Corporation is authorized and empowered to issue and to have outstanding at any one time is increased by an amount sufficient to carry out the provisions of this section.

(b) There is hereby authorized to be appropriated such sums as may be necessary to carry out the provisions of this title.

TECHNICAL SERVICES AND RESEARCH

SEC. 805. To facilitate the provision of farm dwellings, the Secretary is hereby authorized to furnish without charge, or at such charges as the Secretary may determine, technical services such as building plans, specifications, construction supervision and inspection, and advice and information regarding rural housing. The Secretary and the National Housing Agency are authorized to coopera te in research and technical studies in the rural housing field. In furnishing such services and information, the Secretary may utilize, through the Agricultural Extension Service, the facilities and the services of State agencies and educational institutions.

SEC. 806. In carrying out his functions under this title, the Secretary shall have power to

(a) Determine what constitutes decent, safe, and sanitary dwellings in any locality or for any farm by taking into consideration the needs of the family for which such housing is to be used;

(b) Compromise claims and obligations arising out of this title; adjust and modify the terms of contracts and agreements entered into pursuant to this title as circumstances may require; collect claims and obligations, and where he deems it necessary and advisable pursue such claims and obligations to final collection;

(c) Bid for or purchase at foreclosure sale or any other sale, or otherwise acquire, property pledged or mortgaged to secure a loan or other indebtedness; accept title to any property so purchased or acquired; operate or lease such property for such period as may be necessary or advisable to protect the interest of the United States therein; sell or otherwise dispose of such property on such terms as he shall determine to be reasonable; and make loans to provide adequate housing for the purchasers of such property;

(d) Make contracts for services and supplies without regard to the provisions of section 3709 of the Revised Statutes when the aggregate amount involved is less than $300;

(e) Enter into or require subordination or subrogation agreements with the holders of other obligations secured by the farm with respect to which a loan is made.

SEC. 807. The Secretary shall give preference as between eligible applicants seeking loans and other assistance under this title who are equally in need of housing to veterans or the families of veterans who have been discharged (other than dishonorably) from the armed forces of the United States within four years prior to the date of the application for such loan and other assistance.

APPLICATION OF UNITED STATES HOUSING ACT OF 1937 IN RURAL AREAS SEC. 808. In order to provide adequate nonfarm housing for low-income families in rural areas and adequate farm housing for families of farm owners, tenants, sharecroppers, laborers, agricultural workers, and others on farms or in rural areas who due to low income cannot obtain such housing within their means through financial assistance from the Department of Agriculture as provided in the foregoing sections of this title, and in order that such families may be extended assistance comparable to that furnished to families in urban areas under the United States Housing Act of 1937, such Act, as amended, is hereby amended by adding "Title I" after the enacting clause and by adding the following new title II:

"TITLE II-RURAL HOUSING

"SEC. 291. The Authority is hereby authorized and directed, in cooperation with the Department of Agriculture or with the Department of the Interior, as the case may be, to develop and undertake a program to assist local public agencies in providing housing in rural areas for families of low income who cannot otherwise obtain decent, safe, and sanitary housing, with preference as provided in section 10 (g) for families of servicemen and veterans. Such assistance in the case of farm housing for families of low income shall be subject to the following conditions:

"(1) Before housing is constructed on a farm the Department of Agriculture, or the Department of the Interior in the case of farms included in reclamation projects of that Department (through such representatives as it may designate), shall certify

"(a) That the net annual income of the farm, together with the nonfarm income of those to be housed is less than the amount necessary to enable them otherwise to obtain and maintain decent, safe, and sanitary housing. The Department of Agriculture or the Department of the Interior, as the case may be, shall also certify the normal earning capacity of the farm, so that a determination can be made by the local public agency that the farm owner can meet at least the minimum payments required of him, as hereinafter provided;

"(b) That the construction of a suitable type house on the farm is consistent with the respective programs of the Department involved;

"(2) In developing standards as to what constitutes decent, safe, and sanitary dwellings, the Authority shall take into consideration the needs of the family for which such housing is to be used;

(3) With respect to houses on farms, there shall, so far as practicable, be a system of variable payments so that in any year when there is below normal production or prices there may be an appropriate decrease that year in payment below the minimum otherwise required, but only to the extent that credits have been established (as defined by the annual contributions contract) through previous payments by the farm owner in excess of the minimum required payments.

