Evening star., 1939-01-21
Mortgage Insurance
Funds 10 Swell
Reserve
Surplus for Year
Expected to Reach
So, SOC, 900

Income from the Federal Hous-
Ing Administration Mutual Mort
gage Insurance System during the
next fiscal year will be sufficient to
pay its operating expenses and leave
a substantial surplus to. be added to
the insurance reserve funds, accord
ing to budget estimates made public
today by Administrator Stewart
Mcdonald.
Income for the fiscal year, which
ends June 80, 1910, will be approx
imately $17,0OO,000. it is estimated,
and total operating expenses are
estimated at $12,500,000. Under the
budget now before Congress. it is
proposed that $4,000 900 of the F.. H.
AS own income be used to Offset
its operating expenses, leaving
$500 900 to be paid by the Recon-
struction Finance Corp. by congress
sional appropriation.
This arrangement will make it
possible to add about $4,000, 900 to
the insurance reserve funds of the
F. H. A, now available in the Treas
ury to meet possible future losses.
Reserve About S25,OO0,0O0.
Insurance reserve funds now
amount to nearly S25 100000. These
funds have been built up over the
last four years, starting with an
initial allotment by Congress of
S10000,000, through the receipt of
mortgage insurance premiums, ap-
praisal fees and interest on money
reinvested.
Net charges to date against these
reserve funds, incurred through the
sale Of foreclosed properties turned
over to the administrator, total
$l60,000. Only 435 individual home
properties have been acquired after
foreclosure, out of more than 300,-
600 premium paying mortgages out
standing, The low loss ratio, Mr..
Mcdonald said, is testimonial to
the sound and scientific appraisal
and underWrit system employed
by the F. H. A. These mortgages
pay an annual mortgage insurance
premium of one-fourth or one-half
OF l per cent Of the unpaid bal
ance.
The Federal Housing Administra-
ton has now nearly Sl,400 100000
face amount Of premium paying
mortgages insured. 1t is authorized
to insure total of $4,000 900 900
unpaid principal outstanding at any
one time
Applications High.
Applications for mortgage insur-
ance have averaged nearly $780,
100000 month since the amended
National Housing Act went into
effect last February. On these ap-
plications an appraisal fee of SO
per $1,000 of the amount of mort
gage applied for is collected.
Applications for mortgage insur-
ance on small homes are continuing
at a rate far in excess of the figures
OF year ago. In the first two weeks
Of January these applications ex-
ceeded s30000,000, compared with
only S12000,000 in the correspond
ing weeks of 1888, an increase of $50
per cent. This level of applications
shows only moderate seasonal de-
cline from the record figures at
tanned during the summer and fall.
The F. H. AS insuring operations
In the large scale rental housing
field also are going ahead at an
accelerated pace. with January
promising to be the largest month
In its history for the closing of in
surance contracts on mortgages cov-
ering large housing developments.
More than 1000 homes to be built
under F. H. A. inspection went un-
der construction during the first two
weeks of the year, in spite of the
tendency for new construction to
decline in winter months.