Evening star., 1939-04-01
low-|ncome Families
Seen Reaping Chief
Benefits Of F. H. A.
Figures Indicate
One Of Big Objeetives
Being Achieved

Families receiving incomes Of
$2,5O0 or less are the major bene-
ficiaries of the new home financing
facilities made available by Federal
Housing Administration insurance
of home mortgages, according to
Administrator Stewart Mcdonald.
Liberalization of the provisions OF
the National Housing Act to per-
NIT the insurance of mortgages
representing as much as 80 per
cent of the appraised value OF the
property, in some cases, has been of
great benefit to low-income families,
he said. This is true also of the
provision which permits the length
ening of the term of the mortgage
to periods as long as IS years, IN
certain cases.
Recently completed surveys show,
the administrator said, that the
average monthly payment on mort
cages insured for families receiving
incomes of $2,500 or less was 10
per cent smaller in 1888 than in the
previous year. This decrease was
due not only to the lengthening OF
the period of repayment, but also
to slight decreases in the average
value of properties purchased by
families falling in this group.
Has Opened New Fields.
Zone of the main objectives OF
the February, 1898, amendments to
the National Housing Act was to
place home ownership within easier
reach of more families of moderate
and low incomes" the admins
traitor said. Results of the first
years experience with the new plan
indicate that the lowering OF the
down payment, to 10 per cent OF
the appraised value in some cases,
has permitted a large group OF
families to purchase homes on very
reasonable terms.
while the popularity Of the new
high ratio mortgages has resulted
in an increase Of 8 per cent IN
the average mortgage obligation
insured for families falling in the
lower income brackets, this increase
has been accompanied by an even
greater reduction in the average
monthly payments of these fam-
lies.
Last year new homes constituted
approximately 70 per cent OF r.
H. A. business and 96 per cent OF
all mortgages covered single-family
homes. In addition to this, more
than 60 per cent of borrowers under
the F. H. A. plan paid less than
$50 a month for amortization OF
principal and payments for interest
and mortgage insurance premium
on their F.. H. A.-insured loans.
For 81 per cent of the families this
mortgage payment amounted to less
than 20 per cent Of monthly In
come.
Can Now Run Homes.
'Tt can be seen that families
of modest means are finding II
possible. with the new-home hnanc-
Ing facilities which have been made
available, to purchase homes on
terms which will not overburden
them and make the repayment OF
their mortgage obligations dlffl-
cult"
Mr.. Mcdonald pointed out that
average monthly payments for all
groups of families showed a de-
cided decrease during the year. In
view Of the fact that the average
amount of mortgage loans obtained
by families of larger means showed
onlv small increases or even de-
creases, the average monthly pay
ments Of families with over $2,500
income decreased from IL to Is per
cent. This decrease is attributable
in some measure, to the decrease
noted in the average value Of prop
critics purchased by upper income
group families.