SPECIAL ASSISTANCE (FNMA) FOR LOW-COST HOMES

EXCERPT FROM THE DEMONSTRATION CITIES AND METROPOLITAN DEVELOPMENT ACT OF 1966

[Public Law 89-754, 80 Stat. 1255, 1285]

FEDERAL NATIONAL MORTGAGE ASSOCIATION SPECIAL ASSISTANCE FOR FINANCING LOW-COST HOMES

SEC. 1006. The Congress hereby finds that the sharp decline in new home construction over the past year threatens to undercut our present high level of prosperity and employment as such declines have in the past; that the substantial reduction which has taken place has had its greatest impact on families of modest income who are seeking to achieve the goal of homeownership; that this decline in homebuilding is due primarily to the shortage of mortgage financing on terms which moderate income families can afford; and that our national policy objectives in the field of housing and community development are thereby being thwarted. The Congress therefore expresses its intent that the special assistance funds made available to the Federal National Mortgage Association for the financing of new low-cost homes by the Act of September 10, 1966 (Public Law 89-556),1 should be released immediately to halt the continuing decline in the construction of new homes for families of moderate income.

1 The_reference to Public Law 89-556 is in error and should be to Public Law 89-566. Public Law 89-566 amended sec. 305 (g) of the National Housing Act to provide an additional $1,000,000,000 for purchase of FHA and VA mortgages under FNMA's special assistance program. See sec. 305 (g) supra.

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LOW-RENT PUBLIC HOUSING

See also:

Federal enabling legislation for territories_

United States Housing Act of 19371

Page No. 470

[Public Law 412, 75th Congress; 50 Stat. 888; 42 U.S.C. 1401 et seq.]

AN ACT To provide financial assistance to the States and political subdivisions thereof for the elimination of unsafe and insanitary housing conditions, for the eradication of slums, for the provisions of decent, safe, and sanitary dwellings for families of low income, and for the reduction of unemployment and the stimulation of business activity, to create a United States Housing Authority, and for other purposes.

Be it enacted by the Senate and House of Representatives of the United States of America in Congress assembled,

DECLARATION OF POLICY

SECTION 1. It is hereby declared to be the policy of the United States to promote the general welfare of the Nation by employing its funds and credit, as provided in this Act, to assist the several States and their political subdivisions to alleviate present and recurring unemployment and to remedy the unsafe and insanitary housing conditions and the acute shortage of decent, safe, and sanitary dwellings for families of low income, in urban and rural nonfarm areas, that are injurious to the health, safety, and morals of the citizens of the Nation. In 2 the development of low-rent housing it shall be the policy of the United States to make adequate provisions for larger families and for families consisting of elderly persons. It is the policy of the United States to vest in the local public housing agencies the maximum amount of responsibility in the administration of the low-rent-housing program, including responsibility for the establishment of rents and eligibility requirements (subject to the approval of the Authority), with due consideration to accomplishing the objectives of this Act while effecting economies.

1 Public Law 671, 76th Congress, approved June 28, 1940, 54 Stat. 681, 42 U.S.C. 1501, authorized housing projects developed under the United States Housing Act of 1937 to be used for national defense and war housing. These projects have been converted to lowrent public housing use.

Included in the low-rent public housing program are 21,600 units of housing built by the Public Works Administration prior to enactment of the United States Housing Act of 1937 as experimental projects under the National Industrial Recovery Act, Public Law 67, 73d Congress, 48 Stat. 195, 40 U.S.C. 401.

A number of Lanham Act war housing projects were authorized to be conveyed to local housing authorities by sec. 606 of that Act, as amended, 42 U.S.C. 1586.

2 Sec. 501, Housing Act of 1959, Public Law 86-372, approved September 23, 1959, 73 Stat. 654, 679, added these two sentences.

DEFINITIONS

SEC. 2. When used in this Act

(1) The term "low-rent housing" means decent, safe, and sanitary dwellings within the financial reach of families of low income, and developed and administered to promote serviceability, efficiency, economy, and stability, and embraces all necessary appurtenances thereto. The dwellings in low-rent housing shall be available solely for families of low income.

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Except as otherwise provided in section 23, income limits for occupancy and rents shall be fixed by the public housing agency and approved by the Authority after taking into consideration (A) the family size, composition, age, physical handicaps, and other factors which might affect the rent-paying ability of the family, and (B) the economic factors which affect the financial stability and solvency of the project.

