4 1 to bear interest at a rate 2 per centum per annum below 2 3 the maximum rate fixed by the Secretary for mortgages insured under section 203 (b) of this title. 4 "(d) Assistance payments to a mortgagee by the Sec 5 6 retary on behalf of a family holding membership in a co operative association operating a housing project shall be 7 made only during such time as the family is an occupant 8 of such project and shall be in amounts computed on the 9 basis of the formula set forth in subsection (c) applying the 10 cooperative member's proportionate share of the obligations under the project mortgage to the items specified in the formula. 11 121 13 14 "(e) The Secretary may include in the payment to the mortgagee such amount, in addition to the amount computed 15 under subsection (c) or (d), as he deems appropriate to 16 reimburse the mortgagee for its expenses in handling the 17 mortgage. 18 "(f) Procedures shall be adopted by the Secretary for 19 recertification of the mortgagor's (or cooperative member's) 20 income at intervals of two years (or at shorter intervals where the Secretary deems it desirable) for the purpose of adjust ing the amount of such assistance payments within the limits of the formula described in subsection (c), except that no recertification of income will be required of mortgagors re ceiving payments under subsection (c) (2) of this section. 1 2 5 "(g) The Secretary shall prescribe such regulations as he deems necessary to assure that the sales price of, or 3 other consideration paid in connection with, the purchase by 4 5 a homeowner of the property with respect to which assistance payments are to be made is not increased above the appraised 6 value on which the maximum mortgage which the Secretary 7 will insure is computed. 8 "(h) (1) There are authorized to be appropriated such 9 sums as may be necessary to carry out the provisions of this 10 section, including such sums as may be necessary to make the 11 assistance payments under contracts entered into under this 12 section. The aggregate amount of contracts to make such 13 payments shall not exceed amounts approved in appropria14 tion Acts, and payments pursuant to such contracts shall not 15 exceed $325,000,000 per annum prior to July 1, 1972, 16 which maximum dollar amount shall be increased by $400,17 000,000 on July 1, 1972, and by $400,000,000 on July 1, 18 1973. 19 "(2) Not less than 20 per centum of the assistance pay20 ments authorized in paragraph (1) of this subsection shall 21 not be contracted to be made on behalf of families whose 22 income at the time of their initial occupancy are not in excess 23 of the maximum income limits which can be established in 24 the area, pursuant to the limitations prescribed in sections 6 1 2(2) and 15 (7) (b) (ii) of the United States Housing Act 2 of 1937, for initial occupancy in public housing dwellings. 3 Other payments may be made in behalf of families whose 4 incomes exceed those limits but who would nevertheless be 5 eligible for assistance payments under the formula specified 6 in subsection (c) (1) of this section. 7 "(3) Not more than 15 per centum of the appropri 8 ation authorized under this section shall be contracted for 9 10 11 12 13 in connection with existing dwellings, or dwelling units in existing projects, unless such units are approved by the Secretary for substantial rehabilitation. "(i) The Secretary shall from time to time allocate and transfer to the Secretary of Agriculture, for use (in 14 accordance with the terms and conditions of this section) 15 in rural areas and small towns, a reasonable portion of the 16 total authority to contract to make assistance payments as 17 approved in appropriation Acts under subsection (h) (1)." 18 (b) The amendment made by subsection (a) shall be 19 applicable to contracts for assistance payments entered into 20 on and after the date of enactment of this Act. The pro21 visions of section 235 of the National Housing Act, as it 22 existed immediately prior to such date, shall be applicable 23 to contracts for assistance payments entered into prior to 24 such date. SEC. 3. (a) The text of section 101 of the Housing and 7 1 Urban Development Act of 1965 is amended to read as 2 follows: 3 "SEC. 101. (a) The Secretary of Housing and Urban 4 Development (hereinafter referred to as the Secretary) is 5 authorized to make, and contract to make, periodic payments 6 to a 'housing owner' on behalf of 'qualified tenants', as those terms are defined in subsection (c) of this section, in such 8 amounts and under such circumstances as are prescribed in 9 or under this section. A contract providing for such pay10 ments shall be for such period, not in excess of forty years, 11 as the Secretary determines. The aggregate amount of the 12 contracts to make such payments shall not exceed amounts 13 approved in appropriation Acts, and payments pursuant to 14 such contracts shall not exceed $250,000,000 per annum 15 prior to July 1, 1972, which maximum dollar amount shall 16 be increased by $300,000,000 on July 1, 1972, and by 17 $300,000,000 on July 1, 1973. 18 19 "(b) (1) For the purpose of reducing rentals of dwelling units approved hereunder, the Secretary is authorized to 20 make, and to contract to make, periodic interest reduction 222 21 payments on behalf of the owner of a rental housing project designed for occupancy by families eligible under subsection (d), which shall be accomplished through payments to mort gagees holding mortgages meeting the special requirements specified in this section. 8 1 "(2) Contracts for interest reduction payments shall be 2 made for the same period and under the same conditions as 3 for the periodic payments on behalf of 'qualified tenants' as 5 provided in section 101 (a). "(3) The interest reduction payments to a mortgagee 6 by the Secretary on behalf of a project owner shall be in an 7 amount not exceeding the difference between the monthly 8 payment for principal, interest, and mortgage insurance pre9 mium which the project owner as a mortgagor is obliged to pay under the mortgage and the monthly payment for prin 10 11 12 cipal and interest such project owner would be obligated to pay if the mortgage were to bear interest at a rate of 2 per 13 centum less than that fixed by the Secretary for mortgages 14 insured under section 207 of the National Housing Act. 15 16 "(4) The Secretary may include in the payment to the mortgagee such amount, in addition to the amount computed 17 under subsection (b) (3), as he deems appropriate to reim18 burse the mortgagee for its expenses in handling the 19 222 20 mortgage. "(5) The aggregate amount of contracts to make such 21 interest reduction payments shall not exceed amounts ap 22 proved in appropriation Acts and payments pursuant to 23 such contracts shall not exceed $75,000,000 per annum 24 prior to July 1, 1972, which maximum dollar amount shall 25 be increased by $100,000,000 on July 1, 1972, and by |