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Box 7, Folder 13, Document 4
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MAJOR PROVISIONS OF THE
"HOUSING AND URBAN DEVELOPMENT ACT
OF 1968"
(H. R» 17989, as ortered reported by the House
Committee on Banking and Currency on June 20, 1968)
TITLE I -- Sales Housing-- Low and Moderate Income Families
Home Ownership
*%
=
Income Eligibility--families of "low and moderate"income.
Subsidy--Difference between 20 percent of homeowner's income
after. deducting $200 for each minor child and monthly mortgage
payment. Market interest rates may be subsidized down to a .
minimum of one percent.
ESTIMATED MGNTHLY ASSISTANCE PAYMENTS UNDER SEC 215, BY MORTGAGE AMOUNT AND HOMEQW TIER S
ANNUAL INCOME BASED ON 6',-PERCENT 35-YEAR MORIGAGE WITH by-PERSENT MORTGAGE INSURATICE
PREMIUM
. 20 percaat Mortgaze amicunt
Adjusted anaval income! of monthly ——--- - — a
income $3,000 $19,000) S42 09) §4.0od S150 «= S17,500 | $20.)
i) a S00 317,63 $22.82 $35. 72 oO Q () ()
- 2 60 Tal 22,54 33. £A 1.34 $37.15 cy G)
7 : 12.34 29. 06 35,32 54,83 *66. 63 7
©) 19, 65 i. 52 44 25 65.77 $75, 20
i y AS 99 cea siicete 9. 86 73.32 34,85 a6 27 7a 20
oA «bies= Ica apssaat) Baecp es 7s io, 5! 24 85 46.27 67,32
$6492. weyers NEG ee 9 as act, Sa B52 14.85 25.27 37. 52
57,200. : 0... a ae ee Wehtg cas @) 26,27 47,52
$7300. 130... ,--. © otntepegtart taste apzsadeeai 16,27 37, 52
Moathiy paymest dus tha
martg2 328 che ! 67,63 87.81 53.6 11.52 71. 89 1f5 27 167. 52
Mazimum subsrdy.. mi f 30, 48 28.10 45.72 Shi 37,13 66. 67 ie 20
' Total income oft fawity less PICO for each murar held aed any inecata saved by a micas ch'ld,
=Cost ly Suyar sald exceed 13 percent of his movibly income in adadibon a assistance gayiei's ia order to maat
Paymests on ths martzige amourt.
a Lass than $3
Source: Departiredit af Housing and Urbad Devlor.nent,
Maximum mortgage amounts-$15,000 per unit generally, but $17,500
for families of five or more (additional $2,500 in high cost area.)
Structures eligible--new construction, substantial rehabilitation,
and existing housing.
Contract Authorization--$75 million for FY 1969; $100 million for
FY 1970; $125 million for FY 1971. (subject to appropriations. )
Special Mortgage Risks
*
*
Special FHA mortgage insurance for ‘low and moderate income” families
who cannot meet regular credit standards, but who are "reasonably
satisfactory" risks with budget and related counseling.
Authorizes FHA mortgage insurance in older, declining urban areas
on the basis of "acceptable risk."
Aid to Nonprofit Sponsors
*
Technical assistance and information.
=2-
* 80 percent interest-free loans to cover preconstruction costs.
* $7.5 million authorization for lst year; $10 million in Fy 1970.
National Home Ownership Foundation
* A corporation to provide technical and limited financial assistance
to help provide housing for lower income families,
* Appropriation of $10 million authorized.
Insurance Protection for Home Owners
* Secretary to develop insurance plan in cooperation with private .
industry against foreclosure because income curtailed.
TITLE II-- Rental Housing for Low and Moderate Income Families
* Sponsors--nonprofit, limited dividend or cooperatives.
