[Second Annual Report, Housing and Home Finance Agency, Calendar Year 1948]
[From the U.S. Government Publishing Office, www.gpo.gov]
Second Annual Report
HOUSING AND HOME FINANCE AGENCY
Office of the Administrator Home Loan Bank Board Federal Housing Administration Public Housing Administration
ll 11 *UQ1949
Calendar Year
1948
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THE HOUSING AND Raymond M. Foley, A 1626 K Street NW. THE HOME LOAN William K. Divers, Ct J. Alston Adams, Men DATE DUE
0. K. LaRoque, Memb 101 Indiana Avenut THE FEDERAL HOU! Franklin D. Richards
1001 Vermont Aven THE PUBLIC HOUSE John Taylor Egan, Co 1201 Connecticut A1 THE NATIONAL HOI Housing and Home Fi Chairman. Home Loai
Federal Housing Com gaylord PRINTED IN U.S.A.
Public Housing Comn
Secretary of Agriculture (or his designee)
Administrator of Veterans’ Affairs (or his designee)
Chairman, Reconstruction Finance Corporation (or his designee)
Secretary of Commerce (or his designee)
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(J.S. Housing <^nc/ Z4/r,e fiance Second Annual Report
HOUSING AND HOME FINANCE AGENCY
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Part 1 Over-All Report of the Housing and Home Finance Agency,
Office of the Administrator________________________________ 1
Part 2 Home Loan Bank Board_________________________________________ 89
Part 3 Federal Housing Administration_______________________________ 157
Part 4 Public Housing Administration________________________________ 293
UNITED STATES GOVERNMENT PRINTING OFFICE WASHINGTON : 1949
For sale by the Superintendent of Documents, U. S. Government Printing Office, Washington 25, D. C. Price 75 cents
UDOS 000135^14
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LETTER OF TRANSMITTAL
Sirs: I have the honor to transmit herewith the Second Annual Report of the Housing and Home Finance Agency covering the housing activities of the Federal Government for the calendar year 1948.
In this Second Annual Report, the Housing and Home Finance Agency records the activities and accomplishments of the Office of the Administrator and the three constituents of the Agency—the Home Loan Bank Board, the Federal Housing Administration, and the Public Housing Administration, as well as the National Housing Council.
Sincerely,
Raymond M. Foley,
Administrator.
The Speaker of the House of Representatives,
Was hington £5, D. C.
President Pro Tempore, United States Senate,
Washington 25, D. C.
II
TABLE OF CONTENTS
CONTENTS OF PART I
Over-All Report of the Housing and Home Finance Agency Office of the Administrator
Page
INTRODUCTION__________________________________ ----------------- XIII
CHRONOLOGY OF SIGNIFICANT EVENTS IN HOUSING_____________________ xiv
SECTION ONE. HOUSING IN 1948:
Chapter 1. A Summary_______________________________________ 1
Chapter 2. Housing Supply and Housing Needs________________ 8
A. The Housing Supply__________________________________ 8
B. An Estimate of Needs________________________________ 9
C. Slum Clearance, Urban Development and Redevelopment_ 12
Chapter 3. Home Building in 1948___________________________ 15
A. Housing Production_____________________________________ 15
B. Materials for Housing__________________________________ 18
C. Manpower for Housing___________________________________ 20
D. Costs and Prices_______________________________________ 21
Chapter 4. Financing Home Construction and Home Ownership in 1948__________________________________________________ 26
A. The Over-All Situation_________________________________ 26
B. Mortgage Loan Volume Up Slightly_______________________ 27
C. Role of Government Programs in the Home Financing Field. 28
D. Federal Housing Administration Mortgage Insurance___ 29
E. Veterans’ Administration Guaranty of Home Loans________ 31
F. The Credit Reserve: The Federal Home Loan Bank System._ 32
G. Secondary Mortgage Market: Federal National Mortgage Association_______________________________________________ 33
H. RFC Lending Activities_________________________________ 34
SECTION TWO. THE GOVERNMENT ROLE:
Chapter 5. The HHFA: First Full Calendar Year______________ 35
A. The Background_________________________________________ 35
B. HHFA “Tools” for Housing_______________________________ 36
C. Economy Housing Campaign_______________________________ 37
D. National Housing Council_______________________________ 38
E. HHFA Studies and Publications__________________________ 39
F. HHFA Personnel____________i_________________________ 40
G. HHFA Budget, Income and Expense Data________________ 41
Chapter 6. The Office of the Administrator_________________ 47
A. Organization and Structure_____________________________ 47
B. Lanham Act Functions___________________________________ 48
C. Technical Research Activities__________________________ 50
D. International Aspects__________________________________ 55
E. OA Personnel and Budget________________________________ 57
III
293898
CHARTS: Page
Chart 1. Housing and Home Finance Agency_________________________ xni
Chart 2. Housing Starts by Location: 1920-48_____________________ 2
Chart 3. Housing Starts by Type of Structure: 1920-48____________ 17
Chart 4. Construction Cost and Wholesale Prices of Building Materials and All Commodities: 1920-48_____________________ 22
Chart 5. Nonfarm Mortgage Recordings and VA and FHA Home Loans: 1939-48___________________________________________ 26
Chart 6. Nonfarm Real Estate Foreclosures: 1926-48_______________ 29
Chart 7. Office of the Administrator, HHFA_______________________ 46
APPENDICES:
A. STATISTICAL TABLES:
Table 1. Comparison of Estimated Future Housing Requirements of the United States prepared by Congressional Joint Committee on Housing and the Housing and Home
Finance Agency____________________________________ 58
Table 2. State of Repairs and Plumbing Equipment—Nonfarm and Farm Dwelling Units; 1940-47___________________________________ 59
Table 3. Housing Starts by Type of Financing and by Location: 1920-48________________________________________________________ 60
Table 4. Housing Starts by Type of Structure: 1920-48________ 61
Table 5. Estimated Dollar Volume and Average unit Construction
Cost of Privately Financed Nonfarm Dwelling Starts: 1939-48___________________________________________ 62
Table 6. Construction Cost Indexes: 1920-48__________________ 63
Table 7. Indexes of Wholesale Prices of Building Materials: 1920-48— 64
Table 8. Indexes of Production for Selected Construction Materials: 1920-48__________________________________________________________ 65
Table 9. Average Earnings and Hours on Private Building Construction: 1934-48___________________________________ 67
Table 10. Residential Rent Index: 1920-48________________________ 67
Table 11. Comparison of Residential Construction Expenditures with
Gross National Product and Gross Private Investment. 68
Table 12. Nonfarm Real Estate Foreclosures: 1926-48___________ 68
Table 13. Nonfarm Mortgage Recordings of $20,000 or Less and VA and FHA Home Loans: 1939-48____________________________________ 69
Table 14. FNMA Commitments, Purchases, and Balance Outstanding on Mortgages Insured by FHA or Guaranteed by VA: 1948___________________________________________________________ 70
Table 15. Comparison of HHFA Administrative Expenses, Fiscal Year 1948 and 1949_____________________________________________ 70
Table 16. HHFA Summary Comparative Statement of Income and
Expenses.:________________________________________ 71
Table 17. Summary Comparative Statement of Sources and Application of funds_____________________________________________ 72
Table 18. Consolidated Report of Lanham Act and Related Housing Funds at December 31, 1948_____________________________________ 72
B. ORDERS, MESSAGES AND FEDERAL, STATE, AND LOCAL LEGISLATION AFFECTING HOUSING IN 1948:
a. Executive Orders___________________________________________ 73
b. The Congress and Federal Legislation_______________________ 74
c. State and Local Housing Legislation_________________________ 79
C. PUBLICATIONS OF THE HHFA_______________________________________ 84
IV
CONTENTS OF PART II
HOME LOAN BANK BOARD
Page
Home Loan Bank Board___________________________________________________ 89
Activities of the Board in 1948____________________________________ 89
Revision of Rules and Regulations__________________________________ 89
Changes in Staff Organization and Functions------------------------ 90
Influences Affecting Thrift and Home Financing_____________________ 90
Need of Additional Private Savings____________________________________ 91
Trends in Savings_____________________________________________________ 92
Use of Savings in Home Finance________________________________________ 92
Volume of Home Financing______________________________________________ 93
Loans, Collections, and Liquidity_____________________________________ 94
Trends in Foreclosures________________________________________________ 94
Statistical Services__________________________________________________ 94
Advertising, Publicity, and Public Relations__________________________ 94
Responsibilities of the Examining Division of the Bank Board_______ 95
Organization of the Examining Division________________________________ 95
Responsibilities for Examination Broadened During the Year_________ 96
Increased Work Load____________________________________________________96
Examinations Made in 1948____________________________________________ 96
Status of Overdue Examinations_______________________________________ 97
Shift from Budget Expense to “Nonadministrative” Expense___________ 97
Rebuilding the Staff__________________________________________________ 97
Responsibilities of Supervision_______________________________________ 98
Essential Elements of Supervision_____________________________________ 98
Current Operating Conditions._________________________________________ 99
Receiverships and Conservatorships____________________________________ 100
Conferences with Bank Presidents______________________________________ 100
Federal Savings and Loan Advisory Council_____________________________ 100
Interim and Coordinating Committees___________________________________ 102
Internal Organization of the Board___________________________________ 102
Administrative Functions______________________________________________ 102
Personnel____________________________________________________________ 105
Legislation___________________________________________________________ 105
Federal Home Loan Bank System_____________________________________________ 107
Membership of the Bank System________________________________________ 107
Advances to Members__________________________________________________ 108
Number of Borrowing Members__________________________________________ 108
Secured and Unsecured Advances_______________________________________ 109
Interest on Advances_______________________________________________ 109
Source of Funds______________________________________________________ 110
Retirement of Government Stock____________________________________ 110
Sale of Consolidated Obligations_____________________________________ 111
Interbank Deposits____________.____________________________________ 111
Members’ Deposits___________________________________________________ 112
V
TABLE OF CONTENTS
Federal Home Loan Bank System—Continued Page
Liquidity and Reserves____________________________________________ 112
Status of Liquidity Reserve_______________________________________ 113
Government Securities and Consolidated Balance Sheet______________ 113
Income and Expense________________________________________________ 113
Dividend Payments_________________________________________________ 115
Supervision of the Federal Home Loan Banks________________________ 115
Examinations and Reports__________________________________________ 116
Federal Savings and Loan Insurance Corporation________________________ 117
Summary___________________________________________________________ 117
Extent of Insurance Coverage______________________________________ 117
Admissions and Terminations_______________________________________ 118
The Insurance Contract,,__________________________________________ 118
Loss Experience___________________________________________________ 119
Condition of the Corporation______________________________________ 121
Operations of the Corporation_____________________________________ 121
Condition of Insured Associations_________________________________ 122
Federal Savings and Loan Associations_________________________________ 124
New Federal Associations__________________________________________ 124
Board Policy on Branches__________________________________________ 125
Flow of Savings___________________________________________________ 126
Liquidity and Reserves____________________________________________ 126
Mortgage Loans____________________________________________________ 127
Home Owners’ Loan Corporation_________________________________________ 128
12 Years of Liquidation___________________________________________ 128
Administrative____________________________________________________ 129
General Operations________________________________________________ 129
Liquidation_______________________________________________________ 130
Accelerated Liquidation___________________________________________ 130
Investments in Savings and Loan Associations______________________ 130
Bond Retirements__________________________________________________ 131
Status of Accounts________________________________________________ 131
Properties________________________________________________________ 132
Financial Operations______________________________________________ 132
Exhibits____________________________________________________________
1. Federal Home Loan Banks: Summary of Lending Operations, by Years, through December 31, 1948____________________________________ 134
2. Federal Home Loan Banks: Interest Rates on New Advances and Interest Rates Paid on Members’ Time Deposits_______________________ 134
3. Federal Home Loan Banks: Consolidated Statement of Condition as
of December 31, 1948__________________________________________ 135
4. Federal Home Loan Banks: Consolidated Comparative Statement of
Operations for the Calendar Years 1948 and 1947_______________ 137
5. Federal Home Loan Banks: List of the Directors and Officers as of December 31, 1948___________________________________________________ 138
6. Federal Savings and Loan Insurance Corporation: Progress of 19 Insured Associations Following Rehabilitation by FSLIC______________ 140
7. Federal Savings and Loan Insurance Corporation: Statements of Condition and Operation for Federal Institutions Placed in Receivership---------------------------------------------------------------- 141
8. Federal Savings and Loan Insurance Corporation: Statement of
Condition as of December 31, 1948, and December 31, 1947______ 143
VI
TABLE OF CONTENTS
Page
9. Federal Savings and Loan Insurance Corporation: Statement of Operations for the Calendar Years 1948 and 1947-------------------------- 144
10. Federal Savings and Loan Insurance Corporation: Frequency Distribution of Insured Associations, by Asset Size Groups------------------ 145
11. Federal Savings and Loan Insurance Corporation: Number and
Assets of Insured Savings and Loan Associations, by Type, December 31, 1948, and December 31, 1947-------------------------------- 146
12. Federal Savings and Loan Insurance Corporation: Mortgage Portfolio of All Insured Savings and Loan Associations, by Type of Loan, December 31, 1948, and December 31, 1947--------------------------------- 148
13. Home Owners’ Loan Corporation: Historical Summary of Operations. 148
14. Home Owners’ Loan Corporation: Statement of Condition as of December 31, 1948________________________________________________________- 149
15. Home Owners’ Loan Corporation: Statement of Operations from the
Beginning of Operations, June 13, 1933, to December 31, 1948------- 152
16. Home Owners’ Loan Corporation: Statement of Operations for the Calendar Year 1948------------------------------------------------------- 153
VII
CONTENTS OF PART HI
FEDERAL HOUSING ADMINISTRATION
Page
Functions of the Federal Housing Administration_______________________ 157
Sec tion I. General Review__________________________________________ 159
Significant Developments in 1948_______k__________________________ 159
Mortgage Insurance________________________________________________ 197
Rental Housing_________________________________________________ 170
One- to Four-Family Homes_____________________________________ 171
Title I Insurance_______________________________J_________________ 173
Financial Position_________________________________________________ 176
Publications_______________________________________________________ 178
Sec tion II. Statistics of Insuring Operations_______________________ 179
Home Mortgage Insurance under Titles II and VI__________________ 179
Volume of Business____________________________________________ 179
State Distribution__________________________________________ 181
Financial Institutions_______________________________________ 184
Terminations and Foreclosures_________________________________ 188
Mortgage Characteristics______________________________________ 193
Property Characteristics______________________________________ 201
Borrower Characteristics______________________________________ 215
Loans with VA-guaranteed Second Mortgages_____________________ 218
Rental Housing Mortgage Insurance under Titles II and VI___________ 224
Volume of Business____________________________________________ 224
State Distribution____________________________________________ 226
Financial Institutions________________________________________ 226
Terminations and Foreclosures________________________________ 229
Project Characteristics_______________________________________ 230
Property Improvement Loan Insurance under Title I__________________ 240
Volume of Business____________________________________________ 240
State Distribution____________________________________________ 242
Financial Institutions________________________________________ 244
Characteristics of Insured Loans______________________________ 246
Sec tion III. Accounts and Finance___________________________________ 253
Title I: Property Improvement Loan Insurance_______________________ 259
Title II: Mutual Mortgage Insurance Fund___________________________ 266
Title II: Housing Insurance Fund___________________________________ 275
Title VI: War Housing Insurance Fund______________________________ 280
Title VII: Housing Investment Insurance Fund________ _____________ 287
Administrative Expense Account____________________________________ 288
VIII
CONTENTS OF PART IV
PUBLIC HOUSING ADMINISTRATION
Page
Chapter I. 1948: Summary of Operations:
Purposes of the Programs______________________________________ 293
Integrated Administration________________________________________ 294
The Role of Local Agencies_______________________________________ 295
Results of Operations____________________________________________ 295
Chapter II. United States Housing Act Program:
Extent of Federal Aid____________________________________________ 298
Development Activity_____________________________________________ 299
Removal of Ineligible Families___________________________________ 300
Occupancy________________________________________________________ 302
Payments in Lieu of Taxes________________________________________ 302
Financial Policies of Local Authorities:
Estimates of Average Annual Expenses________________________ 304
Estimates of Average Annual Rent____________________________ 304
Operating Reserves__________________________________________ 304
Working Capital Reserve_____________________________________ 305
Chapter III . Public War Housing Program:
Management Activity..______________________________________:___ 307
Disposal of Permanent War Housing______________________________ 308
Disposition of Temporaries_____________________________________ 310
Emergency Housing at Vanport____________________________________ 313
Chapter IV. The Veterans’ Reuse Housing Program:
The McGregor Act_________________________________________________ 316
Size of Program at End of 1948_________________________________ 317
Chapter V. Liquidation of Emergency Programs:
Defense Homes Corporation________________________________________ 319
Terminating Conversion Leases____________________________________ 320
Subsistence Homesteads and Greentowns___________________________ 320
Chapter VI. Administrative Developments:
Internal Reorganization___'______________________________________ 323
Administrative Budget____________________________________________ 327
Personnel Trends_____________•--------------------------------- 327
Fiscal and Statistical Tables:
Table 1. Number of dwelling units owned or supervised by the Public Housing Administration, by program, as of December 31, 1948_____________________________________________ 329
IX
TABLE OF CONTENTS
Fiscal and Statistical Tables—Continued
Table 2. Number of projects and active dwelling units owned or supervised by the PHA, by program and State, as of
December 31, 1948------------------------------------ 330
Table 3. Number of dwelling units made available for disposition and disposed of, by program, type of structure and accommodations, and method of disposition, as of December 31, 1948________________________________________________________ 331
Table 4. U. S. Housing Act program, statement of income and expense for fiscal year ended June 30, 1948--------------------- 331
Table 5. U. S. Housing Act program, balance sheet, as of December 31, 1948________________________________________________________ 334
Table 6. U. S. Housing Act program, statement of sources and application of funds for the fiscal year ended June 30, 1948____________________________________________________________ 336
Table 7. Maximum development cost of all projects under the U. S.
Housing Act, December 31, 1948----------------------- 337
Table 8A. Development cost, loans, and annual contributions for locally owned projects under the U. S. Housing Act program, December 31, 1948---------------------------- 333
Table 8B. Development cost, loans, and annual contributions for locally owned projects under the U. S. Housing Act program, December 31, 1948---------------------------- 339
Table 9. Statement of capital funds and annual contributions committed under the U. S. Housing Act, December 31, 1948- - 340
Table 10. Income and expense statement of all Federally owned projects under the U. S. Housing Act, fiscal year ended
June 30, 1948________________________________________ 341
Table 11. Income and expense statement of PWA projects under the
U. S. Housing Act, fiscal year ended June 30, 1948--- 343
Table 12. Income and expense statement of PHA permanently financed Public Law 412 projects by fiscal years ended in calendar years 1941-48--------------------------------------- 344
Table 13. Subsistence Homestead and Greenbelt Towns program, balance sheet as of June 30, 1948 and December 31, 1948-- 352
Table 14. Subsistence Homestead and Greenbelt Towns program, statement of income and expense for the fiscal yeai ended June 30, 1948--------------------------------------------- 353
Table 15. Subsistence Homestead and Greenbelt Towns program, statement of sources and application of funds for the fiscal year ended June 30, 1948---------------------------------- 355
Table 16. Public War Housing program, balance sheet as of June 30,
1948 and December 31, 1948-------------------------- 356
Table 17. Public War Housing program, statement of income and expense for the fiscal year ended June 30, 1948----------------- 358
Table 18. Average income and expense per unit per month of entirely active projects in the Public War Housing program (Lanham constructed), by type of accommodation------------------ 360
Table 19. Public War Housing program, statement of sources and application of funds for the fiscal year ended June 30, 1948------------------------------------------------------------ 361
X
TABLE OF CONTENTS
Fiscal and Statistical Tables—Continued Page
Table 20. Veterans’ Reuse Housing program, balance sheet, as of
June 30, 1948 and December 31, 1948_________________ 362
Table 21. Veterans’ Reuse Housing program, statement of income and expense for the fiscal year ended June 30, 1948_____________ 363
Table 22. Veterans’ Reuse Housing program, statement of sources and application of funds for the fiscal year ended June 30, 1948____________________________________________________________ 364
Table 23. Homes Conversion program, balance sheet, as of June 30, 1948 and December 31, 1948______________________________________ 365
Table 24. Homes Conversion program, statement of income and expense for the fiscal year ended June 30, 1948_________________ 366
Table 25. Homes Conversion program, statement of sources and application of funds for the fiscal year ended June 30, 1948____________________________________________________________ 368
Table 26. Full-time PHA employment, by ceiling unit, June 1943-December 1948___________________________________________________ 369
Table 27. Analysis of PHA administrative expense for fiscal year 1948____________________________________________________________ 370
Table 28. Cumulative expenditures for project development, by program and State, other than U. S. Housing Act low-rent projects, as of June 30, 1948______________________________ 371
XI
Chart 1
HOUSING AND HOME FINANCE AGENCY
i NATIONAL HOUSING COUNCIL !.
I
Housing and Home Finance Administrator I I Chairman, Home Loan Bank Board ।
I Federal Housing Commissioner
| Public Housing Commissioner । Secretary of Agriculture
। Secretary of Commerce
Administrator of Veterans Affairs
Chairman, Reconstruction Finance Corp.
HOUSING a HOME Fl NANCE
ADMINISTRATOR
Responsible for general supervision and coordination of functions of the three constituent agenc ie s .
Responsible for management and disposition of publicly-financed war and veterans ' emergency housing constructed under the Lanham and related acts.
Responsible for program of research and promotion in connection with standardized building codes, materials, and methods of assembly.
Serves as Chairman of the National Housing Counci I.
'------------------------------------------1
_] EXECUTIVE COUNCIL |
I Housing and Home Finance Administrator I
I I
| Chairman, Home Loan Bank Board |
I |
। Federal Housing Commissioner
Public Housing Commissioner
L______________________________________I
Home Loan Bank Board
Provides a credit reserve for home financing institutions through the Federal Home Loan Bank System; Insures savings of investors up to $5,COO in savings and loan associations through the Federal Savings and Loan Insurance Corporation; charters and supervises Federal savings and loan associations; supervises Home Owners' Loan Corporation (in liquidation).
Federal Housing Administration
Insures mortgage loans on single family and multifamily housIng which conforms to FHA standards.
Insures financial institutions on loans for home conversions, repairs, improvements and new construct ion.
Insures loans for the production of manufactured housing.
Public Housing Administration
Administers Federal aid to low-rent housing and slum clearance projects owned and operated by local housing authorities; has operating responsibility, under the policies established by the HHFA Administrator, for management and disposition of Federally owned war housing; provides temporary housing for veterans; administers other Federally owned nonfarm housing developments, Including subsistence homesteads and Greenbelt Towns.
831481 O - 49 (Face p. XIII)
INTRODUCTION TO PART ONE
In Part One of the Second Annual Report of the HHFA, the Housing and Home Finance Administrator, as the Government’s chief housing officer and Chairman of the National Housing Council, presents summary data on the Government's Role in Housing as well as information on housing activities in general. This part of the report includes data on the over all activities of the HHFA as well as details on the activities of the Office of the Administrator. Specific detail on the programs and activities of the Home Loan Bank Board, the Federal Housing Administration and the Public Housing Administration will be found in Part Two, Three, and Four, respectively of this report. The material presented in Part One is in two major sections: Housing in 19^8 and The Government Role. It is preceded by a chronology of significant events in housing in 1948, and is followed by three appendixes: Appendix A contains various statistical tables—in addition pertinent statistical tables are included in the text. Appendix B lists Executive Orders, Presidential messages and Federal, State, and Local legislation affecting housing in 1948. Appendix C lists HHFA publications.
X111
CHRONOLOGY OF SIGNIFICANT EVENTS IN HOUSING, 1948
1-3 By Executive Order 9919, the President delegated to the Secretary of Commerce his authority, under Public Law 395, Eightieth Congress, to consult with industry about voluntary agreements for allotment of scarce materials.
1-21 HHFA issued The Housing of Negro Veterans, a pamphlet discussing the housing problems of Negro veterans.
1- During January, FHA received applications for mortage insurance covering 91,324 dwelling units, an all time monthly high.
2-7 HHFA issued Housing Statistics Handbook, a compilation of statistical data relating to housing.
2-23 President Truman sent special message to Congress emphasizing need for long-range housing program as well as certain emergency measures such as extension of title VI, and rent control.
2-26 The Senate confirmed the appointment of J. Alston Adams as a member of HLBB.
3-15 Joint Committee on Housing, Eightieth Congress, issued its final majority report (H. R. 1564) recommending comprehensive housing legislation and adoption of national housing policy.
3-19 The Senate confirmed the appointment of Oscar K. LaRoque as a member of HLBB.
3-20 Issuance of draft proposed uniform plumbing code for housing. This was drafted by Uniform Plumbing Code Committee established by HHFA and composed of representatives of plumbing industry, labor and government.
3-30 Public Law 464, Eightieth Congress. Housing and Rent Act of 1948. Extended rent control and veterans preference in new housing to April 1, 1949.
4-3 Senate confirmed appointment of John Taylor Egan to be Commissioner of PHA and William K. Divers to be Chairman of HLBB.
4-17 Manual on Wood Construction for Prefabricated Houses issued by HHFA and OHE.
4-22 S. 866, long-range housing bill, passed by Senate.
5- During May 99,400 new dwelling units were started, probably an all time monthly high.
6-11 Public Law 624, Eightieth Congress; authorizing use of up to $10,000,000 of Lanham Act war housing funds to provide stopgap emergency housing needed as result of Vanport flood.
6-16 House of Representatives Banking and Currency Committee reports out long-range comprehensive housing legislation similar to S. 866 but bill fails to wip approval of Rules Committee.
6-19 Public Law 689, Eightieth Congress; directed that purchase price of permanent war housing sold to veterans be at apportioned cost or appraised value, whichever is less.
6-19 Public Law 702, Eightieth Congress; authorized Veterans’ Administrator to provide plans for building of special type homes for veteran paraplegics and to pay half the cost of such homes, but not to exceed $10,000.
XIV
CHRONOLOGY
6-28 Public Law 796, Eightieth Congress; (McGregor Act) authorized transfer of Federal interest in veterans temporary reuse housing located at educational institutions to such institutions. Extended date for removal of other temporary war and veterans reuse housing to January 1, 1950, and specifically made permanent war housing constructed under Public Law 781, Seventy-sixth Congress, and temporary shelter acts subject to disposition requirements of Lanham Act.
6-28 Pig Iron Voluntary Agreement goes into effect, first of three such allocations plans by voluntary agreement affecting housing materials (authorized under Public Law 395).
6- During June, FHA mortgage insurance written totaled $268,882,000, highest monthly volume in FHA history.
7-1 Voluntary agreement providing steel for warm-air furnaces goes into effect.
7-1 Public Law 864, Eightieth Congress; extended secondary market authorization of Federal National Mortgage Association to include GI-guaranteed or insured home and farm loans, but limited all purchases to certain GI and FHA loans (restricted to sales housing) executed after April 30, 1948. Also authorized FHA insurance of 95 percent mortgages on veterans’ cooperative housing under title II of the National Housing Act.
7-3 Public Law 895, Eightieth Congress; authorized conversion of Federal savings and loan associations to State-chartered associations.
7-30 The Defense Homes Corporation, created in 1940 to provide housing for defense workers, showing a profit of about $2,100,000, was transferred to RFC for liquidation.
8-10 Public Law 901, Eightieth Congress. Housing Act of 1948. Authorized studies and encouragement of modernized and standardized building codes and of standardized measurements of housing materials and parts; revised FFIA mortgage insurance with liberalized provisions for insured mortgages on lower-priced sales housing, moderate and low-rental housing and cooperative housing; authorized RFC loans and broadened FHA insurance of private credit to prefabricators and other mass producers of housing; authorized FHA insurance of minimum yield on debt-free moderate rental housing; liberalized secondary market provisions of Public Law 864, Eightieth Congress, particularly to permit purchase of FHA-insured rental housing mortgages; eliminated restriction on removal of over-income tenants of low-rent public housing projects.
9-1 Last of three voluntary agreements channeling scarce materials into housing goes into effect, this one providing steel for factory-built housing.
9-3 Announcement of reorganization of PHA to provide for centralization of many PHA functions in Washington formerly performed in the field.
9-4 Announcement of establishment of new HHFA Division of Standardized Codes and Materials.
9-14 Nation-wide meetings, under auspices of FHA and National Association of Homebuilders, held for purpose of reviewing with home-building and financing groups significant changes made in FHA mortgage insurance plans under Housing Act of 1948.
10-18 Representatives of about 50 national public interest organizations with active interest in housing meet with HHFA officials to review changes in Federal Housing Programs made by Housing Act of 1948.
XV
CHRONOLOGY
10-26 Last date under McGregor Act for educational institutions to apply for relinquishment of Federal interest in veterans temporary housing on school campuses. In all, 711 institutions had applied for 97 percent of the 129,000 eligible units.
10- During October, construction costs, according to the Department of Commerce composite cost index, turned downwards for the first time since May 1943.
11-18 HHFA made available model State statute for authorizing adoption of building codes by reference. Enactment of such legislation by the States would enable municipalities to avoid excessive publication costs presently required when new codes are adopted. The bill was drafted in cooperation with the Council of State Governments, the Department of Justice, and the Department of Commerce.
11-24 HHFA Administrator Foley announced plans formulated for legislative and other action to stimulate larger volume of housing at lower costs and that the Agency was moving forward on two fronts: (1) Preparation of legislative proposals for submission to Congress, (2) A Nationwide concerted effort throughout the coming year to enlist cooperation of builders, lenders, labor, and other interested groups in get.ing maximum results from the parts of the President’s program already enacted.
11-20 FHA announces issuance of rules and regulations for the Yield Insurance Program authorized under the Housing Act of 1948.
12-1 Key officials of Government agencies in the housing field, meet under sponsorship of National Housing Council to lay plans for major “econ- ( omy house campaign.”
12- Federal Home Loan Bank advances to its members reached $360,000,003 during 1948, an all-time peak. Total savings of individuals in HLBB member institutions reached $11,000,000,000 at the end of 1948 also an all-time peak.
XVI
SECTION ONE: HOUSING IN 1948
Chapter I
A SUMMARY
The American housing economy was at a postwar turning point at the close of 1948. The immediate problems of conversion from wartime to peacetime operations were rapidly giving way during 1948 to the longer-range problems of establishing a continuing and stable high-level production of housing for the years to come based on the needs of the country.
The problems involved in this reorientation of housing objectives dominated legislative discussion and action in the Congress during ihe year. By the end of 1948 they were also becoming the major factors in the policies and outlook of the private housing and home financing industry.
These problems were also a major concern of the Housing and Home Finance Agency which completed its first full calendar year during 1948. The establishment of this Agency on July 27, 1947, under the President’s Reorganization Plan No. 3 of 1947, brought into one organization the three major Federal Agencies in the housing field, the Home Loan Bank Board, the Federal Housing Administration, and the Public Housing Administration, and provided for the establishment of a National Housing Council to coordinate Federal housing policies and programs. This action represented one of the first postwar steps in the development of a more stabilized long-range approach on the part of the Federal Government to housing and during the past year it also served to bring to bear in a consistent manner all the resources of the Federal Government, as authorized, in dealing with housing matters.
On the one hand, the year 1948 saw housing reach a postwar production record of 930,000 new nonfarm dwelling units put under construction, the second highest figure in the country’s history. It saw also the highest annual production of building materials that the Nation had achieved, the highest dollar value of home building’ ($7,041,000,000) ; the highest dollar volume of mortgage recordings ($11,600,000,000) ; and the largest volume of home mortgage insurance in the history of the Federal Housing Administration ($3,341,-000,000, more than twice the previous peak).
831481—49----2
1
HOUSING AND HOME FINANCE AGENCY
But with these record or near record highs, the year also recorded the highest home prices and construction costs known. Despite the high level of housing activity during 1948, it was apparent by year’s end that the basic long-range need and potential demand for housing in the Nation were still to be met.
The quick postwar recovery of the home building industry, aided by the Government’s various emergency programs, had by the end of 1948 begun to relieve the market pressure for housing by those whose incomes and savings enabled them to finance homes in spite of rising
costs. At the same time, millions of families were still unable to obtain adequate accommodations within their income at the current level of prices, and many who had earlier hoped to obtain homes, were now priced out of the market. It became increasingly evident during the year that to insure a level of home building commensurate with the potential need in the country required the production of a much greater volume of housing within the financial reach of the average family. The size of the housing job ahead for American industry, labor, and government exceeded anything that-had been accomplished to date. The problems involved required approaches and techniques that were more directly related to fulfilling the needs of the mass market.
2
NONFARM PERMANENT HOUSING UNITS STARTED BY LOCATION
I000
800
600
400
200
0
I920 I925 I93O I935 I940 I945 I948
I000
800
600
400
200
0
SOURCE: U.S. Department of Labor
Chart 2
THOUSANDS OF UNITS
THOUSANDS OF UNITS
Rural-Nonfarm ■ units
£ Urban units
OFFICE OF THE ADMINISTRATOR
The Setting Has Changed
The last quarter century has witnessed far-reaching changes in our over-all economy; changes which have not been sufficiently reflected in our housing economy. The highest volume of housebuilding ever achieved in any 1 year took place in 1925 when 937,000 new units were started. In 1948, 23 years later, we have almost approached that prior peak, falling short by only 1 percent. But over this same span of years our population increased by 30,000,000 to reach a total of 146,000,000; the number of families grew by more than 40 percent; our industrial production as measured by the Federal Reserve Board more than doubled; and our per capita dollar income, adjusted to reflect price changes, reached $1,303 in 1948, an increase of $440 over 1925.
This is not to say that there have been no’ changes in housing technology or the housing economy over this past quarter of a century. But such changes as have occurred are not large enough in comparison with changes in other aspects of our national life, and a housing economy that might have been satisfactory 23 years ago is not so satisfactory today. t
The Problem is More Than Volume Alone
The vast emergency need at the end of World War II made necessary a concentration upon the production and supply side of the housing problem, and upon the revival of homebuilding which necessarily had been at extremely low levels during the war. Thus, the major immediate postwar task in the housing field was gearing homebuilding up to levels high enough to relieve to some degree the pressure caused by the postwar housing shortage. Government emergency programs to this end in 1946 and the firsst half of 1947 involved liberal use of government aids in the home mortgage field, in materials production and in restricting unessential construction which might otherwise compete with homebuilding for the limited supply of materials and labor available.
The postwar period thus saw a remarkably rapid revival of homebuilding and its speedy expansion within a short period of time to close to previous record levels. However, this occurred while other types of construction were also going ahead at a high volume. Thus, the heavy demand for materials meant costly delays and upward price pressures which, together with increases in the cost of land and labor, brought about a sharp rise in construction costs. In the 3y2 years from VJ-day to the end of 1948, costs had increased by 56 percent and were more than double prewar levels. This situation, to
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HOUSING AND HOME FINANCE AGENCY
gether with rising prices throughout the postwar economy, and the extreme pressure on the demand side because of the critical housing shortage, aided in bringing home prices to extremely high levels in 1948—beyond the reach of those most urgently in need. In late 1948 there were some indications of a possible leveling off in home construction costs; for the last 2 months of 1948, available residential construction cost indexes showed a decline for the first time in more than 5 years. For the year as a whole, however, home construction costs were at an all time annual peak.
Costs Are Too High
The most significant limiting factor on our housing production effort and the end of 1948 was the high cost of housing. This, reflects not only the sharp rise in construction costs and prices since the end of the war but also the backwardness of the entire housing complex— a lag involving not only production and supply methods, financing and attraction for investment capital, but also taxation and the concept of the role of local, State, and Federal Governments in the housing field.
The high cost of housing was not merely a reflection of the inflationary trends in prices in recent years; even before the war housing costs and prices, reflecting the backwardness referred to above, were too high for the pocketbooks of many of our people. As is evidenced by the declining trend in home production, the disparity between costs and needs in the past year was even greater than before the war. Home seekers all over the land were reluctantly finding that because of high prices, down payments and carrying charges for housing of a kind suited to the requirements of their families were beyond their means.
The Pattern of Production hasn’t Fitted the Pattern of Need
Despite the substantial expansion of homebuilding since the war the long range basic problem still remains. Moreover, production in recent years has not served all segments of the population equally, and in all too many cases has been beyond the reach of those most in need of adequate housing.
Most postwar housing has been relatively high in price, and so, available primarily to upper income groups, or with the aid of liberal government emergency financing measures, has been sold to people of low or moderate incomes.
Moreover, far too much of this housing has been sales housing, despite the fact that many of those in the housing market would prefer
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OFFICE OF THE ADMINISTRATOR
to rent. During 1948, only 17 percent of all housing started was rental type housing.
Starts Are Now Declining
Moreover, home starts were beginning to decline in the latter part of 1948, with the number of units started in each of the last 4 months of the year below the same months of 1947. Also, on the basis of late 1948 trends, a lower level of housing production was predicted for 1949.
This downtrend occurred not because of any substantial slackening in housing requirements, nor because of shortages of manpower or materials, but because housing prices were too high for many people who would otherwise have been in the housing market.
The decline in the number of units started in the late months of the year was not the only sign of a slackening in housing activity. It was accompanied by a gradual slowing down of sales, particularly for higher priced units, and the appearance of vacancies in some higher rental apartments. Although the volume of home lending was still high, mortgage money was growing harder to come by and somewhat more expensive.
These conditions underlined the alternatives facing the whole housing industry and the American people as well—finding practical means to reach the huge potential market for lower priced homes of acceptable quality and providing an adequate volume of housing or running the risk of another major decline in residential construction such as plagued homebuilding in the past. Homebuilding over the years has actually fluctuated more violently than any other segment of our economy and, in turn, has contributed in no small way to the instability of our economy as a whole.
HOUSING LEGISLATION
The Congress devoted a considerable amount of time to housing and housing legislation during 1948. About 130 bills affecting housing were introduced during the year. A major event on the legislative side was the completion of a broad-scale investigation into housing problems by the Joint Congressional Committee on Housing and the issuance, on March 15,1948, of its Final Majority Report. This committee, set up in the fall of 1947, held extensive hearings throughout the country, issued reports covering such topics as The High Cost of Housing, The Effects of Taxation on Housing, and Slum Clearance, among others. Its final report recommended a three-way approach to housing problems in America. First, it made recommendations designed to lower costs by increasing the efficiency of the homebuilding
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HOUSING AND HOME FINANCE AGENCY
industry; second, it suggested provisions to encourage a larger volume of lower-cost sales and rental housing; and, third, it recommended Federal aid for slum clearance, the provision of additional low rent public housing and the improvement of farm housing.
Most of the recommendations of the committee were incorporated in amendments to Senate bill 866, a bipartisan long range housing bill then before the Senate. This bill, which passed the Senate on April 22, 1948, and, in substantially the same form, was approved by the House Banking and Currency Committee, did not reach the floor of the House of Representatives for a vote.
The growing threat of rising prices was sufficiently apparent at the beginning of the year so that the Congress, after a temporary extension of FHA’s emergency liberalized war and postwar mortgage insurance authority in title VI, allowed this authority to lapse on April 30 while legislative provisions were discussed that would continue to support housing production without encouraging any further increases in housing prices. Later in the year the provisions of title VI, relating to rental housing only, w7ere again extended on a temporary and somewhat modified basis.
Housing legislation enacted during the regular session of the Eightieth Congress included an extension of modified rent control, provisions affecting disposition of public war and Veterans’ reuse housing, special housing for veteran paraplegics, authorization for conversion of Federal savings and loan associations into State-chartered associations and provisions for the extension on a limited basis of the secondary mortgage market provided by the Federal National Mortgage Association.
The Housing Act of 1948
The Congress was called into special session by the President, convening on July 26, 1948, for the purposes of considering proposals in the housing field and anti-inflation legislation. The most important housing legislation enacted during 1948 came during this session. Public Law 901, the Housing Act of 1948 which became law on August 10, 1948, provided most of the aids to private enterprise contained in S. 866. It omitted, however, those provisions of S. 866 which would have established a national housing policy, authorized Federal aid for slum clearance, urban redevelopment and locally sponsored low-rent public housing, rural housing aids and part of the research provisions. The law was designed primarily to encourage the production by private industry of more housing for sale and rent, primarily for families in the middle and low income brackets. The
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OFFICE OF THE ADMINISTRATOR
major part of the act affected the programs of Federal insurance of housing credit administered by. the FHA. The act:
Liberalized the provisions of the permanent programs of FHA mortgage in surance particularly for the construction of lower-priced sales housing through longer and higher percentage mortgages.
Liberalized the provision of FHA mortgage insurance for the financing of moderate rental housing and for housing projects undertaken by cooperatives.
Provided a new type of yield insurance to encourage large-scale, mortgage-free investment in moderate rental housing.
Liberalized insured credit facilities for the production and marketing of prefabricated houses and established insured credit for builders utilizing the econ omies of large-scale site production; and authorized RFC loans for production of prefabricated housing and components and for modernized large scale site construction.
Authorized a research program in the Housing and Home Finance Agency to develop and encourage the adoption of standardized and improved building codes and of standardized measurements and methods of assembly of housing parts and materials.
Liberalized secondary market program of Federal National Mortgage Association.
By the end of 1948, this act had been in existence less than 6 months. For most of the new type programs authorized, the time elapsed had been barely adequate for the development of procedures and regulations to cover the handling of these programs. This was particularly true of the new programs of mortgage insurance for cooperative housing projects and yield insurance in which considerable interest had been shown by the end of the year, although no mortgage insurance had yet been written, as well as measures designed to encourage large-scale production techniques in home building. More obvious and immediate results from this act were apparent with respect to such programs as the revival of FHA section 608 without which the volume of rental housing in late 1948 would have been far less; revisions in FHA’s section 203 program which provided support for financing of one- to four-family homes; and the revisions in the secondary market operations of the Federal National Mortgage Association of the Reconstruction Finance Corporation.
7
Chapter II
HOUSING SUPPLY AND NEEDS
A. The Housing Supply
The latest figures assembled by the Bureau of the Census show that in April 1947 our inventory of housing in both farm and nonfarm areas combined had reached a new all-time peak of 41,625,000, an increase of nearly 12 percent over 1940. Of this total over 34,100,000 were located in nonfarm areas, the remaining 7,500,000 being in farm areas.
Reflecting the effects of a sustained period of full employment and high incomes during and after the war, coupled with a pressing demand for housing, property owners the country over made remarkable strides in repairing and rehabilitating properties, many of which had been allowed to fall into disrepair during the depression years. As a result the proportion of all dwellings which the Bureau of the Census found to be in good condition or needing only minor repairs rose from 82 percent in 1940 to 90 percent in 1947. In 1947 two-thirds of the Nation’s houses had both a private bath and an indoor flush toilet. In 1940 only slightly more than half our homes were so equipped.
Encouraging as the improvement in the physical condition of our housing inventory has been, there are still slums and blighted areas in our cities and towns, large and small. In rural areas a distressingly large proportion of the housing fails to measure up to a minimum standard for health and decency. On the basis of Bureau of the Census figures there were in April 1947 over 6,100,000 nonfarm homes which did not meet generally accepted standards for adequate housing. In farm areas there were 1,400,000 dwellings in need of major repair to say nothing of several million more which lacked such basic amenities of life as running water, bathtubs, and inside flush toilets.
In addition to the families who live in substandard dwellings like these, the census reports that in April 1948 some 2,500,000 families were living doubled up with other families or living in furnished rooms, trailers, or other makeshift accommodations. This compares with the 1,846,000 doubled families and 100,000 families in makeshift accommodations in 1940.
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OFFICE OF THE ADMINISTRATOR
The situation has been further aggravated by the fact that the marriage rate while lower than in the immediate postwar peak is still high. Thus vital statistics records show that there were about 1,833,000 marriages during 19-18 compared with an average of less than 1,200,000 per year during the 1920’s.
The magnitude of the Nation’s housing needs are apparent from an examination of the scope of the job which must be done if the most critical needs are to be met between now and 1960.
