be regulated or restricted by the Commissioner as to rents, charges, capital structure, rate of return, and methods of operation during any period while it holds the mortgaged property or project; and for such purpose the Commissioner may make such contracts with, and acquire for not to exceed $100 such stock or interest in, any such mortgagor as the Commissioner may deem necessary to render effective such restriction or regulation, such stock or interest to be paid for out of the Housing Fund and to be redeemed by such mortgagor at par upon the sale of such property or project to such nonprofit corporation or nonprofit trust;"; and

(4) by adding "referred to in paragraphs (1) and (2) of this subsection" after "which corporations or trusts".

(b) Section 213 (b) (2) of such Act is amended by inserting immediately after "$8,900" a semicolon and the following: "except that the Commissioner may, by regulation, increase any of the foregoing dollar amount limitations per room contained in this paragraph by not to exceed $1,000 per room in any geographical area where he finds that cost levels so require: Provided further, That in the case of a mortgagor of the character described in paragraph (3) of subsection (a) the mortgage shall involve a principal obligation in an amount not to exceed 85 per centum of the amount which the Commissioner estimates will be the replacement cost of the property or project when the proposed physical improvements are completed: Provided further, That upon the sale of a property or project by a mortgagor of the character described in paragraph (3) of subsection (a) to a nonprofit cooperative ownership housing corporation or trust within 2 years after the completion of such property or project, the mortgage given to finance such sale shall involve a principal obligation in an amount not to exceed the maximum amount computed in accordance with this subsection without regard to the preceding proviso".

(c) Section 213 of such Act is further amended by adding at the end thereof the following subsection:

"(h) In the event that a mortgagor of the character described in paragraph (3) of subsection (a) obtains an insured mortgage loan pursuant to this section and fails to sell the property or project covered by such mortgage to a nonprofit housing corporation or nonprofit housing trust of the character described in paragraph (1) of subsection (a) hereof, such mortgagor shall not thereafter be eligible by reason of such paragraph (3) for insurance of any additional mortgage loans pursuant to this section."

(d) Paragraph (a) of section 227 of such Act is amended by inserting after "subsection (a) thereof" the following: "or with respect to any property or project of a mortgagor of the character described in paragraph (3) of subsection (a) thereof".

GENERAL MORTGAGE INSURANCE AUTHORIZATION

SEC. 105. Section 217 of the National Housing Act is amended

(1) by striking out "July 1, 1955" and inserting in lieu thereof "July 1, 1956";

(2) by striking out "$4,000,000,000" and inserting in lieu thereof "$3,000,000,000"; and

(3) by striking out "section 2" each place it appears and inserting in lieu thereof "section 2 and section 803".

SPONSOR'S RETURN

SEC. 106. Section 220 (d) (3) (B) (ii) of the National Housing Act is amended by inserting after "Commissioner" in the parenthetical phrase a comma and the following: "and, if the mortgagor is also the builder as defined by the Commissioner, shall include an allowance for builder's and sponsor's services, profit, and risk of 10 per centum of all of the foregoing items unless the Commissioner, after certification that such allowance is unreasonable, shall by regulation prescribe a lesser percentage".

RELOCATION HOUSING INSURANCE

SEC. 107. Section 221 (d) of the National Housing Act is amended

(1) by striking out "$7,600" and "$8,600" wherever they appear in paragraphs (2) and (3) and inserting in lieu thereof "$8,600" and "$9,600", respectively;

(2) by striking out “95 per centum of" in paragraphs (2) and (3); (3) by striking out the first proviso in paragraph (2) and inserting in lieu thereof the following: "Provided, That the mortgagor shall be the owner and occupant of the property at the time of the insurance and shall have paid on account of the property at least $150 in cash or its equivalent (which amount may include amounts to cover settlement costs and initial payments for taxes, hazard insurance, mortgage insurance premium, and other prepaid expenses)"; and

(4) by striking out "thirty years" in paragraph (4) and inserting in lieu thereof "thirty-five years (or, in the discretion of the Commissioner, not to exceed forty years where such longer maturity is necessary to enable low-income families to realize the benefits of this section)".

