Evening star., 1935-06-07
HOUSING COST CUT
BY j. s. FORESEEN
Fahey Says on Forum Home
Loan Bank Board to
Make 1/a Slash.

In its long time operation, the Fed
eral Home Loan Bank Board and its
allied agencies. including the Home
Owners Loan Corp. should serve to
reduce the cost of housing to the
average American urban family about
one e-third, John H. Fahey. chairman
of the board, declared last night in an
address on the National Radio Forum.
sponsored by The washington Evening
Star and the National Broadcasting
Co.
At the present time. Mr.. Fahey
said. the actual cost of shelter takes
about 80 cents out Of each dollar
earned by urban families In the small
salary scale Successful functioning
of the Home Loan Banks, the Cor
poration and the Federal Savings and
Loan Corp should bring this cost
down to about 20 cents, the chair
man said.
In discussing distribution of the
new appropriation just granted the
Corporation. Mr.. Fahey emphasized
that loans will be made only TO those
who qualify under terms OF the
Corporation and to those who seem
reasonably likely to repay the obli-
cation within the l5-year term. II
Is the determination Of the Corpora
ton not to be imposed upon by those
not entitled to such aid he added.
The text Of Mr. Fahey's address fol-
lows:
I am deeply indebted to the Ma
tional Radio Forum for the oppor-
k,,- - t,ll tn fapinhf r.
cerning continuance of the work Of
the Federal Home Loan Banks and
the Home Owners Loan Corp. pro-
vided for by the recent amendments
to the home loan act passed by Con-
gress and approved by the President
q few days ago.
am sure all who have had the
privilege Of hearing the many valuable
discussions which the Forum has pre-
sented appreciate the great public serv-
tce rendered by The Washington Eve
ming Star and the National Broad
casting Co. in making these talks pos
sible.
The people Of the country should
understand fully what the Federal
Government is doing. not only to re-
lieve home loan distress, but to make
better homes possible at lower cost.
and to protect investors in home
mortgage loans The various ac-
tivities under the Federal Home Loan
Bank Board touch very intimately
the hearts and the pocketbooks Of
many millions of our citizens. Their
main purpose is to give greater Secur-
70 nf Sn,ol1 r,1ndara .
means in the ownership OF their
homes. and in the employment OF
their savings.
10 Million Families Own Homes.
If you have a home Of your own In
any American town or city, or wish
to have one. then you have very
personal stake In the steps that your
Government is taking to make home
ownership safer and less expensive.
More than 10 million families own and
live in urban homes in the United
States. Most Of them have faced. as
perhaps you have, the problem Of hold
ing their homes against the dangers OF
economic depression. Yet many Of them
have very little knowledge of the
agencies which the Government has
set up to protect them against the
destruction of real estate values.
Even if you live in a city apartment,
or in a rented house or on a farm,
you still have direct concern in
what the Government has done in
the field of home finance, in case you
carry a life insurance policy. or own q
savings account. The savings Of so
million American men and women are
placed largely in home loans by our
insurance companies and savings
banks. All OF these savers. therefore,
have a deep mutual interest in the
program which the Government Is
carrying out for the purpose of keep
ing those loans safe.
The new act of Congress affecting
home mortgages which the President
has just signed and in which he has
constantly maintained intense in
terest. should have far-reaching ef-
fects II the people take full advantage
Of it. 1t will assist not only the now
relatively small number of urban
home owners who are in danger of
foreclosures, but also the great multi
tude Of families who are not in dis
tress. Mortgage relief is only a
temporary and incidental part of the
work of the Federal Home Loan Bank
Board. 1t is handled by just one of
the four agencies under its super
vision. The other three agencies are
permanent. They have for their OBJ
jective the future development of
American home finance, through the
private lending institutions, along
much sounder lines than those which
led 30 many home owners and small
'savers to disaster in the past. and
made home ownership unduly expen-
sive through excessive mortgage costs.
Summary Of Purposes.
These long-run purposes of the
board in the interest of the entire
public can be summarized briefly in
three divisions:
First, Is the task of protecting
through insurance the savings of
the people invested in home
financing thrift institutions.
Second, making sample credit
reserves available to home owners
on liberal. terms through the pri-
vate home-loan agencies.
Third. is the vital purpose of en-
abling American families to finance
or refinance the purchase and
ownership Of their dwellings at
lower cost, through an improved
type Of long-term mortgage loan
from private lenders which can be
Maid of conveniently oyer a reriod
Of years.
ALI three Of these objectives of the