An analysis of Bureau of the Census figures indicates that after deducting summer cottages, boarded-up mansions, uninhabitable shacks, etc., there was an effective supply of nonfarm dwelling units of 34,829,000 at the beginning of 1949 as the following table indicates:
Effective nonfarm housing inventory as of end of 19^8
(In thousands)
Total number of nonfarm dwelling units in April 1947 according to
Bureau of Census_________________________________________________ 134, 248
Substract: £
Uninhabitable dwellings__________________________________137
Seasonal cottages, hunting lodges, etc___________________991
Vacant units held off the market (boarded up mansions, units sold, or rented but not yet occupied)___________________391 1, 519
Effective supply of housing to meet nonfarm needs as of April 1947_ 32, 729
Add :
Estimated additions to supply in 1947 and 1948 through new construction and conversion_____________________________________ 2,100
Estimated effective nonfarm supply, beginning of 1949__________ 34, 829
1 United States Bureau of the Census; Current Population Report Series P-70 No. 1. Housing Characteristics of the United States, April 1947, table 1.
B. Housing Needs
By 1960, it is estimated, there will be some 39,500,000 nonfarm families who will require shelter. When allowance is made for a 4-percent effective vacancy rate to permit the needed mobility in the population and to provide for reasonable freedom of choice in selection of a place to live this family forecast means that we will need an effective nonfarm housing inventory in 1960 of some 41,100,000 units or roughly 8,300,000 more than were on hand in 1947. Allowing for the fact that some 2,100,000 units have apparently been added to the nonfarm supply since 1947, this means that by 1960 at least 6,200,000 dwellings must be added to the nonfarm housing inventory just to keep pace with our expanding family requirements.
If we did no more than this, however, we would actually find the housing situation worse in 1960 than it was in 1947. No account would
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HOUSING AND HOME FINANCE AGENCY
have been taken of the effects of the disaster and ravages of time upon our existing supply, to say nothing of the urgent need for doing something about the more than 6,000,000 nonfarm units which the Census figures show were inadequate in 1947. As the following table shows, there would be a need for replacing or rehabilitating close to 8,500,000 dwellings between now and 1960 if we hope to make any significant progress in improving the housing standards of the nonfarm population.
Nonfarm dwelling units needing replacement or rehabilitation (1947—60) [In thousands]
Urban and rural nonfarm units which were in need of major repairs and
urban units which lacked private bath and toilet in ’April 1947 ---- 5, 600
Suburban units lacking private bath and toilet and currently standard
nonfarm units which will deteriorate by 1960------------------------ 2, 000
Estimated losses through disaster, demolition, etc-------------------- 520
Losses through removal of temporary housing---------------------------- 350
Total replacement and rehabilitation need----------------------- 8,470
1 United States Bureau of the Census; Current Population Report Series P-70 No. 1. Housing Characteristics of the United States, April 191/1, table 4.
There is in addition a need for building or rehabilitating between 2,000,000 and 3,000,000 farm dwellings before I960.
Taken as a whole, therefore, the job which should be done between now and 1960 involves between 17,000,000 and 18,000,000 dwellings as may be seen in the table below.
Housing needs of the United States to 1960
[In thousands]
Number of nonfarm families which will require housing in 1960---- 39, 500
Add: Allowance for 4 percent effective vacancy rate for rent
or sale_______________________________________________________ -b
Total effective supply of dwelling units needed in 1960--- 41,100
Subtract: Estimated effective supply, end of 1948 (from a
previous table)----------------------------------------------- 34,829
Net additional number of units which need to be added to the
supply by 1960 to keep up with rate of family formation-------- 6, 271
Add: Total replacement and rehabilitation need (from table above)------------------------------------------------------------ 8,470
Total nonfarm new construction conversion and rehabilitation need--------------------------------------------------- 44, 741
Add : Total farm new construction and rehabilitation need---------- 2, 000-3, 000
16,741-17, 741
1 Derived from Bureau of the Census estimates of total families in 1960.
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OFFICE OF THE ADMINISTRATOR
The above estimates although they include both farm and nonfarm needs do not cover the problems involved for the millions of homes in rural areas which lack modern sanitary facilities.
Some part of this job will be accomplished through a better utilization and conservation of our present supply. First, some additional housing may be accounted for by the conversion of larger structures into a greater number of smaller dwellings. Second, it may be possible to meet part of this need through a better preservation of our present stock of sound and acceptable housing than in the past. Third, it may also be possible to take care of some of the requirements through the rehabilitation of those substandard units which can be made into sound and acceptable housing, such as has been accomplished to some extent during the recent years. We cannot, however, count too heavily on rehabilitation since it would appear probable that much of the housing which has not been brought up to standard was, by reason of quality, location, and structural characteristics, not worth rehabilitating even during the recent period of unparalleled prosperity and unparalleled housing demand.
Housing for families of moderate and low’ incomes constitutes an important segment of our present and future housing requirements. According to Census Bureau figures, one-fifth of the Nation’s urban families and over half of the Nation’s farm families had total money incomes of less than $2,000 in even as prosperous a year as 1947.
While the rising costs of housing have been a burden to home seekers in all wTalks of life they have been unusually burdensome to those in the lower income brackets. This is particularly true, for example, with respect to minority groups who are concentrated so largely in the lower income levels. Although, according to Census Bureau data, a fourth of the urban nonwhite families had total money incomes of $3,000 or more for the year 1947, over half of such families had total money incomes for 1947 of less that $2,000. At the same time, the proportion of nonfarm dwelling units occupied by nonwhites which were overcrowded was roughly four times as high as that for whites, and the proportion of such units occupied by nonwhites which needed major repairs or lacked essential plumbing facilities was almost six times as high as that for whites.
From all indications, the housing problems of veterans during 1948 continued to be more acute than those of nonveterans. The most recent national surveys of veterans’ housing problems were undertaken in 1946 and early 1947, and no national survey was undertaken during the past year. Some local studies w’ere made in 1948, one in Maryland and one in Seattle, Wash.; these revealed that veterans were still having considerable difficulty in solving their housing problems.
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HOUSING AND HOME FINANCE AGENCY
Another indication of the housing situation of veterans is apparent from a Bureau of the Census survey of doubling-up based on April 1948 data. According to this survey, there were then 2,500,000 families living with other families; at least 1,100,000 of them were families headed by male veterans of World War II. The tabulations available on this survey showed data only for those veteran families which were living “doubled-up” with families to which they were related. Thus the 1,100,000 figure was an understatement since there was undoubtedly an additional—though unascertained—number of other veterans’ families, included in the total 2,500,000 doubled-up families, to which they were not related. However, even on the basis of these minimum figures at least 15 percent of all veterans’ families were living with other families in April 1948, nearly twice the national proportion for doubling-up, according to the Census Bureau.
C. Slum Clearance, Urban Development and Redevelopment
An analysis of the housing problem in America would necessarily include not only a statement of housing needs as presented above but also some indication of the problems involved in clearing out the slums and blight affecting large areas of nearly all American cities.
The very concentration of most of the bad housing of oui cities in slums accentuates all the evil affects of such housing on the health and character of the families who must live under these conditions. It creates additional problems of environment which have an impact on the shim dwellers themselves, on the stability of adjoining areas, and on the financial structure of municipalities. In city after city, the rates of infant mortality, disease, juvenile delinquency, crime, and fires are at least twice as great in slum and blighted areas as in the city at large. The slums are thus social liabilities of the fiist magnitude. They are also financial liabilities since the costs of servicing them far exceed tax revenues from them. I urther, as additional areas of cities experience the progressive deterioration of shuns and blight, new residential construction is forced more and more beyond municipal boundaries into the suburbs beyond, creating additional problems both for the suburban communities and the central cities.
Cities are increasingly aware of the necessity of clearing slums and blighted areas and encouraging the kind of redevelopment that will provide decent living conditions for large segments of their populations and eliminate the heavy social and economic costs which these areas are now causing.
Several cities are now making surveys of their blighted areas, some are drafting specific redevelopment plans, and a few have actually initiated redevelopment operations. In the first group are such cities
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OFFICE OF THE ADMINISTRATOR
as Los Angeles, Minneapolis, and Norfolk, Va., all of which are engaged currently in identifying and analyzing specific areas of blight. In the second category are: Baltimore, with some 8 areas officially approved for redevelopment and plans being perfected for a first project on a close-in downtown area; Chicago, with a first project which has reached the stage of negotiation with a redeveloper and with several sites approved for rehousing families displaced from redeveloped areas; Milwaukee, with 3 areas selected and plans for their redevelopment well advanced; Philadelphia, with 10 areas certified to the redevelopment authority and detailed plans for 4 of them nearing completion; Pittsburgh, with its first project, which will be redevelopment for nonresiclential uses, in the negotiation stage; Providence, with plans for 8 areas before the city council; San Francisco, with official designation of one sizable redevelopment area; and Washington, D. C., with a plan for a first project in the public hearing stage. Of these 8 cities, 5 have some funds available in larger or smaller amounts for initiating actual operations. In the third category are Detroit, with land acquisition, financed by annual appropriations from city funds, under way on 40 acres of a 100-acre redevelopment project ; and Indianapolis, which is in the process of acquiring, with funds obtained from a special tax levy, its first 178-acre redevelopment site and has initiated work on a second one. This is not an exhaustive list of all the redevelopment efforts of one sort or another the country over but it indicates in broad outline the scope and status of urban redevelopment activity today.
Several cities have undertaken programs of law enforcement, with varying degrees of intensity, to require the elimination of the worst hazards to health and safety. Of these, probably the most widely known is the Baltimore plan which calls for a coordinated attack on such conditions by all departments of the city government concerned. It has relieved some of the worst conditions and clearly warrants wider use in appropriate areas. But as the mayor of that city has stated, it is no more than a “first aid” measure that provides only temporary relief until the slums can be torn down and adequate housing supplied.
The slum clearance task is enormous. Reference has been made above to the 6,000,000 odd nonfarm dwelling units which were below standard in 194 7. Even if the rate of housing betterment which obtained between 1940 and 1947 has continued, deterioration likewise has continued and added its toll to the volume of substandard housing. The concentration of the majority of substandard areas of slums and blight makes them unsusceptible to rehabilitation on any economic terms. Nor will the situation be remedied by leaving these properties
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HOUSING AND HOME FINANCE AGENCi
to drop out of the market or disintegrate completely, for they will only contaminate wider areas and increase rather than reduce the problem. The remedy is to remove them and rebuild the areas according to the appropriate needs of the community.
The clearance and rebuilding of such areas at a rate which will arrest and prevent the spread of slums and blight represents a task for which measures and instruments used in the past have been wholly inadequate. Private enterprise has been unable to cope with such a problem, for it could not afford to pay the price of land in blighted areas, which far exceeds the cost of raw land in outlying areas. Furthermore, even the largest developer, let alone the average one, could not assemble tracts sufficiently large for economical redevelopment operations and for protection of the investment against undue risks from neighboring developments of one sort or another. The cities alone have been unable even to check the further spread of blight, far less to recover such areas and redevelop them into useful sections. They have lacked the bonding and taxing powers sufficient to finance operations on the scale required. A combination of the power of eminent domain possessed by cities and the financial resources and know-how of private enterprise are clearly essential in any major effort to restore such sections to usefulness; but the continuing spread of slums and tax-deficit areas, common to all urban areas, emphasizes the need for some type of national approach and assistance in order to enable communities and private enterprise to cope effectively with the problem.
14
Chapter III
HOMEBUILDING IN 1948
A. Housing Production
Total nonfarm starts
Nineteen hundred and forty-eight was the second year in history that the number of new nonfarm permanent, dwellings placed under construction exceeded 900,000 units although the rate of starts was falling off in the last half of the year. About 930,000 units were started in 1948. This number has been exceeded only in 1925 when 937,000 units were started. The 1948 total was 9.5 percent more than were started in 1947 and 38.7 percent above the 1946 figure. (See tables 3 and 4, appendix A.)
The annual average number of starts by decade of (he twentieth century are as follows:
Annual average
Decade : number of starts
1900-09--------------------------------------------- 403, 000
1910-19--------------------------------------------- 400,000
1920-29--------------------------------------------- 703,000
1930-39--------------------------------------------- 273,000
1940-48 1------------------------------------------- 517,000
1 9 years.
When the depression years 1920-21 and the war years 1942-45 are excluded, the annual average was 792,000 starts in the 20’s as compared with 752,000 in the 40’s.
From April through June of 1948, nearly 100,000 units per month were begun. This high rate together with anticipations of a repetition of the contra-seasonal upswing in the rate of starts that occurred in the fall of 1947 brought about midyear forecasts of 950,000 to 1,000,-000 starts in 1948. Starts declined each month since May, however, and the 56,000 figure for December was 2,800 units or 4.8 percent below December 1947. The decline was especially pronounced in the South, Southwest, and North Central States.
Location
The general trend has been toward a larger proportion of total starts in rural nonfarm areas, i. e., areas outside of incorporated
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HOUSING AND HOME FINANCE AGENCY
places of 2,500 population or more in 1940. During the postwar period September 1945 through August 1948, the latest month for which data by location are available, about 42.2 percent of all nonfarm units started were in rural nonfarm areas compared with 36.5 percent in the nineteen-thirties, and 20.2 percent in the 1920 s. (See table 3, appendix A.)
FHA insured starts
About 291,000 new dwelling units were given first compliance inspections by FHA for mortgage insurance under titles II and VI of the National Housing Act in 1948 as compared with about 228,800 units in 1947 and 69,000 units in 1946. These units accounted for over 31 percent of all privately financed units started in 1948 as compared with about 27 percent in 1947 and 10 percent in 1946.
Prefabricated units
The number of prefabricated dwelling units shipped was estimated by the Prefabricated Home Manufacturer’s Institute at 30,000 units in 1948 as compared with 37,400 units in 1947. The Institute indicated that the decline was largely due to the elimination of some firms included in the 1947 estimate (because they are considered site-pre-fabricators rather than factory-prefabricators) ; to some firms going out of business; and to consumer financing difficulties after the expiration of section 603 of the National Housing Act.
Rental housing starts
Preliminary estimates indicate that about 158,000 rental-type units, i. e., units in multifamily and two-family structures, were placed under construction during 1948. These rental-type units accounted for about 17 percent of all new permanent nonfarm dwelling units placed under construction during the year. (See table 4, appendix A.)
The trend in this relationship of rental-type units to total units started has been upward since the end of World War II—having risen from 12 percent in 1946 to 13 percent in 1947 and to 17 percent in 1948. The general trend since the middle 1920’s, however, has been downward. Rental-type units accounted for about 40 percent of all new permanent nonfarm starts in the 1920’s, declined to 22 percent in the 1930’s, and has declined further to less than 16 percent in the 1940’s.
Dollar volume
In dollar value, new nonfarm residential construction put in place, including major additions and alterations, reached the all-time peak of $7,041,000,000 in 1948. This amount was 29.4 percent above the
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OFFICE OF THE ADMINISTRATOR
NONFARM PERMANENT HOUSING UNITS STARTED BY
All units in multifamily and two-family structures are classified as "rental-type"
SOURCE: U.S. Department of Labor
Chart 3
figure for 1947, the second highest year on record, and was almost double the amount for 1946. The value of new nonfarm building placed under construction, exclusive of nonresidential buildings for privately owned public utilities and for military and naval facilities, distributed by type of building for the past 3 years was as follows: ♦ ' '
In millions of dollars
Type of building 1946 1947 1948
Amount Percent of total Amount Percent of total Amount Percent of total
Total, all types $7, 223 100.0 $9,078 100.0 $11,656 100.0
Residential_ _ 3, 552 49. 2 5, 442 60. 0 7, 041 60 4
Industrial . _ E 773 24. 5 1, 727 19. 0 1 410 12 1
Commercial _ 1,114 15. 4 ' 835 9 2 1’ 258 10 8
Educational _ ' 216 3.0 439 4. 8 ’ 797 6 8
Hospital and institutional.. - 166 2.3 188 2 1 320 2 7
Religious -- _ 72 1 0 118 1 3 239 2 1
All other types 330 4.6 329 3.6 591 5.1
Note.—Amounts are in current dollars which have not been adjusted for price changes.
The above table shows the relative importance of the different kinds of new nonfarm building construction to the total. The portion accounted for by residential construction has increased from 49.2 percent in 1946, to 60 percent in 1947, and to 60.4 percent in 1948. This relationship of residential to total new nonfarm building construction
831481—49----3
17
PERCENT
0
1920 1925 1930 1935 1940 1945 1948
100
80
60
40
20
0
2 UJ o tr UJ
I Soles-type Units
RENTAL AND SALES TYPE
100
80
60
40
20
0/
Rental-type units
HOUSING AND HOME FINANCE AGENCY
ranged from 32.8 percent to 57 percent in the 1930s, and from 39.5 percent to 63.7 percent in the 1920’s. (See table 11, appendix A.)
When compared with the total value of all new construction put in place (including highways, streets, utilities, military and naval facilities, farm construction, etc., as well as nonfarm residential and non-residential building) it is found that new nonfarm residential construction accounted for 34 percent of the total in 1946, for 38.9 percent in 1947, and for 39.9 percent in 1948. These percentage relationships for the past 3 years may be compared with the range in this relationship from 11.7 percent to 34.6 percent in the 1930’s and from 25.3 percent to 43.9 percent in the 1920’s.
B. Materials for Housing
Reflecting continued high postwar output levels, building materials supply in 1948—unlike the two year period immediately following VJ-day—was no longer a major factor in restricting and hampering home building. This over-all supply improvement, resulting from the extraordinary postwar recovery of the building materials industry—over-all production in 1948, for the second successive year, set a new record—began to be apparent about mid-1947 and has continued ever since. (See table 8, appendix A.)
Despite these record over-all levels, shortages were evident in a number of places from time to time for cement, metal building items such as nails, plumbing fixtures, cast-iron soil pipe and steel pipe; even with notable production increases the demand for millwork, particularly at the height of the building season, outran supply.
On the whole, however, the supply situation was good and, by year’s end many of the more persistent shortages had eased, stocks were up and in some industries, such as those manufacturing some of the heating items, asphalt roofing, and clay products, production declines were taking place, reflecting the good supply situation.
1948 production record
Production of building materials in 1948, according to the composite production index compiled by the Department of Commerce, was 5 percent higher than in 1947, making 1948 the record year; the previous high year was 1947. Third best year in materials output was 1925. (See table 8, appendix A.)
Noteworthy increases occurred with respect to many of the 20 individual materials which enter into the Department of Commerce composite index. For five of them—gypsum lath, gypsum board, cement, cast iron soil pipe, and asphalt siding and felts—output was
18
OFFICE OF THE ADMINISTRATOR
higher than ever before recorded; and for hardwood flooring, nails, and clay sewer pipe it reached levels not achived since the 1920’s.
Compared with 1947 the output of gypsum lath was more than half as much again also, topping the previous record year (1941) by well over a third. The gain in gypsum board was 25 percent over 1947; in hardwood flooring, 32 percent; in asphalt siding and felts, 20 percent, in softwood plywood, 15 percent. Plumbing fixtures, except for kitchen sinks, showed production increases of a sixth to a third over 1947. Structural insulation board gained 21 percent; hardboard and laminated fiber board, nearly 10 percent. Brick output was up 16 percent. Cement and clay sewer pipe each showed an increase of 10 percent with cement at a new all time production peak. Lumber output was about 2 percent below the level of 1947, and about 3 percent above the 1946 level.
In the iron and steel group, where shortage of basic raw materials has been a constant deterrent to production and competitive demands for the same materials from other industries have been heavy, there were gains of 11 percent in output of cast iron soil pipe, 8 percent for nails, 7 percent in cast iron radiation, 9 percent in rigid steel electrical conduit, 6 percent in concrete reinforcing bars.
Reflecting in part the fuel oil shortage, manufacturers’ shipments of residential type oil burners dropped from 850,000 in 1947 to 274,000 in 1948. Shipments of all types of mechanical stokers increased 24 percent.
A few important housing materials showed declines compared with 1947. Most important was warm air furnaces, for which the decrease was 9 percent. Others were asphalt roofing, 14 percent; range boilers, 22 percent; kitchen sinks, 3 percent; clay structural tile, 2 percent.
Voluntary allocation plans
The heavy competing demand from various industries for certain raw materials, and the necessity of achieving a more balanced over-all economy, led to the adoption of a number of voluntary allocation plans for raw materials, under Public Law 395, of the Eightieth Congress. These plans were intended to assure that essential industries such as those producing housing items were afforded an opportunity for raw materials which they might otherwise have had difficulty in obtaining.
Chief beneficiaries of the plans among producers of housing construction materials were the manufacturers of warm air furnaces, who were allotted approximately 29,000 tons of steel per month beginning in July. A total monthly allocation of 59,000 tons of steel was made to manufacturers of steel prefabricated houses.
With this assistance, the average monthly output of cast iron soil
19
HOUSING AND HOME FINANCE AGENCY
pipe in the last 5 months of the year rose approximately 20 percent; and that of cast iron pressure pipe approximately 10 percent, over that of the first 7 months. Output of warm air furnaces similarly increased about 40 percent, but still did not equal the production realized in 1947.
C. Manpower for Construction
Employment by construction contractors remained above the 2,000,-000 mark for the last 8 months of 1948. The 1948 peak was reached in August when 2,253,000 persons were employed. Since August, employment has tapered off gradually, but it was estimated that 2,079,000 persons still were employed in December—a decline of only 7.3 percent from the August peak. For the entire year, average monthly employment was 2,060,000 persons in 1948 as compared with 1,921,000 in 1947, and 1,661,000 in 1946—the 1948 figure being 7.2 percent above the 1947 average and 24.2 percent above 1946. The estimate for 1946, the first full year after the close of World War II, was only 7.2 percent below average monthly employment in 1941 (1,790,000 persons) which was the peak year for the decade prior to the war. A considerable portion of this 1941 employment was on defense work, however, so a better comparison might be made with 1940—the second highest year of the prewar decade. Average monthly employment for 1946 was 28.4 percent above the 1940 figure (1,294,000 persons). Estimates for average monthly employment by construction contractors during the 1930’s ranged from a high of 1,372,000 in 1930 to a low of 809,000 in 1933.
Average monthly total employment in the United States was estimated at 59,378,000 persons in 1948. The 1948 estimate figure was 1,351,000 or 2.3 percent above the monthly average for 1947, and was 4,128,000 or 7.5 percent higher than the estimate for 1946. In spite of the general tightening of the labor market during the past 3 years, the proportion employed on contract construction work has increased. Average monthly employment by construction contractors accounted for 3 percent of the average monthly total employment in 1946, but this proportion increased to 3.3 percent in 1947 and to 3.5 percent in 1948.
Apprenticeship
The supply of building trade workers has been helped considerably by the apprentice training program. According to reports received by the Bureau of Apprenticeship, there were about 134,300 building trade apprentices in training as of December 31, 1948. This is the highest number reported to be in training at the end of any month for the past 2 years—most months during this period showing an increase from the preceding month. The 134,300 trainees reported at the end
20
OFFICE OF THE ADMINISTRATOR
of 1948 was 19,900 or 17.4 percent higher than the number at the end of 1947, and was 45,000 or 50.4 percent above the 1946 figure. Shortages of workers in the trowel trades have been more severe and more widespread than in the other building trades. There were 19,400 trowel trade apprentices reported to be in training at the end of 1948— 3,600 or 22.8 percent above the number at the end of 1947 and 8,500 or 78 percent higher than at the end of 1947.
D. Costs and Prices
(There are significant current gaps in our statistical knowledge as it relates to housing, particularly in the area of housing costs and prices. For example, no over-all information on housing sales prices is available, and as the Congressional Joint Committee on the Economic Report pointed out in 1948, “There is need for a reliable general construction cost index for the predominant types of residential construction * * The material below is based on such information as is currently available.)
Construction costs
Starting from a level of costs that was too high for the pocketbooks of a large portion of the American people even before the war, by September of 1948 construction costs had reached an all time peak. The Department of Commerce composite cost index covering all types of construction in the month of September reached a level 117 percent above 1939, while the residential construction cost index (derived by the Department of Commerce from city indexes published by E. H. Boeckh and Associates) had risen to a point 120 percent above the 1939 average. More than a third of the increase since 1939 occurred in the past 2 years. (See tables 5, 6 and 7, appendix A.)
At the end of the year there was some evidence that construction costs may be stabilizing and that a turning point may have been reached. Reflecting primarily a small drop in the price of lumber, construction cost indexes showed some decline in late 1948, for the first time since May 1943. These declines had amounted to only about 2 percent from the all-time peak months of the last year, and the indexes were still at more than double the 1939 levels.
For the year 1948 as a whole, average residential construction costs were at an all-time record level, although they had begun to decline during the latter part of 1948. According to the index, average residential construction costs for 1948 were about 11.3 percent above the average for 1947, and were about one-third higher than the 1946 average. As measured by this index, residential construction costs in October 1948, reached the highest level ever recorded and then de-
21
HOUSING AND HOME FINANCE AGENCY
dined during the following 2 months so that December costs were about 2.4 percent below the October peak. The index for December 1948, was 4.3 percent above the index for December 1947, over 30 percent higher than for October 1946 (the last full month for price controls), almost 50 percent above August 1945 (the last month of World War II), and 115 percent above the average index for the year 1939. (See table 6, appendix A.)
According to estimates by the Bureau of Labor Statistics, the average construction cost of all types of new privately financed non-
CONSTRUCTION GOST and WHOLESALE PRICES of BUILDING MATERIALS and ALL COMMODITIES
SOURCES: U.S. Deportments of Labor and Commerce
Chart 4
farm dwelling units started during 1948 ($7,525) was 13.2 percent above the average for 1947 ($6,650), was about one-third higher than the 1946 average ($5,600), and was almost two times the average cost ($3,850) in 1939. The foregoing construction costs, which are based on permit valuations, include only labor, materials, subcontracted work, and that part of the contractor’s overhead and profit which is chargeable directly to the construction. These costs exclude sales profit, selling costs, the cost, of land and site improvements, and all such nonconstruction expense as architectural and engineering fees, so they should not be confused with average selling prices. It also should be noted that dwelling units in all types of structures (multifamily and two-family as well as one-family structures) are included
22
INDEX
Construction Cost,
Building Materials
225
200
175
150
125
100
75
1920 1925 1930 1935 1940 1945 1948
INDEX
225
200
175
150
125
100
75
.All Commodities
(1935-1939 = 100)
OFFICE OF THE ADMINISTRATOR
in the computation of average construction costs. (See table 5, appendix A.)
Wholesale prices of building materials
The composite average of wholesale prices of building materials reached an all-time high in 1948. The average for the year was 7.6 percent above the 1947 average, and was about 2y8 times the average for the prewar year 1939. About three-fourths of this increase over 1939 prices has occurred since the end of World War II. (See table 7, appendix A.)
The peak for these prices was reached in September 1948. Small declines in the composite wholesale price of all building materials occurred in each of the three succeeding months so that the figure for December 1948 was 0.9 percent below the peak. This decline in the composite price was caused almost entirely by the decline of 4.6 percent in theDecember wholesale price of lumber from its postwar peak in August 1948. The price of paint and paint materials in December 1948, was 1.5 percent less than in December 1947, but the price for this item reached its lowest point for 1948 in March (when it was 4.5 below the December 1947 figure) and the general trend was upward during the last 9 months of the year.
Four of the seven basic building material groups included in the composite, however, were still at their postwar peaks in December 1948. These four groups were brick and tile, plumbing and heating, structural steel, and “other building materials” which includes such items as bulk asphalt, insulation board, pine window sash and frames, window glass, sand, and gravel, etc. Changes in the wholesale prices of all commodities except farm products and foods and of building materials are compared in the following:
Percent increase in the average wholesale price for December 1948 from the average for—
kvoiiiiiiutiiLies December 1947 October 1946 i August 19452 1939 s 1932 < 1925 »
All commodities except farm products and
foods 5. 0 32. 0 53. 0 87. 9 117 7 48 9
All building materials.. . _ 5.8 49.9 71. 6 123 3 183.1 98. 7
Brick and tile ... 7.9 25. 6 43.8 75.6 107.6 60.3
Cement _ _ . 9. 8 25. 4 34 3 46. 2 79 7 30 1
Lumber 0. 8 70. 8 96 7 227 8 422 2 203 7
Paint and paint materials 81.5 35.5 50. 5 95.0 127. 1 47.8
Plumbing and. heating 15.6 46. 7 68.4 98.6 135. 5 n. a.
Structural steel _ ... 25 0 48 9 66 6 66 6 121 0 75 0
Other building materials 13.8 44.4 69.6 95.9 122. 5 76.2
1 Last month for price control.
2 Last month of World War II.
! Year before start of defense program.
4 Lowest year for the 1930’s.
8 Peak year for dwelling unit starts.
6 Decrease (all other figures are increases).
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HOUSING AND HOME FINANCE AGENCY
The above table shows that the composite of wholesale prices of all building materials has consistently increased more than the wholesale prices of all commodities exclusive of farm products and foods. For example, the increase in the average wholesale price from 1939 (annual average) to December 1948, was 123.3 percent for all building materials whereas the increase between the same periods for all commodities except farm products and foods amounted to 87.9 percent. Excepting the increase from December 1947 to December 1948, increases in the wholesale price for lumber have been much larger than for any of the other six groups of building materials. In December 1948, the wholesale price of lumber was about 3% times the average price in 1939 and was about 5)4 times the 1932 average. Increases in cement prices over prewar levels have been less than for any of the other six groups of building materials.
Average earnings and hours of work in construction
Along with other elements of construction costs, wages in the construction industry have also risen to new highs during 1948— although to a lesser extent than building materials. The December average of $1,945 per hour was 9.6 percent above the average ($1,774 per hour) for December 1947, 40.1 above the average ($1,388 per hour) for September 1945—the first month after the close of World War II and was 108.7 percent above the average ($0,932 per hour) for the year 1939. The annual average hourly earnings of these workers has risen continuously since 1934, the earliest year recorded for this series, as shown by the following:
Year
Year
Average hourly earnings
Increase from preceding year
1934________________________
1935________________________
1936________________________
1937________________________
1938________________________
1939________________________
1940________________________
1941 _______________________
Average hourly earnings
Increase from preceding year
Percent
$o. 795 (*) 1942
.815 2.5 1943
.824 1.1 1944
.903 9.6 1945
.908 . 6 1946
.932 2.6 1947
.958 2.8 1948
1.010 5.4
$1.148
1. 252
1. 319 1.379 1.478 1.681 1.869
Percent
13.7
9. 1
5.4
4.5
7.2
13.7
11.2
i Not available.
Monthly averages of hours worked per week by site workers employed by contractors on privately financed building construction have remained fairly constant since the close of World War II, ranging from a low of 36.6 hours in November 1947, to a high of 38.8 in October 1946. Annual averages of hours worked per week have declined from 38.1 hours in 1946 to 37.6 hours in 1947, and to 37.3
24
OFFICE OF THE ADMINISTRATOR
hours in 1948. Because of the small declines in average hours worked per week, average weekly earnings have increased somewhat less than average hourly earnings. Average weekly earnings in 1948 ($69.79 per week) were 10.3 percent above the 1947 average ($63.30 per week), were 24.1 percent above the 1946 average ($56.24 per week) and 129.6 percent above the average for 1939 ($30.39). (See table 9, appendix A.)
25
Chapter IV
FINANCING HOME CONSTRUCTION AND HOME OWNERSHIP IN 1948
A. The Over-all Situation
Home-financing activity established a new dollar volume record in 1948, although only slightly above the previous high in 1947. Mortgage lenders generally employed more selective policies in making construction or permanent mortgage loans and stiffened mortgage terms somewhat in 1948. However, the volume of mortgages recorded remained at high levels and it was not until the last 4 months of the year that the volume declined below the same months of 1947. Many lenders were skeptical of the soundness of long-term loans based on current market values and apparently were concerned over the implications of the decline in construction volume during the last half of the year.
Money rates in general moved to higher levels during the summer of 1948 but declined appreciably during the last 2 months of the year.
SOURCES: Home Loan Bank Board, Veterans'Administration,and FHA
Chart 5
26
1939 1940 1941 1942 1943 1944 1945 1946 1947 1948
12
10
8
6
4
2
0
BILLIONS OF DOLLARS
TOTAL NONFARM MORTGAGE RECORDINGS OF $ 20,000 OR LESS
NONFARM MORTGAGE RECORDINGS AND VA AND FHA HOME LOANS
12
10
8
6
4
2
0
BILLIONS OF DOLLARS
VA Home Loans
Other Recordings
FHA I-to4-Family
OFFICE OF THE ADMINISTRATOR
At the end of the year, yields on Government bonds, high-grade municipals and prime corporate bonds were back to about the same levels which prevailed at the end of 1947. This recent softening in money rates has resulted in no appreciable change in mortgage interest rates, although a continuation of the decline in bond yields should relieve the pressure on mortgage interest rates, and the relatively more attractive return may cause lenders to invest more of their funds in mortgages.
Savings in mortgage lending institutions continued to increase in 1948 although at a slower rate than in prior postwar years. There was some minor reversal of this trend in the last few months of the year, which may or may not be temporary and probably reflects greater promotional efforts by lenders and in some cases higher interest rates offered to depositors in order to attract more savings. A factor tending to support the supply of mortgage funds was the reestablishment of the Government secondary market for VA guaranteed loans in mid-1948, and the increased activity in this market for both VA guaranteed and FHA insured mortgages.
B. Mortgage Loan Volume Up Slightly
The dollar volume of home mortgage loans made during 1948 exceeded 1947 by a small margin and established a new high, even though the volume for the last 4 months of the year fell below the same months of 1947. Nonfarm mortgages recorded during 1948 were estimated at $11,600,000,000—up 2 percent from 1947. This indicates a slowing down in the rate of increase, for the volume in 1947 increased 10 percent from 1946, and 1946 increased sharply—85 percent—from 1945. While the dollar volume was up 2 percent in 1948, the number of mortgages recorded declined by 1 percent and the average mortgage recorded rose by 3 percent. In comparison, the average mortgage recorded in 1947 increased 7 percent from 1946, and in 1946 increased 22 percent from 1945. (See table 13, appendix A.)
The following table shows the volume for 1948 and recent years in comparison with the prewar year 1939 :
Number, amount, and average size of nonfarm mortgages recorded, $20,000 or less
Year Number Amount (in millions) Average mortgage
1939 1,288,032 $3,507 $2 722
1945 1,634', 865 5, 623 3 440
1946 2, 474,946 10, 410 4,206
1947 2, 526' 530 11,400 4, 512
1948 2, 500, 741 11,605 4, 641
Note.—These statistics on mortgages reflect principally 1- to 4-family nonfarm residential properties, although they actually include ail nonfarm mortgages of $20,000 or less.
Source: Home Loan Bank Board.
27
HOUSING AND HOME FINANCE AGENCY
Lending volume of mortgage groups
Savings and loan associations continued as the leading type of mortgagee in the home financing field in 1948 although their pro-portion of the total volume of mortgages recorded declined slightly from 1947. Banks and trust companies continued in second place but their proportion of the total declined appreciably—from 25.9 percent of the total in 1947 to 22.7 percent of the total in 1948. Individuals, in third place, increased their relative volume slightly, while insurance companies and mutual savings banks showed significant increases. The “other” category bettered its position slightly in 1948.
Nonfarm mortgages recorded ($30,000 or less), total dollar amount and percent try type of lender
[ Dollar amount in millions]
1939 1945 1947 1948
Total dollar amount- - _ _ _ - . - $3, 507 $5,623 $11,400 $11,605
Total percent 100.0 100.0 100.0 100.0
Savings and loan associations 30.2 35.7 31.1 30.6
Insurance companies 8.2 4.4 7.0 8.3
Banks and trust companies 25.4 19.4 25.9 22.7
Mutual savings banks _ 4.0 3.9 5.2 6.4
Individuals 16.8 24.9 17.3 18.3
Others 1 15.4 11.7 13.5 13.7
1 Includes mortgage companies, fiduciaries, educational institutions, etc.
Source: Home Loan Bank Board.
Outstanding mortgage debt at new high
The mortgage debt outstanding on 1- to 4-family nonfarm properties reached a new record high at the end of 1948. Although a firm estimate of the amount of the debt outstanding is presently not available, the provisional estimate of $35,000,000,000 indicates an increase of approximately $5,000,000,000 during the year—an increase of about the same dollar amount as in 1947 and in 1946. While the outstanding debt at the end of 1948 was not high in relation to disposable personal income—18 percent in 1948 as compared with 26 percent in 1939—it should be noted that a substantial part of this long-term debt was originated during the past 3 years in a period of high family income levels and high property values.
C. Role of Government Programs in the Home Financing Field
The various home-financing aids of the Federal Government continued to play an important role in 1948 in facilitating financing by private enterprise of the construction and sale of new nonfarm homes and rental properties, as well as the sale of existing homes. These financial aids include mortgage insurance on home and multifamily
28
OFFICE OF THE ADMINISTRATOR
NUMBER OF NONFARM REAL ESTATE FORECLOSURES
SOURCE: Home Loon Bonk Board
Chart 6
rental properties through the Federal Housing Administration, and the insurance or guaranty of home loans to veterans through the Veterans’ Administration. A secondary market for FHA insured loans was provided by the Federal National Mortgage Association and, in the last half of 1948, a secondary market for VA guaranteed loans was reestablished under congressional authorization. In addition, a credit reserve for home financing institutions was provided through the Federal Home Loan Bank system, as well as insurance for investments in such institutions through the Federal Savings and Loan Insurance Corporation. Also, funds were macle available late in 1948 for direct loans by the RFC for the production of prefabricated houses or prefabricated housing components or for large-scale modernized site construction.
D. Federal Housing Administration Mortgage Insurance
Insurance of mortgages and loans by the Federal Housing Administration under titles I, II, and VI of the National Housing Act were at an all-time peak in 1948, reaching an over-all dollar volume of about $3,341,000,000. This volume was almost twice the previous high in 1947 and nearly three times any other year in FHA’s history. (See part three of this annual report for detailed data on FHA operations.)
Of the $3,341,000,000 insured in 1948, mortgages insured on 1- to 4-family properties under titles II and VI amounted to $2,109,000,000,
29
1926 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 4 3 4 4 45 4 6 47 48
50
IOO
150
200
250
co Id or
in O _i
Id tn o
o
co o
2
CO
o X I-
250
200
I 50
100
50
0
THOUSANDS OF FORECLOSURES
HOUSING AND HOME FINANCE AGENCY
equal to 20 percent of the total volume of mortgages made on 1- to 4-family nonfarm properties during the year. The following table relates the volume of FHA mortgages insured on 1- to 4-family properties to all mortgages made on such properties:
Millions of dollars
1945 1946 1947 1948
Mortgages made on 1- to 4-family nonfarm properties . . Mortgage insurance written by FHA under secs. 203 and 603 2 . .... _. _ _ _ . .. $4,701 474 10 $9,453 422 4 $10,700 895 8 1 $10,800 2,109 2U
Percent of total mortgages made
i Preliminary estimate.
2 Includes a small volume of mortgages made by Federal Home .Loan Bank member savings and loan associations.
Sources: Home Loan Bank Board and Federal Housing Administration.
In addition to the mortgages insured on 1- to 4-family properties, FHA in 1948 insured a record-breaking volume of mortgages— $609,000,000—on large-scale rental housing projects under section 608, and about $2,000,000 under section 609 for manufactured housing. Another $622,000,000 of property improvement and modernization loans were insured under title I of the National Housing Act.
The importance of the FHA mortgage insurance operation in facilitating the production of new housing accommodations for sale or rent is indicated by the 291,053 new dwelling units on which FHA made its first compliance inspections under titles II and VI during 1948. This means that almost one out of every three nonfarm dwelling units started in 1948 was started under commitments issued by the FHA.
During 1948, a major step was taken in shifting from emergency to peacetime mortgage-insurance provisions. With the expiration of statutory authority early in 1948, the FHA ceased to issue commitments to insure mortgages on new homes for sale or rent under the emergency provisions of section 603, and concentrated on insurance under the peacetime provisions of section 203. After the expiration of statutory authority to issue 603 commitments, new dwelling units started under section 603 commitments previously issued—as indicated by first compliance inspections by FHA—declined sharply during the last half of 1948. Nevertheless the total for the year—130,464—accounted for nearly two-thirds of the 1- to 4-family units started under FHA inspection. On the other hand, the number of new units started under section 203 increased substantially during the last half of 1948, although not rapidly enough to make up for the decline in volume under section 603. Even so, the total for the year under the two sections aggregated 213,443 dwelling units, an increase of almost 20 percent from 1947.
30
OFFICE OF THE ADMINISTRATOR
New dwelling units started under FHA inspections in large-scale, multifamily rental housing projects attained an all-time high of 77,610 units in 1948—all under section 608, a 53-percent increase from the previous high of 50,766 units established in 1947. The total number of rental units started under FHA inspection is even greater than these figures indicate, for the 213,443 starts in 1- to 4-family structures also included a sizable, although indeterminable, number of units which will be offered for rent.
The following table shows the number of dwelling unit starts under FHA inspection compared with estimated total private nonfarm starts:
1945 1946 1947 1948
Total private nonfarm units started With first FHA compliance inspection: Units in 1- to 4-family structures Units in rental housing projects Total FHA Percent of total private nonfarm starts .. 208,100 662, 500 845, 600 i 916, 700
38,897 2, 262 67,122 1,911 178,052 50, 766 213,443 77, 610
41,159 19.8 69,033 10.4 228, 818 27.1 291,053 31.9
1 Includes public units for the last 2 months of the year. Figures are presently not available separately for public units but the number of such units involved is believed to be small.
Sources: Bureau of Labor Statistics and Federal Housing Administration.
E. Veterans’ Administration Guaranty of Home Loans
The volume of home loans guaranteed or insured by the Veterans’ Administration under title III of the Servicemen’s Readjustment Act declined sharply during 1948. A total of 349,934 loans were closed in 1948 involving almost $1,900,000,000, a drop of 35 percent in number and 43 percent in dollar amount from 1947. This reduced volume occurred at a time when the mortgage loan volume in general was increasing slightly, consequently VA guaranteed loans closed represented only 17 percent of total mortgages made on 1- to 4-family properties in 1948, as compared with 31 percent of the total in 1947. The following table relates the volume of VA guaranteed home loans closed to the total lending volume:
Millions of dollars
1945 1946 1947 1948
Mortgages made on 1- to 4-family nonfarm properties VA-guaranteed home loans closed 2 1 Percent of total mortgages made.. $4, 701 3 192 4 $9, 453 2,302 24 $10, 700 3,286 31 1 $10, 800 1,881 17
1 Preliminary estimate.
2 Includes a substantial volume of loans made by Federal Home Loan Bank member savings and loan associations.
3 Includes a small volume of loans made in 1944.
Sources: Home Loan Bank Board and Veterans’ Administration.
31
HOUSING AND HOME FINANCE AGENCY
VA operations show a marked shift during the past 2 years from section 501 loans, which are guaranteed by Veterans’ Administration to the extent of 50 percent of the loan but not to exceed $4,000, to the two-loan plan wherein FFIA insures the first loan and Veterans’ Administration guarantees the second loan, thus providing the mortgagee with 100 percent protection of his investment. For example, in 1947 only 9 percent of the total number of Veterans’ Administra-t ion home loans closed were second mortgages; in 1948 the figure increased to 27 percent, and in the last few months of the year, second mortgages were running at about 40 percent of all VA home loans closed during these months.
F. The Credit Reserve: The Federal Home Loan Bank System
The savings and loan association members of the Federal Home Loan Bank system made $3,300,000,000 of mortgage loans during 1948—or 31 percent of the total volume of new mortgages made on 1-to 4-family nonfarm properties. The following table shows the mortgage loan volume of these member associations and the proportion of total lending that they accounted for:
* Millions of dollars
1945 1946 1947 1948
Mortgages made on 1- to 4-family nonfarm properties Mortgages made by member savings and loan associations 2 Percent of total mortgages made $4. 701 1,749 37 $9, 453 3,322 35 $10, 700 3,466 32 i $10, 800 3,313 31
- 1 Preliminary estimate.
2 Includes a small volume of mortgages insured by FHA and a substantial volume of home loans guaranteed by VA.
Scarce: Home Loan Bank Board.
A large part of the funds used by savings and loan associations in making mortgage loans represents savings which individuals have invested in these associations. Savings in all associations increased by approximately $1,200,000,000 or 13 percent during 1948. The dollar amount of increase was about the same as in 1947 and 1946, although the percentage increase was slightly less than in the previous 2 years. Even so, this constitutes a favorable record, because the annual increase in savings of individuals has been tapering off appreciably since the peak years of savings during the war. Associations whose savings accounts are insured by the Federal Savings and Loan Insurance Corporation showed a more favorable savings record during 1948 than the associations whose savings accounts were not insured.
