Evening star., 1938-12-17
F.H. A. Head Expects
More Building Gains
During Coming Year
Increased Insurinq
Facilities Is Seen
Aid to Industry

The action of President Roose-
velt In authorizing the Federal
Housing Administration to insure
an additional 1000, 900 900 in home
mortgages means the residential
construction industry can count
upon a continuation of the financ-
ing facilities that have contributed
so effectively to the revival of a
building activity since last spring,
Administrator Stewart Mcdonald
said today.
Largely as consequence of the
liberalized F. H. A. program put
into effect last February, 1888 will
be the most prosperous home build
ing year since 1929, and with an ex-
tension of present financing facili-
ties assured, next year should show
still further gains, Mr.. Mcdonald
said.
President Roosevelt acted under
section 203 ta) of the amended Ma
tional Housing Act, which provides
that the aggregate amount of prin-
cipal obligations of all mortgages
insured and outstanding at any one
time may not exceed $2,000,0 900 600.
Except that with the approval of
the President such aggregate amount
may be increased to not to exceed
$3,000,000, ,00o."
Housing Still Inadequate.
Notwithstanding the gains in home
construction registered this year,
Mr.. Mcdonald declared that de
cent housing facilities in the United
States are still grossly inadequate. r"
AN enormous task lies ahead in
promoting sufficient construction to
meet the country's needs" Mr.. Nc
Donald said.
Moreover, the public is begin
ming to understand that the Federal
Housing Administration for the first
time in our history provides an un-
biased agency to which the mex
perienced layman may 60 for guild
ance and protection when he buys a
home. The Federal Housing Ad-
ministration protects the buyer and
the builder against expensive and
unsound financing, second mortgage
rackets, high interest rates, hidden
commissions. and other discredited
devices which contributed so large
y to the real estate collapse of the
early l930s.
IN each of the 48 States the Fed
eral Housing Administration has
established construction standards
to eliminate jerry building. Through
its planning activities the F. H. A.
is assisting in setting up effective
barriers against neighborhood blight
and the development of future
slums. Accordingly the demand for
the services of the F. H. A. is con-
stantly increasing. F. H. A. mort
gage insuring operations are run
ming more than double the rate of
. year ago"
Commitments SI,585, 5,000, 900.
AS of December /. the F. H. A.
had insured or had outstanding
commitments to insure mortgages
amounting to sl,585 900 900. In ad-
dition. mortgages in process of ap-
praisal on December l amounted to
Sis 100000, and applications for
mortgage insurance with appraisal
fees paid are being received at the
rate of more than $100,000.000 a
month. These figures. of course,
do not include short-term property
improvement loans amounting to
S720,000,000 insured under Title I.
In the transaction of business I'M
der the insured mortgage system
the Federal Housing Administration
has incurred net losses of approx
mately $153,000, to meet which it
has reserves available now in the
Treasury amounting to $23,000,000
Current income from insurance
premiums and appraisal fees
amounts to approximately $1,000.-
900 month. For the fiscal year
1910 the Federal Housing Admins
tration. therefore, should be able
to operate the Mutual Mortgage In
surance System at little or no cost
to the Federal Government and at
the same time add substantially to
the reserve fund to meet possible
future losses.