financial institutions to encourage them to make available a larger share of capital funds for home financing purposes.

1

(g) The Commission shall make an interim report not later than July 1, 1969, and shall make a final report of its study and recommendations not later than August 1, 1969, so as to enable the President, Congress, and the Secretary of Housing and Urban Development to take necessary action before October 1, 1969, when the authorization for the increase in interest rates above present statutory ceilings will expire.

(h) The Commission is authorized to secure directly from any department, bureau, agency, board, commission, office, independent establishment, or instrumentality of the executive branch of the Federal Government information, suggestions, estimates, and statistics for the purposes of its work; and each department, bureau, agency, board, commission, office, independent establishment, or instrumentality is authorized to furnish such information, suggestions, estimates, and statistics to the extent permitted by law and within available funds. (i)2 The members of the Commission specified in paragraphs (1) through (5) of subsection (b) shall serve without additional compensation. The members of the Commission appointed under paragraph (6) of subsection (b) shall receive $75 per diem when engaged in the performance of the duties of the Commission. All members of the Commission shall receive reimbursement for necessary traveling and subsistence expenses incurred by them in the performance of the duties of the Commission.

(j) The Secretary of Housing and Urban Development shall designate the Executive Director of the Commission. Financial and administrative services (including those relating to budgeting, accounting, financial reporting, personnel, and procurement) shall be provided the Commission by the Department of Housing and Urban Development, for which payment shall be made in advance, or by reimbursement, from funds of the Commission in such amounts as may be agreed upon by the Chairman of the Commission and said Department.

(k) The Commission shall have power to appoint and fix the compensation of such additional personnel as may be necessary to carry out its duties, without regard to the provisions of the civil service laws and the Classification Act of 1949.

(1) The Commission may also procure, without regard to the civil service laws and the Classification Act of 1949, temporary and intermittent services to the same extent as is authorized for the executive departments by section 15 of the Administrative Expenses Act of 1946 (5 U.S.C. 55a) but at rates not to exceed $50 per diem for individuals.

(m) To the extent of available appropriations, the Commission may obtain, by purchase, rental, donation, or otherwise, such additional property, facilities, and services as may be needed to carry out its duties.

(n) There are authorized to be appropriated, out of any money in the Treasury not otherwise appropriated, such sums as may be necessary to carry out this section.

1 The original termination date (April 1, 1969) for the final report of the Commission was extended to July 1, 1969, by Public Law 91-9, approved April 11, 1969. 83 Stat. 7. and subsequently extended to August 1, 1969, by Public Law 91-38, approved July 1, 1969, 83 Stat. 43.

2

Public Law 90-565, approved Oct. 12, 1968, 82 Stat. 1001, made technical corrections in this subsection.

See sec. 1604, Housing and Urban Development Act of 1968, infra.

BASIC LAWS ON HOUSING AND URBAN DEVELOPMENT

(0) The Commission shall cease to exist sixty days after the submission of its final report.

Approved May 7, 1968.

FUNDS FOR COMMISSION ON MORTGAGE INTEREST RATES

EXCERPT FROM HOUSING AND URBAN DEVELOPMENT ACT OF 1968

[Public Law 90-448, 82 Stat. 476, 602, 12 U.S.C. 1709-1 note]

SEC. 1604. Funds appropriated and available for studies of housing markets and credit as authorized by section 301 of the Housing Act of 1948 and section 602 (a) of the Housing Act of 1956 shall be available for expenses of the Commission established by section 4(b) of Public Law 90-301, including the report required to be rendered by such Commission.

[Public Law 475, 81st Congress; 64 Stat. 48; 12 U.S.C. 1701k and 17011]

TITLE V-MISCELLANEOUS PROVISIONS

SEC. 505. The right to redeem provided for by title 28, United States Code, section 2410 (c), shall not arise in any case in which the subordinate lien or interest of the United States derives from the issuance of insurance under the National Housing Act, as amended.