APPROVAL OF COST CERTIFICATIONS

SEC. 108. Section 227 of the National Housing Act is amended-

(1) by inserting after the first sentence the following new sentence: "Upon the Commissioner's approval of the mortgagor's certification as required hereunder, such certification shall be final and incontestable, except for fraud or material misrepresentation on the part of the mortgagor."; and

(2) by inserting after "legal expenses," each place it appears in paragraph (c) the following: "such allocations of general overhead items as are acceptable to the Commissioner,".

TITLE II-SECONDARY MORTGAGE MARKET

FEDERAL NATIONAL MORTGAGE ASSOCIATION

SEC. 201. (a) Section 302 (b) of the National Housing Act is amended(1) by striking out "and (2)" and inserting in lieu thereof "(2)"; (2) by striking out "if (i)" and inserting in lieu thereof "if"; and (3) by striking out "or (ii) the original principal obligation thereof exceeds or exceeded $15,000 for each family residence or dwelling unit covered by the mortgage" and inserting in lieu thereof "; and (3) the Association may not purchase any mortgage, except a mortgage insured under section 803 or a mortgage covering property located in Alaska, Guam, or Hawaii, if the original principal obligation thereof exceeds or exceeded $15,000 for each family residence or dwelling unit covered by the mortgage". (b) The first sentence of section 303 (b) of such Act is amended to read as follows: "The Association shall accumulate funds for its capital surplus account from private sources by requiring each mortgage seller to make payments of nonrefundable capital contributions equal to not more than 2 per centum of the unpaid principal amount of mortgages therein involved in purchases or contracts for purchases between such seller and the Association."

(c) (1) Section 304 (a) of such Act is amended by adding at the end thereof the following new sentence: "Notwithstanding the preceding provisions of this subsection, advance commitments to purchase mortgages in secondary market operations under this section shall be issued at prices which are sufficient to facilitate advanced planning of home construction, but which are sufficiently below the price then offered by the Association for immediate purchase to prevent excessive sales to the Association pursuant to such commitments."

(2) Section 304 (d) of such Act is amended to read as follows: "The Association may not purchase participations in its operations under this section." (d) The second sentence of section 305 (b) of such Act is amended to read as follows: "Subject to the provisions of this section, the prices to be paid by the Association for mortgages purchased in its operations under this section (including mortgages purchased under subsections (e), (f), and (g) shall be established from time to time by the Association; except that in no event shall any such mortgage be purchased at less than 100 per centum of the unpaid principal amount thereof at the time of purchase, with adjustments for interest and any comparable items, during the period beginning on the date of the enactment of the Housing Act of 1956 and ending June 30, 1957.”

(e) Section 305 (c) of such Act is amended by striking out "$200,000,000" and inserting in lieu thereof "$400,000,000".

(f) Section 305 (e) of such Act is amended by striking out "but not more than $5,000,000 of such authorization shall be available for such commitments in any one State" and inserting in lieu thereof "but such commitments in any one State shall not exceed $5,000,000 outstanding at any one time".

(g) Section 305 of such Act is further amended by adding at the end thereof the following new subsection:

"(g) Notwithstanding any other provision of this Act, the Association is authorized to make commitments to purchase and to purchase, service, or sell, any mortgage with respect to which the Federal Housing Commissioner, on or after the date of the enactment of this subsection, shall have issued a commitment to insure pursuant to section 203 (i): Provided, That the total amount of purchases and commitments authorized by this subsection shall not exceed $50,000,000 outstanding at any one time, and the amount of such purchases and commitments in any State shall not exceed $5,000,000 outstanding at any one time."

(h) So much of section 305 (c) of such Act as precedes the proviso is amended by striking out "purchasers" and inserting in lieu thereof "purchases".

