The Washington times., 1937-12-23
BUYING A HOME
is MADE EASIER
IN HOUSING BILL
Double Blow Is Struck
At High Rentals
BY THEODORE HUNTLEY


which all authorities have been
aiming since the Government houS-
ing drive began. 1t doesn't solve
the housing problem for some mil
lions of families with incomes of
less than $4,000 a year, but it does
make it definitely easier for the
average man to buy a home.
It also strikes double blow at
high house rentalS-firSt by lay
ing the foundation for a greater
volume of competitive building,
and second by cutting the cost of
financing home construction. This
applies to apartments as well as
houses.
ANOTHER GAIN
There is a third gain in the
restoration by the Senate of the
controversial Title /, previously
killed in the Senate Banking and
Currency Committee after the
House had approved it. This part
of the bill provides for a new lot
of modernization and repair loans.
These modernization loans are
the stimulant in the bill, intended
to put money into circulation
quickly and make everyone feel
better until the long-term program
takes hold. The longtime loan
concessions are the solid food.
Both are expected to help business
and increase employment.
Stripped of technicalities and
legal verbiage, here are some of
the things the new law will do
when it becomes operative some
time next month:
l. Raise the present two-billion
dollar limit on the home-mortgage
insurance liability of the Federal
Government, half of which has
been exhausted by mortgages in
Sured so far, to three billions.
CHARGES CUT
2. Cut the combined interest and
premium charge on Government
insured home mortgages from ap-
proximately 6H per cent to 5A
per cent for the next two years
q new ceiling" which will prob
ably stand indefinitely unless the
country should be overtaken by
monetary initiation.
8. Make it possible for a family
which wants to buy a home cost
ing not more than $4,000 before
July !, 1912, to do so on 10 per
cent down payment as compared
with a 20 per cent down payment
required now. To put it another
way, the Government will insure
q mortgage on that kind of a
property up to that date for 80
per cent of the appraised value
of the property, as compared with
80 per cent under the present law.
4. Extend this same concession
In part to the man who wants a
higher-priced property, up to $10,-
900, by insuring 80 per cent OF
the first $4,000 of mortgage in
debtednesS and 80 per cent Of the
remainder, making the insurance
limit $500 on a $4,000 property.
The down payment in that case
would be $1.400.
RUNS TO 1899
5. Until July /, 1899. homes al
ready built and mortgaged may
be refinanced on this same basis.
After that date the Government
insurance concessions will apply
only to newly built houses.
S. In theory, at least. release
another billion dollars for mod
ernization loans, if made prior to
July /, 1889, by providing for in
surance of 10 per cent of such
loans by the Government. For
this purpose $100,000.00O is set
aside in the bill.
The Government already has
taken loss of $4,000, 900 on $780,.
100000 worth of loans of this char
acter made under the authority
which expired April l, 1887, and
expects to lose all told about $685.
O00,0 900, amounting to an outright
subsidy of this amount to financial
institutions to get building money
in circulation.
SEEK CUT IN COST
But through the cost of financ-
ing is cut, the bill contains no
cure Tor high labor and material
costs. The new ceiling" in the
interest charge will save home
buyers about 500 for every $1,000
invested. This saving will be re-
Elected in lower carrying charges
over a period of years.
Along with this gain, housing
experts are shooting at reductions
in the labor wage, which eats up
about a third of the initial con-
struction cost, and in materials,
which account for almost half of
the first cost. Those two object
ives are no realized in the present
bill.
An amendment jammed through
at the last minute restricts Gov
ernment aids to houses on which
the prevailing rate of wages" as
interpreted by the Department of
Labor has been made. That always
means union wages in areas where
the building trades are unionized.
It is a break for labor, but in
some spots admittedly tough on
the customers who have to pay
much higher wages to painters,
carpenters and bricklayerS than
they earn themselves.