Evening star., 1950-04-22
Continued From Page BID

(ContlnueQ from rage B-l.)
Of the sweeping new housing
measure.
AZ Per Cent Rate.
Almost at the same time, the
Federal Housing Administration
announced that after Monday it
would insure mortgages at 4H
per cent rate-a reduction of one
fourth of one per cent from the
existing AZ per cent rate.
A borrower under the FILA
plan still pays three -fourths of one
per cent more than borrower at
the Veterans Administrations 4
per cent rate. One half of one per
cent of this excess is represented
by the FILA mortgage insurance
premium, part of which, theoreti-
cally, could be returned to the
borrower.
In a brief statement, the reduc-
ton in the interest rate maximum
was announced jointly by Admin
istrator Raymond M. Foley of the
Housing and Home Finance Agen-
cy and FILA Commissioner Frank
lin D. Richards.
After months of thoroughly
studying the mortgage money
market, it was concluded that this
lower rate would be effective in
producing a high level of resi-
dental construction under the
FHA program, the two stated.
Answers Questions.
Mr.. Richards, in answer to
questions, later said the per cent
VA rate had mot necessarily"
been taken into consideration in
fixing new FILA rate, and that
the main concern was with what
would be an effective rate"
Regarding the new housing act,
Mr.. Richards said in a statement
that new rules and regulations
governing its operation would be
issued "at the earliest possible
date"
Commenting on the act, Ad-
ministrator Foley said it covers
most of the measures sought by
President Truman this year."
Do -
A partial text of summary of
the new housing act prepared by
the Housing and Home Finance
Agency follows:
The provisions of the bill serve
the following broad purposes:
l. 1t continues Federal assist
ance to private housing produce
ton on basis designed to stimu-
late more housing at lower costs
and lower rents and of more ade-
quate size for family use. 1t also
broadens the provisions for FILA
insurance of loans for co-opera-
tive housing.
The bill makes possible the
purchase of an FHA-insured two
bedroom house valued at $1,000
with $3.50 down payment and with
80 years to pay compared to 500
with Is years to pay previously.
For a four bedroom house valued
at $4,000, the down payment can
be $3.50 with 30 years to pay COM
pared to an $1,100 down payment
and Is years to pay under previous
law. In the rental field, any
projects insured that are esti-
mated by the FHA to cost more
than $4,000 per unit have to have
an average of at least two bed
rooms per unit in order to secure
the best mortgage insurance terms
and the more liberal insurance
terms for rental projects are
limited to the first $1,000 per unit
cost.
2. The bill establishes an or
derly policy for the further use
and disposal of Federally owned
W cl IlOuSulS dllO fCGCl dllo ClIiC1
gency housing in local commu-
mites and at educational institu-
tions. Temporary housing under
existing law heretofore has been
operated under blanket threat
of removal by the end of the year.
This bill relates it's disposition to
local situations and needs.
3. The bill makes home loans
to veterans more widely effective
and available by broadening the
base for such CT guarantees, and
by enabling the Government to
make such loans if they cannot be
obtained from private sources.
The bill also facilitates farm
housing guarantees under the CT
bill.
4. Colleges and universities have
been under tremendous pressure to
meet the heavy demand for post
war educa ton. Housing has been
a prime bottleneck in their oper-
ations. The bill undertakes to
relieve this problem through Fed