INVESTMENT OF NATIONAL SERVICE LIFE INSURANCE FUND

SEC. 202. Section 605 of the National Service Life Insurance Act of 1940 is amended by adding at the end thereof the following new subsection:

"(c) (1) The Secretary of the Treasury is hereby authorized to invest and reinvest not in excess of 10 per centum of such fund by purchasing loans which are guaranteed pursuant to section 501 of the Servicemen's Readjustment Act of 1944, as amended, and which are secured by property located in geographic areas where private capital is found by the Secretary to be generally available for guaranteed loans only at an excessive discount, in order to stabilize the price at which such loans generally will be salable to investors. The price to be paid for such loans shall not exceed the unpaid principal balance thereof, plus accrued interest. No such loan shall be purchased hereunder except from the original mortgagee prior to any other sale thereof. No such loan shall be purchased hereunder after July 25, 1957, except pursuant to an agreement to purchase made on or before such date. Loans will be eligible for purchase hereunder only if guaranteed on or after the date of the enactment of this subsection, and loans so purchased may be sold for an amount not less than the unpaid principal balance plus accrued interest. If any loan acquired under this subsection by the Secretary of the Treasury shall default, and the Secretary determines the default to be insoluble, such loan and the security therefor shall be assigned to the Administrator of Veterans' Affairs, who shall pay to the fund (in the manner provided by the first proviso in section 506 of the Servicemen's Readjustment Act of 1944) the entire unpaid principal balance of the loan plus accrued interest.

"(2) The Federal National Mortgage Association shall act as the agent of the Secretary of the Treasury with respect to the purchase, servicing, and sale of such loans. The Secretary shall reimburse the Federal National Mortgage Association for expenses incurred by it in carrying out such functions from the income derived from such loans; but such reimbursement shall not exceed an amount, payable from the interest portion of each monthly installment applicable to principal and interest collected, equal to three-fourths of 1 per centum per annum computed on the same principal amount and for the same period as the interest portion of such installment."

TITLE III-HOUSING FOR ELDERLY PERSONS

DECLARATION OF PURPOSE

SEC. 301. The purpose of this title is to assist private nonprofit corporations to provide housing and related facilities for elderly families and elderly persons.

LOANS TO CORPORATIONS

SEC. 302. (a) In order to carry out the purpose of this title, the Administrator may make loans to any corporation (as defined in section 304 (2)) for the construction of housing and related facilities for elderly families and elderly persons, except that (1) no such loan shall be made unless the corporation shows that it is unable to secure the necessary funds from other sources upon

terms and conditions equally as favorable as the terms and conditions applicable to loans under this title, and (2) no such loan shall be made unless the Adminis trator finds that the construction will be undertaken in an economical manner, and that it will not be of elaborate or extravagant design or materials.

(b) A loan to a corporation under this title may be in an amount not exceeding the total development cost (as defined in section 304 (3)), as determined by the Administrator; shall be secured in such manner and be repaid within such period, not exceeding fifty years, as may be determined by him; and shall bear interest at a rate determined by him which shall be not more than 3%1⁄2 per centum per annum.

(c) To obtain funds for loans under this title, the Administrator may issue notes and obligations for purchase by the Secretary of the Treasury in an amount not to exceed $250,000,000 outstanding at any one time.

(d) Notes or other obligations issued by the Administrator under this title shall be in such forms and denominations, have such maturities, and be subject to such terms and conditions as may be prescribed by the Administrator with the approval of the Secretary of the Treasury. Such notes or other obligations issued to obtain funds for loans under this title shall bear interest at a rate determined by the Secretary of the Treasury which shall be not more than 3 per centum per annum. The Secretary of the Treasury is authorized and directed to purchase any notes and other obligations of the Administrator issued under this title, and for such purpose is authorized to use as a public-debt transaction the proceeds from the sale of any securities issued under the Second Liberty Bond Act, as amended, and the purposes for which securities may be issued under such Act, as amended, are extended to include any purchases of such notes and other obligations. The Secretary of the Treasury may at any time sell any of the notes or other obligations acquired by him under this section. All redemptions, purchases, and sales by the Secretary of the Treasury of such notes or other obligations shall be treated as public-debt transactions of the United States.

(e) There are authorized to be appropriated to the Administrator such sums as may be necessary, together with loan principal and interest payments made by any corporation assisted hereunder, for payments of notes or other obligations of the Administrator under this title.