* Income levels and authorizatlon--same as in Title I Homeownership
ESTIMATED REDUCTION IN MONTHLY RENTAL UNOER SEC, 236, BY MORTGAGE AMOUNT AND TENANT'S ANNUAL
INCOME BASED ON 67,-PERCENT 40-YEAR MORTGAGE WITH 12-PERCENT MORTGAGE INSURANCE PREMIUM
20 percent Mortgage amount
Annual incame of monthly - 2
income $8,000 $10,000 $12,000 $14.00 $15,000 $1,000
$3,000 +A +. exe $50 $31.45 () a) : * Cc
$3,409 = 5? 31.45 $39.3] ¢) 8 3 «a
$4,900 . 67 a1. 45 39, 31 «© (: Q) ()
$4,690 uf a 25,27 39. 31 $47.18 ) «) ()
$5,200 ashes a7 15.27 46. 15 AT. 18 $55.04 $58.97 $25, 83
$5,900 97 5.27 26,15 47.18 55. 04 58.97 60. 53
$6,400 107 16. 15 40.79 55. 04 58.97 63, 35
$7,559 17 6.15 30.79 55. 04 58. S7 £5.23
$7.400 127 20.79 45.40 53.33 56. 23
Basic rents! charge 70. 82 83,84 100 61 LI? 36 121,36 (27.53
Fair market renal charge t 102.27 123 15 147.79 172, 40 180. 33 194. 22
' Rounded.
= Cost lo tenant would exceed 30 percent of his monthly income in order.to meet basic rental on this mortgage amount,
Source: Department of Housing and Urban Development.
* Subsidy--Same as in Title I; occupants would pay 20 percent of
income toward rent.
Rent Supplements
* A two-year authorization; $40 million for FY 1970; $100 million
for FY 1971.
Public Housing
* <A three-year authorization; $100 million on date of enactment;
$150 million in FY 1970 and $150 million FY 1971.
* Authorization of up to $20 million for improved management activities
and tenant services in FY 1969; and up to $40 million in Fy 1970.
=3~
TITLE III -- FHA Insurance Operations
*%
TITLE IV
Home Improvement Loans--increases loan limitation from $3,500
to $5,000; extends maturity from five to seven years. Small
increase in financing charge.
Other technical FHA amendments.
-- Urban Renewal
Neighborhood Development Program--new financing approach for renewal
projects funded by annual increments.
Increase authorization for renewal projects by $1.4 billion in FY
1970; for renewal projects in model cities, $350 million for FY 1969.
Rehabilitation Grants--increased from $1,500 to $3,000 to low-income
home owners.
Rehabilitation Loans--program extended to June 30, 1973.
Interim Assistance--new grant program for alleviating harmful
conditions in blighted areas where renewal or code enforcement
planned but immediate action needed.
Majority of housing units in a community's future residentially
redeveloped projects must be for low and moderate families and
persons, but at least 20 percent of the units mst be for low
income families.
TITLE V -- Urban Planning and Facilities
*
TITLE VI
Comprehensive urban planning grants for rural areas through State
planning agencies; authorization. increased $35 million for FY 1969;
$125 million for FY 1970.
Planned Areawide-Development--extends to non-metropolitan areas
supplementary planning grants up to 20 percent of project cost
if planning and coordinating standards met.
Water and Sewer Facilities--Interim planning requirements extended
to October 1, 1969; and previous unused authorization restored,
plus an additional $300 million for FY 1968 and FY 1969. Total
available authorization for FY 1970 $885 million.
Open Space land--$150 million authorization for FY 1970.
-- Urban Mass Transportation
Authorizes $190 million for a FY 1970 total of $230 million.
Emergency Mass Transportation Program extended from November 1, 1968
to October 1, 1969.
TITLE VII -- Secondary Mortgage Market
* FNMA's present Secondary Market operation would be turned over to
a Government chartered privete corporation know as FNMA.
* ‘The present special assistance and management and liquidating
functions to be operated by the new Government National Mortgage
Association. (GNMA)
* Increase of $500 million special assistance on July 1, 1969.
* GNMA authorized to guarantee securities backed by FHA and VA
mortgage and loans insured by Farmers Home Administration.
TITLE VIII -- National Housing Partnership (NHP)
* NHP would join with local investors to moblize private capital
and business skills to build low and moderate income housing.
