shall be limited 
to cover the capital costs of constructing such facilities, plus interest 
on borrowings to cover such costs. 
"(f) Should housing and related facilities assisted pursuant to a 
contract under this section be sold to an ineligible transferee or 
diverted to a use other than its primary purpose within a period speci-
fied in the contract, all advances made under such contract shall be 
repaid to the Secretary, up to the amount of the sales price or the fair 
value of the property as determined by the Secretary, whichever is 
higher, with interest from the date of the sale or diversion. If no suit-
able alternate use of the property is available, as determined by the 
Secretary, after the purpose of this section can no longer be served, 
the property shall be returned to its original condition by the recipient 
of the assistance. 
"(g) Interest charged on advances made under this section shall be 
at a rate, prescribed by the Secretary, which shall be not less than a 
82 STAT. 1 
PUBLIC LAW 90-448-AUG. 1, 1%8 
553 
rate determined by the Secretary of the Treasury taking into consid-
eration the current average market yield on outstanding marketable 
obligations of the United States with remaining periods to maturity 
comparable to the average maturities of such loans, adjusted to the 
nearest one-eighth of 1 per centum, less not to exceed the difference 
between the adjusted rate determined by the Secretary of the Treasury 
and 1 per centum per annum, as determined by the Secretary. 
"(h) The Secretary shall prescribe regulations to insure that Fed-
eral funds expended under this section are not wasted or dissipated. 
"(i) As used in this section (1) the term 'related facilities' shall 
"Related faciii-
include any necessary community rooms or buildings, infirmaries, utili- ''^^' 
ties, access roads, water and sewer services, and the minimum fixed or 
movable equipment determined by the Secretary to be necessary to 
make the housing reasonably habitable by trainees and their families; 
and (2) the term 'trainee' means any person receiving training under 
"Trainee." 
any federally assisted training program. 
"(j) There are authorized to be appropriated such sums as may be Appropriation. 
necessary to carry out this section." 
APPROPRIATIONS 
SEC. 1003. Section 513 of the Housing Act of 1949 is amended— 
%ll^^- ^^^' 
(1) by striking out "and (e)" and inserting in lieu thereof yg stat! 793' 
"(e)"; and 
42 use usa. 
(2) by inserting before the period at the end thereof the fol-
lowing: "; and (f) such sums as may be required by the Secretary 
to administer the provisions of sections 235 and 236 of the National 
Housing: Act". 
Ante, pp. 477, 
•= 
498. 
PURCHASE OF LAND FOR BUILDING SITES 
SEC. 1004. Section 514(f)(2) of the Housing Act of 1949 is 75 stat. ise. 
amended- 
^^ "^^ ''''• 
(1) by striking out "and" before "(B)", and 
(2) by inserting before the semicolon at the end thereof the 
following: "and (C) land necessary for an adequate site". 
MUTUAL AND SELF-HELP 
HOUSING 
SEC. 1005. Title V of the Housing Act of 1949 is amended by adding 
42 use 1471-
after section 522 (as added by section 1002 of this Act) the following ^'*^°' 
new section: 
"MUTUAL AND SELF-HEI>P HOUSING 
"SEC. 523. (a) The purposes of this section are (1) to make financial 
assistance available on reasonable terms and conditions in rural areas 
and small towns to needy low-income individuals and their families 
who, with the benefit of technical assistance and overall guidance and 
supervision, participate in approved programs of mutual or self-help 
housing by acquiring and developing necessary land, acquiring build-
ing materials, providing their own Tabor, and working cooperatively 
with others for the provision of decent, safe, and sanitary dwellings 
for themselves, their families, and others in the area or town involved, 
and (2) to facilitate the efforts of both public and private nonprofit 
organizations providing assistance to such individuals to contribute 
their technical and supervisory skills toward more effective and com-
prehensive programs of mutual or self-help housing in rural areas 
and small towns wherever necessary. 
554 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
Contract 
authority. 
Self-Help Fund. 
Ante, pp. 477, 
498. 
Ante, p. 551. 
Loans. 
Considerations. 
"(b) In order to carry out the purposes of this section, the Secretary 
of Agriculture (in this section referred to as the 'Secretary') is 
authorized— 
"(1) (A) to make grants to, or contract with, public or private 
nonprofit corporations, agencies, institutions, organizations, and 
other associations approved by him, to pay part or all of the costs 
of developing, conducting, administering, or coordinating effective 
and comprehensive programs of technical and supervisory assist-
ance which will aid needy low-income individuals and their fami-
lies in carrying out mutual or self-help housing efforts; and 
"(B) to establish the Self-Help Housing Land Development 
Fund, referred to herein as the Self-Help Fund, to be used by the 
Secretary as a revolving fund for making loans, on such terms 
and conditions and in such amounts as he deems necessary, to pub-
lic or private nonprofit organizations for the acquisition and 
development of land as building sites to be subdivided and sold to 
families, nonprofit organizations, and cooperatives eligible for 
assistance under section 235 or 236 of the National Housing Act 
or section 521 of this Act. Such a loan, with interest at a rate not 
to exceed 3 percent per annum, shall be repaid within a period not 
to exceed two years from the making of the loan, or within such 
additional period as may be authorized by the Secretary in any 
case as being necessary to carry out the purposes hereof; and 
"(2) to make loans, on such terms and conditions and in such 
amounts as he deems necessary, to needy low-income individuals 
participating in programs of mutual or self-help 
housing 
approved by him, for the acquisition and development of land and 
for the purchase of such other building materials as may be neces-
sary in order to enable them, by providing substantially all of 
their own labor, and by cooperating with others participating in 
such programs, to carry out to completion the construction of 
decent, safe, and sanitary dwellings for such individuals and their 
families, subject to the following limitations: 
"(A) there is reasonable assurance of repayment of the 
loan; 
"(B) the amount of the loan, together with other funds 
which may be available, is adequate to achieve the purpose 
for which the loan is made; 
"(C) the credit assistance is not otherwise available on like 
terms or conditions from private sources or through other 
Federal, State, or local programs; 
"(D) the loan bears interest at a rate not to exceed 3 per 
centum per annum on the unpaid balance of principal, plus 
such additional charge, if any, toward covering other costs of 
the loan program as the Secretary may determine to be con-
sistent with its purposes; and 
"(E) the loan is repayable within not more than thirty-
three years. 
"(c) In determining whether to extend financial assistance under 
paragraph (1) or (2) of subsection (b), the Secretary shall take into 
consideration, among other factors, the suitability of the area within 
which construction will be carried out to the type of dwelling which 
can be provided under mutual or self-help housing j^rograms, the 
extent to which the assistance will facilitate the provision of more 
decent, safe, and sanitary housing conditions than presently exist in 
the area, the extent to which the assistance will be utilized efficiently 
and expeditiously, the extent to which the assistance will effect an 
increase in the standard of living of low-income individuals partici-
pating in the mutual or self-help housing program, and whether the 
applicants, 
criteria. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
555 
assistance will fulfill a need in the area which is not otherwise being 
met through other programs, including those carried out by other 
Federal, State, or local agencies. 
"(d) As used in this section, the term 'construction' includes the 
"construction." 
erection of new dwellings, and the rehabilitation, alteration, conver-
sion, or improvement of existing structures. 
"(e) The Secretary is authorized to establish appropriate criteria „„^J|^i^'/"^ °^ 
and procedures in order to determine the eligibility of applicants for """ ' " " " 
the financial assistance provided under this section, including criteria 
and procedures with respect to the periodic review of any construc-
tion carried out with such financial assistance. 
"(f) There are hereby authorized to be appropriated for each fiscal Appropriation. 
year commencing after June 30,1968, and ending prior to July 1,1973, 
such sums, not in excess of $5,000,000 for any such fiscal year, as may 
be necessary to carry out the provisions of this section. No grant or 
loan may be made or contract entered into under the authority of this 
section after June 30,1973, except pursuant to a commitment or other 
obligation entered into pursuant to this section before that date. 
"(g) There are hereby authorized to be appropriated for the pur-
]X)ses of subsection (b) (1) (B) not to exceed $1,000,000 for the fiscal 
year ending June 30, 1969. and not to exceed $2,000,000 for the fiscal 
year ending June 30, 1970. Any amount so authorized to be appro-
priated for any fiscal vear which is not appropriated may be appro-
priated for any succeeding fiscal year or years. Amounts appropriated 
under this subsection shall be deposited in the Self-Help Fund, which 
shall be available without fiscal year limitation for making loans under 
subsection (b) (1) (B). Instruments and property acquired by the Sec-
retary in or as a result of making such loans shall be assets of the Self-
Help Fund. Sums received from the repayment of such loans shall be 
deposited in and be a part of the Self-Help Fund." 
TITLE XI—URBAN PROPERTY PROTECTION AND 
REINSURANCE 
SHORT TITLE 
SEC. 1101. This title may be cited as the "Urban Property Protection 
and Reinsurance Act of 1968." 
FINDINGS AND DECLARATION OF PURPOSE 
SEC. 1102. (a) The Congress finds that (1) the vitality of many 
American cities is being threatened by the deterioration of their inner 
city areas; responsible owners of well-maintained residential, business, 
and other properties in many of these areas are unable to obtain ade-
quate property insurance coverage against fire, crime, and other perils; 
the lack of such insurance coverage accelerates the deterioration of 
these areas by discouraging private investment and restricting the 
availability of credit to repair and improve property therein; and this 
deterioration poses a serious threat to the national economy; (2) recent 
riots and other civil commotion in many American cities have brought 
about abnormally high losses to the private property insurance indus-
try for which adequate reinsurance cannot be obtained at reasonable 
cost, and the risk of such losses will make most lines of property 
insurance even more difficult to obtain; (3) the capacity of the private 
property insurance industry to provide adequate insurance is threat-
ened, and the continuity of such property insurance protection is 
essentia] to the extension of credit in these areas; and (4) the national 
interest demands urgent action by the Congress to assure that essential 
lines of property insurance, including lines providing protection 
556 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
against riot and civil commotion damage will be available to property 
owners at reasonable cost. 
(b) The purposes of this title are, therefore, to (1) encourage and 
assist the various State insurance authorities and the property insur-
ance industry to develop and carry out statewide programs which will 
make necessary property insurance coverage against the fire, crime, and 
other perils more readily available for residential, business, and other 
properties meeting reasonable underwriting standards; and (2) pro-
vide a Federal program of reinsurance against abnormally high prop-
erty insurance losses resulting from riots and other civil commotion, 
placing appropriate financial responsibility upon the States to share 
in such losses. 
AMENDMENT OF THE NATIONAL HOUSING ACT 
SEC. 1103. The National Housing Act is amended by adding at the 
end thereof the following new title: 
"TITLE XII—NATIONAL INSURANCE DEVELOPMENT 
PROGRAM 
"PROGRAM AUTHORITY 
560, 563. 
gress 
"SEC. 1201. (a) The Secretary is authorized to establish and carry 
^°^'^^pp 558, 
out the programs provided for in parts A, B, and C of this title. 
" (b) (1) The powers of the Secretary under this title shall terminate 
on April 30, 1973, except to the extent necessary— 
"(A) to continue reinsurance in accordance with the provisions 
of section 1223 (b) until April 30,1976; 
"(B) to process, verify, and pay claims for reinsured losses and 
perform other necessary functions in connection therewith; and 
"(C) to complete the liquidation and termination of the rein-
surance program. 
Rj'P°'"t t° Con- 
"(2) On April 30,1976, or as soon thereafter as possible, the Secre-
tary shall submit to the Congress, for its approval, a plan for the liqui-
dation and termination of the reinsurance program. 
"ADVISORY BOARD; MEETINGS, DUTIES, COMPENSATION, AND EXPENSES 
"SEC. 1202. (a) (1) There is established an Advisory Board (here-
inafter called the 'Board') consisting of nineteen members appointed 
by the Secretary. Members of the Board shall be selected from among 
representatives of the ^neral public, the insurance industry, State 
and local governments including State insurance authorities, and the 
Federal Government. Of these members of the Board, not more than 
six shall be regular full-time employees of the Federal Government, 
and not less than four shall be representatives of the private insurance 
industry and not less than four shall be representatives of State 
insurance authorities. 
"(2) The Secretary shall designate a Chairman and a Vice Chair-
man of the Board. 
"(3) Each member shall serve for a term of two years or until his 
successor has been appointed, except that no person who is appointed 
while a full-time employee of a State or the Federal Government shall 
serve in such position after he ceases to be so employed, unless he is 
reappointed. 
" (4) Any member appointed to fill a vacancy occurring prior to the 
expiration of the term for which his predecessor was appointed shall 
be appointed for the remainder of that term. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
557 
"(b) The Chairman shall preside at all meetings, and the Vice 
Chairman shall preside in the absence or disability of the Chairman. 
In the absence of both the Chairman and Vice Chairman, the Secre-
tary may appoint any member to act as Chairman pro tempore. The 
Board shall meet at such times and places as it or the Secretary may 
fix and determine, but shall hold at least four regularly scheduled 
meetings a year. Special meetings may be held at the call of the Chair-
man or any three members of the Board, or at the call of the Secretary. 
"(c) The Board shall review general policies and shall advise the 
Secretary with respect thereto, and perform such other functions as 
are specified in this title. 
"(d) The members of the Board shall not, by reason of such mem-
bership, be deemed to be employees of the United States, and such 
members, except those who are regular full-time employees of the 
Government, shall receive for their services, as members, the per diem 
equivalent to the rate for grade GS-18 of the General Schedule under 
section 5332 of title 5, United States Code, when engaged in the per- 
s use 5332 
formance of their duties, and each member of the Board shall be 
allowed travel expenses, including per diem in lieu of subsistence, as 
authorized by section 5703 of such title for persons in the Government 
so stat. 499. 
service employed intermittently. 
"DEFINITIONS 
"SEC. 1203. (a) When used in this title, unless the context other-
wise requires, the term— 
"(1) 'environmental hazard' means any hazardous condition 
that might give rise to loss under an insurance contract, but which 
is beyond the control of the property owner; 
"(2) 'essential property insurance' means insurance against 
direct loss to property as defined and limited in standard fire 
policies and extended coverage endorsement thereon, as approved 
by the State insurance authority, and insurance for such types, 
classes, and locations of property against the perils of vandalism, 
malicious mischief, burglary, or theft, as the Secretary by rule 
shall designate. Such insurance shall not include automobile 
insurance tind shall not include insurance on such types of manu-
facturing risks as may be excluded by the State insurance 
authority; 
"(3) 'inspection facility', with respect to any State, means any 
rating bureau or other person designated b j the State insurance 
authority to perform inspections under fair access to insurance 
requirements plans under part A; 
" (4) 'insurer' includes any insurance company or group of com-
panies under common ownership which is authorized to engage 
in the insurance business under the laws of any State; 
"(5) 'pool' means any pool or association of insurance com-
panies in any State which is formed, associated, or otherwise 
created for the purpose of making property insurance more 
readily available; 
" (6) 'losses resulting from riots or civil disorders' means losses 
resulting from riots or civil disorders under policies for standard 
lines of property insurance for which reinsurance is offered under 
section 1221, as determined under regulations of the Secretary; 
"(7) 'property owner', with respect to any real, personal, or 
mixed real and personal property, means any person having an 
insurable interest in such property; 
"(8) 'person' includes any individual or group of individuals, 
corporation, partnership, or association, or any other organized 
group of persons; 
558 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
"(9) 'reinsured losses' means losses on reinsurance claims and 
all direct expenses incurred in connection therewith including, but 
not limited to, expenses for processing, verifying, and paying 
such losses; 
" (10) 'standard line of property insurance' includes— 
" (A) fire and extended coverage; 
"(B) vandalism and malicious mischief; 
"(C) other allied lines of fire insurance; 
"(D) burglary and theft; 
"(E) those portions of multiple peril policies covering 
perils similar to those provided for in subparagraphs (A), 
(B), (C),and (D); 
"(F) inland marine; 
"(G) glass; 
"(H) boiler and machinery; 
"(I) ocean marine; 
" (J) aircraft physical damage; and 
"(K) such other lines generally offered to the public which 
include protection against damage from riot or civil commo-
tion as the Secretary by regulation may designate; 
" (11) 'State' means the several States, the District of Columbia, 
the Commonwealth of Puerto Rico, the territories and posses-
sions, and the Trust Territory of the Pacific Islands; 
"(12) 'urban area' includes any municipality or other j)olitical 
subdivision of a State, subject to population or other limitations 
defined in rules and regulations of the Secretary and such addi-
tional areas as may be designated by the State insurance author-
ity; and 
"(18) 'year' means a calendar year, fiscal year of a company, 
or such other period of twelve months as may be designated by 
the Secretaiy. 
"(b) The Secretary is authorized to define, by rules and regulations, 
any technical or trade term, insofar as such definition is not inconsist-
ent with the provisions of this title. 
"PART A—STATEWIDE PLANS To ASSURE FAIR ACCESS TO INSURANCE 
REQUIREMENTS 
"FAIR PLANS 
"SEC. 1211. (a) Each insurer reinsured under this title shall coop-
erate with the State insurance authority in each State in which it is 
to acquire such reinsurance in establishing and carrying out statewide 
plans to assure fair access to insurance requirements (FAIR plans). 
"(b) Such plans must be approved by, and administered under the 
supervision of, the State insurance authority, or be authorized or 
required by State law, and shall be designed to make essential property 
insurance more readily available in, but not necessarily limited to, 
urban areas. Such plans may vary in detail from State to State because 
of local conditions, but all plans shall contain provisions that— 
"(1) no risk shall be written at surcharged rates or be denied 
insurance coverage for essential property insurance unless there 
has first been an inspection of the risk, without cost to the owner, 
by an inspection facility and a determination by the insurer, based 
on information in the inspection report and other sources, that the 
risk does not meet reasonable underwriting standards at the appli-
cable premium rate; 
"(2) inspections under the plan may be requested by the prop-
erty owner or his representative, the insurer, or the insurance 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
559 
agent, broker or other producer, and such requests need not be 
made in writing; 
"(3) the absence of a building owner or his representative dur-
ing an inspection shall not preclude a tenant seeking insurance 
from obtaining an inspection under the plan; 
"(4) following the inspection, a copy of the inspection report 
shall be promptly sent by the inspection facility to the insurer or 
insurers, or to an all-industrv placement facility referred to under 
section 1212, as may be designated by the person requesting the 
inspection ; 
"(5) after the inspection report is received by an insurer, it 
shall promptly determine if the risk meets reasonable underwrit-
ing standards at the applicable premium rate, and shall promptly 
return to the inspection facility the inspection report and provide 
an action report setting forth— 
"(A) (i) the amount of coverage it agrees to write; and if 
the insurer agrees to write the coverage with a surcharge (if 
such a surcharge is authorized by the State insurance au-
thority), the improvements necessary before it will provide 
coverage at an unsurcharged premium rate; and 
"(ii) the amount of coverage it agrees to write if certain 
improvements specified in the action report are made; or 
"(B) the specific reasons it declines to write coverage; 
"(6) if the insurer declines the risk, or agrees to write the 
coverage sought on condition that the property will be improved, 
it shall also promptly send a copy of both the inspection and action 
reports to the property owner and the State insurance authority, 
and at the time the insurer sends such reports to the property 
owner, it shall also explain his right, under applicable State laws, 
to appeal the decision of the insurer to the State insurance au-
thority, setting forth the procedures to be followed for such 
appeal; 
" (7) all policies written pursuant to the plan shall be promptly 
written after inspection or reinspection and shall be separately 
coded so that appropriate records may be compiled for purposes 
of performing loss prevention and other studies of the operation 
of the plan; 
"(8) the inspection facility shall submit to the State insurance 
authority and to the Secretary periodic reports setting forth 
information, by individual insurers, including the number of risks 
inspected under the plan, the number of risks accepted, the number 
of risks conditionally accepted and reinspections made, the number 
of risks decHned, and such other information as the State insur-
ance authority may request; 
"(0) notice will be given to any policyholder a reasonable time 
prior to the cancellation or nonrenewal of any risk eligible under 
the plan (except in case of nonpayment of premium or evidence 
of incendiarism), to allow ample time for an application for new 
coverage to be made and a new policy to be written under the plan, 
and the insurer shall, in writing, explain to the policvholder the 
procedures for obtaining an inspection under the plan in the notice 
of cancellation or nonrenewal; and 
"(10) a continuing public education program will be under-
taken by the participating insurers, agents, and brokers to assure 
that the plan receives adequate public attention. 
560 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
"ALL-INDUSTRY PLACEMENT FACILITY 
"SEC. 1212. Any plan under this part shall include an all-industry 
placement facility doing business with every insurer participating in 
the plan in the State, and shall provide that this facility shall perform 
certain functions including, but not limited to, the following: 
"(1) seeking, upon request by or on behalf of any property 
owner requesting an inspection under the plan, to distribute the 
risks involved equitably among the insurers with which it is doing 
business; and 
"(2) seeking to place insurance up to the full insurable value 
of the risk to be insured with one or more insurers with which it 
is doing business, except to the extent that deductibles, percent-
age participation clauses, and other underwriting devices are 
employed to meet special problems of insurability. 
"INDUSTRY COOPERATION 
"SEC. 1213. (a) Each insurer seeking reinsurance under this title 
shall file a statement with the State insurance authority in each State 
in which it is participating in a plan under this part, pledging its full 
participation and cooperation in carrying out the plan, and shall file 
a copy of such statement with the Secretary. 
