Full text of Housing and Community Development Act of 1977 and Community Reinvestment Act of 1977

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PUBLIC LAW 95-128—OCT. 12, 1977

Public Law 95-128
95th Congress

.

91 STAT. 1111

v

An Act
To amend certain Federal laws pertaining to community development, housing,
and related programs.

Uct. Iz,
[H.R. 6655]

Be it enacted hy the Senate and House of Representatwes of the
United States of America in Congress assembled^
Housing and
SECTION 1. This Act may be cited as the "Housing and Community Community
Development Act of 1977".

Development Act
42 u s e 5301

TITLE I—COMMUNITY DEVELOPMENT

note.

OBJECTIVES AND PURPOSES OF COMMUNITY DEVELOPMENT ACTIVITIES

SEC. 101. (a) Section 101(c) of the Housing and Community Development Act of 1974 is amended—
42 USC 5301.
(1) by striking out "and" at the end of paragraph (6) ;
(2) by striking out the period at the end of paragraph (7) and
inserting in lieu thereof "; and"; and
(3) by adding the following new paragraph after paragraph
"(8) the alleviation of physical and economic distress through
the stimulation of private investment and community revitalization in areas with population outmigration or a stagnating or
declining tax base."
(b) Section 101(d)(4) of such Act is amended by inserting the
following before the period at the end thereof: "by Federal agencies
and programs, as well as by communities".
DEFINITIONS

SEC. 102. (a) Section 102(a) of the Housing and Community Development Act of 1974 is amended—
42 USC 5302.
(1) by striking out "the Trust Territory of the Pacific Islands;
and Indian tribes, bands, groups, and nations, including Alaska
Indians, Aleuts, and Eskimos, of the United States" in paragraph
' *
(1) and inserting in lieu thereof "and the Trust Territory of the
Pacific Islands";
(2) by inserting before the period at the end of paragraph (4)
the following: "; except that any city which has been classified as
a metropolitan city under clause (B) of this paragraph shall
continue to be so classified until the decennial census indicates that
the population of such city is less than fifty thousand";
(3) by inserting the following before the period at the end of
paragraph (5) : "which have not entered into cooperation agreements with such town or township to undertake or to assist in
the undertaking of essential community development and housing
assistance activities";
(4) by inserting in paragraph (6) "either" before " ( B ) " and
by inserting before the period at the end thereof the following:
"or (C) has a population in excess of one hundred thousand, a

91 STAT. 1112

' . i .<

25 u s e 450 note.
31 u s e 1221
note.
Local
governments,
exclusion from
urban county
population.
Notice.
42 u s e 5302.

PUBLIC LAW 95-128—OCT. 12, 1977
population density of at least five thousand persons per square
mile, and contains within its boundaries no incorporated places as
defined by the United States Bureau of Census";
(5) by redesignating paragraphs (10), (11), (12), and (13) as
paragraphs (17), (18), (19), and (20), respectively; and
(6) by inserting after paragraph (9) the following new paragraphs :
"(10) The term 'age of housing' means the number of existing
housing units constructed in 1939 or earlier based on data compiled by the United States Bureau of the Census and referable to
the same point or period in time.
"(11) The term 'extent of growth lag' means the number of
persons who would have been residents in a metropolitan city or
urban county, in excess of the current population of such metropolitan city or urban county, if such metropolitan city or urban
county had had a population growth rate between 1960 and the
date of the most recent population count referable to the same
point or period in time equal to the population growth rate for
such period of all metropolitan cities.
"(12) The term 'housing stock' means the number of existing
housing units based on data compiled by the United States Bureau
of the Census and referable to the same point or period in time.
"(13) The term 'adjustment factor' means the ratio between
the age of housing in the metropolitan city or urban county and
the predicted age of housing in such city or county.
"(14) The term 'predicted age of housing' means the arithmetic product of the housing stock in the metropolitan city or
urban county multiplied times the ratio between the age of housing in all metropolitan areas and the housing stock in all metropolitan areas.
"(15) The term 'adjusted age of housing' means the arithmetic
product of the age of housing in the metropolitan city or urban
county multiplied times the adjustment factor.
"(16) The term 'Indian tribe' means any Indian tribe, band,
group, and nation, including Alaska Indians, Aleuts, and Eskimos, and any Alaskan Native Village, of the United States, which
is considered an eligible recipient under the Indian Self-Determination and Education Assistance Act (Public Law 93-638) or
under the State and Local Fiscal Assistance Act of 1972 (Public
Law 92-512).".
(b) Section 102 of such Act is amended by adding the following new
subsection at the end thereof:
"(d) An urban countj^ designated under subsection ( a ) ( 6 ) ( B ) ( i )
of this section shall notify, prior to a date set by the Secretary for
each year, all incorporated units of general local government th&
populations of which are included in the population of such urban
county for purposes of this section of their opportunity to exclude
their population from such urban county. Any unit of general local
government which has not elected to have its population so excluded
shall have its population included within the population of such urban
county for purposes of this section until it, on its own initiative, elects
to exclude its population by notifying the urban county on or before
a date set by the Secretary.".

PUBLIC LAW 95-128—OCT. 12, 1977

91 STAT. 1113

AUTHORIZATIONS

SEC. 103. (a) The first sentence of section 103(a) (1) of the Housing
and Community Development Act of 1974 is amended by inserting
"and I n d i a n tribes" after "units of general local government".
(b) Section 1 0 3 ( a ) ( 1 ) of such Act is amended by striking out
everything after t h e first sentence and inserting in lieu thereof the
following: "There are authorized to be appropriated for these purposes not to exceed $3,500,000,000 for the fiscal year 1978, not to
exceed $3,650,000,000 for the fiscal year 1979, and not to exceed
$3,800,000,000 for the fiscal year 1980. A n y amount authorized for
any fiscal year under this section but not appropriated for such year
may be appropriated for any succeeding fiscal year.".
(c) Section 103(a) (2) of such Act is amended to read as follows:
" ( 2 ) Of the amounts approved in appropriations Acts pursuant to
p a r a g r a p h ( 1 ) , $50,000,000 for each of the fiscal years 1975 and 1976,
$200,000,000 for the fiscal year 1977 (not more than 50 per centum of
which amount may be used under section 106(d) ( 1 ) ) , $350,000,000 for
the fiscal year 1978 (of which not more than $175,000,000 may be used
under such section), $265,000,000 for the fiscal year 1979 (of which
not more t h a n $25,000,000 may be used under such section), and
$250,000,000 for the fiscal year 1980 (none of which may be used
under such section) shall be added to the amount available for allocation under section 106(d) and shall not be subject to the provisions
of section 107."
'
(d) Section 103(b) of such Act is amended—
(1) by striking out "for the fiscal year 1977," and inserting
in lieu thereof "for each of the fiscal years 1977, 1978, 1979, and
1980,";
(2) by striking out "to units of general local government having urgent community development needs which cannot be met"
and inserting in lieu thereof "for the financial settlement and, to
the extent feasible, the completion of projects and programs
assisted under the categorical programs terminated in section
116 ( a ) , primarily urban renewal projects assisted under the Housing Act of 1949, to units of general local government which require
supplemental assistance which cannot be provided"; and
(3) by adding at the end thereof the following new sentence:
"No funds shall be made available under this subsection (1) for
fiscal year 1978 unless the amount appropriated under subsection
(a) for fiscal year 1978 is at least $3,500,000,000; (2) for fiscal
year 1979 unless the amount appropriated under subsection (a)
for fiscal year 1979 is at least $3,650,000,000; or (3) for fiscal year
1980 unless the amount appropriated under subsection (a) for
fiscal year 1980 is at least $3,800,000,000.".
(e) Section 103 of such Act is amended by redesignating subsections
(c) and (d) as subsections (d) and ( e ) , respectively, and by a d d i n g
the following new subsection after subsection (b) :
" ( c ) T h e r e is authorized to be appropriated a sum not in excess of
$400,000,000 for supplemental g r a n t assistance under section 119 for
each of the fiscal years 1978,1979, and 1980, except t h a t no funds shall
be made available for such purpose (1) for fiscal year 1978 unless the
amount appropriated under subsections (a) and (b) for fiscal year
1978 is at least $3,600,000,000; (2) for fiscal year 1979 unless the
amount appropriated under subsections (a) and (b) for fiscal year
1979 is at least $3,750,000,000; or (3) for fiscal year 1980 unless t h e
amount appropriated under subsections (a) and (b) for fiscal year
1980 is at least $3,900,000,000.".

42 USC 5303.

•

42 USC 5306.

Post, pp- 1118,
42^USC 5303

^^ USC 5316.
42 USC 1441
^^^^'

42 USC 5303.

Post, p. 1125.

91 STAT. 1114

PUBLIC LAW 95-128—OCT. 12, 1977
APPIJCATION REQUIREMENTS

42 use 5304.

««: rHousing
assistance
P^^";
•

's

,.

,

SEC. 104. (a) Section 104(a) of the Housing and Community Development Act of 1974 is amended—
(1) by inserting "and housing" in paragraph (1) after "which
identifies community development";
(2) by inserting after "needs" in paragraph (2) (B) the following: ", including activities designed to revitalize neighborhoods for the benefit of low^- and moderate-income persons,";
(3) by striking out "and" at the end of paragraph (3) ( A ) ; by
striking out the semicolon at the end of paragraph (3) (B) and
inserting in lieu thereof "and in a manner to insure fully opportunity for participation by, and benefits to, the handicapped;
and"; and by inserting the following new subparagraph after
paragraph (3) ( B ) :
"(C) improve conditions for low- and moderate-income
persons residing in or expected to reside in the community
;'
and foster neighborhood development in order to induce
higher-income persons to remain in, or return to, the
community;";
(4) by striking out paragraph (4) and inserting in lieu thereof
the following:
"(4) submits a housing assistance plan which—
"(A) accurately surveys the condition of the housing stock
in the community and assesses the housing assistance needs of
lower-income persons (including elderly and handicapped
persons, large families, and persons displaced or to be displaced) residing in or expected to reside in the community
and identifies housing stock which is in a deteriorated
condition,
"(B) specifies a realistic annual goal for the number of
dwelling units or lower-income persons to be assisted, including (i) the relative proportion of new, rehabilitated, and
existing dwelling units, (ii) the sizes and types of housing
projects and assistance best suited to the needs of lower..^
income persons in the community, and (iii) in the case of
subsidized rehabilitation, adequate provisions to assure that
a preponderance of persons assisted should be of low- and
moderate-income, and
"(C) indicates the general locations of proposed housing
for lower-income persons, with the objective of (i) furthering
the revitalization of the community, including the restoration
and rehabilitation of stable neighborhoods to the maximum
extent possible, and the reclamation of the housing stock
where feasible through the use of a broad range of techniques
for housing restoration by local government, the private sec"'
tor, or community organizations, including provision of a
reasonable opportunity for tenants displaced as a result of
such activities to relocate in their immediate neighborhood,
(ii) promoting greater choice of housing opportunities and
avoiding undue concentrations of assisted persons in areas
containing a high proportion of low-income persons, and
(iii) assuring the availability of public facilities and services
adequate to serve proposed housing projects;"; and
(5) by striking out paragraph (6) and inserting in lieu thereof
the followina::

PUBLIC LAW 95-128—OCT. 12, 1977
•'^

"(6) provides satisfactory assurances that, prior to submission
of its application, it has (A) prepared and followed a written
citizen participation plan which provides citizens an opportunity
to participate in the development of the application, encourages
the submission of views and proposals, particularly by residents
of blighted neighborhoods and citizens of low- and moderateincome, provides for timely responses to the proposals submitted,
and schedules hearings at times and locations which permit broad
participation; (B) provided citizens with adequate information
concerning the amount of funds available for proposed community
development activities and housing activities, the range of activities that may be undertaken, and other important requirements;
(C) held puijlic hearings to obtain the views of citizens on community development and housing needs; and (D) provided citizens with an opportunity to submit comments concerning the
community development performance of the applicant; but nothing in this paragraph shall be construed to restrict the responsibility and authority of the applicant for the development of the
application and the execution of its community development
program.".
(b) Section 104 (b) (2) of such Act is amended—
(1) by striking out "low- or moderate-income" in the first
sentence and inserting in lieu thereof "low- and moderateincome"; and
(2) by striking out all after "urgency" in the second sentence
and inserting in lieu thereof "because existing conditions pose a
serious and immediate threat to the health or welfare of the community, and other financial resources are not available.".
(c) Section 104(b) (3) of such Act is amended—
(1) by striking out clauses (B) and (C) and inserting in lieu
thereof "(B) the application does not involve a comprehensive
community development program, as determined by the Secretary, and"; and
(2) by redesignating clause (D) as clause (C).
(d) Section 104(c) (3) of such Act is amended by inserting after
'*the requirements of this title" the following: ", with specific regard
to the primary purposes of principally benefiting persons of low- and
moderate-income or aiding in the prevention or elimination of slums
or blight or meeting other community development needs having a
particular urgency,".
(e) Section 104(d) of such Act is amended—
(1) by inserting after the first sentence the following: "The
performance report shall include any citizen comments submitted
pursuant to subsection (a) (6) (D) and the Secretary shall consider such comments, together with the views of other citizens and
such other information as may be available, in carrying out the
provisions of this subsection."; and
(2) by adding at the end thereof the following: "With respect
to grants made pursuant to sections 106(d) (2) and 106(f) (1) (B),
the Secretary may adjust, reduce, or withdraw grant funds, or
take other action as appropriate in accordance with such reviews
and audits, except that funds already expended on eligible activities under this title shall not be recaptured or deducted from
future grants made to the recipient.".
(f) Section 104(e) of such Act is amended by adding the following
new sentence at the end thereof: "In addition, the Secretary may provide an opportunity for the State, in which a grant is to be made to

91 STAT. 1115
Citizen
'
participation
P^^"-

42 USC 5304.

Grants.
Post, p. 1118.

91 STAT. 1116
42 use 5306.

42 use 5304.

Payments,
standards.

Agreements,
review and
approval.

