in compliance with the equivalent elimination requirement hereof, and (b) had a net family income not exceeding the income limits theretofore fixed by the local public agency (and approved by the Authority) for admission of families of low income to such housing: Provided, That the requirement in (a) shall not be applicable in the case of the family of any serviceman or the family of any veteran who has been discharged from (other than dishonorably or the family of any serviceman who died in) the armed forces of the United States within four years prior to the date of application for admission to such housing and when the net family income is too low to enable such family to secure a decent, safe, and sanitary dwelling provided by private enterprise.

"(8) Every contract made pursuant to this title for annual contributions for urban low-rent housing projects hereafter initiated shall require that the local public agency make periodic reexaminations of the net incomes of families living in the low-rent housing project involved; and if it is found, upon such reexamination, that the net incomes of any families have increased to a point where they can afford to rent or purchase decent, safe, and sanitary dwellings provided by private enterprise, such families shall be required to move from the project if there are such dwellings available to them within their means and appropriate to their use."

VETERANS' PREFERENCE

SEC. 702. (a) The United States Housing Act of 1937, as amended, is hereby amended by adding the following new subsection to section 10:

"(g) Every contract made pursuant to this Act for annual contributions for low-rent housing projects hereafter initiated shall require that the local public agency in selecting tenants shall give preference, as between applicants equally in need and eligible for occupancy of the dwelling and at the rent involved, to families of servicemen and to families of veterans who have been discharged from (other than dishonorably and to families of servicemen who died in) the armed forces of the United States within four years prior to the date of application for admission to such housing."

t

(b) Said Act, as amended, is hereby amended by adding the following new subsection to section 2:

"(14) The term 'servicemen' shall mean persons serving, and the term 'veterans' shall mean persons who have served, in the military or naval forces of the United States during World War II."

(c) Subsection (2) of section 2 of said Act is hereby amended by inserting after the words "means families", the words "or persons".

COST LIMITS

SEC. 703. The first sentence of subsection (5) of section 15 of the United States Housing Act of 1937, as amended, is hereby amended to read as follows: "No contract for any loan, annual contribution, or capital grant made pursuant to this title shall be entered into by the Authority with respect to any low-rent housing project constructed hereafter having a cost for construction and equipment of more than $1,000 per room (excluding land, demolition, and nondwelling facilities); except that in any city or metropolitan district, as defined by the Bureau of the Census, the population of which exceeds five hundred thousand, and in Alaska, any such contract may be entered into with respect to a project having a cost for construction and equipment of not to exceed $1,250 per room, and, in the case of Alaska, $1,750 per room (excluding land, demolition, and nondwelling facilities), if in the opinion of the Authority such higher cost per room (the term 'room' to be defined by the Authority) is justified by reason of higher costs of labor and materials and other construction costs."

LOCAL FINANCING

SEC. 704. (a) In order to stimulate increasing local financing of low-rent housing and slum-clearance projects, the United States Housing Act of 1937, as amended, is hereby amended as follows:

(1) The last proviso of subsection (b) and the proviso and the last sentence of subsection (f) of section 10 of said Act are repealed, and the following is added after section 21 of said Act:

"LOCAL FINANCING

"SEC. 22. To facilitate the enlistment of private capital through the sale by local public agencies of their bonds and other obligations to others than the Authority, in financing low-rent housing and slum-clearance projects under this title and title II, and to maintain the low-rent character of housing projects"(a) Every contract for annual contributions (including contracts which amend or supersede contracts previously made) may provide that

"(1) Upon the occurrence of a substantial default in respect of the covenants or conditions to which the local public agency is subject (as such substantial default shall be defined in such contract), the local public agency shall be obligated to convey to the Authority the project, as then constituted, to which such contract relates;

"(2) The Authority shall agree to reconvey the project, as constituted at the time of reconveyance, to the local public agency by which it shall have been so conveyed or its successor (if such local public agency or a successor exists) upon such terms as shall be prescribed in such contract and as soon as practicable: (i) after the Authority shall be satisfied that all defaults with respect to the project have been cured, and that the project will in order to fulfill the purpose of this Act, thereafter be operated in accordance with the terms of such contract; or (ii) after the termination of the obligation to make annual contributions available unless there are any obligations or covenants of the local public agency to the Authority which are then in default. Any prior conveyances and reconveyances shall not exhaust the right to require a conveyance of the project to the Authority, pursuant to subparagraph (1), upon the subsequent occurrence of a substantial default.

