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Sec. 401(d) authorizes $400 million for rural rental assistance payments, of which at least $200 million is to be used to assist tenants living in Sec. 514 and 515 newly constructed and substantially rehabilitated rental housing.

Sec. 401(e) authorizes $12 million for Sec. 523 self-help housing technical assistance grants and $3 million of additional funding for the Sec. 523 self-help development fund loan program.

Rural housing insurance fund amendments

Sec. 402 amends Section 517(j) to remove the authority of the Secretary of Agriculture to utilize the Rural Housing Insurance Fund (RHIF) for making rental assistance payments under Section 521(a)(2) and the authority to utilize the Fund for making construction defects compensation payments pursuant to Section 509(c) since both will be funded through direct authorizations for appropriations.

Tenant contribution

Sec. 403 conforms the definition of income and adjusted income with that applied to the HUD assisted housing programs as amended by this bill in Sec. 202. For rural rental housing assistance programs, the tenant contribution to rent shall be the highest of (1) 25 percent of adjusted family income, (2) 10 percent of gross family income, or (3) the portion of the family's welfare payment designated for housing cost. In addition, provisions are included so that tenant rental payments may not be increased by more than 10 percent per year, and that the provisions in this section will be effective with respect to any rent due on or after the date of enactment. Section 502 loan terms

Sec. 404 authorizes the Secretary of Agriculture to extend the term of any Sec. 502 loan not to exceed 5 years if such an extension will be necessary in order to permit on otherwise eligible low income borrower to afford to participate in the Sec. 502 program. Section 502 interest credits

Sec. 405 provides that interest credit assistance made to Sec. 502 borrowers shall not exceed the lesser of (1) the balance of the monthly principal, interest, taxes and insurance payment remaining after applying 20 percent of the adjusted income of the mortgagor; or (2) the difference in the amount of the monthly principal and interest payment due under the mortgage and the payment due if the mortgage carried one percent interest rate.

Fee inspectors and appraisers

Sec. 406 authorizes the Secretary to utilize fee inspectors and appraisers to process loan and grant applications where a county or district office is unable to expenditiously process applications and provides that the Secretary may include the cost of such services in the amount of each loan and grant.

Determination of farmworker housing need

Sec. 407 provides that for the purposes of Sec. 514 or 516 farmworker housing assistance, the Secretary shall take into considera

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tion the housing needs only of domestic farm labor, including migrant farmworkers, in the area and provides that the determination shall be made without regard to other housing needs in the

area.

Rural rental housing loans

Sec. 408(a) provides that rural rental housing loans may be made for the purpose of utilizing as rental or cooperative housing for low income persons, without regard to whether or not Sec. 521 rental assistance payments will also be utilized to assist such persons, existing Sec. 502 dwellings that the Secretary holds or is likely to hold as a result of the transfer or foreclosure of such dwellings and with respect to which eligible Sec. 502 applicants that might purchase such dwellings have not been identified afer a reasonable period.

Sec. 408(b) provides that for the purpose of determining the market feasibility of any rental assistance project, applicants for projects requiring rental assistance payments shall only be required to demonstrate that a market exists for persons and families in need of and eligible for rental assistance payments. For projects expecting to use assistance provided by a State or other political subdivision that is similar to the assistance provided under Sec. 521, applicants shall be required to demonstrate that a market exists for persons and families eligible for rental assistance, that contracts for such assistance are to be made for a period not less than 5 years, and that such rental assistance shall be made available by the State or political subdivision not less frequently than annually, requires the Secretary to establish standards for housing and related facilities rehabilitated or repaired under Sec. 515 that are less than standards for newly constructed rental housing but which will provide decent, safe and sanitary housing; provides that the Secretary may not deny Sec. 515 or Sec. 521 assistance on the basis that the project involved is to be located on more than one site; that the Secretary may not deny Sec. 515 loans on the basis that rental assistance payments may be required in connection with such loans; or promulgate any regulation that will have the effect of denying occupancy to eligible persons on the basis that such persons require rental assistance payments; also, deletes the priority that was given to rental projects in which 40 percent or fewer of the project units were to receive rental assistance payments.

