Insurance benefits would generally be similar to those authorized for mortgages insured under section 221 of the National Housing Act. Payments on claims would be made either in cash or debentures and could be in an amount equal to the unpaid principal balance of the loan plus any accrued interest and any advances made by the mortgagee with approval of the Secretary and under the provisions of the mortgage, where permitted in the regulations prescribed by the Secretary. Income such as insurance premiums and service charges in connection with the covered programs would be deposited in the new fund. Administrative expenses in connection with these programs and expenses incurred with respect to defaults would be charged to the fund.

Section 105. Condominium and cooperative ownership for low and moderate income families

Subsection (a) adds to section 221 of the National Housing Act two new subsections ((i) and (j)) to permit section 221 (d) (3) belowmarket interest rate rental projects to be converted to condominium or cooperative ownership. The new subsection (i) permits the conversion of such a project to a plan of family unit ownership, and authorizes the Secretary of HUD to insure mortgages financing the purchase of the individual units by persons whose income is within the section 221(d) (3) limits at prices not exceeding the appraised value of the property involved. The interest rate would be determined by the Secretary, but could not be less than the below-market rate and would be increased to reflect increases in the mortgagor's income or upon the termination of the mortgagor's occupancy of the unit otherwise than through sale to an approved nonprofit purchaser or a low or moderate income purchaser whose income is within the section 221 (d) (3) limits. The new subsection (j) permits the conversion of such a project to cooperative ownership, and authorizes the Secretary to insure mortgages financing the purchase of such projects by cooperatives whose membership consists of families whose incomes are within the limits prescribed for section 221(d) (3) below-market interest rate projects; the principal obligation of the mortgage could not exceed the appraised value of the property for continued use as a cooperative.

Subsection (b) and (c) amend section 221 (g) of such act to make section 221's insurance payment provisions applicable to mortgages insured under the new programs.

Subsection (d) amends section 221(f) of such act to permit, with respect to mortgages insured under the new programs, the same discretionary full or partial waiver of the mortgage insurance premium as is presently provided for mortgages insured under section 221(d) (3) and (h).

Section 106. Assistance to nonprofit sponsors of low and moderate income housing

Subsection (a) authorizes the Secretary of HUD (directly or by contract) to provide information, advice, and technical assistance with respect to the construction, rehabilitation, and operation of low and moderate income housing by nonprofit organizations.

Subsection (b) authorizes the Secretary to make 80-percent interestfree loans to nonprofit organizations from a newly created revolving fund to cover preconstruction costs in connection with low and moderate income housing undertakings under federally assisted programs.

Appropriations to the revolving fund are authorized in amounts not exceeding $7.5 million for fiscal year 1969 and $10 million for fiscal year 1970. Loans under the program would normally be repaid when the project involved is permanently financed, but the Secretary is authorized to cancel any part of such a loan which cannot be recovered from the proceeds of the permanent financing.

Section 107. National Homeownership Foundation

Subsection (a) creates a Government-chartered nonprofit private corporation known as the National Homeownership Foundation to carry out a continuing program of encouraging private and public organizations at all levels to provide increased homeownership and housing opportunities in urban and rural areas for lower income families.

Subsection (b) provides for the administration of the foundation by a board of directors consisting of 18 members; 15 are to be appointed by the President, and the other three are the Secretary of HUD, the Secretary of Agriculture, and the Director of OEO. The board will appoint an executive director as the foundation's executive officer.

Subsection (c) directs the foundation to assist public and private organizations in initiating, developing, and conducting programs to expand homeownership and housing opportunities for lower income families.

Subsection (d) authorizes the foundation to make grants and loans to public and private organizations carrying out homeownership and housing opportunity programs for lower income families to help defray organizational and administrative expenses, pay for certain necessary preconstruction costs, and pay for the cost of programs providing counseling or similar services to lower income families for whom housing is being provided. To be eligible for a grant or loan the organization must show that the funds requested are not otherwise available from Federal sources.

Subsection (e) directs the foundation to coordinate its activities and consult with the Department of HUD and other Federal agencies. Subsection (f) directs the foundation to submit an annual report to the President and the Congress.

