Evening star., 1937-12-11
ROOSEVELT HOME
3 VIEWS ANALYzED
Message to Congress Re-
garded as important to
Present Problems.

practical message to the Congress
upon action proposed to encourage
new private construction of homes
strikes at the root Of important pres
ent problems recognizes current needs
which have for months been stressed
by the National Association of Real
Estate Boards, Paul E. Stark, Madison,
Wis, president of the national asso-
citation, said addressing it's Southeast
regional convention in Jacksonville,
Fla, just closed. Notably 50 recog-
nized were:
l. Need of reducing the carrying
cost to the home buyer on his mort
gage Indebtedness.
THE 54 per cent interest rate con-
templated to be made available at
least for some types of new home
construction, if the Presidents recon-
mendations are put into effect, will
bring the cost of home mortgage
money more nearly in line with the
rate of interest at which capital is
available for other business activity"
Mr.. Stark said.
- 1NSSA Va AliSCthlS O11C d4llO0llb Va
down payment which the average
home buyer can at present pay by
increase of the percentage of value
borrowable on an insured mortgage
from 80 per cent to 80 per cent on
homes costing $4,000 or less
3. Desirability of encouraging large
scale building operation for residential
construction, with view of reducing
the cost of shelter.
Other Important Proposals.
Other proposals in President Roose-
velts message which the association
holds Of great Importance:
!. Central mortgage banking, in
the form of mortgage associations to
be financed initially with government
funds up to s50,000000.
This recommendation is recogni-
ton of the need for type of agency
which the association has long ad-
vocated to stabilize mortgage money
flow.
2. Reenactment of the provision
for insurance loans for modernization
and repair, which expired last April
II Congress acts to put the Presi-
dents proposals into effect, Mr. Stark
said, substantial help for home build
ing should result
In building a long-range national
housing policy that shall open the
possibility of home ownership to the
greatest possible number of families,
encourage production of needed decent
housing for all income groups, and
bring the building industry into nor
NAL production, he brought out, this
must be recognized: Aside from the
factor of outlook for general business.
which means the outlook for security
OF family income, the principal de-
termining factor is the monthly car
rying cost Of home ownership and of
rental housing. This is made up
primarily of interest, amortization
charges and tax cost.
Basing the premium charge for in
sured mortgages on the diminishing
balance, as the mortgage is paid off
is change in the National Housing
Act advocated by the National Asso-
citation of Real Estate Boards since
the original introduction of the act.
"As to the lower equity require
ment proposed for insured mortgages
on small houses" Mr. Stark said, "it
Is very generally estimated by real
tors and builders that the average
family buying a small home today is
able to pay no more than 10 per cent
down on the purchase 1t must be held
in mind that the small home prof.
ects having 1920 per cent equity to
which it is proposed to extend mort
gage insurance must have such gen.
eral conditions Gin respect to neigh
borhood factors, soundness of plan and
construction, responsibility of bor-
rower) as to NEE: F. H. A. require,
ments."
Large-Scale Operations.
The new bills, set up as amendments
to the National Housing Act, would at
tempt to encourage large-scale opera
ton by setting up mortgage insurance
Tor two types of residential projects:
/. Single family dwellings in a group
of not less than Is, and multi-family
dwellings, one or more, produced under
the ordinary conditions of private initi-
ative.
However, the principal obligation,
according to the bill as it was intro
duced, must not exceed 100000. and
such part as may be attributable to
dwelling use is not to exceed 81 900
per room. The property must be ap-
proved for insurance prior to beginning
of construction.
z. Housing, either for sale or rent,
produced by public agencies or by pri-
Vate housing corporations, agencies or
trusts under such regulation as NAV
meet F. H. AS requirements. The reeu-
latlon may be as to the rents thev
may charge, their sales, rate of re-
turn, methods of operation, etc. Prof.
ects here may involve principal obli-
CATION of up to $5,oOO,O00, but not to
exceed $1,000 per room.
For the formation of national mort
gage associations the bills now before
Congress would keep the present re-
quirement for CAPITA stock of 40
, 100000 par value, but they call TO,
only one-fourth of this to be paid in
before the association could function
ana this could be in first mortgages
properly valued. No legislation woule
ne needed for the proposed $50, 900 ,00t
Tor their capital purposes which tn.
President asks for r. F. c. to make
available out Of funds allocated tn.
r. F. G. Mortgage Co.
mortgage associations would be au.
tnorized to purchase, service and sci