PUBLIC LAW 95-128—OCT. 12, 1977

a unit of general local government under section 106(d)(2) or 106
( f ) ( 1 ) ( B ) , to participate in the selection process for funding such
grants. Such participation may include, as determined practicable by
the Secretary, the incorporation of State growth and resource coordination policies in funding decisions on such grants, or such other
arrangements, excluding administration of the grants referred to in
the preceding sentence, as the Secretary deems appropriate.".
(g) Section 104 of such Act is amended by adding the following
new subsection at the end thereof:
" (i) (1) The Secretary shall, in making funds available to the recipients of grants under this title, permit any such recipient to receive
funds, in one payment, in an amount not to exceed the total amount
designated in the recipient's application, and approved by the Secretary pursuant to this section, for use by the recipient for establishing
a revolving loan fund which is to be established in a private financial
institution and which is to be used to finance rehabilitation activities
that are part of the recipient's community development program. The
Secretary may, as a condition of making such payment, require that
the revolving loan fund be utilized for the making of loans to finance
rehabilitation activities in a manner consistent with this title. Rehabilitation activities authorized under this section shall begin within
forty-five days after the Secretary has made such payment.
"(2) The Secretary shall establish standards for such cash payments which will insure that the deposits result in appropriate benefits
in support of the recipient's rehabilitation program. These standards
shall be designed to assure that the benefits to be derived from the
local program include, at a minimum, one or more of the following
elements, or such other criteria as determined by the Secretary—
"(A) leverage of community development block grant funds
so that participating financial institutions commit private funds
for loans in the rehabilitation program in amounts substantially
in excess of deposit of community development funds;
"(B) commitment of private funds for rehabilitation loans at
below-market interest rates or with repayment periods lengthened
or at higher risk than would normally be taken;
"(C) provision of administrative services in support of the
rehabilitation program by the participating lending institutions;
and
"(D) interest earned on such cash deposits shall be used in a
manner which supports the community rehabilitation program.
At the time of application, the Secretary shall review and approve all
agreements with lending institutions which receive funds for community rehabilitation programs. Such approval shall be made on a
case-by-case basis, and upon a determination by the Secretary that the
agreement with the lending institution meets minimum benefit standards as listed in this paragraph.".
ELIGIBLE ACTIVITIES

42 use 5305.
^

SEC. 105. (a) Section 105(a) of the Housing and Community Development Act of 1974 is amended by inserting the following after "under
this title" the first time it appears therein: "shall consist of activities
which assist in carrying out a comprehensive strategy for meeting
the community development and housing needs and priorities identified pursuant to section 104, giving primary attention to activities
benefiting low- and moderate-income persons and neighborhoods, aiding in the prevention or elimination of slums or blight, or meeting

PUBLIC LAW 95-128—OCT. 12, 1977
other community development needs having a particular urgency.
These activities".
(b) The parenthetical expression in section 105(a) (4) of such Act
is amended to read as follows: "(including interim assistance, and
financing public or private acquisition for rehabilitation, and rehabilitation, of privately owned properties)".
(c) Section 105(a) (8) of such Act is amended by striking out "economic development,", and by inserting before the semicolon at the end
thereof the following: ", and if such services have not been provided
by the unit of general local government (through funds raised by such
unit, or received by such unit from the State in which it is located)
during any part of the twelve-month period immediately preceding
the date of application submission for funds which are to be made available under this title, and which are to be utilized for such services,
unless the Secretary finds that the discontinuation of such services was
the result of events not within the control of the applicant".
(d) Section 105(a) of such Act is amended—
(1) by striking out "and" at the end of paragraph (12);
(2) by striking out the period at the end of paragraph (13) and
inserting in lieu thereof "; and"; and
(3) by adding at the end thereof the following new paragraphs:
- Ki "(14) activities which are carried out by public or private nonprofit entities when such activities are necessary or appropriate to
meeting the needs and objectives of the community development
plan described in section 104(a) (1), including (A) acquisition of
real property; (B) acquisition, construction, reconstruction, rehabilitation, or installation of (i) public facilities, site improvements, and utilities, and (ii) commercial or industrial buildings or
structures and other commercial or industrial real property
improvements; and (C) planning; and
"(15) grants to neighborhood-based nonprofit organizations,
local development corporations, or entities organized under section 301 (d) of the Small Business Investment Act of 1958 to carry
out a neighborhood revitalization or community economic development project in furtherance of the objectives of section 101(c).".
ALLOCATION AND DISTRIBUTION

91 STAT. 1117

42 USC 5305.

"

'"

42 USC 5304.

15 USC 681.
42 USC 5301.

OF FUNDS

SEC. 106. (a) Section 106(a) of the Housing and Community Development Act of 1974 is amended by striking out "(2) or (3)'" in the
second sentence and inserting in lieu thereof "(1) or (2)".
(b) Section 106(b) of such Act is amended by striking out paragraphs (1) through (4) and inserting in lieu thereof the following:
" (b) (1) The Secretary shall determine the amount to be allocated to
each metropolitan city which shall be the greater of an amount that
bears the same ratio to the allocation for all metropolitan areas as
either—
" (A) the average of the ratios between—
"(i) the population of that city and the population of all
^i
metropolitan areas;
"(ii) the extent of poverty in that city and the extent of
poverty in all metropolitan areas; and
"(iii) the extent of housing overcrowding in that city and
the extent of housing overcrowding in all metropolitan areas;
or
"(B) the average of the ratios between—

42 USC 5306.
Metropolitan
"ty.

Ratios, average,

91 STAT. 1118

Urban county.
Ratios, average.

Ante, p. 1117.

'*•' ""

PUBLIC LAW 95-128—OCT. 12, 1977

"(i) the extent of growth lag in that city and the extent
of growth lag in a41 metropolitan cities;
"(ii) the extent of poverty in that city and the extent of
poverty in all metropolitan areas; and
"(iii) the age of housing in that city and the age of housing in all metropolitan areas.
"(2) The Secretary shall determine the amount to be allocated to
each urban county, which shall be the greater of an amount that bears
the same ratio to the allocation for all metropolitan areas as either—
" (A) the average of the ratios between—
"(i) the population of that urban county and the population of all metropolitan areas ;
"(ii) the extent of poverty in that urban county and the
extent of poverty in all metropolitan areas; and
"(iii) the extent of housing overcrowding in that urban
county and the extent of housing overcrowding in all metropolitan areas; or
"(B) the average of the ratios between—
" (i) the extent of growth lag in that urban county and the
extent of growth lag in all metropolitan cities and urban
counties;
"(ii) the extent of poverty in that urban county and the
extent of poverty in all metropolitan areas; and
"(iii) the age of housing in that urban county and the age
of housing in all metropolitan areas.
"(3) In determining the average of ratios under paragraphs (1)
(A) and (2) (A), the ratio involving the extent of poverty shall be
counted twice, and each of the other ratios shall be counted once; and
in determining the average of ratios under paragraphs (1) (B) and
(2) (B), the ratio involving the extent of growth lag shall be counted
once, the ratio involving the extent of poverty shall be counted one
and one-half times, and the ratio involving the age of housing shall be
counted two and one-half times.".
(c) Section 106(b) (5) of such Act is amended—
(1) by striking out " ( 5 ) " and inserting in lieu thereof " ( 4 ) " ;
and
(2) bv striking out "receive" and inserting in lieu thereof "are
entitled to".
(d) Section 106(c) of such Act is amended—
^ .
(1) by striking out "Durin.Qr the jfirst three years for which
funds are approved for distribution to a metropolitan city or
urban county under this section" in the first sentence and inserting in lieu thereof "With respect to funds approved for distribution to a metropolitan citv or urbnn county under this section
during fiscal years 1975,1976, and 1977"; and
(2) by inserting "onlv for such funds approved for distribution
in fiscal years 1975, 1976, and 1977" after "adjusted" in the first
sentence.
(e) Section 106(d) of such Act is amended to read as follows:
"(d) (1) Any portion of the amount allocated to metroDoliton areas
under the first sentence of subsection^ (a) which remains after the allocation of grants to metropolitan cities and urban cotmties in accordance with subsection (b) and any amounts added in accordance with
the provisions of section 103(a) (2) shall be allocated by the Secretary,
first, for grants to metropolitan cities, urban counties, and other units
of general local government within metropolitan areas to meet their
hold-harmless needs as determined under subsections (g) and (h), and,
second, in accordance with the provisions of paragraph (2).

PUBLIC LAW 95-128—OCT. 12, 1977
. " ( 2 ) A n y portion of siicli amounts wliicli remains afters ai)p]yin^
the provisions of p a i a ^ r a p h (1) shall be utilized by the Secretary for
ojrants to units of ^enei'al local government within metropolitan areas
(other than metropolitan cities and urban counties), and States for
use within metropolitan areas, allocatino; for the metropolitan areas
of each State the o:reater of an amount that bears the same ratio to
the allocation for such areas of all States available under this pai-ag r a p h as either—
'' (A) the average of the ratios between—
" ( i ) the poi^ulation of the metropolitan areas in that State
and the population of the metropolitan areas of all S t a t e s ;
" ( i i ) the extent of poverty in the metropolitan areas in that
State and the extent of poverty in the metropolitan areas of
all States; and
" ( i i i ) the extent of housing overciowding in the metropolitan areas in that State and the extent of housing overcrowding in the metropolitan aieas of all States; or
' ' ( B ) the average of the ratios between—
" ( i ) the age of housing in the metropolitan areas in that
State and the age of housing in the metropolitan areas of
all States;
" ( i i ) the extent of poverty in the metropolitan areas in
that State and the extent of poverty in the metroj)olitan ai'eas
of all States; and
" ( i i i ) the ])0]ndation of the metrojiolitan areas in that
State and the population of the metropolitan areas of all
States.
I n determining the average of the ratios under subparagraph ( A ) , the
ratio involving the extent of poverty shall be counted twice and each
of the other ratios shall be counted once; and in determining the average of the ratios undei" subparagraph ( B ) , the ratio involving the age
of housing shall be counted two and one-half times, the ratio involving
the extent of poverty shall be counted one and one-half times, and the
ratio involving population shall be counted once. The Secretary shall,
in order to compensate for the discrepancy between the total of the
amounts to be allocated under this p a r a g r a p h and the total of the
amounts available under such p a r a g r a p h , make a pro rata reduction
of each amount allocated to the metropolitan areas in each State under
such p a r a g r a p h so that the metropolitan areas in each State wall receive
an amount which represents the same percentage of the total amount
available under such paragraph as the percentage which the metropolitan areas of the same State would have received imder such paragraph if the total amount available under that p a r a g r a p h had equaled
the total amount which was allocated under that p a r a g r a p h .
" ( 3 ) If the Secretary approves a grant under p a r a g r a p h (2) to a
unit of general local government which has a comprehensive community development program with provision for hnver-income housing,
the Secretary may make a multiyear commitment, up to three years, to
any such unit of general local government for specified grant amounts,
subject to the availability of appro])riations. In determining whether
to make such a commitment to a unit of general local government, the
Secretary shall give special consideration to those comnninities presently carrying out comprehensive comnnniity development programs,
which are subject to the provisions of subsection (h) ( 2 ) , before nuiking new commitments. In making grants under p a r a g r a p h ( 2 ) , the
Secretary shall establish for each participating unit of general local
government an annual grant at an amount meaningful to the size of

91 STAT. 1119

Ratios, average.

Pro rata
reduction.

Multiyear
commitment.

Annual grant.

91 STAT. 1120

Limitation.

42 use 5306.

42 use 5303.

Ratios, average.

PUBLIC LAW 95-128—OCT. 12, 1977
the unit and the program identified, and shall consider such factors as
the unit's engaging in economic redevelopment activities, past performance of the unit in community development activities, prior and
present funding levels under this title, the function of the unit as a
regional center of economic development and activity, impact on the
unit's growth of national policy or direct Federal program decisions,
the potential for having increased employment within such unit as a
result of community development activity, the physical and economic
deterioration within the unit, the age of housing stock and the extent
of poverty within the unit, the extent to which the unit's activity or
program of activities is necessary to alleviate a serious threat to health
or safety, the capacity of the unit to carry out such programs, and any
other factors deemed, by the Secretary, to be relevant to carrying out
the purposes of this title. The Secretary shall make grants under paragraph (2) in such a manner as to insure that a reasonable proportion
of grants is available to applicants which are not seeking funding for
comprehensive community development programs. The Secretary may
accept and approve commitments for annual grants based on comprehensive community development programs commencing in future fiscal
years subject only to the availability of appropriations. In computing
amounts under paragraph (2), there shall be excluded metropolitan
cities, urban counties, Indian tribes, and units of general local government which are entitled to hold-harmless grants pursuant to
subsection (h).".
(f) Section 106(e) of such Act is amended—
(1) by striking out "during such program period" in the first
sentence and inserting in lieu thereof "within a reasonable time";
and
(2) by striking out "during the same period" in the first
sentence.
(g) Section 106 (f) of such Act is amended—
(1) by striking out paragraph (1) and inserting in lieu thereof
the following:
"(f)(1) Of the amount approved in an appropriation Act under
section 103(a) for grants in any year (excluding the amount provided
for use in accordance with sections 103 (a) (2) and 107), 20 per centum
shall be allocated by the Secretary—
"(A) first, for grants to units of general local government outside of metropolitan areas to meet their hold-harmless needs as
determined under subsection ( h ) ; and
"(B) second, any portion of such amount which remains after
applying the provisions of subparagraph (A) shall be utilized by
the Secretary for grants to units of general local government outside of metropolitan areas and States for use outside the metropolitan areas, allocating for the nonmetropolitan areas of each
State the greater of an amount that bears the same ratio to the
allocation for such areas of all States available under this subparagraph as either—
"(i) the average of the ratios between—
" ( I ) the population of the nonmetropolitan areas in
that State and the population of the nonmetropolitan
areas of all States;
" ( I I ) the extent of poverty in the nonmetropolitan
areas in that State and the extent of poverty in the nonmetropolitan areas of all States; and
" ( I I I ) the extent of housing overcrowding in the
nonmetropolitan areas in that State and the extent of