* (Investors as limited partnership have no liability beyond investment;
investors do have possible tax advantage on any partnership losses.
TITLE IX -- Rural Housing
* Authorizes direct and insured loans in rural areas for low and
moderate income families and to coops for rental housing where
Title I or II assistance not available. Interest supplements
available.
* Grants and loans administered by Secretary of Agriculture to
assist mitual and self help housing,
TITLE X -- National Insurance Development Corporation
* Federal program of reinsurance against property loss from riots to
private insurance companies so as to continue regular line coverage
against extraordinary losses,
* Losses to be shared by companies, the State, and by the corporation.
* FAIR plans required to assure property owners fair access to property
insurance.
% Rehabilitation loans and grants would be available to property
owners to assist them in bringing their property up to insurable
standards (amendment in Title IV),
TITLE XI -- Flood Insurance
* Amends House passed Flood Insurance Bill to provide a ceiling of
$150 million in borrowing authority.
-5-
TITLE XIT -- FHA Mortgage Insurance for Nonprofit Hospitals
* WNew FHA mortgage insurance program for nonprofit groups to
build and rehabilitate hospitals.
* Maximum mortgage amount not to exceed $25 million and 90 percent
replacement cost.
TITLE XIII -- Housing Goals and Annual Housing Report
* Congress affirms national housing goals in 1949 Housing Act.
* Congress determines the need within next 10 years for con-
struction and rehabilitation of 26 million units, 6 million
of which are for low and moderate income families.
* Report by HUD Secretary annually to President and Council of
Economic Advisors of number of new and rehabilitated units in
the past year, whether 10 year goal is being met, and
legislative and administrative recommendations.
TITLE XIV -- Miscelianeous
* $1 billion authorization for Model Cities for FY 1970 and
$12 million planning authorization for FY 1969.
* <A new College Housing program, involving grants to reduce the
cost of borrowing from private sources. Grants limited to
$10 million annually ($20 million annually after June, 1969.)
* A new Assistant HUD Secretary for Research and Development.
* <A limited expansion of lending SES powers of savings and
loan institutions.
"HOUSING AND URBAN DEVELOPMENT ACT
OF 1968"
(H. R» 17989, as ortered reported by the House
Committee on Banking and Currency on June 20, 1968)
TITLE I -- Sales Housing-- Low and Moderate Income Families
Home Ownership
*%
=
Income Eligibility--families of "low and moderate"income.
Subsidy--Difference between 20 percent of homeowner's income
after. deducting $200 for each minor child and monthly mortgage
payment. Market interest rates may be subsidized down to a .
minimum of one percent.
ESTIMATED MGNTHLY ASSISTANCE PAYMENTS UNDER SEC 215, BY MORTGAGE AMOUNT AND HOMEQW TIER S
ANNUAL INCOME BASED ON 6',-PERCENT 35-YEAR MORIGAGE WITH by-PERSENT MORTGAGE INSURATICE
PREMIUM
. 20 percaat Mortgaze amicunt
Adjusted anaval income! of monthly ——--- - — a
income $3,000 $19,000) S42 09) §4.0od S150 «= S17,500 | $20.)
i) a S00 317,63 $22.82 $35. 72 oO Q () ()
- 2 60 Tal 22,54 33. £A 1.34 $37.15 cy G)
7 : 12.34 29. 06 35,32 54,83 *66. 63 7
©) 19, 65 i. 52 44 25 65.77 $75, 20
i y AS 99 cea siicete 9. 86 73.32 34,85 a6 27 7a 20
oA «bies= Ica apssaat) Baecp es 7s io, 5! 24 85 46.27 67,32
$6492. weyers NEG ee 9 as act, Sa B52 14.85 25.27 37. 52
57,200. : 0... a ae ee Wehtg cas @) 26,27 47,52
$7300. 130... ,--. © otntepegtart taste apzsadeeai 16,27 37, 52
Moathiy paymest dus tha
martg2 328 che ! 67,63 87.81 53.6 11.52 71. 89 1f5 27 167. 52
Mazimum subsrdy.. mi f 30, 48 28.10 45.72 Shi 37,13 66. 67 ie 20
' Total income oft fawity less PICO for each murar held aed any inecata saved by a micas ch'ld,
=Cost ly Suyar sald exceed 13 percent of his movibly income in adadibon a assistance gayiei's ia order to maat
Paymests on ths martzige amourt.
a Lass than $3
Source: Departiredit af Housing and Urbad Devlor.nent,
Maximum mortgage amounts-$15,000 per unit generally, but $17,500
for families of five or more (additional $2,500 in high cost area.)