Savings and loan associations financed more than $1,000,000,000 of
32
OFFICE OF THE ADMINISTRATOR
home construction during 1948. This volume represents an increase of 17 percent from 1947 and occurred during a year when the total volume of loans made had declined slightly. Significantly, loans made for the purchase of homes declined sharply, although the volume of such loans still accounted for almost half of the total volume of the associations.
G. Secondary Mortgage Market
The Federal National Mortgage Association provides a secondary market under certain conditions for FHA titles II and VI insured loans, and for VA guaranteed loans. Authority for FNMA to purchase VA guaranteed loans was granted on July 1, 1948 and further expanded on August 10, 1948. Previously, VA guaranteed loans had been purchased by the RFC Mortgage Company prior to its dissolution on July 1, 1947. FNMA, whose capital stock is owned by RFC, is chartered under Title III of the National Housing Act.
During the last half of 1948, FNMA commitments to purchase FHA insured mortgages totaled $106,000,000. During these months, transfers of FHA insured mortgages to their portfolio aggregated $139,000,000. At year’s end, their portfolio of FHA insured mortgages totaled $188,000,000 and their outstanding commitments to purchase FHA insured mortgages totaled $197,000,000.
During the last half of 1948, FNMA commitments to purchase VA guaranteed home loans totaled $41,000,000. During these months transfers of VA guaranteed home loans to FNMA’s portfolio amounted to $11,000,000. At the end of 1948 there were $11,000,000 in VA guaranteed home loans in their portfolio and outstanding commitments to purchase such loans totaled $30,000,000.
Most of FNMA purchases during the last half of 1948 involved FHA insured mortgages—$139,000,000 FHA insured as compared with $11,000,000 VA guaranteed. However, this situation has been changing recently. Commitments to purchase made in recent months indicate that a substantially increasing proportion of future FNMA purchases will involve VA guaranteed home loans. For example, in December 1948 VA guaranteed home loans accounted for 45 percent of al] FNMA commitments to purchase.
At the end of 1948, the outstanding balance on loans held by FNMA amounted to $199,000,000. Outstanding commitments at the year-end amounted to almost $227,000,000 and borrowing authority available after deducting purchases and outstanding commitments, totaled $526,000,000. (See Table 14, Appendix A)
831481—49---4
33
HOUSING AND HOME FINANCE AGENCY
H. RFC Lending Activity
The Reconstruction Finance Corporation was authorized under section 102 of the Housing Act of 1948, effective August 10, to make direct loans—not to exceed $50,000,000 in all—for the production of prefabricated housing, housing components or large scale housing production. Under this authority, by the end of 1948, ten applications had been received for a total of $4,829,500; of these, four have been disapproved, two approved (for a total of $475,000) and four were pending (for a total of $2,777,000).
Prior to passage of the Housing Act of 1948, the RFC under broad lending powers in section 4 (a) 1 of the RFC Act, as amended, had made loans for large scale modernized site production or factory production of housing. Under this section, by the end of 1948, there were four loans outstanding for a total loan commitment of $14,944,-50'0. Over $6,000,000 had been disbursed against these loans by December 31, 1948.
Under its general business lending authority the RFC also has made a number of loans to producers of housing or housing materials, specific information on which was not available at the time this Annual Report was written.
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SECTION TWO: THE GOVERNMENT ROLE
Chapter V
THE HHFA: FIRST FULL CALENDAR YEAR
A. The Background
The past year was the first full year of HHFA operations. Brought into existence on July 27, 1947, under the President’s Reorganization Plan No. 3 of 1947, the Housing and Home Finance Agency became the Government’s first over-all peacetime housing agency, succeeding the war born and temporary National Housing Agency. It consolidated in one agency three principal constituents, the Home Loan Bank Board, the Federal Housing Administration and the Public Housing Administration, as well as the Office of the Administrator. It was established to provide a basis for the coordination of the Government’s policies and activities in connection with housing; its establishment was a reflection of the fact that housing occupied a special status in our national economy and general welfare and that the Government’s many responsibilities in the housing field could be most effectively discharged through a coordinated Federal agency rather than by a patchwork of separate activities.
In the first full year of its operation the HHFA has become a functioning and accepted reality and appeared to have obtained wide acceptance as a convenient and logical focal point for Government activities in the housing field.
After a comprehensive review of the housing scene, the Congressional Joint Committee on Housing said of the HHFA in its final majority report:
The establishment of the Housing and Home Finance Agency pursuant to Reorganization Plan No. 3 of 1947, as the permanent grouping of the principal housing functions of the Federal Government, has, in the opinion of the committee, been a signal forward step. While initially there were certain misgivings both in the Congress and in private industry as to the effects of this reorganization, the committee feels that the operations of the agency since its establishment in July of last year demonstrate that it provides a sound foundation for coordinated and effective administration of the various necessary housing programs on a basis fully responsive to the basic policies laid down by the Congress. (House Report No. 1564.)
HOUSING AND HOME FINANCE AGENCY
B. HHFA "Tools” for Housing
The facilities available to the HHFA in providing Government aids and leadership in dealing with our housing problems during 1948 were, of course, those outlined in the. various laws pertaining to the operations of the agency and its constituents. At the beginning of 1948, there was under way a broad review of these powers by the Congress, in accordance with recommendations by the President, to determine what additional legislation was required. As matters stood under existing laws major tools available during 1948 were those described below.
The following paragraphs present primarily a broad and generalized description of HHFA programs. Certain of these activities have already been discussed earlier in this report, particularly in Chapter 4, Financing Home Construction and Home Ownership in 1948. A fully detailed description of each of these programs will also be found in the appropriate constituent agency portion of this Annual Report. The operations of the Home Loan Bank Board and its affiliated institutions are described in part two; of the Federal Housing Administration in part three; and of the Public Housing Administration in part four.
Home financing aids
a. The ability to stimulate the flow of savings into home financing through the Federal Home Loan Bank System and the Federal Savings and Loan Insurance Corporation: in all, by the end of 1948 there were 3,769 institutions in the Home Loan Bank system with resources of $12,900,000,000 or 90 percent of the resources of all savings and loan institutions. Savings in these institutions reached a high point of $11,000,000,000 at the close of 1948. The Federal Home Loan Bank system also provides a credit reserve for member home financing institutions. Savings and loan institutions customarily account for about 30 percent of all home financing.
b. The ability through FHA insurance of housing mortgages, loans, and investment to aid and stimulate private enterprise in the construction and sale and in the modernization, improvement, and repair of homes: through establishment of standards on types of homes insured as well as on the financial transactions these activities have tended cumulatively to raise the levels of home mortagages and investments and to raise housing standards generally. FHA insuring operations during 1948 were at an all time peak of $3,341,000,000, double any previous year in its history; by the end of 1948, the FHA had outstanding mortgage insurance totalling $7,300,000,000.
c. The use of the National Housing Council—of which the Housing
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and Home Finance Administrator is chairman—to promote the most effective coordination of the housing activities of the Federal Government: housing activities in other Federal agencies include the guaranty and insurance of veterans’ home loans by the Veterans’ Administration, the secondary mortgage market in the Federal National Mortgage Association (a subsidiary of the RFC), and farm home loans and home loan insurance by the Department of Agriculture.
Public housing aids
This involves the use of Federal resources to make available low-rent public housing for low-income families: this program is operated by the PHA. There were nearly 215,000 dwelling units in the program in 1948, 191,000 of them in an active status and the remainder deferred, under construction, or in preconstruction status. Most of the units were built under the United States Housing Act of 1937 and its amendments, although about 22,000 were built during the mid-thirties as part of the Public Works Administration program. Most of the units are operated by Local Housing Authorities and receive some form of Federal contribution annually to help pay their operating expense.
War and emergency housing aids
This involves managing within statutory limitations the operations and disposition of federally owned or aided housing provided to meet war and postwar emergency needs in such manner as to relieve hardship, aiding in meeting the needs of specially affected groups such as veterans and protecting the existing housing market in localities where these units are located: all of these units are designed by law for ultimate disposition by the Federal Government and are not part of the permanent HHFA programs. Over 950,000 units have been included in these programs; by the end of 1948, as a result of disposition and removal activities, the program included only about 500,000 units.
Housing research
This involved primarily the limited program of technical research authorized under the Housing Act of 1948: it was designed to aid the homebuilding industry to realize as rapidly as possible economies and cost reductions available through better construction methods and improved building codes.
C. Economy Housing Campaign
The closing months of 1948 made clear that the time had come for vigorous effort by all elements in the housing field, industry as well
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as Government, to bring more housing within the reach of more people. In recognition of this situation, the Housing and Home Finance Administrator in a major announcement of future housing policy stated on November 24,1948, that in addition to a legislative program, the Government would undertake a cooperative drive with lenders, builders, suppliers, and others involved in housing to develop a joint program for reducing the cost of producing housing so that good quality housing could be made available for more families. The campaign emphasized the great market available for homes built to meet the needs of families in the middle and lower income brackets.
Preliminary meetings looking toward the opening of this drive as a national program were held during December between the various Government agencies that would be concerned and with national representatives of groups who played a part in the financing and production of housing of all types. General objectives and plans were worked out to be put in readiness for a joint national meeting of all groups in January, which was to launch an economy housing campaign that would be carried into the principal towns and cities of the country with similar joint conferences at the local level.
D. National Housing Council
The National Housing Council was created within the HHFA to provide a central agency on which all Federal agencies having housing responsibilities are represented in order to obtain a unification of approach by the Federal housing agencies to problems in this area. The Council generally met once a month throughout 1948.
Represented on the council are: The HHFA Administrator who is chairman of the Council, heads of the three constituent agencies within the HHFA, and representatives of the Veterans’ Administration, the Reconstruction Finance Corporation, and of the Secretary of Agriculture, and Secretary of Commerce. The major change to the Council during 1948 was made by the Housing Act of 1948 in adding the Secretary of Commerce,- or his designee, to its membership.
By its very nature the Council is primarily a clearing house for the several Federal agencies having responsibilities in the field of housing. Its deliberations take form in action, as a rule, through the activities and policies of the agencies involved. Perhaps more importantly, the Council provides a medium through which the resources of the participating agencies may be brought to bear on the problem of obtaining general Understanding and acceptance of improved housing standards and practices.
Under the common approach to common housing problems encouraged by the creation of the National Housing Council, the Council
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engaged in several long-term projects designed to aid the administration of the various Federal housing programs, and to promote a greater degree of consistency among them. Among these projects was the establishment of a committee on appraisals to review real estate appraisal practices and make recommendations aimed at a greater uniformity. As a result of the work of this committee, ways were recommended in which cost data assembled by the FHA for its mortgage insurance operations could be made more generally available to and used by other governmental agencies, or be adapted by them to meet their specific responsibilities.
Preliminary work was undertaken by the Council to increase the public understanding of and interest in the ill effects of improper subdivision, and to extend the appreciation and application of sound practices in land development operations.
The Council continued its study of housing financing proposals, both as such proposals applied to the problem of providing more housing at low’er use costs, either in the form of payment or rents, and also as these proposals impinged upon the national anti-inflation policies. In this connection the Council established a committee on finance to make continuing reports on housing finance proposals.
A considerable portion of the Council’s activity was directed toward the development of a financial program which would make possible a consistent anti-inflationary policy on the part of the several agencies on the Council without impairing the volume of new residential construction. These discussions resulted in recommendation of a secondary market for mortgage credit which aided in sustaining mortgage credit without adding to the inflationary pressures.
In addition to these long term and continuing activities, the Council provided a means for reaching a substantial degree of agreement on day to day problems affecting vitally important housing policies and legislation.
The Council discussions were also helpful in obtaining agreement upon the Government’s position with respect to various legislative proposals originating outside of Government, and in reviewing numerous proposals to ascertain their effect upon housing production within existing framework of Federal laws.
As a result of discussions within the Council in late 1948, the HHFA launched the Economy Housing Program of 1949.
E. HHFA Publications
In general, and within the limitations of funds available, HHFA publications during 1948 were designed to furnish information about the agency’s operations, developments in the housing field and about
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technical studies and projects that would aid in improving building techniques and reducing housing costs.
The Office of the Administrator and the three constituent agencies all participated in these activities, although not all of these activities resulted in documents for general public distribution. The HLBB, for example, provided member institutions with a monthly series of mortgage recording letters. The FHA continued publication of the Insured Mortgage Portfolio. The PHA published a monthly pamphlet, the PHA Bulletin, primarily designed for its own personnel and local housing authorities.
The OA continued to issue the Technical Bulletin and to report on various research activities. It published the Housing Statistics Handbook, the Manual on Wood Construction for Prefabricated Houses, reports on minority housing; and started a new monthly statistical periodical, “Housing Statistics.”
Major publications of the HHFA are listed in Appendix C: A list of HHFA Publications During 1948.
F. HHFA Personnel
During the calendar year 1948 the Housing and Home Finance Agency and its constituent agencies operated with a total staff of slightly more than 11,500 employees. The following table shows employment within the HHFA at the time the agency was established and at the begining and end of the calendar year:
July 1947
January 1948
December
1948
Office of the Administrator_____________________________
Home Loan Bank Board____________________________________
Federal Housing Administration--------------------------
Public Housing Administration (including project employees)
158 1,214 4,833 7,762
139 1,020 4,490 6,137
140
946
5,1/6
5, 330
13,967 11,786 11,592
A total of 946 persons were employed by the HLBB at the end of the year. Of these, 468 were employed by the HOLC; 77 by the FSLIC; and 145 on the immediate staff of the Board. The remaining 256 employees are employed on the staff of the examining division of the HLBB; these men are engaged wholly in examining the accounts of member institutions on a reimbursable basis and their salaries do not appear in the HLBB budget, but are treated as nonadminis-trative expenses.
The increase in the staff of the FHA during the year took place primarily after August as a result of the additional workload resulting from housing legislation passed in the special session of Congress.
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OFFICE OF THE ADMINISTRATOR
The reduction of 987 employees from PHA during calendar year 1948 was attributable to (1) a reduction in administrative expense authorizations and a reorganization which centralized many functions formerly in field offices : (2) termination of site supervision and inspection personnel with the virtual completion of construction under the Veteran’s Re-use Housing Program; and (3), the continued decline in direct site management operations following disposition activity. During the year the PHA continued to operate under a provision of its appropriation authorization to the effect that no more than 20 percent of the employees paid from administrative funds (as distinguished from the funds used to pay all of the employees on the housing projects), could be in positions at or above the grade CAF-11 level ($5,232).
G. HHFA Budget, Income, and Expense Data
The following paragraphs and tables 15, 16, and 17 of appendix A summarize the financial side of the agency’s operations during the fiscal year 1948 and estimates for the fiscal year 1949. They show in summary form the relation of income to expenses, the sources of funds and the uses to which these funds were put, and the administrative expenses of the agency and its constituent units.
Income and expenses
As shown in table 16 of appendix A, total income from activities for fiscal year 1949 is estimated at $260,400,000, a decrease of $6,000,000 from the 1948 total of $266,500,000. Due to reduced expenses, however, the net income (before cost or value of properties disposed of) is estimated to increase by nearly $11,000,000—from $97,000,000 in 1948 to nearly $108,000,000 in 1949.
Income from agency operations is derived principally from the operation and maintenance of war and emergency housing ($75,000,000) ; disposition of surplus housing ($85,000,000) ; premiums, fees and other income of the Federal Housing Administration and Federal Savings and Loan Insurance Corporation insurance programs ($88,000,000) ; and income from the operation of low rent housing and interest on local housing authority obligations ($11,900,000).
In table 16, activities of a similar character are grouped and summarized. The group captioned “Activities in Support of Private Home Financing” brings together the operations of the Federal Home Loan Bank system, the Federal Savings and Loan Insurance Corporation and the Federal Housing Administration.
Under “Activities in Support of Low Rent Public Housing” are
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shown the operations of the United States Housing Act program administered by the Public Housing Administration.
“War and Emergency Housing Management” summarizes activities in connection with the operation and maintenance of the Public War Housing program, the Homes Conversion program, the Veterans’ Re-Use program, and the Subsistence Homesteads and Greenbelt Towns program, all of which are administered by the Public Housing Administration, in some cases as the delegated agent of the Administrator of the HHFA.
“Liquidation and Disposition Activities” include the disposition of war and emergency and the liquidation of the Home Owners’ Loan Corporation.
Sources and applications of funds
The source of funds available to the agency and its constituents and their disposition, are summarized in table 17 of appendix A. (This table differs from the statement of income and expense in that it deals with the actual movement of cash, and eliminates noncash items such as depreciation, etc.)
The total amount available for expenditure from all sources during 1948 was $744,500,000 and during 1949 it is estimated to be a little more than $494,000,000. About half of these funds come from liquidation of assets, such as repayments on loans and the disposition of war housing. The next largest source of funds is income, which is derived from rents of owned property; from premiums, fees and other income of the Federal Housing Administration and the Federal Savings and Loan Insurance Corporation; and from interest on Government bonds and local housing authority obligations. During 1948 the amount derived from income was $231,400,000 and in 1949, it is estimated to be $192,000,000.
An appropriation of $39,000,000 was provided during 1948. This item consisted in the main of additional funds to complete construction of Veterans’ Re-Use housing. In 1949 appropriations are estimated to amount to $5,939,000, of which the largest item is the appropriation of annual contributions under the low rent housing program.
The funds made available from these various sources are largely returned to the Treasury for three purposes:
(1) to retire capital and borrowings—about $312,000,000 in 1948 and $155,000,000 in 1949 ;
(2) deposits to the general fund of the Treasury—$129,000,000 in 1948 and $133,000,000 in 1949; and,
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OFFICE OF THE ADMINISTRATOR
(3) investments in securities (principally of the United States Government)—$111,000,000 in 1948 and an estimated $62,400,000 in 1949.
Land, property, equipment, and other assets acquired during 1948 amounted to $91,500,000. With the completion of the Veterans’ Re-Use Housing program it is estimated that in 1949 this item will decline to $46,000,000. Expenses incurred during 1948 (principally costs of operation and maintenance of housing projects) were $101,000,000. In 1949 it is estimated that these expenses will amount to $98,000,000.
Administrative expenses
Although the average employment of the agency is expected to be less in fiscal 1949 than it was in fiscal year 1948, the total administrative expense budget of the agency for the 1949 fiscal year will be some $2,000,000 greater than that for fiscal 1948, as shown in table 15 appendix A. This increase is due to the general government salary increase under Public Law 900 (80th Cong.) which became effective during the first pay-roll period of the 1949 fiscal year as well as the additional responsibilities assumed under the provisions of the Housing Act of 1948.
The Housing Act of 1948, approved August 7, 1948, assigned substantial additional functions to the Office of the Administrator and to the Federal Housing Administration and it is these additional functions which account for the increases in the 1949 administrative expenses for these parts of the agency over the amounts actually spent in 1948.
The Office of the Administrator was given responsibility for undertaking a new program of technical research studies in connection with the development and promotion of the acceptance of the standardized building codes and of standardized dimensions and methods of assembly for building materials and equipment. The increased administrative expenses for the Office of the Administrator represent the cost of organizing the Division of Standardization Building Codes and Materials to carry out this program, and the provision of funds for specific research projects carried out through contracts or working fund agreements with other Government agencies and some non-Federal laboratories.
The most important item of workload for the Federal Housing Administration—processing of insurance applications—-is expected to run at close to the high levels reached in 1948, about 582,000. The workload will reflect an increasing volume of applications from the Housing Act of 1948, and specifically from extension of section 608
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HOUSING AND HOME FINANCE AGENCY
rental housing insurance, a new high percentage mortgage insurance on moderate-cost dwellings under title II, and a new type of insurance on the yield of equity investors in rental housing. Increases in personnel are confined almost exclusively to the field offices and to the Comptroller’s Office in Washington which directly handle the cases in process.
The Home Loan Bank Board workload is expected to continue at about the same level as last year. The backlog of past-due examinations of insured savings and loan associations is to be eliminated in the current fiscal year. The trend in Home Owners’ Loan Corporation personnel and expenditures will depend on the rate of liquidation feasible during the coming year in the light of operating and economic conditions.
Public Housing Administration personnel and expenses have been reduced through a major reorganization, which brought about centralization of all administrative and fiscal services in Washington; and replace the former regional offices with ten much smaller area offices concerned chiefly with direct supervision of local housing project activities.
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HOUSING AND HOME FINANCE AGENCY
46
Division of Administration
Division of Housing Data and Analysis
Chart 7
Division of Lanham Act Functions
Division of Standardized Building Codes and Materials
Division of Information
Division of Law
Advisory Services Racial Relations Congressional Liaison International Housing
HOUSING AND HOME FINANCE ADMINISTRATOR
Chapter 6
THE OFFICE OF THE ADMINISTRATOR
A. Functions and Organization
The Administrator of the Housing and Home Finance Agency, as the Government’s principal housing official, is charged with general responsibility for the supervision and coordination of the Government’s principal housing programs and activities. In this capacity, and as chairman of the National Housing Council, the Administrator also provides advice and assistance as required by the President and the Congress in their consideration of housing matters. The Administrator is assisted in the performance of these duties by the professional staff of the Office of the Administrator.
In addition to the general functions described above, the Administrator is directly responsible for the so-called “Lanham Act Functions,” viz, the management and disposition of public housing provided under the war and postwar emergency housing programs (more than 900,000 units in all were programmed) ; while operating responsibilities for these are delegated to the Public Housing Administration, these programs are carried on under the immediate supervision of the Office of the Administrator, which establishes general policies for their handling.
The Housing Act of 1948 also assigned to the Administrator’s Office direct responsibility for a limited program of technical research, making possible expansion of the research program already under way in the field of architecture and engineering; these activities, discussed in greater detail in section C of this chapter, include the development of standardized building codes, materials, and methods of home construction.
An important aspect of Office of Administrator activities during 1948, reflecting the seriousness of housing problems and the interest in housing matters throughout the year was the furnishing of statistical, economic, and technical assistance, as required, to the Congress in connection with numerous legislative proposals under consideration during 1948. With the extensive legislative interest in housing during the year—in all some 130 bills were introduced—it was natural for the Congress to look to the Housing and Home Finance Agency for information and technical assistance.
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HOUSING AND HOME FINANCE AGENCY
Also, throughout the year a considerable amount of staff time was spent furnishing housing information requested by the public, the press, industry and local government officials, all of whom came increasingly to look to the Housing and Home Finance Agency as the central point for the expression of Government housing policy and 1 musing information.
The Office of the Administrator also provides certain services to the agency as a whole on a consolidated basis, where such services can be most economically rendered on this basis. These include legislative reference service, clearance of publications and statistical reports, and maintenance of over-all liaison with such agencies as the Bureau of the Budget, the General Accounting Office, and the Federal Personnel Council.
The accompanying chart shows the current organizational structure of the Office of the Administrator. It reflects the new responsibilities assigned the Office of the Administrator under the Housing Act of 1948 as well as experience during the first year of the agency’s existence with the type of organization designed to provide efficient staff services for the Administrator in the performance of his responsibilities.
B. Lanham Act Functions
The Lanham Act functions of the Housing and Home Finance Agency arise from the efforts of the Federal Government to provide housing for war workers and to meet the emergency housing needs of veterans after the war. These functions have involved the construction and management of over 900,000 housing units as well as their eventual disposition. The Office of the Administrator of the Housing and Home Finance Agency-r-and of the National Housing Agency prior to the establishment of the HHFA—has responsibility for the supervision of these programs. Direct operating responsibility has been delegated to the Public Housing Administration. In order to carry out Office of Administrator policy making and supervisory functions, a division of Lanham Act functions has been established within the Office of Administrator. (See table 18, appendix A for expenditures under the Lanham and related acts.)
Of the 939,000 dwelling accommodations programmed under the various Lanham Act and veterans’ emergency programs, 673,000 were public war housing and 266,000 veterans’ reuse housing. Of the war housing, 432,500 were classified as temporary construction and 191,000 were either nontemporary or demountable units and 49,500 were in the homes conversion program. All of the veterans’ reuse housing was temporary in nature.
Since the end of the war special attention has been given the
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OFFICE OF THE ADMINISTRATOR
disposition of Lanham Act housing. Such disposition activity, by the end of 1948, had involved the removal from workload of about 440,000 units. (The phrase “removed from workload” is a broad term which covers various types of disposition activity, including sale, demolition, transfer to other Government agencies, or—as in the case of a number of temporary war housing units—reuse in other programs such as the veterans emergency housing program.) The major part of the disposition so far accomplished has been in areas where the housing was more or less surplus as the result of postwar declines in employment and population; most of the remaining units present complex disposition problems, since they are located in areas of severe housing shortages.
At the end of 1948, of the remaining 499,000 accommodations, 142,000 were nontemporary and 332,000 were temporary construction (197,000 of the latter being war housing and 135,000 veterans reuse housing) and 25,000 were in the homes conversion program.
The Lanham Act, as amended by the McGregor Act, provides that all housing accommodations of temporary construction under Federal supervision be removed by January 1, 1950, except where the Administrator determines, after consultations with the local community, that the housing is still needed for the orderly demobilization of the war effort. Proposals for ultimate disposition of these units are under consideration.
Removal of nontemporary units is governed by Public Regulation No. 1 of the Housing and Home Finance Agency, first issued on August 27, 1947, which, among other things, gives veterans first priority.
During 1948, the Lanham Act activities of the OA, in addition to advancing the general disposition program and supervising the management of units not yet disposed of, included supervising the completion of the veterans reuse housing program.
About two-thirds of the 266,000 accommodations in the veterans reuse program were federally financed, the remainder being financed by the sponsoring localities. Rising building costs necessitated a cut-back of the federally financed projects in late 1946 and early 1947. An additional appropriation of $35,500,000 was made by the Congress under Public Law 256, on July 29, 1947, to finish construction of suspended projects that were 10 percent or more completed. Under this reactivated program, 8,000 units were completed, the last of them by August 1948.
Strict economies enabled the Housing and Home Finance Agency to return $4,650,000 of the $35,500,000 to the United States Treasury by the end of 1948, and to earmark at that time another $5,000,000 for return.
831481—49----5
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HOUSING AND HOME FINANCE AGENCY
C. Technical Research Activities
Technical housing research received increasing recognition throughout 1948 as a means of accelerating housing progress and lowering costs, particularly in promoting uniform building codes and developing needed technical standards.
Since its inception, the Office of the Administrator has endeavored to develop and encourage housing research directed toward these aims. It has conducted cooperative projects at established research centers, within the limits of its funds and authority, and has disseminated the results data to the housing industry. A large part of the technical program for 1948 consisted in bringing to completion a number of research studies previously initiated to provide data on new materials or troublesome problems in the field of equipment, design, and construction methods.
The Housing Act of 1948, effective August 10, 1948, provided for technical research by the Housing and Home Finance Agency directed specifically to the problems of building codes and dimensional standardization. Work in these fields is now carried on through the Division of Standardized Building Codes and Materials in the Office of the Administrator.
During 1948 the technical program involved two major functions. The first was completion of research and developmental studies covering a broad variety of technical problems in the field of materials, methods and design, and the continuation of its functions of review and coordination of some of the technical operations of the constituent agencies. Second, as a result of the Housing Act of 1948, the technical program was reorganized and expanded and by the end of 1948 staffed within the limit of available funds for its expanding assignments, to give increased emphasis to building codes and technical standards.
Previous operations in coordinating housing research, in working with industry, other government agencies, and universities, plus the fact that a considerable portion of its work in the past had been pointed at improved housing standards, provided a framework adaptable to the kind of operations required by the new program.
Testing and research completed during 1948
A number of significant projects, previously initiated, were brought to completion during the year under cooperative agreements with established laboratories which had staff and facilities adaptable to specialized investigations in particular technical problems. The principal laboratories involved in this work were:
Forest Products Laboratory, Madison, Wis.
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OFFICE OF THE ADMINISTRATOR
National Bureau of Standards, Washington, D. C.
United States Bureau of Reclamation Laboratory, Denver, Col.
Engineering Experiment Station, State College, Pa.
Water and Sanitation Investigation Station, United States Public Health Service, Cincinnati, Ohio.
The following investigations were completed during the year:
Lightweight concrete.—With the object of providing technical data on the structural and insulation characteristics of concrete made from lightweight aggregates, a research project was undertaken in 1947 with the cooperation of the National Bureau of Standards and the Bureau of Reclamation.
Work was divided between the two laboratories and representative samples of aggregates commercially available were tested. Approximately 30 different samples were obtained covering the following types of aggregates: pumice, perlite, vermiculite, expanded slag, clay and shale, diatomaceous earth, and volcanic scoria. Concrete made from these aggregates were subject to a wide range of mix-design studies and tests.
The data obtained provide a valuable addition to the knowledge in this field, useful to engineers, architects, builders, and others interested in the use of lightweight concrete. This work has also indicated the directions which additional research should follow.
Corrosion characteristics of light metals.—Increased use of aluminum and other light metals in house construction emphasizes the need for more complete data regarding their corrosion characteristics, particularly when used in combination with various fastening devices. A research program was set up in 1947 at the National Bureau of Standards to investigate the reaction of a variety of aluminum alloys in connection with various nail and washer combinations under actual exposure conditions.
Over a thousand aluminum alloy specimens were tested. To date test data have been accumulated covering 3, 6, and 12 months’ exposure periods. These data are now being analyzed with a view’ to make it available to engineers and the light metal industry, to fill an important gap in the knowledge of the corrosion characteristics of aluminum and other light metals.
Vapor permeability.—Extensive tests were made during the year to determine the efficiency of various building papers, rubber-base paints, and other materials proposed as vapor barriers. This project provided considerable data of value to continuing studies of condensation control, as well as particular performance data on a variety of materials commercially available. Three laboratories were concerned w ith various phases of this program, including National Bur
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HOUSING AND HOME FINANCE AGENCY
eau of Standards, the Forest Products Laboratory and Pennsylvania State College.
Development of a uniform plumbing code.—Important phases of the broad research program for improvement and simplification of plumbing systems and the development of a uniform plumbing code were completed, including testing work covering self-siphonage of fixture traps, and stack vented and wet vented installations. New testing work initiated included investigations of maximum safe loading of building drains, soil and vent stacks, and flow rate of fixtures.
Under the sponsorship of the Housing and Home Finance Agency and working cooperatively with a uniform plumbing code committee, composed of representatives of labor, government, and industry, a preliminary draft of a uniform plumbing code for housing was prepared and widely distributed for review and comment.
This code was well received by a large number of cities, code authorities, and representatives of the plumbing industry. As an aid to the understanding of the testing program and the uniform code, a motion picture also was prepared and given wide circulation among both technical and lay groups. This code is now being revised to reflect further study and the comments received, as well as to broaden its scope into a uniform plumbing code for all structures. The Department of Commerce is cooperating with the Housing and Home Finance Agency in this program.
Wood, technology.—Several comprehensive investigations in the field of wood technology were carried out in cooperation with the Forest Products Laboratory of the Forest Service, Department of Agriculture. These projects provided basic data on the use of wood and wood products for housing, strength and insulation characteristics of various type panels, and other data applicable to the development of performance standards and test procedures. The following list of projects upon which substantial work was completed indicates the range of this program :
Ventilation requirements for roof panels and attics.
Vapor transmission through various building materials.
Investigation of more economical construction systems, including tests of stressed cover panels with different covering materials; panel bowing under varying moisture conditions; development and determination of performance characteristics of sandwich panels; determination of the adequacy of light framing and wider stud spacing.
Investigation of more realistic evaluation methods of the fire resistance properties of materials and assemblies.
Development of resin impregnated paper overlays for veneer and plywood.
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OFFICE OF THE ADMINISTRATOR
Studies of glues and glue techniques for housing.
Preparation of a manual on test methods and procedures for housing materials.
Preparation of a manual on the control of condensation in dwellings.
Individual sewage disposal.—Research in individual sewage disposal, in cooperation with the United States Public Health Service, involved a number of major problems of vital concern to an increasingly large number of home owners in rural and outlying areas who must depend upon septic tanks. Aimed at improved design, higher operating efficiency and lower costs, studies completed embraced analysis of available technical data, experimentally operated septic tanks, sludge and scum accumulation in septic tanks, sludge and yeast as starters of digestion, effect of zeolite softener salts on digestion, freezing aspects of household sewage disposal systems, and other aspects of the septic-tank problem. Results to date indicate that improvement in septic tank design and operation are possible and significant cost savings attainable. The work is directed to the development of performance standards for the design and installation of septic tanks, and at problems related to the disposal field, such as soil clogging characteristics of tank effluent.
Building codes and technical standards
Title III of the Housing Act of 1948 marked out for increased governmental action two important fields—the development of more uniform building codes and dimensional standardization of building materials and assemblies, or modular coordination. The lack of uniformity in building codes and their restrictive limitations have long been major problems in housing, responsible for many of the delays and considerable of the developmental lag in volume construction, lower costs, and the use of new materials. A great deal of attention is being given to needed corrective measures by local and State governmental authorities, industry, labor, and a number of standards associations that have been established for this purpose.
It is recognized that improved building codes involves both technical work in the field of performance standards and simplification of the complex administrative and procedural problems involved in revising local codes. The Agency is working closely with local and State officials and with industry and code groups in order to expand the field of technical knowledge on these subjects, with the Government undertaking such studies where they are not otherwise being done.
By the end of the year research projects were under way or were being planned including the following specialized projects applicable
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HOUSING AND HOME FINANCE AGENCY
to the development of performance requirements of housing materials, assemblies or equipment: Structural characteristics of various wall, floor and roof assemblies; additional condensation control studies; low pressure warm air heating systems; hydraulics of household water piping; radiant heating; capacity of plumbing stacks find branches for the uniform plumbing code; additional research in individual sewage disposal systems, and others.
Additional staff studies underway applicable to space requirements, design, and the development of related standards included the following:
Analysis of planning aspects of existing building codes to establish a basis for more uniform recommendations on space standards.
Analysis of exit requirements for multifamily housing and the preparation of suggested revisions for existing and proposed codes to simplify these requirements.
Development of functional space requirements applicable to the minimum sized or economy dwelling based upon essential family furniture, fixtures, and household equipment.
Modular coordination
Modular coordination, or dimensional standardization, is generally defined as the relationship of sizes and dimensions that will permit the parts that are assembled during the erection of a building to fit together without extensive field cutting. This coordination is accomplished by applying a uniform size increment or module to the various building dimensions and sizes of parts.
The economies and simplification inherent in standardization of the dimensions of materials have long been recognized and most manufacturers of building items have tended to standardize their products. However, standardization on an industry-wide basis, as to sizes of similar products, has not advanced as rapidly as possible. Substantial work in the development of dimensional standardization has been carried forward by a number of research institutions, and associations of materials producers and architects, and sufficient progress has been made to indicate that substantial savings are possible by developing standard basic dimensions for housing materials and thus simplifying erection techniques and materials distribution and manufacture.
In its work in this field, the division has established cooperative relationships with the architectural profession and materials producers to develop wider usage of modular materials and dimensions already available, both in the design and the materials that go into housing. It has also established working relationships with a committee already set up in the American Standards Association to extend the range of
54
OFFICE OF THE ADMINISTRATOR
building elements and subassemblies which can be made available in modular sizes.
To assist architects and builders in the use of modular design and materials, with resulting savings in costs, three specialized manuals are in preparation. One is a popular brochure to promote fuller understanding of modular coordination and its significance in homebuilding. A second is a manual of modern design for the guidance of architects and builders in the general technique of designing on a modular basis, utilizing modular elements, and in the graphic conventions to be observed in lay-out, detailing and dimensioning to achieve rapid plan production. The third manual will cover field assembly practice, and will describe for builders, workers, and apprentices the manner in which modular elements join together without further cutting and fitting.
As a further aid to guide the development of modular techniques, the HHFA has arranged with the National Academy of Sciences to bring together an advisory group to assist the Agency in studying and analyzing the problem and expanding the system’s application and usefulness. This group will also advise in developing more uniform building codes and other technical standards.
Technical publications
Considerable attention has been given by HHFA to the preparation of technical information and research reports and the dissemination of this information to builders, architects, engineers, trade and professional associations, and to the home buyer.
Three principal methods have been employed in publishing the results of research and staff studies. These are (1) technical bulletins, a bimonthly periodical which carries articles and discussions of broad interest to builders and others on particular technical problems, or design and construction practices directed at lower costs; (2) special manuals and publications covering more extensive details on home building, construction techniques, prefabrication and other subjects; and (3) the series of technical papers which provide immediate presentations of specialized research findings and recommendations.
A list of the technical publications issued by the agency during 1948 is provided in appendix C.
D. International Aspects
In general, during 1948, the world-wide housing crisis deepened. In spite of the large volume of housing produced in the English-speaking countries, the Scandinavian countries, and a few others like Switzerland, homebuilding throughout most of the world did not make
55
HOUSING AND HOME FINANCE AGENCY
great headway in catching up with the enormous deficit of housing which resulted from the prewar backlog of need, the interruption of building during the war, the vast destruction by military action, the huge migrations of the past 10 years, and the steady deterioration of the housing supply.
The world-wide housing shortage adversely affects industrial and agriculture productiveness and production; and it constitutes one of the factors which underlie major political developments.
On the other hand, during 1948, many countries advanced considerably in their attack on the housing problem and there was marked progress in understanding of the problems and in arrangements for dealing with them. The housing crisis itself has stimulated the exploration of new methods which are valuable to all countries, including the United States; and the international interest in American methods has increased.
Within the limits of its facilities, HHFA has taken part in certain phases of international housing activities in the interest of housing in this country and in the interest of the policies and programs of the United States.
First, a beginning was made in the systematic combing out of the experience of other countries for use in this country. Reports and publications were secured; the knowledge of experts coming here and of experts going to other countries was drawn upon. And special projects were organized to tap the work in other countries which may be adapted to conditions in the United States.
Second, during 1948, HHFA advised various American nongovernmental groups concerning methods of other countries and international problems such as exports and imports of housing materials and equipment.
Third, the cooperation of HHFA with other agencies of this Government continued on housing matters which had an international aspect.
Assistance and advice were made available to the Department of Commerce, particularly with reference to controlling exports of materials and equipment needed for housing in this country.
The program of the Department of State was assisted through the distribution of HHFA publications abroad; by helping housing missions coming here from other countries; by arranging expert missions to other countries; by handling inquiries from other countries; in the preparation of the position to be taken by this Government with respect to the work of international organizations in the field of housing; by supplying information and advice to representatives in United States Embassies; in discussion of policies for dealing with
56
OFFICE OF THE ADMINISTRATOR
displaced persons; in connection with international conferences, exhibitions, and broadcasts.
Fourth, under the wing of the State Department, further cooperation developed with international organizations such as the United Nations at Lake Success on the publication of the United Nations Bulletin on Housing and Town and Country Planning and the assembly of national experience for publication by UN, the Economic Commission for Europe with reference to the participation of the United States Delegation in the work of the ECE Subcommittee on Housing, the Food and Agriculture Organization, with reference to its interest in tropical housing, the Pan-American Union on its housing advisory services to the other American Republics, the Interamerican Congress of Architects, and the International Federation for Housing and Town Planning, with reference to its Biennial International Congress.
E. OA Budget and Personnel
With a move into new quarters in the Normandy Building at the beginning of 1948, the entire staff of the Office of the Administrator was brought together in one central place. The staff in January 1948 consisted of 141 persons; by June 30, the staff was reduced to 125 employees to bring it in line with the budget of $750,000 approved by the Congress for fiscal year 1949.
With the passage of the Housing Act of 1948 during the special congressional session in August, the Congress appropriated an additional $300,000 for research “to develop and promote—standardized building codes, standardized dimensions and methods for the assembly of homebuilding material and equipment.” Almost half of these additional funds were earmarked for grants to the laboratories of other government agencies and to universities throughout the country to undertake testing and research necessary in the development of building codes and materials standards. The remainder was used in the employment of a technical staff necessary in the development of uniform codes and in the study of modular coordination.
These new research responsibilities of the Office of the Administrator necessitated a reorganization of the office and the establishment of a separate unit, the Division of Standardized Building Codes and Materials, to undertake the new work. The Division of Housing Data and Analysis absorbed the economic and statistical functions of the former Division of General Program which was abolished. The other four major divisions of the Office of the Administrator, Law, Administration, Information, and Lanham Act Functions continued with minor changes.
Employment in the office stood at 140 at the end of 1948.
57
Appendix A
STATISTICAL TABLES
Table 1.—Comparison of estimated future housing requirement s of the United States prepared by Congressional Joint Committee on Housing and the Housing and Home Finance Agency
[In thousands]
Joint Committee 1
HHFA
1. Estimated 1960 families______ 2 39, 500
Allowance for 4 percent effective vacancies (i. e. units actually for rent or sale and habitable year round)_________________ 1,600
.Total dwelling units needed in 1960________________________ 41,100
4. Subtract: Effective inventory as
of April 1947__________________3 32, 729
5. Number of additional units needed from beginning of 1947. 8,371
6. Subtract: Units added to supply in 1947_____________________________ 1,000
7. Net additional number needed between 1948 and 1960 to bring requirements and supply into into balance____________________________ 7,371
Add:
8. For replacement of estimated losses from 1947 to 1960 (fire, demolition, floods, etc.)________ 520
9. For replacement of nonfarm units in need of major repairs and of urban units lacking private bath and toilet__________ 4 5,200
10. For replacement of substandard units in surrounding suburban areas and for replacement of standard units deteriorating by 1960__________________________ 5 2,000
11. For replacement of temporary structures_______________________ 350
12. Total replacement, 1948-60..________ 8,070
13. Minimum construction needed_________ 15,441
Add:
14. To bring replacement rate to 1 percent.. 1,850
15. Optimum construction needed—nonfarm. 17,291 Add:
16. Farm housing required 1948-60_______ 2, 400-
3,600
17. TOTAL U. S. housing require- 19,691-ments___________________________________ 20, 891
Annual averages:
Nonfarm (minimum)___________________ 1, 287
Nonfarm (optimum)____________________ 1,441
Farm_______________________________ 200-300
Total (minimum)_________________ 1,487-1,587
Total (optimum)_________________ 1, 641-1, 741
1 Estimate presented in Final Majority Report of the Joint Committee on Housing, 80th Cong., March 1948, pp. 8-11.
2 United States Bureau of the Census estimate of nonfarm families presented before the Joint Committee on Housing, 80th Cong., Jan. 12,1948.
3 Computed from United States Bureau of the Census figures from Current Population Reports Series p. 70 No. 1, Housing Characteristics of the United States, Apr. 1947 table 1, by deducting from the total non-larm inventory of 34,248,000, a figure of 1,128,000 units representing uninhabitable units and seasonal dwellings and a figure of 391,000 units representing vacant units held off the market. See Majority Report of Joint Committee on Housing, 80th Cong., p. 9, table I.
4 Represents net additional number needed between 1948 and 1960 exclusive of the 870,000 units (items 8 and 11) needed to replace disaster losses and temporary structures. Excludes existing units covered in items 9 and 10 which will have to be replaced before 1960.
5 Based upon United States Bureau of the Census figures on the quality of the housing inventory as presented in Current Population Reports Series, P-70, No. 1. Housing Characteristics of the United States, Apr. 1947, table 4. The Joint Committee figures represent “all ordinary occupied dwelling units” whereas the Housing and Home Finance Agency figures represent “all ordinary dwelling units.”
3 Presupposes an average life for houses of about 75 years for standard units deteriorating by 1960; includes also an estimate of roughly 500,000 units in rural nonfarm portions of metropolitan districts which while in good condition lacked private bath and toilet in April 1947.
