EXCERPTS FROM HOUSING ACT OF 1964 [Public Law 88-560; 78 Stat. 769, 790; 42 U.S.C. 1452b] TITLE III—URBAN RENEWAL REHABILITATION LOANS SEC. 312. (a) The Secretary is authorized, through the utilization of local public and private agencies where feasible, to make loans as herein provided to the owners and tenants of property to finance the rehabilitation of such property. No loan shall be made under this section unless (1)(A) the property is situated in an urban renewal area or an area in which a program of concentrated code enforcement activity is being carried out pursuant to section 117 of the Housing Act of 1949, and the rehabilitation is required to make the property conform to applicable code requirements or to carry out the objectives of the urban renewal plan for the area and, in addition, to generally improve the condition of the property; or (B)(i) the property is in an area (other than an area described in subparagraph (A)) which the governing body of the locality has determined, and so certifies to the Secretary, contains a substantial number of structures in need of rehabilitation, (ii) there is in effect for the locality a workable program meeting the requirements of section 101(c) of the Housing Act of 1949, (iii) the property is residential and owner-occupied, (iv) the property is in need of rehabilitation and is in violation of the local minimum housing or similar code, and (v) the area is definitely planned for rehabilitation or concentrated code enforcement within a reasonable time, and the rehabilitation of such property is consistent with the plan for rehabilitation or code enforcement; or (C)(i) the property has been determined to be uninsurable because of physical hazards after an inspection pursuant to a statewide property insurance plan approved by the Secretary under title XII of the National Housing Act, and (ii) the loan is made to the owner or tenant of the property to finance rehabilitation which the Secretary determines to be necessary to make the property meet reasonable underwriting standards; or (D) the rehabilitation is a part of, or is necessary or appropriate to the execution of, community development activities under title I of the Housing and Community Development Act of 1974 or an approved urban homestead program under section 809 of such Act; (2) the applicant is unable to secure the necessary funds from other sources upon comparable terms and conditions; and (3) the loan is an acceptable risk taking into consideration the need for the rehabilitation, the security available for the loan, and the ability of the applicant to repay the loan. The Secretary shall, in making loans under this section, give priority to applications by low- and moderate-income persons who own the property to be rehabilitated and will occupy such property upon completion of the rehabilitation, including applications by condominiums and cooperatives in which the residents are principally of low and moderate income. For the purpose of the preceding sentence, the term "low and moderate income" means income which does not exceed 95 per centum of the median income for the area. (b) For the purposes of this section (1) the term "rehabilitation" means the improvement or repair of a structure or facilities in connection with a structure, and may include the provision of such sanitary or other facilities as are required by applicable codes, the urban renewal plan, or a statewide property insurance plan to be provided by the owner or tenant of the property; (2) the term "urban renewal area" means a slum area or a blighted, deteriorated, or deteriorating area as defined in section 110(a) of the Housing Act of 1949; (3) the term "tenant" means a person or organization who is occupying a structure under a lease having a period to run at the time a rehabilitation loan is made under this section of not less than the term of the loan; and (4) the term "Secretary" means the Secretary of Housing and Urban Development. (c) A rehabilitation loan made under this section shall be subject to the following limitations: (1) The loan shall be subject to such terms and conditions as may be prescribed by the Secretary. (2) The term of the loan may not exceed twenty years or threefourths of the remaining economic life of the structure after rehabilitation, whichever is less. (3) The loan shall bear interest at such rate as the Secretary determines to be appropriate, but not to exceed 3 per centum per annum for loans to families with adjusted incomes of not more than 80 per centum of the median income for the area. For loans to families with adjusted incomes above 80 per centum of the median income for the area, as determined by the Secretary, the Secretary may establish interest rates based on adjusted family income, ranging from above 3 per centum to a rate determined by the Secretary, but in no case may any such rate exceed the current average market yield on outstanding marketable securities of the United States with remaining periods to maturity comparable to the terms of loans made pursuant to this section, adjusted to the nearest oneeighth of 1 per centum. The Secretary may prescribe such other charges adequate in the judgment of the Secretary to cover administrative costs and possible losses under the program. (4) The amount of the loan may not exceed (A) in the case of residential property, $33,500 per dwelling unit: Provided, That within the limitations otherwise applicable on the amount of a loan, the loan may exceed the cost of rehabilitation in order to include an amount approved by the Secretary to refinance existing indebtedness secured by such property (i) if such refinancing is necessary to enable the applicant to amortize, with a monthly payment of not more than 20 per centum of his average monthly income, such loan and any other indebtedness secured by his property, or if such refinancing is deemed necessary by the Secretary to minimize displacement of existing tenants of a multifamily property, and (ii) if the Secretary