"(b) Whenever such contract for annual contributions shall include provisions which the Authority, in said contract, determines are in accordance with subsection (a) hereof, and the annual contributions, pursuant to such contract, have been pledged by the local public agency as security for the payment of the principal and interest on any of its obligations, the Authority (notwithstanding any other provisions of this Act) shall continue to make annual contributions available for the project so long as any of such obligations remain outstanding and may covenant in such contract that in any event such annual contributions shall in each year be at least equal to an amount which, together with such income or other funds as are actually available from the project for the purpose at the time such annual contribution is made, will suffice for the payment of all installments, falling due within the next succeeding twelve months, of principal and interest on the obligations for which the annual contributions provided for in the contract shall have been pledged as security: Provided, That such annual contributions shall not be in excess of the maximum sum determined pursuant to the section under which such project is assisted (being the first and second provisos of section 10 (b) in the case of any low-rent housing assisted under title I, except rehabilitation projects where the first proviso of section 23 (a) is applicable; being the proviso of section 206 (b) in the case of rural low-rent housing assisted under title II; and being the third sentence of section 606 (b) of the General Housing Act of 1945 in the case of projects assisted under title VI of that Act); and in no case shall such annual contributions be in excess of the maximum sum specified in the contract involved, nor for longer than the remainder of the maximum period fixed by the contract."; (2) Section 2 (10) of said Act is hereby amended to read as follows:

(10) The term 'going Federal rate' means the annual rate of interest (or, if there shall be two or more such rates of interest, the lowest thereof) specified in the most recently issued bonds of the Federal Government having a maturity of twenty years or more, determined, in the case of loans or annual contributions, respectively, at the date of Presidential approval of the contract pursuant to which such loans or contributions are made.";

(3) Section 9 of said Act is hereby amended by inserting the following at the end of said section, after the word "Authority": "Provided, That in the case of projects receiving annual contributions pursuant to the additional authorization provided for in section 10 (e), loans shall not be made for a period exceeding fortyfive years from the date of the bonds evidencing the loan: And provided further, That in the case of projects assisted by loans for a period not exceeding fortyfive years from the date of the bonds evidencing the loan and by annual contributions for a period not exceeding forty-five years from the date the first annual

contribution for the project is paid, such loans shall bear interest at a rate not less than the applicable going Federal rate.”;

(4) The first sentence of subsection (c) of section 10 of said Act is hereby amended to read as follows: "Every contract for annual contributions shall provide that whenever in any year the receipts of a local public agency in connection with a low-rent housing project exceed its expenditures (including debt service, administration, establishment of reserves, and other costs), an amount equal to such excess shall be applied, or set aside for application, to purposes which will effect a reduction in the amount of subsequent annual contributions.";

(5) Said Act is hereby amended by inserting the following after the first sentence of section 14: "When the Authority finds that it would promote economy and be in the financial interest of the Federal Government, any contract heretofore or hereafter made for annual contributions, loans, or both, may, with Presidential approval, be revised or superseded by a contract of the Authority so that the going Federal rate on the basis of which such annual contributions or interest rate on the loans, or both, respectively, are fixed shall mean the going Federal rate, as herein defined, on the date of Presidential approval of such revised or superseding contract: Provided, That contracts may not be revised or superseded in a manner which would impair the rights of the holders of any outstanding obligations of the local public agency involved for which annual contributions have been pledged.";

(6) The second sentence of subsection (a) of section 20 of said Act is hereby amended by inserting, after the word "issue", the words "and have outstanding at any one time" and by deleting, at the end of that sentence, the words ", exclusive of any obligations which may be issued for refunding purposes";

(7) Section 2 (5) of said Act is hereby amended to read as follows: "(5) The term 'development' means any or all undertakings necessary for land acquisition, demolition, construction, or equipment, in connection with a low-rent housing or slum-clearance project. The term 'development cost' shall comprise the costs incurred by a local public agency in such undertakings necessary for planning, financing (including the payment of carrying charges, but not beyond the point of physical completion), and otherwise carrying out the development of a low-rent housing project."

