would be renewable by the agency and owner at the expiration of the term. No renewal of the contract term could result in a total term of more than 240 months, or 180 months in the case of an existing structure.

Subsection (d) would provide that the period over which annual contributions will be made to a public housing agency for a project under this section and the aggregate amount of payments shall be determined on the basis of the number of units in the community which are in use or can reasonably be expected to be placed in use as low-income housing in private

accommodations.

Subsection (e) would provide that provisions concerning State and

local tax exemption of projects and local cooperation, otherwise applicable to low-income housing, are not applicable to low-income housing in private accommodations.

Subsection (f) would authorize a public housing agency to purchase structures containing dwelling units leased under this section for the purpose of reselling the structure to the tenant or tenants of the structure. The present provision of this section concerning the terms and conditions for resale would be amended to provide that such resale:may be made under the terms and conditions provided for under the new homeownership provisions of the Act.

Section 9 - Annual Contributions for Operation of Low-Income Housing Projects

Subsection (a) would provide a separate authorization for the

Secretary to make annual contributions to public housing agencies for the operation of low-income housing projects (including low-income housing in

private accommodations). The contribution payable annually under this section could not exceed amounts which the Secretary determines are required (1) to assure the low-income character of the projects involved and (2) to achieve adequate operating services. The Secretary would be authorized to embody the provisions for annual contributions for operating subsidy in a contract guaranteeing their payment.

Subsection (b) would provide that families occupying dwelling units in low-income housing owned or leased by a public housing agency which receives assistance under this section shall be required to pay a rent of not less than one-fifth of the family's income, but not to exceed a fair market rental charge based on the full cost of the housing without subsidy assistance. This rental, however, could not exceed the maximum rental requirement in section 3(1), which provides that a family's rental may not exceed one-fourth of family income and includes a special definition of income for maximum rental purposes.

Subsection (c) would establish criteria for the determination of a family's income for purposes of the rent requirements of this section and the homeownership income contribution requirement in section 10 of the revised Act. In determining family income, an amount would be deducted equal to $300 for each minor member of the family residing in the household, and the earnings of any minor person would not be included in the income

of his family.

Subsection (d) would authorize not to exceed $200 million for contracts for annual contributions under this section.

This section would authorize a new public homeownership program for

low-income families.

Subsection (a) would permit low-income families and public housing

tenants, or a cooperative or nonprofit association formed by or for the benefit of such families or tenants, to purchase from a public housing agency, newly developed or acquired housing, as well as existing projects now operated as rental housing. Individual homes and dwelling units or entire projects could be purchased.

Subsection (b) would provide for conveyance of the property to the low-income family as soon as it undertakes the obligation to purchase the property by executing a mortgage to the public housing agency. The mortgage would be in a principal amount of not more than the sale price of the property plus closing costs and prepaid expenses; would bear interest at the maximum rate then applicable to mortgages insured under section. 402 of the Revised National Housing Act, or the rate on the public housing agency's principal debt on the project, whichever is greater; would provide for a maturity satisfactory to the Secretary, but not for a period exceeding forty years; and would be secured by the property which is purchased. Under the mortgage the purchaser would be required to pay onefifth of income to "monthly homeownership expense" but in no case could the purchaser's income contribution be less than monthly homeownership expense,

excluding payments for principal and interest. The income contribution required of a purchaser which is a qualified entity would be determined by using an aggregate amount based on the contribution that would be required of each family who occupies a dwelling unit in the purchased property. The mortgage would also contain provisions requiring the purchaser to make monthly payments for any services furnished by the public housing agency to the purchaser, and would include other terms and conditions which the Secretary determines are required to carry out the purposes of this section.

Subsection (c) would define the term "monthly homeownership expense" to mean monthly amounts for principal and interest under the amortization provisions of the mortgage or other obligation, amounts for insurance and taxes, and an amount attributable to the cost of utilities as determined by the Secretary on the basis of estimated costs for utilities in the area. The term "sale price" would mean (1) in the case of housing newly developed, acquired, or leased for subsequent resale, the portion of the unpaid balance on the public housing agency's principal debt on the project at the time of sale which is allocable to the dwelling unit or units involved, (2) in the case of rental housing, the appraised value of the property at the time of sale, and (3) in cases where participants in mutual-help projects or homebuyers in homeownership opportunity projects (such as Turnkey III) voluntarily elect to purchase their low-income housing units under the terms of the program established under section 10, the purchase price provided for under their lease with option to purchase type of contracts with the public housing agencies involved.

Subsection (d) would provide that the sale of a project would not

affect the Secretary's commitment to pay annual contributions with respect

to the project, but contributions could not exceed the maximum contributions

authorized under section 5(a).

Subsection (e) would provide that, subject to the approval of the Secretary, any contract previously executed by a public housing agency for the sale or lease of low-income housing to low-income families or public housing tenants may be amended to include any of the terms and conditions provided in section 10.

Subsection (a) would require the Secretary to prepare annual budget programs as provided for wholly owned Government Corporations by the Government Corporation Control Act and to maintain an integral set of accounts to be audited annually by the General Accounting Office.

Subsection (b) would provide that all receipts and assets of the Secretary under the Act be available until expended.

Subsection (c) would authorize the Federal Reserve Banks to act as depositories, custodians, and fiscal agents for the Secretary.

Section 12

Financing Low-Income Housing Projects

Subsection (a) would provide that where the Secretary has guaranteed obligations of a public housing agency by pledging loans, annual contributions or both with respect to such obligations, the full faith and credit of the United States would back this guarantee, which would be incontestable in the hands of a bearer.