(2) The term "families of low income" means families (including elderly and displaced families) who are in the lowest income group and who cannot afford to pay enough to cause private enterprise in their locality or metropolitan area to build an adequate supply of decent, safe, and sanitary dwellings for their use. The term "families” includes families consisting of a single person in the case of elderly families and displaced families, and includes the remaining member of a tenant family. The term "elderly families" means families whose heads (or their spouses), or whose sole members, have attained the age at which an individual may elect to receive an old-age benefit under title II of the Social Security Act, or are under a disability as defined in section 223 of that Act, or are handicapped within the meaning of section 202 of the Housing Act of 1959. The term "displaced families" means families displaced by urban renewal or other governmental ac

1 Immediately prior to amendment by sec. 503 (a), Housing Act of 1959, Public Law 86372, approved September 23, 1959, 73 Stat. 654, 680, this paragraph read as follows: "(1) The term 'low-rent housing' means decent, safe, and sanitary dwellings within the financial reach of families of low income, and developed and administered to promote serviceability, efficiency, economy, and stability, and embraces all necessary appurtenances thereto. The dwellings in low-rent housing as defined in this Act shall be available solely for families whose net annual income at the time of admission, less an exemption of (a) $100 for each adult dependent member of the family having no income and for each minor (other than the head of the family and his spouse), and (b) not to exceed $600 of the income of each member of the family other than the principal wage earner, does not exceed five times the annual rental (including the value or cost to them of water, electricity, gas, other heating and cooking fuels, and other utilities) of the dwellings to be furnished such families. For the sole purpose of determining eligibility for continued occupancy, a public housing agency may allow, from the net annual income of any family, an exemption (a) for each minor member of the family (other than the head of the family and his spouse) of either $100 or all or any part of the income of such minor, and (b) of $100 for each adult dependent member of the family having no income, and (c) not to exceed $600 of the income of any other member of the family other than the principal wage earner. For the purposes of this subsection, a minor shall mean a person less than 21 years of age."

2 Sec. 103(b), Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 457, inserted "Except as otherwise provided in section 23," at the beginning of this sentence.

3 Immediately prior to amendment by sec. 104, Housing and Urban Development Act of 1965, Public Law 89-117, approved August 10, 1965, 79 Stat. 451, 457, this paragraph read as follows:

"(2) The term 'families of low income' means families (including elderly and displaced families) who are in the lowest income group and who cannot afford to pay enough to cause private enterprise in their locality or metropolitan area to build an adequate supply of decent, safe, and sanitary dwellings for their use. The term 'families' includes families consisting of a single person in the case of elderly families and displaced families, and includes a single person who is handicapped within the meaning of section 202 of the Housing Act of 1959 or who is the remaining member of a tenant family. The term elderly families' means families whose heads (or their spouses), or whose sole members, have attained the age at which an individual may elect to receive an old age benefit under title II of the Social Security Act, or who are under a disability as defined in sec. 223 of that Act. The term 'displaced families' means families displaced by urban renewal or other governmental action."

tion, or families whose present or former dwellings are situated in areas determined by the Small Business Administration, subsequent to April 1, 1965, to have been affected by a natural disaster, and which have been extensively damaged or destroyed as the result of such disaster.

(3) The term "slum" means any area where dwellings predominate which, by reason of dilapidation, overcrowding, faulty arrangement or design, lack of ventilation, light or sanitation facilities, or any combination of these factors, are detrimental to safety, health, or morals. (4) The term "slum clearance" means the demolition and removal of buildings from any slum area.

(5) The term "development" means any or all undertakings necessary for planning, land acquisition, demolition, construction, or equipment, in connection with a low-rent housing project. The term "development cost" shall comprise the costs incurred by a public housing agency in such undertakings and their necessary financing (including the payment of carrying charges, but not beyond the point of physical completion), and in otherwise carrying out the development of such project. Construction activity in connection with a low-rent housing project may be confined to the reconstruction, remodeling, or repair of existing buildings. In cases where the public housing agency is also the local public agency for the purposes of title I of the Housing Act of 1949,2 or 3 in cases where the public housing agency and the local public agency for purposes of such title I operate under a combined central administrative office staff, an administration building included in a low-rent housing project to provide central administrative office facilities may also include sufficient facilities for the administration of the functions of such local public agency, and in such case, the Authority shall require that an economic rent shall be charged for the facilities in such building which are used for the administration of the functions of such local public agency, and shall be paid from funds derived from sources other than the low-rent-housing projects of such public housing agency.