(b) The last sentence of paragraph Seventh of section 5136 of the Revised Statutes, as amended, is amended by inserting before the colon, after the words "obligations of national mortgage associations", a comma and the following: "or such obligations of any local public agency (as defined in the United States Housing Act of 1937, as amended, or the General Housing Act of 1945) as are secured by a pledge of payments under an annual contributions contract between such local public agency and the Federal agency carrying out the functions, powers, and duties under either of said Acts, and by an agreement between such local public agency and said Federal agency pursuant to section 22 of the United States Housing Act of 1937, as amended, or paragraph (2) of section 607 of the General Housing Act of 1945."

REHABILITATION

SEC. 705. In order to conserve the existing housing supply, the United States Housing Act of 1937, as amended, is hereby amended by adding the following after the new section 22:

"REHABILITATION OF EXISTING BUILDINGS

"SEC. 23. (a) To assist in the use of existing buildings for low-rent housing when this is feasible in lieu of new construction, the Authority may make loans and annual contributions to local public agencies for projects which involve mainly the remodeling, repair, or reconstruction of existing buildings located in neighborhoods where the spread of blight can be prevented or arrested. All provisions of this Act relating to other low-rent housing projects which may be assisted under this title shall be applicable to such projects: Provided, That no contract for annual contributions with respect to a project assisted under this section shall be made for a period exceeding thirty years from the date the first contribution is paid, but that the fixed annual contribution rate under such a contract may exceed the maximum rate authorized with respect to other urban low-rent projects by 1 per centum of the development cost of the project: And provided further, That any loan with respect to a project assisted under this section (which may be in an amount equal to the development cost of the project) shall

not be for a period exceeding thirty years from the date of the bonds evidencing the loan.

"(b) As an alternative to such assistance in the purchase and rehabilitation of existing buildings, assistance may be extended under this section for the leasing and rehabilitation of such buildings by local public agencies when the Authority finds that the annual cost to the Authority would be no greater if the buildings were leased than if they were purchased by the local public agency. In such cases, the provisions of section 15 relating to the acquisition of title by a third party shall not be applicable to the retention of title by the owners of the buildings leased to the local public agency.

"(c) In administering this section, the Authority shall be guided by the following standards:

"(i) That the buildings to be acquired or leased shall be in such condition that it is financially feasible to remodel, repair, or reconstruct them, and that the buildings, when rehabilitated, would provide decent, safe, and sanitary housing for at least the period of assistance undertaken;

"(ii) That the rehabilitation of the buildings comprising the prjoect will prevent or arrest the spread of blight so as to protect the neighborhood in which the buildings are located;

"(iii) That the rehabilitated buildings will provide low-rent housing and will otherwise accomplish the purposes of this Act."

SEC. 706. The United States Housing Act of 1937, as amended, is hereby amended by adding the following new proviso after the word "involved:" at the end of the first proviso of section 10 (b): "And provided further, That in the case of land and utility projects (which do not include the construction of new dwellings) in the Territories, dependencies, and possessions, the fixed contribution may exceed said sum by 1 per centum of the development cost."

ANNUAL CONTRIBUTIONS AUTHORIZATION FOR ADDITIONAL PROGRAM

SEC. 707. (a) Subsection 10 (e) of the United States Housing Act of 1937, as amended, is hereby amended by inserting the following after the first sentence thereof: With respect to projects to be assisted pursuant to this title, the Authority is authorized, in addition to the amount heretofore authorized, to enter into contracts, on and after the date this additional authorization is made, which provide for annual contributions aggregating not more than $22.000,000-per annum, which limit shall be increased by further amounts of $22,000,000 at the beginning of each of the second, third, and fourth years, respectively, from such date: Provided, That any parts of this additional authorization may be made available at earlier dates than are provided above upon a determination by the President (which shall be transmitted in a message to the Congress) that such acceleration is necessary to meet acute shortages of adequate housing for families of low income, including families of servicemen and veterans eligible for such housing under this Act, or to stimulate employment and business activity: And provided further, That the contracts for annual contributions with respect to projects assisted pursuant to this additional authorization shall not provide for the development of more than 500,000 dwelling units (excluding any units provided through rehabilitation of existing structures) without further authorization from the Congress."

(b) Subsection 10 (c) of said Act is hereby amended by adding the following at the end of the last sentence thereof: "Provided, That contracts for annual contributions made pursuant to the additional authorization provided for in section 10 (e) shall not be made for a period exceeding forty-five years from the date the first annual contribution is paid."