1. Estimated 1960 families according to Bureau of Census________ 2 39, 500
2. Allowance of 4 percent effective vacancies (i. e. units actually for rent or sale and habitable year round)____________________ 1,600
3. Total dwelling units needed in
1960_________________________ 41,100
4. Subtract: Effective inventory as
Of April 1947________________ 3 32, 729
5. Number of additional units needed from beginning of 1947. 8,371
6. Subtract: Units added to supply in 1947 and 1948___________________ 2,100
7. Net additional number needed between 1948 and 1960 to bring requirements and supply into balance 5__________________________________ 6,271
Add:
8. For replacement of estimated losses from 1947 to 1960 (fire, demolition, floods, etc.)__________ 529
9. For rehabilitation or replacement of substandard units equivalent to nonfarm units in need of major repairs and of urban units lacking private bath and toilet____________________ 5 5, 600
10. For rehabilitation or replacement of substandard units in surrounding suburban areas and for rehabilitation or replacement of standard units deteriorating by 1960______________ 6 2,000
11. For replacement of temporary structures_________________________ 350
12. Total rehabilitation and replacement, to 1960 ___________________________________ 8, 470
13. Total nonfarm requirements to 1960___ 14, 741
Add:
14. Rehabilitation or new construction of farm housing_______________________________ 2,000-
3,000
15. TOTAL, U. S. housing require- 16,741-ments------------------------------------- 17, 741
Annual averages:
Nonfarm__________________________ 1,340
Farm_______,______________________ 182-273
Total_________________________________ 1, 522-
1,613
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OFFICE OF THE ADMINISTRATOR
Table 2.—State of repair and plumbing equipment: Nonfarm and farm dwelling units, 1940 and 1947
[Units in thousands]
Area, and state of repair and plumbing equipment All ordinary dwelling units, 1947 All dwelling units, 1940
N umber Percent Number Percent
United States, total _ .. 41,625 100 37,325 100
In good condition or in need of minor repairs- 37,505 26,510 90 30, 534 19,093 82
With private bath and private flush toilet 64 51
Without private bath and private flush toilet 10,995 4,120 819 26 11,441 6,791 1,480 5,311 31
In need of major repairs. 10 18
With private bath and private flush toilet 2 4
Without private bath and private flush toilet 3,301 8 14
Nonfarm 34,133 100 29, 683 100
In good condition or in need of minor repairs 31,430 92 25, 485 86
With private bath and private flush toilet 25, 041 73 18,363 62
Without private bath and private flush toilet . 6, 389 2, 703 19 7,122 4,198 24
In need of major repairs 8 14
With private bath and private flush toilet 781 2 1,400 5
Without private bath and private flush toilet 1,922 6 2, 798 9
Farm 7.492 100 7,642 100
In good condition or in need of minor repairs 6,075 81 5,049 66
With private bath and private flush toilet 1, 469 20 730 10
Without private bath and private flush toilet 4,606 1,417 61 4,319 56
In need of major repairs 19 2; 593 34
With private bath and private flush toilet 38 1 80 1
Without private bath and private flush toilet 1,379 18 2, 513 33
Source: Bureau of the Census.
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HOUSING AND HOME FINANCE AGENCY
Table 3.—Housing starts by type of financing and by location: 1920-48
Number of new permanent nonfarm housing accommodations started
Year and month Total Privately financed Publicly financed
Total Urban Rural Total Urban Rural
1920 . - Annual data
247,000 449, 000 716,000 871,000 893,000 937, 000 849,000 810,000 753,000 509,000 330,000 254, 000 134,000 93, 000 126,000 221, 000 319, 000 336, 000 406, 000 515,000 602, 600 706,100 356, 000 191, 000 141,800 209,300 670, 500 849,000 928, 900 247,000 449,000 716, 000 871,000 893,000 937, 000 849,000 810,000 753,000 509,000 330,000 254,000 134,000 93,000 126,000 215, 705 304, 225 332,406 399, 294 458,458 529, 571 619, 511 301,191 183, 703 138, 692 208, 059 662, 473 845, 560 910,900 196, 000 359, 000 574, 000 698, 000 716, 000 752,000 681, 000 643,000 594,000 400, 000 236,000 174, 000 64, 000 45, 000 49, 000 112,591 197,648 214,406 255, 294 303, 547 333,154 369,499 184, 914 119, 714 93, 216 132, 659 395,673 476,360 508, 800 51,000 90, 000 142,000 173, 000 177,000 185, 000 168, 000 167,000 159, 000 109, 000 94,000 80, 000 70,000 48,000 77, 000 103,114 106, 577 118,000 144,000 154, 911 196,417 250,012 116, 277 63, 989 45, 476 75,400 266, 800 369, 200 402,100 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 5,295 14, 775 3,594 6,706 56, 542 73, 029 86, 589 54, 809 7, 297 3,108 1,241 8,027 3, 440 18, 000 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 4,409 13,352 3,594 6,706 55,453 63, 446 64, 801 42, 486 4,686 2,984 1,241 8, 027 3, 440 14, 800 0 0 0 0 0 0 0 0 0 0 0 0 0 0 0 886 1,423 0 0 1,089 9, 583 21, 788 12,323 2, 611 124 0 0 0 3,200
1921 -
1922 .
1923 -
1924 .
1925
1926
1927
1928
1929
1930 .
1931 -
1932
1933
1934
1935 .
1936 .
1937
1938 .
1939
1940 -
1941
1942
1943
1944
1945
1946
1947
1948 (preliminary) 1947—January .
Monthly data (1948—preliminary)
39,300 42, 800 56, 000 67,100 72,900 77, 200 81. 100 86,300 93,800 94,000 79, 700 58,800 52, 600 49, 600 75,100 98, 800 99, 400 97, 500 93, 500 86,300 82, 200 72,900 65,000 56,000 38, 200 42,800 56, 000 67,100 72,900 77,000 81,100 86,100 93,500 93, 500 78, 900 58, 500 51, 800 48, 400 74, 800 97, 500 97, 900 96, 400 92, 200 84. 900 80, 400 7.1,400 62, 700 52, 500 23,100 25,000 31, 800 37, 600 39, 300 42,000 44, 500 47, 200 50, 000 52, 700 47, 200 36,000 29,600 27,800 41, 700 54,100 55, 700 54, 000 50,300 46,500 42, 500 39,300 36, 600 30, 700 15,100 17, 800 24,200 29, 500 33,600 35,000 36,600 38, 900 43, 500 40,800 31, 700 22, 500 22, 200 20, 600 33,100 43,400 42, 200 42, 000 41,900 38,400 37,900 32,100 26,100 21,800 1,100 0 0 0 0 200 0 200 300 500 800 300 800 1,200 300 1,300 1, 500 1.100 1,300 1,400 1.800 1,500 2,300 3,500 1,100 0 0 0 0 200 0 200 300 500 800 300 800 1,000 300 300 1,000 400 1,300 900 1,800 1,500 2,200 3,300 0 0 0 0 0 0 0 0 0 0 0 0 0 200 0 1,000 500 700 0 500 0 0 100 200
February
March ..
April..- ..
May _
June
July.
August. ._ . . .
September.
October .
November. ....
December. _
1948—Januarv _
February ... _ __
March . _ _
April May... _
June. . .. _
July August September October November. December
Source: U. S. Department of Labor; also, see “Housing Statistics Handbook.”
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OFFICE OF THE ADMINISTRATOR
Table 4.—Housing starts by type of structure: 1920-48
Year and month Total accommodations started Number of new permanent units in— Percentage of total units in—
1-family structures 2-family structures 1 Multifamily structures 1 1-family structures 2-family structures Multifamily structures
Annual data
1920 247,000 202, 000 24,000 21,000 81.8 9.7 8.5
1921 449,000 316,000 70, 000 63; 000 70.4 15.6 14.0
1922 ' 716, 000 437, 000 146, 000 133, 000 61.0 20.4 18.6
1923 871', 000 513, 000 175; 000 183, 000 58.9 20.1 21.0
1924 893, 000 534, 000 173,000 186,000 59.8 19.4 20.8
1925 937,000 572,000 157,000 208,000 61.0 16.8 22.2
1926 849', 000 491, 000 117,000 241,000 57.8 13.8 28.4
1927 810, 000 454,000 99,000 257,000 56.0 12.2 31.7
1928 753^ 000 436,000 78,000 239, 000 57. 9 10.4 31.7
1929 509' 000 316,000 5L 000 142,000 62.1 10.0 27.9
1930 330, 000 227,000 29. 000 74,000 68.8 8.8 22.4
1931 254', 000 187, 000 22,000 45,000 73.6 8.7 17.7
1932 134,000 118,000 7,000 9,000 88.1 5.2 6.7
1933 93^ 000 76, 000 5,000 12, 000 81.7 5.4 12.9
1934 126' 000 109,000 5,000 12, 000 86.5 4.0 9.5
1935 221,000 183; 000 8; 000 30; 000 82.8 3.6 13.6
1936 319, 000 244, 000 14,000 61,000 76.5 4.4 19.1
1937 336, 000 267; 000 16, 000 53; 000 79.5 4.8 15.7
1938 406, 000 317,000 18, 000 71,000 78.1 4.4 17.5
1939 515, 000 399,000 29; 000 87,000 77.5 5.6 16.9
1940 602, 600 485, 700 37,300 79,600 80.5 6.2 13.2
1941 706' 100 603; 500 34,300 68,300 85.5 4.9 9.7
1942 356.000 292; 800 20,100 43,100 82.2 5.6 12.1
1943 191,000 143; 600 17,800 29; 600 75.2 9.3 15.5
1944 141,800 117, 700 10, 600 13, 500 83.0 7.5 9.5
1945 209,300 184; 600 8, 800 15, 900 88.2 4.2 7.6
1946. 670, 500 590,000 24, 300 56, 200 88.0 3.6 8.4
1947 849,000 740, 200 33, 900 74, 900 87.2 4.0 8.8
1948 (preliminary) 928,900 764, 500 46, 400 118,000 82.3 5.0 12.7
Monthly data (1948—preliminary)
1947—January 39, 300 35, 000 1,500 2,800 89.1 3.8 7.1
February 42' 800 39; 100 1,600 2, 100 91.4 3.7 4.9
March _ 56,000 49, 900 Z 200 3, 900 89.1 3.9 7.0
April . ... 67,100 60, 500 2,800 3,800 90.2 4.2 5.7
May. . 72,900 65,800 3; 100 4, 000 90.3 4.3 5.5
June ..... 77, 200 67,300 3; 400 6', 500 87.2 4.4 8.4
July 81,100 70', 500 3', 200 7', 400 86.9 3.9 9.1
August.._ . .. 86, 300 74; 100 3, 300 8,900 85.9 3.8 10.3
September... ... _. _. 93, 800 80, 700 3; 300 9,800 86.0 3.5 10.4
October .. .. _ 94,000 80,100 3,300 10, 600 85.2 3.5 11.3
November _ 79' 700 67,300 3, 400 9,000 84.4 4.3 11.3
December... ... 58^ 800 49,900 2, 800 6,100 84.9 4.8 10.4
1948—January ... _ 52' 600 41,300 2,600 8, 700 78.5 4.9 16.5
February 49, 600 38, 300 2,400 8,900 77.2 4.8 17.9
March 75,100 60. 900 4,200 10, 000 81.1 5.6 13.3
April 98^ 800 79, 300 7', 100 12,400 80.3 7.2 12.6
May __ . 99, 400 83, 500 5,100 10, 800 84.0 5.1 10.9
June 97^ 500 8i; 900 4,100 11, 500 84.0 4.2 11.8
July 93' 500 79; 300 4,000 10, 200 84.8 4.3 10.9
August... .... . 86,300 72, 800 3,000' 10, 500 84.4 3.5 12.2
September 82; 200 69; 900 3, 700 8; 600 85.0 4.5 10.5
October . . 72, 900 61, 900 3,200 7,800 84.9 4.4 10.7
November... _ . . 65i 000 53,600 2; 500 8,900 82.5 3.8 13.7
December 56, 000 43, 500 3,000 9, 500 77.7 5.3 17.0
1 All units in multifamily and 2-family structures are classified as rental type. Source: U. S. Department of Labor; also, see Housing Statistics Handbook.
6L
HOUSING AND HOME FINANCE AGENCY
Table 5.—Estimated dollar volume and average unit construction cost of privately financed nonfarm dwelling starts: 1939-48
Year and month Construction cost (millions) 1 Average cost per dwelling unit 1 Year and month Construction cost (millions) 1 Average cost per dwelling unit
All 1 -family All 1-family
ANNUAL DATA
1939 $1, 763. 9 2,072. 2 2,530.8 1,133.8 660.5 $3,850 3,900 4,075 3, 775 3,600 n. a. $4,050 4,250 3,900 3,675 1944 $483.2 959.3 3, 713.8 5, 617. 4 2 6, 978. 6 $3, 475 4,625 5,600 6,650 2 7, 525 $3, 450 4,650 5,525 6, 750 7,875
1940.. 1945
1941 . 1946
1942 1947
1943 1948
MONTHLY DATA (1948—preliminary)
1947—January $215. 9 $5,650 $5, 700 5,825 6,150 6, 275 6, 250 6, 450 6, 725 1948—January ... $365. 9 $7,075 7,325 7,325 7,375 7, 550 7,800 7,875 8,100 $7,450 7,500 7,625 7,775 7, 925 8, 000 8,000 8, 175
February. 244.4 5,700 Februarv 354. 2
March 340.3 6; 075 6,225 6, 200 6, 350 6, 650 March 548 6
April 418. 5 April 718.0 739 6
May ... 452.2 May
June 489.8 June 752.9 726.3
July 539.3 Julv
August 587.7 6, 825 6. 950 August 701.3
September 643.4 6, 875 7,025 September 627.0 7,800 7, 975
October 675.2 7, 225 7, 275 October 550.3 7,750 7,825
November 578.3 7,325 7, 525 November 486.3 7, 750 7,900
December 432.4 7,400 7, 650 December 408.2 7,700 7, 900
1 Private construction costs are based on permit valuation, adjusted for understatement of costs shown on permit application. They are based also on reports from individual construction contractors over the country who provided cost figures for a large and representative sample of projects at or near completion. These figures exclude sales profit, selling costs, the cost of land and site improvements, and all such noncon struction expenses as architectural and engineering fees. They cover only the cost of labor, materials, and subcontracted work and that part of the builder’s overhead and profit chargeable directly to the construction project. Thus, construction cost should not be confused with selling price.
2 Preliminary.
Source: Department of Labor, Bureau of Labor Statistics.
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OFFICE OF THE ADMINISTRATOR
Table 6.—Construction cost indexes: 1920-48 [Base 1939=100]
Year and month U. S. Department of Commerce composite index American Appraisal Co. Associated General Contractors E. H. Boeckh and Associates Engineering News-Record
Residences Apartments, hotels, and office building Commercial and factory building Building 1 Construction
Annual data
1920 - 133.9 141.1 132.0 121.1 113.6 112 0 104 7 107 6
1921 108.9 107.7 107.0 97.3 91.3 91 5 83 9 83 4
1922 97.7 99.7 99.0 89. 5 85. 7 84 8 78 3 74 8
1923 - 107.1 111. 7 107.0 100.3 94 7 94 7 94 0 91 7
1924 106.2 110.7 108.0 98.8 93.0 94 3 93 6 91 1
1925 -. 104.8 108.2 106.0 98.1 93 7 93 7 92 4 87 5
1926 105.2 108.2 105.0 98. 8 94. 5 94 4 93 6 88 4
1927 - 104.4 108.2 107.0 97. 5 93.2 93 3 93 9 87 2
1928 104. 5 108.2 106.0 97 8 93 6 93 4 95 2 87 9
1929 106.7 108.2 108.0 102 0 95 8 96 0 96 5 87 8
1930 102.4 99.7 107.0 99 5 94 3 94 6 93 3 85 5
1931 93.8 88.7 104.0 91.7 87 0 87 6 84 4 75 8
1932 81.1 77.3 91.0 77. 6 74 2 75 4 70 8 66 4
1933 87.1 74.8 87.0 77.7 76 2 77 3 75 5 73 3
1934 94.4 80.3 95.0 84.6 84.1 84 4 84 5 84 3
1935 90.8 80.8 94.0 82.1 82 4 82 8 83 8 83 4
1936 92.8 84.7 95.0 85.9 85 7 86 2 87 7 88 2
1937 100.9 98.7 100.0 95.6 95.3 96 1 99 7 100 2
1938 99.7 99.2 100.6 98.2 98. 9 99 1 99 4 99 8
1939 100.0 100.0 100.0 100.0 100 0 100 0 100 0 100 0
1940 102.7 101.9 100.6 103. 7 101 8 101 9 102 7 103 0
1941 112.3 108. 5 105.3 111.8 106 6 106 9 107 2 110 0
1942 129.1 120.2 111.6 118.1 112. 5 112 4 112 8 117 7
1943 135.7 125.4 115.2 123.6 116.8 116 8 115 8 123 4
1944 133.3 129.9 119.1 134 7 125 0 125 0 118 8 127 0
1945 137.4 135.1 123.0 143.7 132 7 132 2 121 1 131 0
1946 159.6 160. 6 136. 8 159.2 146 3 145 4 134 5 149 0
1947 190.3 214.3 157. 8 193.0 172.3 171 0 159 8 177 1
1948 211.6 244.0 176.6 214.8 192.7 191.4 175.0 196.6
Monthly data
1947—January 174.9 189.9 147.6 174.8 158.6 157.5 152.4 167.0
February 180.6 194.4 149.2 184.9 163.3 162.5 153.3 167.7
March 182.1 201.4 150 2 186. 5 165 1 164 1 154 3 169 4
April 183.8 206.4 152.4 187.8 166.5 165.4 154.0 169.6
May 186.0 208. 9 154. 5 190 1 169 2 167 9 155 4 172 4
June 188.0 212 9 156 6 192 6 171 9 170 5 156 1 175 5
July 190.8 217 8 157 2 194 6 175 0 173 4 160 6 179 3
August 192.4 222.3 159.8 195.0 175.8 174. 5 163.0 180.8
September 195.5 225.3 163.7 199.7 178.6 177.0 165.4 184.3
October. .. .. 196.6 227. 3 166 2 200 4 179 3 177 7 166 4 185 3
November ; 198.5 231.3 167.3 203.3 180.9 179.3 168.3 187.1
December 200.8 233.3 169.4 206.2 182.8 181.7 168.6 187.3
1948—January . 202.3 235. 3 170. 5 207.0 183.8 182 6 169 6 187 7
February. 202. 9 236 8 171 0 207 6 184 5 183 4 168 9 188 1
March 204.5 238.3 171.0 210.8 186.8 185.5 169.1 188’1
April. 206.2 239.8 171.0 212 2 188 7 187 3 168 7 188 7
May 209.0 241.8 171.0 214. 5 191.3 189 8 171. 5 193 3
June .. 211.2 242.3 176.9 215. 5 192.5 190.9 173 0 197 1
July 215.2 245.8 179. 5 216.6 193.8 192.0 179.6 202 3
August.. 216.3 246. 8 181.1 218. 3 196.6 195.7 189 3 202 9
September 217.2 250.2 181.7 220.2 198.7 197.8 180.5 203.6
October _ 216.4 251.2 181. 7 220.3 199. 5 198. 5 179 8 202 8
November 215.5 250.2 181.7 218.9 198.9 197.8 179.7 202.6
December 213.9 249.8 181.7 215.1 197.3 196.0 179.4 202.5
1 Not included in the composite index.
Source: U. S. Department of Commerce; also, see “Housing Statistics Handbook”, p. 33.
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HOUSING AND HOME FINANCE AGENCY
Table 7.—Indexes of wholesale prices of building materials: 1920-1)8
[1926 = 100]
Year and month All building materials Brick and tile Cement Lumber Paint and paint materials Plumbing and heating Structural steel Other building materials
Annual data
1920 150.1 118.4 117.2 165.2 148.1 (') 144.4 135.0
1921 . 97. 4 105.7 110. 8 88.9 83.9 (i) 104 4 111 1
1922 97.3 99.4 103.5 99. 1 93.8 (>) 88.5 95.3
1923 108.7 103. 6 107.9 111. 8 101.3 (') 123. 7 105. 5
1924 102.3 103.4 105.7 99.3 99.7 (!) 114. 2 104 0
1925 . .. 101.7 100.1 102. 6 100.6 109.3 (!) 100 0 100 0
1926 100.0 100.0 100. 0 100. 0 100. 0 100. 0 100. 0 100 0
1927 94.7 95.7 95.4 93.1 96.3 92.0 94.7 95.4
1928 94.1 95.6 92.5 90. 5 93.1 95.1 95. 2 96. 7
1929 95.4 94.3 89.0 93. 8 94.9 95. 0 98.1 97. 7
1930 89.9 89.8 89.8 85.8 90.5 88.6 87.3 93.3
1931 , 79.2 83.6- 74.8 69. 5 79. 4 84. 7 83.1 84. 8
1932 71.4 77.3 74.3 58.5 71.1 66. 8 80. 9 79 5
1933 77.0 79.2 88.1 70.7 73.3 67.1 83 1 87 2
1934 86.2 90.2 93.1 84. 5 79. 5 72. 6 90. 8 90 3
1935 85.3 89.4 92.7 81.8 79. 8 68.9 92. 0 90 1
1936 86.7 88.7 92.2 87.0 80.1 75.0 95.0 90.2
1937 95.2 93.5 89. 0 99. 7 83.4 78. 8 113 2 99 1
1938 90.3 91.0 90.3 87.4 81.3 78. 5 111. 0 92 7
1939. .. 90.5 91.4 91.3 93.2 82. 8 79 2 107. 3 90 3
1940 94.8 90.5 90. 8 102.9 85.7 80. 4 107.3 93 3
1941 103.2 93.7 92.0 122.5 91.4 84.8 107.3 98. 3
1942 110. 2 98.0 94.0 133. 0 100.3 95. 4 107 3 103 5
1943 111. 4 99.1 93.8 141. 4 102.3 90 7 107.3 102 0
1944 115.5 101.7 95. 8 153.3 105. 2 92. 2 107.3 103 1
1945 117.8 112.4 99.4 155.1 106.9 93.4 107.3 104 4
1946... 132.6 122. 9 104.1 178.4 118. 5 103. 8 118. 4 118 6
1947 179.7 140.0 115.7 277.6 162.6 125.4 134. 5 147.4
1948 199.0 156.3 130.5 312.2 159.8 147.8 163.7 167.6
Monthly data
1947—January 170.2 132.5 108.4 254. 5 166.2 116.3 127.7 139.8
February 174. 8 132. 6 109.9 266.6 168.9 116.3 127 7 142 2
March . 177.5 132.7 112.3 272.3 171.1 117. 0 127. 7 144 1
April.. . 178.1 134. 5 114.0 273. 6 170. 4 117.3 127 7 144 4
May... 176.2 134.5 114.0 270.3 164.3 119.1 127.7 144.8
June 174. 1 134.7 114.3 265.5 158.8 119.1 127.7 145.1
July 175. 5 143.3 114.9 268.8 155.4 123. 4 130.8 146. 1
August 179.6 144.3 116.9 276.9 154.2 129.4 143.0 150.1
September 183.4 145.4 119.1 286.5 157.1 136.0 143.0 150.7
October. . 185. 8 146.4 120.1 290 2 160 7 136 1 143 0 152 5
November 187.7 148.1 120.6 296.0 161.8 136.1 143. 0 152.6
December 191.0 148.8 121.6 303.2 164.0 136.1 143.0 155.5
1948—January 193.3 150.9 126. 5 307. 3 163 2 138 8 143 0 157 9
February.. ... 192.7 151. 1 127. 2 303. 8 159. 6 138 7 149 4 159 8
March... 193.1 151. 6 127. 4 303. 8 156. 7 138 7 155 8 161 8
April... . . 195.0 152. 5 127. 5 309. 2 158. 6 138 7 155 8 162 2
May 196.4 152. 8 128. 2 312. 9 158 4 143 2 153 3 163 1
June 196.8 153.3 128.8 313.2 158.7 145.3 153.3 163.5
July 199.9 157.9 132. 2 318 1 157 9 145 3 159 6 167 1
August. . 203. 6 158.6 133. 2 319. 5 158.1 153 9 178 8 173 4
September . 204.0 158.9 133.3 317. 1 160.2 157.0 178.8 174.8
October. 203. 5 160.1 133. 7 314 5 160 4 157 3 178 8 174 8
November 203.0 160.4 133.7 310.7 161. 6 157.3 178.8 175.6
December 202.1 160.5 133.5 305.5 161.5 157. 3 178.8 176.9
1 Included in other building materials prior to 1926.
Source: U. S. Department of Labor, Bureau of Labor Statistics.
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OFFICE OF THE ADMINISTRATOR
Table 8.—Indexes of production for selected construction materials: 1920-48
[1939 monthly average=100]
ii i Li i M i- i - L i H a Yearand month |L ? M 3 jl g| SI si !f *8 | »S 1 8= |
1 r ,000,000 to $40,000,000. This increase was motivated by the acute housing situation in the Portland-Vancouver flood area.
Office of the Housing Expediter—compliance investigations
Public Law 862 carried an appropriation of $15,172,100 to the Office of the Housing Expediter to enable the Expediter to investigate veterans’ preference and related violations of the Veterans’ Emergency Housing Act of 1946.
District of Columbia Life Insurance Company Investments
Public Law 672, approved June 19, 1948, authorized life insurance companies to invest in housing authority bonds and obligations secured by FHA or mortgages guaranteed or insured by the Veterans’ Administrator.
Rent control
The Housing and Rent Control Act of 1948 (Public Law 464, approved March 30, 1948) amended the Housing and Rent Act of 1947 and continued rent control until March 31, 1949, to be administered by the Housing Expediter. Public Law 422, approved February 27, 1948, had extended the Housing and Rent Act of 1947 for 30 days pending the enactment of Public Law 464.
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OFFICE OF THE ADMINISTRATOR
Public Law 466, approved March 30, 1948, continued the District of Columbia rent-control law for 1 month, and Public Law 507, approved April 29, 1948, extended rent control in the District of Columbia until the close of March 31, 1949, and amended the rent-control law.
C. State and Local Housing Legislation
At least 12 of the 20 State legislatures which met in 1948 enacted housing legislation. Most of the legislation amended existing housing laws or extended temporary emergency aids for veterans’ housing. Massachusetts, however, enacted a new $200,000,000 State-aided veterans’ low-rent housing program and Louisiana became the 25th State to enact urban redevelopment legislation. Several cities approved bond issues to finance urban redevelopment or housing projects.
Stimulants and aids to housing production
Chapter 200, acts of 1948, of Massachusetts authorized the Commonwealth, acting through the State board of housing, to guarantee the notes and bonds of local housing authorities to the extent of $200,000,000 and to make annual subsidies to local housing authorities in the amount of $5,000,000 a year for 25 years for low-rent housing for veterans. It is estimated that around 17,000 dwellings will be built under the program. As of December 31, 1948, 47 percent of the program had been allocated.
California, Connecticut, Massachusetts, Mississippi, New Jersey, and New York amended or continued in effect laws previously enacted designed to stimulate or aid the production of housing primarily for veterans.
In California, as of December 31, 1948, appropriations had been made totaling more than $15,000,000 for reimbursing local agencies for not more than 90 percent of the non-Federal costs of establishing temporary housing for veterans and their families. A total of 14,257 housing units had been provided.
When the legislature of the State of California failed in 1947 to enact legislation for a State-aided low-rent housing program an unusual procedure to obtain such a law was started during the early part of 1948. A petition was circulated among the citizens of the State for the legislation to be submitted directly to the voters for approval or rejection in the November 1948 election. “Proposition No. 14,” as it was referred to, would have established a $100,000,000 housing loan fund for loans to local housing authorities and nonprofit housing associations and a $25,000,000 housing assistance fund for subventions to local housing authorities and also to guarantee bonds issued by local authorities. However, the proposition was rejected by the voters.
Connecticut amended its State moderate rental housing law and increased the aggregate amount of State-guaranteed local authority bonds which may be issued for financing such housing from $15,000,000 to $45,000,000.
The “Chapter 372” (acts of 1946) veterans’ housing program of Massachusetts was further liberalized in 1948 to provide that (in addition to the Commonwealth reimbursing the city up to one-half of the loss suffered when housing projects are disposed of), beginning with the completion of a project, the Commonwealth would contribute 2 percent each year for 5 years of the cost of any project.
The “Veterans’ Farm and Home Purchase” program of the State of Mississippi was amended in order to give a veteran a deed to the property being purchased immediately in cases where GI loan guaranty is obtained. Formerly he could not obtain a deed until 25 percent of the purchase price had been paid. The Mississippi Legislature in 1946 appropriated $5,000,000 to assist veterans in
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HOUSING AND HOME FINANCE AGENCY
obtaining small farms or homes in communities and rural areas where private lending agencies are not prepared to make 4-percent loans, as contemplated under the GI bill of rights. The State Veterans’ Farm and Home Board buys the property from the owner and takes title to it, and then conveys title to the veteran and the State takes a trust deed for security of the unpaid balance.
New Jersey extended until July 1,1949, its emergency municipal housing legislation and the State emergency housing act. Under its State emergency act, $41,000,000 of State funds were provided in 1946 for allotment to the municipalities for emergency housing for the cost of constructing dwellings, not including sites and site improvements and utilities. As of January 1, 1949, all available funds had been allotted and it was estimated 7,727 veterans’ dwelling units will be provided. The emergency municipal law authorized municipalities to provide housing and to issue municipal obligations therefor.
In 1948 several measures were adopted in New York to encourage increased activity in the field of privately financed limited dividend housing, and several temporary laws were extended, such as the legislation empowering the State and municipalities to construct emergency housing for veterans. While no new housing program was adopted in New York in 1948 the annual report of the New York Commissioner of Housing states, “New York State has kept pace with the Nation.in private home construction and has been head and shoulders above all the other States in the development of quasi-private and public low rent housing. The provision of emergency housing for veterans and their families in New York has not been equalled elsewhere.”
The veterans’ housing program in Wisconsin was given a set-back in March of 1948 when the Wisconsin Supreme Court held that the State grants for veterans’ housing under the 1947 veterans’ housing law were unconstitutional because the law violated a constitutional ban against spending State funds for “internal improvements.” In July of 1948, a special 2-day session of the legislature approved a proposed constitutional amendment to permit use of State funds for veterans’ housing. Before final adoption the amendment will have to be approved by the 1949 regular session and then by the Wisconsin voters by referendum, probably in April 1949.
City Housing Legislation
Several cities initiated housing programs in 1948. The following are examples of city programs. Denver, Colo., appropriated $29,000 to be used as equity for an FHA-insured loan to build 16 dwellings for moderate-income veterans. The houses are to be made available on a “rent-option” basis—the veterans will rent the houses and then buy them with initial rent payments counting toward the purchase price.
Chicago selected sites for low-rent housing for over 1,000 families to be displaced by its slum clearance program. The housing will be financed by a $15,000,000 bond issue approved by the Chicago voters in November 1947 which will supplement $3,333,000 of State funds made available to the city.
Boston, Mass., appropriated $20,000,000 for the construction of around 1,700 permanent veterans’ housing units under the 1946 State housing law which authorized cities and towns to build such housing for veterans (“Chapter 372 program” supra).
Che New lotk City Housing Authority1 selected sites for four city-aided projects totaling 3,700 apartments for veterans earning $2,500 to $4,000 per
1 Annual report of the Commissioner of Housing to the Governor and the legislature for the year ending March 31. 1948.
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OFFICE OF THE ADMINISTRATOR
year. Two additional projects totaling 2,000 dwelling units were being planned. City subsidies will make up the difference between the anticipated $12.50 per room per month rental and the economic rent. The authority also completed rehabilitation of 319 apartments used to rehouse tenants on the sites of low-rent housing projects, and took title to 11 buildings which will be rehabilitated with a view toward providing 235 apartments for the same purpose.
Late in 1948 the New York City Housing Authority put on the market and sold the first issues of city-guaranteed bonds to finance a $200,000,000 city-financed nonsubsidized moderate rental housing program.
The State legislature authorized the city of Woonsocket, R. I. to provide financial aid to the local housing authority in the form of a guaranty of notes or bonds and payment of annual contributions for housing projects to be undertaken for families of low income. Notes or bonds guaranteed may not exceed $3,000,000 and annual contributions will be equal to 1% percent of project cost, but may not exceed $45,000 for any 1 year. Local aid is to be terminated when Federal or State aid is available.
Also, the city of Providence, R. I., was authorized to issue an additional $350,000 in bonds (raising the total authorization to $2,850,000) to assist the Providence Housing Authority in the development of any housing project. The authority started a moderate-rental housing development financed by a city grant of $1,250,000 and a non-interest-bearing loan by the city to the authority of $1,600,000. In addition, the development will be exempt from local real estate taxes.
The Madison, Wis. Housing Authority began construction of 120-family permanent veterans’ rental housing development financed from the Madison authority first mortgage revenue bonds, a city grant derived from a city bond issue, and other housing authority funds.
In Milwaukee, Wis. the housing authority started construction of two permanent city-aided projects to house 580 veterans and their families. The city will make a grant of $2,300,000 to be derived from bond issues and the remaining $4,600,000 will come from housing authority first mortgage revenue bonds.
Urban redevelopment
Louisiana was the only State in 1948 to enact for the first time urban redevelopment laws, although other States amended their existing laws, and several cities started or continued urban redevelopment programs under their State laws. The Louisiana law applies only to New Orleans.
California amended its Community Redevelopment Act to permit 50 percent (formerly 10 percent) of write-down of property to be absorbed by the locality.
Kentucky extended the provisions of the redevelopment corporations law to cities of second class. The law formerly applied only to cities of the first class.
In the general election of 1948 the Maryland citizens approved a perfecting amendment to the State constitution, clarifying the powers of the redevelopment commission.
The Rhode Island Supreme Court was asked to rule on the constitutionality of the State redevelopment law. The major issue is whether redevelopment is a public purpose. In addition, the Community R'edevelopment Act of Rhode Island was amended (1) to permit any community to appropriate tax funds and to borrow money for noninterest bearing loans or gifts to the local redevelopment agency, and (2) to permit sale of property by a redevelopment agency at its use value.
In July 1948 the board of supervisors of San Francisco passed an ordinance declaring a mile square blighted area to be a “redevelopment area” and in September the mayor appointed a five-member redevelopment agency.
831481—49---7
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HOUSING AND HOME FINANCE AGENCY
A decision of the Illinois Supreme Court on March 18, 1948, upholding the constitutionality of State grants to localities for urban redevelopment and housing cleared the way for Chicago to proceed with its $50,000,000 combined City-State program. City bond issues of $30,000,000—half for land assembly and half for relocation housing—were approved in November 1947.
The citizens of Baltimore on November 2, 1948, voted approval of a $5,000,000 city bond issue for urban redevelopment.
The city planning engineer of Minneapolis, Minn., recommended to the Municipal Housing and Redevelopment Authority of Minneapolis that swampy or otherwise undesirable sites be prepared for building so that houses will not have to be torn down, and that blighted areas be rehabilitated through a remodeling program if the structures are sound enough to warrant investment.
A proposed $16,000,000 city bond issue for redevelopment purposes was rejected by the St. Louis, Mo., voters in the November 1948 election.
The Philadelphia City Planning Commission recommends that $300,000 per year for 6 years of city funds be expended for housing and urban redevelopment and is proceeding with site planning for the redevelopment of certain blighted areas
In a city referendum on November 2, 1948, Providence, R. I. citizens approved a $2,000,000 redevelopment bond issue to provide funds to establish a redevelopment revolving fund.
The city council of Norfolk, Na., gave the Norfolk Redevelopment and Housing Authority $25,000 to make studies and plans for housing and redevelopment projects.
In April 1948, Milwaukee, Wis., voters approved redevelopment bond issues totaling $2,500,000.
Housing market surveys and investigations
Maryland conducted a survey of veterans’ housing needs and issued a report. Massachusetts revived and continued a special commission to study housing.
New Jersey created a temporary committee on housing to be appointed by the governor. Also, the New Jersey Public Housing and Redevelopment Authority sent questionnaires to cities and towns in the State to determine the results of its $41,000,000 housing program.
New York continued its joint legislative committees on housing and multiple dwellings, and rents.
San Diego, Calif.; Waterbury, Conn.; Witchita, Kan.; Baltimore, Md.; Buffalo, Ithaca, Ogdensburg, Elmira, Utica, and Rome, N. Y.; and Seattle, Wash, were among the cities who conducted housing market surveys. Vancouver, Wash, made a survey of physical and human resources in its area aimed at a plan to get rid of its temporary war housing and at the same time, keep the inhabitants of the housing in Vancouver.
Building codes
Louisiana provided for the adoption of building and other codes by municipalities without the necessity of publishing the text of the codes in full.
Massachusetts continued its Emergency Housing Commission which has authority to waive code requirements.
New York State continued a joint committee previously created to study State-wide building codes with instructions for a report to be made by March 31,1949.
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OFFICE OF THE ADMINISTRATOR
Land for Veterans’ Housing
The legislature authorized the city of Pittsfield, Mass., to use for veterans’ purposes certain premises held by the city and also the use of certain lands in the Dorchester district of Boston for housing for veterans. Also, the Massachusetts State Planning Board was authorized to make an investigation relative to all land owned by the commonwealth suitable for veterans’ housing.
Amendments of local housing authority laws—low-rent public housing
New York created four new local housing authorities in Massena, Auburn, Poughkeepsie, and Watertown.
Massachusetts, Mississippi, New Jersey, and Neiv York amended their housing authority laws with respect to administrative provisions, payments in lieu of taxes, and tenant eligibility.
Discrimination prohibited in public housing
Massachusetts amended its housing authorities law to prohibit discrimination because of race, color, creed, or religion in the selection of tenants.
Investors in housing
Michigan and Virginia enacted legislation permitting insurance companies to invest in housing and New York to allow fiduciaries to make such investments.
New housing exempted from taxation
The Rhode Island legislature authorized the town of Warren to exempt from taxation for a period of 3 years all new housing constructed between April 1, 1947, and March 31, 1949.
Evictions
New York further limited rights of landlords, sellers, or purchasers to evict tenants and Rhode Island provided that, with certain exceptions, all eviction proceedings should be stayed until after May 31,1948.
Rent control
New York continued its emergency housing rent control law, validated all Neiv York City rent control laws and continued its joint legislative committee to study rents until June 30,1948.
Virginia continued its Emergency Fair Rent Act until July 1, 1950.
83
Appendix C
PUBLICATIONS OF THE HHFA
A. Office of the Administrator
Annual Report— First annual report of HHFA covering calendar year 1947. Available from Government Printing Office, Washington 25, D. C., $0.75.
Housing and Home Finance Agency—A descriptive analysis of the basic permanent functions being administered by the three constituent agencies of the HHFA. December 1948. Available upon request to the HHFA.
The Housing Situation: the Factual Background.—A compilation of factual information about housing. It was prepared by the HHFA primarily for the National Conference on Family Life, Inc., which met at the White House May 5 through 8, 1948. Available on request to the HHFA.
Housing Statistics—A monthly periodical issued by the HHFA to present under one cover the available current statistical information on housing. Available upon request to the HHFA.
Veterans Housing Plans and Living Arrangements in 1946 for 108 Survey Areas: by Geographic Region and Division, and by Population size of Central City.—January 1948. Available upon request to the HHFA.
The Housing of Negro Veterans—Their Housing Plans and Living Arrangements in 32 Areas—An analysis of Negro veterans’ housing plans and living arrangements in 32 urban areas based on sample surveys conducted during 1946 and 1947 by the Bureau of the Census and the Bureau of Labor Statistics. The analysis shows the rents and prices Negro veterans can pay and the extent of their housing demand and needs in the localities surveyed. January, 1948. Available upon request to the HHFA.
Housing of the Nonwhite Population—1940 to 1947.—This pamphlet presents the housing situation of the nonwhite population for nonfarm areas in terms of recent changes in population, income, tenure, rents, conditions, and facilities as revealed by an analysis of comparative data from the 1940 census and the April 1947 census survey. June 1948. Available from Government Printing Office, Washington 25, D. C. $0.15.
State Statutes Authorizing Insurance Companies, Building and Loan Associations, and Savings Banks to Invest Funds Directly in Ownership and Operation, or Construction and Sale, of Housing Accommodations.—January 1948 with supplement dated September 1948. Available upon request to HHFA.
Rental Housing—Direct Investments by Insurance Companies and Savings Banks—A bibliography of references. References are arranged chronologically under subject groups. Included also is a chart, geographically arranged, listing major projects in which various insurance companies and savings banks have made direct investment. Available upon request to the HHFA.
Manual on Wood Construction for Prefabricated Houses.—Prepared by the Forest Products Laboratory, Forest Service, U. S. Department of Agriculture, in collaboration with the Technical Staff, HHFA. Issued April 1948. For sale by the Government Printing Office, Washington 25, D. C. $1.50.
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OFFICE OF THE ADMINISTRATOR
Technical Papers.—These are specialized studies, produced in mimeograph or multilith form. Distributed only upon request. Technical papers issued during 1948 were:
The Uniform Plumbing Code for Housing.—Preliminary edition of the Uniform Plumbing Code for Housing developed by the Uniform Plumbing Code Committee, sponsored by the HHFA. Available for review and comment. February 1948. Technical Paper No. 6'.
Physical Properties and Fabrication Details of Experimental Honeycomb-Core Sandwich House Panels —Based upon research sponsored by the HHFA and prepared in collaboration with the Forest Products Laboratory, Forest Service, U. S. Department of Agriculture. February 1948. Technical Paper No. 7.
Condensation in Walls and Roofs.—Fourth process report on condensation studies made under the test program of the HHFA in the Climatometer of the Pennsylvania State College Engineering Experiment Station at State College, Pa. April 1948. Technical Paper No. 8.
Some Properties of Paper-Overlaid Veneer and Plywood.—Based on technical research sponsored by the HHFA at the Forest Products Laboratory, Forest Service, U. S. Department of Agriculture. May 1948. Technical Paper No. 9.
Properties of Four Experimental Flush-Type Doors.—A report covering experimental work, including a test procedure of flush-type doors, based upon research sponsored by the HHFA and prepared in collaboration with the Forest Products Laboratory, Forest Service, U. S. Department of Agriculture. August 1948. Technical Paper No. 10.
Properties of Experimental Wood-Base House Flooring Materials.—A report covering tests made of the mechanical and physical properties of several types of flooring materials. Particular attention is paid to the development of testing methods applicable to the evaluation of new flooring materials. Based upon research sponsored by the HHFA, it was prepared in collaboration with the Forest Products Laboratory, Forest Service, U. S. Department of Agriculture. November 1948. Technical Paper No. 11.
Technical Bulletin.—A periodic publication, issued approximately every 2 months, containing articles on research and techniques of building, together with original studies on other aspects of the design and construction of dwellings. Available upon request to HHFA.
B. Home Loan Bank Board Publications
Fifteenth Annual Report of the Federal Home Loan Bank Administration.— This report covers the fiscal year of 1947. Available upon request to the Home Loan Bank Board.
Report of the Home Loan Bank Board for the Year Ending December 31, 19Jt7.—Available upon request to the Home Loan Bank Board.
Outline of Functions of the Home Loan Bank Board.—Describes the four primary obligations of the HLBB in the field of savings and home financing. August 1948. Available upon request to the HLBB.
C. Federal Housing Administration Publications
Annual Report.—Fourteenth annual report of the Federal Housing Administration; year ending December 31, 1947. Available from Government Printing Office, Washington 25, D. C., 35 cents.
The FHA Plan of Home Ownership.—Describes the operations of the FHA in aiding families to achieve home ownership, revised November 1948. Available upon request to the FHA.
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HOUSING AND HOME FINANCE AGENCY
Insured, Mortgage Portfolio.—Issued quarterly. Available at the Government Printing Office, Washington 25, D. C. Single copies 15 cents. Annual subscription 50 cents.
National Housing Act as Amended, and provisions of other laws pertaining to the FHA, including all amendments to August 10, 1948. Revised September 15, 1948. Available upon request to the FHA.
Principles of Planning Small Houses. This publication gives the principles of planning the small house for economy and satisfactory use. Revised June 1948. Available from Government Printing Office, Washington 25, D. C., 15 cents.
Rules and Regulations
These publications may be obtained upon request to the FHA, either at Washington 25, D. C., or at the FHA State and District Offices.
Property improvement loans under title I of the National Housing Act; regulations governing classes 1 and 2 loans (including all amendments through October 25, 1948). October 1948.
Mutual mortgage insurance; administrative rules and regulations under section 203 of the National Housing Act, including all amendments through October 15, 1948.
Multifamily rental housing insurance; administrative rules and regulations under section 207 of title II of the National Housing Act. Revised August 26, 1948.
Administrative rules and regulations under section 609 of the National Housing Act. Revised September 3, 1948.
Administrative rules and regulations under section 611 of the National Housing Act. Issued August 23, 1948.
