Evening star., 1937-11-20
RENTAL PROJECTS
OF F. H. A. PRAISED
Falkland Properties Official
Cites Four Advantageous
Features of Plan.

Rental housing projects as devel-
oped by the Federal Housing Admin
istration offer four advantageous fea-
lures to investment managers of
landed estates, according to William
D. Blair, president of Falkland Prop |
critics, Inc, which now has in opera
ton or nearing completion 479 apart
mentS on a 24-acre tract at Silver
Spring
These four features, as cited by Mr.
Blair in the current issue of the In
sured Mortgage Portfolio, official pub
lication of the Housing Administra-
ton, are: |, retention of the original
land investment: 2, conversion of the
property from liability into an in
come producing asset with prospects
OF steady income and appreciation 3,
setting up safe investment for some
of the estates liquid funds and 4, pos
session. eventually, of a good. unen-
numbered, income-producing housing
property
The rental income from Falkland
properties, after substantial allowances
for vacancies and rent losses, is cal
culated to be sufficient: +, to cover
the cost of operation, taxes, interest
on the mortgages for $2,065 900 and
other charges incidental to the financ-
ing. 2, to retire the mortgage debt in
Is years or less; and 8. provide an in
come of approximately $4,000 a, year
for the holders Of the equity in the
property" Mr.. Blair writes. "Falk-
land Properties, Inc, is capitalized at
S2,725 900 with the $2065,00 mort
cages bearing Az per cent interest.
Mortgage funds for the first Falkland
project of 178 apartments were pro-
vided by the R. F. c. Mortgage Co.
in the amount of S840,000 Funds for
the second project of 301 apartments
were provided by the Union Central
Life Insurance Co. in the amount of
$1,225,000. Mortgages on both de-
velopments are insured by the Federal
Housing Administration.
Our equity in both projects will
increase monthly due to the scheduled
monthly amortization payments which
will retire the debt at much faster
rate than the property will depreciate.
Repairs, maintenance and replace
ments will be cared for in the operat-
ing charges. Furthermore, in addition
to the limited dividends governed by
the Housing Administrators rental
housing regulations substantial cash
surplus will remain to be applied to
additional debt reduction.
AS to rental scales, we could un-
doubtedly get considerably higher
rents now than are allowed under
these Housing Administration regula-
tionS. But, this reduction in income is
offset by the additional security which
results from this policy, which places
the property in a much broader and
therefore much safer rental market
Vacancies should thus be reduced to
minimum.
Federal Housing Administration
operating requirements keep the prop
erty in first-class condition and main
tain its appeal to the renting public.
AS to the matter of dividend linn
ltatlon, we feel the annual cash in
come allowed on our equity investment
is adequate due to the fact the cash
dividends are only part of our real
return from the property. Part of
the rental income each year is applied
to debt retirement. So, when the
mortgage loans are paid off, the full
amount Of the rental income now ap-
piled to interest, mortgage insurance
premiums and amortization will be-
come available for dividend payments. I"