PUBLIC LAW 95-128—OCT. 12, 1977

91 STAT. 1121

housing overcrowding in the nonmetropolitan areas of all
States; or
" (ii) the average of the ratios between—
" ( I ) the age of housing in the nonmetropolitan areas
in that State and the age of housing in the nonmetropolitan areas of all States;
" ( I I ) the extent of poverty in the nonmetropolitan
areas in that State and the extent of poverty in the nonmetropolitan areas of all States; and
" ( I I I ) the population of the nonmetropolitan areas
in that State and the population of the nonmetropolitan
areas of all States.
In determining the average of the ratios under clause (i) of subparagraph (B) the ratio involving the extent of poverty shall be counted
twice and each of the other ratios shall be counted once; and in determining the average of the ratios under clause (ii) of subparagraph
(B), the ratio involving the age of housing shall be counted two and
one-half times, the ratio involving the extent of poverty shall be
counted one and one-half times, and the ratio involving population
shall be counted once. The Secretary shall, in order to compensate for Pro rata
the discrepancy between the total of the amounts to be allocated under reduction.
subparagraph (B) and the total of the amounts available under such
subparagraph, make a pro rata reduction of each amount allocated to
the nonmetropolitan areas in each State under such subparag?:aph so
that the nonmetropolitan areas in each State wdll receive an amoimt
which represents the same percentage of the total amount available
under such subparagraph as the percentage which the nonmetropolitan areas of the same State would have received under such subparagraph if the total amount available under such subparagraph had
equaled the total amount w^hich was allocated under such
subparagraph.
"(2) If the Secretary approves a grant under paragraph (1) (B) Multiyear
to a unit of general local government which has a comprehensive com- commitment.
munity development program with provision for lower-income
housing, the Secretary may make a multiyear commitment, up to three
years, to any such unit of general local government for specified grant
amounts, subject to the availability of appropriations. In determining
whether to make such a commitment to a unit of general local
government, the Secretary shall give special consideration to those
communities presently carrying out comprehensive community development programs, which are subject to the provisions of subsection
(h)(2), before making new commitments. In making grants under Annual grant,
paragraph (1) (B), the Secretary shall establish for each participating
unit of general local government an annual grant at an amount meaningful to the size of the unit and the program identified, and shall
consider such factors as the unit's engaging in economic redevelopment
activities, past performance of the unit in community development
activities, prior and present funding levels under this title, the function of the unit as a regional center of economic development and
activity, impact on the unit's growth of national policy or direct Federal program decisions, the potential for having increased employment
within such unit as a result of community development activity, the
physical and economic deterioration within the unit, the age of housing
stock and the extent of poverty within the unit, the extent to which
the unit's activity or program activities is necessary to alleviate a
serious threat to health or safety, the capacity of the unit to carry
out such programs, and any other factors deemed, by the Secretary,

91 STAT. 1122

Limitation.

42 use 5306.

Funds
allocation
formula,
adequacy.
Report to
Congress.
"Impaction.

Deficiency.

PUBLIC LAW 95-128—OCT. 12, 1977
to be relevant to carrying out the purposes of this title. The Secretary
shall make grants under paragraph (1) (B) in such a manner as to
insure that a reasonable proportion of grants is available to applicants
which are not seeking funding for comprehensive community development programs. The Secretary may accept and approve commitments
for annual grants based on comprehensive community development
programs commencing in future fiscal years subject only to the availability of appropriations. In computing amounts under paragraph
(1)(B), three shall be excluded units of general local government
which are entitled to hold-harmless grants pursuant to subsection
(h) and Indian tribes.";
(2) by redesignating paragraph (2) as paragraph (3);
(3) by striking out "during such period" in paragraph (3), as
redesignated, and inserting in lieu thereof "within a reasonable
time"; and
(4) by striking "during the same period" in such paragraph,
(h) Section 106(g) (2) of such Act is amended—
(1) by striking out "(b) (2) or (3)" and inserting in lieu
thereof "(b) (1) (A) or (B), or (2) (A) or ( B ) " ; and
(2) by inserting ", as computed under subsection (b) (1) (A) or
(B), or (2) (A) or (B)," immediately before "shall" in clauses
(i) and (ii).
(i) Section 106(i) of such Act is amended—
(1) by striking out "population, poverty, and housing overcrowding" ;
(2) by striking out "receive" and inserting in lieu thereof "are
entitled to"; and
(3) by striking out " ( b ) ( 5 ) " and inserting in lieu thereof
"(b)(4)"".
(j) Section 106 (i) of such Act is amended—
(1) by striking out "not later than thirty days prior to the
beginning of any program period" in the first sentence and inserting in lieu thereof "by such date as the Secretary shall determine";
(2) by inserting "for a hold-harmless grant for a single year"
after "eligibility" in the first sentence; and
(3) by striking out "(b) (5)" in the second sentence and inserting in lieu thereof "(b) (4)".
(k) Section 106(1) of such Act is amended to read as follows:
" (1) Not later than September 30, 1978, the Secretary shall report
to the Congress with respect to the adequacy, effectiveness, and equity
of the formula used for allocation of funds under this title, with specific analysis and recommendation as to the feasibility of utilizing
factors of impaction (such as adjusted age of housing and extent of
poverty) as a measurement consideration, and the feasibility of utilizing a single formula based on the current factors or others, including
regional or area differences in income and cost of living. As used in this
subsection, the term 'impaction' means the intensity, measured in terms
of absolute numbers and proportions of each needs factor.".
(1) Section 106 of such Act is amended by adding the following new
subsection at the end thereof:
"(m) In the event that the total amount available for distribution
under this section in fiscal year 1978 or fiscal year 1979 is insufficient
to meet all basic grant and hold-harmless entitlement needs as provided pursuant to this section, and funds are not otherwise appropriated to meet such deficiency, the Secretary shall meet the deficiency
through a pro rata reduction of (1) all basic grant and hold-harmless
entitlement amounts, and (2) funds available under section 106(d) (2)

PUBLIC LAW 95-128—OCT. 12, 1977

91 STAT. 1123

(including amounts provided for use under section 103(a)(2)) and
section 106(f)(1)(B).".
DISCRETIONARY

FUND

SEC. 107. Section 107 of the Housing and Community Development
Act of 1974 is amended—
(1) by striking out "and 1977," in subsection (a) and inserting
in lieu thereof "1977,1978,1979, and 1980,";
(2) by striking out "2 per centum" in subsection (a) and inserting in lieu thereof "3 per centum";
(3) by striking out "and units of general local government" in
subsection (a) (5) and inserting in lieu thereof ", units of general
local government, and Indian tribes";
(4) by striking out "and" at the end of subsection (a) (5), by
striking out the period at the end of subsection (a) (6) and inserting in lieu thereof a semicolon, and by adding the following after
subsection (a) (6) ;^
" (7) to Indian tribes; and
"(8) to States, units of general local government, Indian tribes,
or areawide planning organizations for the purpose of providing
technical assistance in planning, developing, and administering
assistance under this title. The Secretary may also provide such
technical assistance under this paragraph directly or through
contracts.";
(5) by striking out "one-fourth" in subsection (b) and inserting in lieu thereof "15 per centum"; and
(6) by adding the following new subsection at the end thereof:
"(d) No grant may be made to an Indian tribe unless the applicant
provides satisfactory assurances that its program will be conducted
and administered in conformity with title I I of Public Law 90-284.
The Secretary may waive, in connection with such grants, the provisions of section 109 and section 110."

42 USC 5307.

Technical
assistance.

Assurances,
25 USC 1301.
Waiver,

GUARANTEE OF LOANS' FOR ACQUISITION OF PROPERTY

SEC. 108. Section 108 of the Housing and Community Development
Act of 1974 is amended—
(1) by striking out subsections (a) and ( b ) ;
(2) by redesignating subsections (c), (d), (e), (f), and (g)
as subsections (f), (g), (h), (i), and (j), respectively;
(3) by inserting before subsection (f), as redesignated, the
following:
"(a) The Secretary is authorized, upon such terms and conditions as
the Secretary may prescribe, to guarantee and make commitments to
guarantee the notes or other obligations issued by units of general
local government, or by public agencies designated by such units of
general local government, for the purposes of financing acquisition of
real property or the rehabilitation of real property owned by the
unit of general local government (including such related expenses as
the Secretary may permit by regulation). Notes or other obligations
guaranteed pursuant to this section shall be in such form and denominations, have such maturities, and be subject to such conditions as may
be prescribed by regulations issued by the Secretary.
"(b) No guarantee or commitment to guarantee shall be made with
respect to any note or other obligation if the issuer's total outstanding
notes or obligations guaranteed under this section would thereby

42 USC 5308.
42 USC 5308,
31 USC 711.
42 USC 5308.

Prerequisites.

91 STAT. 1124

Securities.

Repayment
contract.

Grants.

Outstanding
obligations,
limitation.

PUBLIC LAW 95-128—OCT. 12, 1977
exceed an amount equal to three times the amount of the grant
approval for the issuer pursuant to section 106.
"(c) Notwithstanding any other provision of this title, grants allocated to an issuer pursuant to this title (including program income
derived therefrom) are authorized for use in the payment of principal
and interest due (including such servicing, underwriting, or other
costs as may be specified in regulations of the Secretary) on the notes
or other obligations guaranteed pursuant to this section.
"(d) To assure the repayment of notes or other obligations and
charges incurred under this section and as a condition for receiving
such guarantees, the Secretary shall require the issuer to—
" (1) enter into a contract, in a form acceptable to the Secretary,
for repayment of notes or other obligations guaranteed hereunder;
"(2) pledge any grant approved or for which the issuer may
become eligible under this title; and
"(3) furnish, at the discretion of the Secretary, such other
security as may be deemed appropriate by the Secretary in making such guarantees, including increments in local tax receipts
generated by the activities assisted under this title or dispositions
proceeds from the sale of land or rehabilitated property.
"(e) The Secretary is authorized, notwithstanding any other provision of this title, to apply grants pledged pursuant to subsection
(d) (2) to any repayments due the United States as a result of such
guarantees.";
(4) by striking out, in the first sentence of subsection (h), as
redesignated, the following: "may, at the option of the issuing
unit of general local government or designated agency," and
inserting in lieu thereof "shall";
(5) by striking out, in the second sentence of subsection (h),
as redesignated, the following: "In the event that taxable obligations are issued and guaranteed, the Secretary is authorized to
make, and to contract to make, grants" and inserting in lieu
thereof "The Secretary is authorized to make, and to contract to
make, grants, in such amounts as may be approved in appropriations Acts,";
(6) by striking out "such unit or agency has elected to issue
as a taxable obligation pursuant to subsection (e) of" in subsection (j), as redesignated, and inserting in lieu thereof "is guaranteed pursuant to"; and
(7) by adding at the end thereof the following:
"(k) Notwithstanding any other provision of this section, the total
amount of outstanding obligations guaranteed on a cumulative basis
by the Secretary pursuant to subsection (a) shall not at any time
exceed $3,500,000,000 or such higher amount as may be authorized
to be appropriated for sections 106 and 107 for any fiscal year.".
REPORTING REQUIREMENTS

42 use 5313.

SEC. 109. Section 113(a) of the Housing and Community Development Act of 1974 is amended—
(1) by striking out "and" at the end of paragraph (1).
(2) by striking out the period at the end of paragraph (2) and
inserting in lieu thereof:"; and"; and
(3) by adding the following new paragraph after paragraph
(2) :
"(3) with respect to the action grants authorized under section
119, a listing of each unit of general local government receiving

PUBLIC LAW 95-128—OCT. 12, 1977

91 STAT. 1125

funds and the amount of such grants, as well as a brief summary
of the projects funded for each such unit, the extent of financial
participation by other public or private entities, and the impact
on employment and economic activity of such projects during the
previous fiscal year.".
URBAN DEVELOPMENT ACTION GRANTS

SEC. 110. (a) Section 104(a) of the Housing and Community Development Act of 1974 is amended by inserting "or section 119" after 42 USC 5304.
"106".
(b) Title I of such Act is amended by adding the following new
sectioil at the end thereof:
" U R B A N D E V E L O P M E N T A C T I O N GRANTS

"SEC. 119. (a) In order to promote the primary objective of this 42 USC 5318.
title of the development of viable urban communities, of the total
amount of authority approved in appropriation Acts under section
103(c), the Secretary is authorized to make urban development action
grants to severely distressed cities and urban counties to help alleviate physical and economic deterioration through reclamation of neigh., . i^,
borhoods having excessive housing abandonment or deterioration, and
through community revitalization in areas with population outmigration or a stagnating or declining tax base. Grants made under this
section shall be for the support of severely distressed cities and urban
counties that require increased public and private assistance in addition to the assistance otherwise made available under this title and
other forms of Federal assistance.
"(b) L^rban development action grants shall be made only to cities
and urban counties that have, in the determination of the Secretary,
demonstrated results in providing housing for persons of low- and
moderate-income and in providing equal opportunity in housing and
employment for low- and moderate-income persons and members of
minority groups. The Secretary shall issue regulations establishing Criteria and
criteria in accordance with the preceding sentence and setting forth standards,
minimum standards for determining the level of physical and eco- regulations.
nomic distress of cities and urban counties for eligibility for such
grants, which standards shall take into account factors such as the age
and condition of housing stock, including residential abandonment;
average income; population outmigration; and stagnating or declining
tax base.
" (c) Applications for assistance under this section shall—
Applications.
"(1) include documentation of eligibility for grants in accordance with the standards described in subsection (b) ;
"(2) describe a concentrated urban development action program setting forth a comprehensive action plan and strategy to
alleviate physical and economic distress through systematic
change, which program shall be consistent with the community
development program described in section 104(a) (2) and the
housing assistance plan described in section 104(a)(4), and,
where it exists and is in effect, the overall economic development
plan as provided for in section 202(b) (10) of the Public Works
and Economic Development Act of 1965, but only in the event and 42 USC 3142.
after such time as such plans are required by law or administrative action to be consistent with community development programs. Such program shall be developed as to take advantage of

91 STAT. 1126

Citizen
participation
plan.

Public hearings.

Ante, p. 1114.
42 u s e 5306.
Selection
criteria.

Consultation
and coordination.