TECHNICAL AMENDMENTS

SEC. 708. The United States Housing Act of 1937, as amended, is hereby amended as follows.

(1) By changing section 2 (11) to read as follows:

(11) The term 'local public agency' means any State, county, municipality, or other governmental entity or public body (excluding the Authority), which is authorized to undertake the project for which assistance is sought.";

(2) By changing the term "public housing agency", wherever it appears in said Act and in title II of Public Law 671, Seventy-sixth Congress, approved June 28, 1940, to "local public agency";

(3) By inserting in section 5 (b) after the words "be sued" the following: "(with respect to its functions under this Act and title II of Public Law 671, Seventy-sixth Congress, approved June 28, 1940)";

(4) By adding to section 6 the following new subsection:

'(e)_ With respect to all projects under title II of Public Law 671, Seventysixth Congress, approved June 28, 1940, references therein to the United States Housing Act of 1937, as amended, shall include all amendments to said Act now or hereafter adopted.'

(5) By deleting from the proviso in section 10 (a) the words ", unless the project includes the elimination" and substituting the words "unless, subsequent to the initiation of the project and within a period specified by the Authority, there has been or will be elimination".

(6) By renumbering sections 22 to 30, inclusive, so that they become sections 24 to 32, inclusive.

TITLE VIII-HOUSING ON FARMS AND IN RURAL AREAS

AID TO PRIVATE FINANCING

SEC. 801. Section 203 (d) of the National Housing Act, as amended, is hereby amended to read as follows:

"(d) The Administrator is authorized to insure, pursuant to the provisions of this section, any mortgage which covers a farm upon which a farmhouse and other farm buildings are located and would otherwise be eligible for insurance under the provisions of paragraph (b) of this section."

SEC. 802. The Secretary of Agriculture (hereinafter referred to as the "Secretary") is authorized to make loans to the owners of farms in the United States and in the Territories of Alaska and Hawaii and in Puerto Rico to provide decent, safe, and sanitary farm dwellings for such owners, their tenants, share croppers, or laborers, through construction, alteration, repair, or replacement. Such loans shall be made only to the owners of farms who cannot elsewhere receive the necessary credit on terms comparable to the terms provided herein. The instruments under which the loan is made and the security given therefor shall

(a) Provide for the repayment of the loan within an agreed period of not more than forty years from the making of the loan;

(b) Provide for the payment of interest on the unpaid balance of the loan at the rate of 3 per centum per annum;

(c) Provide for the repayment of the unpaid balance of the loan, together with interest thereon, in installments in accordance with amortization schedules prescribed by the Secretary;

(d) Be in such form and contain such covenants as the Secretary shall prescribe to secure the payment of the unpaid balance of the loan, together with interest thereon, to protect the security and to assure that the farm will be maintained in repair and that waste and exhaustion of the farm will be prevented; (e) Provide, in the discretion of the Secretary, for the payment of any obligation or indebtedness under a system of variable payments under which a surplus above the required payment will be collected in periods of above normal production or prices and employed to reduce the payments below the required payments in periods of subnormal production or prices.

SEC. 803. The Secretary is authorized to make loans to farm owners, or groups of farm owners, to provide adequate housing for seasonal agricultural workers, not in excess of the amount which the Secretary finds can be repaid within the useful life of the housing. The terms and conditions of such loans shall otherwise be the same as those provided in section 802, and in addition the Secretary may require (subject to such conditions as he may prescribe) that the availability of housing constructed out of the proceeds of such loans shall not be a justification for decreasing directly or indirectly the prevailing wage to the occupants of such houses, and that, if the housing is rented, the rent shall not exceed an amount approved by the Secretary.

SEC. 804. (a) To enable the Secretary to make loans under sections 802 and 803, the Secretary is authorized to borrow from the Reconstruction Finance Corporation at an interest rate not to exceed 3 per centum per annum such sums as may be annually provided in the appropriation for that purpose, and the Reconstruction Finance Corporation is hereby authorized and directed to lend such sums to the Secretary upon the security of any obligations of borrowers from the Secretary under the provisions of this title. The Secretary may utilize the proceeds from the payment of principal and interest on any loans made by him under this title to repay the Reconstruction Finance Corporation the amount borrowed therefrom under the authority of this section, and the amount of notes, bonds, debentures, and other obligations which the Reconstruction Finance

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