Evening star., 1950-10-27
Drastic Effects Seen
Here on Building
Under NewCurbs
Continued From First Page, }

ton than to leave lenders hang
ing. don't see how it could
operate other than to stop almost
all construction loans"
The order warned builders and
lenders that anyone starting con-
struction, whether or not pro-
hlblted now under the order, runs
the risk of having such conStruc-
ton stopped before it is COM
pleted, if it does not further the
defense effort or increase the Ma
tons productive capacity.
Such a step could affect any
type of construction at any time
such action is deemed necessary"
by the Production Authority "in
the interest of national defense to
minimize material shortages"
Big Chance for Lender.
The president of District
mortgage financing firm, which
serves as loan correspondent for
one of the Nations largest insur-
ance companies, said:
Under this order, a lender
would be taking big chance on
making any loan. 1t certainly does
seem to mark a turning point. If
it's really necessary, of course,
that's something else"
The executive vice president of
another large firm making con-
struction and other loans had this
comment:
II think anyone in the financ-
ing field is going to come to the
same conclusion. Who is going to
make a construction loan when
he has clear warning that the
construction may not be per-
mitted to be finished, and that
he may, as result, be left hold
ing the bag?"
The president of one of the
Districts largest banks said that,
while his bank does not make con-
struction loans, as such, he con-
SlderS the warning would virtually
stop all such loans.
Could Be Clarified.
Another banker said:
You won't find many construc-
ton loans being made now, unless
this order is clarified to give lend
erS more assurances than they
now have"
One head of mortgage lending
frm said he intends to stop issu-
ance of commitments at once. He
added that he probably will not
be able to finance projects on
which commitments already have
been issued, including residential
loans.
Unless we can get certificate
OF some kind, or clearance to go
ahead with assurance that the
construction will not be subse-
quently stopped before completion,
we will be forced to eliminate all
construction lending. including
that for veterans housing" he
said.
Earlier William F. Nelson,
president of the Washington
Building Congress, said he ex-
pected the regulation would have
most serious consequences" for
many of the District areas 45,O0O |
construction workers and several
thousand contractors, sub-con-
tractors, building supply houses,
architects, engineers. and others
In the construction industry.
Some Officials Surprised.
Even some Government hous-
ing officials were surprised at the
order and seemed concerned over
its effect.
One said he believes the order
may make necessary the early
imposition of priorities and al
locations.
Yesterdays order was the third
Government step to curb con-
struction since mid-July The
first relatively light order limited
public housing construction to
10000 units in the last half of
this year, increased down pay
ment requirements by per cent
on privately built homes and in
stituted tougher appraisal pol
icy for Government aided f1nanc-
ing.
The second step imposed what
generally have been described as
drastic new mortgage credit regu-
lations, raising down-payment re-
ouirementS to as much as so per
cent for non-veterans and As per
cent for veterans, and shortening
the terms to most mortgages to-
a 20-year maximum.
Permit Some Alterations.
The third step, announced yes
terday as a move designed to con-
serve critical metals and other
materials needed for the defense
program, covers all amusement,
entertainment and recreation
construction to cost more than
SO,UUU. DuG III dlSO Wal llo Glldt
other construction under way
may be halted before completion,
whether or not it is now pro-
hibited.
Any project on which the foot
ings were poured before last mid
night is exempt, however.
Yesterdays order permits r.
pair and construction of existing
buildings and some alteration and
modernization. Restoration OF al
building is permitted after "a dis
aster, an act of God, or an act of
war"
Al Types Affected.
Specifically prohibited are A
different types of construction.
They are as follows:
Amphitheater.
Amusement arcade.
AS,oy u L.