PUBLIC LAW 95-128—OCT. 12, 1977
unique opportunities to attract private investment, stimulate
investment in restoration of deteriorated or abandoned housing
stock, or solve critical problems resulting from population outmigration or a stagnating or declining taxl)ase;
(3) include the activities to be undertaken in the urban development action program, together with the estimated costs and
general locations of such activities;
"(4) indicate public and private resources which are expected
to be made available toward achieving the action plan and strategy
described in paragraph ( 2 ) ; and
"(5) provide satisfactory assurances that, prior to submission
of its application, it has (A) prepared and followed a written
citizen participation plan, which plan provides the opportunity
for citizens to participate in the development of the application,
with special attention to measures to encourage the statement of
views and the submission of proposals by low- and moderateincome people and residents of blighted neighborhoods, and to
scheduling hearings at times and locations which are convenient
to all citizens, (B) provided citizens with adequate information
concerning the amount of funds available for proposed activities
under this section, the range of activities that may be undertaken,
and other important program requirements, and (C) held public
hearings to obtain the views of citizens on needs which may be
dealt with under this section.
"(d) To the extent that the application requirements of section
104(a) (4) have been satisfied in connection with a grant made pursuant to section 106, such requirements shall be determined to have been
met for purposes of this section.
"(e) In establishing criteria for the purpose of making grants
imder this section the Secretary shall establish selection criteria which
must include (1) as the primary criterion, the comparative degree
of phj^sical and economic distress among applicants, as measured (in
the case of a metropolitan city or urban county) by the differences
in the extent of growth lag, the extent of poverty, and the adjusted
age of housing in the metropolitan city or urban county; (2) other
factors determined to be relevant by the Secretary in assessing the
comparative degree of physical and economic deterioration in cities
and urban counties; and (3) at least the following other criteria:
demonstrated performance of the city or urban county in housing and
community development programs; impact of the proposed urban
development action program on the special problems of low- and
moderate-income persons and minorities; extent of financial participation by other public or by private entities; extent of assistance to be
made available by the State; impact on the physical, fiscal, or economic
deterioration of the city or urban county; extent to which the program
describes activities representing a special or unique opportunity to
meet local priority needs or the objectives of this title; and feasibility
of accomplishing the program in a timely fashion within the grant
amount available.
"(f) In addition to activities authorized under section 105(a), an
urban development action program may also include such additional
community development and neighborhood development and conservation activities as the Secretary may determine to be consistent with
the purposes of this section.
" (g) No assistance shall be provided for business loans or industrial
development under this section unless the Secretary shall first consult

PUBLIC LAW 95-128—OCT. 12, 1977

91 STAT. 1127

with and coordinate such assistance with other Federal agencies which
make available funds for similar activities.
"(h) The Secretary shall, at least on an annual basis, make reviews Annual reviews
and audits of recipients of grants pursuant to this section as necessary and audits.
to determine the progress made in carrying out activities substantially
in accordance with approved plans and timetables. The Secretary
may adjust, reduce, or withdraw grant funds, or take other action as
appropriate in accordance with the findings of such review and audits,
except that fimds already expended on eligible activities under this
title shall not be recaptured or deducted from future grants made
to the recipient.
"(i) No assistance may be provided under this section for projects Relocation,
intended to facilitate the relocation of industrial or commercial plants
or facilities from one area to another, unless the Secretary finds that
Kuch relocation does not significantly and adversely affect the unemployment or economic base of the area from which such industrial
or commercial plant or facility is to be relocated.
"'(j) The Secretary shall allocate the amounts available for grants
under this section in a manner which achieves a reasonable balance
among programs that are designed primarily (1) to restore seriously
deteriorated neighborhoods, (2) to reclaim for industrial purposes
underutilized real property, and (3) to renew commercial employment
centers.
"(k) Not less than 25 per centum of the funds made available for
grants under this section shall be used for cities under fifty thousand
population which are not central cities of a standard metropolitan
statistical area.".
REHABILITATION

LOANS

SEC. 111. (a) Section 312(c)(4)(A) of the Housing Act of 1964
is amended—
42 USC 1452b,
(1) by striking out "the amount of a loan which could be
insured by the Secretary of Housing and Urban Development
under section 220(h) of the National Housing Act" and inserting
in lieu thereof "$27,000 per dwelling unit"; and
(2) by striking out "under such section".
(b) Section 312(d) of such Act is amended by striking out "and
not to exceed $100,000,000 for the fiscal vear beginning on October 1,
1976" and inserting in lieu thereof "not to exceed $100,000,000 for
the fiscal year beginning on October 1, 1976, and not to exceed
$60,000,000 for the fiscal year beginning on October 1, 1977".
(c) Section 312(h) of such Act is amended by striking out "1977"
each place it appears and inserting in lieu thereof "1979".
COMPREHENSIVE

PLANNING

SEC. 112. The second sentence of section 701(e) of the Housing
Act of 1954 is amended by striking "and not to exceed $100,000,000 40 USC 461.
for the fiscal year 1977" and inserting in lieu thereof "not to exceed
$100,000,000 for the fiscal year 1977, and not to exceed $75,000,000
for the fiscal year 1978".
STUDY ON SMALL CITIES

SEC. 113. The Secretary of Housing and Urban Development shall
conduct a study and, not later than one year after the date of enact-

Report to
President and
Congress.
42 USC 5313
note.

91 STAT. 1128

Alternative
formulae.

42 use 5301.

PUBLIC LAW 95-128—OCT. 12, 1977

ment of this Act, report to the President and to the Congress recommendations on the formation of a national policy on the developmental
needs of small cities. In carrying out such study, the Secretary shall
(1) take steps to improve the data available about small cities, (2)
suggest means of reducing the duplication in government programs
in jurisdictions which affect small cities, and (3) consider all of the
relevant differences and similarities between small and large cities,
particularly in the area of housing, growth, development patterns,
infrastructure, education, energy needs, and social development. In
addition, the Secretary shall include in the report alternative verifiable
formulae to be used in the distribution of discretionary balance funds
available for allocation to small cities under title I of the Housing
and Community Development Act of 1974.
EFFECTIVE DATE

42 u s e 5301
note.

SEC. 114. The amendments made by this title shall become effective
October 1, 1977.
T I T L E II—HOUSING ASSISTANCE AND RELATED
PROGRAMS
LOW-INCOME HOUSING

Annual
contributions.
42 u s e 1437c.

42 u s e 1440.
Post, p. 1129.
42 u s e 1437f.

SEC. 201. (a) The first sentence of section 5(c) of the United States
Housing Act of 1937 is amended—
(1) by striking out "and" immediately following "July 1,
1975," the first time it appears; and
(2) by inserting immediately after "on October 1, 1976," the
following: "and by $1,159,995,000 on October 1, 1977,".
(b) Section 5 (c) of such Act is amended by inserting after the third
sentence the following: "Of the additional authority to enter into
contracts for annual contributions provided on October 1, 1977, and
approved in appropriation Acts, the Secretary shall make available
not less than $42,500,000 for modernization of low-income housing
projects, not less than $197,139,200 for low-income housing projects
permanently financed by loans from State housing finance or State
development agencies, as defined in section 802(b)(2)(A) of the
Housing and Community Development Act of 1974, and not less than
$120,000,000 for low-income housing projects permanently financed by
loans pursuant to section 202 of the Housing Act of 1959."
(c) Section 8(c)(1) of such Act is amended by adding the following
new sentence at the end thereof: "Notwithstanding any other provision
of this section, after the date of enactment of the Housing and
Community Development Act of 1977, the Secretary shall prohibit
high-rise elevator projects for families with children unless there is
no practical alternative.".
(d) Section 8(c) (4) of such Act is amended by striking out the
following: "(i) if the unoccupied unit is in a project insured under
the National Housing Act, except pursuant to section 244 of such Act,
or (ii)".
(e) (1) Section 8(d) of such Act is amended by adding the following new paragraph at the end thereof:
" (3) Notwithstanding any other provision of law, with the approval
of the Secretary the public housing agency administering a contract
under this section with respect to existing housing units may exercise
all management and maintenance responsibilities with respect to those

PUBLIC LAW 95-128—OCT. 12, 1977
units pursuant to a contract between such agency and the owner of
such units.".
(2) Section 8(e) (2) of such Act is amended by adding the following new sentence at the end thereof: "In approving any public housing
agency to assume all the management and maintenance responsibilities
of any dwelling unit under the preceding sentence, the Secretary may
do so without regard to whether such agency administers the housing
assistance payment contract for that unit.".
(f) Section 9(c) of such Act is amended—
(1) by striking out "and" immediately following "on or after
July 1, 1976,"; and
(2) by inserting immediately before the period at the end
thereof the following: ", and not to exceed $685,000,000 on or
after October 1,1977".
(g) The Secretary of Housing and Urban Development shall conduct a study of payments in lieu of taxes made under section 6(d) of
the United States Housing Act of 1937 and report to the Congress
on the status and adequacy of such payments not later than twelve
months after the date of enactment of this section.
(h) Section 208 of the Housing and Community Development Act
of 1974 is amended by inserting ", including the right to renewal of
such lease to the maximum term permitted by law," after "United
States Housing Act of 1937".

91 STAT. 1129

42 u s e 1437f.

Annual
contributions.
42 u s e 1437g.

Study.
Report to
eongress.
42 u s e 1437d.

42 u s e 1421b
note.

SECTION 2 0 2 HOUSING FOR T H E ELDERLY

SEC. 202. (a) Section 202(d) (3) of the Housing Act of 1959 is 12 USe 1701q
amended by inserting the following before the period at the end
thereof: ", which cost shall be determined without regard to mortgage
limits applicable to housing projects subject to mortgages insured
under section 231 of the National Housing Act".
12 use 1715v.
(b) Section 202 of such Act is amended by adding at the end thereof
the following new subsection:
"(g) In carrying out the provisions of this section and section 8 Applications
of the United States Housing Act of 1937, the Secretary shall issue processing,
and implement regulations, as soon as practicable after the date of regulations.
enactment of Housing and Community Development Act of 1977, 42 use 1437f..
which shall provide that the processing of any application for a loan
for a project under this section and the processing of any application
for assistance under such section 8 with respect to housing units in
the same such project shall be coordinated in an economical and
efficient manner.".
URBAN HOMESTEADING DEMONSTRATION

SEC. 203. Section 810(g) of the Housing and Community Development Act of 1974 is amended by striking out "and not to exceed 12 USe 1706e.
$5,000,000 for the fiscal year 1978" and inserting in lieu thereof "and
not to exceed $15,000,000 for the fiscal year 1978",
RESEARCH AUTHORIZATION

SEC. 204. The second sentence of section 501 of the Housing and
Urban Development Act of 1970 is amended by inserting before the 12 USe 1701z-l.
period at the end thereof the following: ", and not to exceed
$60,000,000 for the fiscal year 1978".

91 STAT. 1130

PUBLIC LAW 95-128—OCT. 12, 1977
SECTION 2 3 5 ASSISTANCE FOR COOPERATIVES

12 use I7l5z.

SEC. 205. Section 235(b) (2) (A) of the National Housing Act is
amended by inserting "or section 221(d)(3)" immediately after
"financed with a mortgage insured under section 213".
SECTION 2 3 0 OPERATING SUBSIDIES

Monthly
assistance
payment.
Contracts.
12 u s e 1715Z-1.

Effective
date.
12 u s e 1715Z-1
note.

SEC. 206. (a) Section 236(f)(3) of the National Housing Act is
amended by striking out the second and third sentences and inserting
in lieu thereof the following: "The Secretary is authorized to make,
and shall contract to make to the extent of the moneys in the reserve
fund established under subsection (g) and to the further extent of
funds authorized in appropriation Acts, an additional monthly
assistance payment to the project owner up to the amount by which
the sum of the cost of utilities and local property taxes exceeds the
initial operating expense level. Such payment shall be used by the
project owner solely to effect, and there shall be, a reduction in the
basic rental charges established for the project. Any contract to make
additional monthly assistance payments shall be for a one-year period
and shall be adjusted periodically to provide, to the extent approved
in appropriation Acts, for continuation of the payments and for an
appropriate adjustment in the amount of the assistance payments.".
(b) Section 236(f) (3) of such Act is further amended by striking
out "only if the Secretary finds that the increase in the cost of utilities or local property taxes is reasonable and is" in the last sentence
and inserting in lieu thereof "unless the Secretary finds that the
increase in the cost of utilities or local property taxes is not reasonable or not".
(c) Section 236(g) of such Act is amended by striking out "1974"
in the fourth sentence and inserting in lieu thereof "1977".
(d) The amendments made by this section shall become effective
on October 1, 1977, and shall apply to assistance payments pursuant
to section 236(f) (3) of the National Housing Act with respect only
to periods commencing on or after such date.
HOUSING ASSISTANCE PLANS

Funds,
allocation and
reservation.
42 u s e 1439.

Ante, p. 1114.

SEC. 207. Section 213(d)(1) of the Housing and Community
Development Act of 1974 is amended by inserting after the first
sentence the following new sentence: "The Secretary shall assure, to
the maximum extent practicable in carrying out the national housing
and community development objectives, that funds available for each
housing assistance program referred to in subsection (a) shall be
allocated or reserved in accordance with goals described in local,
State, or other housing assistance plans approved by the Secretary
pursuant to section 104, and shall be utilized to meet needs reflected
in data referred to in the preceding sentence.".
NEW COMMUNITIES

42 use 4521.

SEC. 208. Section 720(a) of the Housing and Urban Development
Act of 1970 is amended by striking out "October 1, 1977" and inserting in lieu thereof "October 1, 1978".

