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EXPERIMENTAL DUAL INTEREST RATE SYSTEM

2 SEC. 103. (a) Notwithstanding any maximum interest 3 rate established by the Secretary of Housing and Urban 4 Development pursuant to section 4 of the Revised National 5 Housing Act, the Secretary is authorized, pursuant to com6 mitments issued prior to July 1, 1973, to insure mortgages, 7 under any provisions of such Act he deems appropriate, at 8 whatever interest rate may be agreed upon by the mortgagor 9 and mortgagee if the mortgagee establishes to the satisfaction 10 of the Secretary that it has made no charges, either directly or indirectly, in the nature of discounts or points in connec12 tion with the mortgage transaction.

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(b) The Secretary shall take appropriate steps to assure 14 that prospective mortgagors have adequate information as to 15 the alternative methods for establishing interest rates pursu16 ant to this section and section 4 of the Revised National 17 Housing Act.

TITLE II-PUBLIC HOUSING ASSISTANCE

PROGRAM

SEC. 201. The United States Housing Act of 1937 is

21 amended to read as follows:

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"SHORT TITLE

"SECTION 1. This Act may be cited as the "United

24 States Housing Act of 1937.

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"DECLARATION OF POLICY

"SEC. 2. It is the policy of the United States to pro

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1 mote the general welfare of the Nation by employing its 2 funds and credit, as provided in this Act, to assist the sev3 eral States and their political subdivisions to remedy the 4 unsafe and unsanitary housing conditions and the acute

shortage of decent, safe, and sanitary dwellings for families 6 of low income and, consistent with the objectives of this Act, 7 to vest in local public housing agencies the maximum amount 8 of responsibility in the administration of their housing programs. It is the sense of the Congress that no person should

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be barred from serving on the board of directors or similar

governing body of a local public housing agency because

of his tenancy in a low-income housing project.

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"DEFINITIONS

"SEC. 3. When used in this Act

"(1) The term low-income housing' means decent, safe, 16 and sanitary dwellings within the financial reach of families 17 of low income, and embraces all necessary appurtenances

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thereto. Except as otherwise provided in sections 8 and 9 of 19 this Act, income limits for occupancy and rents (which may

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not exceed one-fourth of the family's income, as defined by 21 the Secretary) shall be fixed by the public housing agency 22 and approved by the Secretary. In defining income for pur

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poses of applying the one-fourth of family income limitation

set forth above, the Secretary shall consider income from all

sources of each member of the family residing in the house

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1 hold who is at least eighteen years of age; except that (A) 2 nonrecurring income, as determined by the Secretary, and 3 the income of full-time students shall be excluded; (B) an 4 amount equal to the sum of (i) $300 for each dependent, 5 (ii) $300 for each secondary wage earner, (iii) 5 per 6 centum of the family's gross income (10 per centum in the

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case of elderly families), and (iv) those medical expenses 8 of the family properly considered extraordinary shall be de9 ducted; and (C) the Secretary may allow further deductions in recognition of unusual circumstances.

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"(2) The term 'low-income families' means 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' 16 includes families consisting of a single person in the case of

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elderly families and displaced families, and includes the re18 maining member of a tenant family. The term 'elderly

families' means families whose heads (or their spouses),

or whose sole members, are at least fifty years of age, or

are under a disability as defined in section 223 of the Social

Security Act, or are handicapped. A person shall be considered handicapped if such person is determined, pursuant to regulations issued by the Secretary, to have a physical impairment which (A) is expected to be of long-continued

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1 and indefinite duration, (B) substantially impedes his ability 2 to live independently, and (C) is of such a nature that 3 such ability could be improved by more suitable housing 4 conditions. The term 'displaced families' means families dis5 placed by governmental action, or families whose present 6 or former dwellings are situated in areas determined by the 7 Small Business Administration, subsequent to April 1, 1965, 8 to have been affected by a natural disaster, and which have 9 been extensively damaged or destroyed as the result of such 10 disaster.

11 "(3) The term 'development' means any or all under12 takings necessary for planning, land acqusition, demolition, 13 construction, or equipment, in connection with a low-income 14 housing project. The term 'development cost' shall comprise 15 the cost incurred by a public housing agency in such under16 takings and their necessary financing (including the pay17 ment of carrying charges), and in otherwise carrying out 18 the development of such project. Construction activity in 19 connection with a low-income housing project may be con20 fined to the reconstruction, remodeling, or repair of existing 21 buildings.

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22 "(4) The term 'operation' means any or all under23 takings appropriate for management, operation, services, 24 maintenance, or financing in connection with a low-income 25 housing project. The term also means the financing of tenant

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programs and services for families residing in low-income 2 housing projects, particularly where there is maximum 3 feasible participation of the tenants in the development and 4 operation of such tenant programs and services. As used in 5 this paragraph, the term 'tenant programs and services' 6 includes the development and maintenance of tenant organi7 zations which participate in the management of low-income 8 housing projects; the training of tenants to manage and 9 operate such projects and the utilization of their services in 10 project management and operation; counseling on household management, housekeeping, budgeting, money management,

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12 child care, and similar matters; advice as to resources for job 13 training and placement, education, welfare, health, and other 14 community services; services which are directly related to 15 meeting tenant needs and providing a wholesome living 16 environment; and referral to appropriate agencies when 17 necessary for the provision of such services. To the maximum 18 extent available and appropriate, existing public and private 19 agencies in the community shall be used for the provision of 20 such services.

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"(5) The term 'acquisition cost' means the amount 22 prudently required to be expended by a public housing 23 agency in acquiring a low-income housing project.

"(6) The term 'public housing agency' means any State, county, municipality, or other governmental entity or public