"(b) No insurer acquiring reinsurance under this title shall direct 
any agent or broker or other producer not to solicit business through 
such a plan, nor shall any agent, broker, or other producer be penalized 
by such insurer in any way for submitting applications for insurance 
to an insurer under the plan. 
"PLAN EVALUATION 
"SEC. 1214. (a) In accordance with such rules and regulations as 
the Secretary may prescribe, each State insurance authority shall— 
"(1) transmit to the Secretary any proposed or adopted plan, 
or amendments thereto; and 
"(2) advise the Secretary, from time to time, concerning the 
operation of the plan, its effectiveness in providing essential prop-
erty insurance, and the need to form a pool of insurers or adopt 
other programs to make essential property insurance more readily 
available in urban areas of the State. 
"(b) The Secretary may, after full consultation with the Board, by 
rules and regulations, modify the plan criteria set forth under this 
part, if he finds, on the basis of experience, that such action is neces-
sary or desirable to carry out the purposes of this title. The Secretary 
may also, with respect to any State, waive compliance with one or 
more of the plan criteria, upon certification by the State insurance 
authority that compliance is unnecessary or inadvisable under local 
conditions or State law. 
"PART B—REINSURANCE COVERAGE 
"REINSURANCE OF LOSSES FROM RIOTS OR CIVIL DISORDERS 
"SEC. 1221. (a)(1) The Secretary is authorized to offer to any 
insurer or pool, subject to the conditions set forth in section 1228, 
reinsurance against property losses resulting from riots or civil dis-
orders in any one or more States. 
"(2) Reinsurance shall be offered to any such insurer or pool only 
on all standard lines of property insurance enumerated under sub-
paragraphs (A) through (E) of section 1203(a) (10) together, and 
any insurer or pool purchasing such reinsurance shall also be eligible, 
82 STAT. J 
PUBLIC LAW 90*448-AUG. 1, 1968 
561 
to purchase reinsurance on any one or more standard lines of property 
insurance enumerated under subparagraphs (F) through (J) of sec-
tion 1203(a) (10) or which may be designated by regulation pursuant 
to subparagraph (K) of that section. 
"(b) Reinsurance coverage under this section may be provided 
immediately following the enactment of this title to any insurer or 
pool in any State on a temporary basis, and on such terms and condi-
tions as may be agreed upon, and coverage under such terms and con-
ditions may be bound with respect to any such insurer or pool by 
means of a written binder w^hich shall remain in force not more than 
ninety days and shall expire at the earlier of either— 
" (1) the termination of such ninety-day period, or 
"(2) the effective date of any governmg contract, agreement, 
treaty, or other arrangement entered into between the insurer or 
pool and the Secretary under section 1222 for the purpose of pro-
viding reinsurance coverage against losses resulting from riots 
or civil disorders. 
" (c) No reinsurance shall be offered to any insurer or pool in a State 
after the expiration of the written binder entered into under subsection 
(b), unless there is in effect in such State a plan as set forth under 
part A and the insurer or pool is participating in such plan, and unless, 
in the case of an insurer m a State where a pool has been established 
pursuant to State law, the insurer is participating in such a pool. 
"REINSURANCE AGREEMENTS AND PREMIUMS 
"SEC. 1222. (a) During the first year following the date of the 
enactment of this title, the Secretary is authorized to enter into any 
contract, agreement, treaty, or other arrangement with any insurer or 
pool for reinsurance coverage, in consideration of payment of such 
premiums, fees, or other charges by insurers or pools which the Secre-
tary, after full consultation w^th the Board, deems to be adequate to 
obtain aggregate reinsurance premiums for deposit in the National 
Insurance Development Fund established under section 1233 in excess 
of the estimated amount of insured riot losses during the calendar year 
1967, on the assumption that a substantial proportion of the property 
insurance written will be reinsured under this title, and thereafter the 
Secretary may increase or decrease such premiums for reinsurance if 
it is found after full consultation with the Board and the National 
Association of Insurance Commissioners that such action is necessary 
or appropriate to carry out the purposes of this title. 
"(b) Reinsurance offered under this title shall reimburse an insurer 
or pool for its total proved and approved claims for covered losses 
resulting from riots or civil disorders during the term of the reinsur-
ance contract, agreement, treaty, or other arrangement, over and above 
the amount of the insurer's or pool's retention of such losses as pro-
vided in sucli reinsurance contract, agreement, treaty, or other 
arrangement entered into under this section. 
"(c) Such contracts, agreements, treaties, or other arrangements 
may be made without regard to section 3679 (a) of the Revised Statutes 
of the United States (31 U.S.C. 665(a)), and shall include any terms 
and conditions which the Secretary deems necessary to carry out the 
purposes of this title. The premium rates, terms, and conditions of such 
contracts with insurers or pools, throughout the country, in any one 
year shall be uniform. 
"(d) Any contract, agreement, treaty, or other arrangement for 
reinsurance under this section shall be for a term expiring on April 30, 
1969, and on April 30 each year thereafter, and shall be entered into 
within ninety daj^s after the date of the enactment of this title or with-
in ninety days prior to April 30 each year thereafter, or within ninety 
562 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
days after an insurer is authorized to write insurance eligible for re-
insurance in a State which it was not authorized to write in the 
preceding year. 
"CONDITIONS or REINSURANCE 
"SEC. 1223. (a) Subject to the provisions of subsection (b), rein-
surance shall not be offered by the Secretary in a State or be applicable 
to insurance policies written in that State by an insurer— 
" (1) after one year following the date of the enactment of this 
title, or, if the appropriate State legislative body has not met in 
regular session during that year, by the close of its next regular 
session, in any State which has nc^t adopted appropriate legisla-
tion, retroactive to the date of the enactment of this title, under 
which the State, its political subdivisions, or a governmental cor-
poration or fund established pursuant to State law, will reimburse 
the Secretary, in an amount up to 5 per centum of the aggregate 
property insurance premiums earned in that State during the pre-
ceding calendar year on those lines of insurance reinsured by the 
Secretary in that State during the current year, such that the Sec-
retary may be reimbursed for amounts paid by him in respect to 
reinsured losses that occurred in that State during a calendar 
year in excess of (A) reinsurance premiums received in that State 
during the same calendar year plus (B) the excess of (i) the total 
premiums received by the Secretary for reinsurance in that State 
during a preceding period measured from the end of the most 
recent calendar year wdth respect to which the Secretary was reim-
bursed for losses under this title over (ii) any amounts paid by 
the Secretary for reinsured losses that occurred during this same 
period; 
" (2) after thirty days following notification to the insurer that 
the Secretary finds (after consultation with the State insurance 
authority) that there has not been adopted by the State, or the 
property insurance industry in that State, a suitable program or 
programs, in addition to plans under part A, to make essential 
property insurance available without regard to environmental 
hazards, and that such action is necessary to carry out the pur-
poses of this title; except that this paragraph shall not become 
effective until two years after the date of the enactment of this 
title, or at such earlier date as the Secretary, after consultation 
with the State insurance authority, may determine; 
" (8) after thirty days following notification to the insurer that 
the Secretary, or the State insurance authority, finds that such 
insurer is not fully participating— 
" (A) in the plan in the State; 
"(B) where it exists, in a pool; and 
"(C) where it exists, in any other program found by the 
Secretary to aid in making essential property insurance more 
readily available in the State: 
Provided^ That the Secretary shall not make any such finding 
with respect to any insurer unless (i) prior to making such find-
ing the Secretary has requested and considered the views of the 
State insurance authority as to whether such finding should be 
made, or (ii) the Secretary has made such a request in writing to 
the State insurance authority and such authority has failed to 
respond thereto within a reasonable period of time after receiv-
ing such request; 
"(4) following a merger, acquisition, consolidation or reorga-
nization involving one or more insurers having lines of property 
insurance in the State reinsured under this title and one or more 
82 
STAT.] 
PUBLIC LAW 90-448-AUG. 1, 1968 
563 
insurers with or without such reinsurance, unless the surviving 
company— 
" (A) meets the criteria of eligibility for reinsurance, other 
than as provided under section 1222(d); and 
"(B) within ten days pays any reinsurance premiums due; 
or 
"(5) upon receipt of notice from the insurer or pool that it 
desires to cancel its reinsurance agreement with the Secretary in 
the State. 
"(b) Notwithstanding the foregoing provisions of this section, rein-
surance may be continued for the term of the policies written prior 
to the date of termination or nonrenewal of reinsurance under this 
section, for as long as the insurer pays reinsurance premiums annually 
in such amounts as are determined under section 1222, based on the 
annual premiums earned on such reinsured policies, and for the pur-
pose of this subsection, the renewal, extension, modification, or other 
(hange in a policy, for which any additional premium is charged, shall 
be deemed to be a policy written on the date such change was made. 
"RECOVERY OF PREMIUMS; STATUTE OF LIMITATIONS 
"SEC. 1224. (a) The Secretary, in a suit brought in the appropriate 
United States district court, shall be entitled to recover from any 
insurer the amount of any unpaid premiums lawfully payable by 
such insurer to the Secretary. 
"(b) No action or proceeding shall be brought for the recovery of 
any premium due to the Secretary for reinsurance, or for the recovery 
of any premium paid to the Secretary in excess of the amount due to 
him, unless such action or proceeding shall have been brought within 
five years after the right accrued for which the claim is made, except 
that, where the insurer has made or filed with the Secretary a false or 
fraudulent annual statement, or other document with the intent to 
evade, in whole or in part, the payment of premiums, the claim shall 
not be deemed to have accrued until its discovery by the Secretary. 
"PART C—PROVISIONS or GENERAL APPLICABILITY 
"CLAIMS AND JUDICIAL REVIEW 
"SEC. 1231. (a) All reinsurance claims for losses under this title 
shall be submitted by insurers in accordance with such terms and con-
ditions as may be established by the Secretary. 
"(b) (1) Upon disallowance of any claim under color of reinsurance 
made available under this title, or upon refusal of the claimant to 
accept the amount allowed upon any such claim, the claimant may 
institute an action against the Secretary on such claim in the United 
States district court for the district in which a major portion (in 
terms of value) of the claim arose. 
"(2) Any such action must be begun within one year after the date 
upon which the claimant received written notice of disallowance or 
partial disallowance of the claim, and exclusive jurisdiction is hereby 
conferred upon U^nited States district courts to hear and determine 
such actions without regard to the amount in controversy. 
U.S. 
courts, 
tion. 
district 
jurisdic-
u 
FISCAL I N T E R M E D I A R I E S AND SERVICING AGENTS 
"SEC. 1232. (a) In order to provide for maximum efficiency in the 
administration of the reinsurance program under this title, and in 
order to facilitate the expeditious payment of any funds under such 
jjrogram, the Secretary may enter into contracts with any insurer, pool, 
Contract au-
thority. 
564 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
or other person, for tlie purpose of providing for the performance of 
any or all of the following functions: 
"(1) estimating or determining any amounts of payments for 
reinsurance claims; 
" (2) receiving and disbursing and accounting for funds in mak-
ing payments for reinsurance claims; 
"(3) auditing the records of any insurer, pool, or other person 
to the extent necessary to assure that proper payments are made; 
"(4) establishing the basis of liability for reinsurance pay-
ments, including the total amount of proved and approved claims 
which may be payable to any insurer, and the total amount of 
premiums earned by any insurer in the respective States for re-
insured lines of property insurance; and 
" (5) otherwise assistmg in any manner provided in the contract 
to further the purposes of this title. 
"(b) (1) Any such contract may require the insurer, pool, or other 
person, or any of its officers or employees certifying payments or dis-
, 
bursing funds pursuant to the contract, or otherwise participating in 
carrying out the contract, to give surety bond to the United States in 
such amounts as the Secretary may deem appropriate. 
"(2) In the absence of gross negligence or intent to defraud the 
United States— 
"(A) no individual designated pursuant to a contract under 
this section to certify payments shall be liable with respect to any 
payment certified by him under this section; and 
"(B) no officer of the United States disbursing funds shall be 
liable with respect to any otherwise proper payment by him if it 
was based on a voucher signed by an individual designated pur-
suant to a contract under this section to certify payments. 
a 
79 Stat. 472. 
NATIONAL INSURANCE DEVELOPMENT F U N D 
"SEC. 1233. (a) To carry out the programs authorized under this 
title, the Secretary is authorized to establish a National Insurance 
l>evelopment Fund (hereinafter called the 'fund') which shall be 
available, without fiscal year limitations— 
"(1) to make such payments as may, from time to time, be 
required under reinsurance contracts under this title; 
"(2) to pay such administrative expenses as may be necessary 
or appropriate to carry out the purposes of this title; and 
"(3) to repay to the Secretary of the Treasury such sums, 
including interest thereon, as may be borrowed from" him for pur-
• - — -"• 
poses of such programs under section 520 (b). 
12 use i735d. 
„ ^^^ r^^^ ^^^^^^ ^j^ 
J j ^^ Credited with— 
"(1) reinsurance premiums, fees, and other charges which may 
be paid or collected m connection with reinsurance provided under 
part B ; 
" (2) interest which may be earned on investments of the fund; 
" (3) such amounts as may be advanced to the fund from appro-
priations in order to maintain the fund in an operative condition 
adequate to meet its liabilities; 
"(4) receipts from any other source which may, from time to 
time, be credited to the fund; and 
"(5) funds borrowed by the Secretary under section 520(b) 
and deposited in the fund. 
"(c) If, after any amounts which may have been advanced to the 
fund from appropriations have been credited to the appropriation 
from which advanced (including interest thereon at the rate prescribed 
under section 520(b)), the Secretary determines that the moneys of 
the fund are in excess of current needs, he may request the investment 
of such amounts as he deems advisable by the Secretary of the Treasury 
in obligations issued or guaranteed by tfie United States. 
82 STAT.J 
P U B L I C LAW 90-448-AUG. 1, 1968 
565 
"(d) An annual business-type budget for the fund shall be pre-
pared, transmitted to the Congress, considered, and enacted in the 
manner prescribed by law (sections 102, 103, and 104 of the Govern-
ment Corporation Control Act (31 U.S.C. 847-849)) for wholly-owned 
Government corporations. 
59 Stat. 597; 
61 Stat. 584. 
"RECORDS, ANNUAL STATEMENT, AND AUDITS 
"SEC. 1234. (a) Any insurer or pool acquiring reinsurance under 
this title shall furnish ithe Secretary with such summaries and analyses 
of information in its records as may be necessary to carry out the pur-
poses of this title, in such form as the Secretary, in cooperation with 
the State insurance authority, shall, by rules and regulations, pre-
scribe. The Secretary shall make use of State insurance authority 
examination reports and facilities to the maximum extent feasible. 
"(b) Any insurer or pool acquiring reinsurance under this title 
shall file with the Secretary a true and correct copy of any annual 
statement, or amendment thereof, filed with the State insurance 
authority of its domiciUary State, at the time it files such statement or 
amendment with such State insurance authority. 
" (c) Any insurer or other person executing any contract, agreement. 
Recordkeeping 
or other appropriate arrangement with the Secretary under section """"'"""""" ° 
1222 or section 1232 shall keep reasonable records which fully disclose 
the total costs of the programs undertaken or the services being ren-
dered, and such other records as will facilitate an effective audit of 
liability for reinsurance payments by the Secretary. 
"(d) The Secretary and the Comptroller General of the United 
States, or any of their duly authorized representatives, shall have 
access for the purpose of investigation, audit, and examination to any 
books, documents, papers, and records of any insurer or other person 
that are pertinent to the costs of any program undertaken for, or serv-
ices rendered to, the Secretary. Such audits shall be conducted to the 
maximum extent feasible in cooperation with the State insurance 
authorities and through the use of their examining facilities. 
"STUDY OF REINSURANCE AND OTHER PROGRAMS 
"SEC. 1235. (a) The Secretary is authorized and directed to conduct 
a study of i-einsurance and other means to help assure— 
" (1) an adequate market for burglary and theft and other prop-
erty insurance in urban areas; and 
"(2) adequate availability of surety bonds for construction con-
tractors in urban areas. 
"(b) The Secretary shall submit the results of this study, together 
with appropriate recommendations, to the President and Congress no 
later than one year following the date of the enactment of this title. 
requirements. 
Access to rec-
ords, etc. 
U 
OTHER STUDIES 
"SEC. 1236, (a) The Secretary is authorized to undertake such stud-
ies as may be necessary to carry out the purposes of this title including, 
but not limited to, inquiries concerning— 
" (1) the operation of plans under part A; 
" (2) the extent to which essential property insurance is unavail-
able in urban areas; 
" (3) the market for private reinsurance; and 
"(4) loss prevention methods and procedures, insurance mar-
keting methods, and underwriting techniques. 
"(b) To such extent and under such circumstances as may be prac-
ticable and feasible, the Secretary shall conduct any study authorized 
566 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
under this section in cooperation with State insurance authorities and 
the private insurance industry. 
"GENERAL POWERS 
"SEC. 1237. In the performance of, and with respect to, the functions, 
powers, and duties vested in him by this title, the Secretary shall (in 
addition to any authority otherwise vested in him) have the functions, 
powers, and duties (including the authority to issue rules and regul^t-
tions) set forth in section 402, except subsections (c) (2), (d), and (f), 
64 Stat. 78; 
of the Housiug Act of 1950. Any rules or regulations of the Secretary 
12 use 1749a. 
shall ouly be issued after full consultation with the Board and after 
notice and hearing, if granted, as required by the Administrative 
60 Stat. 237. 
Procedurc Act. 
5 u s e 551 
et seq. 
" S E R V I C E S A N D F A C I L I T I E S O F O T H E R AGENCIES—UTILIZATION OF 
PERSONNEL, SERVICES, FACILITIES, x\ND INFORMATION 
"SEC. 1238. The Secretary may, with the consent of the agency con-
cerned, accept and utilize, on a reimbursable basis, the officers, employ-
ees, services, facilities, and information of any agency of the Federal 
Government, except that any such agency having custody of any data 
relating to any of the matters within the jurisdiction of the Secretary 
shall, to the extent permitted by law, upon request of the Secretary, 
make such data available to the Secretary. 
"ADVANCE PAYMENTS 
"SEC. 1239. Any payments which are made under the authority of 
this title may be made, after necessary adjustments on account of pre-
viously made underpayments or overpayments in advance or by way 
of reimbursement. Payments may be made in such installments and on 
such conditions as the Secretary may determine. 
"
> 
TAXATION 
"SEC, 1240, (a) The National Insurance Development Fund, includ-
ing its reserves, surplus, and income, shall be exempt from all taxation 
now or hereafter imposed by the United States, or by any State, or any 
subdivision thereof, except that any real property acquired by the 
Secretary as a result of reinsurance shall be subject to taxation by any 
State or political subdivision thereof, to the same extent, according 
to its value, as other real property is taxed. 
"(b) Any measures undertaken by any State to meet or to fund its 
obligations under section 1223(a) (1) shall not be the subject of any 
retaliatory or fiscal imposition by any other State. 
;; 
APPROPRIATIONS 
"SEC. 1241. There are hereby authorized to be appropriated such 
sums as may be necessary to carry out this title." 
FINANCING 
79 Stat. 472. 
SEC. 1104. Sectlou 520(b) of the National Housing Act is amended 
12 use i735d. 
i^y. inserting " (1)" after "necessary" in the first sentence, and hj strik-
ing out the period at the end of such sentence and inserting in lieu 
thereof ", and (2) to make payments for reinsured losses under title 
X I I of this Act: Provided, however, That borrowings to make pay-
ments for reinsured losses under title X I I shall be limited to 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
567 
$250,000,000 or such further sum as tlie Congress, by joint resolution, 
may from time to time determine." 
FEDEILVL INSURANCE 
ADMINISTEATOR 
SEC. 1105. (a) There is hereby established in the Department of 
Housing and LTrban Development the position of Federal Insurance 
Administrator. 
(b) Section 5815 of title 5, United St<ates Code, is amended by 81*^^3^63^^^' 
adding at the end thereof the following new paragraph: 
"(91) Federal Insurance Administrator, Department of Housing 
and Urban Development." 
CLARIFYING AMENDMENTS TO ACTS REFERRING TO DISASTERS 
SEC. 1106. (a) Section 7(b) (1) _ of the Small Business Act is 
J^ stat.^asj. 
amended by inserting ", riots or civil disorders," before "or other 
catastrophes". 
(b) Section 101(c) (2) (E) of the Housing and Urban Development 
Act of 1965 is amended by striking out "natural". 
^9 stat. 451.^ 
(c) Section 111 of the Housing Act of 1949 is amended by striking 
70 sta^ \^io\! 
out "the Secretary" after "disaster," and inserting in lieu thereof "or si stat. 21. 
which the Secretary has determined is in need of such redevelopment 
"
^
^ ^^'^ ^'^^^' 
or rehabilitation as a result of a riot or civi] disorder, he". 
(d) Section 203(h) of the National Housing Act is amended by 
^^ ^
t
^
^
^
- 592. 
inserting "riot or civil disorder," before "or other catastrophe". 
(e) No person who has been convicted of committing a felony dur-
ing and in connection with a riot or civil disorder shall be permitted, prohlbin'on! 
for a period of one year after the date of his conviction, to receive any 
benefit under any law of the United States providing relief for disaster 
victims. 