PUBLIC LAW 95-128—OCT. 12, 1977

91 STAT. 1131

TREASURY DRAW AUTHORITY

SEC. 209. Section 14(b) of the Federal Reserve Act is amended by 12 USC 355.
striking out "November 1, 1978" and inserting in lieu thereof "October 1, 1977"; and by striking out "October 31, 1978" and inserting in
lieu thereof "September 30, 1977".
T I T L E III—FEDERAL HOUSING ADMINISTRATION MORTGAGE INSURANCE AND RELATED PROGRAMS
EXTENSION OF FEDERAL HOUSING ADMINISTRATION MORTGAGE INSURANCE
PROGRAMS

SEC. 301. (a) Section 2(a) of the National Housing Act is amended
by striking out "October 1,1977" in the first sentence and inserting in
lieu thereof "October 1,1978".
(b) Section 217 of such Act is amended by striking out "September 30,1977" and inserting in lieu thereof "September 30, 1978".
(c) Section 221(f) of such Act is amended by striking out "September 30, 1977" in the fifth sentence and inserting in lieu thereof
"September 30,1978".
(d) Section 235 (m) of such Act is amended by striking out "September 30, 1977" and inserting in lieu thereof "September 30, 1978".
(e) Section 236 (n) of such Act is amended by striking out "September 30, 1977" and inserting in lieu thereof "September 30, 1978".
(f) Section 244(d) of such Act is amended—
(1) by striking out "September 30, 1977" in the first sentence
and inserting in lieu thereof "September 30, 1978"; and
(2) by striking out "October 1,1977" in the second sentence and
inserting in lieu thereof "October 1,1978".
(g) Section 245 of such Act is amended by striking out "September 30, 1977" where it appears and inserting in lieu thereof
"September 30,1978".
(h) Section 809(f) of such Act is amended by striking out "September 30, 1977" in the second sentence and inserting in lieu thereof
"September 30,1978".
(i) Section 810(k) of such Act is amended by striking out "September 30, 1977" in the second sentence and inserting in lieu thereof
"September 30,1978".
(j) Section 1002(a) of such Act is amended by striking out "September 30, 1977" in the second sentence and inserting in lieu thereof
"September 30,1978".
(k) Section 1101(a) of such Act is amended by striking out "September 30, 1977" in the second sentence and inserting in lieu thereof
"September 30,1978".

12 USC 1703.

12 USC 1715h,.
12 USC 1715/.

12 USC 1715z
12 USC 1715Z-1.
12 USC 1715Z-9.

12 USC
1715Z-10.
12 USC
1748h-l.
12 USC
1748h-2.
12 USC 1749bb.

12 USC 1749aaa.

EXTENSION OF FLEXIBLE INTEREST RATE AUTHORITY

SEC. 302. Section 3(a) of the Act entitled "An Act to amend 12 USC 1709-1.
chapter 37 of title 38 of the United States Code with respect to the
veterans' home loan program, to amend the National Housing Act
with respect to interest rates on insured mortgages, and for other purposes", approved May 7, 1968, as amended (12 U.S.C. 1709-1), is
amended by striking out "October 1,1977" and inserting in lieu thereof
"October l', 1978".

91 STAT. 1132

PUBLIC LAW 95-128—OCT. 12, 1977
INCREASE I N M A X I M U M MORTGAGE AMOUNTS UNDER FEDERAL HOUSING
ADMINISTRATION MORTGAGE INSURANCE PROGRAMS

12 u s e 1709.

12 u s e 1715k.

12 u s e 1715/.

12 u s e 1715m.
12 u s e 1715y.

Homeownership
or membership
in cooperative
association for
lower income
families.
12 u s e 1715z.

SEC. 303. (a) Section 203(b)(2) of the National Housing Act is
amended by striking out "$45,000", "$48,750", and "$56,000" wherever
they appear and inserting in lieu thereof, "$60,000", "$65,000", and
"$75,000", respectively.
(b) Section 220(d) (3) (A) of such Act is amended by striking out
"$45,000", "$48,750", and "$56,000" wherever they appear and inserting in lieu thereof "$60,000", "$65,000", and "$75,000", respectively,
(c) Section 221(d) (2) (A) of such Act is amended by—
(1) striking out "$25,000", "$29,000", and "$33,000" each place
they appear and inserting in lieu thereof "$31,000", "$36,000",
and "$42,000", respectively; and
(2) striking out "$28,000", "$38,880", "$47,520", "$36,000",
"$46,080", and "$54,720", and inserting in lieu thereof "$35,000",
"$48,600", "$59,400", "$45,000", "$57,600", and "$68,400", respectively.
(d) Section 222(b)(2) of such Act is amended by striking out
"$45,000" and inserting in lieu thereof "$60,000".
(e) Clause (A) of the third sentence of section 234(c) of such Act
is amended by striking out "$45,000" and inserting in lieu thereof
"$60,000".
(f) Section 235 of such Act is amended—
(1) by striking out, in the last proviso in subsection (b)(2),
"$25,000", "$29,000", "$29,000", and "$33,000," and inserting in
lieu thereof "$32,000", "$38,000", "$38,000", and "$44,000",
respectively;
(2) by striking out, in subsection (i) (3) (B) "$25,000",
"$29,000", "$29,000", and "$33,000" and inserting in lieu thereof
"$32,000", "$38,000", "$38,000", and "$44,000", respectively;
(3) by striking out "and" at the end of subparagraph (B) of
subsection (i) (3);
(4) by redesignating subparagraph (C) of subsection (i) (3)
as subparagraph (E) and inserting immediately following subparagraph (B) the following new subparagraphs:
"(C) involve, in the case of a dwelling unit other than a
condominium or cooperative unit, a principal obligation
including such initial service charges, appraisal, inspection,
and other fees as the Secretary shall approve) in an amount
not to exceed $32,000 ($38,000 in any geographical area
where the Seretary authorizes an increase on the basis of a
finding that cost levels so require), except that with respect
to any family with five or more persons the foregoing limits
shall be $38,000 and $44,000, respectively ;
"(D) involve, in the case of a two-family dwelling, a
principal obligation (including such initial service charges,
appraisal, inspection, and other fees as the Secretary shall
approve) in an amount not to exceed $44,000 ($49,000 in any
geographical area where the Secretary authorizes an increase
on the basis of a finding that cost levels so require) ; and";
and
(5) by adding the following new subsection at the end thereof:
"(n) No mortgage may be insured under this section on a unit in a
subdivision, after the effective date of enactment of this subsection,

PUBLIC LAW 95-128—OCT. 12, 1977

91 STAT. 1133

which, when added to any other mortgages insured under this section
in that subdivision after such date, represents more than 40 per centum
of the total number of units in the subdivision, except that the preceding limitation shall not apply with regard to any rehabilitated unit,
or to any unit or subdivision located or to be located in an established
urban neighborhood or area, where a sound proposal is involved and
where an aggregation of subsidized units is essential to a community
sponsored overall redevelopment plan, as determined by the
•
Secretary.".
(g) Section 203 (i) of such Act is amended bv striking out "$16,200" 12 USC 1709.
and inserting in lieu thereof "75 per centum of the limit on the principal obligation applicable to a one-family residence under subsection
(b) of this section".
DECREASE IN" DOWNPAYMENT REQUIREMENTS

SEC. 304. (a) Section 203(b)(2) of the National Housing Act is
amended—
(1) by striking out, in clause (i) of the first sentence, all the
parenthetical language which begins "(but, in any case";
(2) by striking out clauses (ii) and (iii) in the first and second
sentences and inserting in lieu thereof in each sentence "and (ii)
95 per centum of such value in excess of $25,000."; and
(3) by inserting immediately after the second sentence the
following: "Notwithstanding any other provision of this section,
in any case where the dwelling is not approved for mortgage
insurance prior to the beginning of construction, such mortgage
shall not exceed 90 per centum of the entire appraised value of the
property as of the date the mortgage is accepted for insurance,
unless the dwelling was completed more than one year prior to the
application for mortgage insurance, or the dwelling was approved
for guaranty, insurance, or a direct loan under chapter 37 of
title 38, United States Code, prior to the beginning of construetion.".
(b) Section 220(d) (3) (A) (i) of such Act is amended—
(1) by striking out the comma at the end of clause (1) and
all of clauses (2) and (3) in the matter preceding the first proviso
and inserting in lieu thereof "and (2) 95 per centum of such value
in excess of $25,000"; and
(2) by striking out in the second proviso the comma at the end
of clause (1) and all of clauses (2) and (3) and inserting in lieu
thereof "and (2) 95 per centum of such value in excess of $25,000".
(c) Section 222(b)(3) of such Act is amended by striking out
clauses (ii) and (iii) and inserting in lieu thereof "and (ii) 95 per
centum of such value in excess of $25,000;".
(d) The third sentence of section 234(c) of such Act is amended
by striking out clauses (A) (ii) and (A) (iii) and insertina: in lieu
thereof "and (ii) 95 per centum of such value in excess of $25,000,".

'.»;»:

^
38 USC 1801 et
se?12 USC 1715k.

12 USC 1715m.
12 USC 1715y.

AUTHORITY TO INCREASE MORTGAGE INSURANCE P R E M I U M FOR
SECTION 2 0 3 (U)

SEC. 305. Section 203(c) of the National Housing Act is amended 12 USC 1709.
by inserting the following before the colon preceding the first proviso:
^^Provided, That premium charges fixed for insurance under subsection (n) is not required to be the same as the premium charges for
mortgages insured under the other provisions of this section, but in

91 STAT. 1134

PUBLIC LAW 95-128—OCT. 12, 1977
no case shall premium charges under subsection (n) exceed 1 per
centum per annum",
M A X I M U M MORTGAGE AMOUNT AND MATURITY UNDER TITLE I OF T H E
NATIONAL HOUSING ACT

12 use 1703.

Increase,
regulation.

SEC. 306. (a) The first sentence of section 2(b) of the National
Housing Act is amended—
(1) by striking out "$10,000" the first time it appears in
clause (1) and inserting in lieu thereof "$15,000"; and
(2) by striking out "twelve years" in clause (2) and inserting
in lieu thereof "fifteen years".
(b) Section 2(b) of such Act is amended by striking out "$12,500
($20,000" in clause (1) and inserting in'lieu thereof "$16,000
($24,000"; and by inserting the following before the semicolon at the
end of the proviso in clause (2) : "(twenty-three years and thirty-two
days in the case of a mobile home composed of two or more modules)".
(c) Subparagraph (B) of the second paragraph of section 2(b) of
such Act and subparagraph (B) of the third paragraph of such section 2(b) are each amended by striking out "twenty years" and inserting in lieu thereof in each case "twenty-three years".
(d) Section 2(b) of such Act is amended by adding at the end
thereof the following new undesignated paragraph:
"Because of prevailing higher costs, the Secretary may, by regula{[QYI, jn Alaska, Guam, or Hawaii, increase any dollar amount limitation on mobile homes or mobile home lot loans contained in this
subsection by not to exceed 40 per centum.".
SECTION 2 0 3 INSURANCE I N CERTAIN COMMUNITIES

12 use 1709.

SEC. 307. Section 203 of the National Housing Act is amended by
adding at the end thereof the following:
" ( o ) ( l ) Notwithstanding anv other provision of this section or
any other section of this title, the Secretary is authorized to insure,
and to commit to insure, under subsection (b) of this section as modified by this subsection a mortgage which meets both the requirements
of this subsection and such criteria as the Secretary by regulation may
prescribe to further the purpose of this subsection, in any community
where the Secretary determines that—
"(A) temporary adverse economic conditions exist throughout
the community as a direct and primary result of outstanding
claims to ownership of land in the community by an American
Indian tribe, band, or Nation;
"(B) such ownership claims are reasonably likely to be settled,
by court action or otherwise;
"(C) as a direct result of the community's temporarily impaired
economic condition, owner occupants of homes in the community
have been involuntarilv unemployed or underemployed and have
thus incurred substantial reductions in income which significantly
impair their ability to continue timely payment of their
mortgages;
"(D) as a result, widespread mortgage foreclosures and distress sales of homes are like! v in the community; and
" (E) fifty or more individual homeowners were joined as parties
defendant or were members of a defendant class prior to December 31, 1976, in litigation involving claims to ownership of land
in the community by an American Indian tribe, band, or Nation.

PUBLIC LAW 95-128—OCT. 12, 1977
" (2) A mortgage shall be eligible for insurance under subsection (b)
of this section as modified by this subsection without regard to limitations in this title relating to a mortgagor's reasonable ability to pay,
economic soundness, marketability of title, or any other statutory
restriction which the Secretary determines is contrary to the purpose
of this subsection, but only if the mortgagor is an owner occupant of a
home in a community specified in paragraph (1) who, as a direct
result of the community's temporarily impaired economic condition,
has been involuntarily unemployed or underemployed and has thus
incurred a substantial reduction in income which significantly impairs
the owner's ability to continue timely payment of the mortgage. The
Secretary is authorized to encourage or afford directly to or on behalf
of mortgagors whose mortgages are insured under subsection (b) as
modified by this subsection forebearance, assignment of mortgages to
the Secretary, or such other relief as the Secretary deems appropriate
and consistent with the purpose of this subsection. The Secretary, in
connection with any mortgage insured under subsection (b) as modified
by this subsection, shall have all statutory powers, authority, and
responsibilities which the Secretary has with respect to other mortgages insured under subsection (b), except that the Secretary may
modify such powers, authority, or responsibilities where the Secretary deems such action to be necessary because of the special nature of
the mortgage involved. Notwithstanding section 202 of this title, the
insurance of a mortgage under subsection (b) of this section as modified by this subsection shall be the obligation of the Special Risk Insurance iFund created pursuant to section 238 of this title.".

91 STAT. 1135
Mortgage
eligibility,

.

12 USC 1708.
12 USC 1715z;-3.

MISCELLANEOUS MORTGAGE INSURANCE

SEC. 308. (a) Sections 232(d)(4) and 242(d)(4) of the National
Housing Act are amended by inserting "or section 1521" after "section 12 USC 1715w,
604(a)(1)';.
•
1715Z-7.
(b) Section 242(c) of such Act is amended by adding the following sentence at the end thereof: "No mortgage insurance premium
shall be charged with respect to the amount of principal and interest
guaranteed by the Department of Health, Education, and Welfare
under title V I I of the Public Health Service Act.".
42 USC 292.
MORTGAGE INSURANCE I N MILITARY IMPACTED AREAS

SEC. 309. Section 238(c) of the National Housing Act is amended to 12 USC 1715z^3.
read as follows:
"(c) (1) Notwithstanding the provisions of this or any other Act,
and without regard to limitations upon eligibility contained in any
section of this title, the Secretary is authorized, upon application by
the mortgagee, to insure under any section of this title a mortgage
executed in connection with the construction, repair, rehabilitation, or
purchase of property located near any installation of the Armed
Forces of the United States in federally impacted areas in which the
conditions are such that one or more of the eligibility requirements
applicable to the section under which insurance is sought could not
be met, if (A) the Secretary finds that the benefits to be derived from
such use outweigh the risk of probable cost to the Government, and
(B) the Secretary of Defense certifies that there is no intention insofar as can reasonably be foreseen to curtail substantially the personnel
assigned or to be assigned to such installation. The insurance of a
>*

91 STAT. 1136

Premiums
and other
charges,
establishment.

