Evening star., 1950-04-12
Sparkman Urges FILA
To Cut Interest Rate
To 81 Loan Level
BY Robert J. Lewis
S,or Staff Correspondent

NEW YORK, April 1Z.-Senator
Sparkman, Democrat, OF Alabama.
believes the 4 per cent CT home
loan interest rate should remain
at that level and that the Federal
Housing Administration should
lower its ~ per cent rate.
The Senator told the closing
sessions Of the Mortgage Bankers
Associations spring conference
here yesterday that a 4 per cent
rate Is sufficient on VA loans "in
view Of the present cost Of money
and in view of elimination OF
private investment risk through
guaranteed loans"
Would Reduce FHA Rate.
Declaring that the existing diff
ferential between the 4 per cent
VA loans and the AZ per cent
FILA loans poses problem, Sena-
tor Sparkman added:
For some time, I have thought
that pephaps the best solution is
, to reduce FHA interest rates, and
I am still of that opinion.
IF the gap cannot be entirely
closed, it can certainly be greatly
narrowed"
In saying this, the Senator ap-
parently implied that If FHA does
not wish to reduce the rate on
mortgages it insures TO the same
4 per cent level as is provided for
In VA home loans, it should reduce
the rate TO-. perhaps. "a per cent.
Competition Provided.
Tied in with the problem
created by the two sets OF in
terest rates is the competition
which FILA loans now provide for
investors money, particularly in
sales of home mortgages held by
the Government through the Fed
eral National Mortgage Associa-
ton.
BY making the two interest
rates equal, or by narrowing the
u per cent gap, CT loans would
become more attractive to in
yestors, some observers say.
More than rs Washington area
delegates attended the conference,
which attracted about 500 persons
from the Eastern States.
Other speakers at yesterdays
sessions included FHA Commis-
sioner Franklin D. Richards, who
told the group that the new hous-
ing bill will make sweeping
changes" in the Governments
housing activity.
Bill Called Forward Step.
Senator Sparkman referred to
the bill as the greatest step
forward in the housing and home
finance program that we have yet
made"
The FILA commissioner said that
II present trends continue, he ex-
poets 1850 to be another record
volume year for FILA, the lenders
and the industry" in home build
ing.
Senator Sparkman criticized
home building and financing lead
ers who opposed cooperative
housing legislation as "socialistic'
and yet favored similar legislation
when It benefited themselves.
1.-THE builders, and others. who
fought the middle income housing
legislation as being socialistit
might we'll have remembered the
lesson taught by FHA," he said
Most of us here recall the charge
of socialism made when that
agency was created"
Recalls Opposition.
He also mentioned early opposi-
ton to the Federal Deposit Insur-
ance Corp, the Home Owners
Loan Corp, and the Federal Ma
tional Mortgage Association. and
said that each played IAN impor-
tant part in propping up and Gre
ating profits for every segment of
the home building industry"
The Senator declared that the
cooperative housing legislation
which was defeated by Congress
was "in keeping with the private
enterprise system" and definitely
sis not q dead issue"