Evening star., 1950-10-15
New Era
Under ). Aid
VA Expected to Ploy
Major Role in Future
Financing Program
By Robert J. Lewis

1y NObSIa -. GSVbS
A new era" in home building,
with an increasingly greater share
dependent on the Govern
ment, will emerge from currently
confused events in the housing
field, close observers of the situa-
ton predicted yesterday.
Starting with inssuance of dras-
tic new curbs on mortgage credit.
the past week was highlighted by
a rush of District builders to beat
the housing curb deadline.
But the rush, described as fan
tastic," and the welter of new
housing rules slapped on top Of
the existing pile of Federal reg
ulations, will lead to a future pat
tern of Government financing in
which the Veterans Administra-
ton will play major part, it
appeared.
VA already has booming hous-
ing setup largely independent Of
the rest of centralized Federal
operations. 1t soon may be put
ting other agencies in the shade
so far as total financing is con-
cerned.
Veterans Financing Liberalized.
Veterans home financing was
further liberalized yesterday by
Housing and Home Finance Ad-
ministrator Raymond M. Foley.
His action heightened veterans
terms to 80 years. Only
a few days ago such terms had
been cut to 20 and IS years.
The switchover to the situation
as before" was explained by VA
as a step ito preserve fully the
credit preferences of veterans in
accordance with the Defense Pro-
duction Act"
Privately, Government officials
said the shortened mortgage terra
for veteran loans never shouN
have been issued in the first place,
and that 1t was caused by an
oversight"
Period Increased by Congress.
Congress less than o year ago
raised the VA mortgage maturity
period to 80 years in q step to
cut monthly payments and thus
make it still easier for q veteran
to buy house.
In enacting the Defense Pro-
duction Act about two months ago,
Congress specified that, in any
cutback in housing credit, vet
Grams should continue to receive
preference" over nonveterans.
Removal Of the mortgage term
differential was interpreted az
weakening veterans preference,
and 80 the reversal was ordered.
VA. which resisted having its
home loan operations blanketed
under the existing Government
housing set-up, is not the only
agency In business of providing
veterans housing, however.
The Federal Housing Admins
tration, the permanent" agency
In the field, has been participate
Ing in veterans home financing,
as well as having made possible
the financing of 100000 apart
ment units throughout the coun-
try on which veterans are legally
entitled to first preference.
FHA Has "Ace in Hole"
Another FHA ace in the hole
for provision of veterans housing
Is its so-called builders co-opera-
tive" program of houses to be built
for sale.
1t was mainly to build this type
Of coop" housing that District
area builders engaged in their
beat-the-deadline rush. They
f1led financing applications for a
total Of about $500 units of this
coop housing. They can be sold
to veterans with only a 10 per cent
down payment on 40-year mort
cages.
FHA, however. has indicated it
many of the coop appli-
cations to fall by the wayside"
owing to a strict policy on ap-
prevails and other conditions.
In the era ahead, the bulk Of
new housing is expected to be
helped by Government financing.
Some builders assured themselves
Of low down-payments and longer
mortgage terms by applying for
Government credit aids before the
new housing curbs went into ef-
feet last Wednesday midnight.
In the District alone. financing
for $500 housing units was ap-
piled for before the deadline.
Currently, Government aided
building and nom Government
aided building share the market
almost equally.
Under the new conditions, the
amount of non-Government-aided
of new construction
could decline almost to a dribble.
This is due to the fact that non
Government aided houses started
after October II can be sold only
with higher down payments and
shorter mortgage terms.
The Government has not yet
spelled out what it is going to do
about its huge public housing pro-
gram. Production of this housing.
Of which Congress authorized a
total of 10000 units to be built
within six years at a cost esti-
mated at from SO billion to $12
Dillon, has been slow in getting
Under way.
After the first mild housing
curbs went into effect in mid
July, representatives of the Public
Housing Administration were tell
ing some cities to go ahead with
planning of this construction.
Home Tour Officials
To Meet in Annapolis
NfFoiolc of tho NEorv1opJ Jo,,ea