PUBLIC LAW 95-128—OCT. 12, 1977
mortgage pursuant to this subsection shall be the obligation of the
Special Risk Insurance F u n d .
" ( 2 ) The Secretary is authorized ( A ) to establish such premiums
and other charges as may be necessary to assure that the mortgage
insurance p r o g r a m pursuant to this subsection is made available on a
basis which, in the Secretary's judgment, is designed to be actuarially
sound and likely to maintain tlie fiscal integrity of such program, and
( B ) to prescribe such terms and conditions relating to insurance
pursuant to this subsection as may be found by the Secretary to be
necessary and appropriate, and which are to the maximum extent
possible, consistent with provisions otherwise applicable to mortgage
insurance and payment of insurance benefits.".
EXPERIMENTAL FINANCING

12 use
1715Z-10.

Principal
obligation,
limitation.

12 u s e 1709.

Ante, p. 1132.
Graduated
mortgage
provisions.

.l-:-xf.|: •

SEC. 310. (a) Section 245 of the National Housing Act is amended—
(1) by striking out "on an experimental basis" in the first
sentence;
(2) by striking out the second sentence and inserting in lieu
thereof the following: "Nothwithstanding any other provision
of this title the principal obligation (including all interest to be
deferred and added to principal) of a mortgage insured pursuant
to this section may not exceed 97 per centum of the appraised
value of the property covered by the mortgage as of the date the
mortgage is accepted for insurance, or if the mortgagor is a
veteran and the mortgage is to be insured in accordance with the
provisions of section 203 of this title, such higher percentage of
appraised value as is provided for purposes of determining the
maximum mortgage amount eligible for insurance under section
203(b) (2) in the case of veterans,"; and
(3) by adding at the end thereof the following new sentence:
" A n y mortgage or loan insured pursuant to this section which contains or sets forth any graduated mortgage provisions (including
but not limited to provisions for adding deferred interest to
principal) which are authorized under this section and applicable
regulations, or which have been insured on the basis of their being
so authorized, shall not be subject to any State constitution,
statute, court decree, common law, or rule or public policy limiting
the amount of interest which may be charged, taken, received, or
reserved, or the manner of calculating such interest (including
but not limited to prohibitions against the charging of interest
on interest), if such statute, court decree, common law, or rule
would not apply to the mortgage or loan in the absence of such
graduated payment mortgage provisions.".
(b) T h e caption of section 245 of such Act is amended to read as
follows:
"GRADUATED PAYMENT MORTGAGES".

TITLE IV—LENDING POWERS OF FEDERAL
AND LOAN ASSOCIATIONS; SECONDARY
AUTHORITIES

SAVINGS
MARKET

CONSTRUCTION LOANS

12 u s e 1464.

SEC. 401. The twenty-first undesignated p a r a g r a p h of section 5(c)
of the Home Owners' Loan Act of 1933 is amended by striking out "3
per centum" and inserting in lieu thereof "5 per centum".

PUBLIC LAW 95-128—OCT. 12, 1977

91 STAT. 1137

SINGLE FAMILY DWELLING LIMITATIONS

I

SEC. 402. The first undesignated paragraph of section 5(c) of the
Home Owners' Loan Act of 1933 is amended by striking out ''$55,000'' 12 USC 1464.
and inserting in lieu thereof "$60,000", and by inserting "but of said
20 per centum the amount deemed to be loaned in transactions which,
except for excess in amount, would be eligible for such association
under provisions of this sentence (other than this exception) or under
the next following sentence shall be only the outstanding amount of
such excess," immediately after "improved real estate without regard
to the foregoing limitations,".
LENDING AUTHORITY

SEC. 403. The twenty-second undesignated paragraph of section 5(c)
of the Home Owners' Loan Act of 1933 is amended by inserting "or
farm" immediately after "residential".
PROPERTY IMPROVEMENT LOANS

SEC. 404. The second and third undesignated paragraphs of section
5(c) of tlie Home Owners' Loan Act of 1933 are amended by striking
out "$10,000" and inserting in lieu thereof "$15,000".
MULTIFAMILY DWELLING

LIMITATIONS

SEC. 405. The first sentence of section 5(c) of the Home Owners'
Loan Act of 1933 is amended by striking out ", and the Board shall by
regulation limit to not more than 20 per centum of the assets of the
association the aggregate amount or amounts of the investments which
may be made by an association under the foregoing provisions of this
sentence on the security of property which comprises or includes more
than four dwelling units or does not constitute homes or combinations
of homes and business property".
CONFORMING AMENDMENT TO FEDERAL HOME LOAN BANK ACT

SEC. 406. Section 10(b) of the Federal Home Loan Bank Act is 12 USC 1430.
amended by striking out "$55,000 (except that with respect to
dwellings in Alaska, Guam, and Hawaii the foregoing limitations
;
may, by regulation of the Board be increased by not to exceed 50 per
centum)" and inserting in lieu thereof the following: "the dollar limitation imder the first proviso of the first sentence of section 5(c) of the
Home Owners' Loan Act of 1933, as amended,".
Supra.
GOVERNMENT NATIONAL MORTGAGE ASSOCIATION HOME PURCHASE
ASSISTANCE

:

SEC. 407. (a) Section 313(a)(1) of the National Housing Act is 12 USC I723e.
amended by adding at the end thereof the following: "To the extent
feasible and consistent with the primary purpose of this section to
stabilize housing production, the Secretary may direct the exercise of
:
the authority conferred by this section to promote homeownership
opportunities for moderate-income families.".
(b) Section 313(a) of such Act is amended by adding at the end
thereof the following:

91 STAT. 1138
Regulations.

12 use 1723e.
42 use 1437f.

12 use 1723e
note.

PUBLIC LAW 95-128—OCT. 12, 1977
"(3) In carrying out the authority conferred by this section, the
Secretary may require the Association to utilize a part of the authority
to purchase mortgages under this section for the purchase of mortgages
executed to finance the rehabilitation or acquisition and rehabilitation
of housing in older or declining neighborhoods to the extent such
action is feasible and consistent with the primary purpose of this
section, and for the purpose of this paragraph, the Secretary is
authorized to prescribe such regulations as may be appropriate.".
(c)(1) Section 313(b) (B) of such Act is amended by inserting
after "$42,000" the following: "($49,000 in the case of any property
with respect to which assistance payments pursuant to section 8 of
the United States Housing Act of 1937 are being or will be made and
which is located in any geographical area where the Secretary authorizes an increase on the basis of a finding that cost levels so require)".
(2) Section 313(b) (D) of such Act is amended by inserting after
"Secretary" the following: "and $55,000 in the case of any property
with respect to which assistance payments pursuant to section 8 of the
United States Housing Act of 1937 are being or will be made and
which is located in any geographical area where the Secretary authorizes an increase on the basis of a finding that cost levels so require".
(d) Section 313(g) of such Act is amended by adding at the end
thereof the following: "The Association's purchases and commitments under this section during fiscal year 1978 may not exceed
$7,500,000,000.".
(e) Section 3(b) of the Emergency Home Purchase Assistance Act
of 1974 is amended by striking out "October 1, 1977" and inserting
in lieu thereof "October 1, 1978".
L I M I T ON AMOUNT OF A CONVENTIONAL MORTGAGE W H I C H MAY BE PURCHASED BY FEDERAL NATIONAL MORTGAGE ASSOCIATION OR FEDERAL
H O M E LOAN MORTGAGE CORPORATION

12 use 1717.
12 use 1454.
12 use 1723a.
Review; study.

Transmittal
to eongress.

SEC. 408. (a) The last sentence of section 302(b) (2) of the National
Housing Act is amended by inserting "by more than 25 per centum"
(b) The last sentence of section 305(a) (2) of the Federal Home
Loan Mortgage Corporation Act is amended by inserting "by more
than 25 per centum" after "exceed".
(c) Section 309(h) of the National Housing Act is amended by
inserting at the end thereof the following: "Pursuant to the authority
provided in this subsection, the Secretary shall conduct a review of
the financial operations of the corporation and undertake a study
of the extent to which the activities of the corporation meet the
purposes of this title. Such review and study shall be completed and
transmitted to the Congress on or before July 1, 1978.".
T I T L E V—RURAL HOUSING
AUTHORIZATIONS

42 use 1483.

42 use 1485.

SEC. 501. (a) Section 513 of the Housing Act of 1949 is amended—
(1) by striking out "September 30, 1977" in clauses (b), (c),
and (d), and inserting in lieu thereof "September 30, 1978"; and
(2) by striking out "$80,000,000" in clauses (b) and (c) and
inserting in lieu thereof "$105,000,000".
(b) Section 515(b)(5) of such Act is amended by striking out
"September 30, 1977" and inserting in lieu thereof "September 30,
1978".

PUBLIC LAW 95-128—OCT. 12, 1977
(c) Section 517(a)(1) of such Act is amended by striking out
"September 30, 1977" and inserting in lieu thereof "September 30,
1978".
(d) Section 523 (f) of such Act is amended—
(1) by striking out "October 1, 1977" and inserting in lieu
thereof "October 1,1978"; and
(2) by striking out "September 30, 1977" and inserting in lieu
thereof "September 30,1978".

91 STAT. 1139
42 u s e 1487.

42 u s e 1490c.

CHANGES I N T H E GUARANTEED HOUSING LOAN PROGRAM

SEC. 502. (a) Section 502(b)(3) of the Housing Act of 1949 is 42 u s e 1472,,
amended by inserting "except for guaranteed loans," after "(3)".
(b) Section 517(e) of such Act is amended by inserting after the Rural Housing;
first sentence the following new sentence: "The guaranteed loan pro- Insurance Fund.
gram under this title shall be operated separately from the insured 42 u s e 1487.
of
k)an program operated under this title and no funds designated for Transfer
funds.
one program may be transferred to another program.".
(c) Section 517 of such Act is amended by adding the following
new subsection at the end thereof:
"(n) Loans guaranteed under this section shall be made only to
borrowers with above-moderate incomes.".
(d) Section 521 (a) (1) of such Act is amended by adding at the end Interest rates.
thereof the following: "Any loan guaranteed under this title shall 42 u s e 1490a.
bear interest at such rate as may be agreed upon by the borrower and
the lender.".
PREPAYMENT OF TAXES AND SIMILAR ITEMS BY FARMERS H O M E
ADMINISTRATION BORROWERS

SEC. 503. Section 501(e) of the Housing Act of 1949 is amended 42 USC 1471.
by striking out the second sentence and inserting in lieu thereof the
following: "Such payments shall be disbursed by the Secretary at
the appropriate time or times for the purposes for which such payments are made, and after October 1, 1977, if the prepayments made
by the borrower are not sufficient to pay the amount due, advances
may be made by the Secretary to pay these costs in full, which
advances shall be charged to the account of the borrower and bear
interest and be payable in a timely fashion not to exceed two years,
as determined by the Secretary.".
COMPENSATION FOR CONSTRUCTION DEFECTS

SEC. 504. Section 509 of the Housing Act of 1949 is amended by 42 USe 1479.
adding at the end thereof the following new subsections:
"(c) The Secretary is authorized, after October 1, 1977, with
respect to any unit or dwelling newly constructed during the period
beginning eighteen months prior to the date of enactment of the
Housing and Community Development Act of 1977 and purchased
with financial assistance authorized by this title which he finds to
have structural defects to make expenditures for (1) correcting such
defects, (2) paying the claims of the owner of the property arising
from such defects, or (3) acquiring title to the property, if such
assistance is requested by the owner of the property within eighteen
months after financial assistance under this title is rendered to the
owner of the property or, in the case of property with respect to
which assistance was made available within eighteen months prior
to the date of enactment of the Housing and Community Develop-

\
91 STAT. 1140

Terms and
conditions.

PUBLIC LAW 95-128—OCT. 12, 1977
ment Act of 1977, within eighteen months after such date of enactment. Expenditures pursuant to this subsection may be paid from
the Rural Housing Insurance Fund. Decisions by the Secretary
regarding such expenditures or payments under this subsection, and
the terms and conditions under which the same are approved or disapproved, shall not be subject to judicial review.
"(d) The Secretary shall, by regulation, prescribe the terms and
conditions under which expenditures and payments may be made
under the provisions of this section.".
FARM LABOR HOUSING LOANS AND GRANTS I N PUERTO RICO AND T H E
VIRGIN ISLANDS

42 u s e 1484.
"Domestic
farm labor."

SEC. 505. Section 514(f) (3) of the Housing Act of 1949 is amended
to read as follows:
"(3) the term 'domestic farm labor' means persons who receive
a substantial portion (as determined by the Secretary) of their
income as laborers on farms situated in the United States, Puerto
Rico, or the Virgin Islands and either (A) are citizens of the
United States, or (B) reside in the United States, Puerto Rico,
or the Virgin Islands after being legally admitted for permanent
residence therein.".
PURPOSES FOR W H I C H FUNDS FROM T H E RURAL HOUSING INSURANCE F U N D
MAY BE USED

42 use 1487.

Ante, p. 1139.
Ante, p. 1139.

SEC. 506. Section 517 (j) of the Housing Act of 1949 is amended—
(1) by striking out "and" at the end of paragraph (3) ;
(2) by striking out the period at the end of paragraph (4) and
inserting in lieu thereof a semicolon; and
(3) by adding at the end thereof the following new paragraphs :
"(5) after October 1, 1977, and as approved in appropriations
Acts, to make advances authorized by section 501(e) ; and
"(6) after October 1, 1977, and as approved in appropriations
Acts, to make the expenditures authorized by section 509(c).".
HOUSING FOR T H E ELDERLY AND HANDICAPPED

42 u s e 1471.

