Subsection (k) would direct the Secretary to transfer periodically part of the contract authority to the Secretary of Agriculture for use

Subsection (a) would provide for four categories of multifamily housing; (1) rental projects, (2) cooperative projects, (3) projects in which the individual units are to be sold on a condominium or other basis, and (4) a mobile home court. The mortgage amount with respect to new construction would be based on the "replacement cost" of the project, which would include the Secretary's estimate of the value of the land, the cost of the proposed physical improvements, utilities within the boundaries of the project, architect's fees, builder's and sponsor's profit and risk allowance, taxes and interest during construction, and other miscellaneous charges incident to construction and the initial operation or disposition of the project as the Secretary approved.

Subsections (b) and (c) would authorize the Secretary to insure mortgages financing the construction of new multifamily projects and the rehabilitation, purchase or refinancing of existing multifamily projects. It is intended that this authority with respect to existing projects which are not to be rehabilitated be exercised only to cover the various limited situations involving such properties under the following provisions of the National Housing Act: (1) Section 223(a) (7) refinancing of insured mortgages;

(2) Section 236(j) (3) - sales of assisted projects by limited distribution mortgagors to nonprofit or cooperative entities; (3) Section 221(j) conversions of rental projects covered by below-market interest rate loans to cooperative ownership; (4) Section 213(a)(3) - sales of projects by investor-sponsors to management-type cooperatives; (5) Section 223(b) refinancing of uninsured mortgages covering projects in urban renewal areas; (6) Sections 220(d)(3)(B)(ii) and 221(d)(3)(iii) – sales of projects rehabilitated by local renewal agencies with funds provided under the urban renewal program; (7) Section 213(i) - sales of projects to managementtype cooperatives; (8) Section 235(j)(1) - purchase by nonprofit organization of existing standard single-family units as part of a package with units to be rehabilitated and spun-off to lower income purchasers; and (9) Section 223(a)(1)-(6) - disposition of various projects by governmental agencies.

Subsection (d) would provide that with respect to new construction the amount of the mortgage could not exceed 90 percent of the replacement cost (97 percent in the case of a cooperative mortgagor).

Subsection (e) would provide that in the case of rehabilitation the amount of the mortgage could not exceed 90 percent (97 percent for a cooperative) of the sum of the Secretary's estimate of the cost of rehabilitation and the value of the property before rehabilitation.

Subsection (f) would provide that in the case of the purchase or refinancing of an existing project without rehabilitation, the mortgage amount could not exceed 90 percent of the appraised value of the project (97 percent in the case of a cooperative).

Subsection (g) would further limit the mortgage amount for projects

in which the units are to be sold to individual purchasers. The project mortgage could not exceed the sum of the individual mortgage amounts which could be insured for owner-occupants under title IV of the Act.

Subsection (h) would authorize the Secretary to establish the maximum term of the mortgage.

Subsection (i) would require that a project contain at least 5 dwelling units (which, with the Secretary's approval, need not be self-contained living units) or 5 spaces in a mobile home court. The project would be required to be primarily residential but could include non-dwelling facilities adequate to serve the occupants and surrounding neighborhood. Section 502 - Multifamily Housing Assistance

Subsection (a) would authorize the Secretary to contract to make periodic assistance payments on behalf of project owners to mortgagees holding mortgages meeting the requirements of this section.

Subsection (b) would require that the assistance payments be made by

the Secretary only with respect to projects (1) covered by mortgages insured under this section or assigned to the Secretary, or (2) financed under a State or local program if the project is approved for receiving the benefits of this section by the Secretary prior to the beginning of construction or

rehabilitation.

Subsection (c) would provide that the assistance payment on behalf of a project owner could not exceed the difference between the monthly payment for principal, interest and mortgage insurance premium (or other comparable charges approved by the Secretary) on a market rate mortgage and

the monthly payment for principal and interest that would be due on a mortgage at one percent.

Subsection (d) would authorize the Secretary to reimburse the mortgagee

for its additional expenses in handling mortgages insured under this

section.

Subsection (e) would require the Secretary to provide for recertification of tenant incomes at intervals of two years (or shorter intervals where the Secretary deems it desirable) and would require the project owner to comply with the Secretary's requirements as to tenant eligibility and rentals.

Subsection (f)(1) would provide for the establishment of a "basic rental" for each unit in an assisted project determined on the basis of operating the project with the benefit of the assistance payments. A tenant would pay the basic rental for his unit or such greater amount, not exceeding the fair market rental for such unit (the rental without subsidy), as represents 25 per centum of his income.

Subsection (f)(2) would authorize the Secretary, with respect to up to 20 percent of the dwelling units in any project, to contract to make assistance payments to a project owner on behalf of tenants whose incomes are too low to afford the basic rentals. These payments with respect to any unit, could not exceed the lesser of the amount required to reduce the rental paid by the tenant to an amount equal to 25 percent of the tenant's income or to 30 percent of the basic rental.

Subsection (g) would require a project owner to pay to the Secretary

any rentals charged in excess of the basic rental charges, to be credited to the appropriation available for assistance payments through the next fiscal year.

Subsection (h) would provide contract authorizations not to exceed (for contracts entered into by the Secretary under this section and under section 236 of the NHA) $75 million per year prior to July 1, 1969, which amount

would be increased by $125 million on July 1, 1969, $150 million on

July 1, 1970, $200 million on July 1, 1971, and by such sums as may be necessary thereafter.

Subsection (i) would authorize the Secretary to insure mortgages under this section which meet the requirements of section 501 except as modified. The difference from section 501 is that nonprofit, cooperative, and builder-seller mortgagors (as defined by the Secretary) would qualify

for 100 percent mortgages.

Subsection (j)(1) would define "tenant" and "rental charge" as applicable to cooperatives.

Subsection (j)(2) would define "lower income tenants" to mean those tenants whose incomes do not exceed the median incomes for the area as determined by the Secretary with adjustments for smaller and larger families, except that the Secretary could establish income ceilings higher or lower than the median in any area where a variation was necessary because of prevailing levels of construction costs, unusually high or low family incomes, or other factors.

Subsection (k) would provide that $300 be deducted from family income for each minor member of the family residing in the household and that the earnings of such a minor be excluded from family income.

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