SUMMARY OF THE HOUSING ACT OF 1956

TITLE I_FHA INSURANCE PROGRAMS

Title I Home Improvement Loans

1. Extended the program to September 30, 1959.

2. Permits the FHA Commissioner to waive the 6-months occupancy requirement.

3. Increases the maximum loan limit (single family dwelling) to 93,500.

4. Gives the FHA Commissioner authority to increase the maximum term of the Title I loans to 5 vears and 32 days.

5. Increases the maximum loan for improving a multiunit structure to $15,000 and not over $2,500 per unit.

6. Authorizes a $5 discount rate for loans up to $2,500 and g4 rate in excess of $2,500.

Sales Housing Mortgage Insurance fncreases the maximum loan for disaster housing under Sec. 203 (h) from 97,000 to 912,000.

Rental Housing (Sec. 207)

' Permits a loan of. 90/o instead of 8O/o and not to exceed $2,250 per room (or $8,100 per unit if the number of rooms is less than 4) or not to exceed $1,000 per space or $300,000 per mortgage for trailer courts: Provided that, as to projects to consist of elevator-type structures, the Commissioner may increase the dollar amount limitation to not exceed $2,7W per room, and $8,40O per unit.

Housing for the Elderly

Where the mortgagor is over 6O years of age, a third person can make the down payment.

Also authorizes a mortgage of %/o of replacement costs by non-profit corporations (maximum of $8,100 per unit) for rentals for elderly persons where the entire structure is designed for such elderly persons.

Also authorizes H&HFA to set uD a commission to study the housing of elderly persons.

Cooperative Housing (Sec. 213)

Reduces f.rom 65/o to SO/a the proportion of veterans in a cooperative group required to make the cooperative eligible for the more liberal terms for a veteran cooperative.

The FHA Commissioner is authorized, to increase the maximum loan amount available by $1,000 per room in high-cost areas.

A new provision which would permit a mortgagorsponsor approved by FHA to obtain an FHA-insured mortgage upon certification to the Commissioner that the completed housing project will be sold to a cooperative group. The sponsor could obtain an 85/o mortgage (of replacement cost). When completed it is to be sold to a cooperative group which will then be eligible for the higher ratio mortgage. If the sponsor fails to sell it, he is no longer eligible for any FHA-insured loans.

General FHA Mortgage Insurance Authorization

Increased the authorization to $3 billion for next fiscal year.

Housing in Urban Renewal Areas

Authorizes a lO% profit (except on the land) for sponsors of Sec. 220 projects unless the Commissioner decides it is unreasonably high.

Also, the FHA may increase the doliar limitations by $1,000 per room in high-cost areas.

Low Cost Housing for Displaced Families (Sec. 221) fncreased from $7,5@ to $9,0O0 the maximum loan, ($10,000 in high-cost areas) and authorizes a l0oo/o rnortgage (except for $200 cash payment which includes closing costs), and a 40-year loan.

Cost Certifications

Makes cost certifications final upon approval of FHA Commissioner.

TITLE II_SECONDARY MORTGAGE MARKET

Under existing law, FNMA requires lenders selling mortgages to FNMA to buy stock of FNMA equal to 3/o oI the mortgages sold. The new bill lowers this requirement to 2/o or a lor,ver figure as determined by FNMA but not lower than l/o.

Also under the bill, special assistance mortgages purchased by FNMA must be bought at not less than 99, for a period of one year.

TITLE III_SLUM CLEARANCE AND URBAN RENEWAL

Increases the ceiling on urban renewal funds available to any one State. Also provides assistance for families or businesses forced to give up homes or businesses as a result of slum clearance. Also a number of other less important amendments.

TITLE IV_PUBLIC HOUSING

Authorizes 35,000 units a year, for 2 years, and requires the locality to have a workable program. Housing for the Elderly

Authorizes construction of new housing or remodeling of existing housing for the elderly, and authorizes a prior preference for such persons.

Also authorizes a single person over 65 to occupy public housing.

Also authorizes a cost of $2,250 per room for public housing for elderly persons.

Also made provision for ,transfer of farm-labor camps and for disposition of certain defense housing.

TITLE V-MILITA.RY HOUSING

Extends this program for two years and permits an average of not to exceed $16,500 per unit.

Also gives authority to the Secretary of Defense to acquire Wherry Act housing by purchase or condemnation at not to exceed the FHA's estimate of replacement cost.

TITLE VI_MISCELLANEOUS

Directs H&HFA to undertake research on national housing policies and programs.

Revived the program for loans and grants to public and non-profit agencies for hospital construction.

Farm Housing-Title V of the Housing Act of 1949 is extended for 5 years, and authorizes $450 million for farm housing loans, $10 million for contributions by the Secretary of Agriculture to prevent defaults in payments of loans for potentially adequate farms, and $50 million in grants and loans for improvement and repair of farms.

The VA Direct Home Loan program was continued for one year beyond 1957.