Insurance for investments in rental housing for families of moderate income; administrative rules and regulations under title VII of the National Housing Act. Issued November 12, 1948.
D. Public Housing Administration Publications
Annual Report.—First Annual Report of the Public Housing Administration covering the calendar year 1947. Available upon request to the Public Housing Administration.
86
PART II
OF THE
Second Annual Report
HOUSING AND HOME FINANCE AGENCY
Covering the Activities of the
HOME LOAN BANK BOARD
March 7,1949.
LETTER OF TRANSMITTAL
Hon. Raymond M. Foley,
Administrator, Housing and Home Finance Agency, Washing ton, I). C.
Dear Mr, Foley: Submitted herewith is the calendar year report of the Home Loan Bank Board for the year ending December 31, 1948.
Very truly yours,
William K. Divers, Chairman.
ort
31,
ANNUAL REPORT OF THE HOME LOAN BANK BOARD FOR THE CALENDAR YEAR 1948
This is the first full calendar-year report of the Home Loan Bank Board under the Reorganization Plan No. 3 approved July 27, 1947. The Board, in presenting this calendar-year report for 1948, speaks for itself and of itself as one of three constituents of the Housing and Home Finance Agency. It speaks also for each of the four operating units for which it is responsible, namely, the Federal Home Loan Bank System, the Federal Savings and Loan Insurance Corporation, the Federal Savings and Loan Associations, and the Home Owners’ Loan Corporation.
Activities of the Board in 19Jp8
Throughout 1948, the Board members spent much of their time in the field familiarizing themselves with the problems, policies, and operating procedures of members of the Bank System and their 11 district banks. Frequent opportunities were accepted for meeting with State and regional groups in conventions and conferences. In addition, executives of savings and home financing institutions were encouraged to take up their problems with the Board as fully and freely as they desired. No barriers or restraints to frank, direct discussion were imposed. For the first time the Chairman of the Board of Directors of each of the Federal Home Loan Banks was invited to meet together and with the Board for a study and review of bank operations and allied subjects of mutual interest.
These meetings with officers and directors of district banks, with managers of local institutions, and with boards and committees of national and State trade associations enabled the Board to become more intimately acquainted with current work and plans of the savings and home financing organizations and related institutions than had formerly been possible.
Revision of rules and regulations
One of the products of its observations and study of bank operations and the points of view of managers of member institutions of the Bank System has been a recasting of the rules and regulations governing lending by Federal savings and loan associations and by savings associations insured by the Federal Savings and Loan Insurance Corporation. While only relatively minor changes were made in the
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HOUSING AND HOME FINANCE AGENCY
substance, except to accomplish conformity with pertinent changes in Federal law, the related provisions were brought together in more clear and explicit language as a valuable and welcome working aid to association management, and to the Board’s examining and supervisory staff as well. It is believed that the rules and regulations now present clear, simplified statements of the rights, powers, and duties of Federal associations and of such State-chartered institutions as are insured by the Federal Savings and Loan Insurance Corporation.
Changes in staff organization and functions
As a part of its internal activity, the Board made a critical examination of its staff organization with special reference to administrative needs and services. In this the Board was assisted by a committee of Presidents of the Federal Home Loan Banks. Toward the end of the year the Board abolished the offices of Governor, Deputy Governor, and Assistant Governor of the Federal Home Loan Bank System. Prior to this change and as a means of preparing for it, A. R. Gardner, President of the Federal Home Loan Bank of Chicago, served for several months as Acting Governor. The Board deeply appreciates his assistance and the cooperation of the Board of Directors of the Federal Home Loan Bank of Chicago in making his services available.
The department heads who formerly reported to the Governor now report directly to the Board. Of these there are four—the Comptroller (now Director of Operations of the Federal Home Loan Banks), the Chief Examiner, the Chief Supervisor, and the Director of Federal Savings and Loan Operations. In addition to these four, the Board has created the office of the Auditor. The Auditor is charged with the responsibility of making internal audits of the Board’s administrative accounts and of the accounts of each of its operating units and the Federal Home Loan Banks. He reports directly to the Board. Influences affecting thrift and home financing
As a definite part of its responsibility to the Federal Government and to its member institutions, the Board, through its staff, has undertaken to make a continuing study of the influences that directly affect private savings and the use of such savings in home finance. It has had the benefit of close cooperation with the Administrator’s Office of the Housing and Home Finance Agency and the heads of other agencies of the Government represented on the National Housing Council. Likewise it has benefited by frequent conferences with executives of State governments and national trade associations and with smaller groups representing the interests of those who desire to
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HOME LOAN BANK BOARD
increase the volume of home ownership and the quality and utility of homes that are privately owned.
The Board has viewed with considerable satisfaction the maintenance of a high level of private savings and the increased margin between purchase price and the loan, as well as the almost universal use of the direct-reduction loan plan. These evidences of prudence and caution by saver, lender, and borrower, supported also by a high level of liquidity and reserves within most of our lending institutions, provide grounds for increasing confidence and satisfaction in the operations of our savings and home financing institutions.
Need of additional private savings
Increased activity by our institutions in the encouragement and solicitation of savings is occasioned by the current need of more money for home mortgage financing. Refinements in the art of encouragement have grown out of increasing appreciation of the influences that cause people to save and appreciation too of the conveniences and rewards that tend to sustain the practice of saving and keep the total volume of savings on a high level. National, regional, and local surveys made during the current year on behalf of various financial organizations disclose that savers are influenced by several specific considerations. These, stated in the order of their importance, are:
1. Knowledge of and confidence in the institution which is to receive and invest their money. In one word, the primary consideration of those who save is—safety.
2. Easy access to their money. This in common bank parlance is called liquidity. Savers, without exception, expect and tacitly require prompt availability of their funds. They want to know with reasonable certainty that they can obtain their money without prior notice when, as, and if wanted. Unless they have reasonable confidence in their ability to obtain their money without any embarrassment or delay, they are inclined to have some question not only of its liquidity, but of its safety.
3. A third consideration is convenience. Those who save prefer institutions which are conveniently located, whose business hours serve their convenience, and whose methods of receiving and handling savings accounts involve a minimum of formality and detail.
4. A fourth but not unimportant consideration is yield or financial return. Savers expect that interest or dividends earned on their savings will reward them for their thrift and their trust. Although the factor of return is less important than the other three, according to current evidence, it nevertheless has a great influence on the volume,
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HOUSING AND HOME FINANCE AGENCY
continuity, and persistence of savings effort. Attractiveness of return in the vast majority of cases, however, occupies a relatively lower position than the other three major considerations. When a comparatively high yield is added to safety, liquidity, and convenience, the institution offering it is in a favorable position. However, among executives of savings institutions, there is growing fear that the accounts of savers who look chiefly at return are more fickle and transient than are those of savers to whom yield is less important than safety, quick availability, and ease of handling their savings transactions.
Trends in savings
Savings funds continued to flow into savings and loan associations at a favorable rate during 1948, and at the year end approximately $11,000,000,000 was held in the share accounts of these institutions. This was approximately 2% times the amount in the associations at the start of the war.
Both new savings and withdrawals were at peak ' levels, with $3,878,000,000 being invested and $2,731,000,000 being withdrawn during the year. The net accumulation of $1,147,000,000 was slightly under the 1947 peak level, but otherwise was the largest annual addition to savings on record, and represents the fourth consecutive year in which net savings receipts of associations have exceeded $1,000,000,000.
Since the close of the war, savings and loan associations have been accounting for larger proportions of the total long-term savings of individuals in principal types of institutions. Life insurance companies, commercial banks, mutual savings banks, and savings and loan associations together had $112,000,000,000 invested in them at the close of 1948; this total plus United States Savings Bonds and Postal Savings, amounted to $163,000,000,000. The $11,000,000,000 invested in the associations was equal to 11 percent of the total for private institutions, as compared with 9 percent in 1945 and in 1941. The associations’ holdings on December 31, 1948, were the equivalent of 6.7 percent of the total including United States Savings Bonds and Postal Savings, while at the close of 1945 they amounted to 5.4 percent.
Use of savings in home finance
Practically all funds invested by members of the Bank System, except those held for liquidity, are used as loans to finance construction, purchase, or improvement of homes. Members of the Bank System continue to make more than one-third by number and volume of all loans on nonfarm homes valued at less than $20,000. Policies and methods of finance have changed little among its members over the past 15 years since the Bank System became well established.
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HOME LOAN BANK BOARD
Use of the long-term, amortized loan, repaid in regular monthly installments, with interest charged only on the declining unpaid balance, which is a characteristic practice of savings and loan associations, during this 15-year period has been more widely adopted by all types of institutions engaged in home mortgage finance. Recently, among member institutions of the Bank System, there has been increasing provision for including tax payments and insurance payments in the amortization payments of principal and interest. An increasingly large number of members have inserted also acceleration clauses in their mortgage contracts and offsetting these have provided for moratoria and lapses of payment without delinquency when substantial portions of the debt are repaid ahead of schedule.
During the year, among members of the Bank System, there has been a tendency to make more conservative loans. This conservatism is represented in a slight decrease in the ratio of Ioan to purchase price as well as a tendency to be more selective in the taking of credit risks, either by way of making a larger number of loans on houses in the lower price brackets or by making a large number of loans insured by the Federal Housing Administration or guaranteed by the Veterans Administration.
Volume of home financing
Mortgage lending by savings and loan associations, which reached an all-time record of $3,811,000,000 in 1947, declined to $3,607,000,000 for the year 1948—a drop of 5 percent. The reduction was due almost entirely to a 20-percent drop in loans for the purchase of homes, which resulted from a slower turn-over in sales of existing properties. Loans for the construction of new homes, while slowing down somewhat as 1948 drew to a close, were 17 percent higher for the year as a whole than in 1947. In 1948 construction loans were equal to 29 percent of all loans made by savings and loan associations, while 47 percent were for the purchase of homes. In contrast, construction loans in 1945 accounted for but 9 percent of new loans, while purchase loans were equal to 71 percent of the total.
Savings and loan associations continued as the principal lender in the home mortgage field, despite a slackening in loan volume in 1948. During that year, these institutions recorded nearly 31 percent of all nonfarm mortgages of $20,000 or less, while in 1947 it was slightly over this proportion. Commercial banks, which are second among the major types of mortgage lenders, recorded less than 23 percent of the 1948 total as campared with 26 percent in the previous year. While mutual savings banks and insurance companies continued to finance relatively small proportions of the nonfarm mortgages of $20,000 or less, they increased their proportions substantially during the year.
HOUSING AND HOME FINANCE AGENCY
Loans, collections, and liquidity
Collection of money due on outstanding loans, maintenance of a safe margin of liquidity, and accumulation of adequate reserves for losses are perennial problems of lending institutions. In the lush days of full employment, high income, and larger than normal savings, members of the Bank System have lately enjoyed greater freedom from worry than are their wont. This period of relative ease of management has given them time to put their respective houses in order and prepare for the day when conditions may not be as favorable. That they have done so to the advantage of their customers is evident in low and virtual absence of delinquency, abnormally high level of liquidity, and the steady increase of reserves and other forms of surplus.
Trends in foreclosures
After declining persistently for well over a decade, nonfarm real estate foreclosures increased slightly for the second consecutive year. In 1948 there were 11,500 foreclosures on nonfarm properties, as compared with 10,600 in 1947, and 10,500 in 1946. While indicative of the end of the sharp downward trend in foreclosure activity, the level is lower than in any other year since records have been compiled (1926 to date). The volume of foreclosures is less than one-half that for 1943, one-tenth that for 1938, and less than one-twentieth of the peak volume of 252,000 nonfarm foreclosures recorded in the depression year of 1933.
Statistical services
As a continuing and regular service to its member institutions, the Board undertakes through its Operating Analysis Division to supply up-to-date statistics on the volume of private savings, mortgage recordings, and other phases of activity and balance-sheet information of member institutions and all public institutions engaged in home financing. These figures, together with records and analysis of operating procedures and accomplishments, are provided to keep the members informed on current activities and developments in the whole range of thrift and home finance.
Advertising, publicity, a,nd public relations
It is the policy of the Board to leave to member institutions the handling of promotional advertising and general public relations, but from time to time it has been necessary, during the past year, to indicate the appropriate range and limitations which these forms of information and education should take. Some unfortunate advertising during the year gave rise to frictions which are injurious to
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HOME LOAN BANK BOARD
the operation of all sound institutions and tend to confuse the public and destroy their respect and their confidence in financial integrity and administration.
Except for such advertising and public relations as is represented in speeches made by Board Members, in reports made to Congress, and in such occasional news releases as are desirable to report the activities and accomplishments of the Federal Home Loan Banks and their member institutions, the Board, during the year, did not engage directly in advertising or publicity. Each of the Federal Home Loan Banks has handled its own publicity and advertising. In their case, most of their publications were limited to their financial and fiscal reports to stockholders. Educational pamphlets and such material as is commonly supplied by publicity and advertising was left largely to the member institutions. Their material, supplemented by the publicity of their State and national trade associations, has provided practically all of the information supplied the public in 1948 concerning savings, home financing, and the other activities which engage the attention of the Federal Home Loan Banks and their members.
Responsibilities of the Examinning Division of the Bank Board
The Examining Division, organized in 1934, reports directly to the Home Loan Bank Board. It is responsible for the conduct of examinations of Federal savings and loan associations and other member institutions of the Bank System which are insured by the Federal Savings and Loan Insurance Corporation and such State-chartered member institutions of the Bank System as are not insured and are not subject to State examination and supervision. The Division also examines savings and loan associations which apply for membership in the Bank System, for insurance of accounts, or for conversion from State to Federal charter.
Insured savings and loan associations, both Federal and State-chartered, are required to have an annual audit as well as a supervisory examination. If an association is not audited by a qualified independent accountant in a manner satisfactory to the Board, the examination by the Examining Division must include an audit. Approximately 83 percent of all insured associations elect to have their audits included with their supervisory examinations.
Organization of the Examining Division
The Examining Division is directed by the Chief Examiner who has a small staff in Washington to perform necessary administrative functions. Under the Chief Examiner there is in each Federal Home Loan Bank District a District Examiner who supervises the staff of field examiners in his District territory.
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HOUSING AND HOME FINANCE AGENCY
Among the principal responsibilities of the Chief Examiner, therefore, is that of coordinating the work of the several districts in order that, with the desired decentralization, the broad objectives of the Board will be carried out uniformly; examining standards in the several districts will be substantially similar; leadership will provide and encourage a helpful training program, and will keep examiners in all districts well informed; and cooperative relationships will be maintained with the State examining departments.
Responsibilities for examination broadened during the year
While there was no basic change in the separation of examining and supervisory responsibilities, there became effective in 1948 a revision of the Examining Division’s original function of fact-finding only, so that the examiner now disposes of certain exceptions during the course of the examination. The examiner now selects and reports those facts of basic importance which should receive the further deliberate consideration of the association’s directors and the supervisory authorities. However, matters which are not controversial or which do not involve major policies are promptly handled by the examiner. This revision in procedure has been well received by the associations examined.
Increased work load
There was a tremendous growth in the work load during the war years, and the volume of examining work since 1945 has continued to increase. As of December 31, 1945, there were 2,475 insured associations with total assets of $6,148,000,000, making the average size of each institution subject to examination $2,484,000. At the close of 1948, there were 2,616 insured associations with assets aggregating $9,734,000,000. The average size had thus increased to $3,721,000. The volume of new loans to be reviewed by the examiners had increased even more markedly. Loans made by insured associations in 1945 totaled $1,448,817,000. In 1948 the total was $2,754,577,000, an increase of more than 90 percent.
Examinations made in 19f8
For the protection of the investing public and the Federal Savings and Loan Insurance Corporation as well as for the guidance of associations' executives and directors, it is of the utmost importance that insured institutions be examined at least annually. In the year ended December 31, 1948, the Examining Division made 1,841 supervisory examinations, 133 examinations of applicant institutions for membership, insurance, or conversion, 15 examinations of uninsured members, and 5 examinations of liquidating corporations. This was not sufficient coverage to make any net reduction during the year in the past-due supervisory examinations.
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HOME LOAN BANK BOARD
Status of overdue examinations
At the beginning of this calendar year there were 561 overdue examinations. The number steadily increased until July 1, when it was possible to start rebuilding the staff. With additional but inexperienced examiners, with longer periods of review because of the overdue situation, and with a greater number of examinations for insurance of accounts, it was impossible to make much headway in reducing the overdue work until the latter part of the calendar year. Following is a brief schedule showing the number of associations not examined in the preceding 12 months and the growth in the size of the field staff :
Date
Dec. 31, 1947_______________________________________.------
Mar. 31, 1948______________________________________________
June 30,1948 ______________________________________________
Sept. 30,1948______________________________________________
Dec. 31, 1948______________________________________________
Number of overdue examinations
561
724
746
706
586
Percent of number of associations
22.2
28.5
29.2
27.5
22.4
Number of field examiners
129
127
151
185
207
Shift from budget expense to “nonadministralive” expense
During the past several years restriction on the amount expendable for personal services held the staff of examiners considerably below that necessary to keep the work reasonably current. The institutions bear the costs of examination. The fees charged are calculated to meet all operating expenses of the Examining Division. The Examining Division is entirely self-sustaining and receives no appropriations from the United States Treasury to defray its expenses. However, these expenses were subject to annual authorization of the Congress until the current fiscal year or the beginning of the last half of the calendar year ending December 31,1948. Public Law 895, Eightieth Congress, approved July 3, 1948, provided that “all necessary expenses in connection with the making of supervisory or other examinations (except examinations of Federal Home Loan Banks), including the provision of services and facilities therefor shall be considered as nonadministra-tive expenses.” This means that the Examining Division should now be able to maintain an adequate staff. As a unit of the Board, the Examining Division reimburses the Board for its proportionate share of the Board’s administrative expenses.
Rebuilding the staff
At the beginning of each fiscal year each District Examiner files with the Chief Examiner a detailed analysis of the work load of supervisory examinations and of the number and grade of examiners proposed to be assigned to each examination. Despite the growth in volume of
831481—49—8
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HOUSING AND HOME FINANCE AGENCY
examination work year after- year, the staff of field examiners had declined in March 1948 to 127, the smallest number of examiners in the history of the Division following its first few months of existence. Six years earlier, in 1942, the average number of field examiners had been 193. The estimated need was in excess of 200.
Therefore, a large recruiting program was necessary. Only men with technical knowledge could be used. At the end of the year, with a staff of 207 field examiners, the program of recruiting was largely completed. Every effort will be made to maintain a well-trained and competent staff, and the large arrearage of overdue work should now be reduced very rapidly.
Responsibilities of supervision
The Board’s responsibility for supervision originates primarily from two sources: Section 5 of the Home Owners’ Loan Act of 1933, as amended, which provides for the chartering and supervision of Federal savings and loan associations; and Title IV of the National Housing Act, pertaining to insurance by the Federal Savings and Loan Insurance Corporation of the accounts of Federal associations and of State-chartered savings and loan associations. Tersely stated, the chief purpose of supervision by the Board in discharging its obligations under law is to prevent development or continuance in these institutions of unsafe and unsound financial practices.
Essential elements of supervision
The institutions supervised are privately owned and locally managed. Each is governed by a board of directors, of its own choosing, who are responsible for the conduct of its business and for the pursuance of policies and practices that are sound, and that are consistent with the dignity of financial institutions generally and with applicable laws and regulations. The law does not intend nor does the Board undertake to substitute supervision for those primary responsibilities of directors and management.
A fair and constructive administration of supervisory duty, entirely aside from any considerations of broad provisions of law or of ultimate power, must take these essential factors into account. It is therefore understandable that in its major accomplishments supervision relies upon an attitude of mutual respect and purpose between management and the supervisory authority. In undertaking to work out with the directors and management appropriate measures of correction in each instance where the facts disclose a reasonable need for supervisory action, the Board is concerned principally with questions of substance in respect to such fundamental matters as: Actual or threatened impairment of capital; strength of the reserve course being pursued;
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HOME LOAN BANK BOARD
soundness of lending, investment, and other financial practices; effectiveness of collection policies; adequacy of internal controls and of accounting practices and procedures; any improper use of position or wrongful act by any director, officer, or employee; conformance of competitive practices with standards of the savings and loan business in general; and compliance with laws and regulations.
The broad principles underlying sound financial practice may be said to apply independently of other considerations but, at the same time, practical and effective supervisory conclusions must be formulated in the individual case with due evaluation of local practices, conditions, and circumstances. Further, in instances involving State-chartered insured institutions, supervisory action must generally be determined upon and carried out in cooperation and under working arrangements with the respective State authorities who are not only charged with important supervisory responsibility but are also vested with the primary supervisory authority in respect to such institutions.
Those important factors have influenced the Board’s administrative organization for carrying out its supervisory duties. This work is discharged by a Supervisory Division directed by the Chief Supervisor and is carried on through the Presidents of the Federal Home Loan Banks in their capacity as supervisory agents in their respective districts. A number of valuable advantages flow from such a decentralization. It facilitates and promotes favorable relationships between the Board’s supervisory officials and the managements of individual associations, and with the several State authorities; and by gaining the benefits of personal contact and of first-hand acquaintance with local conditions and developments it contributes to the discharge of the supervisory responsibility in a practical manner.
Current operating conditions
Economic conditions affecting the business of savings and loan associations during 1948 were generally favorable, as is indicated by the continuance of the trends of the preceding year. The assets of Federal associations and other insured institutions increased from $8,547,-000,000 to $9,734,000,000. Lending volume totaled approximately $2,-775,000,000, including $848,000,000 of loans to finance new construction. Total loans outstanding increased $1,190,000,000 and there was a net gain of $1,075,000,000 in savings accounts. The number of supervised institutions increased from 2,536 to 2,616.
Even with this substantial growth and volume, however, other developments apparent in 1947 became more evident in 1948. While the rate of return on loan portfolios generally remained fairly constant, competitive factors and a loan demand in excess of the net inflow of savings led to a further firming of the competitive rate paid
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HOUSING AND HOME FINANCE AGENCY
for savings, with increases or a movement toward increases in the rate particularly in highly competitive metropolitan areas. Where this has taken or is taking place, the result is a compressing of operating margins which were already affected by increased present-day costs of doing business. A levelling-off in the real estate market also became increasingly apparent.
The major current problems of management have to do with the maintenance of liquidity and other financial policies adequate to meet and to adjust to these forces which, as they continue or develop, will also add correspondingly to the demands upon the facilities and resources of supervision.
Receiver ships and conservator ships
No conservatorships or receiverships were established in 1948. The conservatorship of the Long Beach Federal Savings and Loan Association, which had been established May 20, 1946, was terminated January 24, 1948.
Conferences with Bank Presidents
As has been its custom, the Board during the year made liberal use of the experience and points of view of the Presidents of the Federal Home Loan Banks which serve the 11 districts into which the United States, Puerto Rico, Alaska, and Hawaii are divided. Three formal conferences, each covering 3 or 4 days, were held in 1948. The subjects discussed included technical problems and items of policy and administration such as trends in interest rates and dividends; liquidity and reserve requirements; examination procedure and reporting; insurance standards; clarification of rules and regulations; marketing of consolidated obligations; and legislation. These conferences are another method of keeping in close touch with the member institutions of the Federal Home Loan Bank System and keeping advised of their current problems and views.
Federal Savings and Loan Advisory Council
The Federal Savings and Loan Advisory Council is a statutory body created under section 8 (a) of the Federal Home Loan Bank Act. Under this section the Council is required to meet in Washington, D. C., at least twice a year and oftener if requested by the Board. It is empowered to confer with the Board on general business conditions, and on special conditions affecting the Federal Home Loan Banks and their members and the Federal Savings and Loan Insurance Corporation; and it is empowered also to request information, and make recommendations, with respect to matters within the jurisdiction of the Board.
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HOME LOAN BANK BOARD
Two meetings were held by the Advisory Council during the year, one in Abay, the other in November. At these meetings the Advisory Council, in a 3-day session on each occasion, dealt with numerous items of business, among them legislation, revision of rules and regulations for the Bank System, advertising, community surveys, and secondary markets for FHA and VA insured loans.
The following members of the Council served for the period May 28, 1948, through December 31, 1948:
Advisory Council Members Appointed by Home Loan Bank Board
Boston
Judge Frederick J. Dillon, Probate Court for Suffolk County, Boston, Mass.
New York
Francis V. D. Lloyd, Attorney at Law, 210 Main Street, Hackensack, N. J.
Winston-Salem
Horace S. Haworth, Attorney at Law, Roberson, Haworth & Reese, High Point, N. C.
Cincinnati
Dr. Howard L. Bevis, President, Ohio State University, Columbus 10, Ohio.
Indianapolis
Charles T. Fischer, Jr., President National Bank of Detroit, Detroit 32, Mich.
Little Rock
Ben II. Wooten, Vice President, Republic National Bank of Dallas, Dallas, Tex.
Advisory Council Members Elected by Federal Home Loan Banks
Boston
E. Harrison Merrill, Secretary-treasurer, Laconia Federal Savings and Loan Association, 653 Main Street, Laconia, N. H.
New York
Cadman H. Frederick, President, Suffolk County Federal Savings and Loan Association, 136 West Main Street, Babylon, N. Y.
Pittsburgh
James J. O’Malley, President, First Federal Savings and Loan Association of Wilkes-Barre, 23 West Market Street, Wilkes-Barre, Pa.
Chicago
A. H. Koepke, President, Welfare Building and Loan Association, 2200 North Third Street, Milwaukee 12, Wis.
Des Moines
G. V. Kenton, Vice president and secretary, Farm and Home Savings and
Loan Association of Missouri, 228 West Cherry Street, Nevada, Mo.
Little Rock
Louis D. Ross, President, St. Tammany Homestead Association, 210 New Hampshire Street, Covington, La.
Winston-Salem
Frank Muller, Jr., President, Liberty Federal Savings and Loan Association, 215 North Liberty Street, Baltimore 1, Md.
Cincinnati
W. Megrue Brock, President, The Gem City Building and Loan Association, 6 North Main Street, Dayton 2, Ohio.
Indianapolis
Fermor S. Cannon, President, Railroadmen’s Federal Savings and Loan Association of Indianapolis, 21 Virginia Avenue, Indianapolis 4, Ind.
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HOUSING AND HOME FINANCE AGENCY
Topeka
L. S. Barnes, President, Ponca City Savings and Loan Association, Masonic Building, Ponca City, Okla.
San Francisco
Guy E. Jacques, President, Portland Federal Savings and Loan Association, 333 Southwest Fifth Avenue, Portland, Oreg.
Interim and coordinating committees
For purposes of special study and action upon important items requiring attention between its formal meetings, the Advisory Council has delegated a part of its responsibilities to two committees, one known as the Interim Committee, the other as the Coordinating Committee. The Interim Committee held three meetings in 1948—in April, October and December—and dealt with the Board on such problems of policy and administration as supervision, examinations, inflationary pressures affecting loans, interest rates, dividend rates, and advertising. The Coordinating Committee of the Advisory Council held two meetings during the year—in February and April. Most of its attention was given to legislative proposals submitted to it prior to submission to Congress and to legislative bills introduced in Congress and submitted to it for study. Out of its deliberations, the Coordinating Committee was instrumental in achieving harmony among proponents of various legislative proposals directly affecting operations of the Federal Home Loan Bank System and its members and in gaining greater unity of interest and purpose among the various elements of the savings and loan industry representing not only its member institutions but nonmembers and competitors.
Internal organization of the Board
Responsibility for directing and supervising the activities of the Federal Home Loan Bank System, the Federal Savings and Loan Insurance Corporation, and the Home Owners’ Loan Corporation is exercised through a corps of officers and employees for each who are aided by a staff which serves and reports directly to the Board.
Combined organization and function charts of the Home Loan Bank Board and its staff and operating units are presented between pages 102 and 103. They show the relation of the parts to each other and to the whole, with particular emphasis on the fact that the Board, as the unifying and directing force, governs their diverse operations in the interests of economy, efficiency, and full-scale cooperation not only among themselves, but between them and other agencies—Federal, State, and local.
Administrative functions
Besides dealing -with all matters of policy, program, and general administration of its own and its operating units, the Board deals
102
HOME LOAN BANK BOARD
HOME LOAN BANK BOARD
ORGANIZATION AND FUNCTION CHART OF THE HOME OWNERS’ LOAN CORPORATION
Created under the Act of June 13,1933, for refinancing mortgages and extending relief to distressed home owners. Since June 12, 1936, it has been engaged in servicing its loans and liquidating its assets.
HOME LOAN BANK BOARD
The Board provides a number of staff services for itself and the subordinate Corporations. They include legal services by the Board’s General Counsel; Personnel Department functions ; Auditing; coordination of budget estimates and justifications.
GENERAL MANAGER
Under the direction and authority of the Home Loan Bank Board, plans, organizes, and directs the operations of the Corporation.
LOANS AND PROPERTIES ACCOUNTING DIVISION
DIVISION ---------------------------------
---------------------------------- Responsible for the mainte-
Supervises and directs the serv- nance of all accounting records of
icing of the Corporation’s loans, the Corporation; the preparation
management of properties, recon- and interpretation of all financial
ditioning, and appraisal opera- ------- and statistical records and fore-
tions. Maintains records and pro- casts of financial condition and
vides for the payment of taxes and operating results,
jnsurance coverage on security and owned properties.
Deputy General Manager Chief Accountant
PURCHASE AND SUPPLY TREASURY DIVISION
SECTION ---------------------------------
--------------------------------Responsible for the safekeeping
Responsible for purchase and- and proper disbursement of all
sale operations; stock room ; funds of the Corporation, the safemaintenance of equipment; proc- keeping of bonds, investment cer-
esses and promulgates official reg- tificates, agreements, and other
ulations and procedures forms and valuable papers and instruments
instructions. entrusted to its care.
Supervisor Treasurer
103
HOME LOAN BANK BOARD ORGANIZATION AND FUNCTION CHART OF THE FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION
Created by Title IV of the National Housing Act, 1934, for the purpose of insuring savings in all Federal savings and loan associations and in all State-chartered savings and loan, building and loan, and homestead associations, and cooperative banks which apply and qualify. The insurance coverage for each account is limited to $5,000.
HOME LOAN BANK BOARD
The Board provides a number of staff services for itself and the subordinate. Corporations. They include legal services by the Board s General Counsel; Personnel Department functions; auditing; coordination of budget estimates and justifications, and such housekeeping services as procurement, files and records, mail and messenger services, and the like.
I
GENERAL MANAGER
Under supervision and authority of the Home Loan Bank Board, plans, organizes, and directs the operations of the Corporation.
UNDERWRITING DIVISION OPERATING ANALYSIS
--------------------------------- DIVISION
Develops programs for insur- ---------------------------------
ance of accounts; passes upon all Provides analyses of financial
applications for insurance of ac- and other operating information
counts; coordinates underwriting pertaining to the administrative
activities with officials of Federal and supervisory problems of the
Home Loan Banks and State Corporation and the Federal
Supervisory Authorities. Home Loan Bank System; com-
piles and analyzes statistical series in thrift, home mortgage, housing, and real estate activities ; provides economic background and other data bearing upon problem cases of the Corporation.
Assistant General Manager Chief
INSURANCE SETTLEMENT REHABILITATION AND
DIVISION RECOVERIES DIVISION
Supervises the payment and set- Responsible for taking neces-
tlement of insurance to insured sary steps as provided by law to
shareholders of institutions in re- prevent a default in an insured
ceivership. In addition to this institution or restore an insured
primary function the services of institution in default to normal
the division are used to pass upon operation. Supervises recoveries
amendments to Charter, bylaw and conversion into cash of assets
and security forms, and fidelity in institutions for which Corpora-
bond coverage for all insured asso- tion has been appointed receiver,
ciations.
Assistant General Manager Assistant General Manager
COMPTROLLER'S DIVISION
Plans, organizes, and directs accounting and fiscal activities of the Corporation. Controls all accounting operations including receiverships and prepares financial statements, reports, and analyses. Controls all operations pertaining to the receipt and disbursement of funds of the Corporation; maintains internal control of allotted budgetary funds.
Comptroller
HOME LOAN BANK BOARD
specifically with applications for membership in the Federal Home Loan Bank System, applications for Federal Savings and Loan charters, and applications for insurance of savings accounts by the Federal Savings and Loan Insurance Corporation. Only the Board can approve membership in the Bank System, grant charters to Federal Savings and Loan Associations, and authorize insurance of savings accounts in Federal Savings and Loan Association and institutions of the savings and loan type. Their specific responsibility for these actions include also responsibility for the broad management of investments of the Federal Home Loan Banks, the Federal Savings and Loan Insurance Corporation, and the liquidation of the Home Owners’ Loan Corporation.
Personnel
Employed personnel of the Bank Board and its operating units varies from month to month. Taking only the average of personnel employed in each of the offices during the calendar year 1948 and combining them for the full year of service, the Board and its staff units had combined personnel of 75; the Bank System, combined personnel of 68; the Insurance Corporation, combined personnel of 77; and the Home Owners’ Loan Corporation, combined personnel of 469, making a total personnel for all units of 689. These figures do not include the 256 employees of the Examining Division, salaries of which, as mentioned earlier in this report, are carried as nonadministrative expenses of the Board for the reason that all of their expenses are borne by the institutions examined and are recovered on a reimbursable basis.
Two of the units in the staff of the Bank Board are responsible for 55 of its total of 75 employees. These units—the Office of the Secretary and of the General Counsel—have employed personnel of 33 and 22, respectively. The Secretary’s Office is responsible for the housekeeping functions of the Board, while the staff of the General Counsel is responsible for all legal work performed on behalf of the Board, including that of legislation, litigation, and general legal advice.
Legislation
During 1948 there were several legislative enactments which affected the operations under the Home Loan Bank Board.
Public Law 895, Eightieth Congress, approved July 3,1948, amended section 5 of the Home Owners’ Loan Act of 1933 to authorize Federal savings and loan associations under certain conditions to convert into State-chartered institutions. A principal condition of any such conversion specified by the new statute is that the law of the State where the Federal association is located permits the conversion of any
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HOUSING AND HOME FINANCE AGENCY
State-chartered savings and loan type of institution into a Federal savings and loan association.
Public Law 895, Eightieth Congress, also amended section 19 of the Federal Home Loan Bank Act to provide that examination expense, except expense for examination of Federal Home Loan Banks, shall be considered as nonadministrative expense. The expenses for examination of Federal savings and Ioan associations and certain State-chartered institutions, including State-chartered insured institutions, are charged against the institutions examined and thus such expenses are not borne by the Government. This change in the law facilitates the making of such examinations on a current basis.
The Government Corporations Appropriation Act, 1949, Public Law 860, Eightieth Congress, approved June 30, 1948, transferred the capital stock of the Federal Savings and Loan Insurance Corporation in the amount of $100,000,000 from the Home Owners’ Loan Corporation to the Secretary of the Treasury. In connection with such transfer, the act directed the Secretary of the Treasury to cancel HOLC bonds in an amount equal to the par value of the transferred stock plus accrued dividends thereon which the statute prescribed were to be computed at a rate approximating the average interest cost incurred by the Home Owners’ Loan Corporation on its total borrowings during each respective fiscal year.
Because most of the member institutions of the Bank System and a majority of State-chartered institutions which are insured by the Federal Savings and Loan Insurance Corporation are engaged in making loans to veterans insured or guaranteed by the Veterans Administration, and many of them also are engaged in making loans insured by the Federal Housing Administration, legislation during the year affecting these organizations was of interest to the Home Loan Bank Board. Of particular interest was the provision which extended the authority of the Federal National Mortgage Association to serve as a secondary market for FHA insured and VA guaranteed mortgages by the purchase of such mortgages under certain conditions from member institutions of the Bank System.
Of interest also was an act for the revision, codification, and enactment into positive law of title 18 of the United States Code, entitled “Claims and Criminal Procedure,” approved June 25,1948. This law repealed nearly all of the former penal provisions affecting the operating units of the Bank Board, including provisions of the Federal Home Loan Bank Act, the Home Owners’ Loan Act, and title IV of the National Housing Act. There is now set up under title 18 a simplified code covering claims and criminal procedure which applies to all Federal agencies.
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FEDERAL HOME LOAN BANK SYSTEM
The Federal Home Loan Banks were created by act of Congress approved July 22, 1932, to serve as a permanent reservoir of credit for thrift and home financing institutions. The Banks assist both borrowers and investors in such institutions through the supply of money to maintain liquidity or to provide for mortgage lending when local funds are insufficient. With the establishment of the Federal Home Loan Banks, a basic weakness of the American home financing structure—the lack of any credit reserve facilities—has been eliminated. The principal function of the Federal Home Loan Banks is to supply, primarily on first mortgage collateral, funds required by member institutions in order to enable them to meet the home financing needs in their communities as well as the withdrawal demands of savers and investors. Through the Federal Home Loan Bank System, thrift and home mortgage finance have been better protected against local and Nation-wide economic fluctuations, home ownership has been placed on a more secure basis, and the construction of new homes as well as the improvement of housing conditions has been encouraged. The establishment of the Federal Home Loan Bank System has afforded member home financing institutions not only a larger volume of potential credit, but cheaper money and a type of credit adapted to their special needs.
Membership of the Bank System
Membership in the System is open to building and loan associations, savings and loan associations, cooperative banks, homestead associations, insurance companies, and savings banks. On December 31, 1948, the membership of the Federal Home Loan Bank System comprised 3,769, consisting of 3,733 savings and loan associations, 26 savings banks, and 10 insurance companies. This total membership represented a net increase of 64 members during the year, resulting from the admission of 74 State-chartered savings and loan associations, 7 new Federal savings and loan associations, 4 cooperative banks, and 2 savings banks, and the cancellation of 23 memberships through withdrawals. Eight of the withdrawals represented voluntary liquidations, 1 reincorporation, and 9 consolidations; 4 were due to members’ requests, and 1 resulted from removal by action of the Home Loan Bank Board. As of December 31, 1948, 51 applications for membership were pending.
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HOUSING AND HOME FINANCE AGENCY
Advances to members
From October 15,1932, when the 12 Federal Home Loan Banks (now 11 Federal Home Loan Banks) first opened for business, to December 31, 1948, advances to home financing institutions totaled $2,687,049,-028.65, of which $2,172,032,939.46 has been repaid, resulting in a balance of $515,016,089.19 outstanding on the latter date. This indicates the extent to which the Federal Home Loan Bank System has been called upon to serve as a national credit reservoir.
Advances made by the Federal Home Loan Banks during the year ended December 31, 1948, totaled $359,612,776.74. Repayments of advances aggregated $280,168,873.35, and the balance outstanding at the close of 1948, as stated above, aggregated $515,016,089.19. Exhibit 1 contains a summary of the lending operations of the Banks, by years, through December 31, 1948.
Number of borrowing members
On December 31, 1948. there were 1,993 member borrowers from the Banks, representing 52.9 percent of the total membership, as compared with 1,804 member borrowers and 48.7 percent of the membership on December 31, 1947. During the year 1948 the average number of borrowers was 1,863, which represented an increase of 24.5 percent over the average of 1,496 borrowers during the preceding calendar year. There have been no nonmember borrowers from the Federal Home Loan Banks since August 1939.
The 1,993 borrowing members as of December 31, 1948, consisted of 868 Federal savings and loan associations, the outstanding advances to which aggregated $308,100,000, which represented 5.9 percent of the share accounts in this type of association; 632 insured State-chartered members, the indebtedness of which to the Banks totaled $145,500,000, or 4.9 percent of the savings held by this type of institutional member; and 491 noninsured State-chartered associations with advances of $55,800,000, which amount approximated 3.3 percent of the total savings held by all members of this type. One insurance company and one savings bank member held advances outstanding to the Federal Home Loan Banks aggregating $5,400,000 and $300,000, respectively.
The following tabulation presents comparative figures on the number and percent of borrowing members as of December 31, 1948, and December 31, 1947:
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HOME LOAN BANK BOARD
Dec. 31,1948 Dec. 31, 1947
Number 868 632 493 Percent of— Number 849 549 406 Percent of—
Borrowing members: Federate Insured State Noninsured State Type 58.5 56.1 42.6 Total 43.6 31.7 24.7 Type 57.4 52.1 34.6 Total 47.1 30.4 22.5
Total borrowers Nonborrowing members 1,993 1,776 i 52.9 1 47.1 100.0 1,804 1,901 i 48.7 1 51.3 100.0
Total 3, 769 100.0 3,705 100.0 —
i Percentage of total membership.
Secwed and unsecured advances
The growth in the volume of secured advances outstanding to a peak of $400,800,000 on December 31,1948, represented the borrowings of 1,461 members.. More than one-half of such advances were for terms in excess of 1 year. A total of 146,237 home mortgages having unpaid balances aggregating $684,300,000 together with $93,600,000 face amount of United States Treasury obligations and 16 insured home mortgages having a principal amount of $3,100,000, collateralized these advances. The face value of all collateral, exclusive of Federal Home Loan Bank stock, was $780,900,000, or 194.8 percent of the secured advances, while the collateral value assigned by the Banks was $556,500,000. A continued increase in the average unpaid balance of individual home mortgages is noted from the amounts of $4,680 on December 31,1948, $4,426 on June 30, 1948, and $4,207 on December 31, 1947. The prewar average approximated $2,300.
Unsecured advances of $114,200,000 represented 22.2 percent of total advances outstanding to 770 members. The Federal Home Loan Banks held a statutory lien on $68,500,000 paid-in stock as further security to both types of advances outstanding on December 31, 1948.
Interest on advances
The changes in interest rates charged members on advances by the Federal Home Loan Banks followed the general firmness of the money markets during the year. One Federal Home Loan Bank increased its rate on all types of advances to members from 2 percent to 2.25 percent, while two Banks discontinued their 2 percent rates on shortterm advances and placed all advances on a 2.5 percent basis. Exhibit 2 reflects the interest rates charged on advances which were in effect on December 31, 1948. Since the organization of the Federal Home Loan Banks, interest rates charged on their advances to members have been substantially reduced. In 1932, at the inception of the Federal
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HOUSING AND HOME FINANCE AGENCY
Home Loan Bank System, when money was still scarce and costly, interest rates on Federal Home Loan Bank advances ranged from 4 percent to 5 percent. On December 31,1948, however, as here reported, such rates ranged from 2 percent to 2.5 percent.
Source of funds
The Federal Home Loan Banks obtain their funds from their capital stock, the proceeds from the sale of consolidated Federal Home Loan Bank obligations to the public, and deposits received from member institutions. From these sources the Federal Home Loan Banks are able to advance funds to their member institutions on long terms, up to 10 years, in line with the essential long-term character of the mortgage loans made by these institutions.
The capital stock of the Federal Home Loan Banks is made up by subscription of member institutions and of the United States Government. In order to assist in the organization of the Federal Home Loan Bank System, the Congress authorized the Secretary of the Treasury, in behalf of the United States Government, to invest up to $125,000,000 in the capital stock of the Federal Home Loan Banks. The amount originally invested by the Government aggregated $124,741,000. Initial investments of members were small. Each is required to invest an amount equal to 1 percent of the aggregate of the unpaid principal of its home mortgage loans, but in no event less than $500. With the growth in number and assets of member institutions, the proportion of Federal Home Loan Bank stock owned by the United States Government to the total capital stock of the Banks has decreased during 1948 to a point where, for the first time, the members owned a majority of the stock.
Retirement of Government stock
Pursuant to the provisions of the Federal Home Loan Bank Act, whereby the Government-owned capital stock in the Federal Home Loan Banks must be retired to the extent of 50 percent of all payments on capital stock made by members subsequent to such time as the amount of member-owned stock equals that owned by the Government, four of the Federal Home Loan Banks made further statutory retirements of Government-owned stock during the year to the extent of $2,881,000.
Within the 12 months ended December 31, 1948, the paid-in capital stock of the Banks held by members increased $18,159,900, to a total paid in by members of $121,237,475, which amount is 50.3 percent of the total stock subscriptions on that date. During the same period, the United States Government-owned stock was reduced to $119,791-200, resulting in a net increase in paid-in capital stock of $15,278,900.