TITLE XII—DISTRICT OF COLUMBIA INSURANCE 
PLACEMENT ACT 
SHORT TITLE 
SEC. 1201. This title may be cited as the "District of Columbia Insur-
ance Placement Act". 
DECLARATION OF FURPOSB 
SEC. 1202. The purposes of this title are— 
(1) to assure stability in the property insurance market for 
property located in the District of Columbia; 
(2) to assure the availability of basic property insurance as 
defined by this title; 
(3) to encourage maximum use, in obtaining basic property 
insurance, of the normal insurance market provided by authorized 
insurers; and 
(4r) to provide for the equitable distribution among insurers of 
the responsibility for insuring qualified property in ihe District of 
Columbia for which insurance cannot be obtained through the 
normal insurance market and to authorize the establishment of a 
joint underwriting association in the District of Columbia to pro-
vide for reinsuring of basic property insurance without regard to 
environmental hazards. 
Relief to con-
victed felons, 
96-600 O - 69 - 39 
568 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
DEFINITIONS 
SEC. 1203. As used in this title, unless the context otherwise 
requires— 
(1) The term "Commissioner" means the Commissioner of the Dis-
trict of Columbia or his designated agent. 
(2) The term "basic property insurance" means (1) insurance 
against direct loss to property caused by perils as defined and limited 
in the standard fire policy and extended coverage endorsement 
thereon, as approved by the Commissioner, and (2) such other insur-
ance (including insurance against the perils of vandalism, malicious 
mischief, burglary, theft, and robbery) as the Commissioner may des-
ignate (under regulations adopted or made under section 1205 of this 
title) from those lines of property insurance for which reinsurance is 
available for losses from riots or civil disorders under part B of title 
Ante. p. 560. 
X I I of the National Housing Act. 
(3) The term "environmental hazard" means any hazardous condi-
tion that might give rise to loss under an insurance contract, but which 
is beyond the control of the property owner. 
(4) The term "inspection bureau" means any rating bureau or other 
organization designated by the Commissioner to perform inspections 
to determine the condition of the properties for which basic property 
insurance is sought. 
(5) The terms "Industry Placement Facility" and "Facility" mean 
the facility consisting of all insurers licensed to write and engaged in 
writing basic property insurance (including homeowners and commer-
cial multiperil policies) within the District of Columbia to assist 
agents, brokers, and applicants in securing basic property insurance. 
(6) The term "premiums written" means ^ross direct premiums 
(;harged with respect to property in the District of Columljia on all 
policies of basic property insurance and the basic property insurance 
j)remium components of all multiperil policies, less all premiums and 
dividends returned, paid, or credited to policyholders or the unused or 
unabsorbed portions of premiums deposits. 
(7) The term "property owner" means any person having an insur-
able interest in real, personal, or mixed real and personal property. 
INDUSTRY PLACEMENT FACILITY 
SEC. 1204. (a) Within thirty days after the date of the enactment 
of this title all insurers licensed to write and engaged in writing in the 
District of Columbia, on a direct basis, basic property insurance or 
any component thereof in multiperil policies, shall establish an Indus-
try Placement Facility. The Facility shall formulate and admin-
ister a program, subject to disapproval by the Commissioner in whole 
or in part, to seek the equitable apportionment amount such insurers of 
basic property insurance which may be afforded applicants in the Dis-
trict of Columbia whose property is insurable in accordance with 
reasonable underwriting standards and who individually or through 
their insurance agent or broker request the aid of the Facility to pro-
cure such insurance. The Facility shall seek to place insurance wnth 
one or more participating companies up to the full insurable value of 
the risk, if requested, except to the extent that deductibles, percentage 
participation clauses, and other underwriting devices are employed to 
meet special problems of insurability. 
(b) The Facility may, subject to the approval of the Commissioner, 
provide as part of its program for the equitable distribution of com-
mercial risks and dwelling risks among insurers. 
(c) Each insurer licensed to write and engaged in writing in the 
District of Columbia, on a direct basis, basic property insurance or 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
569 
any component thereof in multiperil policies shall participate in the 
Industry Placement Facility program in accordance with the estab-
lished rules of the program as a condition of its authority to transact 
such kinds of insurance in the District of (^olumbia, except that, in lieu 
of revoking or suspending the certificate of authority of any company 
for any failure to comijly with any of the established rules of the pro- 
Penalty for 
gram, the Commissioner may subject such company to a penalty ot not "°ncompiiance. 
more than $200 for ejich such failure to so comply Avhen in his judg-
ment he finds that the public interest would be best served by the con-
tinued operation of the company in the District of Columbia. 
FAIR ACCESS TO IXSUKANCE 
REQUIREMENTS 
SEC. 1205. (a) The Industry Placement Facility shall on its own 
motion, or within thirty days after a request by the Commissioner, 
submit to the Commissioner such proposed rules and regulations 
applicable to insurers, agents, and brokers deemed necessary to assure 
all property owners fair access to basic proi:)erty insurance through 
the normal insurance markets, including rules and regulations 
concerning— 
(1) the manner and scope of inspections of risk by an inspec-
tion bureau; 
(2) the preparation and filing of inspection reports and reports 
on actions taken in connection with inspected risks, and sum-
maries thereof; 
(8) the operation of the F'acility, including rules and regula-
tions concerning— 
(A) the basic property insurance coverages to be provided 
through the Facility; 
(B) the reasonable effort to obtain insurance in the normal 
commercial market required of an applicant before recourse 
to the Facility; and 
(C) the appeals procedure witliin the Facility for any 
applicant for insurance regarding any ruling, action, or 
decision by or on behalf of the Facility. 
(b) The Commissioner may adopt such of the rules and regulations 
submitted pursuant to subsection (a) of this section as he approves. 
If the Commissioner disapproves any proposed rule or regulation sub-
mitted, he shall state the reasons for so doing, and he shall require 
the Facility to submit a revision therof within such time as he may 
designate, but no less than ten days. During such designated time, 
the Commissioner and the Facility shall consult regarding any such 
disapproved rule or regulation. If the Facility fails to submit a pro-
posed rule or regulation, or revision thereof, Avithin the designated 
time, or if a revised rule or regulation is unacceptable to the Commis-
sioner, the Commissioner may make such rules and regulations cov-
ering the proposed general subject matter as he shall deem necessary 
to carry out the purposes of this title. Any rule or regulation adopted or 
made under this section shall be consistent with the requirements of 
part A of title X I I of the National Housing Act. 
^"'e- P. sss. 
J O I N T UNDERWRITING 
ASSOCIATION 
SEC. 1206. (a) The Commissioner i.s authorized to establish by order 
a joint underwriting association if he finds, after notice and hearing, 
that such association is necessary to carry out the purposes of this 
title. Such joint underwriting association .shall consist of all insurers 
licensed to write and engaged in writing in the District of Columbia, 
on a direct basis, such basic property insurance as may be designated 
by the Commissioner or any component thereof in multiperil policies. 
noncompliance < 
570 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
(b) Every such insurer shall be and remain a member of the associa-
tion and shall comply with all requirements of membership as a 
(condition of its authority to transact such kinds of insurance in the 
District of Columbia, except that in lieu of revoking or suspending 
the certificate of authority of any company for any failure to comply 
Penalty for 
^vitli auy of the requirements of membership, the Commissioner may 
subject such company to a penalty oi not more than $200 for each 
such failure to so comply when in his judgment he finds that the pub-
lic interest would be best served by the continued operation of the 
company in the District of Columbia. 
(c) (l} Within sixty days following the effective date of the order 
of the Commissioner under this section the association shall submit 
to him a proposed plan of operation, consistent with the provisions of 
this title, which shall provide for economical, fair, and nondiscrimina-
tory administration oi the association and for the prompt and efficient 
})rovision of reinsurance, without regard to environmental hazards, 
for such basic property insurance as may be designated by the Com-
missioner. The plan of operation shall include provisions for— 
(A) preliminary assessment of all members for initial expenses 
necessary to commence oj>erations; 
(B) establishment of necessary facilities; 
(C) management and operation of the association; 
(D) assessment of members to defray losses and expenses; 
(E) commission arrangements; 
(F) reasonable underwriting standards; 
((T) assumj)tion and cession of reinsurance; and 
(H) such other matters as the Commissioner may designate. 
(2) The plan of operation shall not take effect until approved by 
the Commissioner. If the Commissioner disapproves the proposed plan 
of operation (or any part thereof), he shall state the reasons for so 
doing, and the association shall within thirty days thereafter submit 
for his review an appropriately revised plan of operation. During 
such time, the Commissioner and the association shall consult regard-
ing the disapproved plan or part thereof. If the association fails to 
submit a revised plan of operation, or if the revised plan so submitted 
is unacceptable to the Commissioner, the Commissioner shall ]>romul-
gate a plan of operation. 
(3) The association may, on its own initiative, amend such plan, 
subject to approval by the Commissioner, and shall amend such plan 
at the direction of the Commissioner if he finds such action is neces-
sary to carry out the purposes of this title. 
(d) All members of the association shall participate in its writings, 
expenses, profits, and losses, or in such categories thereof as may be 
separately established by the association, subject to approval by the 
Commissioner, in the proportion that the premiums written by each 
such member during the preceding calendar year bear to the aggregate 
premiums written in the District of Columbia by all members of the 
association, or in accordance with such other formula as the association 
may devise with the approval of the Commissioner. Such participation 
by each insurer in the association shall be determined annually on the 
basis of such premiums written during the preceding calendar year 
as disclosed in the annual statements and other reports filed by the 
insurer with the Commissioner. 
(e) The association shall be governed by a board of eleven directors, 
elected annually by cumulative voting by the members of the associa-
tion, whose votes in such election shall be weighted in accordance with 
the proportionate amount of each member's net direct premiums writ-
ten in the District of Columbia during the preceding calendar year. 
Access to rec-
ords. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
571 
The first board shall be elected at a meeting of the members or their 
authorized representatives, which shall be held within thirty days 
after the effective date of the order under this section establishing the 
association, at a time and place designated by the Commissioner. 
EXAMIXATIOX BY COMMISSIONER 
SEC. 1207. The operation of any inspection bureau, the Industry 
Placement Facility, and the joint underwriting association shall at 
all times be subject to the supervision and regulation of the Commis-
sioner. The Commissioner shall have the power of visitation of and 
examination into such operations and free access to all the books, rec-
ords, files, papers, and documents that relate to such operations, may 
summon and qualify witnesses under oath, and may examine directors, 
officers, agents, employees or, any other person having knowledge of 
such operations. 
WAIVER o r LIABILITY 
SEC. 1208. There shall be no liability on the part of, and no cause 
of action of any nature shall arise against, insurers, any inspection 
bureau, the Industry Placement Facility, the joint underwriting asso-
ciation, the agents or employees of such bureau, I'acility, or association, 
or any officer or employee of the District of Columbia, for any state-
ments made in good faith by them concerning the insurability of prop-
erty (A) in any reports or other communications, (B) at the time of 
the hearings conducted in connection therewith, or (C) in the findings 
Avith respect thereto required by the provisions of this title. The reports 
and communications of any inspection bureau, the Industry Placement 
Facility, and the joint underwriting association with respect to indi-
vidual properties shall not be open to inspection by, or otherwise 
available to, the public. 
ANNUAL REPORTS BY J O I N T UNDERWRITING ASSOCIATION 
SEC. 1209. The joint underwriting association shall file with the 
Commissioner, annually on or before the 1st day of March, a statement 
which shall contain information with respect to its transactions, con-
dition, operations, and affairs during the preceding year. Such state-
ment shall contain such matters and information as are prescribed by 
the Commissioner and shall be in such form as is approved by him. The 
Commissioner may at any time require the association to furnish him 
with additional information with respect to its transactions, condition, 
or any matter connected therewith which he considers to be material 
and which will assist him in evaluating the scope, operation, and 
experience of the association. 
APPEALS 
SEC. 1210. (a) Any api)licant for insurance and any affected insurer 
may appeal to the Commissioner within ninety days after any final 
ruling, action, or decision by or on behalf of any inspection bureau, the 
Industry Placement Facility, or the joint underwriting association, 
following exhaustion of remedies available within such bureau. Facil-
ity, or association. 
(b) All final orders or decisions of tlie Commissioner made under 
this title shall be subject to review by the District of Columbia Court 
of Appeals under section 11-742 of the District of Columbia Code. 
'''^ ^*^'- '^^'^-
572 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
REIMBURSEMENT FOR REINSURANCE PROVIDED UNDER NATIONAL 
INSURANCE DEVELOPMENT PROGRAM 
SEC. 1211. (a) In order to carry out the purposes of this title and to 
make available to insurers who particii^ate hereunder the reinsurance 
Ante, P. 560. 
afforded under part B of title X I I of the National Housing Act 
against losses to property resulting from riots or civil disorders, the 
C/ommissioner is authorized to assess each insurance company author-
ized to do business in the District of Columbia an amount, in the pro-
portion that the premiums earned by each such company in the District 
of Columbia, on lines reinsured in the District of Columbia by the 
Secretary of Housing and Urban Development, during the preceding 
calendar year bear to the aggregate premiums earned on those lines 
iri the District of Columbia by all insurance companies, sufficient to 
l^rovide a fund to reimburse the Secretary of Housing and ITrban 
Development in the manner set forth in section 1223(a)(1) of such 
part B. Such fund mav be added to or such fund may be created by 
moneys appropriated therefor by the Congress. 
(b) Insurers shall add to the premium rate an amount, to be 
approved by the Commissioner, sufficient to recover, within not more 
than three years, any amounts assessed under subsection (a) of this 
section durnig the preceding calendar year. Such amount shall be a 
separate charge to the insured in addition to the premium to be paid 
and shall be reflected as such in the policy of insurance. No commis-
sion shall be paid thereon to any agent or broker producing or selling 
the policy of insurance Avherein such amount is added. 
DELEGATION 
SEC. 1212. The Commissioner is authorized to delegate any of the 
functions vested in him by this title. 
JUDICIAL REVIEW 
77 Stat. 485; 
SEC. 1213. Scctiou 11-742(a) of the District of Columbia Code is 
78 Stat. 633. 
amended (1) by striking out "and" immediately following paragraph 
(10); (2) by striking out the period following paragraph (11) and 
inserting in lieu thereof "; and"; and (3) by adding at the end thereof 
the following new paragraph: 
" (12) final orders and decisions of the Commissioner of the Dis-
trict of Columbia under the provisions of the District of Columbia 
Insurance Placement Act." 
TITLE XIII—NATIONAL FIX)OD INSURANCE 
SHORT TITI.E 
SEC. 1301. This title may be cited as the "National Flood Insurance 
Act of 1968". 
FINDINGS AND DECLARATION OF PURPOSE 
SEC. 1302. (a) The Congress finds that (1) from time to time flood 
disasters have created personal hardships and economic distress which 
have required unforeseen disaster relief measures and have placed ah 
increasing burden on the Nation's resources; (2) despite the instal-
lation of preventive and protective works and the adoption of other 
public programs designed to reduce losses caused by flood damage, 
these methods have not been sufficient to protect adequately against 
growing exposure to future flood losses; (3) as a matter of national 
policy, a reasonable method of sharing the risk of flood losses is 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
573 
through a program of flood insurance which can complement and 
encourage preventive and protective measures; and (4) if such a pro-
gram is initiated and carried out <>Taduall|^, it can be expanded as 
knowledge is gained and experience is appraised, thus eventually mak-
ing flood insurance coverage available on reasonable terms and condi-
tions to persons who have need for such protection. 
(b) The Congress also finds that (1) many factors have made it 
uneconomic for the private insurance industry alone to make flood 
insurance available to those in need of such protection on reasonable 
terms and conditions; but (2) a program of flood insurance with large-
scale participation of the Federal (xovernment and carried out to the 
maximum extent practicable by the private insurance industry is feasi-
ble and can be initiated. 
(c) The Congress further finds that (1) a program of flood insur-
ance can promote the public interest by providing appropriate protec-
tion against the perils of flood losses and encouraging sound land use 
by minimizing exposure of property to flood losses; and (2) the objec-
tives of a flood insurance program should be integrally related to a 
unified national program for flood plain management and, to this end, 
it is the sense of Congress that within two years following the effective 
date of this title the President should transmit to the Congress for its 
Proposals 
consideration any further proposals necessary for such a unified cong|^'"s^'^ *° 
program, including proposals for the allocation of costs among bene-
ficiaries of flood protection. 
(d) It is therefore the purpose of this title to (1) authorize a flood 
insurance program by means of which flood insurance, over a period of 
time, can be made available on a nationwide basis through the coopera-
tive efforts of the Federal Government and the private insurance 
industry, and (2) provide flexibility in the program so that such flood 
insurance may be based on workable methods of pooling risks, mini-
mizing costs, and distributing burdens equitably among those who 
will be protected by flood insurance and the general public. 
(e) It is the further purpose of this title to (1) encourage State and 
local governments to make appropriate land UFB adjustments to con-
strict the development of land which is exposed to flood damage and 
minimize damage caused by flood losses, (2) guide the development 
of proposed future construction, where practicable, away from loca-
tions which are threatened by flood hazards, (3) encourage lending 
and credit institutions, as a matter of national policy, to assist in 
furthering the' objectives of the flood insurance program, (4) assure 
that any Federal assistance provided under the program will be related 
closely to all flood-related programs and activities of the Federal Gov-
ernment, and (5) authorize continuing studies of flood hazards in 
order to provide for a constant reappraisal of the flood insurance pro-
gram and its eflFect on land use requirements. 
AMENDMENTS TO T H E FEDERAL FLOOD INSURANCE ACT OF 1 9 5 6 
SEC. 1303. (a) The second sentence of section 15(e) of the Federal 
Flood Insurance Act of 1956 (79 Stat. 1078) is amended— 
7o stat. io84. 
(1) by striking out "rate" the second time it appears in such 
"
*
^ ^^^ ^'*^'^' 
sentence, and inserting in lieu thereof "market yield", and 
(2) by striking out "as of the last day of", and inserting in lieu 
thereof "during". 
(b) Section 15(e) of such Act is further amended by striking out 
the last sentence thereof. 
(c) Sections 2 through 14, subsections (a) through (d), and (f) 
Repeal. 
and (g) of section 15, and sections 16 through 23 of such Act are et seq. 
hereby repealed. 
Post, 
p. 581. 
574 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
CHAPTER I—THE NATIONAL FLOOD INSURANCE 
PROGRAM 
BASIC AUTHORITY 
SEC. 1304. (a) To carry out the purposes of this title, tlie Secretary 
of Housing and Urban Development is authorized to establish and 
carry out a national flood insurance program which will enable inter-
ested persons to purchase insurance against loss resulting from physical 
damage to or loss of real property or personal property related thereto 
arising from any flood occurring in the United States. 
(b) In carrying out the flood insurance program the Secretary shall, 
to the maximum extent practicable, encourage and arrange for— 
(1) appropriate flnancial participation and risk sharing in the 
program by insurance companies and other insurers, and 
(2) other appropriate participation, on other than a risk-shar-
ing basis, by insurance companies and other insurei-s, insurance 
agents and brokers, and insurance adjustment organizations, 
in accordance with the provisions of chapter XL 
SCOPE OF PROGRAM AND PRIORITIES 
SEC. 1305. (a) In carrying out the flood insurance program the 
Secretary shall afford a priority to making flood insurance available 
to cover residential properties which are designed for the occupancy 
of from one to four families and business properties which are owned 
or leased and operated by small business concerns. 
(b) If on the basis of— 
(1) studies and investigations undertaken and carried out and 
information received or exchanged under section 1307, and 
(2) such other information as may be necessary, 
the Secretary determines that it would be feasible to extend the flood 
insurance program to cover other properties, he may take such action 
under this title as from time to time may be necessary in order to make 
flood insurance available to cover, on such basis as may be feasible, 
any types and classes of— 
(A) other residential properties, 
(B) other business properties, 
(C) agricultural properties, 
(D) properties occupied by private nonprofit organizations, and 
(E) properties owned by State and local governments and 
agencies thereof, 
and any such extensions of the program to any types and classes of 
these properties shall from time to time be prescribed in regulations. 
(c) The Secretary shall make flood insurance available in only those 
States or areas (or subdivisions thereof) which he has determined 
have— 
(1) evidenced a positive interest in securing flood insurance 
coverage under the flood insurance program, and 
(2) given satisfactory assurance that by June 30, 1970, per-
manent land use and control measures wdll have been adopted for 
the State or area (or subdivision) which are consistent with the 
comprehensive criteria for land management and use developed 
under section 1361, and that the application and enforcement of 
such measures will commence as soon as technical information on 
floodways and on controlling flood elevations is available. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
575 
NATUKE AND LIMITATION OF INSURANCE COVERAOE 
SEC. 1306. (a) The Secretary shall from time to time, after consul-
tation M'ith the advisory committee authorized under section 1818, 
appropriate representatives of the pool formed or otherwise created 
under section 1331, and appropriate representatives of the insurance 
authorities of the respective States, provide by regulation for gfeneral 
terms and conditions of insurability which shall be applicable to 
properties eligible for flood insurance coverage under section 1305, 
including— 
(1) the types, classes, and locations of any such j^roperties 
Avhich shall be eligible for flood insurance; 
(2) the nature and limits of loss or damage in any areas (or 
subdivisions thereof) which may be covered by such insurance; 
(3) the classification, limitation, and rejection of any risks 
which may be advisable; 
(4) appropriate minimum premiums; 
(5) appropriate loss-deductibles; and 
(6) any other terms and conditions relating to insurance cov-
erage or exclusion which may be necessary to carry out the pur-
poses of this title. 