GENERAL PROVISIONS

SEC. 303. (a) In the performance of, and with respect to, the functions, powers, and duties vested in him by this title, the Administrator, notwithstanding the provisions of any other law, shall

(1) prepare and submit annually a budget program as provided for whollyowned Government corporations by the Government Corporation Control Act; and

(2) maintain an integral set of accounts which shall be audited annually by the General Accounting Office in accordance with the principles and procedures applicable to commercial transactions as provided by the Government Corporation Control Act, and no other audit shall be required. Such financial transactions of the Administrator as the making of loans and vouchers approved by the Administrator in connection with such financial transactions shall be final and conclusive upon all officers of the Government. (b) Funds made available to the Administrator pursuant to the provisions of this title shall be deposited in a checking account or accounts with the Treasurer of the United States. Receipts and assets obtained or held by the Administrator in connection with the performance of his functions under this title, and all funds available for carrying out the functions of the Administrator under this title (including appropriations therefor, which are hereby authorized), shall be available, in such amounts as may from year to year be authorized by the Congress, for the administrative expenses of the Administrator in connection with the performance of such functions.

(c) In the performance of, and with respect to, the functions, powers, and duties vested in him by this title, the Administrator, notwithstanding the provisions of any other law, may

(1) prescribe such rules and regulations as may be necessary to carry out the purpose of this title;

(2) sue and be sued;

(3) foreclose on any property or commence any action to protect or enforce any right conferred upon him by any law, contract, or other agree

ment, and bid for and purchase at any foreclosure or any other sale any property in connection with which he has made a loan pursuant to this title. In the event of any such acquisition, the Administrator may, notwithstanding any other provision of law relating to the acquisition, handling, or disposal of real property by the United States, complete, administer, remodel and convert, dispose of, lease, and otherwise deal with, such property; but any such acquisition of real property shall not deprive any State or political subdivision thereof of its civil or criminal jurisdiction in and over such property or impair the civil rights under State or local laws of the inhabitants on such property;

(4) enter into agreements to pay annual sums in lieu of taxes to any State or local taxing authority with respect to any real property so acquired or owned;

(5) sell or exchange at public or private sale, or lease, real or personal property, and sell or exchange any securities or obligations, upon such terms as he may fix;

(6) obtain insurance against loss in connection with property and other assets held;

(7) subject to the specific limitations in this title, consent to the modification, with respect to the rate of interest, time of payment of any installment of principle or interest, security, or any other term or condition, of any contract or agreement to which he is a party or which has been transferred to him pursuant to this title; and

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

(d) Section 3709 of the Revised Statutes shall not apply to any contract for services or supplies on account of any property acquired pursuant to this title if the amount of such contract does not exceed $1,000.

SEC. 304. As used in this title

DEFINITIONS

(1) The term "housing" means (A) new structures suitable for dwelling use by elderly families and new structures suitable for such use by one or more elderly persons, and (B) dwelling facilities provided by rehabilitation, alteration, conversion, or improvement of existing structures which are otherwise inadequate for proposed dwelling use by such families and persons.

(2) The term "corporation" means any incorporated private institution or foundation no part of the net earnings of which inures to the benefit of any private shareholder, contributor, or individual.

(3) The term "development cost" means costs of construction of housing and of other related facilities, and of the land on which it is located, including necessary site improvement.

(4) The term "elderly families" means families the head of which is sixtyfive years of age or over; and the term "elderly persons" means persons who are sixty-five years of age or over.

(5) The term "State" includes the several States, the District of Columbia, the Commonwealth of Puerto Rico, and the Territories and possessions of the United States.

(6) The term "Administrator" means the Housing and Home Finance Administrator.

(7) The term "construction" means erection of new structures, or rehabilitation, alteration, conversion, or improvement of existing structures.

(8) The term "related facilities" means (A) new structures suitable for use as cafeterias or dining halls, community rooms or buildings, or infirmaries or other inpatient or outpatient health facilities, or for other essential service facilities, and (B) structures suitable for the above uses provided by rehabilitation, alteration, conversion, or improvement of existing structures which are otherwise inadequate for such uses.

TITLE IV-URBAN RENEWAL

SLUM CLEARANCE AND URBAN RENEWAL

SEC. 401. The first sentence of section 103 (b) of the Housing Act of 1949, as amended, is amended to read as follows: "The Administrator, on and after