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HOME LOAN BANK BOARD
On December 31,1948, the total outstanding capital stock of the Banks was $241,028,675, of which $119,791,200 was owned by the Government and $121,237,475 was owned by the members. At that time the Government owned 49.7 percent of the outstanding total, whereas the members owned 50.3 percent. The following table reflects the capital structure of the Federal Home Loan Banks as of December 31, 1948, and December 31, 1947:
Dec. 31, 1948 Dec. 31, 1947
Capital Stock: U. S. Government- - - - - -- - $119, 791,200 121,249,300 11,825 121, 237,475 $122, 672, 200 103,083, 400 5,825 103,077, 575
Members: Stock subscribed _
Less unpaid subscriptions _ ________ ____________ __
Total member --
Total paid-in capital - - - -
241,028,675 225, 749, 775
Surplus: Legal reserve _ _ ______ _ _ _ _ _ _ _ _______ _ _ _ _ _
12,232,449 4, 283, 027 9,001,282 11,307,097 4, 291,612 8,524,750
Reserve for contingencies
Undivided profits
Total surplus _
25,516, 758 24,123,459
Total capital _
266,545,433 249,873, 234
Sale of consolidated obligations
Consolidated obligations as a supplementary source of funds of the Federal Home Loan Banks have been marketed for the past 12 years. The first public sale of $24,700,000 was made May 10, 1937. Up to January 1, 1948, total obligations of $1,152,200,000 had been issued, of which $890,500,000 had been retired, leaving $261,700,000 outstanding at the beginning of the year. During 1948, four public offerings were made aggregating $416,500,000 and one private sale of $40,000,000 was made. This financing represented $247,000,000 of new funds, $209,500,000 of refunding, and the paying off of $92,-200,000, resulting in a balance of $416,500,000 of consolidated Federal Home Loan Bank obligations outstanding on December 31, 1948. These mature on the dates and in the amounts indicated below:
Due
Amount
Jan. 20,1949__________________________________________________________-______________
Apr. 15,1949_________________________________________________________________________
July 22,1949_________________________________________________________________________
Sept. 15,1949________________________________________________________________________
$97,000,000
84, 500,000
115,000,000
120,000,000
Total_______________________________________________________________________
416, 500,000
Interbank deposits
Interbank deposits, i. e., deposits made by a Federal Home Loan Bank in another Federal Home Loan Bank, continued to play an
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HOUSING AND HOME FINANCE AGENCY
important part in the operations of the Banks during the year. At the beginning of the year, $11,500,000 of interbank deposits were outstanding. Such deposits were made to the extent of $62,250,000 during the year; repayments aggregated $67,500,000, resulting in a balance outstanding on December 31, 1948, of $6,250,000, of which $2,000,000 were payable on demand and $4,250,000 on a time basis.
Members’ deposits
As previously indicated, deposits of member institutions represent one of the sources of funds of the Federal Home Loan Banks. During the year 1948 there was a substantial increase in such deposits, the total amount of which as of December 31, 1948, aggregated $133,-355,226, consisting of $24,554,177 on a demand and $108,801,049 on a time basis. While no interest is paid on the demand deposits of members, interest at the rate of from 1 percent to 1^2 percent per annum is paid on members’ time deposits remaining for 30 days or more.
As already indicated, the Federal Home Loan Banks obtain their funds (exclusive of interbank deposit transactions) from three sources, i. e., subscriptions to their capital stock, the sale of their consolidated obligations, and deposits of member institutions. During the year ending December 31, 1948, the net accretions to the funds of the Banks from these sources were as follows:
Paid in on capital stock____________1________________$15, 278, 900
Sale of consolidated obligations_____________________ 154, 800, 000
Members’ deposits------------------------------------ 45, 520,100
215,599, 000 Liquidity and reserves
Section 16 of the Federal Home Loan Bank Act, as amended, provides that each Federal Home Loan Bank shall carry to a reserve account semiannually 20 percent of its net earnings until such reserve account shall show a credit balance equal to 100 percent of the paid-in capital of the Bank, after which time 5 percent of the Bank’s net earnings shall be added thereto semiannually. As already indicated, this reserve aggregated $12,232,449.37 as of December 31, 1948, in addition to which there was a reserve for contingencies amounting to $4,283,027.01, making total surplus reserves of $16,515,476.38. As of the same date, undivided profits of the Banks totaled $9,001,281.70, resulting in a total earned surplus of $25,516,758.08.
In order to enhance potential ability of the Banks to meet the demands of their member institutions, a liquidity reserve of $100,-000,000 over and above the statutory reserve referred to in the preceding paragraph was established during the year 1948, to consist of 50 percent in 2 percent special series United States Treasury notes,
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15 percent in iy2 percent special series United States Treasury notes, and 35 percent in cash, United States Treasury bills, United States certificates of indebtedness and/or United States Treasury notes commonly traded in on the market on the same basis as United States certificates of indebtedness.
Status of liquidity reserve
On December 31, 1948, the special liquidity reserve of $100,000,000 consisted of—
In cash, U. S. Treasury bills, certificates of indebtedness and/or notes-------------------------------------------------------------$35,000,000
2 percent special series U. S. Treasury notes_____________________ 50, 000, 000
1% percent U. S. Treasury notes___________________________________ 15, 000, 000
Total----------------------------------------------------- 100,000,000
In addition to the $100,000,000 liquidity reserve, the Banks held the following highly liquid resources:
U. S. Treasury bills and notes_______________________________$43,150, 000
1% percent special series U. S. Treasury notes_______________ 21, 200, 000
Cash--------------------------------------------------------- 34,911,490
Total----------------------------------------------- 99, 261, 490
As of December 31, 1948, the Banks also held $92,702,523 par value of other United States Government obligations in excess of the statutory requirements.
Government securities and consolidated balance sheet
During the year, United States Government obligations were purchased by the Federal Home Loan Banks to the extent of $546,084,000 face amount. Government securities having a face amount of $410,794,000 were matured or sold, and $271,893,000 face amount of such securities were held by the Banks on December 31, 1948.
A comparative consolidated statement of condition of the 11 Federal Home Loan Banks as of December 31,1948, is contained in exhibit 3 of this report, from which it will be noted that the total resources of the Banks increased from $612,689,341 at the close of 1947 to $820,-684,758 at the end of 1948.
/ncome and expense
A comparative consolidated statement of income and expense of the 11 Federal Home Loan Banks for the calendar years 1947 and 1948 is contained in exhibit 4 of this report. It will be noted from this exhibit that the total gross operating income of the Banks for the calendar year 1948 was $12,684,042.72, as compared with $8,673,-487.26 for the preceding calendar year. This represents an increase
831481—49----9
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HOUSING AND HOME FINANCE AGENCY
in gross operating income of 46.4 percent over that for 1947, which resulted primarily from increased interest on advances and interest on investments which reflected gains of 53.3 percent and 32 percent, respectively. It will also be observed that the total operating expenses for the calendar year 1948 amounted to $8,104,323.98, as compared with $4,221,890.67 for the preceding year. Nonoperating income for the calendar year 1948 aggregated $99,970.61, as compared with a total of $376,086.64 for the preceding year. Nonoperating charges for 1948 amounted to $52,925.43, while such charges for the preceding calendar year aggregated $28,932.81. Net income of the Banks for the calendar year 1948 aggregated $4,626,763.92, as compared with $4,569,044.50 for the calendar year 1947. The increase in the cost of borrowed money and members’ deposits, together with other operating expense increases, was sufficient to hold the net income of the Banks for the calendar year 1948 to the figure indicated, which is only 1.3 percent greater than that for the preceding calendar year.
While there was an increase of 46.9 percent in the average balance of Federal Home Loan Bank advances outstanding in 1948 over 1947, the Banks’ return was 2.02 percent or only 0.09 percent in excess of the 1.93 percent for the calendar year 1947. However, a yield of 1.67 percent on an average investment balance of $228,000,000 was slightly lower than the yield of 1.73 percent on the average investment balance in the calendar year 1947. The average weekly balance of members’ deposits during 1948 aggregated $91,000,000 and represented an annual cost of 0.79 percent. Funds derived by the Federal Home Loan Banks from consolidated Federal Home Loan Bank obligations issued and outstanding during 1948 averaged $347,200,000, the annual cost of which was 1.67 percent as compared with the 1947 average of $171,-500,000, and an annual cost of 1.42 percent.
The total net income of the Banks for the calendar year 1948, which, as indicated above, amounted to $4,626,763.92, was distributed (in
round figures) as follows:
Percent
Dividends paid-----------,-----------------------------$3,157, 820 68. 3
U. S. Government___________________________________ 1, 567, 989 33. 9
Members-------------------------------------------- 1,589,831 34.4
Retirement fund prior service-------------------------- 75, 645 1. 6
Legal reserve---------------------------------------------- 925, 352 20. 0
Contingent reserve------------------------------------- (8,585) (.2)
Undivided profits__________________________________________ 476, 532 10. 3
Total.
4, 626, 764
100.0
The net income of the Banks from the beginning of their operations through December 31, 1948, aggregated $60,530,687.75 and was distributed (in round figures) as follows:
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HOME LOAN BANK BOARD
Percent
Dividends paid $34,511,144 57.0
U. S. Government 23,897 392 39 5
Members 10, 613, 752 17.5
Retirement fund prior service 502,786 .8
Legal reserve 12,232,449 20.2
Contingent reserve 4, 283,027 7.1
Undivided profits 9, 001, 282 14.9
Total 60, 530, 688 100.0
Dividend payments
Dividend declarations by the Banks resulted in the distribution of $3,157,819 for the year 1948, which amount was $216,562 greater than that applicable to the preceding year. Of the amount of dividends distributed for the year 1948, the United States Government received $1,567,989 and member institutions received $1,589,830. The total amount of dividends received by the United States Government and member institutions on their stock investment in the Federal Home Loan Banks from October 15,1932, through December 31,1948, aggregates $23,897,392 and $10,613,752, respectively.
The following tabulation reflects the total dividend distribution, by Banks, from the beginning of operations through December 31, 1948:
Dividend distribution Oct. 15, 1932, to Dec. 31, 191)8
Members United States Government Total
Federal Home Loan Bank: Boston . . _ $775, 704.74 1,008,053.91 747,706.30 1,030,479.57 2,141,926.39 1,178,281.57 1,357,395. 74 752,911.73 414,185.32 344,712.88 862,393.94 $1,905,204.61 3,297,356.75 2,227,398.89 1,641,355.79 3,128,548.08 1, 523,465.34 3,468,859.70 1,649,669.09 1,538,199.62 1,083,280.56 2,434,053.74 $2,680,909.35 4,305,410.66 2,975,105.19 2,671,835.36 5,270,474.47 2,701,746.91 4,826,255.44 2,402, 580.82 1,952,384.94 1,427,993.44 3,296,447.68
New York . ...
Pittsburgh . .
Winston-Salem . . _
Cincinnati ......
Indianapolis ......
Chicago _ . .
Des Moines... ........
Little Rock _ _ .
Topeka..
San Francisco .....
Total ....
10,613,752.09 23,897,392.17 34, 511,144.26
Supervision of the Federal Home Loan Banks
In supervising the operations of the Federal Home Loan Banks pursuant to the provisions of the Federal Home Loan Bank Act, as amended, the Home Loan Bank Board requires each Federal Home Loan Bank to submit to it for approval an annual budget covering the expenses to be incurred by it. The semiannual and/or annual (the latter in the case of two of the Federal Home Loan Banks) dividend declarations authorized by the local boards of directors of the
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HOUSING AND HOME FINANCE AGENCY
Federal Home Loan Banks are likewise subject to the approval of the Home Loan Bank Board, as are also any changes in the rates of interest on advances, members’ deposits, and interbank deposits which are not within the rate ceilings prescribed by the Board.
With the exception of the purchase and/or sale of United States Treasury bills, United States certificates of indebtedness, and United States Treasury notes commonly traded in on the market in the same manner as United States Treasury certificates of indebtedness, all transactions of the Banks in United States Government obligations are subject to the approval of the Home Loan Bank Board.
All officers and counsel appointed by the local Boards of Directors of the Federal Home Loan Banks and their salaries are subject to the approval of the Home Loan Bank Board. The management of each Federal Home Loan Bank is vested in a local Board of 12 directors, 4 of whom are appointed by the Home Loan Bank Board and 8 of whom are elected by the members. Annual elections are held under the auspices of the Home Loan Bank Board pursuant to its rules and regulations on the subject. A list of the directors and officers of each Federal Home Loan Bank as of December 31, 1948, is included in exhibit 5.
Examinations and reports
The Federal Home Loan Banks are subject to a semiannual examination by examiners attached to the staff of the auditor of the Home Loan Bank Board. In addition to such examination, the Banks as well as the internal fiscal operations of the Home Loan Bank Board are now audited annually by representatives of the Division of Corporation Audits of the General Accounting Office pursuant to the provisions of the Government Corporation Control Act of December 6, 1945. As provided in the same act, all Government security transactions of the Federal Home Loan Banks in excess of $100,000, as well as all issues by the Home Loan Bank Board of consolidated Federal Home Loan Bank obligations (which are the joint and several obligations of all the Federal Home Loan Banks) are cleared with the United States Treasury Department. Moreover, the Treasury is supplied not only with a copy of the Board’s annual report to the Congress, but also with monthly reports reflecting all security transactions of the Federal Home Loan Banks and with special quarterly and annual reports required by Budget-Treasury Regulation No. 3.
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FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION
Summary
Since June 27, 1934, the Federal Savings and Loan Insurance Corporation has been providing savings insurance for member State-chartered and Federal savings and loan associations. The costs of the insurance operation as well as reserves for future losses are obtained from the premiums paid by insured members and earnings on Corporation investments.
The year 1948 witnessed the largest annual net increase in the number of insured associations since the early years of the Corporation’s history when the insurance program was in the organizational stage. The 2,616 institutions which were members of the Corporation on December 31, 1948, held assets of $9,734,000,000, reflecting a growth of 14 percent during the year. Significantly, their reserves which are available for losses increased 19 percent during the year and were equivalent to 6.6 percent of assets at year end.
It was natural that the Federal Government’s program to strengthen the financial structure of the country during the 1930’s should in elude application of the long-tested principles of insurance. To eliminate the causes of past loss as well as to establish a basis for building for the future, a Nationwide savings insurance plan was adopted as one of the constituent parts of the Federal program. In order to apply insurance principles to the particular characteristics of savings in mutual savings and loan associations, the Congress established the Federal Savings and Loan Insurance Corporation in mid-1934. It was recognized at the time that a system of insurance on a countrywide scale 'would strengthen the confidence of the public in savings and home-financing institutions, resulting in an increased flow of funds, which in turn would enlarge the capacity of the institutions to meet the home-financing needs of their communities.
Extent of insurance coverage
During the 141/2 years since the creation of the Corporation, associations holding over 74 percent of the assets of the savings and loan business have qualified for insurance. On December 31, 1948, a total of 2,616 mutual institutions were insured, and their assets aggregated $9,734,000,000. Of these, 1,485 were Federal savings and loan associations, required by law to qualify for insurance, and 1,131 were institutions of the savings and loan type chartered by the governments
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HOUSING AND HOME FINANCE AGENCY
of the States in which they are located. State-chartered institutions are not required to become insured, but may do so after applying and meeting the eligibility standards of the Corporation. Assets of the Federal group amounted to $6,162,000,000 and of the State-chartered membership to $3,572,000,000.
Over 6,100,000 savers and investors hold insured accounts in savings and loan associations. Their aggregate savings amount to $8,266,000,-000, of which over 93 percent, or $7,714,000,000, is covered by insurance.
Admissions and terminations
The past year has seen a substantial increase in the number of institutions applying for admission to the insurance program. During 1948, 87 associations with estimated assets of $115,000,000 qualified for insurance, the largest number of admissions during any 1 year since 1940, when a total of 92 associations was admitted. It is evident that the current high rate of applications results from more widespread understanding of the value of an insurance program and an increasing demand from the public for the added protection which insurance provides.
Consistent with the freedom of a private enterprise economy, the insurance law provides that institutions may voluntarily terminate their insurance contract, provided adequate notice is given to all insured accountholders. No institution cancelled its insurance during 1948 and continued operations. There were, however, seven withdrawals from the insured membership during the year, two because of merger with other insured associations, four following voluntary dissolution, and one reincorporating as a State-chartered insured association.
Although the Corporation hits the authority to terminate the insured status of an institution for a violation of the law or the rules and regulations, no insurance has been cancelled by the Corporation, except at the request of the institution.
The insurance contract
The inherent safety of savings in a financial institution of course derives first from the strength of the institution itself, which in large part is the result of capable, honest management and tested operating policies. Insurance provides an additional safeguard by guaranteeing that funds invested in a member association will be protected against all forms of loss within the insured maximum of $5,000. Included in the coverage is protection against those unexpected and emergency situations which even the most farsighted management cannot always anticipate.
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HOME LOAN BANK BOARD
Although all withdrawable savings accounts in an institution which is approved for insurance automatically become covered up to $5,000, the insurance contract actually runs to the insured saver, not to the institution. To achieve its purpose of protecting the saver against loss, the Corporation has authority to act in two specific areas—rehabilitation of impaired institutions and payment of insurance to accountholders of institutions placed in liquidation.
If the facts warrant, the Corporation may restore an impaired association to normal operation under capable management, in this manner protecting the savings entrusted to the institution not only from loss but also from any disturbance. To effect rehabilitation of an institution in trouble a cash contribution may be made to the association, or the Corporation may make a loan or may purchase assets with cash.
In those cases where rehabilitation does not appear feasible and the decision is made to liquidate the institution, the Corporation immediately effects payment of insurance, in the form of two methods of settlement which are optional with the saver. First, the individual may choose an insured account in another operating institution equal to his insured savings in the liquidating association. If he selects this method, his new account will share in earnings and be entitled to the same rights and privileges as other accounts of that association. To make this type of settlement, the Corporation contracts with other insured institutions to issue the required number of accounts, reimbursing those associations in cash. It is also possible to create a new Federal savings and loan association solely for this purpose.
If the investor prefers, he may choose to receive 10 percent of his insured account in cash and the balance in negotiable noninterestbearing debentures of the Corporation, half of which are payable within 1 year and the remainder within three years from the date of default.
Loss experience
For over 4 years the Corporation has experienced no losses and for over 7 years no insured institution has been placed in liquidation. This record is obviously due in large part to the favorable economic conditions existing during the period, as well as to preventive efforts of the Corporation and Federal and State supervisory authorities aimed at minimizing the development of losses through encouraging adherence to sound operating policies by the insured membership.
Since the Corporation was established, it has removed the impairment of 28 institutions, with assets of $57,000,000, by making a cash contribution to cover known and expected losses. When reasonable
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doubt as to the exact extent of the loss existed, an agreement was executed with the rehabilitated institution providing for the return to the Corporation of that part of the cash grant not actually needed.
Accompanying rehabilitation, six of these institutions merged with other insured associations, three voluntarily dissolved, and the remaining 19 continued operations as separate entities. As an illustration of the success of the rehabilitated institutions, their condition on December 31, 1948, is compared with their status immediately prior to rehabilitation in exhibit 6. A total of $5,374,125 was disbursed to the 28 institutions in order to make rehabilitation possible. Since a contribution is primarily intended to cover existing loss, it is obvious that any recovery can be only a small percentage of the original disbursement. Indicative of this is the experience to date, which shows that a total of $475,796 of the cash grants has been recovered, resulting in an estimated final loss of $4,898,329 to the Corporation. No situation has arisen in which either a purchase of institutional assets or a loan by the Corporation has been deemed to be the most desirable method of removing impairment.
Thorough examination of the circumstances existing in seven cases proved that rehabilitation was not advisable, and the institutions were placed in liquidation by the supervisory authorities. Four were Federal savings and loan associations and three were State-chartered institutions.
Following the decision to liquidate and as soon as arrangements were made with other institutions for the issuance of new accounts, the Corporation made the two optional methods of settlement available to the insured savers. It is significant that nearly all of the 7,705 insured account holders chose new accounts in settlement of their insurance claims. Only six preferred to accept cash and Corporation debentures.
Insured savings accounts in the institutions placed in liquidation aggregated $6,706,841. Savers holding $6,683,494 of this amount were issued new insured accounts, the cash and debenture outlay amounted to $13,200, and accounts totaling $10,147 are still unsettled, because of the failure of the accountholders to file claims.
Following disbursement of funds by the Insurance Corporation to effect settlement of the insured accounts, liquidation of the assets of the seven associations proceeded. In two cases, a State authority acted as receiver; in one case a State authority and the Insurance Corporation served jointly; and for four associations, the Insurance Corporation was appointed sole receiver. Through orderly liquidation of the assets of the receiverships, the Insurance Corporation has recouped all but $312,000 of its original disbursement, and account-
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holdeis having accounts in excess of $5,000 have also participated in the distribution of liquidating dividends. In those cases where returns in excess of 100 percent were realized, the accountholders received the excess amount.
Total assets of the four associations for which the Insurance Corporation acted as sole receiver amounted to $8,668,778. Two of these receiverships were concluded basically during 1946 but final closure occurred during 1948. In exhibit 7 are shown condition and operating data of the receiverships conducted by the Corporation.
Condition of the Corporation
Not only must the Corporation be prepared at all times to absorb possible losses, but also it is equally important that it be ready to make payment upon the insured savings of member institutions affected. For this reason the Corporation maintains over 98 percent of its assets in the form of cash and securities of the United States Government; of the total assets of $202,800,000 on December 31, 1948, about $793,000 consisted of cash and $199,200,000 of Government securities. The major portion of the remaining assets consisted of insurance premiums due but not yet payable, in the amount of $2,650,000.
At the end of June 1948, ownership of the $100,000,000 capital stock of the Corporation, which had been held by the Home Owners’ Loan Corporation, was transferred to the United States Treasury, as provided by a statute enacted June 30. In keeping with this legislation, dividends accumulated on the capital stock from July 1, 1935, through June 30, 1948, were computed at the figure of $25,182,000. Cumulative dividends subsequent to that date are being computed by the Corporation at the rate of 3 percent annually.
One feature which particularly reflects the condition of the Corporation is its reserve account. The reserve on December 31, 1948 amounted to $97,834,000, all of which is available to meet losses. ? However , it should be noted, as referred to above, that estimated cumulative dividends amounted to $26,681,750 at the end of 1948. Consistent with sound dividend policy, the declaration of dividends is dependent upon evaluation of business conditions and the status of the insured members. The dividend question will be referred to the Congress for final disposition.
A complete picture of the financial condition and the growth of the Corporation during the past year may be obtained from the comparative statements of condition appearing in exhibit 8.
Operations of the Corporation
I he Corporation obtains its income mainly from three sources—premiums, interest on Government securities, and admission fees paid by
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new members. It is significant that in the early years of the Corporation’s history, investment income was the most important of these, but, with the growth of the insured membership, premiums have steadily increased until today they are more than double the interest received on investments.
Premiums, paid by institutions at the rate of one-eighth of 1 percent of their share accounts and creditor obligations, amounted to $9,456,079 during 1948. Investment income reached $4,388,170, while admission fees, computed at four one-hundredths of 1 percent of the premium base, amounted to only $40,296.
As the workload of the Corporation has increased over the years, expenses of operation have necessarily risen, but have not grown proportionately to either income or the insured risk. Total administrative expenses amounted to 3.75 percent of operating income during 1948. For chart of organization and functions of the Corporation, see page 103. Of gross expenses of $557,500, salaries of Corporation employees accounted for $308,900. The sum of $156,000 was paid during the year for services of the Home Loan Bank Board and $370 to the Housing and Home Finance Agency. Miscellaneous operating items such as rent, supplies, communications, and audit expense, totaled $55,700. Expenses arising from liquidation activities and past insurance losses amounted to $19,500, and depreciation of equipment reached $17,000. A complete income and expense statement of the Corporation for 1947 and 1948 appears in exhibit 9.
Condition of insured associations
/Size.—The average size of insured associations is continuing the upward trend evident for some years. At the end of 1948, the average association had assets of $3,721,000, over 10 percent above the average of $3,370,000 a year earlier. As the average size of institutions has risen, the number of insured associations in the larger size groups lias proportionately increased. A 3-year comparison of the frequency distribution of insured associations among the various asset size groups may be referred to in exhibit 10.
Assets.—The same trends in asset accounts of insured institutions which have been apparent since the end of the war continued during 1948, although at a decelerating rate. Mortgage loan holdings, for example, increased from 77 percent of assets to 79.9 percent during the year, while cash and Government securities dropped from a ratio of 19.8 percent to 16.6 percent of assets.
Total assets grew 14 percent during 1948 to a total of $9,734,000,000. Mortgage loans, which had increased 18 percent during the year, amounted to $7,777,000,000 at year end, and liquid holdings decreased
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nearly 5 percent to $1,615,000,000 on December 31. Exhibit 11 offers a comparison of the number and assets of insured associations at the end of 1948 and 1947, by States.
Included in the mortgage loan portfolio of insured associations were $1,886,222,000 of loans insured or guaranteed by the Veterans Administration and an additional $445,115,000 of loans insured by the Federal Housing Administration. About 30 percent of the mortgage loan portfolio, therefore, consisted of insured or guaranteed loans, while the balance were loans of the conventional uninsured type. The composition of the loan portfolio of insured institutions as of December 31,1948, may be seen in exhibit 12.
Savings.—The period since the close of the war has witnessed increasing activity in the savings field. The flow of new savings into insured associations during 1948 was 15 percent greater than the inflow during 1947. On the other hand, withdrawals were 23.4 percent greater during 1948, so that the net inflow was only a fraction of one percent larger than the net increase of 1947.
In dollar amounts, new savings of $3,217,000,000 were received by insured institutions during 1948. After deduction of total withdrawals of $2,242,000,000, the net increase in savings during the year amounted to $975,000,000.
Reserves.—One of the best criteria for measuring a financial institution’s stability and its capacity to withstand financial shock is its reserve account. The reserves and undivided profits of insured associations, which are available for the absorption of losses arising in the course of business, increased 19 percent during 1948. Insured institutions now hold aggregate reserves and undivided profits of $646,000,-000, equivalent to 6.6 percent of assets, while a year earlier I he reserve accounts amounted to $543,000,000 or 6.4 percent of assets.
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FEDERAL SAVINGS AND LOAN ASSOCIATIONS
Creation of Federal savings and loan associations was authorized by section 5 of the Home Owners’ Loan Act of 1933. This section specified that in issuing charters, the Home Loan Bank Board (to which Congress assigned the responsibility for creation, examination, and supervision) must in each instance give “primary consideration to the best practices of local mutual thrift and home-financing institutions in the United States.” Federal savings and loan associations are required to raise their own capital in the form of shares or share accounts, which represent private individual savings. No Federal association is permitted to accept deposits and no certificates of indebtedness may be issued except for such borrowed money as may be authorized by regulations of the Board.
The law provides that Federal savings and loan associations may be established either by issuing charters to newly formed groups or to existing State-chartered institutions which qualify by conversion. As of December 31,1948, a total of 1,485 Federal savings and loan associations were in operation. Of these, 642 represented associations originally organized under Federal charter, the remaining 843 associations having converted from State to Federal charter. At the year end, Federal charters were outstanding in each of the 48 States as well as in the District of Columbia, Alaska, Hawaii, and Puerto Rico. The combined resources of all Federal associations at the end of 1948 amounted to approximately $6,162,000,000, reflecting an increase in total assets of 12.9 percent during the year. The resources Of the Fed-erals now account for nearly one-half (47 percent) of the total assets of all institutions of the savings and loan type in the country. During the past year the average size of Federal savings and loan associations increased from $3,694,000 to $4,150,000, or by 12.3 percent.
New Federal associations
During 1948 seven new Federal savings and loan associations were organized and five State-chartered savings and loan associations converted to Federal charter. Among the new Federal associations chartered in 1948 was the First Federal Savings and Loan Association of Puerto Rico, with headquarters in San Juan. Chartering of the Federal in Puerto Rico was the culmination of a prolonged effort of a group of citizens of the islands to provide for their people this form of cooperative organization for the promotion of thrift and home
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financing. Of the other Federal associations formed in 1948, one was created by the consolidation of two Federal associations. During the year, three Federal associations ceased to exist by reason of voluntary dissolution, one merged with another insured association, and one reincorporated as a State-chartered insured association. The effect of these changes was a net increase of seven in the number of Federal savings and loan associations during 1948. In addition, five Federal associations received authorization from the Board in 1948 to establish branch offices. As of December 31, 1948, 45 of the 1,485 Federal associations were operating a total of 58 branch offices.
The development and use of branch offices by savings institutions in the United States has never been as aggressive as has been their development and use by commercial banks. As of December 31, 1947, the latest year end for which figures are available, commercial banks, numbering 14,181—State and National—had 4,161 branches, including a few designated statistically as “additional offices.” Of these commercial banks, the national banks alone, totaling 5,005, had 1,870 branches.
Savings institutions, on the other hand, had a far smaller number of branches. Figures are not available for State-chartered institutions of the savings and loan type, but mutual savings banks, totaling 533, had 171 branches, and Federal savings and loan associations, totaling at the same time 1,478, had 53 branches, including in their number branches which converted Federal associations operated prior to conversion under the authority of their State charters.
The foregoing figures make clear that on December 31, 1947, all types of commercial banks had approximately 40 branches for every 140 institutions, whereas Federal savings and loan associations had only 5 branches for every 140 associations. In other words, the commercial banks of the country, operating under State and national charters, have roughly 8 times as many branches proportionately as Federal savings and loan associations.
Board policy on "branches
The problem of creating branches of Federal associations has been a live one in many quarters throughout 1948. The public recognizes that as a general policy the Board is reluctant to authorize the establishment of a branch by a Federal unless there is clear, substantial evidence of need and large prospective value—a need and value comparable to that required as evidence for the establishment of a new association. Several applications for authority to create branches, which were filed with the Board during the year, have not been acted upon, but are still under consideration.
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Without formal expression of policy, the members of the Board have made clear in speeches and conferences their recognition of the point of view of State supervisory authorities whose influence for the most part, in the matter of creating additional branches, has been on the side of extreme caution and restraint. The atmosphere of cooperation and mutual respect which has characterized the relationships between the Board and State supervisory authorities on this subject and other kindred subjects of policy and administration has led to a liberal exchange of information which in itself has been a favorable factor in permitting full, free, and objective examination of varied points of view and prospective reactions. The Board is gratified that it has been able to work in close cooperation with State authorities. It desires both to continue and to improve this relationship. It does not, however, accept the thesis that its judgments or authority are bound by State laws or by the policies of State supervisory authorities with respect to the creation and approval of branch organizations. In its interpretation of Federal statutes, the Board has formed the opinion that to the extent that Congress empowered it to charter Federal associations, it likewise, under the law and for the same reasons and with the same general limitations, gave the Board authority to sanction and approve the creation of branches.
Flow of savings
In contrast to the postwar decline in the amount the American people have been able to save out of current income, the flow of individual savings into Federal savings and loan associations continued in record volume during 1948. During the year, savings of the public invested in Federals increased by $642,052,000, or 13.9 percent. This increase which, dollarwise, was the largest annual gain in the 15 year history of Federals, brought total private savings in these institutions to $5,250,821,000, as of December 31, 1948. The number of individuals holding savings accounts in Federals increased from 3,281,000 to 3,669,000 during the year.
Liquidity and reserves
Liquidity and reserves have been important subjects of policy and administration during 1948. Year-end reports reveal that cash and U. S. Government obligations held by all Federal associations amounted to $1,010,229,000, which is equivalent to 16.4 percent of their total assets. During the year liquid assets of this character declined $63,019,000, to a total 5.9 percent below the comparable figure for the preceding year end. General reserves and undivided profits accounts of Federal associations increased from $329,784,000 to $393,114,000. At the close of 1948, such reserve accounts were equivalent to approx
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imately 6.4 percent of total assets, as compared with 6 percent at the end of 1947.
Mortgage loans
First mortgage loans, primarily on one- to four-family homes, normally represent from 75 percent to 85 percent of the total assets of Federal savings and loan associations. At the end of 1948, first mortgages constituted 80 percent of the total assets. Dollarwise, mortgage holdings of Federals increased from $4,225,963,000 to $4,937,758,000 during the year. This increase, which amounted to $711,795,000, or 16.8 percent, was somewhat less than the $868,381,000, or 25.9 percent, gain in mortgage portfolios registered in 1947. The smaller net increase in 1948 stemmed primarily from a decline in the volume of new mortgage loans made. During 1948, Federals made $1,719,537,000 of first mortgage loans, a volume 5.5 percent less than the 1947 record. Although the total volume of mortgage loans made by Federal associations declined during the reporting year, the volume of loans made to finance the construction of new homes continued to rise. The $551,354,000 of construction loans made during 1948 represented one-third of all loans made by Federals and was 12.9 percent greater than the aggregate amount of such loans made during 1947. A brief summary of new mortgage loans made by these institutions during 1947 and 1948, classified as to purpose of loan, is shown in the following table:
New mortgage loans made by all Federal savings and loan associations
Purpose 1948 1947 Percent change in 1948
Amount Percent of total Amount Percent of total
Construction.. $551,354 768,040 161,853 61, 076 177, 214 32.1 44.7 9.4 3.5 10.3 $488, 502 966,932 153, 779 49,349 159, 948 26.9 53.2 8.4 2.7 8.8 +12.9 -20.6 +5.3 +23.8 +10.8
Purchase .
Refinancing
Reconditioning..
Other...
Total 1, 719, 537 100.0 1, 818, 510 100.0 -5.5
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HOME OWNERS’ LOAN CORPORATION
12 years of liquidation
On June 12, 1936, the 3-year lending period of the Home Owners’ Loan Corporation terminated. Since that time, the major activity of the Corporation has been the liquidation of its great volume of loans. The results attained during this 12-year period of liquidation have been extremely favorable. Of the total lending of approximately $3,500,000,000, over 89 percent has been liquidated. Less than $400,-000,000 of the cumulative investment was outstanding at the end of the calendar year 1948.
The loans of the Corporation were originally made to refinance the mortgages of more than a million American home owners who were victims of the depression. Most of these home owners were in arrears nearly 2 years on principal and interest, and 3 years on taxes. At the time, it was felt that this rescue operation might result in a loss to the Government of one-half billion to a billion dollars. Instead, at the end of 12 years of liquidation, it now appears that, when liquidation of the remaining loans is completed, the Corporation will have repaid the $3,500,000,000 of bonds guaranteed by the Government and will be able to return, without impairment, after paying interest on its bonds and all of its administrative and operating expenses, the $200,000,000 of capital originally subscribed by the Government.
In the course of its operations, the Corporation extended a helping hand to thousands of financial institutions by taking over almost $2,000,000,000 of their mortgage loans at a time when no other refinancing was available. The Corporation also helped thousands of local Government units by advancing $485,000,000 to pay taxes, many of which were seriously delinquent. Not least among its services was the fact that the Corporation gave impetus to long-term direct-reduction loans which has had a beneficial influence on the entire structure and procedure of home financing. Its 15-year monthly payment loans with interest of not more than 5 percent on the declining unpaid balance gave substantial evidence throughout the United States of the fairness and value of this type of loan in contrast to the expensive, short-term loan with its renewal fees and its recurring threats of loss. Moreover, the lenient collection policy of the Corporation, together with the servicing methods which it developed to help home owners, also contributed to security. The successful outcome of this lending operation stands as a demonstration of the respect of borrowers for their financial obligations to their Federal Government and the sound-
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ness of a program gauged to the resources and capacity of the borrower.
The Home Owners’ Loan Corporation has devoted much effort to individual servicing of its loan accounts. This servicing has enabled the Corporation to locate causes of trouble and to take prompt action to avoid foreclosure. As part of this servicing program, the Corporation collects funds from borrowers on a monthly instalment basis for the payment of taxes and insurance. This procedure assists borrowers to avoid tax difficulties and reduces the Corporation’s expenses by eliminating the necessity for searching tax records to determine whether delinquencies exist. The proportion of such accounts increased from 72.1 percent of outstanding loan accounts at the beginning of the 1948 calendar year to 77.9 percent at the end of the year. A brief historical summary of HOLC operations, arranged in chronological order, is given in exhibit 13.
A dm inis trativ e
The personnel and administrative expense of the Corporation has been reduced rapidly in recent years. The number of employees on December 31, 1948, was 473 as compared with 662 one year before, and 21,000 at the peak of its operations. The present organization and function chart of the Home Owners’ Loan Corporation is presented on page 103 of this report. The administrative expenses of the Corporation during calendar year 1948 were $2,395,209 as compared with $3,422,839 during the preceding year, and $37,427,000 during its peak year.
General operations
From June 13, 1933, through June 12, 1936, the Corporation loaned $3,093,451,321. These loans were made to finance the home mortgages of 1,017,821 individuals who were unable to finance their loans elsewhere and were, therefore, dependent on the credit of the Government. The financial conditions prevailing then and later were so adverse that some of these home owners, despite the efforts of the Corporation, were unable to work out of their financial difficulties. However, the Corporation has enabled more than 800,000 families to avoid foreclosure on their homes.
Die Corporation’s original investment has been increased by supplementary advances made for the payment of taxes, insurance, maintenance, and reconditioning, the capitalization of delinquent interest, and acquisition costs. From the beginning of operations to December 31, 1948, these supplemental capitalizations totaled $402,437,585, and brought the Corporation’s gross cumulative investment to $3,495,888,906.
831481—49----10
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Liquidation
Liquidation of this investment has proceeded rapidly. At the end of the 1948 calendar year, the balance of original loans, vendee accounts, and property accounts was $368,936,083, a decrease of 24 percent from the balance of $486,090,711 at the beginning of the year. Of the $3,495,888,906 gross cumulative investment, $3,126,952,823, or 89.4 percent had been liquidated by the end of the calendar year 1948. The reduction in these assets is summarized in the following table:
Original amount loaned____________________________________$3, 093, 451, 321. 01
Subsequent advances to borrowers, net additions included in
capitalized value of properties, etc____________________ 402, 437, 584. 79
Original loans plus advances, capitalized additions, etc_ 3, 495, 888, 905. 80
Outstanding on December 31, 1948:
Original loans and advances__________$234,144, 621. 20
Vendee accounts and advances_________ 134, 763, 440. 22
Property acquired and in process of acquisition__________________________ 28, 021. 31
Total outstanding___________________________________ 368, 936, 082. 73
Net reduction in mortgage and property assets_______ 3,126, 952, 823. 07
Accelerated liquidation
During the current calendar year, a special program for accelerating liquidation was initiated for application in those States in which the aggregate loan balances were $1,000,000 or less, starting with Nevada in March and adding another State to the program each month thereafter. An additional program was also initiated for liquidating accounts with small loan balances in the other States, which has resulted in a substantial decrease in the number of these outstanding accounts. The following table shows the result of the State liquidation program:
Number of loans outstanding
Start Dec. 31, 1948 Percent of liquidation Start Dec. 31, 1948 Percent of liquidation
Nevada 163 384 552 655 368 358 1 37 162 250 152 117 99.4 90.4 70.7 61.8 58.7 67.3 New Hampshire.--Delaware 350 473 724 121 393 598 65.4 16.9 17.4
Wyoming _
Montana Maine
Idaho ------ Total
4,027 1,831 54.5
New Mexico Vermont- -
Investments in savings and loan associations
Congress in 1935 authorized the Home Owners’ Loan Corporation to purchase shares of savings and loan associations in order to make funds available to stimulate the local financing of home loans. The
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cumulative investment in savings and loan shares made by the Corporation totaled $223,856,710 by December 31, 1948. Of this investment, only $5,882,650 remained outstanding at the end of the 1948 calendar year, as compared with $8,063,350 at the beginning of the year. Dividends aggregating $44,660,863 have been received by the Corporation from these investments.
Bond retirements
The Home Owners’ Loan Act of 1933 requires that all payments upon principal of the Corporation’s loans must be used to retire outstanding bonds. In order to retire bonds, the Corporation also uses certain other receipts such as amounts received as a result of the repurchase of shares in savings and loan associations. By the end of calendar 1948, the total applied to bond retirement was $3,176,628,822. The amounts deposited with the Treasurer of the United States and used or available to retire bonds are shown in the following table:
Disposition of funds allocated (through Dec. 31, 191/8) to bond retirement fund
Applied to retirement of bonds__________________________$3,176, 628, 821. 55
Deposited for matured or called bonds on which interest has
ceased------------------------------------------------ 2, 557, 675. 00
Available for future retirement of Unmatured bonds______ • 99,704.30
Gross amount deposited in bond retirement fund____ 3,179,286,200.85
Balance due retirement fund for Dec. 1948 to be deposited in
January 1949__________________________________________ 943, 849. 23
Total applicable to bond retirement_______________ 3,180, 230, 050. 08
As a result of bond retirements, the outstanding unmatured bonds of the Corporation on December 31, 1948, all of which are held by the United States Treasury, totaled $182,000,000, or 5.2 percent of the total amount of $3,489,453,550 of bonds issued.
Status of accounts
As previously stated, the Corporation made loans to 1,017,821 individuals during its 3 years of lending operations. Adding to this original number 1,968 subsequent divisions and acquisitions of property, and subtracting 103 subsequent consolidations, made a net total of 1,019,686 accounts. Of this net number, 778,514 or over two-thirds have been terminated, leaving 241,172 accounts outstanding as of December 31, 1948.
Included in the 778,514 terminated accounts were 652,307 original loans and 110,593 vendee accounts paid in full; 15,370 acquired properties sold for cash; and the remaining balances on 244 accounts charged off.
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Of the 241,172 accounts outstanding as of December 31, 1948, there were 171,281 original loans, 69,871 vendee accounts and 20 properties. Of the outstanding debtor accounts, 115,643 original loans had been extended under the Mead-Barry Act. Of the 20 properties on hand, one was owned and 19 still subject to redemption.
Over 95 percent of the Corporation’s outstanding accounts were paid on schedule or less than 3 months in arrears at the end of the reporting period. For the loans extended from the original 15 years to not more than 25 years under authorization of the Mead-Barry Act, the results have been especially noteworthy. All of these borrowers were behind in their payments when the extensions were granted. By December 31, 1948, there were 109,743, or 94.9 percent of the outstanding extended original loans, which were paid on schedule or less than 3 months in arrears. By reducing the required monthly payments, these extensions have averted many thousands of foreclosures which would have resulted in losses to the Corporation.
Properties
As a result of foreclosures, voluntary deeds, abandonments, etc., the Corporation had acquired up to December 31, 1948, a total of 198,217 properties including 19 still subject to redemption. Of this total, 4,000 were reacquisitions of properties sold and 74 other properties acquired, leaving 194,143 properties acquired from original borrowers. Subtracting these latter acquisitions from the 1,017,821 total original borrowers, leaves 823,678 or 80.9 percent of original borrowers whose homes have been saved from impending foreclosure which they faced when the loans were made.
The rapid decrease in the number and capital value of properties which the Corporation had on hand is shown in the following table:
Properties on hand including those subject to redemption
Number
Capital value
Dec. 31, 1942____________________________________________________________
Dec. 31, 1943....1_______________________________________________________
Dec. 31, 1944____________________________________________________________
Dec. 31, 1945____________________________________________________________
Dec. 31, 1946____________________________________________________________
Dec. 31, 1947________________________________________________________....
Dec. 31, 1948____________________________________________________________
31,621 15, 578
I, 935 368 106
63
20
$226, 925,127 96, 455,077 11,407,422 1,632,490 418,326 181,551 28.021
Financial operations
In exhibit 14 the balance sheet of the Corporation as of December 31, 1948, is presented. Because of the rapid progress of the Corporation’s liquidation during calendar 1948, the total assets decreased 35.4 percent during the year. Exhibit 15 presents a cumulative statement of
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income and expense from the beginning of operations through December 31, 1948, and exhibit 16 a statement of income and expense for calendar year 1948.
Up to December 31, 1948, the Corporation had a cumulative net income of $336,376,696 before actual losses and provisions for future losses.
The total cumulative loss on the sale of properties amounted to $336,-531,405. This loss includes brokers’ commissions, selling costs, and the difference between the sale price and capital value of the property.. The capital value includes unpaid principal, delinquent interest and subsequent capital charges for taxes, reconditioning, acquisition,. etc.
In addition to the $336,531,405 loss on property sales, there were other losses amounting to $1,375,338 from principal, interest, and properties charged off, fire and other hazards, and fidelity and casualty losses. This makes the cumulative total of all losses $337,906,743 as of December 31, 1948.