(b) In addition to any other tenns and conditions under subsection 
(a), such regulations shall provide that— 
(1) any flood insurance coverage based on chargeable premium 
rates under section 1308 which are less than the estimated pre-
mium rates under section 1307(a) (1) shall not exceed— 
(A) in the case of residential properties which are designed 
for the occupancy of from cne to four families— 
(i) $17,500 aggregate liability for any dwelling unit, 
and $30,000 for any single dwelling structure containing 
more than one dwelling unit, and 
(ii) $5,000 aggregate liability per dwelling unit for 
any contents related to such unit; 
(B) in the case of business properties Avhich are owned or 
leased and operated by small business concerns, an aggregate 
liability with respect to any single structure, including any 
contents thereof related to premises of small business occu-
pants (as that term is defined bv the Secretary), which shall 
be equal to (i) $30,000 plus (li) $5,000 multiplied by the 
number of such occupants and shall be allocated among such 
occupants (or amon^ the occupant or occupants and the 
owner) under regulatjons prescribed by the Secretary; except 
that the aggregate liability for the structure itself may in 
no case exceed $30,000; and 
(C) in the case of any other properties which may become 
eligible for flood insurance coverage under section 1305— 
(i) $30,000 aggregate liability for any single structuie, 
and 
(ii) $5,000 aggregate liability per dwelling unit for 
any contents related to such unit in the case of residential 
properties, or per occupant (as that term is defined by 
the Secretary) for any contents related to the premises 
occupied in the case of any other properties; and 
(2) any flood insurance coA^erage which may be made available 
in excess of any of the limits specified in subparagraph (A), (B), 
or (C) of paragraph (1) (or allocated to any person under sub-
paragraph (B) of such paragraph) shall be based only on charge-
able premium rates under section 1308 which are not less than 
the estimated premium rates under section 1307(a) (1), and the 
576 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
amount of such excess coverage shall not in any case exceed an 
amount which is equal to the applicable limit so specified (or 
allocated). 
ESTIMATES OF P R E M I U M 
RATES 
SEC. 1307. (a) The Secretary is authorized to undertake and carry 
out such studies and investigations and recei>e or exchange such infor-
mation as may be necessary to estimate, and shall from time to time 
estimate, on an area, subdivision, or other appropriate basis— 
(1) the risk premium rates for flood insurance which— 
(A) based on consideration of the risk involved and 
accepted actuarial principles, and 
(B) including— 
(i) the applicable operating costs and allowances set 
forth in the schedules prescribed under section 1311 and 
reflected in such rates, and 
(ii) any administrative exj>enses (or portion of such 
expenses) of carrying out the flood insurance program 
which, in his discretion, should properly be reflected in 
such rates, 
would be required in order to make such insurance available on 
an actuarial basis for any types and classes of properties for 
which insurance coverage is available under section 1305(a) (or 
is recommended to the C^ongress under section 1305(b)) ; 
(2) the rates, if less than the rates estimated under paragraph 
(1), which would be reasonable, would encourage prospective 
insureds to purchase flood insurance, and would be consistent with 
the purposes of this title; and 
(3) the extent, if any, to which federally assisted or other 
flood protection measures initiated after the date of the enact-
ment of this title affect such rates. 
(b) In carrying out subsection (a), the Secretary shall, to the 
maximum extent feasible and on a reimbursement basis, utilize the 
services of the Department of the Army, the Department of the Inte-
rior, the Department of Agriculture, the Department of Commerce, 
and the Tennessee Valley Authority, and, as appro])riate, other Fed-
eral departments or agencies, and for such purposes may enter into 
agreements or other appropriate arrangements with any persons. 
(c) The Secretary shall give priority to conducting studies and 
investigations and making estimates under this section in those States 
or areas (or subdivisions thereof) which he has determined have 
evidenced a positive interest in securing flood insurance coverage 
under the flood insurance program. 
ESTABLISHMENT OF CHARGEABLE PREMIUM 
RATES 
SEC. 1308. (a) On the basis of estimates made under section 1307 
and such other information as may be necessary, the Secretary shall 
from time to time, after consultation with the advisory committee 
authorized under section 1318, appropriate representatives of the pool 
formed or otherwise created under section 1331, and appropriate rep-
resentatives of the insurance authorities of the respective States, pre-
scribe by regulation— 
(1) chargeable premium rates for any types and classes of 
properties for which insurance coverage shall be available under 
section 1305 (at less than the estimated risk premium rates under 
section 1307(a) (1), where necessary), and 
(2) the terms and conditions under which, and the areas (includ-
ing subdivisions thereof) within which, such rates shall apply. 
82 STAT. I 
PUBLIC LAW 90-448-AUG. 1, 1968 
577 
(b) Such rates shall, insofar as practicable, be— 
(1) based on a consideration of the respective risks involved, 
including differences in risks due to land use measures, flood-
proofing, flood forecasting, and similar measures. 
(2) adequate, on the basis of accepted actuarial principles, to 
provide reserves for anticipated losses, or, if less than such 
amount, consistent with the objective of making flood insurance 
available where necessary at reasonable rates so as to encourage 
prospective insureds to purchase such insurance and with the 
purposes of this title, and 
(3) stated so as to reflect the basis for such rates, including the 
differences (if any) between the estimated risk premium rates 
under section 1307(a)(1) and the estimated rates under section 
1307(a)(2). 
(c) Notwithstanding any other provision of this title, the charge-
able rate with respect to any property, the construction or substantial 
improvement of which the Secretary determines has been started after 
the identification of the area in which such property is located has been 
published under paragraph (1) of section 1360, shall not be less than 
tlie applicable estimated risk premium rate for such area (or subdi-
vision thereof) under section 1307(a) (1). 
(d) In the event any chargeable premium rate prescribed under this 
section— 
(1) is a rate which is not less than the applicable estimated risk 
premium rate under section 1307(a) (1), and 
(2) includes any amount for administrative expenses of carry-
ing out the flood insurance program which have been estimated 
under clause (ii) of section 1307(a) (1) (B), 
a sum equal to such amount shall be paid to the Secretary, and he 
shall deposit such sum in the National Flood Insurance Fund estab-
lished under section 1310. 
FINANCING 
SEC. 1309. (a) All authority which was vested in the Housing and 
Home Finance Administrator by virtue of section 15 (e) of the Fed-
eral Flood Insurance Act of 1956 (70 Stat. 1084) (pertaining to the 
^^ use 24u. 
issue of notes or other obligations to the Secretary of the Treasury), 
as amended by subsections (a) and (b) of section 1303 of this x\ct, 
shall be available to the Secretary for the purpose of carrying out the 
flood insurance program under this title; except that the total amount 
of notes and obligations which may be issued by the Secretary pur-
suant to such authority shall not exceed $250,000,000, and all authority 
of the Secretary to issue notes and obligations under said section 15 
(e) beyond such sum is hereby rescinded. 
(b) Any funds borrowed by the Secretary under this authority shall, 
from time to time, be deposited in the National Flood Insurance Fund 
established under section 1310. 
NATIONAL FLOOD INSURANCE 
FUND 
SEC. 1310. (a) To carry out the flood insurance program authorized 
by this title, the Secretary is authorized to establish m the Treasury 
of the United States a National Flood Insurance Fund (hereinafter 
referred to as the "fund") which shall be available, without fiscal year 
limitation— 
(1) for making such payments as may, from time to time, be 
required under section 1334; 
(2) to pay reinsurance claims under the excess loss reinsurance 
coverage provided under section 1335; 
578 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
(3) to repay to the Secretary of the Treasury such sums as may 
be borrowed from him (together with interest) in accordance with 
the authority provided in section 1309; and 
(4) to pay such administrative expenses (or portion of such 
expenses) of ca.rrying out the flood insurance program as he may 
deem necessary; and 
(5) for the purposes specified in subsection (d) under the con-
ditions provided therein. 
(b) The fund shall be credited with— 
(1) such funds borrowed in accordance with the authority pro-
vided in section 1309 as may from time to time be deposited in the 
fund; 
(2) premiums, fees, or other charges which may be paid or 
collected in connection with the excess loss reinsurance coverage 
provided under section 1335; 
(3) such amounts as may be advanced to the fund from appro-
priations in order to maintain the fund in an operative condition 
adequate to meet its liabilities; 
(4) interest which may be earned on investments of the fund 
pursuant to subsection (c); 
(5) such sums as are required to be paid to the Secretary under 
section 1308 (d) ; and 
(6) receipts from any other operations under this title (includ-
ing premiums under the conditions specified in subsection (d), 
and salvage proceeds, if any, resulting from reinsurance cover-
age). 
(c) If, after— 
(1) all outstanding obligations of the fund have been liqui-
dated, and 
(2) any outstanding amounts which may have been advanced 
to the fund from appropriations authorized under section 1376 
(a) (2) (B) have been credited to the appropriation from which 
advanced, with interest accrued at the rate prescribed under sec-
la use 2 ^4 • 
^'^^^^ ^^ ^^^ ^* ^^^^ Federal Flood Insurance Act of 1956, as in effect 
"
* 
immediately prior to the enactment of this title. 
Investment o
f 
the Secretary determines that the moneys of the fund are in excess of 
*"°''''^^" 
current needs, he may request the investment of such amounts as he 
deems advisable by the Secretary of the Treasury in obligations issued 
or guaranteed by the United States. 
(d) In the event the Secretary makes a determination in accordance 
with the provisions of section 1340 that operation of the flood insurance 
program, in whole or in part, should be carried out through the facili-
ties of the Federal Government, the fund shall be available for all 
purposes incident thereto, including— 
(1) cost incurred in the adjustment and payment of any claims 
for losses, and 
(2) f)ayment of applicable operating costs set forth in the 
schedules prescribed under section 1311, 
for so long as the program is so carried out, and in such event any 
premiums paid shall be deposited by the Secretary to the credit of the 
fund. 
(e) An annual business-type budget for the fund shall be prepared, 
transmitted to the Congress, considered, and enacted in the manner 
prescribed by law (sections 102, 103, and 104 of the Government Cor-
59 Stat. 597; 
poratiou Control Act (31 U.S.C. 847-849)) for wholly-owned Govern-
61 Stat. 584. 
mftut corporatious. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
579 
OPERATING COSTS AND ALLOWANCES 
SEC. 1311. (a) The Secretary shall from time to time negotiate 
with appropriate representatives of the insurance industry for the 
purpose of establishing— 
(1) a current schedule of operating costs applicable both to 
risk-sharing insurance companies and other insurers and to insur-
ance companies and other insurers, insurance agents and brokers, 
and insurance adjustment organizations participating on other 
than a risk-sharing basis, and 
(2) a current schedule of operating allowances applicable to 
risk-sharing insurance companies and other insurers, 
Avhich may be payable in accordance with the provisions of chapter 
II, and such schedules shall from time to time be prescribed in 
^°s'' P- ssi. 
regulations. 
(b) For purposes of subsection (a)—• 
(1) the term "operating costs" shall (without limiting such 
"Operating 
j_ 
\ " 
1 1 
costs, 
term) include— 
(A) expense reimbursements covering the direct, actual, 
and necessary expenses incurred in connection with selling 
and servicing flood insurance coverage; 
(B) reasonable compensation jDayable for selling and 
servicing flood insurance coverage, or commissions or service 
fees paid to producers; 
(C) loss adjustment expenses; and 
(D) other direct, actual, and necessary expenses which the 
Secretary finds are incurred in connection with selling or 
servicing flood insurance coverage; and 
(2) the term "operating allowances" shall (without limiting i^'^^^^lfl?^ ^^' 
such term) include amounts for profit and contingencies which 
the Secretary finds reasonable and necessary to carry out the 
purposes of this title. 
PAYMENT OF CLAIMS 
SEC. 1312. The Secretary is authorized to prescribe regulations 
establishing the general method or methods by which proved and 
approved claims for losses may be adjusted and paid for any damage 
to or loss of property which is covered by flood insurance made avail-
able under the provisions of this title. 
DISSEMINATION OF FLOOD INSURANCE INFORMATION 
SEC. 1313. The Secretary shall from time to time take such action 
as may be necessary in order to make information and data available 
to the public, and to any State or local agency or official, with regard 
to— 
(1) the flood insurance program, its coverage and objectives, 
and 
(2) estimated and chargeable flood insurance premium rates, 
including the basis for and differences between such rates in 
accordance with the provisions of section 1308. 
PROHIBITION AGAINST CERTAIN DUPLICATIONS OF BENEFITS 
SEC. 1314. (a) Notwithstanding the provisions of any other law, 
no Federal disaster assistance shall be made available to any person— 
(1) for the physical loss, destruction, or damage of real or per-
sonal property, to the extent that such loss, destruction, or dam-
age is covered by a valid claim which may be adjusted and paid 
580 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
"Federal dis-
aster assist-
ance." 
64 Stat. 1109. 
75 Stat. 311. 
72 Stat. 389; 
79 Stat. 206. 
"Financial as-
sistance." 
42 use 1855ff. 
under flood insurance made available under the authority of 
this title, or 
(2) except in the situation provided for under subsection (b), 
for the physical loss, destruction, or damage of real or personal 
property, to the extent that such loss, destruction, or damage 
could have been covered by a valid claim under flood insurance 
which had been made available under the authority of this title, 
(A) such loss, destruction, or damage occurred subsequent 
to one year following the date flood insurance was made 
available in the area (or subdivision thereof) in which such 
property or the major part thereof was located, and 
(B) such property was eligible for flood insurance under 
this title at that date; 
and in such circumstances the extent that .such loss, destruction, 
or damage could have been covered shall be presumed (for pur-
poses of this subsection) to be an amount not less than the maxi-
mum limit of insurable loss or damage applicable to .such property 
in such area (or subdivision thereof), pursuant to regulations 
under section 1306, at the time insurance was made available in 
such area (or subdivision thereof). 
(b) In order to assure that the provisions of subsection (a) (2) 
will not create undue hardship for low-income persons who might 
otherwise benefit from the provision of Federal disaster assistance, 
the Secretary shall provide by regulation for the circumstances in 
which the provisions of subsection (a) (2) shall not be applicable to 
any such persons. 
(c) For purposes of this section, "Federal disaster assistance" shall 
include any Federal financial assistance which may be made available 
to any person as a result of— 
(1) a major disaster (within the meaning of that term as deter-
mined by the President pursuant to the Act entitled "An Act to 
authorize Federal assistance to State and local governments in 
major disasters, and for other purposes"', as amended (42 U.S.C. 
1855-1855g)), 
(2) a natural disaster, as determined by the Secretary of Agri-
culture pursuant to section 321 of the Consolidated Farmers 
Home Administration Act of 1961 (7 U.S.C. 1961), or 
(3) a disaster with respect to which loans may be made under 
section 7(b) of the Small Business Act (15 U.S.C. 636(b)). 
(d) For purposes of section 10 of the Disaster Relief Act of 1966 (80 
Stat. 1320), the term "financial assistance'' shall be deemed to include 
any flood insurance which is made available under this title. 
STATE AND LOCAL LAND USE CONTROLS 
SEC. 1315. After June 30,1970, no new flood insurance coverage shall 
be provided under this title in any a,rea (or subdivision thereof) unless 
an appropriate public body shall have adopted permanent land use and 
control measures (with eft'ective enforcement provisions) which the 
Secretary finds are consistent with the comprehensive criteria for 
land management and use under section 1361. 
PROPERTIES IN VIOLATION OF STATE AND LOCAL LAW 
SEC. 1316. No new flood insurance coverage shall be provided under 
this title for any property which the Secretary finds has been declared 
by a duly constituted State or local zoning authority, or other author-
ized public body, to be in violation of State or local laws, regulations, 
or ordinances which are intended to discourage or otherwise restrict 
land development or occupancy in flood-prone areas. 
et seq. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
581 
COORDINATION W I T H OTHER PROGRAMS 
SEC. 1317. In carrying out this title, the Secretary shall consult with 
other departments and agencies of the Federal Government, and with 
interstate. State, and local agencies having responsibilities for flood 
control, flood forecasting, or flood damage prevention, in order to 
assure that the programs of such agencies and the flood insurance 
program authorized under this title are mutually consistent. 
ADVISORY COMMITTEE 
SEC, 1318. (a) The Secretary shall appoint a flood insurance advisory 
committee without regard to the provisions of title 5, United States 
Code, governing appointments in the competitive service, and such 
c^us'^* io°f 
committee shall advise the secretary in the preparation of any regula-
tions prescribed in accordance with this title and with respect to policy 
matters arising in the administration of this title, and shall perform 
such other responsibilities as the Secretary may, from time to time, 
assign to such committee. 
(b) Such committee shall consist of not more than fifteen persons 
and such persons shall be selected from among representatives of— 
(1) the insurance industry, 
(2) State and local governments, 
(3) lending institutions, 
(4) the homebuilding industry, and 
(5) the general public. 
(c) Members of the committee shall, while attending conferences or 
compensation, 
meetings thereof, be entitled to receive compensation at a rate fixed by "°""'' ——•"--
the Secretary but not exceeding $100 per day, including traveltime, and 
while so serving away from their homes or regular places of business 
they may be allowed travel expenses, including per diem in lieu of 
subsistence, as is authorized under section 5703 of title 5, United States 
(/ode, for persons in the Government service employed intermittently. 
INITIAL PROGRAM LIMITATION 
SEC. 1319. The face amount of flood insurance coverage outstanding 
and in force at any one time under this title shall not exceed the sum 
of $2,500,000,000. 
REPORT TO T H E PRESIDENT 
SEC. 1320. The Secretary shall include a report of operations mider 
this title in the annual report to the President for sulbmission to the 
Congress required by section 8 of the Department of Housing and 
Urban Development Act. 
79 stat. 67o. 
42 u s e 3536. 
CHAPTER II—ORGANIZATION AND 
ADMINISTRATION 
OF T H E FLOOD INSURANCE PROGRAM 
ORGANIZATION AND ADMINISTRATION 
SEC. 1330. Following such consultation with representatives of the 
insurance industry as may be necessary, the Secretary shall implement 
the flood insurance program authorized under chapter I in accordance ^n'e» P 574; 
with the provisions of part A of this chapter and, if a determination 53°//' ^^ ^*^' 
is made by him under section 1340, under part B of this chapter. 
travel expenses. 
80 Stat. 499. 
582 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
PART A—INDUSTRY PROGRAM W I T H FEDERAL FINANCIAL ASSISTANCE 
INDUSTRY FLOOD INSURANCE 
POOL 
SEC. 1331. (a) The Secretary is authorized to encourage and other-
wise assist any insurance companies and other insurers which meet 
the requirements prescribed under subsection (b) to form, associate, 
or otherwise join together in a pool— 
(1) in order to pix)vide the flood insurance coverage authorized 
Ante, p. 574. 
Under chapter I; and 
(2) for the purpose of assuming, on such terms and conditions 
as may be agreed upon, such financial responsibility as will enable 
such companies and other insurers, with the Federal financial and 
other assistance available under this title, to assume a reasonable 
proportion of responsibility for the adjustment and payment of 
claims for losses under the flood insurance program. 
(b) In order to promote the effective administration of the flood 
insurance program under this part, and to assure that the objectives 
of this title are furthered, the Secretary is authorized to prescribe 
appropriate requirements for insurance companies and other insurers 
participating in such pool including, but not limited to, minimum 
requirements for capital or surplus or assets. 
AGREEMENTS W I T H FLOOD INSURANCE POOL 
Srx!. 1332. (a) The Secretary is authorized to enter into such agree-
ments with the pool formed or otherwise created under this part as he 
deems necessary to carry out the purposes of this title. 
(b) Such agreements shall specify— 
(1) the terms and conditions under which risk capital will be 
available for the adjustment and payment of claims, 
(2) the terms and conditions under which the pool (and the 
companies and other insurers participating therein) shall par-
ticipate in premiums received and profits or losses realized or 
sustained, 
(3) the maximum amount of profit, established by the Secretary 
and set forth in the schedules prescribed under section 1311, which 
may be realized by such pool (and the companies and other 
insurers participating therein), 
(4) the terms and conditions under which operating costs and 
allowances set forth in the schedules prescribed under section 1311 
may be paid, and 
(5) the terms and conditions under which premium equalization 
payments under section 1334 wall be made and reinsurance claims 
under section 1335 will be paid. 
(c) In addition, such agreements shall contain such provisions as 
tlie Secretary finds necessary to assure that— 
(1) no insurance company or other insurer which meets the 
requirements prescribed under section 1331(b), and which has 
indicated an intention to participate in the flood insurance pro-
gram on a risk-sharing basis, will be excluded from participating 
in the pool, 
(2) the insurance companies and other insurers participating 
in the pool will take whatever action may be necessary to provide 
continuity of flood insurance coverage by the pool, and 
(3) any insurance companies and other insurers, insurance 
agents and brokers, and insurance adjustment organizations will 
be permitted to cooperate with the pool as fiscal agents or other-
wise, on other than a risk-sharing basis, to the maximum extent 
practicable. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
583 
ADJUSTMENT AND PAYMENT OF CLAIMS AND JUDICIAL REVIEW 
SEC. 18H3. The insurance companies and other insurers which form, 
associate, or otherwise join together in the pool under tliis part may 
adjust and pay all claims for proved and approved losses covered by 
flood insurance in accordance with the provisions of this title and, 
upon the disallowance by any such company or other insurer of any 
such claim, or upon the refusal of the claimant to accept the amount 
allowed upon any such claim, the claimant, within one year after the 
date of mailing of notice of disallowance or partial disallowance of the 
claim, may institute an action on such claim against such company 
or other insurer in the United States district court for the district in 
which the insured property or the major part thereof shall have been 
situated, and jurisdiction is hereby conferred upon such court to hear 
and determine such action without regard to the amount in controversy. 