SEC. 508. It is the intent of Congress that no sale of a dwelling on which a mortgage is insured under the National Housing Act, as amended, shall be financed, while such mortgage is so insured, at an interest rate higher than that prescribed by the Secretary of Housing and Urban Development. It is the further intent of Congress that no such sale shall be made, while such mortgage is so insured, on terms less favorable to the purchaser as to amortization, retirement, foreclosure, or forfeiture than those contained in such mortgage.

Approved April 20, 1950.

BUILDERS WARRANTY-FHA HOUSING

EXCERPTS FROM HOUSING ACT OF 1954

[Public Law 560, 83d Congress; 68 Stat. 590, 642; 12 U.S.C. 1701j)

SEC. 801. (a) The Secretary of Housing and Urban Development is hereby authorized and directed to require that, in connection with any property upon which there is located a dwelling designed principally for not more than a four-family residence and which is ap proved for mortgage insurance prior to the beginning of construction, the seller or builder, and such other person as may be required by the said Secretary to become warrantor, shall deliver to the purchaser or owner of such property a warranty that the dwelling is constructed in substantial conformity with the plans and specifications (including any amendments thereof, or changes and variations therein, which have been approved in writing by the Secretary of Housing and Urban Development) on which the Secretary of Housing and Urban Development based his valuation of the dwelling: Provided, That the Secretary of Housing and Urban Development shall deliver to the builder, seller, or other warrantor his written approval (which shall be conclusive evidence of such approval) of any amendment of, or change or variation in, such plans and specifications which the Secretary deems to be a substantial amendment thereof, or change or variation therein, and shall file a copy of such written approval with such plans and specifications: Provided further, That such warranty shall apply only with respect to such instances of substantial nonconformity to such approved plans and specifications (including any amendment thereof, or changes or variations therein, which have been approved in writing, as provided herein, by the Secretary of Housing and Urban Development) as to which the purchaser or homeowner has given written notice to the warrantor within one year from the date of conveyance of title to, or initial occupancy of, the dwelling, whichever first occurs: Provided further, That such warranty shall be in addition to, and not in derogation of, all other rights and privileges which such purchaser or owner may have under any other law or instrument: And provided further, That the provisions of this section shall apply to any such property covered by a mortgage insured by the Secretary of Housing and Urban Development on and after October 1, 1954, unless such mortgage is insured pursuant to a commitment therefor made prior to October 1, 1954.

(b) The Secretary of Housing and Urban Development is further directed to permit copies of the plans and specifications (including written approvals of any amendments thereof, or changes or variations therein, as provided herein) for dwellings in connection with which warranties are required by subsection (a) of this section to be made available in their appropriate local offices for inspection or for copying by any purchaser, homeowner, or warrantor during such hours or periods of time as the said Secretary may determine to be reasonable.

Approved August 2, 1954,

SECONDARY MARKET FOR HOUSING LOANS

See also:

Participation sales...

Page No.

EXCERPTS FROM THE NATIONAL HOUSING ACT TITLE III-NATIONAL MORTGAGE ASSOCIATIONS 1

PURPOSES

1

596

SEC. 301. The Congress hereby declares that the purposes of this title are to establish 2 secondary market facilities for home mortgages, to provide that the operations thereof shall be financed by private capital to the maximum extent feasible, and to authorize such facilities to

(a) provide supplementary assistance to the secondary market for home mortgages by providing a degree of liquidity for mortgage investments, thereby improving the distribution of investment capital available for home mortgage financing;

(b) provide special assistance (when, and to the extent that, the President has determined that it is in the public interest) for

1 Prior to amendment by sec. 802(a), Housing and Urban Development Act of 1968, the heading of title III was "Federal National Mortgage Association."

Sec. 201 of the Housing Act of 1954, Public Law 560, 83d Congress, approved August 2, 1954, 68 Stat. 590, 612, 12 U.S.C. 1716 et seq., rewrote title III of the National Housing Act to recharter the Federal National Mortgage Association and prescribe its functions. Sec. 312 of the National Housing Act which provides that title III may be referred to as the "Federal National Mortgage Association Charter Act."