42 u s e 1485.
42 u s e 1490a.

SEC. 507. (a) Title V of the Housing Act of 1949 is amended—
(1) by striking out "elderly persons" in section 501(a)(3)
and inserting in lieu thereof "elderly or handicapped persons or
families";
(2) by striking out "that he is an elderly person in a rural area
without an adequate dwelling or related facilities for his own
use," in section 501(c) (1) and inserting in lieu thereof "that the
applicant is an elderly or handicapped person or family in a
rural area without an adequate dwelling or related facility for
its own use,";
(3) by striking out "elderly persons and elderly families" in
subsections (a) and (b) of section 515 and inserting in lieu
thereof "elderly or handicapped persons or families";
(4) by striking out "elderly persons and elderly families" in
section 521(a) (1) and inserting in lieu thereof "elderly or handicapped persons or families"; and
(5) by inserting "or handicapped" after "elderly" in clause (i)
of the last ^ntence of section 521 (a) (2) (A).

PUBLIC LAW 95-128—OCT. 12, 1977

91 STAT. 1141

(b) Section 501(b) (3) of such Act is amended to read as follows:
" (3) For the purposes of this title, the term 'elderly or handicapped
persons or families' means families which consist of two or more
persons, the head of which (or his or her spouse) is at least sixty-two
years of age or is handicapped. Such term also means a single
person who is at least sixty-two years of age or is handicapped. A
person shall be considered handicapped if such person is determined,
pursuant to regulations issued by the Secretary, to have an impairment which (A) is expected to be of long-continued and indefinite
duration, (B) substantially impedes his ability to live independently,
and (C) is of such a nature that such ability could be improved by
more suitable housing conditions, or if such person is a developmentally disabled individual as defined in section 102(7) of the
Developmental Disabilities Services and Facilities Construction Act.
The Secretary shall prescribe such regulations as may be necessary to
prevent abuses in determining, under the definitions contained in this
paragraph, eligibility of families and persons for admission to and
occupancy of housing constructed with assistance under this title.
Notwithstanding the preceding provisions of this paragraph, such
term also includes two or more elderly (sixty-two years of age or
over) or handicapped persons living together, one or more such persons
living with another person who is determined (under regulations
prescribed by the Secretary) to be essential to the care or well-being
of such persons, and the surviving member or members of any family
described in the first sentence of this paragraph who were living, in
a unit assisted under this title, with the deceased member of the family
at the time of his or her death.".

42 USC 1471.
"EWerly or
handicapped
persons
°^''^°"* or
°^

CONGREGATE HOUSING FOR ELDERLY AND HANDICAPPED

families."

42 USC 6001.

FAMILIES

SEC. 508. (a) Section 515(c) of the Housing Act of 1949 is amended 42 USC 1485.
by adding at the end thereof the following new sentence: "However,
specifically designed equipment required by elderly or handicapped
persons or families shall not be considered elaborate or extravagant.".
(b) Section 515(d) (1) of such Act is amended by adding at the end
thereof the following: "; and such term also means congregate housing
facilities for elderly or handicapped persons or families who require
some supervision and central services but are otherwise able to care for
themselves; such housing for the handicapped may be utilized in
conjunction with educational and training facilities;".
(c) Section 515(d) (3) of such Act is amended to read as follows:
"(3) the term 'congregate housing' means housing in which "Congregate
(A) some of the units may not have kitchen facilities, and (B) housing."
there is a central dining facility to provide wholesome and
economic meals for elderly or handicapped persons or families.".
PROVIDING FOR A DIVISION OF INSURED RURAL HOUSING LOANS

SEC. 509. Section 517 of the Housing Act of 1949 (as amended by
section 502(c)) is amended by adding at the end thereof the following Ante, p. 1139.
new subsection:
" (o) At least 60 per centum of the amount of loans made pursuant to
sections 502 and 515 shall benefit persons of low income.".
42 USC 1472,
1485.

91 STAT. 1142

PUBLIC LAW 95-128—OCT. 12, 1977
RURAL HOUSING RESEARCH

42 u s e 1476.
Research
capacity,
establishment.

SEC. 510. Section 506(d) of the Housing Act of 1949 is amended
to read as follows:
" ( d ) I n order to carry out this section, the Secretary shall establish
a research ^^apacity within the F a r m e r s Home Administration which
shall have authority to undertake, or to contract with any public or
private body to undertake, research authorized by this section.".
RURAL RENTAL ASSISTANCE

42USC1490a.

S E C . 511. Section 5 2 1 ( a ) ( 2 ) ( A ) of the Housing Act of 1949 is
amended by striking out " m a y " wherever it appears, except in clause
( i ) , and inserting in lieu thereof "shall".
TAXATION o r FARMERS HOME ADMINISTRATION-HELD PROPERTY

42 u s e 1490h.

42 u s e 1490h
note.

Supra.

Effective
date.
42 u s e 1490h
note.
42 u s e 4501
note.

SEC. 512. (a) Title V of the Housing Act of 1949 is amended by
a d d i n g t h e following new section at the end thereof:
" S E C . 528. All property subject to a lien held by the United States
or the title to which is acquired or held by the Secretary under this title
other than property used for administrative purposes shall be subject
to taxation by a State, Commonwealth, territory, possession, district,
and local political subdivisions in the same manner and to the same
extent as other property is t a x e d : Provided., T h a t no tax shall be
imposed or collected on or with respect to any instrument if the tax is
based on—
" ( 1 ) the value of any notes or mortgages or other lien instruments held by or transferred to the Secretary;
" ( 2 ) any notes or lien instruments administered under this title
which are made, assigned, or held by a person otherwise liable for
such t a x ; or
" ( 3 ) the value of any property conveyed or transferred to the
Secretary, whether as a tax on the instrument, the privilege of
conveying or transferring, or the recordation thereof; nor shall
the failure to pay or collect any such tax be a ground for refusal
to record or file such instruments, or for failure to i m p a r t notice,
or prevent the enforcement of its provisions in any State or
Federal court.".
(b) Notwithstanding any other provision of law, no State, Commonwealth, territory, possession, district, or local political subdivision
which has received, prior to the date of enactment of this Act, tax
payments from the Department of Agriculture based on property held
by the F a r m e r s Home Administration shall be liable for, or be obligated to refund, the amount of any such payment, which, if it had
been made after the date of enactment of this Act, would have been
authorized by the provisions of section 528 of the Housing Act of 1949,
and no officer or employee of the United States shall incur or be under
any liability by reason of having made or authorized any such
payments.
(c) The amendment made by subsection (a) shall become effective
as of J a n u a r y 1,1977.
TITLE VI—NATIONAL URBAN POLICY
SEC. 601. (a) Section 701 of the U r b a n Growth and New Community Development Act of 1970 is amended—

PUBLIC LAW 95-128—OCT. 12, 1977
(1) by striking out subsection (a) and inserting in lieu thereof
the following:
" ( a ) This title may be cited as the 'National U r b a n Policy and New
Community Development Act of 1970'.";
(2) by striking out " g r o w t h " the first time it appears in subsection ( b ) ;
(3) by inserting "energy a n d " before "our n a t u r a l resources"
in subsection ( b ) ;
(4) by inserting "and their residents" before "of adequate tax
base," in subsection ( b ) ; and
(5) by inserting "good housing in" before "well-balanced
neighborhoods" in subsection ( b ) .
(b) Section 702 of such Act is amended—
(1) by striking out subsection (a) and inserting in lieu thereof
the following:
" ( a ) The Congress finds t h a t rapid changes in patterns of urban
settlement, including change in population distribution and economic
bases of urban areas, have created an imbalance between the Nation's
needs and resources and seriously threaten our physical and social
environment, and the financial viability of our cities, and t h a t the
economic and social development of the Nation, the proper conservation
of our energy and other natural resources, and tlie achievement of
satisfactory living standards depend upon the sound, orderly, and more
balanced development of all areas of the Nation.";
(2) by inserting "and redevelopment" before "which adversely
affect" in subsection ( b ) , by striking out "our" in subsection (b)
and inserting in lieu thereof "energy and other", and by striking
out " g r o w t h " the last time it appears in subsection (b) ;
(3) by inserting "energy and other" before " n a t u r a l resources,"
in the first sentence of subsection ( c ) , by striking out " g r o w t h "
in the first sentence of subsection ( c ) , by striking out " g r o w t h "
the first time it appears in the second sentence of subsection (c)
and inserting in lieu thereof "development and redevelopment",
and by striking out "growth and stabilization" in the second sentence of subsection (c) and inserting in lieu thereof " u r b a n " ;
(4) by striking out " g r o w t h " the first time it appears in subsection ( d ) ;
(5) by striking out "help reverse trends of migration and physical growth which reinforce" in p a r a g r a p h (3) of subsection (d)
and inserting in lieu thereof "encourage patterns of development
and redevelopment w^hich minimize"; and
(6) by striking out "growth and stabilization," in p a r a g r a p h
(8) of subsection (d) and inserting in lieu thereof "development
and redevelopment, encourage", by inserting "energy and other"
before " n a t u r a l resources" in such p a r a g r a p h ( 8 ) , and by striking
out "the protection" in such p a r a g r a p h (8) and inserting in lieu
thereof "protect".
(c) Section 703 of such Act is amended—
(1) by striking out the section heading and the material
preceding p a r a g r a p h (1) of subsection (a) and inserting in lieu
thereof the following:

91 STAT. 1143
42 u s e 4501
note.

42 u s e 4501.

Congressional
findings and
declaration of
policy.

42 u s e 4502.

42 u s e 4503.

NATIONAL URBAN POLICY REPORT

" S E C . 703. (a) The President shall transmit to the Congress d u r i n g Report to
F e b r u a r y 1978, and d u r i n g F e b r u a r y of every even-numbered year Congress.

PUBLIC LAW 95-128—OCT. 12, 1977

91 STAT. 1144

thereafter, a Report on National Urban Policy which shall contribute
to the formulation of such a policy, and in addition shall include—";
(2) by striking out "and statistics, describing characteristics
of urban growth and stabilization and identifying significant
trends and developments" in paragraph (1) of subsection (a) and
inserting in lieu thereof ", statistics, and significant trends
relating to the pattern of urban development for the preceding
two years";
(3) by striking out "growth" in paragraph (2) of subsection
(a), and by inserting "affecting the well-being of urban areas"
before the semicolon at the end of such paragraph;
(4) by redesignating paragraphs (3) through (7) as paragraphs (4) through (8), respectively;
(5) by inserting after paragraph (2) the following:
"(3) an examination of the housing and related community
development problems experienced by cities undergoing a growth
rate which eq^uals or exceeds the national average;";
(6) by striking out "growth" in paragraph (4) of subsection
(a), as redesignated;
(7) by striking out "growth" in subsection (b) and inserting in
lien thereof "policy"; and
(8) by striking out "Report on Urban Growth" in subsection
(c) and inserting in lieu thereof "National Urban Policy Report"
and by striking out "growth" in such subsection and inserting in
lieu thereof "areas".
(d) The title heading for such Act is amended by striking out
"URBAN GROWTH" and inserting in lieu thereof "NATIONAL
URBAN POLICY".
(e) The part heading for part A of such Act is amended by striking
out "GROWTH".

TITLE VII—FLOOD AND RIOT INSURANCE
EXTENSION OF NATIONAL ELOOD INSURANCE PROGRAM

42 use 4026.
42 use 4056.

SEC. 701. (a) Section 1319 of the National Flood Insurance Act of
1968 is amended by striking out "September 30, 1977" and inserting
in lieu thereof "September 30, 1978".
(b) Section 1336(a) of such Act is amended by striking out "September 30, 1977" and inserting in lieu thereof "September 30, 1978".
FLOOD INSURANCE STUDIES

42 use 4127.

SEC. 702. Section 1376(c) of the National Flood Insurance Act of
1968 is amended by inserting the following before the period at the
end thereof: "and not to exceed $108,000,000 for the fiscal year 1978".
SANCTIONS

42 use 4106.
42 use 4104a.

SEC. 703. (a) Section 202(b) of the Flood Disaster Protection Act of
1973 is amended to read as follows:
"(b) In addition to the requirements of section 1364 of the National
Flood Insurance Act of 1968, each Federal instrumentality described
in such section shall by regulation require the institutions described
in such section to notify (as a condition of making, increasing, extending, or renewing any loan secured by property described in such section) the purchaser or lessee of such property of whether, in the event
of a disaster caused by flood to such property, Federal disaster relief
assistance will be available to such property.".