Structures eligible--new construction, substantial rehabilitation,
and existing housing.
Contract Authorization--$75 million for FY 1969; $100 million for
FY 1970; $125 million for FY 1971. (subject to appropriations. )
Special Mortgage Risks
*
*
Special FHA mortgage insurance for ‘low and moderate income” families
who cannot meet regular credit standards, but who are "reasonably
satisfactory" risks with budget and related counseling.
Authorizes FHA mortgage insurance in older, declining urban areas
on the basis of "acceptable risk."
Aid to Nonprofit Sponsors
*
Technical assistance and information.
=2-
* 80 percent interest-free loans to cover preconstruction costs.
* $7.5 million authorization for lst year; $10 million in Fy 1970.
National Home Ownership Foundation
* A corporation to provide technical and limited financial assistance
to help provide housing for lower income families,
* Appropriation of $10 million authorized.
Insurance Protection for Home Owners
* Secretary to develop insurance plan in cooperation with private .
industry against foreclosure because income curtailed.
TITLE II-- Rental Housing for Low and Moderate Income Families
* Sponsors--nonprofit, limited dividend or cooperatives.
* Income levels and authorizatlon--same as in Title I Homeownership
ESTIMATED REDUCTION IN MONTHLY RENTAL UNOER SEC, 236, BY MORTGAGE AMOUNT AND TENANT'S ANNUAL
INCOME BASED ON 67,-PERCENT 40-YEAR MORTGAGE WITH 12-PERCENT MORTGAGE INSURANCE PREMIUM
20 percent Mortgage amount
Annual incame of monthly - 2
income $8,000 $10,000 $12,000 $14.00 $15,000 $1,000
$3,000 +A +. exe $50 $31.45 () a) : * Cc
$3,409 = 5? 31.45 $39.3] ¢) 8 3 «a
$4,900 . 67 a1. 45 39, 31 «© (: Q) ()
$4,690 uf a 25,27 39. 31 $47.18 ) «) ()
$5,200 ashes a7 15.27 46. 15 AT. 18 $55.04 $58.97 $25, 83
$5,900 97 5.27 26,15 47.18 55. 04 58.97 60. 53
$6,400 107 16. 15 40.79 55. 04 58.97 63, 35
$7,559 17 6.15 30.79 55. 04 58. S7 £5.23
$7.400 127 20.79 45.40 53.33 56. 23
Basic rents! charge 70. 82 83,84 100 61 LI? 36 121,36 (27.53
Fair market renal charge t 102.27 123 15 147.79 172, 40 180. 33 194. 22
' Rounded.
= Cost lo tenant would exceed 30 percent of his monthly income in order.to meet basic rental on this mortgage amount,
Source: Department of Housing and Urban Development.
* Subsidy--Same as in Title I; occupants would pay 20 percent of
income toward rent.
Rent Supplements
* A two-year authorization; $40 million for FY 1970; $100 million
for FY 1971.
Public Housing
* <A three-year authorization; $100 million on date of enactment;
$150 million in FY 1970 and $150 million FY 1971.
* Authorization of up to $20 million for improved management activities
and tenant services in FY 1969; and up to $40 million in Fy 1970.
=3~
TITLE III -- FHA Insurance Operations
*%
TITLE IV
Home Improvement Loans--increases loan limitation from $3,500
to $5,000; extends maturity from five to seven years. Small
increase in financing charge.
Other technical FHA amendments.
-- Urban Renewal
Neighborhood Development Program--new financing approach for renewal
projects funded by annual increments.
