TITLE I-FHA TITLE VI AND TRANSITIONAL PERIOD AMENDMENTS

SEC. 101. The National Housing Act, as amended, is hereby amended as follows:

TITLE VI AMENDMENTS

(a) Section 603 (a) is amended

(1) by striking out "$5,350,000,000" and inserting in lieu thereof "$5,950,000,000 except that with the approval of the President such aggregate amount may be increased to not to exceed $6,950,000,000";

(2) by striking out "April 30, 1948" in each place where it appears and inserting in lieu thereof "March 31, 1949";

(3) by striking out the period and adding a comma and the following: "and that, of the total authorization provided in this subsection, not less than $800,000,000 shall be made available for the insurance of mortgages on rental properties under section 608, and not less than $200,000,000 shall be made available for the insurance of mortgages on multifamily dwellings under section 603, on which commitments for insurance are issued subsequent to March 31, 1948."

(b) Section 603 (b) (5) is amended by striking out the period at the end thereof and inserting in lieu thereof a colon and the following: "Provided, That the Administrator, with the approval of the Secretary of the Treasury, may prescribe by regulation a higher maximum rate of interest, not exceeding 42 per centum per annum on the amount of the principal obligation outstanding at any time, if he finds that the mortgage market demands it."

(c) Section 608 (b) (3) (B) is amended by striking out the semicolon and the word "and" at the end of the first proviso and inserting in lieu thereof a colon and the following: And provided further, That the principal obligation of the mortgage shall not, in any event, exceed 90 per centum of the Administrator's estimate of the replacement cost of the property or project on the basis of the costs prevailing on December 31, 1947, for properties or projects of comparable quality in the locality where such property or project is to be located; and".

(d) (1) Section 608 (b) (3) (C) is amended by striking out "$1,500 per room" and inserting in lieu thereof "$8,100 per family unit";

(2) Section 608 (b) (3) (C) is amended by striking out the colon and the proviso and inserting in lieu thereof a period.

(e) Section 609 is amended

(a) By striking out all of paragraph (1) of subsection (b) and inserting in lieu thereof the following:

"(1) The manufacturer shall establish that binding purchase contracts have been executed satisfactory to the Administrator providing for the purchase and delivery of the houses to be manufactured, which contracts shall provide for the payment of the purchase price at such time as may be agreed to by the parties thereto, but, in no event, shall the purchase price be payable on a date in excess of thirty days after the date of delivery of such houses, unless not less than 20 per centum of such purchase price is paid on or before the date of delivery and the lender has accepted and discounted, or has agreed to accept and discount, pursuant to subsection (i) of this section a promissory note or notes, executed by the purchaser, representing the unpaid portion of such purchase price, in which event such unpaid portion of the purchase price may be payable on a date not in excess of one hundred and eighty days from the date of delivery of such houses." (b) By striking out the first and second sentences of paragraph (4) of subsection (b) and inserting in lieu thereof the following:

"The loan shall involve a principal obligation in an amount not to exceed 90 per centum of the amount which the Administrator estimates will be the necessary current cost, exclusive of profit, of manufacturing the houses, which are the subject of such purchase contracts assigned to secure the loan, less any sums paid by the purchaser under said purchase contracts prior to the assignment thereof. The loan shall be secured by an assignment of the aforesaid purchase contracts and of all sums payable thereunder on or after the date of such assignment, with the right in the assignee to proceed against such security in case of default as provided in the assignment, which assignment shall be in such form and contain such terms and conditions, as may be prescribed by the Administrator; and the Administrator may require such other agreements and undertakings to further secure

the loan as he may determine, including the right, in case of default or at any time necessary to protect the lender, to compel delivery to the lender of any houses then owned and in the possession of the borrower." (e) By adding at the end of subsection (f) the following new sentence: "The provisions of section 603 (d) shall also be applicable to loans insured under this section and the reference in said section 603 (d) to a mortgage shall be construed to include a loan or loans with respect to which a contract of insurance is issued pursuant to this section."

