Evening star., 1937-01-30
FIJI. A. INSURANCE
CONDITIONS SET UP.
Certain Physical Standards
Also Required for Under
writing.


ministration will commit itself to
insure loans on properties in an un-
developed subdivision the underwrit-
ing regulations require certain physi-
cal standards and at least one OF the
following three conditions be present
In the proposed subdivision:
/. Marketability and desirability
must be proved by the presence Of a
suficient number Of wner-occupied
houses to establish the subdivision.
2. When q sufficient number of
houses has not been built, there must
be an established rate of sale of
houses so that it is possible to fore
cast that the subdivision will soon be
established.
3. II the subdivision is not estab-
lished by either Of the aforementioned
conditions, there must be sufficient
evidence at hand so that the Fed
eral Housing Administration can con-
clude, after examination of the build
ing program, that the subdivision will
be developed in such a manner as
to establish the marketability and de-
STABILITY in the near future.
It can be seen that the developer
does not not necessarily have to
build and sell a number of houses be-
fore an insured mortgage loan can
be obtained upon a single house. If
the demand Is present and the build
ing program has been properly plan
ned, the developer may be able to
obtain insurance on his first loan
applications.
Demand Can Be Determined.
Upon the basis of q market study,
the demand can be determined and
q successful building program out
lined. Results of the study should
indicate the type and price ranges
Of houses which will have the readiest
sale within the proposed subdivision,
and consequently something Of the
manner in which it should be plan
ned and developed.
The existence and the extent OF
the market will depend upon such
factors as: The amount of land in
the surrounding area which is avail
able and appropriate for homes in the
price range contemplated; the num-
ber Of families present and to be ex-
pected within year or two in the
area and their incomes: the existing
supply of suitable dwelling units in
the price range contemplated, also
the number of houses unfit for use
those more than 40 years old, and
those needing major repairs. Other
important considerations are the
trends Of the residential growth within
the area and of business and indus
trial conditions, particularly as they
may affect the income groups under
consideration.
Developers have found that the
average purchaser of low-priced
homes does not readily read blue
prints and plot plans. OF the few
who may prove to be the exception
to the rule, it is quite certain that
their wives rarely understand a blue
print, and more often than not the
housewife Is the determining factor
in the purchase of a home.
Model Houses Popular.
Consequently the use of model
houses to show prospective purchasers
just what Is offered is becoming in
creasingly popular. The success of
this plan has led to numerous elabo-
rationS, such as miniature models of
individual rooms, model of the sub
division as it will appear when COM
pleted. The alternate elevations of
the stock houses have been success
fully employed and can be constructed
at no great cost. Graphic maps, cross
sections Of walls. samples of hard
ware, weather stripping, and so on
have also been used and have proved
their advantage over blueprint maps,
circulars, booklets and the like.
It Is frequently assumed that the
developer must complete all streets
and utility improvements in the en-
tire tract before the Federal Hous-
ing Administration will insure loans
on properties within the subdivision.
This is not the case. The admin
istration usually merely limits its
mortgage insurance to those proper
ties which are served with the i'm
provements.
From the developers standpoint, it
frequently has been found more prac-
ticable. desirable and less burdensome
from the standpoint of initial outlay
to make these improvements in
waves" However, it is desirable to
put in sufhcient street and utility i'm
provements to give prospective pur-
chasers assurance that the improve
ments will be extended when they are
required.
Master Plan Advisable.
In all cases the subdivision de-
veloper should follow master plan of
the layout of his entire property. This
need not be recorded, but individual
plat plans Of sections Of the master
plan should be recorded from time to
time as the development progresses.
BY this means the undeveloped areas
will remain in acreage and receive the
benefits of lower taxes until they are
to be used, plated and recorded.