PREMIUM EQUALIZATION PAYMENTS 
SEC. 1334. (a) The Secretary, on such terms and conditions as he 
may from time to time prescribe, shall make periodic payments to the 
pool formed or otherwise created under section 1331, in recognition of 
such reductions in chargeable premium rates under section 1308 below 
estimated premium rates under section 1307(a) (1) as are required in 
order to make flood insurance available on reasonable termsi and 
conditions. 
(b) Such payments shall be based only on the aggregate amount of 
flood insurance retained by the pool after ceding reinsurance in 
accordance with the provisions of section 1335, and shall not exceed 
an aggregate amount in any payment period equal to the sum of 
the following: 
(1) an amount for los.ses which bears the same ratio to the 
amount of all proved and approved claims for losses under this 
title during any designated j^eriod as the amount equal to the dif-
ference between— 
(A) the sum of all premium payments for flood insurance 
coverage in force under this title during such designated 
period which would have been payable during such period if 
all .such coverage were based on estimated risk premium rates 
under section 1307(a)(1) 
(excluding any administrative 
exj^enses which may be reflected in such rates, as specified in 
clause (ii) of section 1307(a) (^1) (B)),and 
(B) the sum of the premium payments actually paid or 
payable for such insurance under this title during .such period, 
bears to the amount specified in clause ( A ) ; and 
(2) subject to the terms and conditions specified in the agree-
ments entered into with the pool under section 1332, a proportion-
ate amount for appropriate operating costs and allowances (a.s 
set forth in the schedules prescribed under section 1311) during 
any designated period which bears the same ratio to the total 
amount of such operating costs and allowances during .such period 
as the ratio specified in paragraph (1). 
(c) Designated periods under this section and the methods for 
determining the sum of premiums paid or payable during such periods 
.shall be established by the Secretary. 
REINSURANCE COVERAGE 
SEC. 1335. (a) The Secretary is authorized to take such action as 
may be necessary in order to make available, to the pool formed or 
otherwise created under section 1331, reinsurance for losses (due to 
claims for proved and approved losses covered by flood insurance) 
96-600 O - 69 - 40 
584 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
which are in excess of losses assumed by such pool in accordance with 
the excess loss agreement entered into under subsection (c). 
(b) Such reinsurance shall be made available pursuant to contract, 
agreement, or any other arrangement, in consideration of such pay-
ment of a premium, fee, or other charge as the Secretary finds neces-
sary to cover anticipated losses and other costs of providing such 
reinsurance. 
(c) The Secretary is authorized to negotiate an excess loss agree-
ment, from time to time, under which the amount of flood insurance 
retained by the pool, after ceding reinsurance, shall be adequate to 
further the purposes of this title, consistent with the objective of main-
taining appropriate financial participation and risk sharing to the 
maximum extent practicable on the part of participating insurance 
companies and other insurers. 
(d) All reinsurance claims for losses in excess of losses assumed by 
the pool shall be submitted on a portfolio basis by such pool in accord-
ance with terms and conditions established by the Secretary. 
PART B—GOVERNMENT PROGRAM W I T H INDUSTRY ASSISTANCE 
FEDERAI, OPERATION OF THE PROGRAM 
SEC. 1840. (a) If at any time, after consultation with representa-
tives of the insurance industry, the Secretary determines that opera-
tion of the flood insurance program as provided under part A cannot 
be carried out, or that such operation, in itself, would be assisted mate-
rially by the Federal Government's assumption, in whole or in part, of 
the operational responsibility for flood insurance under this title (on 
a temporary or other basis) he shall promptly undertake any necessary 
arrangements to carry out the program of flood insurance authorized 
under chapter I through the facilities of the Federal Government, uti-
lizing, for purposes of providing flood insurance coverage, either— 
(1) insurance companies and other insurers, insurance agents 
and brokers, and insurance adjustment organizations, as fiscal 
agents of the United States, 
(2) officers and employees of the Department of Housing and 
Urban Development, and such other officers and employees of any 
executive agency (as defined in section 105 of title 5 of the United 
80 Stat. 379. 
States Codc) as the Secretary and the head of any such agency 
may from time to time, agree upon, on a reimbursement or other 
basis, or 
(3) both the alternatives specified in paragraphs (1) and (2). 
^^^°^ '° *^''"' 
(b) Upon making the determination referred to in subsection (a), 
and at least thirty days prior to implementing the program of flood 
insurance authorized under chapter I through the facilities of the 
Federal Government, the Secretary shall make a report to the Con-
gress and such report shall— 
(1) state the reasons for such determination, 
(2) be supported by pertinent findings, 
(3) indicate the extent to which it is anticipated that the insur-
ance industry will be utilized in providing flood insurance coverage 
under the program, and 
(4) contain such recommendations as the Secretary deems 
advisable. 
ADJUSTMENT AND PAYMENT OF CLAIMS AND JUDICIAL REVIEW 
SEC. 1341. In the event the program is carried out as provided in 
section 1340, the Secretary shall be authorized to adjust and make 
payment of any claims for proved and approved losses covered by 
Ante, p. 574. 
gress 
thority. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
585 
flood insurance, and upon the disallowance by the Secretary of any 
such claim, or upon the refusal of the claimant to accept the amount 
allowed upon any such claim, the claimant, within one year after the 
date of mailing; of notice of disallowance or partial disallowance by 
the Secretary, may institute an action against the Secretary on such 
claim in the United States district court for the district in which the 
insured property or the major part thereof shall have been situated, ^^^^ ttisdic' 
and jurisdiction is hereby conferred upon such court to hear and deter- uon.' '"" 
mine such action without regard to the amount in controversy. 
PART C—PROVISIONS OF GENERATE APPLICABILITY 
SERVICES BY INSUILINCE INDTJSTRY 
SEC. 1345. (a) In administering the flood insurance program under ,t,^,°f^'"^'^* ^" 
this chapter, the Secretary is authorized to enter into any contracts, 
agreements, or other appropriate arrangements which may, from time 
to time, be necessary for the purpose of utilizing, on such terms and 
conditions as may be agreed upon, the facilities and services of any 
insurance companies or other insurers, insurance agents and brokers, 
or insurance adjustment organizations; and such contracts, agree-
ments, or arrangements may include provision for payment of appli-
cable operating costs and allowances for such facilities and services as 
set forth in the schedules prescribed under section 1811. 
(b) Any such contracts, agreements, or other arrangements may be 
entered into without regard to the provisions of sectjon 8709 of the 
Revised Statutes (41 ILS.C. 5) or any other provision of law requiring 
competitive bidding. 
CSE OF INSURANCE POOL, COMPANIES, OR OTHER PRIVATE ORGANIZATIONS 
FOR CERTAIN PAYMENTS 
SEC. 1346. (a) In order to provide for maximum efficiency in the 
administration of the flood insurance program and in order to facilitate 
the expeditious payment of any Federal funds under such program, 
the Secretary may enter into contracts with pool formed or otherwise 
created under section 1831, or any insurance company or other private 
organization, for the purpose of securing performance by such pool, 
company, or organization of any or all of the following responsibili-
ties : 
(1) estimating and later determining any amounts of payments 
to be made; 
(2) receiving from the Secretary, disbursing, and accounting 
for funds in making such payments; 
(3) making such audits of the records of any insurance com-
pany or other insurer, insurance agent or broker, or insurance 
adjustment organization as may be necessary to assure that proper 
payments are made; and 
(4) otherwise assisting in such manner as the contract may 
provide to further the purposes of this title. 
(b) Any contract with the pool or an insurance company or other 
private organization under this section may contain such terms and 
conditions as the Secretary finds necessary or appropriate for carry-
ing out responsibilities under subsection (a), and may provide for 
payment of any costs which the Secretary determines are incidental 
to carrying out such responsibilities which are covered by the contract. 
(c) Any contract entered into under subsection (a) may be entered 
into without regard to section 8709 of the Revised Statute (41 U.S.C. 
5) or any other provision of law requiring competitive bidding. 
586 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
(d) No contract may be entered into under this section unless the 
Secretary finds that the pool, company, or organization will perform 
its obligations under the contract efficiently and effectively, and will 
meet such requirements as to financial responsibility, legal authority, 
and other matters as he finds pertinent. 
(e) (1) Any .such contract may require the pool, company, or orga-
nization or any of its officers or employees certifying payments or dis-
bursing funds pursuant to the contract, or otherwise participating in 
carrying out the contact, to give surety bond to the United States in 
such amount as the Secretary may deem appropriate. 
(2) No individual designated pursuant to a contract under this sec-
tion to certify payments shall, m the absence of gross negligence or 
intent to defraud the ITnited States, be liable with respect to any pay-
ment certified by him under this section. 
(3) No officer disbursing funds shall in the absence of gross negli-
gence or intent to defraud the United States, be liable with respect to 
any payment by him under this section if it was based upon a voucher 
signed by an individual designated to certify payments as provided 
in paragraph (2) of this subsection. 
(f) Any contract entered into under this section shall be for a term 
of one year, and may be made automatically renewable from term to 
term in the absence of notice by either party of an intention to termi-
nate at the end of the current term; except that the Secretary may ter-
minate any such contract at any time (after reasonable notice to the 
pool, company, or organization involved) if he finds that the pool, com-
l)any, or organization has failed substantially to carry out the con-
tract, or is carrying out the contract in a manner inconsistent with the 
efficient and effective administration of the flood insurance program 
authorized under this title. 
SETTLEMENT AND AKBITRATION 
SEC. 1347. (a) The Secretary is authorized to make final settlement 
of any claims or demands which may arise as a result of any financial 
transactions which he is authorized to carry out under this chapter, 
and may, to assist him in making any such settlement, refer any dis-
putes relating to such claims or demands to arbitration, with the con-
sent of the parties concerned. 
(b) Such arbitration shall be advisory in nature, and any award, 
decision, or reconmiendation which may be made shall become final 
only upon the approval of the Secretary. 
RECORDS AND AUDITS 
SEC. 1348. (a) The flood insurance pool formed or otherwise created 
Ante, p. 582. 
vuidcr pait A of this chapter, and any insurance company or other 
private organization executing any contract, agreement, or other 
a])propriate arrangement with the Secretary under part B of this 
chapter or this part, shall keep such records as the Secretary shall 
prescribe, including records which fully disclose the total costs of the 
program undertaken or the services being rendered, and such other 
records as will facilitate an effective audit. 
(b) The Secretary and the Comptroller General of the LTnited 
Slates, or any of their duly authorized representatives, shall have 
access for the purpose of audit and examination to any books, docu-
ments, papers, and records of the pool and any such insurance com-
])any or other private organization that are pertinent to the costs of 
the program undertaken or the services being rendered. 
Ante, 
p. 584. 
Access to rec 
ords for audit. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
587 
(CHAPTER III—COORDINATION OF FLOOD INSURANCE 
W I T H LAND-MANAGEMENT 
PROGRAMS 
IN 
FLOOD-
PRONE AREAS 
IDENTIFICATION OF FLOOD-PRONE AREAS 
SEC. 1360. The Secretary is authorized to consult with, receive iiifor- j,^^^°"''"^'" ^"" 
Illation from, and enter into any agreements or otlier arrangements 
with the Secretaries of the Army, the Interior, Agriculture, and Com-
merce, the Tennessee Valley Authority, and the heads of other Federal 
departments or agencies, on a reimbursement basis, or with the head 
of any State or local agency, or enter into contracts with any persons 
or private firms, in order that lie may— 
(1) identify and publish information with respect to all flood . Publication o
f 
plain areas, including coastal areas located in the United States, 
which have special flood hazards, within five years following the 
date of the enactment of this Act, and 
(2) establish flood-risk zones in all such areas, and make esti- 
Fiood-risk 
mates with respect to the rates of probable flood-caused loss for 
the various flood-risk zones for each of these areas, within fifteen 
years following such date. 
CRITERIA FOR LAND MANAGEMENT AND USE 
SEC. 1861. (a) The Secretary is authorized to carry out studies and 
investigations, utilizing to the maximum extent practicable the exist-
ing facilities and services of other Federal departments or agencies, 
and State and local governmental agencies, and any other organiza-
tions, with respect to the adequacy of State and local measures in flood-
])rone areas as to land management and use, flood control, flood zon-
ing, and flood damage prevention, and may enter into any contracts, 
agreements, or other appropriate arrangements to carry out such 
authority. 
(b) Such studies and investigations shall include, but not be limited 
to, laws, regulations, or ordinances relating to encroachments and 
obstructions on stream channels and floodways, the orderly develop-
ment and use of flood plains of rivers or streams, floodway encroach-
ment lines, and flood plain zoning, building codes, building permits, 
and subdivision or other building restrictions. 
(c) On the basis of such studies and investigations, and such other 
information as he deems necessary, the Secretary shall from time to 
time develop comprehensive criteria designed to encourage, where 
necessary, the adoption of jKirmanent State and local measures which, 
to the maximum extent feasible, w^ill— 
(1) constrict the development of land which is exposed to flood 
damage where appropriate, 
(2) guide the development of proposed construction away from 
locations which are threatened by flood hazards, 
(3) assist in reducing damage caused by floods, and 
(4) otherwise improve the long-range land management and 
use of flood-prone areas, 
and he shall work closely wath and provide any necessary technical 
assistance to State, interstate, and local governmental agencies, to 
encourage the application of such criteria and the adoption and 
enforcement of such measures. 
588 
PUBLIC LAW 90-448-AUG. 1, 1968 
fe2 
STAT. 
PURCHASE 
OF CERTAIN 
INSURED 
PROPERTIES 
SEC. 1362. The Secretary may, when he determines that the public 
interest would be served thereby, enter into negotiations with any 
owner of real property or interest therein which— 
(1) was located in any flood-risk area, as determined by the 
Secretary, 
(2) was covered by flood insurance under the flood insurance 
program authorized under this title, and 
(3) was damaged substantially beyond repair by flood while 
so covered, 
and may purchase such property or interests therein, for subsequent 
transfer, by sale, lease, donation, or otherwise, to any State or local 
agency w^hich enters into an agreement with the Secretary that such 
property shall, for a period not less than forty years following trans-
fer, be used for only such purposes as the Secretary may, by regula-
tion, determine to be consistent with sound land management and use 
in such area. 
CHAPTER IV—APPROPRIATIONS AND MISCELLANEOUS 
PROVISIONS 
DEEINITIONS 
SEC. 1370. As used in this title— 
(1) the term "flood" shall have such moaning as may be pre-
scribed in regulations of the Secretary, and may include inunda-
tion from rising waters or from the overflow of streams, rivers, or 
other bodies of water, or from tidal surges, abnormally high tidal 
water, tidal waves, tsunamis, hurricanes, or other severe storms 
or deluge; 
(2) the terms "United States" (when used in a geographic 
sense) and "State" includes the several States, the District of 
Columbia, the territories and possessions, the Commonwealth of 
Puerto Rico, and the Trust Territory of the Pacific Islands; 
(3) the terms "insurance company", "other insurer" and "in-
surance agent or broker" include any organizations and persons 
authorized to engage in the insurance business under the laws of 
any State; 
(4) the term "insurance adjustment organization" includes any 
organizations and persons engaged in the business of adjusting 
loss claims arising under insurance policies issued by any insur-
ance company or other insurer; 
(5) the term "person" includes any individual or group of 
individuals, corporation, partnership, association, or any other 
organized group of persons, including State and local governments 
and agencies thereof; and 
(6) the term "Secretary" means the Secretary of Housing and 
Urban Development. 
STUDIES OF OTHER NATURAL DISASTERS 
SEC. 1371. (a) The Secretary is authorized to undertake such studies 
as may be necessary for the purpose of determining the extent to which 
insurance protection against earthquakes or any other natural disaster 
perils, other than flood, is not available from public or private sources, 
and the feasibility of such insurance protection being made available. 
(b) Studies under this section shall be carried out, to the maximum 
extent practicable, with the cooperation of other Federal depart-
ments and agencies and State and local agencies, and the Secretary is 
82 STAT, I 
PUBLIC LAW 90-448-AUG. 1, 1968 
589 
authorized to consult with, receive information from, and enter into 
any necessary agreements or other arrangements with such other 
Federal departments and agencies (on a reimbursement basis) and 
such State and local agencies. 
PAYMENTS 
SEC. 1372. Any payments under this title may be made (after neces-
sary adjustment on account of previously made underpayments or 
overpayments) in advance or by way of reimbursement, and in such 
installments and on such conditions, as the Secretary may determine. 
GOVERNMENT CORI'ORATION CONTROL ACT 
SEC. 1373. The provisions of the Government (Corporation Control 
S9 stat. 597. 
.Vet shall apply to the program authorized under this title to the no^tl.^^^ ^^^ 
same extent as they apply to wholly owned Government corporations. 
FINALITY OF CERTAIN FINANCIAL TRANSACTIONS 
SEC. 1374. Notwithstanding the provisions of any other law— 
(1) any financial transaction authorized to be carried out under 
this title, and 
(2) any payment authorized to be made or to be received in 
connection with any such financial transaction, 
shall be final and conclusive upon all officers of the Government. 
ADMINISTRATIVE EXPENSES 
SEO. 1375. Any administrative expenses which may be sustained 
by the Federal Government in carrying out the flood insurance pro-
gram authorized under this title may be paid out of appropriated 
funds. 
APPROPRIATIONS 
SEC. 1376. (a) There are hereby authorized to be appropriated 
such sums as may from time to time be necessary to carry out this title, 
including sums— 
(1) to cover administrative expenses authorized under section 
1375; 
(2) to reimburse the National Flood Insurance Fund estab-
lished under section 1310 for— 
^"'e- p- 577. 
(A) premium equalization payments under section 1334 
which have been made from such fund; and 
(B) reinsurance claims paid under the excess loss rein-
surance coverage provided under section 1335; and 
(3) to make such other payments as may be necessary to carry 
out the purposes of this title. 
(b) All such funds shall be available without fiscal year limitation. 
EFFECTIVE DATE 
SEC. 1377. This title shall take effect one hundred and twenty days 
following the date of its enactment, except that the Secretary, on the 
basis of a finding that conditions exist necessitating the prescribing 
of an additional period, may prescribe a later effective date which in 
no event shall be more than one hundred and eighty days following 
such date of enactment. 
590 
PUBLIC LAW 90-448-AUG. 1, 1968 
L82 STAT. 
TITLE XIV—INTERSTATE LAND SALES 
SHORT TITLE 
SEC. 1401. This title may be cited as the ''Interstate Land Sales 
Full Disclosure Act". 
DEFINITIONS 
SEC. 1402. For the purposes of this title, the term— 
(1) "Secretary" means the Secretary of Housing and Urban 
Development; 
(2) "person"' means an individual, or an unincorporated orga-
nization, partnership, association, corporation, trust, or estate; 
(3) "subdivision'" means any land which i.s divided or proposed 
to be divided into fifty or more lots, whether contiguous or not, 
for the purpose of sale or lease as part of a common promotional 
plan and where subdivided land is offered for sale or lease by a 
single developer, or a group of developers acting in concert, and 
such land is contiguous or is known, designated, or advertised as 
a common unit or by a common name such land shall be presumed, 
without regard to the number of lots covered by each individual 
offering, as being offered for sale or lease as part of a common 
promotional plan; 
(4) "developer" means any person who, directly or indirectly, 
sells or leases, or offers to .sell or lease, or advertises for sale or lease 
any lots in a subdivision; 
(5) "agent"' means any person who represents, or acts for or on 
behalf of, a developer in selling or leasing, or offering to .sell or 
lease, any lot or lots in a subdivision; but shall not include an 
attorney at law whose representation of another person consists 
solely of rendering legal .services; 
(6) "blanket encumbrance" means a trust deed, mortgage, judg-
ment, or any other lien or encumbrance, including an option or 
contract to sell or a trust agreement, affecting a subdivision or 
affecting more than one lot offered within a subdivision, except 
that such term shall not include any lien or other encumbrance 
arising as the result of the imposition of any tax assessment by any 
public authority; 
(7) "interstate commerce"' means trade or commerce among the 
several States; 
(8) "State"' includes the several States, the District of Colum-
bia, the Commonwealth of Puerto Rico, and the territories and 
possessions of the ITnited States; 
(9) "purchaser" means an actual or prospective purchaser or 
lessee of any lot in a subdivision; 
(10) "offer" includes any inducement, solicitation, or attempt 
to encourage a person to acquire a lot in a subdivision. 