(d) By adding at the end thereof the following new subsection:

“(i) (1) In addition to the insurance of the principal loan to finance the manufacture of housing, as provided in this section, and in order to provide short-term financing in the sale of houses to be delivered pursuant to the purchase contract or contracts assigned as security for such principal loan, the Administrator is authorized, under such terms and conditions and subject to such limitations as he may prescribe, to insure the lender against any losses it may sustain resulting from the acceptance and discount of a promissory note or notes executed by a purchaser of any such houses representing an unpaid portion of the purchase price of any such houses. No such promissory note or notes accepted and discounted by the lender pursuant to this subsection shall involve a principal obligation in excess of 80 per centum of the purchase price of the manufactured house or houses; have a maturity in excess of one hundred and eighty days from the date of the note or bear interest in excess of 4 per centum per anum; nor may the principal amount of such promissory notes, with respect to any individual principal loan, outstanding and unpaid at any one time, exceed in the aggregate an amount prescribed by the Administrator.

(2) The Administrator is authorized to include in any contract of insurance executed by him with respect to the insurance of a loan to finance the manufacture of houses, provisions to effectuate the insurance against any such losses under this subsection.

"(3) The failure of the purchaser to make any payment due under or provided to be paid by the terms of any note or notes executed by the purchaser and accepted and discounted by the lender under the provisions of this subsection, shall be considered as a default under this subsection, and if such default continues for a period of thirty days, the lender shall be entitled to receive the benefits of the insurance, as provided in subsection (d) of this section except that debentures issued pursuant to this subsection shall have a face value equal to the unpaid principal balance of the loan plus interest at the rate of 4 per centum per annum from the date of default to the date the application is filed for the insurance benefits. "(4) Debentures issued with respect to the insurance granted under this subsection shall be issued in accordance with the provisions of section 604 (d) except that such debentures shall be dated as of the date application is filed for the insurance benefits and shall bear interest from such date.

"(5) The Administrator is authorized to fix a premium charge for the insurance granted under this subsection, in addition to the premium charge authorized under subsection (h) of this section. Such premium charge shall not exceed an amount equivalent to 1 per centum of the oroginal principal of such promissory note or notes and shall be paid at such time and in such manner as may be prescribed by the Administrator."

(f) Section 610 is amended by adding at the end thereof the following new paragraph:

"The Administrator is further authorized to insure or to make commitments to insure in accordance with the provisions of this section any mortgage executed in connection with the sale by the Government, or any agency or official thereof, of any of the so-called Greenbelt towns, or parts thereof, including projects, or parts thereof, known as Greenhills, Ohio, Greenbelt, Maryland, and Greendale, Wisconsin, developed under the Emergency Relief Appropriation Act of 1935, or of any of the village properties under the jurisdiction of the Tennessee Valley Authority, and any mortgage executed in connection with the first resale, within two years from the date of its acquisition from the Government, of any portion of a project or property which is the security for a mortgage insured pursuant to the provisions of this section."

(g) Title VI is amended by adding after section 610 the following new section:

"SEC. 611. (a) In addition to mortgages insured under other sections of this title, and in order to assist and encourage the application of cost-reduction

techniques through large-scale modernized site construction of housing and the erection of houses produced by modern industrial processes, the Administrator is authorized to insure mortgages (including advances on such mortgages during construction) which are eligible for insurance as hereinafter provided. "(b) To be eligible for insurance under this section, a mortgage shall"(1) have been made to and be held by a mortgagee approved by the Administrator as responsible and able to service the mortgage properly; "(2) cover property, held by a mortgagor approved by the Administrator, upon which there is to be constructed or erected dwelling units for not less than twenty-five families consisting of a group of single-family or twofamily dwellings approved by the Administrator for mortgage insurance prior to the beginning of construction: Provided, That during the course of construction there may be located upon the mortgaged property a plant for the fabrication or storage of such dwellings or sections or parts thereof, and the Administrator may consent to the removal or release of such plant from the lien of the mortgage upon such terms and conditions as he may approve;

"(3) involve a principal obligation in an amount-

"(A) not to exceed 90 per centum of the amount which the Administrator estimates will be the value of the completed property or project, exclusive of any plant of the character described in paragraph (2) of this subsection located thereon, and

"(B) not to exceed a sum computed on the individual dwellings comprising the total project as follows:

"(i) $8,100 or 90 per centum of the valuation, whichever is less, with respect to each single-family dwelling, and

"(ii) $12,500 or 90 per centum of the valuation, whichever is less, with respect to each two-family dwelling.