Deducting the $336,376,696 cumulative net income from the $337,-906,743 losses, leaves $1,530,047 net loss as of December 31,1948. Balances in reserves and provisions for future losses amounted to $2,877,-069 and brought the total deficit to 4,407,116 as of December 31,1948.
During the calendar year 1948 the total income of the Corporation amounted to $45,381,815. Expenses, including interest on bonds and administrative expenses, amounted to $5,751,970, leaving a net income, before provision for losses, of $39,629,845. The provision for losses amounted to $24,496, leaving a net income of $39,605,349. This latter figure included cumulative Federal Savings and Loan Insurance Corporation dividends for the period from July 1, 1935, to June 30, 1948, received in connection with transfer of the Corporation’s investment to the United States Treasury.
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Exhibit 1
FEDERAL HOME LOAN BANKS
Summary of lending operations
Year 1948 Balance outstanding end of year
Advances Repayments
Boston _ __ $17,645,798.00 $12,385,020.00 $27,227,988.00
New York 30,763,703.32 33, 562, 855.14 36,973,142 29
Pittsburgh . . __ 22, 282,000.00 19,300,449.00 43,042,127.50
Winston-Salem . ... ... _ . 59,158,175.00 40,472,606. 85 93,219, 570.25
Cincinnati _ 20; 050; 250.00 20,236, 398. 20 30, 913, 994.22
Indianapolis 20,827, 925.00 14,024,775.05 37,123,144.41
Chicago . . _ _ ... 43,321, 896.00 32; 670; 098.81 70,156,087.70
Des Moines 24, 628,237.00 20, 468,636.82 32; 874; 904.68
Little Rock. - _ - _ _ _ . 2L 442,360.00 13,832, 238. 00 30,190,954.00
Topeka,. _ ------- 11,794, 590.00 9, 714,855.00 23,125,648.50
San Francisco 87i 697; 842. 42 63; 500; 940.48 90,168', 527.64
Total, year 1948 359,612, 776.74 280,168, 873.35 515,016,089.19
1947 . 351,079,350 99 208, 961, 931. 93 435,572,185.80
1946 329, 231,890.68 230,649,366. 93 293,454, 766.74
1945 277; 748; 276.84 213, 438, 982.95 194,872; 242.99
1944 . 239,254,221.89 218,759,089. 74 130; 562; 949.10
1943 156,925, 588 93 176,070,303.60 lio; 067,816.95
1942 99,461,876 19 189 695,394 41 129,212,531.62
1 941 157,600,420.85 139,646,335.38 219,446,049.84
i 940 134,212,165.93 114,033,192.20 201,491,964.37
1939 94; 780, 586.64 112; 310,034.15 181,312; 990.64
1938 81,958,343 39 83 153,601.22 198; 842; 438.15
1937 123,251,172. 91 68, 440,498.13 200,037,695.98
1936 93,257,057 50 50, 715, 704. 66 145; 227; 021.20
1935 59,130,068. 56 43,046, 971. 39 102,685; 668.36
1934 38, 680, 566.12 37; 505; 249. 30 86; 602; 571.19
1933 90,027,164.49 5; 437; 410.12 85; 427; 254.37
1932 837; 500 00 '837; 500.00
Grand total .. _ ... 2,687,049,028.65 2,172,032,939. 46
Exhibit 2
FEDERAL HOME LOAN BANKS
Schedule of interest rates on new advances and interest rates paid on members' time deposits Jan. 1,19^9
134
Advances to members Boston New York Pittsburgh Winston-Salem Cincinnati Indianapolis Chicago Des Moines Little Rock Topeka I San Francisco |
Only 1 rate in effect Percent Percent Percent Percent 2.0 Percent 2. 25 Percent ’2.5 Percent Percent 2.0 Percent 2.0 Percent 2.5 Percent 2.0
Secured advances: Not exceeding 1 year.-. 2.0 2.0 2.0 2.5 2.0
1 year to 5 years.-. .
1 year to 10 years _. _ 2.5 2.0 1.0 2.5 2.0 ’ 1.5 2.5 2.0 1.0
Unsecured advances: 1 year or less . _ 2.5 1.0
Rates paid on time deposits remaining: Over 30 days _ 1.0 1.0 1 1.5 1.0 1.0
Over 90 days _ _ 1.0 .5 1.0
Over 6 months _ ___ . ’ 1.25 1.5
Certificates of deposit (1 year). 1.5 1.5 1.5 1.5 1.5
’New rate effective since Oct. 1, 1948,
HOME LOAN BANK BOARD
Exhibit 3
FEDERAL HOME LOAN BANKS
Consolidated statement of condition as of Dec. 31,1948
Dec. 31, 1948 Increase or (decrease) since—
Dec. 31, 1947 June 30, 1948
ASSETS Cash: On hand—Including imprest funds On deposit with: Treasurer of the United States Commercial banks In transit $30, 810.02 9,685,084. 62 20,620,594.51 $(37, 713.32) • (4.828,350.18) (1,501, 627. 43) (269.59) $(15,242.83) 3,052,976.00 1,614, 226.36 (5,049.19)
Total cash 30,336, 489.15 (6,367, 960. 52) 4, 646, 910.34
Investments: Bills, certificate of indebtedness, and notes Bonds 159,185,717. 61 114, 670, 830. 47 146,249,345.71 (11,520,289.36) 106,816.017.42 2, 759,318.61
Total investments 273,856,548.08 134, 729,056.35 109,575,336.03
Advances outstanding to members: 1 year or less Amortized—1 to 10 years 257,178,514.93 257, 837, 574. 26 38,832, 725. 90 40.611,177. 49 27, 452,343.87 12,316,089. 77
Total advances outstanding to members 515,016,089.19 79,443,903.39 39, 768,433.64
Accrued interest receivable: Investments Advances to members * 580,503.18 696,111.04 (45,942. 98) 250,298.19 (195. 766.59) 137,525. 62
Total accrued interest receivable 1,276, 614. 22 204,355. 21 (58, 240.97)
Deferred charges: Discount on consolidated obligations Prepaid consolidated obligations expense Prepaid surety bond premiums Other prepaid expenses 179,689. 49 11,154.57 811.10 (34,027. 77) 85,453.37 6,016.40 (951.07) 43, 418. 70 4,525.32 519.81
Total deferred charges 191,655.16 56, 490.93 48, 463.83
Other assets: U. S. savings bonds redeemed Accounts receivable Furniture and equipment 7,351.65 11.00 (62, 415.31) (8,012. 92) (38,736. 21) (6,845.86)
Total other assets 7,362. 65 (70.428. 23) (45, 582.07)
Total assets 820, 684, 758. 45 207,995,417.13 153,935,320.80
T . , „ LIABILITIES AND CAPITAL Liabilities: Deposits: Members—Time Members—Demand Treasurer of United States—Sec. 14 of act Government instrumentalities—Demand ... Applicants 108,801,049.43 24,554,177.12 98,419. 70 177, 400.00 42.843.576. 49 2,676,578. 49 (10,500,000.00) (64, 772. 52) 48,825.00 35, 767,922. 20 (1,220, 724.26) (62,894.12) 86,450.00
Total deposits 133,631,046.25 35.004, 207. 46 34,570,753.82
Accrued interest payable: Deposits of members—Time Consolidated obligations 93,507.93 3,993,950.04 49,967.22 3,277,418.77 23, 625.08 2,080,069.51
Total accrued interest payable 4,087,457. 97 3,327,385. 99 2,103,694.59
Dividends payable: U. S. Treasury ..... Member institutions 849, 464.88 934,842.56 (59,888.12) 127,818.19 320,573.00 389,174.98
Total dividends payable.. Accounts payable 1,784,307.44 6, 513. 71 67, 930.07 (6,305.80) = 709, 747.98 (5,227. 90)
135
HOUSING AND HOME FINANCE AGENCY
Exhibit 5
FEDERAL HOME LOAN BANKS
Schedule of directors and officers, Dec. 31,1948
Boston directors
Rockwell C. Tenney (public interest).
J. Bertram Watson (public interest).
F. J. Dillon1 (public interest). William J. Pape (public interest). George J. Holden (at large).
H. Dudley Mills (at large).
Raymond P. Harold (class A).
Edward H. Weeks 2 (class A).
Mil ton A. Barrett (class B).
William J. D. Ratcliff (class B).
E. Harrison Merrill (class O).
Leo G. Shesong (class C).
OFFICERS
Herbert N. Faulkner, President.
Lawrence E. Donovan, Vice President and Treasurer.
Paul H. Heywood, Vice President and Secretary.
Beatrice E. Holland, Assistant Secretary.
New York directors Eustace Seligman (public interest). George MacDonald1 (public interest). James Bruce (public interest).
F. V. D. Lloyd 2 (public interest).
Walter J. Babcock (at large).
E. H. Schoonmaker (at large). Cadman H. Frederick (class A).
W. J. Almekinder (class A).
John W. Cadman (class B).
Joseph Holzka (class B).
Joseph A. O'Brien (class C).
Arthur C. Blackwell (class C).
officers
Nugent Fallon, President.
Denton C. Lyon, Vice President and Secretary.
H. B. Diffenderfer, Vice President and Treasurer.
Joseph F. X. O’Sullivan, Assistant Secretary.
Pittsburgh directors
Walter B. Gibbons (public interest). Ernest T. Trigg1 (public interest).
Charles S. Tippitts2 (public interest) Arthur B. Koontz (public interest). Alexander Salva tori (at large).
James J. O’Malley (at large).
C. Elwood Knapp (class A). Norman E. Clark (class A). William Reinhardt (class B). N. F. Braun (class B).
Charles Warner (class C).
Francis E. McGill (class C).
OFFICERS
G. R. Parker, President.
H. L. Tweedy, Vice President. William M. Stout, Vice President. Dale Park, Treasurer.
Warren A. Sutton, Secretary.
WINSTON-SALEM
DIRECTORS
James G. Luttrell, (public interest). W. Waverly Taylor (public interest). Horace S. Haworth1 (public interest) Raymond D. Knight (public interest). Frank Muller, Jr. (at large) Marion M. Hewell (at large).
Edward C. Baltz 2 (class A).
Wallace O. Du Vail (class A).
D. R. Fonville (class B).
Peyton R. Keller (class B).
H. L. Sudduth (class O).
George E. Rutledge (class C).
OFFICERS
Joseph W. Holt, Executive Vice-President-Treasurer.
J. Moyer Sink, Vice President.
C. Edwin Kline, Assistant Secretary.
James T. Spence, Assistant Treasurer.
1 Chairman.
8 Vice chairman.
138
HOME LOAN BANK BOARD
Schedule of directors and officers, Dec. 31, 19f8—Continued
Cincinnati directors
Frazer D. LeBus (public interest). Frank K. Vaughn (public interst). W. D. Gradison (public interest). Howard L. Bevis1 (public interest). W. B. Furgerson (at large).
W. Megrue Brock 2 (at large).
Allen C. Knowles (class A).
A. E. Albright (class A).
Charles J. Haase (class B).
John C. Minderman (class B).
R. A. Stevens (class C).
H. F. Cellarius (class C).
officers
W. D. Shultz, President.
W. E. Julius, Vice President-Treasurer. J. W. Whittaker, Vice President.
E. T. Berry, Secretary.
Indianapolis directors
Carleton B. McCulloch (public interest).
S. Rudolph Light (public interest). Herman B. Wells1 (public interest). Charles T. Fisher, Jr. (public interest). Fermor S. Cannon 2 (at large).
Arthur H. Deitsch (at large).
Joseph G. Standart (class A).
W. B. Burdick (class A).
Grant H. Longenecker (class B). Donald L. Adair (class B).
Amos N. Adams (class C).
D. L. Cooley (class C).
officers
Fred T. Greene, President-Secretary. Fermor S. Cannon, Vice President.
G. E. Ohmart, Vice resident-Treasurer. Sylvia F. Brown, Assistant Secretary. Caroline F. White, Assistant Treasurer.
Chicago directors
Henry G. Zander, Jr.2 (public interest). George F. Rowe (public interest). Ralph M. Monk (public interest).
Charles E. Broughton1 (public interest).
Edward J. Czekala (at large). Arthur G. Erdmann (at large). Robert M. Brown (class A). A. H. Koepke (class A).
Rilen McConachie (class B). Allen R. Calhoun (class B). Earl S. Larson (class C).
Robert L. Hirschinger (class C). officers
A. R. Gardner, President.
John P. Domeier, Vice President and Treasure!.
Constance M. Wright, Secretary. Lauretta Quam, Assistant Treasurer.
Des Moines directors Robert E. Lee Hill1 (public interest). John D. Adams (public interest). J. B. Bridston (at large). J. W. Davis (at large). Sylvester A. Koster (class A). C. B. Fletcher (class A).
E. Raymond Hughes 2 (class B).
W. L. Sloan (class B>.
W. W. Pinson (class C). Edward A. Murphy (class C).
officers
R. J. Richardson, President, and Secretary.
W. H. Lohman, Vice President, and Treasurer.
A. E. Mueller, Assistant Treasurer.
J. M. Martin, Assistant Secretary.
1 Chairman.
2 Vice chairman.
139
HOUSING AND HOME FINANCE AGENCY
Consolidated statement of condition as of Dec. 31, 1948—Continued
Dec. 31, 1948 Increase or (decrease) since—
Dec. 31, 1947 June 30, 1948
liabilities and capital—continued Liabilities—Continued Consolidated obligations:1 1.45 percent series C—1948 notes due 7-22-48.._ 154 percent series A—1948 notes due 9-15-48. 1J4 percent series A—1948 bonds due 4-15-48 _ 1% percent series B—1948 notes due 2-16-48. 1% percent series A—1949 notes due 1-20-49. _. 196 percent series B—1949 notes due 4-15-49... 1.65 percent series C—1949 notes due 7-22-49... 1% percent series D—1949 notes due 9-15-49.._ Total consolidated obligations Less: Series A—1949 notes purchased., and held Net consolidated obligations outstanding. __ Total liabilities Capital: Capital stock outstanding (par): Members (fully paid) Members (partially paid) Total member subscriptions Less: Unpaid subscriptions Total paid in by members U. S. Government subscriptions (fully paid).. Total paid in on capital stock Surplus—Earned: Legal reserve Reserve for contingencies Total surplus reserves Undivided profits Total earned surplus Total capital Total liabilities and capital.. $97,000,000. 00 84,500,000.00 115,000,000.00 120,000, 000.00 $(85,000,000.00) (140,000,000.00) (36, 700,000.00) 97,000,000. 00 84,500,000. 00 115,000,000. 00 120,000,000.00 $(40,000,000.00) (85,000, 000.00) 115,000,000.00 120,000,000.00
416,500,000. 00 (1,870, 000.00) 154, 800,000.00 (1,870,000. 00) 110,000,000.00 (1,870,000.00)
414,630, 000.00 152, 930,000. 00 108,130.000.00
554,139,325.37 191,323,217. 72 145, 508,968.49
121, 224,000.00 25,300.00 18,151, 700. 00 14, 200.00 8,061,000.00 13,300.00
121,249,300.00 11,825.00 18,165, 900.00. (6,000. 00) 8,074,300.00 (10, 225.00)
121,237,475.00 119, 791, 200.00 18,159, 900. 00 (2,881,000.00) 8,064,075.00
241,028,675. 00 15, 278, 900.00 8,064,075.00
12, 232, 449.37 4, 283,027. 01 925,352. 79 (8. 585. 32) 459,,847.38 1 (5,034.11)
16,515,476.38 9,001, 281. 70 916,767.47 476,531.94 454,813.27 (92,535.96)
25,516, 758. 08 266, 545,433. 08 1,393,299. 41 16, 672,199. 41 362,277.31 8,426,352.31
820,684, 758. 45 207,995,417.13 153,935,320.80
> Consolidated Federal Home Loan Bank obligations issued by the Home Loan Bank Board and now outstanding are the joint and several obligations of all Federal Home Loan Banks.
136
HOME LOAN BANK BOARD
Exhibit 4
FEDERAL HOME LOAN BANKS
Consolidated comparative statement of operations for the calendar years 191)8 and 191)1
1948 1947
Earned operating income: Interest on advances _ _ $8,884,812. 97 3, 796, 212.15 3,017.60 $5, 794,042. 84 2, 876,335. 46 3,108. 96
Interest on securities . _ _
Miscellaneous operating income.. _ _
Total earned operating income . .
12,684,042. 72 8, 673, 487. 26
Operating expenses: Compensation, travel, and other expenses (detail below). _
1, 213,445. 79 5,412, 449. 92 329,325. 54 54,348. 70 722, 284. 94 7,469. 09 365,000. 00 1,028,128. 22 2, 256,877.64 141,458. 29 32, 882. 72 489, 096. 87 152.85 503,000. 00
Interest on consolidated obligations .
Consolidated obligations—Concessions. .
Office of fiscal agent .
Interest on members’ deposits .
Interest on deposits—U. S. Treasurer
Assessment for expenses of HLBB
Total operating expenses _ .
8,104,323. 98 4,451, 596. 59
Net operating income ...
4, 579, 718. 74 4, 221,890. 67
Nonoperating income: Profit—Sales of securities
99,377. 28 362,275. 27 11, 000. 00 2,811.37
HLB Board assessment refund . .
Miscellaneous nonoperating _ _ 593.33
Total nonoperating income .....
99, 970. 61 376,086. 64
Nonoperating charges: Loss—Sales of securities ....
14,369.16 10,521.16 28,035.11 16, 871.04 12,061.77
Furniture and equipment purchased . .
GAO audit expense (prior years)
Total nonoperating charges
52, 925.43 28,932.81
Net income
4, 626, 763. 92 4, 569, 044. 50
DETAIL OF COMPENSATION, TRAVEL, AND OTHER EXPENSES
Compensation:
Directors’ fees____________________________________________________
Officers’ salaries_____________________________________________HI I
Counsel’s compensation___________________________________________
Other salaries__________________________________________1________II
Total compensation______________________________________________
Travel expense:
Directors__________________________________________________________
Officers_______________________________________________IZI1IIIIIIII
Counsel and others_______________________________________________
Maintenance and operation costs of automobile______________________
Total travel expense____________________________________________
Other expenses:
Retirement fund contributions______________________________________
Telephone and telegraph____________________________________________
Postage and expressage____________________________________________
Stationery, printing, and office supplies_________________________
Rent of banking quarters (net)____________________________________
Maintenance of quarters and equipment_____________________________
Services of HLBB’s examining division______________;_______.______
Safekeeping and protection services_______________________________
Insurance and surety bond premiums_________________________________
Reports and other publications____________________________________
Stockholders’ annual meeting expense______________________________
Dues and subscriptions___________________________________________II
Public relations expense______________________________________I___
Miscellaneous operating expenses___________________________________
Total other expenses_________________________
Total compensation, travel, and other expenses (carried above)__
$46,490. 22
387,946.38
76, 519.63
285,942.36
$41,007. 50
346,670. 00
36,400. 00
264, 436. 27
796,898. 59
688, 513. 77
47,054.14
28,517. 91
10,426. 65
4,032. 71
41,914.01
23, 724. 38
7, 879. 99
3, 665.32
90,031.41
77,183. 70
51,639. 76 41,885. 77
27, 519. 63 21. 886. 69
19, 716.18 18, 768. 49
29, 070. 78 19.809. 51
85, 440.89 79, 550. 73
20,427. 77 13,401.01
5,880.11 5, 822. 95
2, 571. 46 2, 662. 96
15, 628. 67 14,411.04
7,885. 33 7, 019. 23
14,463.11 13, 008.16
14,579.84 9,818. 02
12,173. 44 11,092. 27
19,518. 82 3, 293. 92
326, 515. 79 262, 430. 75
1, 213,445. 79 1, 028,128. 22
137
HOUSING AND HOME FINANCE AGENCY
Schedule of directors and officers, Dec. 31, 191/8—Continued
Little Rock officers
DIRECTORS
Gordon H. Campbell (public interest).
B. H. Wooten1 (public interest).
T. J. Butler (public interest).
O. W. Boswell (at large).
W. P. Gulley2 (at large).
J. J. Miranne (class A).
Irvin H. Schonberg (class A).
R. H. McCune (class B).
A. J. Bush (class B).
Robert T. Love (class C).
Louis D. Ross (class C).
OFFICERS
H. D. Wallace, President-Secretary.
J. C. Conway, Vice President.
W. F. Tarvin, Treasurer.
Topeka
DIRECTORS
Paul F. Good (public interest).
William M. Jardine1 (public interest).
A. O. Johnson (public interest).
Harrington Wimberly (public interest).
Henry A. Bubb 2 (at large).
S. W. Humphreys (class A).
D. A. Willbern (class A).
Arthur W. Hiner, Jr. (class B).
Leo Smith (class B).
A. G. Hartronft (class C).
Cecil Calvert (class C).
C. A. Sterling, President and Secretary. R. H. Burton, Vice President and Treasurer.
San Francisco
DIRECTORS
C. W. Leaphart (public interest).
Ben A. Perham1 (public interest).
William A. Davis2 (public interest).
L. H. Hoffman (public interest).
Guy E. Jaques (at large).
R. Floyd Hewitt (at large).
Roy E. Hegg (class A).
J. H. Andrews (class A).
D. H. Driggs (class B).
C. N. Bloomfield (class B).
M. L. Carrier (class C).
P. C. Bulen (class C).
OFFICERS
Irving Bogardus, Acting President.
Guy E. Jaques, Vice President.
L. F. Nolan, Assistant Treasurer.
•Helen C. Eck, Assistant Treasurer.
Kathleen McCliment, Assistant Secretary.
E. M. Jenness, Assistant Secretary.
E. E. Pearson, Assistant Secretary.
Exhibit 6
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION
Progress of 19 insured associations following rehabilitation by Federal Savings and Loan Insurance Corporation
Item Date immediately prior to rehabilitation Dec. 31, 1948 Increase or decrease Percentage change
Assets: 154.19
Total assets _ $52, 259,000 32, 750,000 $132,835,600 $80,576,600
Mortgage loans _ __ . 110,675,900 77,925,900 237.94
Owned real estate 11,371,000 1,990,000 89,400 18, 032, 500 -11,281,600 -99.21
Cash and U. S. Government securities 16,042, 500 806.16
Liabilities: 164.19
Total savings _ _ - 43,810,000 5, 212,000 -3,633,000 Percent 115, 743,800 71,933, 800
Borrowed money . - - 6,339,400 1,127,400 21.63
Gp.np.r3] reserves and undivided profits 6,670, 700 Percent 10,303, 700
Ratios to total assets:
Owned real estate 21.76 0. 07
Cash and TT ft Government securities 3.81 13.58
-6.95 5.02
2 Vice chairman.
1 Chairman.
140
HOME LOAN BANK BOARD
141
Exhibit 7
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION
Statements of condition and operation for Federal institutions placed in receiver ship
CONDENSED COMPARATIVE STATEMENTS OF CONDITION
In process of liquidation Receiverships terminated
Aetna F. S. & L. A. Topeka, First F. S. & L. A. of Okla- Security F. S. & L. A. of JL s-t a ' A‘ 2
Kans. homa, Oklahoma City, Okla. Guymon, Guymon, Okla. en^Mo ’ 1 depend’
Date of re- . , n „. Date of re- * „ . Tl „„ Date of re- . o Date of re- . „
ceivership, iS01Jl|c‘31’ ceivership, As of Dec. 31, ceivership, As°fi£oC’31’ ceivership, A' °U?eC'31
Aug. 27, 1941 ly4S Aug. 30, 1941 ly4S Feb. 12,1940 1948 June 26,1940 1948
ASSETS
Mortgage loans--------------------- $3,369,490.13 _____ $838,573.90 _________ $96,496.34 __________ $892,380.31 _____
Share loans---------------------- 14,110.99 ___________ 4,056.87 ______________________________ 12,427.73
Real estate sold on contract_____ 798,133.72 32,973.99 1,147.14 64,909.46
Real estate owned—includes office building_ 1,334,352.47 _ 374,286.24 $5.00 118,457.27 . . 213,607.94
Cash and investments_______________________ 309,115.93 $73,198.57 99,664.33 30,129.55 8,697.00 ____ 52,429.44 _ .
Furniture, fixtures and equipment__________ 10,597.23 ____ 2,198.55 _________ 455.00 ____ 2,251.99
Other assets----------------------- 8,012.03 2,381.35 28.00 7,542.89 I____7...
Total------------------------ 5,843,812.50 73,198.57 1,354,135.23 30,134.55 225,280.75 ________ 1,245,549.76 ________
LIABILITIES AND CAPITAL
Secured claims of creditors---------------- 527,459. 59 __ 336,380. 44 ______ 14, 236.01 __________ 274, 730. 50
Unsecured claims of creditors______________ 13,740. 80 ___ 9, 278. 50 1,720.05 364. 48 _____ 2, 276. 69
Loans in process--------------------------- 101,886.79 _ 706.09 ___________________________________ 2,015.00 ________"
Advance pavments by borrowers______ 34,593.25 __________ 2,017.84 _____________________
Other liabilities__________________________ 48,880.42 32.47 15,425.91 478.42 1,684.20 ____________________
Reserve for uncollected interest_,_ 10,622.67 ____________ 873.18 ___________ 1,880.39 ____________ 7,244.71
Allowance for losses--------------- 522,286.28 ___________ 66,858.58 ________ 48,916.59 _______ 101,472.59
Surplus or deficit_________________________ 1 387,830.69 1 180,627.29 1 141,035.30 ‘134,904.40 ‘ 7,741.23 _ ‘ 19,559.68
Shares purchased by the F. S. & L. I. C_____ 245,844.99 __________ 120,000.79 _____________ . _______
Other share account claims_______ 4,972,173.39 7,948.40 1,063,629.99 42,839.69 165,940.31 ________ 877.369.95 ___
Total------------------------ 5,843,812.50 73,198.57 1,354,135.23 30,134.55 225,280.75 ________ 1,245,549.76 ________
1 Indicates loss.
HOUSING AND HOME FINANCE AGENCY
Statements of condition and operation for Federal institutions placed in receivership—Continued
CONDENSED STATEMENT OF OPERATION
Cumulative Cumulative Cumulative Cumulative
Year ended Aug. 27, 1941 Year ended Aug. 30, 1941 Year ended Feb. 12, 1940 Year ended June 26, 1940
Dec. 31, 1948 to Dec. 31, Dec. 31,1948 to Dec. 31, Dec. 31, 1948 to Dec. 31, Dec. 31, 1948 to Dee. 31,
1948 1948 1948 1948
Gross operating income______________________ $776,477.48 _________ $181,449.53 _________ $32,063.04 __________ $176,721.54
Less: Gross operating expense____ $769.95 440,835.08 $1,222.99 105,921.86 $80.16 27,799.34 $75.35 80,835.56
Net income or expense________ > 769.95 335,642. 40 * 1,222,99 75, 527. 67 > 80.16 4,263. 70 1 75. 35 95,885. 98
Gross capital gains______________ 37.46 72,079.77 ________ 39,889.30 50.00 6,409.40 57.77 25,294.42
Less: Gross capital losses_...... 2,326.72 722,805.05 ________ 176,144.65 __________ 50,046.02 ___________ 137,800.72
Net gain or loss_____________ > 2,289. 26 > 650,725. 28 ______ > 136, 255. 35 50. 00 > 43,636. 62 57. 77 • 112, 506. 30
Net profit or loss—All operations___ ‘ 3,059.21 >315,082.88 >1,222.99 > 60,727.68 >30.16 > 39,372.92 >17.58 > 16,620.32
Percent of liquidating dividends declared___ 95.0 ________________ 85.0 ________________ 101.1 _______________ 107.7
■Indicates loss.
142
HOME LOAN BANK BOARD
Exhibit 8
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION Statement of condition
Dec. 31, 1948 Dec. 31, 1947
ASSETS Cash . ... .. . . $792, 925.15 $1,761, 910. 40
Accounts receivable: Insurance premiums—payments due Insurance premiums—payments deferred j Admission fees receivable ... .
96,808. 25 2. 647, 449. 48 3.20 886. 46 69. 3»9.62 2, 297,910. 41
Due from receiver for institutions in liquidation Due from Governmental agencies Investments: U. S. Government securities (par value) Unamortized premium on investments Accrued interest on investments 1, 843.03 3. 741. 70
2. 745, 147.39 2,372. 884. 76
198, 962,000. 00 17, 503. 91 184,462,000.00 18, 439. 67
198, 979, 503. 91 184. 480, 439. 67
171. 576.69 170. 587. 68
Subrogated accounts in insured institutions in liquidation Less: Allowance for losses
365, 845.78 280, 025. 28 372, 077.06 287, 555.38
Insured accounts in institutions in liquidation—Pending and unclaimed ... _.
85, 820. 50 84, 521. 68
10. 146.38 718.61 10,895.12 810.63
Less: Allowance for losses
Furniture, fixtures, and equipment Less: Reserve for depreciation
9, 427.77 10,084.49
52, 629. 74 52, 629. 74 35, 651. 54 35,651. 54
Deferred charges: Home Loan Bank Board
44, 621. 51 927.28
Fidelity bond and other insurance premiums Unallocated preliminary expense on problem cases Total assets . 126. 06
45, 548.79 126.06
202, 829, 950. 20 188, 880, 554.74
LIABILITIES AND CAPITAL Liabilities: Accounts payable. ... _ ...
69. 51 21. 540. 23 13,304. 12 10,146.38 2, 655. 97 8, 947. 29 79, 547. 91 14,160.33 10, 895.12 26.52
Accrued liabilities
Deductions from employees’ salaries Pending and unclaimed accounts in insured institutions in liquidation
Custodial funds—receiverships Deferred credits: Unearned insurance premiums Prepaid insurance premiums _. _ ....
47, 716. 21 113, 577.17
4, 948, 599.94 26.01 4, 268,081.37 72.98
Capital: Capital stock. . ... . .
4, 948, 625.95 4. 26s, 154.35
100,000,000.00 100,000,000.00
Reserve fund as provided by law Special reserve for contingencies
1 92,206, 266. 04 42,457,624. 50 37, 500,000.00 4, 541,198.72
Unallocated income 5,627,342.00
Total liabilities and capital .
97.833, 60b. 04 84, 498,823. 22
202,829,950. 20 188,880, 554. 74
1 Pursuant to Public Law 860,80th Cong., cumulative dividends as of June 30, 1948, were determined to be $25,181,749.98. Cumulative dividends thereafter are being computed by the Corporation at the rate o $250,000 monthly.
143
HOUSING AND HOME FINANCE AGENCY
Exhibit 9
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION
Income and expense statement
■ Jan. 1, 1948 through Dec. 31,1948 Jan. 1, 1947 through Dec. 31, 1947
Operating income and recoveries: Insurance premiums earned .. . - . - $9,456,079. 50 40, 295. 52 4, 388,169. 53 103. 74 $8, 099,643.22 14, 884.48 4,130, 005.16 .30 145,241.56
Admission fees earned
Interest earned on U. S. Government securities Miscellaneous _ _ _ _ -
Recoveries on contributions to insured institutions Total operating income and recoveries Operating expenses and losses: Administrative expenses ..
13, 884, 648. 29 12,389, 774.72
515, 806. 52 13,140. 64 16, 940. 80 6,343. 59 541, 924.04 14, 517.39 5,878.63
Liquidation and other expenses Depreciation of furniture, fixtures, and equipment
Total operating expenses and losses Net income from operations. Nonoperating income: Profit on sale of furniture, fixtures, and equipment Miscellaneous . _
552, 231. 55 562,320.06
13,332, 416. 74 11,827, 454.66
18. 51 474.50 12.25
Total nonoperating income _
18. 51 486.75
Nonoperating charges:
156. 26 •
Net income before adjustment of valuation reserves Adjustment of valuation reserves: Provision for losses on subrogated accounts in insured institutions in liquidation __ . .. . - ...
13,332, 278. 99 11,827, 941.41
7, 530.10 92. 02 -2, 289.69 39.45 54,148.10
Provision for losses on insured accounts in institutions in liquidation-pending and unclaimed Cancellation of approved contributions
Net adjustments of valuation reserves Net income for period _ __
7, 622.12 51,897.86
13, 339, 901.11 -5,116. 29 11,879, 839.27 -2,154.94
Adjustment of net income for prior years Net income... .. -
13,334, 784. 82 11,877,684.33
144
HOME LOAN BANK BOARD
Exhibit 10
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION
Frequency distribution of insured associations by asset size groups, Dec. 31,1946, 1947, and 1948
Asset size group Number of insured associations
1948 i 1947 1946
United States total Under $250,000 2,616 93 2.536 132 2,496 193
$250,000-$500,000 242 259 290
$500,000-$1,000,000 .. 408 419 435
$1,000,000-$2.500,000_ .. . 764 749 752
$2,500,000-$5,000,000. . . 588 526 465
$5,000,000-$10,000,000_. 312 281 230
$10,000,000-$25,000,000. 176 143 112
$25,000,000 and over . 33 27 19
1 Preliminary.
831481—49--- 11
145
HOUSING AND HOME FINANCE AGENCY
146
Exhibit 11
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION
Number and assets of all insured savings and loan associations, by type, Dec. 31, 1947 and 1948
All insured Federal Insured State
1948 1947 1948 1947 1948 1947
Nbe?' Assets NbeT Assets Nbe?’ Assets Nbe?' Assets Nbe?' Assets ^be”' Assets United States____ 2,616 $9,733,723,000 2,536 $8,547,297,000 1,485 $6,162,094,000 1,478 $5,459,640,000 1,131 $3,571,629,000 1,058 $3,087,657,000
District No. 1—Boston_______ 67 464,652.000 66 405,744,000 53 416,457,000 53 374,766,000 14 48,195,000 13 30,978,000
Connecticut________ 28 150,935,000 28 131,259,000 17 117,103,000 17 101,551,000 11 33,832,000 11 29,708,000
Maine______________ 5 6,298,000 5 5,511,000 5 6,298,000 5 5,511,000 ___________________________
Massachusetts________ 26 254,797.000 26 232,356,000 26 254,797,000 26 232,356,000 __________________________
New Hampshire______ 4 19,761.000 4 18,785,000 2 18,368,000 2 17,515,000 2 1,393,000 2 1,270,000
Rhode Island_______ 2 22,011.000 1 7,723,000 1 9,041,000 1 7,723,000 1 12,970,000 ___________
Vermont____________ 2 10,850,000 2 10,110,000 2 10,850,000 2 10.110,000 __________________________
District No. 2—New York_ 267 1,298,874,000 252 1,082,692,000 82 652,888,000 82 545,485,000 185 645,986,000 170 537,207,000
New Jersey__________ 135 396,521,000 132 356,556,000 17 42,108,000 16 37,633,000 118 354,413,000 116 318,923,000
New York____________ 132 902,353,000 120 726,136,000 65 610,780,000 66 507,852,000 67 291,573,000 54 218,284,000
District No. 3—Pittsburgh___ 250 628,728,000 247 565,757,000 135 413,924,000 136 378,391,000 115 214,804,000 111 187,366,000
Delaware___________ 1 1,250,000 1 949,000 1 1,250,000 1 949,000 __________________________—
Pennsylvania________ 224 582,015,000 220 523,803,000 113 373,935,000 113 341,996,000 111 208,080,000 107 181,807,000
West Virginia________ 25 45,463,000 26 41,005,000 21 38,739,000 22 35,446,000 4 6,724,000 4 5,559,000
District No. 4—Winston-Salem.. 320 1,147,838,000 302 1,003,109,000 232 903,583,000 226 792,638,000 88 244,255,000 76 210,471,000
Alabama______________ 26 49,377,000 26 41,451,000 18 40,820,000 18 34,215,000 8 8,557,000 8 7,236,000
District of Columbia_ 14 115,540,000 11 106,436,000 7 72,960,000 5 63,449,000 7 42,580,000 6 42,987,000
Florida______________ 50 267,048,000 49 229,858,000 49 264,319,000 48 227,178,000 1 2,729,000 1 2,680,000
Georgia______________ 53 170,582,000 51 147,448,000 47 145,557,000 46 126,077,000 6 25,025,000 5 21,371,000
Maryland_____________ 42 185,551,000 42 171,134.000 32 142,650,000 32 133,818,000 10 42,901,000 10 37,316,000
North Carolina_______ 65 161,909,000 56 135,941,000 27 88,922,000 27 78,865,000 38 72,987,000 29 57,076,000
South Carolina_______ 42 89,563,000 40 76,165,000 32 70,748,000 30 60,374,000 10 18,815,000 10 15,791,000
Virginia_____________ 28 108,268,000 27 94,676,000 20 77,607,000 20 68,662,000 8 30,661,000 7 26,014,000
District No. 5—Cincinnati_ 349 1,536,764,000 343 1,409,787,000 218 885,375,000 216 794,147,000 131 651,389,000 127 615,640,000
Kentucky_____________ 56 156,186,000 56 140,849,000 54 152,145,000 54 137,138,000 2 4,041,000 2 3,711,000
Ohio________________ 258 1,266,922,000 252 1,171,626,000 129 619,574,000 127 559,697,000 129 647,348,000 125 611,929,000
Tennessee__________ 35 113,656,000 35 97,312,000 35 113,656,000 35 97,312,000 __________________________
District No. 6—Indianapolis_ 183 619,072,000 183 557,915,000 102 431,438,000 101 387,601,000 81 187,634.000 82 170,314,000
Indiana_____________ 137 375,912,000 137 338,904,000 69 256,555,000 69 233,500,000 68 119,357,000 68 105,404,000
Michigan_____________ 46 243,160,000 46 219,011,000 33 174,883,000 32 154,101,000 13 68,277,000 14 64,910,000
HOME LOAN BANK BOARD
147
District No. 7— Chicago--- 326 1,121, 566,000 308 971, 575,000 140 592, 751, 000 139 529, 269,000 186 528,815,000 169 442. 306 000
Wriconrin------------ 209 243 100 512,128,000 99 459,461,000 134 385,585,000 119 319’, 677’, 000
Wisconsin..---------- 92 223,853,000 90 192,437,000 40 80,623,000 40 69,808,000 52 143,230,000 50 122 629 000
District No. 8—Des Moines- 160 544,730,000 156 487,645,000 106 410,573,000 106 373,382,000 54 134,157,000 50 114 263 000
Iowa------------------- 43 85,815,000 42 78,667,000 32 67,951,000 32 63,423,000 11 17,864,000 10 15 244 000
Minnesota-------------- 35 210,412,000 35 190,567,000 30 205,881,000 30 187,073,000 5 4,531,000 5 3’494 000
NnrihT^knG'------------ 6? 2J?’???’222 66 192>694’000 34 120,507,000 34 108,461,000 35 98,780,000 32 ’ 84^233’,000
T?aik°+a----------- ? 21,411,000 7 18,858,000 6 11,065,000 6 9,819,000 1 10,346,000 1 9,039 000
Vt------ o«2 cJ’22o’22° 6 6,859,000 4 5,169,000 4 4,606,000 2 2,636,000 2 2,253^000
District No. 9 Little Rock- 269 556,073,000 263 474,950,000 159 252,748,000 160 212,329,000 110 303,325,000 103 262 621 000
ttT--------------------- % ,£’B222 38 38,793,000 34 40,106; 000 34 33,08^000 4 VOL 000 4 ^O^OOO
Louisiana...----------- 71 188,470,000 69 164,116,000 13 29,741,000 13 24,150,000 58 158,729.000’ 56 139 966 000
xnJSS1ivr1P1?1--------- 24 29,019,000 23 22,928,000 20 25,885,000 20 21,076,000 4 3,134,000 3 1’852 000
ToJIcMeX1C°----------- 43 o?a’o64’000 13 16,827,000 7 13,320,000 7 10,462,000 6 7,644,000 6 6;365 000
....................... Hl ol?’oo!’™° 120 232,286,000 85 143,696,000 86 123,554,000 38 126,627.000 34 108,732,000 District No. 10 Topeka. 157 388,836,000 153 341,711,000 97 287,302,000 97 258,052,000 60 101,534,000 56 83,659,000
kS--------------------- -o aaa ro do’7??’000 23 72,418,000 23 63,406,000 13 26,926,000 12 19,386,000
ShrtV;------------------- ?2 222’222 58 102,514,000 28 72,461,000 28 65,824,000 31 41,472,000 30 36,690,000
------------------- d d?’222’222 19 22,080,000 15 19,447,000 15 18,001,000 4 4,933,000 4 4,079,000 r>ist?WNnnliai'"a"Y----- „43 l2l’U2’2°° 41 134,325,000 31 122,976,000 31 110 821,000 12 28,203,000 10 23.504,000
‘1 "as® 14i 8H?:S 1 7l ..JLT6:.37i.~.................................................
Montana-------------- 10 22,792,000 10 20,238,000 3 3,536,000 3 3,137,000 7 19,256 000 7 17 101 000
Nevada--------------- 1 4,063,000 1 3,379,000 1 L 063,000 1 3 379 000 . . 7 17,101,000
Oregon--------------- 21 59,169,000 21 53,463,000 21 59,169,000 21 53,463,000 ____
Utah.. -------------- 9 50,038,000 9 46,019,000 6 22,299,000 6 20,775,000 3 27,739,666 3 *25 244 666
Washington----------- 54 237,407,000 54 222,665,000 36 170,742,000 36 159 584 000 18 66 665 000 18 63 081 000
Wyoming------------ 9 13,690,000 9 11,936,000 9 13,690,000 9 11 936 000 . « Od,U81,uuu
Alaska.-------------- 1 1,302,000 1 1,336,000 1 1,302,000 1 1 336; 000 ’
Hawan---------------- 4 9,584,000 4 8,792,000 1 5,272,000 1 4,565,000 3 4,312,666 3 ' 4,227,666
Source: Monthly reports of insured associations.
HOUSING AND HOME FINANCE AGENCY
Exhibit 12
FEDERAL SAVINGS AND LOAN INSURANCE CORPORATION
Mortgage portfolio of all insured savings and loan associations, by type of loan, Dec. 31, 1947 and 1948
[In thousands of dollars]
Dec. 31, 1948 Dec. 31, 1947 Percent increase Average size
1948 1947
Amount of mortgage loans: FHA insured__________________
VA insured or guaranteed..
Conventional_____________
Total__________________
Percent to total mortgage loans:
FHA insured_______________
VA insured or guaranteed. _
Conventional______________
Total__________________
$445,115 $376, 872 18. 1 $4, 933 $4, 574
1, 886, 222 1, 648,091 14.4 5, 562 5,567
5, 451, 451 4, 567, 245 19.4 3,340 3,185
7, 782, 788 6, 592, 208 18.1 3, 775 3,638
5. 7 5. 7
24. 2 25. 0
70. 1 69. 3
100.0 100.0
Exhibit 13
HOME OWNERS’ LOAN CORPORATION
Historical facts
Date of origin and authority for creation: June 13, 1933, by Home Owners’ Loan Act. Capital stock authorized, issued, and outstanding December 31, 1948: $200,000,000 subscribed by the United States Treasury.
Bond authority: $4,750,000,000 fully guaranteed by the Government as to interest and principal.
Bonds issued: $3,489,589,700.
Bonds outstanding December 31, 1948 : $184,693,825.
Authorized lending period: Three years beginning June 13, 1933, ending June 12, 1936.
Number of applications received: 1,886,491. (This figure does not include applications presented but not accepted because ineligible.)
Number of loans closed: 1,017,821.
Dollar amount of loans closed: $3,093,451,321.
Average size of loans made: $3,039.
Number of cities and towns in which loans were made: Approximately 19,000.
Period for which loans were made: 15 years; subsequently extended where the facts justified, to 25 years.
Interest charged on loans: 5 percent; subsequently accepted 4% percent after October 16,1939, without rewriting of the mortgage contract.
Total disbursement to mortgagees in refinancing operations: $2,750,000,000.
To banks and trust companies: $935,000,000.
To savings and loan associations and similar institutions: $770,000,000.
To finance and mortgage companies: $195,000,000.
To insurance companies: $165,000,000.
To estates: $110,000,000.
To individuals: $575,000,000.
148
HOME LOAN BANK BOARD
Cumulative disbursements for taxes, insurance, reconditioning, and repairs: $711,000,000.
Personnel at peak: 20,811 as of November 1934.
Personnel on December 31, 1948: 473.
Number of offices at peak: 458, including State and regional offices.
Number of offices as of December 31, 1948 : 1.
