tives, with 40-year maturity and interest at not to exceed 4 percent per annum, has been modified as follows: (a) In the case of housing cooperatives whose membership consists primarily of veterans of World War II, FHA insurance is made available for similar loans up to 95 percent of the estimated value of the property. (b) Provisions have been included to make it clear that the powers of the National Home Mortgage Corporation established by title II of the draft legislation will be available to provide a secondary market for mortgages insured under this section. 6. VII-Yield insurance for rental housing The yield-insurance plan (now included in title IV of the draft legislation) has been modified as follows: (a) The coverage has been increased so that the insurance is available until 90 percent (instead of 85 percent) of the initial investment has been amortized. (b) The section relating to eligibility for insurance has been simplified. (c) The section relating to rents has been revised to obviate any possible construction that control of tenant selection or the application of a need or means test was required. (d) The section relating to the application (for the purposes of the insurance contract) of excess earnings, 50 percent to increased return and 50 percent to accelerated amortization, until such application results in a return of 4 percent after which 100 percent of such excess earnings must be applied to accelerated amortization has been changed so that the break-off point is a return of 5 percent. (e) The provisions which would have supplied the $10,000,000 capital for the housing investment insurance fund from the Reconstruction Finance Corporation have been changed to authorize a direct appropriation for such purpose. This is because, since the enactment of Public Law 132, Eightieth Congress, approved June 30, 1947, this type of assistance by RFC is no longer authorized. (f) The minimum annual return is raised from 34 percent of the outstanding investment to 3%1⁄2 percent. 7. Title VIII-Land assembly and preparation for redevelopment This title (now included as title V of the draft legislation) has been revised and simplified. The major changes are as follows: (a) In lieu of loans, and annual contributions over a 45-year period, a system of loans and capital grants has been substituted. (b) There was formerly provided a $500,000,000 loan authorization. The draft legislation provides for a loan authorization of $1,010,000,000 with $10,000,000 thereof becoming available on July 1, 1948, and $200,000,000 becoming available on July 1, 1949, with further amounts of $200,000,000 becoming available on the 1st day of July in each of the years 1950, 1951, 1952, and 1953. (c) There was formerly provided a system of annual contributions to be payable over a 45-year period, with an initial authorization for contribution contracts aggregating $4,000,000 a year, increasing by a like amount over the succeeding 4 years to a maximum of $20,000,000 per year. The draft legislation substitutes a system of capital grants with an authorization for contracts aggregating $100,000,000 on and after July 1, 1948, and increasing by a like amount on the first day of July in each of the years 1949, 1950, 1951, and 1952—a total authorization of $500,000,000. (d) The draft legislation includes requirements that the local agencies undertaking projects assisted under the title shall not disburse funds for the purchase of land prior to July 1, 1949, and that there shall not be any demolition of residential structures in connection with such a project prior to July 1, 1950, if in the opinion of the governing body of the locality such demolition would result in undue hardship to the occupants of such structures. (e) Operations under this title are brought under the Government Corporation Control Act, with provision for separate accounts and an annual business-or commercial-type audit by the General Accounting Office. (f) The provisions vesting in the Housing and Home Finance Administrator the functions under this title are retained, but there has been added provision for the appointment of a Director to administer the title under the general supervision of the Administrator. Under such circumstances, the provisions of section 812 of S. 866 relating to the nondelegability of functions under this title appear to be unnecessary and have therefore been eliminated. (g) There has been added a section providing that, in extending financial assistance under this title, the Administrator shall give consideration to the extent to which the locality has undertaken a program to encourage housing cost reductions and efficiency in construction through the adoption and improvement of building and other local codes. 8. Title IX-Urban low-rent housing This title (now included as title VI of the draft legislation) includes the following changes: (a) It adds to the requirement of local governing body approval of any project assisted, an additional requirement of approval by such body of the maximum income limits both for admission and continued occupancy and of any changes in such limits. (b) It strengthens and perfects the veterans' preference provisions. Thus, (1) it makes the preferences for admission to projects applicable for the next 5 years instead of the 4-year period formerly provided; (2) it includes in such preferences families of deceased veterans; (3) it gives a first preference to disabled veterans; and (4) it excludes the net income for the purposes of tenant eligibility disability pensions. (c) In line with the more permanent nature of higher building cost levels as indicated by developments during the past year, the title extends to 1951 the 1949 limitation date for higher cost limits ($250 per room). Since this higher limit would be authorized only where necessary for sound construction and to meet an acute need in the locality, the title also eliminates the requirement for a special finding that such temporary higher cost limits are particularly needed for veterans of low income. (d) It reduces the maximum period over which loan and annual contributions assistance may be provided by the Federal Government from the present 60-year period to 40 years-that is, it reduces such period by one-third, as compared with the 60- to 45-year (or 25 percent) reduction formerly provided in S. 866. To make this possible, and also to provide necessary flexibility in financing of projects even under adverse market conditions, it also authorizes an increase of 1 percent of development or acquisition cost in the maximum annual contribution, where annual contributions are thus limited to 40-year periods. (e) It combines the 4-year $26,400,000 annual contribution authorization or low-rent housing in urban areas, and the 5-year $5,000,000 authorization for low-rent nonfarm housing in rural areas, into a single 5-year, $32,000,000, authorization for low-rent housing generally. This change is also designed to meet the higher level of building costs. (f) In connection with lending operations, it now requires that all borrowings by the Public Housing Administration for the purposes of the act be from the Treasury. Also, in order to facilitate private financing of the capital cost of low-rent housing projects, it contains an amendment to the Banking Act to enable better participation by national banks and State member banks of the Federal Reserve System. (g) It eliminates the special provisions with respect to rehabilitation of existing structures. (h) It eliminates the provision for certain types of advance loans. to local housing authorities for the planning of low-rent-housing projects. 9. Title X-Farm housing This title (now included as title VII of the draft legislation) has been changed with respect to the provisions authorizing the Secretary of Agriculture to borrow from the Reconstruction Finance Corporation the funds for loan purposes under the title. Since the enactment of Public Law 132, Eightieth Congress, approved June 30, 1947, this type of assistance is no longer authorized, and provisions are now included which authorize the Secretary of Agriculture to borrow the loan funds directly from the Treasury. 10. Title XI-Rural nonfarm housing This title has been eliminated since it is believed that satisfactory operations in rural areas can be obtained under the existing legislation with the public low-rent-housing amendments provided in title VI of the draft legislation. 11. Title XII-Disposition of permanent federally owned housing This title has been eliminated. Since the time for filing applications for the transfer of such housing for low-rent use has expired and the applications received are now under study, it is felt that legislation on this question should be deferred until the examination of such applications has been finished and the complete picture can be presented for consideration. 12. Title XIII-Miscellaneous provisions This title has been revised and shortened. The only major change involves the inclusion of salary provisions, which were included in titles II and III of S. 866 and contemplated a salary of $15,000 per annum for the Administrator and salaries of $12,000 per annum for the Commissioners and members of the Home Loan Bank Board. In line with subsequent developments the rates of compensation now provided would be $17,500 per annum and $15,000 per annum, respectively. INDEX TO THE DRAFT LEGISLATION TITLES AND SECTIONS CROSS REFERENCED TO THE CORRESPONDING TITLES AND SECTIONS OF S. 866 Draft legislation-Titles or section S. 866-Corresponding titles or section numbers Sec. 2-Declaration of national housing Title I. policy. Title I-FHA title VI and transitional numbers |