Title III of the National Housing Act as it was originally enacted authorized the creation of national mortgage associations to purchase and seli first mortgages on real estate. At the request of the President of the United States, on February 10, 1938, pursuant to title III, the Federal National Mortgage Association was chartered by the Federal Housing Adminis tration as the "National Mortgage Association of Washington". The name was changed to the Federal National Mortgage Association on April 5, 1938. The entire capital stock and paid-in surplus were subscribed and paid for by the Reconstruction Finance Corporation, and the conduct of the Association's affairs was integrated with and directed by the RFC. On September 7, 1950, the Association was transferred to the Housing and Home Finance Agency pursuant to Reorganization Plan No. 22 of 1950, 64 Stat. 1277.

Sec. 202 of the Housing Act of 1954 provided that the "Federal National Mortgage Association, established pursuant to the provisions of title III of the National Housing Act as in effect prior to July 1, 1948, and named in sec. 101 of the Government Corporation Control Act, as amended, shall be the body corporate referred to in sec. 302 of title III of the National Housing Act, as amended by the Housing Act of 1954".

Sec. 5(b) of the Department of Housing and Urban Development Act, Public Law 89-174, approved September 9, 1965, 79 Stat. 667, 669, transferred the Association to the Department established by that Act.

Title VIII, Housing and Urban Development Act of 1968, Public Law 90-448, approved Aug. 1, 1968, 82 Stat. 476, 536 amended title III extensively. Sec. 801 stated the purposes of Title VIII as follows:

"SEC. 801. The purposes of this title include the partition of the Federal National Mortgage Association as heretofore existing into two separate and distinct corporations, each of which shall have continuity and corporate succession as a separated portion of the previously existing corporation. One of such corporations, to be known as Federal National Mortgage Association, will be a Government-sponsored 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 continue 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 functions authorized by such sections 305 and 306."

Sec. 808 of the 1968 Act provided as follows:

"SEC. 808. The amendments made by this title shall be effective from and after a date, no more than one hundred and twenty days following 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."

This date was established as Sep. 1, 1968.

Sec. 802 (b) (1), Housing and Urban Development Act of 1968, Public Law 90-448, approved Aug. 1, 1968, 82 Stat. 476, 536, deleted "in the Federal Government a" after "establish".

the financing of (1) selected types of home mortgages (pending the establishment of their marketability) originated under special housing programs designed to provide housing of acceptable standards at full economic costs for segments of the national population which are unable to obtain adequate housing under established home financing programs, and (2) home mortgages generally as a means of retarding or stopping a decline in mortgage lending and home building activities which threatens materially the stability of a high level national economy; and

(c) manage and liquidate federally owned mortgage portfolios in an orderly manner, wlth a minimum of adverse effect upon the home mortgage market and minimum loss to the Federal Government.

CREATION OF ASSOCIATION

SEC. 302. (a) (1) There is hereby created a body corporate to be known as the "Federal National Mortgage Association" which shall be in the Department of Housing and Urban Development. The Association shall have succession until dissolved 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. Agencies or 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.

2

(2) On the effective date 3 established pursuant to section 808 of the Housing and Urban Development Act of 1968, the body corporate described 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 without capital stock to be known as Government National Mortgage Association (hereinafter referred to as the "Association"), which shall be in the Department 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 succession until dissolved 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. Agencies or 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 Mortgage Association (hereinafter referred to as the "corporation"), which shall retain the assets and liabilities acquired and incurred under sections 303 and 304 prior to such effective date. The corporation shall have succession until dis

1 Sec. 802 (b) (5), Housing and Urban Development Act of 1968, Public Law 90-448, approved Aug. 1, 1968, 82 Stat. 476, 536, substituted "federally owned mortgage portfolios" for "the existing mortgage portfolio of the Federal National Mortgage Association". Sec. 802 (c) (3), Housing and Urban Development Act of 1968, Public Law 90-448, approved Aug. 1, 1968, 82 Stat. 476, 536, added paragraph (2).

September 1, 1968.