Increase authorization for renewal projects by $1.4 billion in FY
1970; for renewal projects in model cities, $350 million for FY 1969.
Rehabilitation Grants--increased from $1,500 to $3,000 to low-income
home owners.
Rehabilitation Loans--program extended to June 30, 1973.
Interim Assistance--new grant program for alleviating harmful
conditions in blighted areas where renewal or code enforcement
planned but immediate action needed.
Majority of housing units in a community's future residentially
redeveloped projects must be for low and moderate families and
persons, but at least 20 percent of the units mst be for low
income families.
TITLE V -- Urban Planning and Facilities
*
TITLE VI
Comprehensive urban planning grants for rural areas through State
planning agencies; authorization. increased $35 million for FY 1969;
$125 million for FY 1970.
Planned Areawide-Development--extends to non-metropolitan areas
supplementary planning grants up to 20 percent of project cost
if planning and coordinating standards met.
Water and Sewer Facilities--Interim planning requirements extended
to October 1, 1969; and previous unused authorization restored,
plus an additional $300 million for FY 1968 and FY 1969. Total
available authorization for FY 1970 $885 million.
Open Space land--$150 million authorization for FY 1970.
-- Urban Mass Transportation
Authorizes $190 million for a FY 1970 total of $230 million.
Emergency Mass Transportation Program extended from November 1, 1968
to October 1, 1969.
TITLE VII -- Secondary Mortgage Market
* FNMA's present Secondary Market operation would be turned over to
a Government chartered privete corporation know as FNMA.
* ‘The present special assistance and management and liquidating
functions to be operated by the new Government National Mortgage
Association. (GNMA)
* Increase of $500 million special assistance on July 1, 1969.
* GNMA authorized to guarantee securities backed by FHA and VA
mortgage and loans insured by Farmers Home Administration.
TITLE VIII -- National Housing Partnership (NHP)
* NHP would join with local investors to moblize private capital
and business skills to build low and moderate income housing.
* (Investors as limited partnership have no liability beyond investment;
investors do have possible tax advantage on any partnership losses.
TITLE IX -- Rural Housing
* Authorizes direct and insured loans in rural areas for low and
moderate income families and to coops for rental housing where
Title I or II assistance not available. Interest supplements
available.
* Grants and loans administered by Secretary of Agriculture to
assist mitual and self help housing,
TITLE X -- National Insurance Development Corporation
* Federal program of reinsurance against property loss from riots to
private insurance companies so as to continue regular line coverage
against extraordinary losses,
* Losses to be shared by companies, the State, and by the corporation.
* FAIR plans required to assure property owners fair access to property
insurance.
% Rehabilitation loans and grants would be available to property
owners to assist them in bringing their property up to insurable
standards (amendment in Title IV),
TITLE XI -- Flood Insurance
* Amends House passed Flood Insurance Bill to provide a ceiling of
$150 million in borrowing authority.
-5-
TITLE XIT -- FHA Mortgage Insurance for Nonprofit Hospitals
* WNew FHA mortgage insurance program for nonprofit groups to
build and rehabilitate hospitals.
* Maximum mortgage amount not to exceed $25 million and 90 percent
replacement cost.
TITLE XIII -- Housing Goals and Annual Housing Report
* Congress affirms national housing goals in 1949 Housing Act.
* Congress determines the need within next 10 years for con-
struction and rehabilitation of 26 million units, 6 million
of which are for low and moderate income families.
* Report by HUD Secretary annually to President and Council of
Economic Advisors of number of new and rehabilitated units in
the past year, whether 10 year goal is being met, and
legislative and administrative recommendations.
TITLE XIV -- Miscelianeous
* $1 billion authorization for Model Cities for FY 1970 and
$12 million planning authorization for FY 1969.
* <A new College Housing program, involving grants to reduce the
cost of borrowing from private sources. Grants limited to
$10 million annually ($20 million annually after June, 1969.)
* A new Assistant HUD Secretary for Research and Development.
* <A limited expansion of lending SES powers of savings and
loan institutions.
Comments