Subsection (g) provides for a GAO audit of the foundation's financial transactions.

Subsection (h) provides for the deposit of the foundation's funds in financial institutions actively engaged in housing activities for lower income families.

Subsection (i) authorizes the appropriation to the foundation of $10 million to carry out its activities. (The foundation is authorized in subsection (a) (6) to receive donations and grants from individuals and from public and private organizations, foundations, and agencies.) Section 108. New technologies in the development of housing for lower income families

Subsection (a) directs the Secretary of HUD to institute a program under which qualified public and private organizations will submit plans for the development of housing for lower income families, using new and advanced technologies, on Federal land made available for that purpose or other land which is suitable.

Subsection (b) directs the Secretary to approve up to five plans utilizing new housing technologies which are submitted to him under the program, considering (among other things) the potential of the technology employed and the ability of the organization submitting the plan to produce at least 1,000 dwelling units a year utilizing that technology.

Subsection (c) directs the Secretary to seek to achieve the construction of at least 1,000 dwelling units a year over a 5-year period for each of the various types of technologies proposed in the plans approved.

Subsection (d) authorizes the transfer to the Secretary of certain Federal land which is excess property for use in carrying out the program.

Subsection (e) directs the Secretary to report at the earliest practicable date with respect to projects assisted under the program, together with his recommendations.

Subsection (f) amends section 233 of the National Housing Act to authorize FHA insurance of mortgages covering projects carried out under the new program. It also makes the same benefits (e.g., interest subsidies) with respect to any mortgage insured under section 233 as would have been available under the basic section of the act pursuant to which it is insured.

Section 109. Insurance protection for homeowners

This section authorizes the Secretary of HUD (in cooperation with the private insurance industry) to develop a plan for the establishment of an insurance program to help homeowners in meeting mortgage payments in times of personal economic adversity, and directs him to submit to the Congress within 6 months (after consulting with other Federal agencies and instrumentalities which insure or guarantee home mortgages) a report thereon together with his recommendations. Section 110. National Advisory Commission on Low-Income Housing This section establishes a National Advisory Commission on LowIncome Housing to undertake a comprehensive study and investigation of the resources and capabilities in the public and private sectors of the economy which may be used to fulfill more completely the objectives of the national goal of "a decent home and a suitable living environment for every American family," particularly as such goal relates to low-income families. The Commission is directed to submit to the President and the Congress an interim report with respect to its findings and recommendations not later than July 1, 1969, and a final report not later than July 1, 1970.

TITLE II-RENTAL HOUSING FOR LOWER INCOME FAMILIES

Part A-Private Housing

Section 201. Rental and cooperative housing for lower income families Subsection (a) adds to title II of the National Housing Act a new section 236, establishing for lower income families a rental and cooperative housing assistance program, under which interest reduction payments will be made to the mortgagee to reduce the monthly payment which the owner of a rental or cooperative project is required

to pay for principal, interest, and mortgage insurance premiums under the mortgage covering the project to that amount which would be required for principal and interest if the mortgage bore interest at the rate of 1 percent. The mortgage must be insured under subsection (j) of the new section (except that certain projects which are owned by private nonprofit entities, limited-dividend entities, or cooperative housing corporations and are financed through State or local assistance programs may also be approved, prior to the completion of construction or substantial rehabilitation, for interest reduction payments under the new section).

Each tenant or cooperative member would pay either a basic rental charge (determined on the basis of operating the project with a 1-percent mortgage) or such greater amount as represented 25 percent of his income (determined with a $300 deduction for each minor person in the family and without regard to any income of such minor, and recertified at least every 2 years), but not in excess of the fair market rental charge. Any amounts collected in excess of the basic rental charge would be returned to the Secretary and placed in a revolving fund for use in making other interest reduction payments.