"SEC. 202. The Secretary of Agriculture and the Secretary of the Interior are authorized to utilize such employees and facilties of their respective Departments as are necessary to assist in the development of the program under this title. The Authority may reimburse or make advances to either Department for salaries and other expenses incurred or to be incurred by such Department in carrying out its functions under this title.

"RURAL NONFARM HOUSING

"SEC. 203. Assistance may be extended under this title for the provision of ponfarm housing for families of low income in rural areas, with sufficient land for home gardens. Such assistance shall be subject to the condition that the Authority shall first determine that such housing will be so located that sources of employment will be accessible to the occupants thereof.

"OPTION TO PURCHASE

"SEC. 204. Contracts for assistance under this title shall provide that any lessee of a farmhouse shall be given an option to purchase the house; and may provide, when appropriate, that similar options be given to lessees of nonfarmhouses in rural areas. When any such option is exercised, the purchaser shall be given credit for payments made by him which were applied toward amortizing the cost of the house; in the case of houses where the lease (with option to purchase) is assignable, said credit shall include such payments made by previous lessees.

"LOANS

"SEC. 205. (a) The Authority may make loans to local public agencies under this title to finance the provision of housing in rural areas for families of low income. Such loans shall not exceed the cost of such housing, shall bear interest at such rate not less than the applicable going Federal rate, shall be secured in such manner, and shall be repaid within such period not exceeding forty-five years from the date of the bonds evidencing the loan, as may be deemed advisable by the Authority.

"(b) Funds obtained through the issuance of obligations pursuant to title I shall be available for the loan purposes of this title.

"ANNUAL CONTRIBUTIONS

"SEC. 206. (a) The Authority may make annual contributions to local public agencies to assist them in making housing available for families of low income in rural areas within their means. The Authority shall embody the provisions for such annual contributions in a contract guaranteeing their payment over a fixed period of years. In no case shall any contract be made for a period exceeding forty-five years from the date the first annual contribution is paid.

"(b) Annual contributions shall be strictly limited to the amounts and periods necessary in the determination of the Authority to assure that the purposes of this title will be achieved: Provided, That the maximum contribution payable annually under any contract (which shall be specified in such contract) shall in no case exceed an amount which shall be the difference between (i) the estimated annual costs of the local public agency for debt service, maintenance, administration, and other costs (including the establishment of reserves) with respect to the housing covered by such contract, and (ii) the estimated annual receipts from the minimum payments required to be charged with respect to the housing as hereinafter provided. The amounts of such estimated annual costs and estimated annual receipts shall be the amounts certified by the local public agency and approved by the Authority at the time the contract is made.

"(c) Each contract for annual contributions shall contain provisions to assure that

"(1) Such annual contributions will be reduced, or terminated, to the extent that they are no longer needed;

"(2) Appropriate increases shall be made in the annual payment required with respect to the house based on increases in ability to pay; and when such income increases sufficiently to enable the payment of the full economic costs (including interest and costs of maintenance and administration, and other costs) applicable to the house involved, the annual payments required will be increased to cover such full economic costs;

“(3) Whenever in any year the receipts of a local public agency in connection with a project assisted under this title exceed its expenditures (including debt service, administration, establishment of reserves, and other costs), an amount equal to such excess shall be applied, or set aside for application, to purposes which will effect a reduction in the amount of such subsequent annual contributions.

"(d) As used in this title, the term 'families of low income' in ural areas shall mean families whose net annual income is less than the amount necessary to enable them to obtain and maintain decent, safe, and sanitary housing.

