Evening star., 1952-09-14
|AngryBui|ders
|HitvAbanon on
Final Approva|s
Construction Halt
Stops Payments to
Many Subcontroetors


q crisis because of the Veterans
Administration refusal to approve
under construction pending
a checkup to see if construction
standards are being met.
The VA last week called of the
final inspections and approval of
houses to be financed under the
GI Bill of Rights. Some 5000
homes in the Washington area are
effected.
The final inspections were halted
until the VA makes a survey to
see if builders are complying with
VA minimum standards. Houses
undergo three inspections. It was
the final one that was halted for
an indefinite period.
In Wake of league Report.
The VA action followed a crit
ical report of the House Commit
tee headed by Representative
league. Democrat, of Texas, which
investigated the veterans housing
program around the Nation. The
report severely criticized the local
VA Office for failing to enforce
minimum construction standards.
Office Reorganized.
Since then, the VA office has
been reorganized thoroughly. A
breakdown was announced and the
ban on final inspections followed.
The immediate effect of the ban
lis this:
l. Sales to veterans have been
held up indefinitely since the VA
inspections are needed to allow a
builder to close a sale to a veteran
getting a VA guaranteed loan.
2. Many builders find they can
not complete houses under con-
struction because they need the
VA inspections to complete their
financing arrangements. No VA
approval results in no further fl
nancing from lending institutions.
RealtOr Terms 1t Serious
Edward r. Carr. president of the
Washington Real Estate Board,
termed the situation most seri-
GUS" and absolutely unfair" to
the many legitimate builders in
the area.
I'm hopeful steps can be taken
to straighten the situation out"
Mr.. Carr said. "The present situa-
tion is one that I'm sure neither
the VA nor the builders want"
Mr.. Carr pointed out the veteran
who wants to buy a house is the
ultimate loser. He said the houses
could be sold under FHA loans or
conventionally but that would
eliminate most prospective veteran
home purchasers.
He would not discuss the mat
ter further, saying he didn't wart
to try the case in the newspapers.
But he intimated the real estate
industry was going to sit down and
discuss the matter with the VA
and reach a solution.
Others More Vehement.
Other real estate men, who
would not be quoted, were more
vehement in their denunciation
Of the VA action.
One builder outlined his situa.
ton as follows:
! When house is under con-
struction, three inspections are
made. In order to pay off the SUBJ
contractors, the builder has to OBJ
tain VA approval for each stage
OF the construction. In turn, he
takes this approval to his lending
institution to obtain money to
pay of the subcontractors and
continue construction.
Without the approval. the
builder cannot pay off the SUBJ
contractors as the lending insti-
tuition will not advance the money.
The result is obvious. Construc-
ton stops.
This builder predicted that un.
less the VA began making the in
spections soon, many a small
builder will go broke before the
end Of the year.
Another builder said the leeit-
innate firms are suffering along
with those who may have deviated
from construction standards. He
criticized the VA for this indis-
criminate handling of the situa-
ton.
| A third builder pointed out that
OF some $4,000 houses built in the
washington area since the war.
only a handful had been criticized
by the league Committee. But all
builders were suffering because
OF the critical league report.
Method Just as Good.
Another builder said his houses
were good houses but he suddenly
found that q minor construction
practice deviated from the VA
minimum construction standards.
The method he used was lust as
good, but he faced complete black
ball by the VA because it did not
go by the book.
Other builders said to conform
to the VA minimum construction
standards - and change from
proven methods now being used
would add to the cost Of q house
which the veteran would pay. The
result would be not a better house.
only a more expensive one.
Some builders criticized the
slowness of the VA in issuing GER
tif1cates Of reasonable value.
This certificate is the appraised
value the VA sets on a house. To
get a VA guaranteed loan, the
house must sell at or below the
reasonable value set by the VA.
One builder said he had been
trying to get certificates of reason
able value out of the VA since last
May but had not succeeded yet.
The VA admitted some time ago
that the league Committee in
vestigation-and the resulting re-
of the local VA office
had slowed down the processing