Tenants of these projects who pay less than the fair market rental charge for their units would generally have to have incomes, at the time of the initial rent-up of the projects, not in excess of 135 percent of the maximum income limits that could be established in the area for initial occupancy in public housing dwellings. However, up to 20 percent of the contract funds, authorized in appropriation acts, may be made available for projects in which some or all the units will be occupied, at the time of the initial rent-up, by tenants whose incomes exceed the above limit but do not exceed 90 percent of the income limits for occupancy of section 221(d) (3) BMIR projects. These limitations are to be administered so as to accord a preference to those families whose incomes are within the lowest practicable limits for obtaining rental accommodations in projects assisted under this section. A deduction of $300 for each minor person in the family is permitted in calculating income for purposes of determining eligibility, and any income of such minors is also to be disregarded for this purpose. The Secretary is to report annually to the Banking and Currency Committees with respect to income levels of families assisted.

To qualify for mortgage insurance under this section, a mortgagor would have to be a nonprofit organization, a cooperative, or a limiteddividend entity of the types permitted under section 221 (d) (3) or (e) of the National Housing Act. In addition, the mortgage limitations with respect to maximum mortgage amount and the amount of the mortgage attributable to each dwelling unit would be the same as those for mortgages insured under section 221 (d) (3).

Mortgage insurance would also be available under this section to enable a cooperative or private nonprofit organization to purchase a project from a limited-dividend mortgagor. In such a case, the Secretary would be authorized to insure the purchaser's mortgage in an amount not exceeding the appraised value of the property at the time of purchase which value shall be based upon a mortgage amount on which the debt service can be met from the income of the property when operated on a nonprofit basis.

A project insured under this section could include such nondwelling facilities as the Secretary deemed adequate and appropriate to serve

the occupants of the project and the surrounding neighborhood, as long as the project was predominantly residential and any nondwelling facilities contributed to the economic feasibility of the project, with due consideration being given to the possible effect of the project's commercial facilities on other business enterprises in the community. Where a project was designed primarily for occupancy by elderly or handicapped families (as defined in sec. 202 of the Housing Act of 1959), it could include related facilities for use of such families, such as dining, work, recreation, and health facilities.

Individuals of lower income under 62 years of age would be eligible for occupancy in a project, as long as no more than 10 percent of the dwelling units in the project was so occupied.

With the approval of the Secretary, a mortgagor could sell the individual dwelling units to lower income purchasers, including elderly or handicapped, and these purchasers could qualify for individual assistance payments under the provisions of the new section 235.

The aggregate amount of interest reduction payment contracts, as approved in appropriation acts, could not initially exceed $75 million, which limit would be increased by $100 million on July 1, 1969, and by an additional $125 million on July 1, 1970. (A reasonable portion of this authority is to be transferred to the Secretary of Agriculture for use in rural areas and small towns.)

Subsection (b) amends sections 212 and 227 of the National Housing Act to make FHA's labor standards provisions and cost certification provisions applicable to projects financed with mortgages insured under the new section 236 program.

Subsection (c) authorizes the Secretary to transfer to the new section 236 (j) insurance program any below-market interest rate mortgage approved but not finally endorsed under FHA's section 221(d) (3) program.

Subsection (d) authorizes the Secretary to insure, under the new section 236(j), at any time up to or within a reasonable period after project completion, any mortgage given to refinance a loan made under section 202 of the Housing Act of 1959.

Subsection (e) permits up to 20 percent of the units in any one project to be occupied by tenants receiving rent supplement benefits under section 101 of the Housing and Urban Development Act of 1965. In addition, the subsection amends the rent supplement law to permit a deduction of $300 for each minor person in the tenant's family for purposes of determining the tenant's eligibility for assistance as well as his contribution toward the monthly rental, and any income of such minors is also to be disregarded for this purpose.

Subsection (f) amends section 207 of the Appalachian Regional Development Act of 1965 to reflect the new section 236 program.

Subsection (g) amends section 305 (i) of the National Housing Act to authorize the purchase of section 236 construction loans (as well as the section 236 (j) mortgages themselves) under FNMA's special assistance functions.

Section 202. Rent supplement program

Subsection (a) amends section 101(a) of the Housing and Urban Development Act of 1965 to increase the contract authority available for the rent supplement program by $40 million beginning with fiscal

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