Evening star., 1934-11-04
NEW HOME LOAN
PLAN SUPPORTED
Riggs and Guaranty Trust
Lead in Insurance Plan
Applications.

Washington played a prominent
part yesterday as actual operations
started under the second phase of
the housing act. the mortgage insur-
ance program, through which the
Government seeks to make millions
of dollars available on favorable terms
for home building.
That Capital financial institutions
will be among the first to lend the
Government cooperation in this pro-
gram. which is heavily counted upon
in the battle for recovery, was ap-
parent when Federal Housing Admin
istrator James A. Moffett announced
that Riggs National Bank, through
its president, Robert " Fleming, was
the first applicant for insurance of a
mortgage, and the second applicant
for approval as mortgages.
The Guaranty Trust Co. of New
York, the largest institution of its
kind in the world, became the first
applicant for approval as mortgage,
the administrator reported. He stated
many applications have been received
for insurance of mortgages under title
2 OF the housing act, and for approval
as mortgages.
Application Pleases Moffett.
Mr.. Moffett commented that it was
significant of the support and CO.
operation which the Federal Housing
Administration may expect from the
large banks, trust companies and
other lending institutions of the coun-
try that the first application came
from the Guaranty Trust signed by
William G. Potter, chairman of the
board.
That institution is the largest
trust company in the world" state
ment from the Housing Administra-
tion said. 1T was chartered in 1864
and in 1929 merged with the Ma
tional Bank of Commerce. The
statement of the company's condition
as of September 80, 1884, showed
total resources of S1,497,373,747.52."
Title 2 of the housing act, for
which the rules of operation have
just been announced, provides for
the insurance of mortgages up to 80
per cent of the appraised value of the
home. To be eligible for an insured
mortgage the home purchaser must
have 20 per cent of the purchase
price. The principal obligation of the
mortgage cannot exceed $4,000. The
interest rate was fixed at 5 per cent
by President Roosevelt.
Building Revival Expected.
Through this section of the housing
act the Government seeks to ac-
complish directly the creation of an
almost limitless national market for
home loan mortgages and the stabili-
Zatlon of home real estate values
thereby; elimination of exorbitant costs
of home financing and the consequent
saving of millions of dollars to home
owners, and the launching of build
ing revival which will put millions of
men back to work.
The section is aimed to help the
man who wishes to refinance his home
on more favorable terms, as we'll as to
Encourage new building If the man
who now has short-term mortgage
of less than 80 per cent of the ap-
praised value OF his home and who
owns an equity of 20 per cent in it
wishes to refinance his home he can
do so over a maximum period of 20
years at 5 per cent interest. The
same long term amortized mortgage
may be obtained by the man desirous
of purchasing or building a home.
The Housing Administration an
nounced that all plans for beginning
the insurance Of mortgages virtually
have been completed. An army of
employees is being assembled to in
vestigate the applications for loans
to determine whether they are Of the
type which will permit insurance by
the Government.