EXEMPTIONS 
SEC. 1403. (a) Unless the method of disposition is adopted for the 
purpose of evasion of this title, the provisions of this title shall not 
apply to— 
(1) the sale or lease of real estate not pursuant to a common 
promotional plan to offer or sell fifty or more lots in a subdivision; 
(2) the sale or lease of lots in a subdivision, all of which are 
five acre^ or more in size; 
(3) the sale or lease of any improved land on which there is a 
residential, commercial, or industrial building, or to the sale or 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
591 
lease of land under a contract obligating the seller to erect such a 
building thereon within a period oi two years; 
(4) the sale or lease of real estate under or pursuant to court 
order; 
(5) the sale of evidences of indebtedness secured by a mortgage 
or deed of trust on real estate; 
(6) the sale of securities issued by a real estate investment 
trust; 
(7) the sale or lease of real estate by any government or gov-
ernment agency; 
(8) the sale or lease of cemetery lots; 
(9) the sale or lease of lots to any person who acquires such 
lots for the purpose of engaging in the business of constructing 
residential, commercial, or industrial buildings or for the purpose 
of resale or lease of such lots to persons engaged m such 
business; or 
(10) the sale or lease of real estate which is free and clear of 
all liens, encumbrances, and adverse claims if each and every 
purchaser or his or her spouse has personally inspected the lot 
which he purchased and if the developer executes a written affir-
mation to that effect to be made a matter of record in accordance 
with rules and regulations of the Secretary. As used in this sub-
paragraph, the terms "liens," "encumbrances," and "adverse 
claims'' are not intended to refer to property reservations which 
land developers commonly convey or dedicate to local bodies or 
public utilities for the purpose of bringing public services to the 
land being developed nor to taxes and assessments which, under 
applicable State or local law, constitute liens on the property 
before they are due and payable. 
(b) The Secretary may from time to time, pursuant to rules and 
regulations issued by him, exempt from any of the provisions of this 
title any subdivision or any lots in a subdivision, if he finds that the 
enforcement of this title with respect to such subdivision or lots is not 
necessary in the public interest and for the protection of purchasers by 
reason of the small amount involved or the limited character of the 
public offering. 
PKOH TUITIONS RELATING TO T H E SALE OR LEASE OF LOTS I N 
SUBDIVISIONS 
SEC. 1404. (a) It shall be unlawful for any developer or agent, 
directly or indirectly, to make use of any means or instruments of 
transportation or communication in interstate commerce, or of the 
mails— 
(1) to sell or lease any lot in any subdivision unless a statement 
of record with respect to such lot is in effect in accordance with 
section 1407 and a printed property report, meeting the require-
ments of section 1408, is furnished to the purchaser in advance of 
the signing of any contract or agreement for sale or lease by the 
purchaser; and 
(2) in selling or leasing, or offering to sell or lease, any lot in 
a subdivision— 
(A) to employ any device, scheme, or artifice to defraud, or 
(B) to obtain money or property by means of a material 
misrepresentation with respect to any information included 
in the statement of record or the property report or with 
respect to any other information pertinent to the lot or the 
subdivision and upon which the purchaser relies, or 
592 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
(C) to engage in any transaction, practice, or course of 
business which operates or would operate as a fraud or deceit 
upon a purchaser, 
(b) Any contract or agreement for the purchase or leasing of a lot 
in a subdivision covered by this title, where the property report has 
not been given to the purchaser in advance or at the time of his sign-
ing, shall be voidable at the option of the purchaser. A purchaser may 
revoke such contract or agreement within forty-eight hours, where he 
has received the property report less than forty-eight hours before he 
signed the contract or agreement, and the contract or agreement shall 
so provide, except that the contract or agreement may stipvilate that 
tlie foregoing revocation authority shall not apply in the case of a pur-
chaser who (1) has received the property report and inspected the lot 
to be purchased or leased in advance of signing the contract or agree-
ment, and (2) acknowledges by his signature that he has made such 
inspection and has read and understood such report. 
Statement of 
record. 
Fees. 
Information, 
availability to 
public. 
REGISTRATION OF SUBDIVISIONS 
SEC. 1405. (a) A subdivision may be registered by filing with the 
Secretary a statement of record, meeting the requirements of this title 
and such rules and regulations as may be prescribed by the Secretary 
in furtherance of the provisions of this title. A .statement of record 
shall be deemed effective only as to the lots specified therein. 
(b) At the time of filing a statement of record, or any amendment 
thereto, the developer shall pay to the Secretary a fee, not in excess 
of $1,000, in accordance with a schedule to be fixed by the regulations 
of the Secretary, which fees may be used by the Secretary to cover 
all or part of the cost of rendering services under this title, and such 
expenses as are paid from such fees shall be considered non-adminis-
trative. 
(c) The filing with the Secretary of a statement of record, or of 
an amendment thereto, shall be deemed to have taken place upon the 
receipt thereof, accompanied by payment of the fee required by sub-
section (b). 
(d) The information contained in or filed with any statement of 
record shall be made available to the public under .such regulations as 
the Secretary may prescribe and copies thereof shall be furnished to 
every applicant at such reasonable charge as the Secretary may 
prescribe. 
INFORMATION REQUIRED I N STATEMENT OF RECORD 
SEC. 1406. The statement of record shall contain the information 
and be accompanied by the documents specified hereinafter in this 
section— 
(1) the name and address of each person having an interest in 
the lots in the subdivision to be covered by the statement of record 
find the extent of such interest; 
(2) a legal description of, and a statement of the total area 
included in, the subdivision and a statement of the topography 
thereof, together with a map showing the division proposed and 
the dimensions of the lots to be covered by the statement of 
record and their relation to existing streets and roads; 
(3) a statement of the condition of the title to the land com-
prising the subdivision, including all encumbrances and deed 
restrictions and covenants applicable thereto; 
(4) a statement of the general terms and conditions, including 
the range of selling prices or rents at w^hich it is proposed to dis-
pose of the lots in the subdivision; 
82 STAT. ] 
PUBLIC LAW 90^448-AUG. 1, 1968 
593 
(5) a statement of the present condition of access to the sub-
division, the availability of sewage disposal facilities and other 
public utilities (including water, electricity, gas, and telephone 
facilities) in the subdivision, the proximity in miles of the sub-
division to nearby municipalities, and the nature of any improve-
ments to be installed by the developer and his estimated schedule 
for completion; 
(6) in the case of any subdivision or portion thereof against 
which there exists a blanket encumbrance, a statement of the con-
sequences for an individual purchaser of a failure, by the person 
or persons bound, to fulfill obligations under the instrument or 
instruments creating such encumbrance and the steps, if any, 
taken to protect the purchaser in such eventuality ; 
(7) (A) copy of its articles of incorporation, with all amend-
ments thereto, if the developer is a corporation; (B) copies of all 
instruments by which the trust is created or declared, if the de-
veloper is a trust; (C) copies of its articles of partnership or 
association and all other papers pertaining to its organization, 
if the developer is a partnership, unincorporated association, joint 
stock company, or any other form of organization; and (D) if 
the purported holder of legal title is a person other than devel-
oper, copies of the above documents for such person; 
(8) copies of the deed or other instrument establishing title to 
the subdivision in the developer or other person and copies of any 
instrument creating a lien or encumbrance upon the title of devel-
oper or other person or copies of the opinion or opinions of coun-
sel in respect to the title to the subdivision in the developer or 
other person or copies of the title insurance policy guaranteeing 
such title; 
(9) copies of all forms of conveyance to be used in selling or 
leasing lots to purchasers; 
(10) copies of instruments creating easements or other restric-
tions ; 
(11) such certified and uncertified financial statements of the 
developer as the Secretary may require; and 
(12) such other information and such other documents and cer-
tifications as the Secretary may require as being reasonably nec-
essary or appropriate for the protection of purchasers. 
TAKING EFFECT OF STATEMENTS OF RECORD AND AMENDMENTS THERETO 
SEC. 1407. (a) Except as hereinafter provided, the effective date of 
a statement of record, or any amendment thereto, shall be the thirtieth 
day after the filing thereof or such earlier date as the Secretary may 
determine, having due regard to the public interest and the protection 
of purchasers. If any amendment to any such statement is filed prior 
to the effective date of the statement, the statement shall be deemed 
to have been filed when such amendment was filed; except that such an 
amendment filed with the consent of the Secretary, or filed pursuant 
to an order of the Secretary, shall be treated as being filed as of the 
date of the filing of the statement of record. When a developer records 
additional lands to be offered for disposition, he may consolidate the 
subsequent statement of record with any earlier recording offering 
subdivided land for disposition under the same promotional plan. At 
the time of consolidation the developer shall include in the consoli-
dated statement of record any material changes in the information 
contained in the earlier statement. 
(b) If it appears to the Secretary that a statement of record, or any 
amendment thereto, is on its face incomplete or inaccurate in any 
material respect, the Secretary shall so advise the developer within a 
Access to rec-
ords, etc. 
594 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
reasonable time after the filing of the statement or the amendment, 
but prior to the date the statement or amendment would otherwise be 
effective. Such notification shall serve to suspend the effective date of 
the statement or the amendment until thirty days after the developer 
files such additional information as the Secretary shall require. Any 
developer, upon receipt of such notice, may request a hearing, and such 
hearing shall be held within twenty days of receipt of such request by 
the Secretary. 
(c) If, at any time subsequent to the eft'ective date of a statement of 
record, a change shall occur affecting any material fact required to be 
contained in the statement, the developer shall promptly file an amend-
ment thereto. Upon receipt of any .such amendment, the Secretary 
may, if he determines such action to be necessary or appropriate in 
the public interest or for the protection of purchasers, suspend the 
statement of record until the amendment becomes effective. 
(d) If it appears to the Secretary at any time that a statement of 
record, which is in effect, includes any untrue .statement of a material 
fact or omits to state any material fact required to be stated therein or 
necessary to make the statements therein not misleading, the Secretary 
may, after notice, and after opportunity for hearing; (at a time fixed 
by the Secretary) within fifteen days after such notice, issue an order 
su.spending the statement of i-ecord. When such statement has been 
amended in accordance with such order, the Secretary shall so declare 
and thereupon the order shall cease to be effective. 
(e) The Secretary is hereby empowered to make an examination in 
any case to determine whether an order should issue under subsection 
(d). In making such examination, the Secretary or anyone designated 
by him .shall have access to and may demand the production of any 
books and papers of, and may administer oaths and affirmations to and 
examine, the developer, any agents, or any other person, in respect of 
any matter relevant to the examination. If the developer or any agents 
shall fail to cooperate, or shall obstruct or refuse to permit the making 
of an examination, such conduct shall be proper ground for the issu-
ance of an order suspending the statement of record. 
(f) Any notice required under this section shall be sent to or served 
on the developer or his authorized agent. 
INFORMATION REQUIRED IN rROPERTY REPORT 
SEC. 1408. (a) A property report relating to the lots in a subdivision 
shall contain such of the information contained in the statement of 
record, and any amendments thereto, as the Secretary may deem neces-
sary, but need not include the documents referred to in paragraphs 
(7) to (11), inclusive, of section 1406. A property report shall also con-
tain such other information as the Secretary may by rules or regula-
tions require as being necessary or appropriate in the public interest 
or for the protection of purchasers. 
(b) The property report shall not be used for any promotional pur-
poses before the statement of record becomes effective and then only if 
it is used in its entirety. No person may advertise or represent that the 
Secretary approves or recommends the subdivision or the sale or lease 
of lots therein. No portion of the propertj^ report shall be underscored, 
italicized, or printed in larger or bolder type than the balance of the 
statement unless the Secretary requires or permits it. 
COOPERATION WITH STATE AUTHORITIES 
SEC. 1409. (a) In administering this title, the Secretary shall coop-
erate with State authorities charged with the responsibility of regu-
lating the sale of lots in subdivisions which are also subject to tliis 
title and may accept for filing under section 1405 and declare effective 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
595 
as a statement of record, if he finds such action to be appropriate in 
the public interest or for the protection of purchasei*s, material filed 
with and found acceptable by such authorities. 
(b) Nothinjif in this title shall affect the jurisdiction of the real 
estate commission (or any agency or office performing like functions) 
of any State over any subdivision or any person. 
CIVIL LIABILITIES 
SEC. 1410. (a) Where any part of the statement of record, when such 
part became effective, contained an untrue statement of a material 
fact or omitted to state a material fact required to be .stated therein, 
any person acquiring a lot in the subdivision covered by such state-
ment of record from the developer or his agent during such period 
the statement remained uncorrected (unless it is proved that at the 
time of such acquisition he knew of such untruth or omission) may, 
either at law or in equity, in any court of competent jurisdiction, sue 
the developer. 
(b) Any developer or agent, who sells or leases a lot in a sub-
division— 
(1) in violation of section 1404, or 
(2) by means of a property report which contained an untrue 
statement of a material fact or omitted to state a material fact 
required to be .stated therein, may be sued by the purchaser of 
such lot. 
(c) The suit authorized under subsection (a) or (b) may be to 
recover such damages as shall represent the difference between the 
amount paid for the lot and the reasonable cost of any improvements 
thereto, and the lesser of (1) the value thereof as of the time .such 
suit was brought, or (2) the price at which such lot shall have been 
disposed of in a bona fide market transaction before suit, or (3) the 
price at which such lot shall have been disposed of after suit in a bona 
fide market transaction but before judgment. 
(d) Every person who becomes liable to make any payment under 
this section may recover contribution as in cases of contract from any 
person who, if sued separately, would have been liable to make the 
same payment. 
(e) In no case shall the amount recoverable under this section exceed 
the sum of the purchase price of the lot, the reasonable cost of improve-
ments, and reasonable court costs. 
COURT REVIEW OF 
ORDERS 
SEC. 1411. (a) Any person, aggrieved by an order or determination 
of the Secretary issued after a hearing, may obtain a review of such 
order or determination in the court of appeals of the United States, 
within any circuit wherein such person resides or has his principal 
jilace of business, or in the United States Court of Appeals for the 
District of Columbia, by filing in such court, within sixty days after 
the entry of such order or determination, a written petition praying 
that the order or determination of the Secretary be modified or be set 
aside in whole or in part. A copy of such petition shall be forthwith 
transmitted by the clerk of the court to the Secretary, and thereupon 
the Secretary shall file in the court the record upon which the order 
or determination complained of was entered, as provided in section 
2112 of title 28, United States Code. No objection to an order or 
72 stat. 941. 
determination of the Secretary shall be considered by the court unless 
such objection shall have been ur^ed before the Secretary. The finding 
of the Secretary as to the facts, if supported by substantial evidence, 
shall be conclusive. If either party shall apply to the court for leave 
596 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
Findings, 
modification. 
62 Stat. 928. 
to adduce additional evidence, and shall show to the satisfaction of 
the court that such additional evidence is material and that there 
were reasonable grounds for failure to adduce such evidence in the 
hearing before the Secretary, the court may order such additional 
evidence to be taken before the Secretary and to be adduced upon a 
hearing in such manner and upon such terms and conditions as to 
the court may seem proper. The Secretary may modify his findings 
as to the facts by reason of the additional evidence so taken, and shall 
file such modified or new findings, which, if supported by substantial 
evidence, shall be conclusive, and his recommendation, if any, for the 
modification or setting aside of the original order. Upon the filing of 
such petition, the jurisdiction of the court shall be exclusive and its 
judgment and decree, affirming, modifying, or setting aside, in whole 
or in part, any order of the Secretary, shall be final, subject to review 
by the Supreme Court of the United States upon certiorari or certifica-
tion as provided in section 1254 of title 28, United States Code. 
(b) The commencement of proceedings under subsection (a) shall 
not, unless specifically ordered by the court, operate as a stay of the 
Secretary's order. 
LIMITATION OF ACTIONS 
SEC. 1412. No action shall be maintained to enforce any liability 
created under section 1410(a) or (b)(2) unless brought within one 
year after the discovery of the untrue statement or the omission, or 
after such discovery should have been made by the exercise of reason-
able diligence, or, if the action is to enforce a liability created under 
section 1401 (b) (1), unless brought within two years after the violation 
upon which it is based. In no event shall any such action be brought by 
a purchaser more than three years after the sale or lease to such 
purchaser. 
CONTRARY STIPULATIONS VOID 
SEC. 1413. Any condition, stipulation, or provision binding any per-
son acquiring any lot in a subdivision to waive compliance with any 
provision of this title or of the rules and regulations of the Secretary 
shall be void. 
ADDITIONAL REMEDIES 
SEC. 1414. The rights and remedies provided by this title shall be 
in addition to any and all other rights and remedies that may exist at 
law or in equity. 
Investigation 
authority. 
INVESTIGATIONS, I N J U N C T I O N S , AND PROSECUTION OF OFFENSES 
SEC. 1415. (a) Whenever it shall appear to the Secretary that any 
]jerson is engaged or about to engage in any acts or practices which 
constitute or will constitute a violation of the provisions of this title, 
or of any rule or regulation prescribed pursuant thereto, he may, in 
his discretion, bring an action in any district court of the United 
States, or the United States District Court for the District of Colum-
bia to enjoin such acts or practices, and, upon a proper showing, a 
permanent or temporary injunction or restraining order shall be 
granted without bond. The Secretary may transmit such evidence as 
may be available concerning such acts or practices to the Attorney 
General who may, in his discretion, institute the appropriate criminal 
proceedings under this title. 
(b) The Secretary may, in his discretion, make such investigations 
as he deems necessary to determine whether any person has violated 
or is about to violate any provision of this title or any rule or regu-
lation prescribed pursuant thereto, and may require or permit any 
court order. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
597 
person to file with him a statement in writing, mider oath or other-
wise as the Secretary shall determine, as to all the facts and circum-
stances concerning the matter to be investigated. The Secretary is 
Publication of 
authorized, in his discretion, to publish information concerning any inf°'""'«ti°n 
such violations, and to investigate any facts, conditions, practices, or 
matters which he may deem necessary or proper to aid in the enforce-
ment of the provisions of this title, in the prescribing of rules and 
regulations thereunder, or in securing information to serve as a basis 
for recommending further legislation concerning the matters to which 
this title relates. 
(c) For the purpose of any such investigation, or any other pro- 
subpena power. 
ceeding under this title, the Secretary, or any officer designated by 
him, is empowered to administer oaths and affirmations, subpena wit-
nesses, compel their attendance, take evidence, and require the produc-
tion of any books, papers, correspondence, memorandums, or other 
records which the Secretary deems relevant or material to the inquiry. 
Such attendance of witnesses and the production of any such records 
may be required from any place in the United States or any State 
at any designated place of hearing. 
(d) In case of contumacy by, or refusal to obey a subpena issued 
to, any person, the Secretary may invoke the aid of any court of the 
United States within the jurisdiction of which such investigation or 
proceeding is carried on, or where such person resides or carries on 
business, in requiring the attendance and testimony of witnesses and 
the production of books, papers, correspondence, memorandums, and 
other records and documents. And such court may issue an order ^J^i*"^,^^t^' 
requiring such person to appear before the Secretary or any officer 
designated by the Secretary, there to produce records, if so ordered, 
or to give testimony touching the matter under investigation or in 
question; and any failure to obey such order of the court may be 
punished by such court as a contempt thereof. All process in any such 
case may be served in the judicial district whereof such person is an 
inhabitant or wherever he may be found. 
(e) No person shall be excused from attending and testifying or 
from producing books, papers, correspondence, memorandums, and 
other records and documents before the Secretary, or in obedience to 
the subpena of the Secretary or any officer designated by him, or in 
any cause or proceeding instituted by the Secretary, on the ground 
that the testimony or evidence, documentary or otherwise, required 
of him may tend to incriminate him or subject him to a penalty or 
forfeiture; but no individual shall be prosecuted or subject to any 
penalty or forfeiture for or on account of any transaction, matter, 
or thing concerning which he is compelled, after having claimed his 
privilege against self-incrimination, to testify or produce evidence, 
documentary or otherwise, except that such individual so testifying 
shall not be exempt from prosecution and punishment for perjury 
committed in so testifying. 
ADMIN ISTRATION" 
SEC. 1416. (a) The authority and responsibility for administering 
this title shall be in the Secretary of Housing and Urban Develop-
ment who may delegate any of his functions, duties, and powers to 
employees of the Department of Housing and Urban Development or 
to boards of such employees, including functions, duties, and powers 
with respect to investigating, hearing, determining, ordering, or other-
wise acting as to any work, business, or matter under this title. The 
persons to whom such delegations are made with respect to hearing 
functions, duties, and powers shall be appointed and shall serve in the 
528. 
hearings. 
598 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
Department in compliance with sections 3105, 3344, 5362, and 7521 of 
80 Stat. 415- 
title 5 of the United States Code. The Secretary shall by rule prescribe 
such rights of appeal from the decisions of his hearinjj examiners to 
other hearing examiners or to other officers in the Department, to 
boards of officers or to himself, as shall be appropriate and in accord-
ance with law. 
Records o
f 
(b) All hearings shall be public and appro])riate records thereof 
shall be kept, and any order issued after such hearing shall be based 
on the record made in such hearing which shall be conducted in 
60 Stat. 237. 
accordaucc with the provisions of the Administrative Procedure Act. 
5 u s e 551 
^ 
et seq. 
UNLAWFUL REPRESENTATIONS 
SEC. 1417. The fact that a statement of record Avith respect to a 
subdivision has been filed or is in effect shall not be deemed a finding 
by the Secretary that the statement of record is true and accurate on 
its face, or be held to mean the Secretary has in any way ])assed u^)on 
the merits of, or given approval to, such subdivision. It shall be unlaw-
ful to make, or cause to })e made, to any prospective purchaser any 
rei)resentation contrary to the foregoing. 
