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METROPOLITAN CITIES, URBAN COUNTI, ES~ AND,TOWNS: A three-factor formula - the city or county's ratio of population, poverty double counted and regionalized), and housing overcrowding - would be used to determine a "basic grant entitlement". Also each city or county would have a "hold- harmless" calculated for it, with the formula phased in and hold-harmless phased out. First year, the community would receive the higher of its hold- harmless or one-third of formula; second year, higher of hold-harmless or two thirds of formula; third year, higher of hold-harmless or formula: fouz~h year, higher of formula or two-thirds of hold-harmless; fifth year, higher or formula or one-third of hold-harmless; and sixth year, formula only. AUTHDRIZATIONS The Housing and Community Development Act will become effective on January 1, 19'/5, with 2.5 billion authorized for the first year, 2.95 billion dollars for fiscal year 1976, and 2.95 billion dollars in fiscal year 1977. In addition, 50 million dollars is available in fiscal years 1975-1976, and not to exceed 100 million dollars in fiscal year 1977 for use by communities with urgent needs that cannot be met by the allocation provisions of the bill. HUD may apply up to 20% of any community's grant (after local consultation) towards repayment of temporary loans from existing projects if additional capital grants are required for completion. HUD may advance to hold-harmless cities up to 10% of their first year entitlement for continuing projects or for preparing for block grant implemen- tat ion. ANALYSIS OF TITLE II OF THE HOUSING AND COMMUNITY DEVELOPMENT ACT 1974 Of primary importance in the new legislation is the development of a new "housing assistance payments program for lower income families". Section 8 of the United States Housing Act of 1937, as contained in the Housing and Community Development Act of 1974; formerly called Section 23 program for "Housing in Private Accomodations". The primary purpose of Section B is to aid lower-income families in obtaining a decent place to live and of promoting economically mixed housing. Assistance payments may be made with respect to existing, newly-constructed and substantially-rehabilitated housing. The Secretary of HUD is authorized to contract with public housing agencies and these agen?ies may contract with owners of existing dwelling units. In areas where no public housing agency has been organized or where the Secretary of HUD determines that a public housing agency is unable to implement the progt.am, the Secretary may enter into contracts directly O001C",