Definition of rural area

Sec. 409 provides that a rural area with a population in excess of 10,000 but below 20,000 is eligible to participate in FmHA housing programs through the end of the fiscal year 1984, as long as it has a serious lack of mortgage credit for lower and moderate income families.

Shared elderly housing

Sec. 410 provides that rural rental assistance payments shall be permitted for elderly and handicapped persons who elect to live in shared housing in a single family dwelling and provides that the

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Secretary shall issue minimum property standards or modify existing standards for such shared housing.

Processing of applications

Sec. 411 provides that in processing applications for FmHA assistance the Secretary shall give priority to applications from persons having the lowest incomes and the greatest housing needs or to applicants whose projects will serve such persons. In making assistance available, the Secretary shall provide a preliminary reservation of assistance at the time of the initial approval of the project.

Rental housing preservation grants

Sec. 412 provides for a new program of rental housing preservation grants to units of general local government, Indian tribes, private and public nonprofit organizations for housing repair and rehabilitation projects for low income persons in rural areas; that such assistance may be provided for rental housing and for multifamily cooperative housing that has a resale structure that maintains affordability for low income persons, and if determined necessary to low income homeowners.

Use of funds.--The assistance must be used to stimulate the repair and rehabilitation of rental or limited equity cooperative buildings, and may include single-family dwellings occupied by or to be occupied by low income persons. If the Secretary determines that such rental or cooperative housing is inappropriate the meet the needs of such persons in any area, by providing capital grants, loans, interest reduction payments, or comparable assistance to reduce shelter costs for low income persons and, to the extent feasible, for persons with incomes of 50 percent or less of area median income.

Administration of funds.-The Secretary is authorized to enter into contracts with units of general local governments or nonprofit organizations to carry out repair and rehabilitation activities subject to rules, regulations and procedures promulgated by the Secretary.

Allocation of funds.-In allocating assistance, the Secretary shall seek to ensure that there is a reasonable distribution of such assistance among eligible rural areas throughout this Nation.

Project selection criteria.-The Secretary shall select projects for assistance on the basis of (1) the extent to which the activities will assist low income persons in need of adequate shelter (with a priority to applications for projects that assist the maximum number of persons and families whose incomes do not exceed 50 percent of the area median income); (2) the participation of other public or private organizations providing financial assistance to lower the cost of such projects, or to which activities will be undertaken in rural areas having populations below 10,000 or in remote parts of other rural areas; and (3) the extent to which the repair and rehabilitation activities may be expected to result in achieving the greatest degree of repair or improvement for the least cost per unit or dwelling.

Amount of assistance.-The amount of assistance is limited to the least amount that the Secretary determines is necessary to

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repair and rehabilitate housing that will provide decent, safe and sanitary housing for low income persons.

Terms and conditions of assistance.-Assistance will be made to rental or cooperative housing only if: the project owner agrees to assure compliance with the program's requirements and assures that the project is financially feasible; the project owner agrees that repaired and rehabilitated units will be occupied or available for occupancy by low income persons for not less than a 15-year period; the project owner will pass on to tenants any reduction in debt service payments resulting from this assistance; the project owner will not discriminate against tenants receiving other housing assistance, and the owner will not convert the units to condominiums during the 15-year period; units of local government and nonprofit organizations that apply to administer the assistance will certify that they will conform with the provisions of P.L. 88-352 and 90-284 (the Fair Housing laws); the owner agrees to enter into and abide by written leases which provide that: any proposed rent increase shall be reviewed by the unit of local government or nonprofit organization which also shall determine any increase as justified and reasonable; tenants may be evicted only for good cause and tenants may appeal to an impartial hearing officer any decision which is detrimental to their tenure and well being. For homeowners projects assistance may be provided only if there is compliance with: the Fair Housing Laws; in addition any other requirements that the Secretary may establish to carry out the purposes of this section. This section also provides that the unit of local government or nonprofit organization utilizing the assistance will supervise and inspect repairs and rehabilitation undertaken by using persons other than employees of the local government or nonprofit organization; and that periodic reports to the Secretary will be made by the local government or nonprofit organizations utilizing the assistance.