PENALTIES 
SEC. 1418. Any person who willfully violates any of the provisions 
of this title or the rules and regulations prescribed pursuant thereto, 
or any person who willfully, in a statement of record filed under, or in 
a property report issued pursuant to, this title, makes any untrue 
statement of a material fact or omits to state any material fact required 
to be stated therein, shall UJKJU conviction be fined not more than 
?i>5,000 or imprisoned not more than five years, or both. 
RULES, RE(U'LA'IIONS. AND ORDERS 
SEC. 1419. The Secretary shall have authority from time to time 
to make, issue, amend, and rescind such rules and regulations and such 
orders as are necessary or appropriate to the exercise of the functions 
and powers conferred upon him elsewhere in this title. For the pur[X)se 
of his rules and regulations, the Secretary may classify persons and 
matters within his jurisdiction and prescribe different requirements 
for different classes of persons or mattei-s. 
JURISDICTION o r OFFENSES AND SUITS 
SEC. 1420. (a) The district courts of the United States, the United 
States courts of any territory, and the United States District Court 
for the District of Columbia shall have jurisdiction of offenses and 
violations under this title and under the rules and regulations pre-
scribed by the Secretary pursuant thereto, and concurrent with 
State courts, of all suits in equity and actions at law brought to enforce 
any liability or duty created by this title. Any such suit or action may 
be brought to enforce any liability or duty created by this title. Any 
such suit or action may be brought in the district wherein the defend-
ant is found or is an inhabitant or transacts business, or in the district 
where the offer or sale took place, if the defendant participated therein, 
and process in such cases may be served in any other district of which 
the defendant is an inhabitant or wherever the defendant may be 
found. Judgments and decrees so rendered shall be subject to review as 
62 Stat. 928, 
provlded in sections 1254 and 1291 of title 28, United States Code. No 
^^^' 
case arising under this title and brought in any State court of compe-
tent jurisdiction shall be removed to any court of the LTnited States, 
except where the United States or any officer of employee of the United 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
599 
L'tates in his official capacity is a party. No costs shall be assessed for 
or against the Secretary in any proceeding under this title brought by 
or against him in tlie Supreme Court or such other courts. 
APPROPRIATIONS 
SEC. 1421. Thei'e are authorized to be appropriated such sums as 
may be necessary to carry out this title. 
EFFECTIVE DATE 
SEC. 1422. This title shall take effect upon the expiration of two 
hundred and seventy days after the date of its enactment. 
TITLE XV—MORTGAGE INSURANCE FOR 
NONPROFIT HOSPITALS 
AMENDMENT TO NATIONAL HOUSING ACT 
1715y. 
SEC. 1501. Title I I of the National Housing Act is amended by ,,^,25^0 1707-
adding at the end thereof (after the new section added by section 
807 of this Act) the following new section: 
"MORTGAGE INSURANCE FOR NONPROFIT HOSPITALS 
"SEC. 242. (a) The purpose of this section is to assist the provision 
of urgently needed hospitals for the care and treatment or persons 
who are acutely ill or who otherwise require medical care and related 
services of the kind customarily furnished only (or most effectively) 
by hospitals. 
"(b) For the purposes of this section— 
" (1) the term 'hospital' means a facility— 
" (A) which provides community service for inpatient med-
ical care of the sick or injured (including obstetrical care); 
"(B) not more than 50 per centum of the total patient days 
of which during any year are customarily assignable to the 
categories of chronic convalescent and rest, drug and alco-
holic, epileptic, mentally deficient, mental, nervous and 
mental, and tuberculosis; and 
"(C) which is owned and operated by one or more non-
profit corporations or associations no part of the net earnings 
of which inures, or may lawfully inure, to the benefit of any 
private shareholder or individual; and 
" (2) the terms 'mortgage' and 'mortgagor' shall have the mean-
ings respectfully set forth in section 207(a) of this Act. 
"(c) The Secretary is authorized to insure any mortgage (including 
advances on such mortagage during construction) in accordance with 
the provisions of this section upon such terms and conditions as he may 
prescribe and to make commitments for insurance of such mortgage 
prior to the date of its execution or disbursement thereon. 
"(d) In order to carry out the purpose of this section, the Secretary 
is authorized to insure any mortgage which covers a new or reha-
bilitated hospital, including equipment to be used in its operation, 
subject to the following conditions: 
" (1) The mortgage shall be executed by a mortgagor approved by 
the Secretary. The Secretary may in his discretion require any such 
mortgagor to be regulated or restricted as to charges and methods of 
financing, and, in addition thereto, if the mortgagor is a corporate 
entity, as to capital structure and rate of return. As an aid to the regu-
lation or restriction of any mortgagor with respect to any of the fore-
78 Stat. 452. 
42 u s e 291d. 
600 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
going matters, the Secretary may make such contracts with and 
acquire for not to exceed $100 such stock or interest in such mortgagor 
as he may deem necessary. Any stock or interest so purchased shall 
be paid for out of the General Insurance Fund, and shall be redeemed 
by the mortgagor at par upon the termination of all obligations of the 
Secretary under the insurance. 
"(2) The mortgage shall involve a principal obligation in an 
amount not to exceed $25,000,000, and not to exceed 90 per centum of 
the estimated replacement cost of the property or project, including 
equipment to be used in the operation of the hospital, when the pro-
posed improvements are completed and the equipment is installed. 
"(3) The mortgage shall— 
"(A) provide for complete amortization by periodic payments 
within such term as the Secretary shall prescribe, and 
"(B) bear interest (exclusive of premium charges for insur-
ance and service charges, if any) at not to exceed such per centum 
per annum (not in excess of 6 per centum), on the amount of the 
principal obligation outstanding at any time, as the Secretary 
finds necessary to meet the mortgage market. 
"(4) The Secretary shall not insure any mortgage under this section 
unless he has received, from the State agency designated in accord-
ance with section 604(a) (1) of the Public Health Service Act for the 
State in which is located the hospital covered by the mortgage, a certi-
fication that (A) there is a need for such hospital, and (B) there are in 
force in such State or the political subdivision of the State in which 
the proposed hospital would be located reasonable minimum standards 
of licensure and methods of operation for hospitals. No such mortgage 
shall be insured under this section unless the Secretary has received 
such assurance as he may deem satisfactory from the State agency 
that such standards w^ill be applied and enforced with respect to any 
hospital located in the State for which mortgage insurance is pro-
vided under this section. 
"(e) The Secretary may consent to the release of a part or parts of 
the mortgaged property or project from the lien of any mortgage 
insured under this section upon such terms and conditions as he may 
prescribe. 
"(f) The activities and functions provided for in this section shall 
be carried out by the agencies involved so as to encourage programs 
that undertake responsibility to provide comprehensive health care, 
including outpatient and preventive care, as well as hospitalization, 
to a defined population. 
"(g) (1) Notwithstanding any of the other provisions of this title, 
the Secretary maj^ insure under this section a mortgage which provides 
permanent financing or refinancing of existing mortgage indebtedness 
in the case of a hospital whose permanent financing is presently lack-
ing, if the construction of such hospital was completed between Janu-
ary 1,1966, and the date of the enactment of this Act. 
"(2) The aggregate principal balance of all mortgages insured 
under paragraph (1) and outstanding at any one time shall not exceed 
$20,000,000. 
"(h) The provisions of subsections (d), (e), (g), (h), (i), (j), (k), 
12 use 1713. 
(1), and (n) of section 207 shall apply to mortgages insured under 
this section and all references therein to section 207 shall be deemed to 
refer to this section." 
LABOR 
STANDARDS 
12 use 1715c. 
gEC. 1502. Section 212(a) of the National Housing Act is amended 
by inserting after the fifth sentence the following new sentence: "The 
provisions of this section .shall also apply to the insurance of any mort-
gage under section 242, except that compliance with such provisions 
82 STAT. ] 
PUBUC LAW 90-448-AUG. 1, 1968 
601 
may be waived by the Secretary in cases or classes of cases where labor-
ers or mechanics, not otherwise employed at any time on the project, 
voluntarily donate their services without compensation for the pur-
pose of lowering the costs of construction and the Secretary determines 
that any amounts thereby saved are fully credited to the nonprofit cor-
poration or association undertakhig the construction; and each laborer 
or mechanic employed on any facility covered by a mortgage insured 
under section 242 .shall receive compensation at a rate not less than 
^nte, p. 599. 
one and one-half times his basic rate of pay for all hours worked in 
any workweek in excess of eight hours in any workday or forty hours 
in the workweek, as the case may be." 
TITLE 
XVI—HOUSING GOALS 
AND ANNUAL HOUSING 
REPORT 
REAFFIRMATION 
OF GOAL 
SEC. 1601. The Congress finds that the supply of the Nation's hous-
ing is not increasing rapidly enough to meet the national housing goal, 
established in the Housing Act of 1949, of the "realization as soon as 
63 stat. 413. 
feasible of the goal of a decent home and a suitable living environment notl^^*^ '^^^ 
for every x\merican family". The Congress reaffirms this national hous-
ing goal and determines that it can be substantially achieved within 
the next decade by the construction or rehabilitation of twenty-six mil-
lion housing units, six million of these for low and moderate income 
families. 
REPORT OUTLINING 
PLAN 
SEC. 1602. Not later than January 15,1969, the President shall make 
Report to con-
a report to the Congress setting forth a plan, to be carried out over ^'^contents. 
a period of ten years (June 30, 1968, to June 30, 1978), for the elimi-
nation of all substandard housing and the realization of the goal 
referred to in section 1601. Such plan shall—• 
(1) indicate the number of new or rehabilitated housing un^ts 
which it is anticipated will have to be provided, with or without 
Government assistance, during each fiscal year of the ten-year 
period, in order to achieve the objectives of the plan, showing the 
number of such units which it is anticipated will have to be ])ro-
vided under each of the various Federal programs designed to 
assist in the provision of housing; 
(2) indicate the reduction in the number of occupied substand-
ard housing units which it is anticipated will have to occur during 
each fiscal year of the ten-year period in order to achieve the 
objectives of the plan; 
(3) provide an estimate of the cost of carrying out the plan for 
each of the various Federal programs and for each fiscal year 
during the ten-year period to the extent that such costs will be 
reflected in the Federal budget; 
(4) make recommendations with respect to the legislative and 
administrative actions necessary or desirable to achieve the objec-
tives of the plan; and 
(5) provide such other pertinent data, estimates, and recom-
mendations as the President deems advisable. 
Such report shall, in addition, contain a projection of the residential 
mortgage market needs and prospects during the coming year, includ-
ing an estimate of the requirements with respect to the availability, 
need, and flow of mortgage funds (particularly in declining urban 
and rural areas) during such year, together with such recommenda-
tions as may be deemed appropriate for encouraging the availability 
of such funds. 
602 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
PERIODIC REPORTS 
c<fn^^resV° 
^^^- ^^^'^' 9 ^ J^Huary 15,1970, and on each succeeding year through 
c"omrnts. 
1979, the President shall submit to the Congress a report which shall— 
(1) compare the results achieved during the preceding fiscal 
year for the completion of new or rehabilitating housing units and 
the reduction in occupied substandard housing with the objectives 
established for such year under the plan; 
(2) if the comparison provided under clause (1) shows a fail-
ure to achieve the objectives set for such year, indicate (A) the 
reasons for such failure; (B) the steps being taken to achieve the 
objectives of the plan during each of the remaining fiscal years 
of the ten-year period; and (C) any necessary revision in the 
objectives established under the plan for each such year; 
(3) project residential mortgage market needs and prospects 
for the coming calendar year including an estimate of the require-
ments with respect to the availability, need, and flow of mort-
gage funds (particularly in declining urban and rural areas) 
during such period, in order to achieve the objectives of the plan; 
(4) provide an analysis of the monetary and fiscal policies of 
the Government for the coming calendar year required to achieve 
the objectives of the plan and the impact upon the domestic econ-
omy of achieving the plan's objectives for such period; 
(5) make recommendations with respect to any additional legis-
lative or administrative action which is necessary or desirable to 
achieve the objectives of the plan; and 
(6) provide such other pertinent data, estimates, and recom-
mendations as the President deems advisable. 
COMMISSION ON MORTGAGE INTEREST RATES 
SEC. 1604. Funds appropriated and available for studies of housing 
markets and credit a,s authorized by section 301 of the Housing Act of 
7o"tlr*inV' 
^^^^ ^^^ section 602(a) of the Housing Act of 1956 shall be available 
12 use i7oie 
for expenses of the Commission established by section 4(b) of Public 
i7oid-3. 
i^aw 90-301, including the report required to be rendered by such 
Ante, p. 114. 
/-, 
• 
• 
' 
'^ 
tr 
i 
j 
Commission. 
TITLE XVII—MISCELLANEOUS 
MODEL CITIES 
SEC. 1701. (a) Section 111(a) of the Demonstration Cities and 
*2 us^c ^^11' 
Metropolitan Development Act of 1966 is amended— 
(1) by striking out "and" the third time it appears,; and 
(2) by inserting before the period at the end thereof ", and not 
to exceed $12,000,000 for the fiscal year ending June 30, 1969". 
(b) Section 111(b) of such Act is amended— 
(1) by striking out "and" the third time it appears; and 
(2) by inserting before the period at the end thereof ", and not 
to exceed $1,000,000,000 for the fiscal year ending June 30, 1970". 
(c) Section 111(c) of such Act is amended to read as follows: 
"(c) Any amounts appropriated under this section shall remain 
available until expended, and any amounts authorized for any fiscal 
year under this section but not appropriated may be appropriated for 
any succeeding fiscal year commencing prior to July 1, 1970." 
82 STAT. ] 
PUBLIC LAW 90-44S-AUG. 1, 1968 
603 
URBAN RENEWAL DEMONSTRATION GRANT PROGRAM 
SEC. 1702. (a) Section 314(a) of the Housing Act of 1954 is ,^%ll%\^_^'' 
amended— 
42 use 1452a. 
(1) by striking out in the first sentence "to public bodies, includ-
ing cities and other political subdivision," and inserting in lieu 
thereof "to public bodies (including cities and other political 
subdivisions) and nonprofit organizations,"; 
(2) by inserting after the first sentence the following: "In the 
case of any such grant to a nonprofit organization, the Secretary 
shall require that the assisted activities and undertakings are not 
inconsistent with the program of the local public agency."; and 
(3) by striking out m the second sentence "No such grant shall 
exceed two-thirds of the cost, as determined or estimated by said 
Secretary, of such activities or undertakings," and inserting in 
lieu thereof the following: "No such grant shall exceed 90 per 
centum of the cost, as determined or estimated by the Secretary, 
of the assisted activities or undertakings,". 
(b) Section 314(c) of such Act is amended by striking out 
"$10,000,000" and inserting in lieu thereof "$20,000,000". 
AUTHORIZATION FOR URBAN INFORMATION AND TECHNICAL ASSISTANCE 
SERVICES PROGRAM 
SEC. 1703. (a) The first sentence of section 906 of the Demonstra-
tion Cities and Metropolitan Development Act of 1966 is amended by 
*^ ?1^* ^284. 
striking out "and not to exceed $5,000,000 for the fiscal year ending 
June 30, 1968" and inserting in lieu thereof "not to exceed $5,000,000 
for each of the fiscal years 1968 and 1969, and not to exceed $15,000,000 
for fiscal year 1970". 
(b) The second sentence of section 906 of such Act is amended to 
read as follows: "Any amounts appropriated under this section shall 
remain available until expended, and any amounts authorized for any 
fiscal year under this section but not appropriated may be appropri-
ated for any succeeding fiscal year commencing prior to July 1, 1970." 
ADVANCES I N TECHNOLOGY I N HOUSING AND URBAN DEVEL0P3IENT 
SEC. 1704. (a) Section 1010(d) of the Demonstration Cities and 
Metropolitan Development Act of 1966 is amended by inserting before 
'^^ '^sc 3372. 
the period at the end of the first sentence the following: ", and not to 
exceed such sums for subsequent fiscal years as may be necessary". 
(b) Section 1010(c) of such Act is amended by striking out "two 
years" in the second sentence and inserting in lieu thereof "four years". 
(c) Section 1010(a) of such Act is amended— 
(1) by striking out "and" at the end of paragraph (1); 
(2) by striking out the period at the end of paragraph (2) and 
inserting in lieu thereof "; and"; and 
(3) by adding after paragraph (2) a new paragraph as follows: 
"(3) require, to the greatest extent feasible, the employment of 
new and improved technology, techniques, materials, and methods 
in housing construction, rehabilitation, and maintenance under 
programs administered by the Department of Housing and Urban 
Development with a view to reducing the cost of such construction, 
rehabilitation, and maintenance, and stimulating the increased 
and sustained production of housing under such programs." 
604 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
64 Stat. 77. 
12 u s e 1749. 
69 Stat. 644. 
73 Stat. 681. 
69 Stat. 645. 
64 Stat. 80; 
75 Stat. 173. 
12 u s e 1749b. 
1-^ 
COLLEGE HOUSING 
r 
SEC. 1705. (a) The heading of section 401 of the Housing Act of 
1950 i.s amended by striking out "LOANS" and inserting in lieu thereof 
"ASSISTANCE IN THE FORM OF LOANS OR ANNUAL GRANTS''. 
(b) Section 401(a) of such Act is amended to read as follows: 
"(a) To assist educational institutions in providing housing and 
other educational facilities for students and faculties, the Secretary 
may make loans of fund.s to such institutions for the construction or 
purchase of such facilities or may, as an alternative to all or part of 
the loan (in the case of any such institution), make annual grants to 
the institution to reduce the cost of its borrowing from other sources 
for such construction or purchase: Provided, That no such assistance 
shall be provided unless (1) the educational institution involved is 
unable to secure the necessary funds for the construction or purchase 
from other sources upon terms and conditions equally as favorable as 
the terms and conditions applicable to loans under this title, and (2) 
the Secretary finds that any such construction will be undertaken in an 
economical manner, and that any such facilities are not or will not be 
of elaborate or extravagant design or materials." 
(c) Section 401 (c) of such Act i,s amended— 
(1) by inserting " ( 1 ) " after "(c)"; 
(2) by striking out "of (1)" and "or (2)" and inserting in lieu 
thereof "of (A)" and "or (B)", respectively; and 
(3) by adding at the end thereof the following new paragraph: 
"(2) Annual grants to an educational institution with respect to 
any housing or other educational facilities shall be made over a fixed 
j)eriod not exceeding 40 years, and provision for such grants shall be 
embodied in a contract guaranteeing their payment over such period. 
Each such grant shall be in an amount equal to the difference between 
(A) the average annual debt service which would be required to be 
paid, during the life of the loan, on the amount borrowed from other 
sources for the construction or purchase of such facilities, and (B) 
the average annual debt service which the institution would have been 
required to pay, during the life of the loan, with respect to such 
amount if the applicable interest rate were the rate specified in para-
graph (1) : Provided^ That the amount on which such grant is based 
shall be approved by the Secretary but in no event shall exceed the 
total development cost of the facilities." 
(d) Section 401 (d) of such Act is amended by inserting " (1)" after 
" (d)", and by adding at the end thereof the following new paragraph: 
"(2) There are hereby authorized to be appropriated to the Secre-
tary such sums as may be necessary, together with loan principal and 
interest payments made by educational institutions assisted with leans 
made hereunder, for payments on notes or other obligations issued 
by the Secretary under this section." 
(e) Section 401(f) of such Act is amended to read as follows: 
"(f)(1) There are hereby authorized to be appropriated to the 
Secretary such sums as may be necessary for the payment of annual 
grants to educational institutions in accordance with this section. 
"(2) Contracts for annual grants under this section shall not be 
entered into in an aggregate amount greater than is authorized in 
appropriation Acts; and in any event the total amount of annual 
grants which may be paid to educational institutions in any year 
pursuant to contracts entered into under this section shall not exce^ 
$10,000,000, which amount shall be increased by $10,000,000 on July 1, 
1969." 
(f) Section 403 of such Act is amended by striking out "the funds 
provided for in this title in the form of loans" and inserting in lieu 
thereof "the amount of the funds provided for in this title in the form 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
605 
of loans, and not more than 12i^ per centum of the funds provided 
for in this title for grants,". 
(g) (1) Section 401(g) of such Act is amended to read as follows: 
73 stat.esa. 
"(g) Except as otherwise provided in the second paragraph of 
^^ ^^^ ^
^
"
*
^ 
section 404 (b), in the case of any loan which is made under this section 
^g^^*°* ^^'^' 
to a nonprofit student housing cooperative corporation referred to in 
12 use 1749c. 
clause (5) of section 404(b), or w^hich is obtained from other sources 
73 stat. esa. 
by such a corporation and is the subject of a contract for annual grants 
entered into under this section, the Secretary shall require that the 
note securing such loan be cosigned by the educational institution 
(referred to in clause (1) of such section) at which such corporation 
is located, and that, in the event of the dissolution of such corporation, 
title to the housing constructed with such loan will vest in such educa-
tional institution." 
(2) Section 404(a) of such Act is amended by inserting "or exist-
ing" immediately after "new". 
(3) Clause (3) (B) of section 404(b) of such Act is amended by 
^i stat. 304. 
striking out "of any loan secured under this title" and inserting in 
lieu thereof the following: "of any loan which is made under section 
401, or is the subject of a contract for annual grants entered into under 
section 401,". 
