Evening star., 1939-06-17
2,OO7,523 Families,
Small Businesses
Use F. H. A. Loans
Insured Face Values
Total $8l8,003,439
Under Title |

More than 100000 American FAM
flies and small businessmen have
been enabled to modernize and i'm
prove their properties with loans
insured by the F. H. A. under title
Of the National Housing Act, Federal
Housing Administrator Stewart Nc
Donald announced today.
The number of those moderniza-
tion loans crossed the 100000 mark
late in May. On June 2, 2,O07 ,523
such loans with a face value of s818,-
003,489 had been insured. These
loans represent advances by quail
fed private lending institutions for
undermining, repairing, altering or
otherwise improving properties.
determination loan insurance is
now proceeding at the rate of more
than 1,500 cases every business day,
with a minimum of two or three men
being put to work directly on each
modernization project, Mr.. Nc
Donald said Of the total volume,
SAT OPT in the amount of $255 $50, ,154
have been made since February,
1888, when this type of insurance was
restored after a lapse of nearly
year
Mr., Mcdonald called attention to
the successful loss record experienced
under this form of loan insurance.
As of June 2, he said, lending insti-
tutions had presented to the F. H. A.
and had been paid claims in the face
amount of $21082,011 on 94,067 of
these notes, or approximately 2.5
per cent of the dollar volume, and
At per cent of the number.
A much larger loss had been orig
inally anticipated under the opera
tions of title I insurance with Con-
gress setting aside $2OO,OOO,OOO in
order to pay possible losses on ST.
000000,000 of insurance, the ad-
ministrator recalled. Lending insti-
tutions were first insured up to 20
per cent of the total volume of loans
made under this section of the act.
this was later reduced to the present
10 per cent.
Mr.. Mcdonald also pointed out
that S3623.515 of the amount of
claims paid had been recovered in
cash payments from original borrow
ers and credits on properties repos-
sessed and turned over to the pro-
curement division of the Treasury
amounted to $3,658,252. AS far as
the loss to the Government is con-
cerned, these collections and credits
should be deducted from the $21,-
002,011 paid in claims. The balance,
$13,800244, does not represent the
net loss that will be sustained since
collections are being made steadily
on this amount.
The presentation of notes to the
F. H. A. by lending institutions does
not conclude the process of collecting
from borrowers. Approximately ST.
0000G0 will have been collected in
the first six months of this year, he
said, in sums obtained from bor-
rowers after lending institutions had
ceased their own efforts to collect.
IF we take into consideration the
number of workers removed from
relief rolls through these activities,
along with taxes paid into the
Treasury by business stimulated
thereby, it seems to me the insurance
claims paid on title I notes repre-
sents very good investment on the
part OF the Government" said Mr..
Mcdonald.
The administrator also called at
tention to the fact that insurance of
modernization loans under title I
has been extended by Congress for
an additional two years beyond June
80. These loans are available from
qualified lending institutions to
property owners for modernization,
repair, alteration and improvement.
AS a general rule, most improve
ments are eligible provided they
become a permanent and integral
part of the structure. Construction
OF certain limited types of residential
and non-residential buildings also
may be undertaken with the pro-
ceeds of title loans.