Failure to carry out agreements.-Provides that if owners of properties assisted under this section fail to carry out the agreements, the project owner or successor must repay the assistance with interest and that any assistance provided shall constitute a debt and shall be secured by the security instruments provided by the owner to the Secretary.

Project rents.-Provides that rents charged low income tenants must be approved by the Secretary; shall not exceed 25 percent of their adjusted income; and, shall not be increased without 30 days prior written notice. Also, rent schedules submitted to the Secretary shall be deemed approved by the Secretary, within 60 days after receipt of schedule, unless such schedule is disapproved.

Recapture of assistance.--Provides that the assistance will be recaptured by FmHA upon any disposition of housing that involves a discontinuation of the use of housing for low income persons as required by this section.

Advance payments.-The Secretary shall make advances of the assistance as necessary to carry out the program.

Definition of unit of general local government.-A unit of general local government is any borough, city, county, parish, town, township, village, or other general purpose State political subdivision.

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Regulations.-The Secretary must issue regulations necessary to carry out the provisions of this section no later than six months after enactment.

Authorization.-$100 million is authorized for fiscal year 1984 for assistance under this section and not more than 10 percent the amounts of the assistance may be used by the units of general local government and nonprofit organizations for administrative expenses in carrying out the program.

Guaranteed loan demonstration program

Sec. 413 authorizes such sums as may be necessary for the Secre tary of Agriculture to establish a program to demonstrate the effectiveness of providing shallow interest credit subsidies to eligible persons purchasing their homes with FmHA guaranteed loans to encourage State housing finance agencies and private lenders to make mortgage financing available in rural areas. For the purposes of the demonstration, the Secretary is authorized to subsidize the interest rate of loans guaranteed by FmHA down to 91⁄2 percent for borrowers with adjusted incomes of not more than 130 percent of the area median income. Provisions are included to require that the subsidy shall be a secured debt which is subject to recapture on the disposition or nonoccupancy of the property by the borrower.

Farm labor housing

Sec. 414 provides that the Secretary shall, to the extent approved in appropriation Acts, utilize not more than 10 percent of the amount appropriated for Sec. 516 grants for financial assistance to eligible private and public nonprofit agencies to encourage the development of domestic and migrant farm labor housing projects.

TITLE V-PROGram AmendmentS AND EXTENSIONS

PART A-FEDERAL HOUSING ADMINISTRATION MORTGAGE INSURANCE PROGRAMS

Extension of mortgage insurance programs

Sec. 501 of the bill extends through fiscal year 1984 (September 30, 1984), the authority of the Secretary of Housing and Urban Development to insure mortgages or loans under certain HUD-FHA mortgages or loan insurance programs contained in the National Housing Act. Under existing law, these authorities will expire on May 20, 1983.

Subsection (a) extends through fiscal year 1984 Sec. 2(a)-property improvement and manufactured home loan insurance programs. Subsection (b) extends through fiscal year 1984 all FHA mortgage insurance programs under the authority of the HUD Secretary including Sec. 203-basic home mortgage insurance; Sec. 207— rental housing insurance; Sec. 213-cooperative housing insurance; Sec. 220-rehabilitation and neighborhood conservation housing insurance; Sec. 222-mortgage insurance for servicemen; Sec. 223miscellaneous housing insurance, including insurance in older, declining urban areas and for existing multifamily housing projects; Sec. 231-housing for the elderly; Sec. 232-nursing homes; Sec.