"With respect to the insurance of advances during construction, the Administrator is authorized to approve advances by the mortgagee to cover the cost of materials delivered upon the mortgaged property and labor performed in the fabrication or erection thereof;

"(4) provide for complete amortization by periodic payments within such term as the Administrator shall prescribe and shall bear interest (exclusive of premium charges for insurance) at not to exceed 4 per centum per annum on the amount of the principal obligation outstanding at any time: Provided, That the Administrator, with the approval of the Secretary of the Treasury, may prescribe by regulation a higher maximum rate of interest, not exceeding 4% per centum per annum on the amount of the principal obligation outstanding at any time, if he finds that the mortgage market demands it. The Administrator may consent to the release of a part or parts of the mortgaged property from the lien of the mortgage upon such terms and conditions as he may prescribe and the mortgage may provide for such release.

"(c) Preference or priority of opportunity in the occupancy of the mortgaged property for veterans of World War II and their immediate families and for hardship cases as defined by the Administrator shall be provided under such regulations and procedures as may be prescribed by the Administrator. "(d) The provisions of subsections (c), (d), (e), and (f) of section 608 shall be applicable to mortgages insured under this section."

TITLE II AMENDMENTS

(h) Section 203 (b) (2) (B) is amended by striking out "$5,400" and inserting in lieu thereof "$6,300."

(i) Section 203 (b) (2) (C) is amended

(1) by striking out "$8,600" and inserting in lieu thereof "$9,500"; (2) by striking out "$6,000" in each place where it appears and inserting in lieu thereof "$7,000";

(3) by striking out $10,000" and inserting in lieu thereof "$11,000."

(j) Section 203 (b) is amended by striking out in paragraph numbered (3) the following: "of the character described in paragraph (2) (B) of this subsection" and inserting in lieu thereof the following: "on property approved for insurance prior to the beginning of construction."

(k) Section 203 (b) is amended as follows:

(1) By striking out the period at the end of paragraph (2) (C), inserting in lieu thereof a comma and the word "or", and adding the following new paragraph:

"(D) not to exceed $6,000 and not to exceed 90 per centum of the appraised value, as of the date the mortgage is accepted for insurance (or 95 per centum if, in the determination of the Administrator, insurance of mortgages involving a principal obligation in such amount under this paragraph would not reasonably be expected to contribute to substantial increases in costs and prices of housing facilities for families of moderate income), of a property, urban, suburban, or rural, upon which there is located a dwelling designed principally for a single-family residence the construction of which is begun after March 31, 1949, and which is approved for mortgage insurance prior to the beginning of construction: Provided, That the Administrator may by regulation provide that the principal obligation of any mortgage eligible for insurance under this paragraph shall be fixed at a lesser amount than $6,000 where he finds that for any section of the country or at any time a lower-cost dwelling for families of lower income is feasible without sacrifice of sound standards of construction, design, and livability: And provided further, That with respect to mortgages insured under this paragraph the mortgagor shall be the owner and occupant of the property at the time of the insurance and shall have paid on account of the property at least 10 per centum (or 5 per centum, in the case of a 95 per centum mortgage insured pursuant to this paragraph (D)) of the appraised value in cash or its equivalent, or shall be the builder constructing the dwelling in which case the principal obligation shall not exceed 85 per centum of the appraised value of the property.”

(2) By striking out the period at the end of paragraph numbered (3), and adding a comma and the following: "or not to exceed thirty years in the case of a mortgage insured under paragraph (2) (D) of this subsection."

(3) By striking out the period at the end of paragraph numbered (5), and adding a comma and the following: "or not to exceed 4 per centum per annum in the case of a mortgage insured under paragraph (2) (D) of this subsection." (1) (1) Section 203 (c) is amended (1) by striking out in the last sentence the words "section or section 210" and inserting in lieu thereof the word "title"; and (2) by striking out in said sentence (i) the words “under this section", and (ii) the following: "and a mortgage on the same property is accepted for insuranc at the time of such payment,”.

(2) Section 603 (c) is amended by striking out in the next to the last sentence the following: "and a mortgage on the same property is accepted for insuranco at the time of such payment,".

(m) Section 204 (a) is amended

(1) by striking out, in the last sentence, the following: "prior to July 1, 1944,";

(2) by inserting between the first and second provisos in the last sentence the following: "And provided further, That with respect to mortgages which are accepted for insurance under section 203 (b) (2) (D) or under the second proviso of section 207 (c) (2) of this Act, there may be included in the debentures issued by the Administrator on account of the cost of foreclosure (or of acquiring the property by other means) actually paid by the mortgagee and approved by the Administrator an amount, not in excess of two-thirds of such cost or $75 whichever is the greater :".