(4) Clause (4) of section 404(b) of such Act is amended by strik-
ing out "to obtain loans" and inserting in lieu thereof "to obtain loans 
or grants". 
(5) The second paragraph of section 404(b) of such Act is amended 
by inserting after "clause (5) of this subsection," the following: "and 
in the case of any loan which is obtained from other sources by such 
a corporation and is the subject of a contract for annual grants entered 
into under section 401,". 
(6) Section 404(c) of such Act is amended by inserting before the 
period at the end thereof the following: "; except that in the case of 
the purchase of facilities such term means the cost as approved by the 
Secretary". 
(7) Section 404(h) of such Act is amended by inserting "or exist-
ing" immediately after "new". 
(h) The last sentence of paragraph "Seventh" of section 5136 of 
the Revised Statutes (12 U.S.C. 24) (appearing immediately before 
the sentence added by section 911 of this Act) is amended by inserting 
after "the Asian Development Bank" the following: ", or obligations 
issued by any State or political subdivision or any agency of a State or 
political subdivision for housing, university, or dormitory purposes," 
irOUSING FOR THE ELDERLY 
SEC. 1706. Section 202(a) of the Housing Act of 1959 is amended— 
^ l'^'^ f^^J-
(1) by inserting in paragraph (1) after "corporations," the 
^ '^' 
following: "limited profit sponsors,"; 
(2) by inserting in paragraph (2) after "(as defined in subsec- 
^s stat. 162. 
tion (d)(2))," the following: "to any limited profit sponsor 
approved by the Secretary,"; and 
(3) by inserting in paragraph (3) after "Secretary" the follow-
ing : ", except that in the case of other than a corporation, con-
sumer cooperative, or public body or agency the amount of the 
loan shall not exceed 90 per centum of the development cost". 
FEDERAL-STATE TRAINING PROGRAMS 
SEC. 1707. (a) Title V I I I of the Housing Act of 1964 is amended— 
^s stat. 802. 
(1) by inserting after "urban centers," in section 801(b) the 
^° ^^^ soi-sii. 
following: "and with business firms and associations, labor unions, 
and other interested associations and organizations"; and 
606 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
78 Stat. 802. 
20 u s e 801, 
502. 
20 u s e 805. 
(2) by striking out "technical and professional people" in 
sections 801(b) (1) and 802(a)(1) and inserting in lieu thereof 
"technical, professional, and other persons with the capacity to 
master and employ such skills''; and 
(3) by inserting after "which has responsibility for community 
development" in sections 801(b)(1) and 802(a)(1) the follow-
ing: ", or by a private nonprofit organization which is conducting 
or has responsibility for housing and community development 
programs". 
(b) Section 805 of such Act is amended by inserting "Guam, Amer-
ican Samoa, the Trust Territory of the Pacific Islands," after "the 
Commonwealth of Puerto Rico,". 
Ante, 
p. 89; 
79 Stat. 668. 
42 u s e 3533. 
81 Stat. 198. 
ADDITIONAL ASSISTANT SECRETARY OF HOUSING AND URBAN DEVELOPMENT 
SEC. 1708. (a) The first sentence of section 4(a) of the Department 
of Housing and Urban Development Act is amended by striking out 
"five" and inserting in lieu thereof "six". 
(b) Paragraph (87) of section 5315 of title 5, United States Code, 
is amended by striking out "(1)" and inserting in lieu thereof "(6)". 
71 Stat. 305; 
!1 Stat. 24. 
12 u s e 1701d-4. 
INTERNATIONAL 
HOUSING 
SEC. 1709. Section 604 of the Housing Act of 1957 is amended to 
read as follows: 
SEC. 604. (a) The Secretary of Housing and Urban Development 
may exchange data relating to housing and urban planning and devel-
opment with other nations and assemble such data from other nations, 
tlirough participation in international conferences and other means, 
where such exchange or assembly is deemed by him to be beneficial in 
carrying out his responsibilities under the Department of Housing 
and Urban Development Act or other legislation. In carrying out his 
responsibilities under this subsection the Secretary m^y— 
"(1) pay the expenses of participation in activities conducted 
under authority of this section including, but not limited to, the 
compensation, travel expenses, and per diem in lieu of subsistence 
of persons serving in an advisory capacity while away from their 
homes or regular places of business in connection with attendance 
at international meetings and conferences, or other travel for the 
purpose of exchange or assembly of data relating to housing and 
urban planning and development; but such travel expenses shall 
not exceed those authorized for regular officers and employees 
traveling in connection with said activities; and 
" (2) accept from international organizations, foreign countries, 
and private nonprofit foundations, funds, services, facilities, 
materials, and other donations to be utilized jointly in carrying 
out activities under this section. 
"(b) International programs and activities carried out by the Sec-
retary under the authority provided in subsection (a) shall be subject 
to the approval of the Secretary of State for the purpose of assuring 
that such authority shall be exercised in a manner consistent with the 
foreign policy of the United States." 
Rehabilitation 
projects. 
New York. 
75 Stat. 150. 
12 u s e 1715^ 
ELIGIBILITY FOR RENT SUPPLEMENT 
PAYMENTS 
SEC. 1710. Notwithstanding any other provision of law respecting 
the date after which a mortgage must have been approved for mort-
gage insurance under section 221(d) (3) of the National Housing Act, 
the Secretary of Housing and Urban Development is authorized to 
make, and contract to make, rent supplement payments under the pro-
D.C. Code 5-103 
to 5-111. 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
607 
visions of section 101 of the Housing and Urban Development Act of 
1965 to the owners of the housing projects known as the 114th Street 
J^ ^^^^ ^^^^^ 
rehabilitation project and the 114th Street rehabilitation project num-
bered 2, in New York City, New^ York (project numbers 012-33501 and 
012-33512). 
CONSOLIDATION 
OF LOW-RENT 
PUBLIC 
HOUSING PROJECTS 
I N 
T H E 
DISTRICT OF COLUMBIA 
SEC. 1711. All projects now operated and maintained by the National 
Capital Housing Authority pursuant to title I of the District of 
Columbia Alley Dw^elling Act are deemed to be low-rent housing 
^^^^*^*- ^^'i-
projects and may be consolidated, pursuant to section 15(6) of the 
United States Housing Act of 1937, into any contract for annual con- 
63 stat. 42 
tributions covering projects maintained and operated pursuant to title ^\f'use ^1415 
II of the District of Columbia Alley Dwelling Act. 
52 stat. 11 as. 
D.C. Code .5-112 
to 5-116. 
URBAN 
RENEWAL 
PROJECT I N 
GARDEN 
CITY, 
MICHIGAN 
SEC. 1712. Notwithstanding the date of commencement of construc-
tion of the Florence Primary School in Garden City, Michigan, local 
expenditures made in connection with such school shall, to the extent 
otherwise eligible, be counted as a local grant-in-aid toward the Cherry 
Hill urban renewal project (Mich. R-46) for purposes of title I of the 
Housing Act of 1949. 
42 use 1450-
° 
1468. 
URBAN RENEWAL PROJECT I N SACRAMENTO, 
CALIFORNIA 
SEC, 1713. Notwithstanding the date of commencement of construc-
tion of the storm drainage system in the Capitol Mall Riverfront 
urban renewal project (Calif. R-67) in Sacramento, California, local 
expenditures made in connection with such storm drainage system 
located in that project shall, to the extent otherwise eligible, be counted 
as a local grant-in-aid toward that project for purposes of title I of 
the Housing Act of 1949. 
SELr-HEI>P STUDIES 
SEC. 1714. (a) Section 207 of the Housing Act of 1961 is amended 
75 stat. 165; 
by inserting after the words "improved means" the following: ^^42'^usc°i436. 
", including the study of self-help in the construction, rehabilitation, 
and maintenance of housing for low-income persons and families and 
the methods of selecting, involving, and directing such persons and 
families in self-help activities,". 
(b) The Secretary of Housing and Urban Development shall make 
Report to con-
a report to the Congress, within one year after the date of enactment ^''^^^• 
of this Act, setting forth the results of the self-help studies and dem-
onstrations carried out under section 207 of the Housing Act of 
1961, together with such recommendations as he deems appropriate. 
EARTHQUAKE 
STUDY 
SEC. 1715. Section 5 of the Southeast Hurricane Disaster Relief 
Act of 1965 is amended by striking out "three years after the appro- 
79 stat. 1301. 
})riation of funds for this study" and inserting in lieu thereof "June 
30, 1969". 
608 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
SAVINGS AND LOAN ASSOCIATIONS 
u us^c /^64 
^^^- -^'^^^- (^) Section 5 (b) of the Home Owners' Loan Act of 1933 
^'*^'*• 
is amended to read as follows: 
"(b) (1) An association may raise capital in the form of such sav-
ings deposits, shares, or other accounts, for fixed, minimum, or indef-
inite periods of time (all of which are referred to in this section as 
savings accounts and all of which shall have the same priority upon 
liquidation) as are authorized by its charter or by regulations of the 
Board, and may issue such passoooks, time certificates of deposit, or 
other evidence of savings accounts as are so authorized. Holders of 
savings accounts and obligors of an association shall, to such extent as 
may be provided by its charter or by regulations of the Board, be 
members of the association, and shall have such voting rights and such 
other rights as are thereby provided. Except as may be otherwise 
authorized by the association's charter or regulation of the Board in the 
case of savings accounts for fixed or minimum terms of not less than 
thirty days, the payment of any savings account shall be subject to the 
right of the association to require such advance notice, not less than 
rliirty days, as shall be provided for by the charter of the association 
or the regulations of the Board. The payment of withdrawals from 
savings accounts in the event an association does not pay all with-
drawals in full (subject to the right of the association to require notice) 
shall be subject to such rules and procedures as may be prescribed by 
the association's charter or by regulation of the Board, but any asso-
ciation which, except as authorized in writing by the Board, fails to 
make full payment of any withdrawal when due shall be deemed to be 
in an unsafe or unsound condition to transact business within the 
meaning of subsection (d) of this section. Savings accounts shall not 
be subject to check or to withdrawal or transfer on negotiable or trans-
ferable order or authorization to the association, but the Board may 
by regulation provide for withdrawal or transfer of savings accounts 
upon nontransferable order or authorization. 
"(2) To such extent as the Board may authorize by regulation or 
advice in writing, an association may borrow, may g'ive security, and 
may issue such notes, bonds, debentures, or other obligations, or other 
securities (except capital stock) as the Board may so authorize." 
(b) Section 5(c) of the Home Owners' Loan Act of 1933 is 
amended— 
(1) by striking out "shares" in the first sentence and inserting 
in lieu thereof "savings accounts"; and 
(2) by inserting after the first .semicolon in the second proviso 
the following words: "or in time deposits, certificates, or accounts 
of any bank the deposits of which are insured by the Federal 
Deposit Insurance Corporation;". 
(c) Section 5(c) of such Act is amended by inserting in the .second 
paragraph after "property alteration, repair, or improvement" the 
following: ", including the construction of new structures related to 
residential use of the property". 
(d) Section 5(c) of such Act is amended by adding immediately 
after the second paragraph thereof the following new" paragraph: 
"Without regard to any other provision of this subsection, but .sub-
ject to such prohibitions, limitations, and conditions as the Board may 
by regulation prescribe, any such association may make and invest in— 
" (A) any loan not exceeding $5,000 made for the repair, equip-
ping, alteration, or improvement of any real property, or 
"(B) any loan made for the purpose of mobile home financing." 
(e) The first sentence of the paragraph which, prior to the amend-
ments made by this Act, was the next to the last paragraph of section 
5(c) of such Act is amended— 
82 STAT. ] 
PUBLIC LAW 90-448-AUG. 1, 1968 
609 
(1) by inserting " (1)'' immediately before "invest"; 
(2) by striking out "(1)" before "secured"; 
(3) by inserting ", now or hereafter in effect,'' after "National 
Housing Act"; and 
(4) by striking out all that follows "(2)" and inserting in lieu 
^^ ?1^'- 46 5. 
thereof the following: "acquire and hold investments in housing 
project loans, or interests therein, having the benefit of any 
guaranty under section 221 of the Foreign Assistance Act of 1961, 75 stat. 429. 
as now or hereafter in effect, or loans, or interests therein, having 
^^ ^^^ ^^^'^' 
the benefit of any guaranty under section 224 of such Act, or any 
^9 stat. ess. 
commitment or agreement with respect to such loans, or interests 
"
*
' 
therein, made pursuant to either of such sections." 
(f) Section 5(c) of such Act i.s amended by adding immediately 
1
2 use i464. 
before the last paragraph thereof the following new paragraph: 
"Any such association may invest in loans, or interests ui loans, to 
financial institutions with respect to which the United States or any 
agency or instrumentality thereof ha.s any function of examination 
or supervision, or to any broker or dealer registered with the Securi-
ties and Exchange Commission, secured by loans, obligations, or 
investments in which it has any statutory authority to invest directly." 
FEDERAL HOME L0.\N BANK 
ACT 
80 Stat. 1293. 
SEC. 1717. Section 12 of the Federal Home Loan Bank Act, as 
amended (12 U.S.C. 1432), is amended by inserting " ( a ) " after "SEC. Jl,^^,^';J^^^' 
12.", and oy adding at the end thereof a new subsection as follows: 
"(b) Subject to such regulations as may be prescribed by the Board, 
one or more Federal home loans banks may acquire, hold, or dispose 
of, in whole or in part, or facilitate such acquisition, holding, or dis-
position by members of any such bank of, housing project loans, or 
interests therein, having the benefit of any guaranty under section 221 
of the Foreign Assistance Act of 1961, as now or hereafter in effect, 
or loans, or interests therein, having the benefit of any guaranty under 
section 224 of such Act, or any commitment or agreement with respect 
to such loans, or interests therein, made pursuant to either of such 
sections." 
FEDERAL RESERVE ACT 
SEC. 1718. Section 24 of the Federal Reserve Act, as amended (12 
U.S.C. 371), is amended— 
73 stat. 489; 
(1) by striking out "twenty-four months", wherever it appears 
in the third paragraph and inserting in lieu thereof "thirty-six 
months"; 
(2) by striking out "when the entire amount of such obligation 
is sold to the association", wherever it appears in the first and 
second paragraphs, and inserting in lieu thereof "in whole or in 
part and at any time or times prior to the maturity of such obli-
gation" ; and 
(3) by striking out the last paragraph and inserting in lieu 
thereof the following: 
"Loans made to any borrower (i) where the association looks for 
repayment by relying primarily on the borrower's general credit 
standing and forecast of income, with or without other security, or 
(ii) where the association relies on other security as collateral for the 
loans (including but not limited to a guaranty of a third party), and 
where, in either case described in clause (i) or (ii) above, the associa-
tion wishes to take a mortgage, deed of trust, or other instrument upon 
real estate (whether or not constituting a first lien) as a precaution 
79 Stat. S09. 
610 
PUBLIC LAW 90-448-AUG. 1, 1968 
[82 STAT. 
against contingencies, such loans shall not be considered as real estate 
loans within the meaning of this section but shall be classed as ordi-
nary non-real-estate loans." 
LOW-RENT PUBLIC HOUSING 
CORPORATE STATUS 
SEC. 1719. (a) The first sentence of section 3 of the United States 
42 u^c U03 
Housing Act of 1937 is amended by striking "a body corporate of per-
petual duration to be known as". 
fo^^at'. 897. 
(^) Section 17 of such Aot is repealed. The capital stock referred to 
42 use 1417. 
in such section shall be retired, and sum of $1,000,000 represented 
b}^ such stock shall be returned to the Treasury of the United States, 
(c) Such Act is amended by adding a new section 17 as follows: 
"SEC. 17. In the performance of, and with respect to, functions, 
powers, and duties under this Act, the Secretary shall have (in addi-
tion to any authority otherwise vested in him) the functions, powers, 
and duties set forth in subsections (a), (b), and (e) of section 402 of 
73^813^68^1^' 
the Housing Act of 1950." 
1
2 use 1749a. 
(d) Section 101 of the Government Corporation Control Act is 
31 u^c 8^6^' 
amended by striking out "United States Housing Authority and 
including public housing projects financed through appropriated funds 
and operations thereof;". 
S P E C I A L STUDIES OF SAVINGS AND LOAN INDUSTRY 
SEC. 1720. That part of chapter IV of the Second Supplemental 
80 Stat. 143. 
Appropriation Act, 1966, w^iich relates to expenses necessary for 
special studies of the savings and loan industry is amended by striking 
out "1968" and inserting "1969". 
SMALL BUSINESS 
ACT 
15 us^c 6^3^3*' 
^^^' ^'^'^^' Subsection (a) of section 4 of the Small Business Act 
is amended by inserting immediately after "the Commonwealth of 
Puerto Rico," the following: "the Trust Territory of the Pacific 
Islands,". 
TECHNICAL 
AMENDMENTS 
79ltar477°"' 
^^^' ^'^^^' ^^^ Sectiou 110(c) of the Housing Act of 1949 is 
42*usc 1460. 
amended by striking out "paragraphs (7), (8), and (9)" in the second 
unnumbered paragraph following the numbered paragraphs and 
inserting in lieu thereof "paragraphs (7), (8), (9), and (10)". 
68 Stat. 626. 
(b) Sectiou 110(d) of the Housing Act of 1949 is amended by 
striking out "clauses (2), (3)" and inserting in lieu thereof "clauses 
(2), (3), (7)". 
(c) Section 110(e) of the Housing Act of 1949 is amended by strik-
ing out "and (9)" in clause (i) and inserting in lieu thereof " (9), and 
(10)". 
i2usci7"aaa 
(^) Sectiou 1101(c) (3) of the National Housing Act is amended 
by inserting "from the beginning of amortization of the mortgage" 
immediately after "twenty-five years". 
(e) Section 213(o) of the National Housing Act is amended by 
adding at the end thereof four new sentences as follows: "Moneys 
in the Cooperative Management Housing Insurance Fund not needed 
for current operations of the fund shall be deposited with the Treas-
urer of the United States to the credit of the Cooperative Manage-
ment Housing Insurance Fund or invested in bonds or other obliga-
tions of, or in bonds or other obligations guaranteed as to principal 
and interest by, the United States. The Secretary may, with the 
79 Stat. 469. 
12 u s e 1715e 
82 STAT. ] 
PUBLIC LAW 90-449-AUG. 2, 1968 
611 
approval of the Secretary of the Treasury, purchase in the open market 
debentures which are the obligations of the Cooperative Management 
Housing Insurance Fund. Such purchases shall be made at a price 
which will provide an investment yield of not less than the yield 
obtainable from other investments authorized by this subsection. 
Debentures so purchased shall be canceled and not reissued.'' 
(f) Section 810(e) of the National Housing Act is amended— 
^3 stat. 684. 
\ / 
, v , / 
, 
cj 
2 2 use 1 74fth 0 
(1) by striking out "private corporation, association, cooj^era-
tive society, or trust" in the first sentence and inserting in lieu 
thereof "mortgagor approved by the Secretary", and 
(2) by striking out "corporation, association, cooperative 
society, or trust" in the third and fourth sentences and inserting 
in lieu thereof "mortgagor". 
(g) Section 220(d) (2) (B) of the National Housing Act is amended 
es stat. 596. 
by striking out "corporations restricted by ' and inserting in lieu 
thereof "corporations or other legal entities restricted by or under". 
Approved August 1, 1968, 11:52 a.m. 
Public Law 90-449 
AN ACT 
August 2,1968 
To amend title 89, United States Code, to provide for disciplinary action against 
[ • • 15387] 
employees in the postal field service who assault other employees in such 
service in the performance of official duties, and for other purposes. 
12 u s e 171Sk. 
Postal Service 
employees. 
Be it enacted l)y the Senate and House of Representatwes 
of the 
United States of America in Congress assembled^ That (a) the portion 
of chapter 41 of title 39, L^nited States Code, under the heading ""yVstat^.^eos; 
"EMPLOYEES GENERX\LLY" is amended by adding immediately following ^9 stat. me. 
section 3107 thereof the following new section: 
*
*
§ 3108. Disciplinary action against employees who assault other 
employees 
"The Postmaster General may take appropriate disciplinary action, 
including, when circumstances warrant, suspension from duty without 
pay, reduction in pay, demotion, or removal from the service, against 
any employee who forcibly assaults any other employee while such 
other employee is engaged in the performance of his ojfficial duties or 
on account of the performance by such other employee of his official 
duties.". 
(b) That part of the table of contents of chapter 41 of title 39, 
United States Code, under the heading "EMPLOYEES GENERALLY" is 
amended by adding— 
"3108. Disciplinary action against employees who assault other employees." 
immediately below— 
"3107. Postal employees relocation expenses.". 
SEC. 2. Section 1114 of title 18, United States Code, is amended 
^^ stat. 721. 
by striking out "any post-office inspector," and inserting in lieu thereof 
"any postal inspector, any postmaster, officer, or employee in the field 
service of the Post Office Department,". 
SEC. 3. Effective on the date of enactment of this A c t ^ 
sea^ch^nd^E^n^'i-
(1) the provisions of section 201 of the Revenue and Expendi- neering^umita^ 
ture Control Act of 1968 shall cease to apply with respect to 'i°"^' exemption. 
officers and employees of the Bureau of Research and Engineering 
" ^' P-
of the Post Office Department, and officers and employees in the 
postal field service except those in regional offices; and