"(e) For the purposes of this title, the Authority is authorized, on and after the date of the enactment of this title, to enter into contracts which provide for annual contributions aggregating not more than $5,000,000 per annum, which limit shall be increased by further amounts of $5,000,000 at the beginning of each of the second, third, fourth, and fifth years, respectively, after such date: Provided, That any part of this authorization may be made available at earlier dates than are provided above upon a determination by the President (which shall be transmitted in a message to the Congress) that such acceleration is necessary to meet acute shortage of decent, safe, and sanitary housing for families of low income in rural areas, including families of servicemen and veterans eligible for such housing under this title, or to stimulate employment and business activity. "(f) When annual contributions are made under this title to assist in making housing available within the means of families of low income in rural areas, the family living in a nonfarm house or the owner of the farm upon which a farmhouse is provided shall be required to make a minimum payment at least equal to an amount representing the average of the annual principal payments which would be required to repay the cost of the house during the period of its useful life. Provided, That with respect to housing made available to a family of low income through sale or financing, if the owner is unable at any time to meet necessary costs for adequate maintenance of the house, there may be credited against such minimum payment an allowance for such necessary maintenance costs (theretofore approved by the local public agency) to be incurred by the owner.

"(g) The Authority may include in any contract or instrument made pursuant to this title such other covenants, conditions, or provisions as it may deem necessary to assure that the purpose of this title will be achieved.

"APPLICABILITY OF TITLE

"SEC. 207. The provisions of this title shall apply to housing assisted under this title for families of low income in rural areas, which shall mean areas other than those designated as urban areas by the Bureau of the Census in its latest publication at the time of the annual contributions contract with respect to the project involved. Provided, That assistance may be extended under this title with respect to projects in other areas where such projects are undertaken by regional, county, or other local public agencies as part of a comprehensive rural housing program and where the Authority finds that the purposes of this Act will best be accomplished thereby.

"SEC. 208. Except as otherwise specifically provided, the provisions of title I of this Act shall apply to this title II except that the provisions of sections 9, 10 (a), (b), (c), 11, 12, 15, and 23 shall not so apply."

TECHNICAL AMENDMENTS

SEC. 809. The United States Housing Act of 1937, as amended, is hereby amended as follows:

(1) By deleting the words "this Act" where they appear in section 11 (a), 15 (4), 15 (5), and 30 (previsouly numbered section 28) and substituting the words "this title";

(2) By deleting the words "this section" where they appear in section 10 (d) and (e), by deleting the words "section 20" in section 10 (d), and substituting in all three instances the words: "title I and title II of this Act";

(3) By changing the words "low-rent housing", appearing in the second sentence of subsection 2 (1), to read "urban low-rent housing (urban housing being that assisted under title I and located in areas designated as urban by the Bureau of the Census in its latest publication at the time of the annual contributions contract with respect to the project involved)";

(4) By inserting the word "urban" before the words "low-rent housing" in subsection 13 (e);

(5) By amending the second sentence of subsection 13 (a) to read as follows: "The Authority may bid for and purchase at any foreclosure by any party or at any other sale, or acquire (pursuant to section 22 or otherwise) any project which it previously owned or in connection with which it has made a loan, annual contribution or capital grant; and in such event the Authority may complete, administer, dispose of, and otherwise deal with, such projects or parts thereof, but low-rent housing projects assisted under title I shall be subject to the limitations elsewhere in this Act governing their administration and disposition."

TITLE IX-DISPOSITION OF PERMANENT WAR HOUSING AND OTHER FEDERALLY OWNED HOUSING WITH PREFERENCE TO SERVICEMEN AND VETERANS

SEC. 901. Permanent war housing, and other federally owned housing held by the Federal Public Housing Authority under the United States Housing Act of 1937, as amended, shall be disposed of consistently with the postwar housing need and with preference to the families of servicemen and veterans.