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(6) The term "administration" means any or all undertakings necessary for management, operation, maintenance, or financing in connection with a low-rent-housing or slum-clearance project, subsequent to physical completion.

(7) The term "Federal project" means any project owned or administered by the Authority.

(8) The term "acquisition cost" means the amount prudently required to be expended by a public housing agency in acquiring a lowrent-housing or slum-clearance project.

(9) The term "non-dwelling facilities" shall include site development, improvements and facilities located outside building walls (including streets, sidewalks, and sanitary, utility, and other facilities).

1 This sentence added by sec. 307, Housing Act of 1957, Public Law 85-104, 85th Congress, approved July 12, 1957, 71 Stat. 294, 301.

2 Title I of the Housing Act of 1949, as amended, authorizes the urban renewal program. Sec. 502 (1), Housing Act of 1959, Public Law 86-372, approved September 23, 1959, 73 Stat. 654, 680, inserted", or in cases where the public housing agency and the local public agency for purposes of such title I operate under a combined central administrative office staff,".

Sec. 502(2), Housing Act of 1959, Public Law 86-372, approved September 23, 1959, 72 Stat. 654, 680, substituted "the functions of" for "its functions as".

(10) The term "going Federal rate" means the annual rate of interest (or, if there shall be two or more such rates of interest, the highest thereof) specified in the most recently issued bonds of the Federal Government having a maturity of ten years or more, determined, in the case of loans or annual contributions, respectively, at the date of Presidential approval of the contract pursuant to which such loans or contributions are made: Provided,1 That, with respect to any loans or annual contributions made pursuant to a contract approved by the President after the first annual rate has been specified as provided in this proviso, the term "going Federal rate" means the annual rate of interest which the Secretary of the Treasury shall specify as applicable to the six-month period (beginning with the six-month period ending December 31, 1953) during which the contract is approved by the President, which applicable rate for each six-month period shall be determined by the Secretary of the Treasury by estimating the average yield to maturity, on the basis of daily closing market bid quotations or prices during the month of May or the month of November, as the case may be, next preceding such six-month period, on all outstanding marketable obligations of the United States having a maturity date of fifteen or more years from the first day of such month of May or November, and by adjusting such estimated average annual yield to the nearest one-eighth of one per centum: And provided further, That for the purposes of this Act, the going Federal rate shall be deemed to be not less than 212 per centum.

(11) The term "public housing agency" means any State, county, municipality, or other governmental entity or public body (excluding the Authority), which is authorized to engage in the development or administration of low-rent housing or slum clearance. The Authority shall enter into contracts for financial assistance with a State or State agency where such State or State agency makes application for such assistance for an eligible project which, under the applicable laws of the State, is to be developed and administered by such State or State agency.

(12) The term "State" includes the States of the Union, the District of Columbia, and the Territories, dependencies, and possessions of the United States.

(13) The term "Authority" means the United States Housing Authority created by section 3 of this Act.

(14) The term "initiated" when used in reference to the date on which a project was initiated refers to the date of the first contract

1 This proviso was added by section 24 (c), Housing Amendments of 1953, Public Law 94, 83d Congress, approved June 30, 1953, 67 Stat. 121. 128.

2 Sec. 202, Housing Act of 1961, Public Law 87-70, approved June 30, 1961, 75 Stat. 149, 163, deleted the following paragraph (14) and renumbered this paragraph (formerly numbered (15)) to be paragraph (14):

"(14) The term "veteran" shall mean a person who has served in the active military or naval service of the United States at any time (i) on or after September 16, 1940, and prior to July 26, 1947, (ii) on or after April 6. 1917, and prior to November 11, 1918, (iii) on or after June 27, 1950, and prior to such date thereafter as shall be determined by the President, and who shall have been discharged or released therefrom under conditions other than dishonorable. The term "serviceman" shall mean a person in the active military or naval service of the United States who has served therein at any time (i) on or after September 16, 1940, and prior to July 26, 1947, (ii) on or after April 6, 1917, and prior to November 11, 1918, or (iii) on or after June 27, 1950, and prior to such date thereafter as shall be determined by the President."