(n) (1) Section 207 (b) is amended by amending paragraph numbered (1) to read as follows:

"(1) Federal or State instrumentalities, municipal corporate instrumentalities of one or more States, or limited dividend or redevelopment or housing corporations restricted by Federal or State laws or regulations of State banking or insurance departments as to rents, charges, capital structure, rate of return, or methods of opeation; or".

(2) Section 207 (c) is amended by amending the first sentence to read as follows:

"(c) To be eligible for insurance under this section a mortgage on any property or project shall involve a principal obligation in an amount

"(1) not to exceed $5,000,000, or, if executed by a mortgagor coming within the provisions of paragraph numbered (b) (1) of this section, not to exceed $50,000,000:

"(2) not to exceed 80 per centum of the amount which the Administrator estimates will be the value of the property or project when the proposed improvements are completed, including the land; the proposed physical improvements; utilities within the boundaries of the property or project; architects' fees; taxes and interest accruing during construction; and other miscellaneous charges incident to construction and approved by

the Administrator: Provided, That, except with respect to a mortgage executed by a mortgagor coming within the provisions of paragraph numbered (b) (1) of this section, such mortgage shall not exceed the amount which the Administrator estimates will be the cost of the completed physical improvements on the property or project, exclusive of public utilities and streets and organization and legal expenses; and

"(3) not to exceed $8,100 per family unit for such part of such property or project as may be attributable to dwelling use."

(o) (1) Section 207 (h) is amended by striking out in paragraph numbereu (1), the words "paid to the mortgagor of such property", and and inserting in lieu thereof the following: "retained by the Administrator and credited to the Housing Insurance Fund".

(2) Section 204 (f) is amended by inserting in clause numbered (1), immediately preceding the semicolon, the following: "if the mortgage was insured under section 203 and shall be retained by the Administrator and credited to the Housing Insurance Fund if the mortgage was insured under section 207".

(p) Section 2 is amended:

TITLE I AMENDMENTS

(1) by striking out "$165,000,000" in subsection (a) and inserting in lieu thereof "$175,000,000";

(2) by striking out "$3,000" in subsection (b) and inserting in lieu thereof "$4,500";

(3) by striking out the first proviso in the first sentence of subsection (b) and inserting in lieu thereof the following: "Provided, That insurance may be granted to any such financial institution with respect to any obligation not in excess of $10,000 and having a maturity not in excess of seven years and thirty-two days representing any such loan, advance of credit, or purchase made by it if such loan, advance of credit, or purchase is made for the purpose of financing the alteration, repair, improvement, or conversion of an existing structure used or to be used as a hotel, apartment house, dwelling for two or more families, hospital, orphanage, college, or school :".

(4) by striking out the last sentence of subsection (b).

SEC. 102. In order to aid housing production, the Reconstruction Finance Corporation is authorized to make loans to and purchase the obligations of any business enterprise for the purpose of providing financial assistance for the production of prefabricated houses or prefabricated housing components, or for large-scale modernized site construction. Such loans or purchases shall be made under such terms and conditions and with such maturities as the Corporation may determine: Provided, That to the extent that the proceeds of such loans or purchases are used for the purchase of equipment, plant, or machinery the principal obligation shall not exceed 75 per centum of the purchase price of such equipment, plant, or machinery: And provided further, That the total amount of commitments for loans made and obligations purchased under this section shall not exceed $50,000,000 outstanding at any one time, and no financial assistance shall be extended under this section unless it is not otherwise available on reasonable terms.

SEC. 103. The Servicemen's Readjustment Act of 1944, as amended, is hereby amended by inserting immediately after section 510 thereof the following new section:

"INCONTESTABILITY

"SEC. 511. Any evidence of guaranty or insurance issued by the Administrator shall be conclusive evidence of the eligibility of the loan for guaranty or insurance under the provisions of this title and of the amount of such guaranty or insurance, except that nothing in this section shall preclude the Administrator from establishing, as against the original lender, defenses based on fraud or material misrepresentation, and except that the Administrator shall not, by reason of anything contained in this section, be barred from establishing, by regulations in force at the date of such issuance or disbursement, whichever is the earlier, partial defenses to the amount payable on the guaranty or insurance."

SEC. 104. The Servicemen's Readjustment Act of 1944, as amended, is hereby amended, by striking out the period at the end of section 500 (b) and inserting in lieu thereof the following: “And provided further, That the Administrator, with the approval of the Secretary of the Treasury, may prescribe by regulation a