Evening star., 1938-06-28


into home ownership.
These things are Of vast Importance
to our Nation. Satisfied home owners
who are reasonably sure Of keeping
their home through thick and thin.
plus sound financial Institutions
which are reasonably sure Of the value
Of their loans, are among the greatest
assets which our country can have
from the standpoint Of economies and
Of our citissns' well-being. These
things tnstill In US q sense Of security
and feeling Of confidence Jas to thu
future. -
The value Of the F. H. AS principles
is shown by the foreclosure. record on
homes financed under tlSs insured
mortgage system. More than 1l0. 900
insured mortgages Are nov paying
premiums, and vt only ia have been
conveyed to the administration - q
result Of foreclosure. Net losses to
the mortgage insurance fund have
amounted to only $50. $50, or 4 loss
ratio Of $1,000 Of per cent. Surely
this record reflects the sound
ness of the Federal Hol,afng Admin
istration's method Of risk rating and
appraisal, now widely used by mort
gage lenders throughout the country.
Does Net Lend Nancy.
think this discussion already has
made 1t clear that the r H.. A. does
not lend any money. II does not. OF
course, build houses or participate In
any active way in financing or con-
structing homes. It simply cooper
ates With private capital by insuring
Institutions against loss on the loans
they make. But in doing 20, 1t Is
able to make certain principles attrac-
tive to lenders. and these principles
aid borrowers IS we'll as lenders. We
have nothing to enforce ON any one,
only advantages to offer those who
wish to accept them In essence the
National Housing Act is nothing more
than = statement OF principle. It
contains no penalties. It depends en-
tirely upon voluntary cooperation. II
a bank does not wish to make loans,
there Is no way we can compel 1t TO-
If = builder does not want to build,
We cannot force him to build. II
people don't want to buy homes, there
is nothing we can do about 1t.
But for people who do want to
buy homes the F. H. A. provides q
method by which they know they are
acquiring . good home The average
man knows nothing about building.
1t may interest you to hear of one
or two cases which typify how the
Federal Housing Administration aids
and protects people In buying homes.
Case In Pointed Out.
remember the case of q small
business man in Miami who applied
for an insured mortgage loan to pur-
chase a $40, 900 house. But his appli-
cation could not be approved. because
his income was not large enough to
cover the necessary payments, with
out hardship to him. Later ne decided
to build a house costing only $500.
which he has found entirely adequate
Tor MS family. and q good deal easier
on his budget
A man In Texas was renting a
three-room apartment for five years
paying $45 a month rent. With an
F. H. A.-insured loan he built a new
five-room house, and his total pay
ments are only $45 . month. He told
us that he now has plenty of room,
his own garden. and all the ad-
vantages of his own home.
A business man in a Midwestern
city wanted an insured loan to cover
the cost OF $4,000 house. The
local F. H. A. once found the neigh
borhood was composed OF smaller, less
elaborate homes and suggested that
some other neighborhood might be
better. At first the borrower was
angry. But later he followed the
suggestion. and wrote US an apprecia-
tive letter, saying he would always