PUBLIC LAW 95-128—OCT. 12, 1977

91 STAT. 1145

(b) Section 3 ( a ) ( 4 ) of such Act is amended by striking out all 42 USC 4003.
after "mortgages or mortgage loans" and inserting in lieu thereof
the following: "but shall exclude assistance pursuant to the Disaster
Relief Act of 1974 (other t h a n assistance under such Act in connec- 42 USC 5121
tion with a
flood);".
note.
FLOOD INSURANCE PROGRAM IMPROVEMENTS

SEC. 704. (a) Section 1306(b) of the National Flood Insurance Act
of 1968 is amended by striking out p a r a g r a p h (2) and inserting in
lieu thereof the following:
" ( 2 ) in the case of any residential property for which the risk
premium rate is determined in accordance with the provisions
of section 1307(a) ( 1 ) , additional flood insurance in excess of t h e
limits "Specified in clause (i) of subparagraph ( A ) of p a r a g r a p h
(1) shall be made available to every insured upon renewal and
every applicant for insurance so as to enable such insured or applicant to receive coverage u p to an amount of $150,000 under the
provisions of this clause;
" ( 3 ) in the case of any residential property for which the risk
premium rate is determined in accordance with the provisions of
section 1 3 0 7 ( a ) ( 1 ) , additional flood insurance in excess of the
limits specified in clause (ii) of subparagraph ( A ) of p a r a g r a p h
(1) shall be made available to every insured upon renewal and
every applicant for insurance so as to enable any such insured or
applicant to receive coverage u p to an amount of $50,000 under
the provisions of this clause;
" ( 4 ) in the case of business property owned, leased, or operated
by small business concerns for which the risk premium rate is
determined in accordance with the provisions of section 1307
(a) ( 1 ) , additional flood insurance in excess of the limits specified
in s u b p a r g r a p h ( B ) of p a r a g r a p h (1) shall be made available
to every such owner, lessee, or operator in respect to any single
structure, including any contents thereof, related to premises of
small business occupants (as t h a t term is defined by the Secret a r y ) , u p to an amount equal to (i) $250,000 plus (ii) $200,000
multiplied by the number of such occupants which coverage shall
be allocated among such occupants (or among the occupant or
occupants and the owner) in accordance with the regulations
prescribed by the Secretary pursuant to such subparagraph ( B ) ,
except t h a t the aggregate liability for the structure itself may in
no case exceed $250,000;
" ( 5 ) any flood insurance coverage which may be made available in excess of the limits specified in subparagraph ( A ) , ( B ) ,
or (C) of p a r a g r a p h ( 1 ) . shall be based only on chargeable
premium rates under section 1308 which are not less t h a n the
estimated premium rates under section 1 3 0 7 ( a ) ( 1 ) , and the
amount of such excess coverage shall not in any case exceed an
amount equal to the applicable limit so specified (or allocated)
under p a r a g r a p h (1) ( C ) , ( 2 ) , ( 3 ) , or ( 4 ) , as applicable; and
" ( 6 ) the flood insurance purchase requirements of section 102
of the Flood Disaster Protection Act of 1973 do not apply to the
additional flood insurance limits made available in excess of
twice the limits made available under p a r a g r a p h (1).".
(b) Section 1362 of such Act is amended—
(1) by inserting " ( a ) " after " S E C . 1362.";
(2) by striking out p a r a g r a p h (3) and inserting in lieu thereof
the following:

42 USC 4013.

42 USC 4014.

42 USC 4012a.
42 USC 4103. ^

91 STAT. 1146

Real property
purchases.

Low-interest
loans for
single-family
dwellings.

Regulations.

42 use 4104.
Reimbursement
of certain
expenses.

Appropriation
authorization.

42 use 4105.
Administrative
procedures,
establishment.

Reimbursement
of certain
expenses.

PUBLIC LAW 95-128—OCT. 12, 1977

" ( 3 ) incurred significant flood damage on not less than three
previous occasions over a five-year period of time and on each
occasion the cost of repair, on the average, equaled or exceeded
25 per centum of the value of the structure at the time of each
flood event or was damaged substantially beyond repair by flood
while so covered,"; and
(3) by adding at the end thereof the following:
" ( b ) When any real property referred to in p a r a g r a p h s (1) and
(2) of subsection (a) has sustained damage as a result of a single
casualty of any nature under such circumstances t h a t a statute, o r d i nance or regulation precludes its repair or restoration or permits
repair or restoration only at a significantly increased construction
cost, the Secretary may enter into negotiations with the owner of the
property or interest therein for the purchase of such property for the
uses and purposes of this section.
" ( c ) "Whenever, as a result of damage from any casualty, the repair,
reconstruction, or substantial improvement of any single-family
dwelling structure located within a regulatory flood way and insured
under the flood insurance program is deemed by the Secretary to be
made more effective from the standpoint of prudent flood plain management by elevation of the structure so it will not interfere with the
flow of water from the base flood within such regulatory floodway,
the Secretary is authorized to make a low-interest loan at a rate of
interest of 2 per centum per annum, repayable in ten years, to the
owner of any such structure for the purpose of so elevating the structure. There is authorized to be appropriated for purposes of implementing this subsection not to exceed $4,500,000.
" ( d ) The Secretary is authorized to issue such regulations as may
be necessary to carry out the purposes of this section.".
(c) Section 13(>3 of such Act is amended—
(1) by redesignating subsection (f) as subsection (g) ; and
(2) by inserting after subsection (e) the following:
" ( f ) When, incident to any appeal under subsection (b) or (c), the
owner or lessee of real property or the community, as the case may be,
incurs expense in connection with the services of surveyors, engineers,
or similar services, but not including legal services, in the effecting of
an aijpeal which is successful in whole or part, the Secretary shall
reimburse such individual or community to an extent measured by
the ratio of the successful portion of the appeal as compared to the
entire appeal and applying such ratio to the reasonable value of all
such services, but no reimbursement shall be made by the Secretary
in respect to any fee or expense payment, the payment of which was
agreed to be contingent upon the result of the appeal. There is authorized to be ajjpropriated for purposes of implementing this subsection,
not to exceed $250,000.".
(d) Section 201 of the Flood Disaster Protection Act of 1973 is
amended by adding at the end thereof the following:
" ( e ) The Secretary is authorized to establish administrative procedures whereby the identification under this section of one or more
areas in the community as having special flood hazards may be
appealed to the Secretary by the community or any owner or lessee
of real property within the conmiunity who believes his property has
been inadvertently included in a special flood hazard area by the
identification. When, incident to any appeal under this subsection, the
owner or lessee of real property or the comnmnity, as the case may
be, incurs expense in connection with the services of surveyors, engi-

PUBLIC LAW 95-128—OCT. 12, 1977

91 STAT. 1147

neers, or similar services, but not including legal services, in the effecting of an appeal which is successful in whole or part, the Secretary
shall reimburse such individual or community to an extent measured
by the ratio of the successful portion of the appeal as compared to
the entire appeal and applying such ratio to the reasonable value of
all such services, but no reimbursement shall be made by the Secretary
in respect to any fee or expense payment, the payment of which was
agreed to be contingent upon the result of the appeal. There is author- Appropriation
ized to be appropriated for purposes of implementing this subsection authorization.
not to exceed "$250,000.".
Community
Reinvestment
SEC. 801. This title may be cited as the "Community Reinvestment Act of 1977.
Citation of
Act of 1977".
title.
SEC. 802. (a) The Congress finds that—
12 u s e 2901
(1) regulated financial institutions are required by law to note.
demonstrate that their deposit facilities serve the convenience and 12 u s e 2901.

T I T L E VIII—COMMUNITY REINVESTMENT

needs of the communities in which they are chartered to do
business;
(2) the convenience and needs of communities include the need
for credit services as well as deposit services; and
(3) regulated financial institutions have continuing and affirmative obligation to help meet the credit needs of the local
comiimnities in which they are chartered.
(b) It is the purpose of this title to require each appropriate Federal financial supervisory agency to use its authority when examining
financial institutions, to encourage such institutions to help meet the
credit needs of the local communities in which they are chartered
consistent with the safe and sound operation of such institutions.
SEC. 803. For the purposes of this title—
12 u s e 2902.
(1) the term "appropriate Federal financial supervisory agency"
means—
(A) the Comptroller of the Currency with respect to
national banks;
(B) the Board of Governors of the Federal Reserve System
with respect to State chartered banks which are members of
the Federal Reserve System and bank holding companies;
(C) the Federal Deposit Insurance Corporation with
respect to State chartered banks and savings banks which
are not members of the Federal Reserve System and the
deposits of which are insured by the Corporation; and
(D) the Federal Home Loan Bank Board with respect to
institutions the deposits of which are insured by the Federal
Savings and Loan Insurance Corporation and to savings and
loan holding companies;
(2) the term "regulated financial institution" means an insured
bank as defined in section 3 of the Federal Deposit Insurance Act 18 u s e 709.
or an insured institution as defined in section 401 of the National
Housing Act; and
12 u s e 1724.
(3) the term "application for a deposit facility" means an application to the appropriate Federal financial supervisory agency
otherwise required under Federal law or regulations thereunder
for—
(A) a charter for a national bank or Federal savings and
loan association;

91 STAT. 1148

12 u s e 1828.
12 u s e 1724.

12 u s e 1842.
12 u s e 1730a.
Financial
institutions,
evaluation.

12 use 2903.

Report to
eongress.
12 u s e 2904.
Regulations.
12 u s e 2905.

PUBLIC LAW 95-128—OCT. 12, 1977
(B) deposit insurance in connection with a newly chartered
State bank, savings bank, savings and loan association or
similar institution;
(C) the establishment of a domestic branch or other facility
with the ability to accept deposits of a regulated financial
institution;
(D) the relocation of the home office or a branch office of
a regulated financial institution;
(E) the merger or consolidation with, or the acquisition
of the assets, or the assumption of the liabilities of a regulated financial institution requiring approval under section
18(c) of the Federal Deposit Insurance Act or under regulation^ issued under the authority of title IV of the National
Housing Act; or
(F) the acquisition of shares in, or the assets of, a regulated financial institution requiring approval under section
3 of the Bank Holding Company Act of 1956 or section 408
(e) of the National Housing Act.
SEC. 804. In connection with its examination of a financial institution, the appropriate Federal financial supervisory agency sliall—
(1) assess the institution's record of meeting the credit needs
of its entire community, including low- and moderate-income
neighborhoods, consistent with the safe and sound operation of
such institution; and
(2) take such record into account in its evaluation of an application for a deposit facility by such institution.
SEC. 805. Each appropriate Federal financial supervisory agency
shall include in its annual report to the Congress a section outlining
the actions it has taken to carry out its responsibilities under this title.
SEC. 806. Regulations to carry out the purposes of this title shall be
published by each appropriate Federal financial supervisory agency,
and shall take effect no later than 390 days after the date of enactment
of this title.
T I T L E IX—MISCELLANEOUS
INDIAN AND ALASKA NATIVE HOUSING AND COMMUNITY

42 u s e 3533.
Special
Assistant for
Indian and
Alaska Native
Programs.

Report to
eongress.

DEVELOrMENT

SEC. 901. Section 4 of the Department of Housing and Urban Development Act is amended by adding at the end thereof the following:
"(d) (1) There shall be in the Department a Special Assistant for
Indian and Alaska Native Programs, who shall be responsible for
coordinating all programs of the Department relating to Indian and
Alaska Native housing and community development. The Special
Assistant for Indian and Alaska Native Programs shall be designated
by the Secretary not later than 60 days after the date of enactment
of this subsection.
"(2) The Secretary shall, not later than December 1 of each year,
submit to Congress an annual report which shall include—
"(A) a description of his actions during the current year and
a projection of his activities during the succeeding years;
"(B) estimates of the cost of the projected activities for succeeding fiscal years;
"(C) a statistical report on the conditions of Indian and Alaska
Native housing; and
,!-,...•
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PUBLIC LAW 95-128—OCT. 12, 1977

91 STAT. 1149

"(D) recommendations for such legislative, administrative,
and other actions, as he deems appropriate,".
MOBILE H O M E SAFETY

SEC. 902. (a) Section 604 of the Housing and Community Develop- 42 use 5403.
ment Act of 1974 is amended by adding at the end thereof the
following:
" (h) The Secretary shall exclude from the coverage of this title any Construction
structure which the manufacturer certifies, in a form prescribed by and safety
standards
the Secretary, to be:
"(1) designed only for erection or installation on a site-built coverage,
exclusion.
permanent foundation;
"(2) not designed to be moved once so erected or installed;
"(3) designed and manufactured to comply with a nationally
recognized model building code or an equivalent local code, or
with a State or local modular building code recog;nized as generally equivalent to building codes for site-built housing, or with
minimum property standards adopted by the Secretary pursuant
12 u s e 1707.
to title I I of the National Housing Act; and
" (4) to the manufacturer's knowledge is not intended to be used
other than on a site-built permanent foundation.",
42 u s e 5409.
(b) Section 610 (a) of such Act is amended—
(1) by striking out "or" at the end of paragraph (4) ;
(2) by striking out the period at the end of paragraph (5) and
inserting in lieu thereof "; or"; and
(3) by adding at the end thereof the following new paragraph:
"(6) issue a certification pursuant to subsection (h) of section
604, if such person in the exercise of due care has reason to know
that such certification is false or misleading in a material respect.".
HOMEOWNERSHIP COUNSELING

SEC. 903. Section 106(a) (2) of the Housing and Urban Develop- 12 USe 1701x.
ment Act of 1968 is amended by inserting the following immediately
before the period at the end of the first sentence thereof: "and may
provide such services for other owners of single family dwelling units
insured under title I I of the National Housing Act".
PROTOTYPE COSTS

SEC. 904. (a) Beginning in calendar year 1979, the Secretary of Prototype
Housing and Urban Development shall prepare and publish annually housing costs,
prototype housing costs for one- to four-family dwelling units for each annual
publication.
housing market area in the United States, as determined by the Secre- 42
use 3540.
tary. Prototype housing costs for an area shall be determined on the
basis of the Secretary's identification and estimate of reasonable construction and other costs (including reasonable allowances for the cost
of land and site improvements) for that area of various types and sizes
of new one- to four-family dwelling units designed for various segments of the housing market of the area, as determined by the
Secretary. In determining prototype housing costs, the Secretary is
authorized to take into account the need for durability required for
economic maintenance of housing, the need for amenities suitable to

91 STAT. 1150

PUBLIC LAW 95-128—OCT. 12, 1977
assure a safe and healthy family life and neighborhood environment,
the application of good design and quality in architecture, and the need
for maximum conservation of energy, as well as the advice and
recommendations of local housing producers.
(b) The Secretary is authorized to take such action as may be necessary to develop, aggregate, and evaluate data and other information
required for the timely development, implementation, and maintenance
of the prototype housing cost system referred to in subsection (a).
Approved October 12, 1977.

LEGISLATIVE HISTORY:
HOUSE REPORTS: No. 95-236 (Comm. on Banking, Finance and Urban Affairs) and
No. 95-634 (Comm. of Conference).
SENATE REPORT No. 95-175 accompanying S. 1523 (Comm. on Banking, Housing,
and Urban Affairs).
CONGRESSIONAL RECORD, Vol. 123 (1977):
May 6, 10, 11, considered and passed House.
June 6, 7, considered and passed Senate, amended, in lieu of S. 1523.
Oct. 1, Senate agreed to conference report.
Oct. 4, House agreed to conference report.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 13, No. 42:
Oct. 12, Presidential statement.