SEC. 902. (a) When the President determines that any permanent war housing, constructed or acquired with appropriated funds, is no longer needed for purposes of war and that disposition hereunder is consistent with orderly demobilization, and when the governing body of the locality involved finds that it would be in the best interests of the community or of the families of servicemen and veterans therein to make such housing available as low-rent housing for families of low income, the National Housing Administrator may authorize the disposition by the Federal Public Housing Authority of any such war housing for use (when it is certified by the Authority as suitable for such use) as low-rent housing, with families of servicemen and veterans having therein the preference provided in section 702 hereof. Upon such an authorization, the Authority may dispose of any such permanent war housing under the United States Housing Act of 1937, as amended, except that the proceeds of disposition of the aforesaid permanent war housing shall be handled in the manner provided by Public Law 849, Seventysixth Congress, approved October 14, 1940, as amended (which includes provisions relating to the time for covering balances into the Treasury as miscellaneous receipts). In disposing of such war housing, the Authority may transfer all right, title, and interest of the Federal Government in such war housing which shall include any real or personal property acquired, held, or constructed in connection with such housing or to serve the inhabitants thereof.

(b) To obtain the maximum return consistent with making housing described in section 901 available for low-income families of servicemen, veterans, or others, the Authority may, in lieu of any other method prescribed by law for the disposal of such projects, sell any such project under the terms of the United States Housing Act of 1937, as amended, to a local public agency for a consideration which consists of payment to the Authority during the useful life of the project (as defined in the contract of sale) of all the net income from the project.

(c) Nothing in this title shall be construed to prevent the sale of permanent war housing at its fair value on a home-ownership basis, where the planning and construction of such housing make it feasible so to dispose of it.

TITLE X-PERIODIC INVENTORY OF HOUSING NEEDS AND PROGRAMS

SEC. 1001. The National Housing Administrator shall present to the Congress, not less than once a year, a comprehensive report including but not limited to(a) The most current estimates of Nation-wide housing needs, for all income groups and for various parts of the country, both urban and rural;

(b) The rates of employment and investment in housing and related community development, compared with the rates required for the construction industry's part in full production and full employment;

(c) Nation-wide progress in meeting these needs and requirements;

(d) Recommendations as to any additional specific programs and action required to carry out the national policy in housing and related community development set forth in the policy preamble of this Act toward achievement of the objectives set forth in said policy preamble.

SEC. 1002. In preparing this report and the recommendations contained therein, the Administrator shall cooperate with and seek the advice of appropriate Federal, State, and local agencies, as well as representatives of the various groups interested in housing and community development as producers or consumers.

TITLE XI-MISCELLANEOUS PROVISIONS

ACT CONTROLLING

SEC. 1101. Insofar as the provisions of any other law are inconsistent with the provisions of this Act, the provisions of this Act shall be controlling.

SEPARABILITY

SEC. 1102. If any provisions of this Act, or the application thereof to any persons or circumstances, shall be adjudged by any court of competent jurisdiction to be invalid, such judgment shall not affect, impair, or invalidate the remainder of this Act or its application to other persons and circumstances, but shall be confined in its operation to the provisions of this Act, or the application thereof to the persons and circumstances directly involved in the controversy in which such judgment shall have been rendered.

The CHAIRMAN. Our first witness is the distinguished Administrator of the National Housing Agency, Mr. John B. Blandford, Jr.

Mr. Blandford, we are delighted to have you as our first witness. Would you prefer not to be interrupted until you have finished your statement, or whatever may be your choice the committee will do. What would you rather do?

STATEMENT OF JOHN B. BLANDFORD, JR., ADMINISTRATOR, NATIONAL HOUSING AGENCY, WASHINGTON, D. C.

Mr. BLANDFORD. Mr. Chairman, I do not mind interruptions. I think it will work out rather well if we go quite naturally. The CHAIRMAN. Very well. You may proceed.

Mr. BLANDFORD. Of course I am very happy and privileged and honored, sir, to be the first witness in such an important set of hearings.

In view of the scope of the bill before you, I am deeply desirous of avoiding either of two extremes. On the one hand, I want to cover enough ground to do justice to the subject. On the other hand, I do not want to take more of your time than is necessary.

Both of these tasks have been made easier for me, and I believe your labors have been lightened, by the work already done by representatives of this committee and other members of the Senate.

The chairman of this committee, and one of the sponsors of this bill, has been a pioneer in housing legislation for many years.