determines that such refinancing is necessary and appropriate; (B) in the case of residential property in which some or all of the dwelling units do not contain kitchen facilities and to which there is connected a central dining facility where meals can be served to the occupants of such residential property, $25,000 per dwelling unit; (C) in the case of residential property in which some or all of the dwelling units do not contain bathroom or kitchen facilities, $15,000 per dwelling unit; and (D) in the case of nonresidential property, whichever of the following is the least: $100,000, or the cost of rehabilitation, or an amount which when added to any outstanding indebtedness related to the property securing the loan creates a total outstanding indebtedness that the Secretary determines could be reasonably secured by a first mortgage on the property. (5) A loan shall be secured as determined by the Secretary. (d) There is authorized to be appropriated not to exceed $150,000,000 for each fiscal year ending prior to July 1, 1975, not to exceed $100,000,000 for the fiscal year beginning on October 1, 1976, not to exceed $60,000,000 for the fiscal year beginning on October 1, 1977, not to exceed $245,000,000 for the fiscal year beginning on October 1, 1978, not to exceed $140,000,000 for the fiscal year beginning on October 1, 1979, and not to exceed $144,000,000 for the fiscal year beginning on October 1, 1980, which shall constitute a revolving fund to be used by the Secretary in carrying out this section. All moneys in such revolving fund shall be available for necessary expenses of servicing loans made pursuant to this section, including reimbursement or payment for services and facilities of the Government National Mortgage Association and of any public or private agency for the servicing of such loans. The amount of commitments to make loans pursuant to this section entered into after August 22, 1976, shall not exceed amounts approved in appropriation Acts, and not more than $210,000,000 may be approved in appropriation Acts for such loans with respect to the fiscal year beginning on October 1, 1980. The Secretary may not establish (1) any requirement that a certain proportion of assistance received under this section be utilized for any particular type of dwelling unit; or (2) any priority for the receipt of such assistance that is based on the receipt or use of funds by an applicant or area under any other program of Federal assistance for housing or community development, other than the urban homesteading program established in section 810 of the Housing and Community Development Act of 1974. (e) In the performance of, and with respect to, the functions, powers, and duties vested in him by this section, the Secretary shall have (in addition to any authority otherwise vested in him) the functions, powers, and duties set forth in section 402 of the Housing Act of 1950 (except subsection (c)(2)). (f) The Secretary is authorized to delegate to or use as his agent any Federal or local public or private agency or organization to the extent he determines appropriate and desirable to carry out the objectives of this section in the area involved, except that the Secretary may not delegate to any agency or organization outside the Department of Housing and Urban Development the authority to determine whether to permit refinancing of existing indebtedness under subsection (c)(4)(Ā). (g) The Secretary is authorized to issue such rules and regulations and impose such requirements and conditions (in addition to those specified in this section) as he determines to be desirable to carry out the objectives of this section, including limitations on the amount of a loan and restrictions on the use of the property involved. (h) No loan shall be made under this section after September 30, 1984, except pursuant to a contract, commitment, or other obligation entered into pursuant to this section prior to October 1, 1984. (i) The Secretary may not, after 270 days following the date of the enactment of this subsection, make any loan under this section. with respect to any property unless the Secretary has determined that the improvements to such property, upon completion of the rehabilitation, will meet cost-effective energy conservation standards prescribed by the Secretary. (j) Rehabilitation loans under this section for multifamily property shall be subject to the following additional limitations and conditions: (1) The property must meet the requirements of subsection (a) and (A) be located in a low- or moderate-income neighborhood; or (B) have a majority of tenants of low and moderate income. (2) The property must have fewer than 100 units, except where the Secretary determines that a loan under this section is essential to meet the community development needs of a neighborhood and alternative sources of financing are not available. (3) The Secretary shall enter into an agreement with the investor-owner of a multifamily property which is to be rehabilitated with a loan under this section to limit, for a period of at least five years, the increased rent caused by the rehabilitation. (4) The Secretary shall minimize involuntary displacement caused by rehabilitation loans under this section with respect to multifamily properties. (k) In conjunction with the annual report required under section 113(a) of the Housing and Community Development Act of 1974, the Secretary shall submit to the Congress a report on the rehabilitation loan program under this section. Such report shall include a summary of the use of funds under this section, particularly with regard to the types of neighborhoods and persons aided under this section, and an evaluation of progress made toward community development goals under this section. As soon as feasible, but not later than December 1, 1979, the Secretary shall submit to Congress an interim report evaluating the use of funds under this section for multifamily properties, with legislative recomendations for |