Evening star., 1935-09-07
HOME FINANCING
METHOD CHANGED
IN D. c. BY F. H. A.
378 Mortgages Are Insured
Here for Total of
$2,475,000.
200 MORE IN PROCESS
OF GETTING APPROVAL
Enthusiasm of Speculative Home
Builders Held Encouraging
Aspect of Promotion.
BY JAMES Y. NEWTON.

BY JAMES Y. NEWTON.
Predictions made in some quarters
q year ago that Title II of the Ma
tional Housing act would revolutionize
the method of home financing in
Washington are partially borne out
in the announcement today that the
Federal Housing Administration has
insured 378 mortgages here for total
of s2,475,O0O in the brief time of its
operation.
Title II of the housing act, carrying
Government insurance of private
mortgage loans and new method OF
financing along long-term lines, was
launched in January. Progress was
exceedingly slow at first as the new
machinery of F. H. A. swung into
action, and as the Administration
began the huge task of educating
home owners ard prospective home
owners in the new thought in mort
gage lending. Financial institutions
were reluctant to invest At that time
in almost any type of private construc-
ton, and in particular home flnanc-
ing houses were reluctant to enter
into the F. H. A. plan.
Interest Increased.
However, with each succeeding
week interest in the Administrators
plan increased, and soon the local
office was flooded with inquiries about
the new procedure. F. H. A. started
insuring loans in February and an in
crease in the amount of business has
been shown each month over the
preceding one. Henry H. Dearing,
chief of the Administrations District
of Columbia office, stated that in ad-
dition to the insured mortgages that
have been closed, 200 more are with
banks or financial institution in the
process of being approved. He stated
attaches of his Office have interviewed
and explained mutual mortgage In
surance to 10000 persons in the last
eight months.
I'VE don't have to worry any
longer Dearing said. about locat-
ing a financial institution that will
advance money for the loans. There
Is plenty of money available for the
prospective home owner OF good
credit standing. At the present time
about 35 per cent of the mortgages
we have insured have been for new
construction, the rest are retlnanclng
propositions. One Of the most en-
couraging signs to us is that the num-
Der and amount of the new building
loans are increasing each week"
Dearing said another encouraging
aspect in the promotion of the insured
mortgage and the F. H. A. method OF
financing is the enthusiasm mani
fest towards it recently by the Specu-
lative home builders. Several months
ago the administration announced
that builders might apply for prellml-
nary approval of their houses as soon
as they were started. This meant that
an F. H. A. appraiser would examine
plans and specifications of the houses,
its sale price, and the neighborhood
in which it was located. If the house
was passed by the appraiser the
builder would be given certlflcate
of preliminary approval for mortgage
insurance. This plan, it was hoped,
would serve the double purpose OF
advancing the cause of the administra-
ton and at the same time OF giving
the builder sales argument. Thls
plan has succeeded we'll, Dearing said.
FIJI. A. Approval Valued.
"F. H. A. approval for insurance"
he declared. has become badge OF
quality for the builder and his house,
and more and more people who con-
template buying homes are asking the
builders and their brokers whether the
particular house they are trying to
sell has been examined by our men.
In recent weeks builders and de-
Velopers have been advertising the
fact that their houses have been ap-
proved for mortgage insurance by the
F. H. A. These builders state that it
has proved an excellent sales argu-
ment, especially when, perhaps, an
other house the prospective purchaser
has been considering, does not have
the administrations endorsement.
Dearing said his Office has approved
cot applications for mortgage inSur-
ance submitted by speculative builders.
Dearing has high praise for the way
Washington banks and building and
loan companies have co-operated with
his Office. To date % such financial
institutions have been qualified to
make loans under the F. H. A. plan.
One local bank has purchased more
than S400,000 in insured mortgages. A
large insurance company is close sec
ond with $365, 900 invested in insured
loans here.
Modernization loans under Title I
OF the housing act also have been
made In great number, Dearing said.
Banks and building and loan institu-
tions have made more than 5000 small
home repair loans, totaling about
s2,500,000 in the last year. Dearing
estimates that total of $4,000, 900
has been spent for property rehabili-
tation work in the Capital in the past
IL months.