Investments in savings and loan associations:
Shares purchased---------------------------------------$223, 856, 710
Repurchases____________________________________________ 217, 974, 060
On hand December 31, 1948----------------------------- 5, 882, 650
Percent of liquidation as of December 31, 1948: 89.4 percent.
Exhibit 14
HOME OWNERS’ LOAN CORPORATION
Balance sheet at Dec. 31, 1948
ASSETS
Mortgage loans, vendee accounts, and advances—at present face value________________________________________________$368, 908, 061. 42
Interest receivable_______________________________________ 1,184, 649. 59
Property:
Owned---------------------------------- $3, 687. 61
In process of acquiring title__________ 24, 333. 70
--------------— 1 28, 021. 31
370,120, 732. 32
Less: Reserve for losses________________________1_______ 2,629,943.96
367, 490, 788. 36 Investments—at cost:
Savings and loan associations :
Federal chartered______ $3, 667, 150. 00
State chartered________ 2, 215, 500. 00
--------------- 5, 882, 650. 00
Public debt obligations of the United
States (borrowers’ special deposits)—at
face value------------------------------- 12. 400, 000. 00
--------------- 18, 282, 650. 00
Bond retirement fund: Cash (including $2,-
557,675.00 deposited with U. S. Treasury for
retirement of matured bonds)______________________'_________ 2, 657, 379. 30
1 Property owned and property in process of acquiring title are stated at values represented by unpaid balances of loans and advances, unpaid interest to date of foreclosure sale or judgment, foreclosure costs, net charges prior to date of acquisition, and permanent additions, initial repairs and reconditioning subsequent to acquisition. Unpaid interest included in these values amounts to $1,224.95.
149
HOUSING AND HOME FINANCE AGENCY
Balance sheet at Dec. 31, 1948—Continued
assets—continued
Cash: Operating funds (includes $943,849.23 payable to bond retirement fund in January 1949; and $1,276,861.34 deposited by borrowers and employees— see contra) $5, Special funds held by U. S. Treasury for payment of interest coupons (see contra) Special funds—Federal tax withheld (see contra) Special funds—held by U. S. Treasury for refunding of 1% percent series M bonds called as of June 1, 1945 995, 624. 47 278, 649.10 40, 711. 80 136,150. 00 $6, 451,135. 37
Fixed assets: Furniture, fixtures, and equipment—at cost- Less: Reserve for depreciation 310, 044. 22 310, 044. 22
Other assets: Accounts receivable Less: Reserve for uncollectible accounts receivable 77,082. 44 70, 781. 46
Dividends receivable 6, 300. 98 67, 519. 00
73, 819. 98 29, 728.36
Deferred and unapplied charges
394, 985, 501. 37
LIABILITIES AND CAPITAL
Bonded indebtedness: (Guaranteed as to principal and interest by United States, except $103,400 of unpaid matured 4 percent bonds guaranteed as to interest only) : Bonds outstanding—not matured__________$182, 000, 000. 00
Bonds matured—on which interest has ceased_____________________ 2, 693, 825. 00
--------------- $184, 693, 825.00
150
HOME LOAN BANK BOARD
Balance sheet at Dec. 31, 1948—Continued liabilities and capital—continued
Accounts payable:
Interest due (see contra)------------- $278,649.10
Accrued payroll----------------------- 30, 450. 59
Insurance premiums____________________ 103, 240. 01
Special deposits:—
By borrowers______________________ 13, 664,121. 61
By employees (savings bonds)------ 4,135.15
Civil service retirement deductions- 8, 604. 58
Federal tax withheld (see contra) 40,711.80
Miscellaneous_________________________r 19, 306. 87
Accrued liabilities___________________________________________
Deferred and unapplied credits________________________________
Reserve for fidelity and casualties___________________________
Capital stock less deficit:
Capital stock: Authorized, issued, and
outstanding____________________________ 200, 000, 000. 00
Deficit:
Losses in excess of
net earnings______2 $1, 530, 047. 68
Reserves for future
losses ___________ 2, 877, 068. 96 4, 407,116. 64
$14, 149, 219. 71
46, 912. 72
255, 535. 58
247,125. 00
195, 592, 883. 36
394, 985, 501. 37
2 Reflects the Corporation’s actual losses sustained in the sale of its acquired properties, on mortgage loans and other losses, on fire and other hazards and on fidelity and casualties in excess of its cumulative net earnings.
Except for property transactions which are recorded on a cash basis, major items of income and expense are recorded on an accrual basis. Therefore, no asset has been recognized with respect to uncollectible rental or prepaid taxes nor liability for accrued taxes.
151
HOUSING AND HOME FINANCE AGENCY
Exhibit 15
HOME OWNERS’ LOAN CORPORATION
Statement of income and expense from the beginning of operations—-June 13, 1933 to December 31, 1948
Operating and other income:
Interest:
Mortgage loans and advances— $1, 043, 903, 366. 82
Vendee accounts and advances— 129, 491, 806. 46
Special investments.
1,173, 395,173. 28
1, 250,144. 88
Property income_____________________________________
Dividends received—F. S. & L. I. C------------------
Dividends on investments in savings and loan associations____________________________________________
Miscellaneous_______________________________________
$1,174, 645, 318.16
138, 645, 358. 38
28, 217, 076. 07
44, 660, 863. 36
9, 425, 620. 04
Operating and other expenses: Interest on bonded indebtedness $653, 706, 094. 94 Less: Premium on bonds sold 1, 618, 866. 43 ■■ $652, 087, 228. 51 Discount on refunded bonds 7,147, 710. 28 1, 395, 594, 236. 01
659, 234, 938. 79 Administrative expenses 268, 508, 909. 38 General expenses 18, 647, 210. 52 Property expense 112, 826, 481. 56 1, 059, 217, 540. 25
Net income before provision for losses which may be sustained in the liquidation of assets Provision for losses: On mortgage loans, interest, and property $349, 737,153. 25 For fidelity and casualties 1, 355, 270. 86 For fire and other hazards 881,252.50 For uncollectible accounts receive- able 63, 421. 26 336, 376, 695. 76 352, 037, 097. 87
Loss for period June 13, 1933 to Dec. 31, 1948 Deduct: Surplus adjustments—reserve against fire and other hazards, reserve for losses on mortgage loans, interest and property and unlocated payments (net) 15, 660, 402.11 11, 253,285.47
Deficit at Dec. 31, 1948 4,407,116. 64
152
HOME LOAN BANK BOARD
Exhibit 16
HOME OWNERS’ LOAN CORPORATION
Statement of income and expense for the calendar year 1948
Operating and other income:
Interest:
Mortgage loans and advances_______________________$12, 200, 039. 36
Vendee accounts and advances______________________ 6, 893, 087. 50
19, 093,126. 86
Special investments____________________.------------- 141, 763.10
Total___________________________________________________ 19, 234, 889. 96
Property income_________________________________________________ 2, 663. 71
Dividends received from savings and loans associations--- 178, 235. 80
Dividends received from F. S. & L. I. C__________________ 25,181, 749. 98
Miscellaneous_________________________________________________ 784, 275. 89
Total income_______________________________________ 45, 381, 815. 34
Operating and other expenses :
Interest on bonded indebtedness-------------------------- 3, 337, 890.13
Administrative and general expenses:
Administrative expenses______________________________ 2, 395, 209. 25
General expenses_____________________________________ 25, 524. 70
Property expense_________________________________________ 1 6, 654. 20
Total expense_________________________________________ 5, 751, 969. 88
Net income before provision for losses which may be sustained in the liquidation of assets_________________________________________ 39, 629. 845. 46
Provision for losses:
On mortgage loans, interest and property___________________ —
For fidelity and casualties________________________________ 17,123. 00
For fire and other hazards_________________________________ —
For uncollectible accounts receivable______________________ 7, 373. 57
24, 496. 57
Net income for calendar year after provision for losses— 39, 605, 348. 89 Deficit at Dec. 31, 1947____________________$54,012,370.57
Deduct: Surplus adjustments—net_____________ 9, 999, 905. 04
---------------- 44, 012, 465. 53
Deficit at Dec. 31, 1948_________________________________ 4, 407,116. 64
1 Net credit.
153
PART III
OF THE
Second Annual Report
HOUSING AND HOME FINANCE AGENCY
Covering the Activities of the
FEDERAL HOUSING ADMINISTRATION
LETTER OF TRANSMITTAL
To the Congress oj the United States:
In accordance with Section 5 of the National Housing Act, as amended, I transmit herewith the Fifteenth Annual Report of the Federal Housing Administration. This report covers the calendar year 1948.
Respectfully,
Franklin D. Richards, Commissioner.
as he
ar
Functions of the Federal Housing Administration
Under authority provided in Titles I, II, VI, and VII of the National Housing Act of June 27, 1934, as amended, the Federal Housing Administration operates an insurance program designed to encourage improvement in housing standards and conditions and to guide the creation of a sound mortgage market. The FHA itself makes no loans and does no building.
Title I, Housing Renovation and Modernization:
Title I of the act authorizes the FHA to insure qualified lending institutions against loss on loans made to finance the alteration, repair, improvement, or conversion of existing structures, and the building of small new structures.
Title II, Mortgage Insurance:
Section 203 of Title II authorizes the insurance of mortgages in amounts up to $16,000 on one- to four-family homes.
Section 207 authorizes the insurance of loans on multi family rental housing projects and projects built by nonprofit cooperatives to provide housing for their members.
Title VI, War Housing Insurance:
Section 608 (added to the act in 1941) authorizes the insurance of mortgages on one- to four-family dwellings. The authority to issue commitments on new construction under this section expired April 30,1948.
Section 608 (added in 1942) authorizes the insurance of mortgages in amounts up to $5,000,000 on rental housing projects.
Section 609 (added in 1947) authorizes the insurance of short-term loans to finance the manufacture of housing, and the insurance of lending institutions against loss on notes given in part payment by purchasers of manufactured housing financed with insured loans.
Section 610 (added in 1947) authorizes the insurance under Sections 603 and 608 of mortgages on specified types of permanent housing-sold by the Government.
Section 611 (added in 1948) in order to encourage the application of cost-reduction techniques through large-scale modernized construction operations authorizes the insurance of mortgages, including construction advances, on projects of 25 or more new single-family dwellings.
Title VII, Insurance for Investments in Rental Housing for Families of Moderate Income:
Title VII (added in 1948) authorizes the insurance of a minimum amortization charge and an annual return on outstanding investments in rental projects for moderate-income families, where no mortgage financing is involved.
157
Section I
GENERAL REVIEW
Significant Developments in 1948
Two notable events of 1948 were the passage of the Housing Act of 1948, which placed increased responsibilities on the Federal Housing Administration, and the writing of a record volume of FHA insurance during the year.
Provisions of the 19^8 Housing Act and Other Legislation
Public Law 468, Eightieth Congress, approved March 31, 1948, extended from March 31 to April 30 the expiration date of the authority to issue commitments for the insurance of new-construction mortgages under Sections 603 and 608 of the National Housing Act, and substituted value for necessary current cost as the basis for considering applications under Section 603 received during the period of the extension. This law also increased the insurance authorization under Title VI from $4,950,000,000 to $5,350,000,000.
The chief purposes of the Housing Act of 1948 (Public Law 901, 80th Congress, approved August 10) were to stimulate the production through private enterprise of housing in the lower price and rental ranges where the greatest demand exists, and to aid the transition from emergency to normal peacetime conditions in home financing. The provisions of the act that directly affected FHA operations took the form of amendments to the National Housing Act, including the following:
Title I was amended to provide insurance coverage for loans in amounts up to $10,000, with maturities up to 7 years, to finance the alteration, repair, improvement, or conversion of existing structures used or to be used as apartment houses or dwellings for two or more families. The maximum amount of a Title I “Class 3” loan to finance the construction of a single-family dwelling was increased from $3,000 to $4,500. The limitation on aggregate outstanding insurance liability under Title I was increased from $165,000,000 to $200,000,000.
Section 203 of Title II was amended by increasing the maximum amount of a 90 percent mortgage from $5,400 to $6,300, and the maximum amount of a 90-80 percent mortgage from $8,600 to $9,500 (90 percent of the first $7,000 of appraised value and 80 percent of the remainder up to $11,000). The 25-year maximum maturity for-
159
HOUSING AND HOME FINANCE AGENCY
inerly applicable only to mortgages of $5,400 or less on singlefamily owner-occupied homes now applies to mortgages up to $16,000 on property approved for insurance before construction is begun.
Section 203 was further amended by the addition of a new subsection 203(b)(2)(D) to authorize the insurance of mortgages on single-family dwellings up to 95 percent of appraised value when the loan is made to an owner-occupant, or 85 percent when made to an operative builder. The maximum amount of such a loan is $6,000, and the maximum maturity is 30 years.
Section 204 was amended to permit the inclusion of a limited amount of foreclosure costs in the debentures issued with respect to mortgages insured under Section 203(b)(2)(B) when the amount of mortgage principal amortized before foreclosure is less than 10 percent of the appraised value of the property. Inclusion of these costs was formerly limited to mortgages accepted for insurance before July 1, 1944. Similar costs may be included in debentures issued with respect to mortgages insured under the new Section 203 (b)(2)(D), and mortgages on cooperative projects and projects for low-income families insured under Section 207. Section 204 was further amended to provide that when the amount realized from a property insured under Section 207 and conveyed to the FHA exceeds the claims of the FHA and the mortgagee against the property the excess is to be credited to the Housing Insurance Fund instead of being refunded to the mortgagor.
Section 207 was amended to provide for:
(1) Insurance of mortgages in amounts up to $50,000,000 when the mortgagor is a governmental agency or a limited-dividend, redevelopment, or housing corporation restricted by Federal or State laws or regulations of State banking or insurance departments. Other mortgages insured under Section 207 may not exceed $5,000,000.
(2) Insurance of mortgages up to 90 percent of estimated value on special projects for low-income families and on cooperative projects, and mortgages up to 95 percent of replacement costs as of December 31, 1947, on cooperative projects for veterans. Other mortgages insured under Section 207 may not exceed 80 percent of estimated value, and may not exceed the estimated cost of the completed physical improvements.
(3) Limitation of maximum mortage amount attributable to dwelling use to $8,100 per family dwelling unit; or, for a cooperative project, to $8,100 per dwelling unit or $1,800 per room if the FHA finds that the per-room basis more adequately meets the needs of the cooperative.
160
FEDERAL HOUSING ADMINISTRATION
(4) Amortization within a maximum term of 40 years for mortgages on cooperative projects or projects for low-income families. Other mortgages insured under Section 207 are to provide for amortization “within such term as the Commissioner shall prescribe.”
The insurance authorization under Title VI was increased from $5,350,000,000 to $5,750,000,000, with an additional $400,000,000 to be made available at the discretion of the President.
Under Section 608 of Title VI, the authority to issue commitments of mortgage insurance on new construction, which had expired April 30, was extended to March 31, 1949, with the stipulation that in selecting tenants no discrimination should be made against families with children. The limitation on maximum mortgage amount was amended to provide for (1) not over $5,000,000, (2) not over 90 percent of necessary current cost, (3) not to exceed the cost of the completed physical improvements, (4) not over 90 percent of the FHA estimate of replacement costs as of December 31, 1947, and (5) not over $8,100 per family dwelling unit. The former limitations were $5,000,000, 90 percent of necessary current cost, cost of the completed physical improvements, and $1,500 to $1,800 per room.
Section 609 was amended to provide for insurance of lenders against loss on notes given by purchasers in part payment for houses lhe manufacture of which was financed under this section, and for a premium charge of not over 1 percent for such insurance.
Section 610 was amended to include mortgages on additional types of permanent housing sold by the Government.
Section 611, providing for the insurance of mortgages, including construction advances, on projects of 25 or more single-family dwellings, was added to Title VI “in order to assist and encourage the application of cost-reduction techniques through large-scale modernized site construction of housing and the erection of houses produced by modern industrial processes.” The amount of the blanket mortgage may not exceed 80 percent of the estimated value of the completed project, and further may not exceed a sum computed on the basis of $6,000 or 80 percent of valuation per dwelling unit, whichever is less. The maximum interest rate permitted is 4 percent per annum, or 4% percent if the Commissioner determines that the mortgage market demands it. The mortgage may provide for release of individual dwellings from the mortgage lien. Occupancy preference is to be given to World War II veterans and their families and to hardship cases.
Title VII, Insurance for Investments in Rental Housing for Families of Moderate Income, was added to the National Housing Act to encourage investments in rental housing for moderate-income families,
831481—49----12
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HOUSING AND HOME FINANCE AGENCY
where no mortgage financing is involved. It authorizes the insurance of a minimum annual amortization charge of 2 percent of the established investment and an annual return of 2% percent on the outstanding investment. The aggregate insurance liability outstanding at any one time may not exceed $1,000,000,000. A revolving fund of $10,000,000 is established for carrying out the provisions of this title.
Industry Meetings
In order that all elements of the building industry might have a clear understanding of the nature of the changes in the FHA program brought about by the provisions of the Housing Act of 1948, and might appreciate the underlying purposes of the legislation, the Federal Housing Administration and the National Association of Home Builders jointly sponsored a series of meetings held in 120 cities throughout the country in September, soon after the new housing act became effective. To these meetings were invited builders, dealers, representatives of lending institutions and labor organizations, and other industry groups. Approximately 14,500 persons attended.
In discussing the new legislation and the consequent amendments to FHA administrative rules and regulations, the meetings stressed possibilities of reducing housing costs at all price and rental levels without sacrifice of sound standards or fair return, the need for an expanded production of good housing at lower prices, and the importance of cooperation between industry and government if the desired results were to be attained.
Plans for the 19 f 9 Economy Housing Program
The industry meetings held in September 1948 highlighted several aspects of the housing market: (1) The demand for moderate- and high-priced housing was rapidly being satisfied; (2) with the passing of the critical phase of the postwar housing emergency consumers were better able to resist prices they could not afford to pay and were becoming more selective from the standpoint of quality, so that a lessening of demand for new housing seemed inevitable unless prices and rents at all levels could be reduced; (3) the demand at the lower price and rent levels was not only the largest but the most constant; (4) to bring down costs without sacrifice of quality it would be necessary to effect economies at every stage of planning, building, and marketing.
Confident that a series of economies could be effected which in the aggregate would represent substantial reductions, the FHA in the remaining months of the year made plans to take part in an intensive
162
FEDERAL HOUSING ADMINISTRATION
campaign beginning early in 1949, to promote the realization of such economies.
The economy housing program represents a joint effort by all constituent parts of the home building industry and all agencies of government, Federal and local, concerned with housing. It encompasses both conventional and insured financing. It emphasizes sound construction, good design, and livability, combined with increased efficiency in production, and in particular seeks to provide a greater volume of good housing at the lower price levels where demand is most insistent. By the end of the year plans were nearly completed for a series of meetings in February at which the program would be inaugurated.
Minority Group Housing
A conference held in Washington September 21-24 marked the completion of the first year of service of the five racial relations advisers appointed by the FHA in August 1947. The conference had as its chief purposes the presentation of reports by the racial relations advisers on their activities during the year, an evaluation of their accomplishments, and discussions of common problems and possibilities of increased usefulness in the future.
The efforts of these men have been of great value in stimulating the interest of builders, financial institutions, and others in finding ways to meet the urgent housing needs of minorities. FHA field directors have been instructed to cooperate to the fullest extent in such efforts. Particular encouragement is being given to steps taken by minority groups themselves, such as the formation of savings and loan associations, the organization of housing cooperatives, and work done by established builders and financial institutions among members of these groups. It is realized, however, that the work done by these groups can only supplement the major task that needs to be done.
Insured Financing for Prefabricators
Three loans to manufacturers of prefabricated houses were insured in 1948 under the provisions of Section 609 of the National Housing-Act.
The first loan, which was insured in February under the original provisions of the section, was made by the Trust Company of New Jersey to the Housemart, Inc., of Cleveland, Ohio, to finance the manufacture in the Housemart’s Cleveland plant of 194 houses to be sold to a Cleveland building company.
The second and third loans, which were insured under the amended provisions, were made by the County Trust Company of Tarrytown, N. Y.: one to Reliance Homes, Inc., Philadelphia, for the production of
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HOUSING AND HOME FINANCE AGENCY
230 houses to be purchased by two Philadelphia builders; the other to the New Jersey Permacrete Corporation, Philadelphia, for the production of 100 houses to be purchased by the Burlington Housing Corporation for erection at Burlington, N. J.
Interest of lenders in the Section 609 insurance was accelerated by the provisions in the Housing Act of 1948 affecting purchases of manufactured houses financed with insured loans. By the end of the year 14 applications for insurance under the new provisions, involving a total of $6,826,964, were under consideration by the FHA. The number of houses covered by these applications was 3,887.
Yield Insurance
FHA rules and regulations for the rental housing yield insurance program provided in the Housing Act of 1948 were issued on November 12.
Yield insurance is available to individuals, unincorporated groups, corporations, trusts, and other legal entities approved by the FHA. The purpose of the insurance is to attract equity capital into the production of housing for families of moderate income, where no mortgage financing is involved. The FHA is authorized to insure the minimum amortization charge of 2 percent of the established investment (including all approved costs prior to initial occupancy), and an annual return of 2% percent on the outstanding investment. An annual premium of one-half of 1 percent of the outstanding investment is charged for the insurance.
When the earnings of a project in any year amount to more than 31^ percent in addition to the minimum amortization charge, 50 percent of the excess may be added to the return for the year, which may not, however, total more than 5 percent. The remainder of the excess earnings may be applied to amortization of the investment over and above the minimum amortization charge.
When the net income for the year is less than the sum of the minimum annual amortization charge and the insured annual return, the investor may make claim under the insurance contract for the difference and receive payment in cash of an amount not exceeding 2 percent of the established investment plus 2^4 percent of the outstanding investment.
If aggregate claims paid under the contract amount to 15 percent or more of the established investment, the FHA has the option of acquiring the project in exchange for 2% percent debentures with a total face value of 90 percent of the outstanding investment, guaranteed by the Government and maturing in 40 years or less. If aggregate operating losses exceed 5 percent of the established investment, 164
FEDERAL HOUSING ADMINISTRATION
the investor may convey the project to the FHA in return for similar debentures.
Field Organization
The record volume of business handled in 1948 and the expansion of the FHA program resulting from the Housing Act of 1948 placed a greatly increased burden of work on the field organization. At the end of the year there were 120 field offices, 7 more than at the end of 1947. The number of insuring offices increased by 3 during the year, and the number of valuation stations by 5. There was a decrease of 1 service office. The total at the end of 1948 included 68 insuring offices, in which applications for mortgage insurance are received and undergo complete processing; 12 service offices which receive applications for mortgage insurance and prepare architectural and valuation reports; and 40 valuation stations in which technical personnel are located for special assignments.
Volume of Insurance
Insurance written by the FHA in the 14^ years from its establishment in 1934 through 1948 totaled $14,569,243,203. It was estimated that $7,276,341,716, or about half of the total amount of insurance written, was outstanding at the end of the year.
The $3,340,865,390 of insurance written in 1948 is by far the largest volume for any one year. It represents an increase of nearly 87 percent over the volume for 1947, which itself greatly exceeded that for any previous year.
As can be see from Chart 1 and Table 1, there was an increase in
YEARLY VOLUME OF FHA INSURANCE WRITTEN
1934 - 1948
Chart I
165
MILLIONS OF DOLLARS
------3,000
------2,500
------2,000
-------1,500
-------1,000
--------500
-----------2
LEGEND
PROPERTY IMPROVEKNT HOME MORTGAGES RENTAL HOUSING
1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948
3,000 -
2,500-
2,000-
1,500-
1,000-
500-
MILLIONS OF DOLLARS
HOUSING AND HOME FINANCE AGENCY
Table 1.—Yearly volume of mortgages and loans insured by FHA under all titles: Face amount of mortgages written and net proceeds of loans insured, 1934-1948
Year Total all titles (amount) Title I Title II
Classes 1, 2, and 3 loans Section 203 home mortgages Section 207 1 rental projects
Number Net proceeds Number Amount Units Amount
1934 $27, 405, 525 72, 658 $27, 405, 525
1935 297,495,144 635, 747 201,258,132 23,397 $93,882,012 738 $2,355,000
1936 532, 581,028 617, 697 221, 534,922 77,231 308,945,106 624 2,101,000
1937 489, 200, 337 124, 758 54,344,338 102, 076 424, 372,999 3,023 10, 483,000
1938 671, 593,326 382,325 150, 709,152 109, 279 473,246,124 11,930 47, 638,050
1939 925,262,132 513,091 203,994, 512 153, 747 669,416,154 13, 462 51,851,466
1940 991,173, 855 662,948 241, 734,821 168, 293 736, 490,344 3, 559 12, 948,690
1941 1,152,342,183 687, 837 248, 638, 549 198, 799 876, 707,384 3, 741 13, 565,000
1942 1,120, 839,108 432, 755 141,163, 398 149, 635 691,445,427 1, 547 5, 792,000
1943 933, 986, 444 308,161 87,194,156 52, 408 244, 514,138 185 714,000
1944 877, 472, 057 389, 592 113,939,150 46,677 216,368, 057 2,181 7,175,806
1945 664, 984, 729 501, 401 170, 823, 788 46, 572 219,299, 950 891 3, 806,015
1946 755, 777, 661 799, 284 320, 593,183 66, 858 347,356,890 694 2, 509,977
1947 1, 788, 264, 284 1, 247, 590 533, 604,178 76, 813 445, 667,150 2 32,000
1948 3,340, 865,390 i; 359, 776 621,612, 484 133, 280 880, 353,450
Total-. 14, 569, 243, 203 8, 735, 620 3, 338, 550, 288 1,405, 065 6, 628,065,185 8 42, 575 8 160,972,004
Title VI«
Year Section 603 home mortgages Section 608 rental projects Section 609 manufactured housing Section 603-610 home mortgages Section 608-610 rental projects
Number Amount Units Amount Units Amount Number Amount Units Amount
1941 3, 778 68,706 113, 659 100,320 50, 244 14,034 64, 570 163, 444 $13, 431, 250 267,015, 578 517, 656,180 491, 068,944 255, 044,040 74, 652, 600 449,027, 650 1, 224, 925, 850
1942 4, 295 19,994 10, 249 3,167 1, 538 46, 604 77, 818 $15, 422, 705 83, 907,970 48, 920,100 16,010, 936 10,665,011 359, 912, 206 605,862, 784
1943
1944
1945
1946
1947 4 920 $21, 100 3,390,350 1,366 $2,848,500
1948 Total.. 524 $1,871,972
578, 755 3, 292,822, 092 163,665 1,140,701,712 524 1, 871, 972 924 3, 411, 450 1,366 2,848,500
i Includes also rental and release-clause projects insured under Sec. 210.
2 Increase in amount of a mortgage insured prior to 1947.
8 Includes 37,964 units in new and rehabilitation projects insured for $144,386,206.
4 Sec. 603 enacted on Mar. 28, 1941, Sec. 608 on May 26,1942, Sec. 609 on June 30,1947, and Sec. 610 on Aug. 5, 1947.
194-8 in the amount of insurance written under every section of the act, except Section 207. The greatest increase occurred in mortgage insurance under Section 603, although no commitments for the insurance of new-construction mortgages under this section were issued after April 30. There was an increase of over 68 percent in the amount of rental housing mortgages insured under Section 608, although the authorization for the issuance of new-construction commitments under this section expired April 30 and was not renewed until August 10.
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FEDERAL HOUSING ADMINISTRATION
In 1948 two FHA field offices, Detroit and Los Angeles, passed the billion-do]lar mark in aggregate volume of insurance written since the beginning of operations.
Table 2 shows the status of insuring operations at the end of 1948.
Table 2.—Status of insurance written under all titles, as of Dec. 31, 1948
Status of insurance written Total all titles (amount) Title I' Title II
Classes 1, 2, and 3 loans Section 203 home mortgages Section 207 rental projects 2
Number Amount Number Amount Units Amount
Face amount written $14,569, 243,203 5,951,224,065 8,735,620 6,281, 620 3 $3,338,550,288 1,831,703,212 1,405,065 720,036 $6,628,065,185 3,167,619, 702 42, 575 32, 561 $160, 972,004 122,019, 908
Less: Insurance terminated __ __
Face amount in force Less: Estimated amount amortized on mortgages in force
8,618,019,138 1,341,677,422 2,454,000 1,506,847,076 626,000,000 685,029 3,460,445, 483 569,913,937 10,014 38, 952,096 6,586,352
Net insurance outstanding.
7, 276,341,716 2,454,000 880,847,076 685,029 2,890, 531, 546 10,014 32,365, 744
Status of insurance written Title VI
Section 603 home mortgages4 Section 608 rental projects 4 Section 609 manufactured housing
Number Amount Units Amount Units Amount
Face amount written Less: Insurance terminated Face amount in force Less: Estimated amount amortized on mortgages in force Net insurance outstanding 579,679 176,465 $3,296,233,542 811,188,471 165,031 4,632 $1,143, 550, 212 18,692,772 524 $1,871,972
403,214 2,485,045,071 124,266,154 160,399 1,124,857,440 14,892,249 524 1,871,972 18,730
403, 214 2, 360,778,917 160,399 1,109, 965,191 524 1,853,242
1 Other than face amount written, all items are estimated.
2 Includes rental and release-clause projects insured under Sec. 210.
3 Based on net proceeds.
4 Includes public housing-disposition mortgages insured pursuant to Sec. 610.
As shown in Table 3 and Chart II, the FHA has been instrumental in providing 1,835,819 new dwelling units in properties financed under its program. Of this total, 291,053 units were started in 1948, representing about 32 percent of all privately financed nonfarm dwelling units started during the year as reported by the Bureau of Labor Statistics.
Mortgage Insurance
Increased efficiency of operation and greater emphasis on housing to meet the needs of lower-income groups characterized FHA mortgage insurance operations in 1948.
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HOUSING AND HOME FINANCE AGENCY
Table 3.—Neto dwelling units started under FHA inspection and total number of privately financed nonfarm dwelling units provided, 1935-48
Year 1- to 4-family homes Rental projects Total FHA units Total nonfarm units 2 Percen FHA to total
Class 3 Sec. 203 Sec. 603 Total Sec. 207 1 Sec. 608 Total
1935 13,226 13,226 738 738 13, 964 216,000 6.5
1936 48,752 48,752 624 624 49,376 304,000 16.2
1937 56,980 56,980 3,023 3,023 60, 003 332,000 18.1
1938 5,845 100,966 106,811 11,930 11,930 118,741 399, 000 29.8
1939 io' 783 133i 874 144; 657 13i 462 13,462 158,119 458,000 34.5
1940 10^ 194 166^ 451 176', 645 3,446 3,446 180,091 530, 000 34.0
1941 9^ 145 ISO', 156 27,790 217; 091 3,296 3, 296 220,387 619,000 35.
1942 4^010 4L 578 *114,616 160,204 1,163 4, 295 5,458 165, 662 301,000 55.0
1943 '307 '338 125,474 126,119 41 19,994 20,035 146,154 184,000 79.4
1944 208 83,396 83, 604 9,655 9,655 93, 259 139, 000 67.1
1945 17,049 21,848 38,897 200 2,062 2, 262 41,159 208,000 19.8
1946 . 44,244 22,878 67,122 41 1,870 1,911 69,033 662, 000 10.4
1947 (3) 20,884 157,168 178,052 50, 766 50,766 228,818 846,000 27.0
1948 (3) 82i 979 130; 464 213,443 — 77; 610 77,610 291,053 914,000 31.8
Total.. 40, 284 907, 685 683,634 1,631,603 37,964 166, 252 204,216 1,835,819 6,112, 000 30.0
BASCO ON TOTAL PRIVATELY FINANCED NONFARM DWELLING UNITS STARTED AS REPORTED BY THE BUREAU OF LABOR STATISTICS'
Chart II
Early in the year a series of biweekly chief underwriters’ conferences was initiated at Washington headquarters attended by small groups of four or five chief underwriters from various field offices.
168
1 Includes rental and release-clause projects insured under Sec. 210.
2 Total number of privately financed nonfarm dwelling units started as reported by the Bureau of Labor Statistics. „
?Not available.
NEW DWELLING UNITS STARTED UNDER FHA INSPECTION
AND TOTAL NUMBER OF NONFARM DWELLING UNITS PROVIDED*
1935 - 1948
THOUSANDS OF UNITS
LEGEND
TOTAL UNITS PROVIDED
900
BOO
700
600
500
400
300
200
100
UNITS STARTED UNDER FHA
THOUSANDS OF UNITS
- 900
-800
- 700
-600
- 500
- 400
- 300
- 200
- 100
1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948
/27V
/lO%/
,20V
755%'
'36%'
I 34%'
79
/35%
,30%'
kl8%5
;'6%X
FEDERAL HOUSING ADMINISTRATION
The discussions centered on recurring underwriting problems and methods of solving them.
In September, for the second year, a special field committee made up of State and district directors, chief underwriters, and office managers from all over the country met to re-examine insuring procedures and recommend improvements. The committee suggested some 30 changes to shorten processing time and improve service, most of which were adopted.
The meeting of racial relations advisers, also held in September, helped to broaden the service rendered by these advisers.
The FHA-sponsored industry meetings throughout the country, shortly after the Housing Act of 1948 was enacted, called attention to the new FHA facilities provided by the act to stimulate the production of housing at lower levels of price and rent, and the importance to the industry and the consumer alike of producing housing at these levels and of bringing down the cost of housing at all levels.
FHA land planning activities were considerably expanded during the year. In addition to technical advice and assistance to insuring offices, land planners rendered professional assistance in matters pertaining to zoning and town planning when consulted by civic officials and boards. Under direction of the headquarters land planning staff a Nation-wide street improvement program was encouraged, and special engineering problems incident to such a program were carefully reviewed. In order to improve the processing of proposed subdivisions and land developments, the headquarters staff reviewed and revised existing forms and procedure. Considerable assistance was rendered to the Atomic Energy Commission and other national and local organizations.
The FHA analyzed an unusually large number of new building methods and special methods of construction in 1948. Approximately 200 special and general engineering bulletins were issued to field offices to establish a basis for structural acceptance of particular methods of construction.
Some changes were made in the minimum property requirements to facilitate justified construction economies and use of satisfactory building material assemblies and equipment. A number of prefabricated-housing manufacturers were given assistance in the initial development of the typical house structure and architectural features as related to essential FHA minimum requirements. These determinations included technical investigation of shop-fabricated houses submitted by manufacturers for consideration under Section 609.
Systems of heating and mechanical equipment such as radiant panel heating systems, compact mechanical equipment assemblies, and types
169
HOUSING AND HOME FINANCE AGENCY
of insulating materials and improved plumbing techniques were analyzed.
Cooperation was given to local and State health authorities in effecting minimum sanitary engineering requirements. Economy and efficiency were promoted through water-supply and sewage-disposal systems using new and improved materials.
Rental Housing
The need for new rental housing continued to be acute throughout the year. A total of 77,610 new units was started under Section 608 of the FHA program, exceeding by more than 50 percent the number provided in the previous record year of 1947. This does not include rental housing in new two-, three-, and four-family structures financed under the provisions of Sections 203 and 603. Altogether 141,600 privately financed rental units were started in 1948 with and without FHA insurance. In spite of this, it was felt that further incentives were needed to stimulate the production by private enterprise of a greater volume of rental housing, particularly for families in the moderate and lower income groups. To provide these incentives and also to bridge the period of transition from the postwar emergency to peacetime conditions, a number of amendments were made during the year in the rental housing provisions of Sections 207 and 608 of the National Housing Act.
Section 608 provides for the insurance of mortgages on rental housing during the war and postwar emergencies. The authorization to issue insurance commitments on new-construction mortgages under this section expired April 30 and was renewed on August 10 with a new expiration date set at March 31, 1949. The entire volume of FHA rental housing insurance in 1948 was written under this section.
As extended on August 10, the section provides for insurance of a mortgage with the amount allocable to dwelling use not to exceed $8,100 per family dwelling unit and not to exceed 90 percent of FHA estimate of replacement costs prevailing on December 31, 1947, or necessary current costs, whichever is less. The former limitations were $1,500 to $1,800 per room and 90 percent of the necessary current cost. The section as extended August 10 also requires certification by the mortgagor that in selecting tenants he will not discriminate against families with children. Veterans of World War II and their families have preference of occupancy.
Mortgages insured under Section 608 in 1948 totaled $605,862,784, bringing the aggregate amount insured since the section was enacted in 1942 to $1,140,701,712. The amount of insurance and the number of units provided each year are shown in Table 1 on page 166. Of the
170
FEDERAL HOUSING ADMINISTRATION
aggregate insurance written, an estimated $1,109,965,191 was outstanding at the end of 1948.
Section 207 of the act, which embodies the long-range FHA rental housing insurance program, was amended on August 10 with special provisions made for cooperative projects and projects for low-income families. The amendments are briefly outlined on pages 160 and 161 of this report.
A further incentive to the production of rental housing was provided in the Housing Act of 1948 by the addition of Title VII to the National Housing Act. This new title authorizes the insurance of an annual minimum amortization charge of 2 percent on the established investment and an annual return of 2% percent on outstanding investments in rental housing for moderate-income families where no mortgage financing is involved. Its purpose is to attract equity capital into this form of investment.
A special section has been set up in the Washington office of the FHA to assist in developing cooperative and yield insurance projects along lines that will assure the broadest possible benefits in meeting current rental housing needs. Considerable interest has been manifested in both types of projects since the rules and regulations were issued late in the year, and at the end of December several applications for mortgage insurance on cooperative projects were under consideration.
For detailed statistics of rental housing insurance operations see pages 224 to 239.
One- to four-family homes
The FHA insured 296,724 mortgages amounting to over $2,000-000,000 in 1948 under Sections 203 and 603. Of these, 133,280 totaling $880,353,450 were insured under Section 203, the long-range program inaugurated in 1934. This volume represented the largest number of mortgages insured under Section 203 since 1942, and the largest dollar amount of insurance written in any one year of FHA operation. At the end of the year 685,029 mortgages insured under this section were outstanding with balances estimated at $2,890,531,546.
Although, in accordance with the provisions of the act, no commitments of mortgage insurance on new construction under Section 603 were issued after April 30, the volume of insurance under the provisions of this section was much larger than in any previous 12-month period. It totaled 163,444 mortgages in the amount of $1,224,925,850, nearly 2% times the amount insured in 1947. At the end of 1948, 403,214 mortgages insured under Section 603 were outstanding with unpaid balances totaling $2,360,778,917.
171
HOUSING AND HOME FINANCE AGENCY
Several amendments to Section 203 were contained in the Housing Act of 1948, having as their object an increased production of homes at lower prices and providing for higher percentage mortgages and longer maturities for such mortgages.
Under the provisions of Section 203, as amended by the Housing Act of 1948, the FHA insures the following classes of mortgages:
Type of property Type of borrower Maximum mortgage amount Maximum percent of appraised value Maximum maturity
1- to 4-family Owner-occupant, or long-term investor. $16, 000 80 percent 20 years.
1- to 4-family 1 1-family 1 Do.1 do O wner occupant do 16, 000 6,300 9,500 do 90 percent 90 percent of 1st $7,000, 80 percent of remainder up 25 years. Do. Do.
to $11,000.
Do.’ 3- or 4-family 1 do Operative builder 6,000 16. 000 95 percent 80 percent 30 years. 20 years.
2-family 1 do 2 12, 800 80 percent of 1st $10,000, 60 percent of remainder Do.
1-family 1 do 2 10, 400 up to $18,000. 80 percent of 1st $7,000, 60 percent of remainder up to $15,000. Do.
Do.1 do 6,000 85 percent 30 years.
1 Must be approved for mortgage insurance before construction starts.
- The maximum mortgage amoimts of $12,800 on a 2-family dwelling and $10,400 on a single-family dwelling on loans to operative builders have been determined by administrative policy.
Applications for mortgage insurance under Section 203 are submitted by approved mortgagees to the FHA insuring office having jurisdiction over the area in which the property is located. The insuring office is a complete operating unit of FHA and handles the entire processing of the application. If the mortgage is on new construction, plans and specifications are submitted with the application, together with a plot plan and other pertinent information. For an existing structure, the mortgagee gives the location and a description of the property.
FHA appraisers examine the neighborhood and the property, the Architectural Section reviews the plans and specifications, and FHA valuators determine the valuation to be placed on the property, making an estimate of replacement cost as the upper limit of valuation. The mortgagor’s credit is checked, as well as his estimated ability to repay the loan in accordance with its terms.
If the insuring office determines that the transaction is an acceptable risk, it issues a commitment to the mortgagee that when the loan is made and the terms of the commitment are fulfilled the FHA will insure the mortgage. When the mortgagor is unknown and so cannot be specified in the application, a conditional commitment is issued,
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indicating the maximum mortgage that will be insurable when an acceptable mortgagor is named. A firm commitment is issued when a mortgagor is named in the application. A firm commitment issued when an operative builder is mortgagor may also indicate the maximum term and amount that will be issued if an owner-occupant becomes mortgagor. After the lending institution makes the loan it sends the mortgage note to the FHA insuring office for the insurance endorsement.
Approximately one out of every five (19.3%) applications submitted to the FHA are rejected or withdrawn by the mortgagee before processing is completed, while commitments are issued on the balance of 80.7 percent. Of the commitments issued, about one-third expire as conditional commitments and one-tenth as firm commitments. Thus, of the total applications received, a net of just under 40 percent results in insurance.
Detailed statistics of home mortgage insurance operations are presented on pages 179 to 224.
Title I Insurance
For the third consecutive year the outstanding fact in reporting Title I operations is the record volume of loans insured. It exceeded by nearly $100,000,000 the amount insured in 1947, which in itself was a record volume. Loans insured under Title I in 1948 financed the repair and preservation of more than a million homes. Most of the loans were for repairs to roofs and side walls, for heating and plumbing systems, and for structural alterations. Through this plan thousands of home owners were able to maintain their homes in a comfortable and livable condition and thus were not forced to compete in the crowded market for new houses.
This year also was the first full calendar year since the end of the war in which loans insured under Title I financed the erection of new low-cost homes. By the end of 1948 approximately 3,500 houses having a total valuation of over $14,000,000 had been completed or were under construction. Frequently the borrower had built the house himself or, acting as his own contractor, had performed varying amounts of the labor himself. This method enabled him to obtain a house at a much lower cost than otherwise would have been possible.
Scope of Title I
Under authority of Title I of the National Housing Act, as amended, the Federal Housing Administration insures qualified lending institu
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HOUSING AND HOME FINANCE AGENCY
tions against loss on the following classes of property improvement loans:
Type of loan Type of improvement Maximum maturity Maximum amount Maximum financing charge
Class 1 (a). Repair, alteration, or improvement of an existing structure. 3 years, 32 days... $2,500 $5 discount per $100 per year,
Class 1 (b). Alteration, repair, improvement, or conversion of an existing structure used or to be used as an apartment house or a dwelling for two or more families. 7 years, 32 days... 10,000 $5 discount per $100 per year if $2,500 or less, $4 discount per $100 if in excess of $2,500.
Class 2 (a). Construction of a new structure to be used exclusively for other than residential or agricultural purposes. 3 years, 32 days 3,000 $5 discount per $100 per year.
Class 2 (b) _ Construction of a new structure to be used in whole or in part for agricultural purposes, exclusive of residential purposes. 7 years, 32 days; if secured by first lien, 15 years, 32 days. 3,000 $5 discount per $100 per year, $3.50 discount per $100 if maturity is in excess of 7 years, 32 days.
Class 3 Construction of a new structure to be used for residential purposes. 20 years, 5 months. 4, 500 Interest at 4H percent per year, or equivalent charge on discount basis.
Application for a loan is made direct to the lending institution or through a contractor or dealer. The lending institution has full responsibility for approving the applicant’s credit and for using prudent business judgment in making the loan.
The lending institution is insured against loss up to 10 percent of its total net advances under Title I. The aggregate outstanding insurance liability plus the amount of claims paid, less the amount collected from insurance premiums and other sources, is limited in the act to $200,-000,000. The Housing Act of 1948 authorized an increase to this amount from the former limitation of $165,000,000.
The FHA has charged a premium for Title I insurance since July 1, 1939. The income from premiums, plus the recoveries obtained on defaulted notes on which claims were paid, has exceeded the amount of claims paid since that date plus the amount of all administrative expenses incurred in the same period. Thus, the operation of this title of the act is self-supporting.
During the year some important changes were made in the regulations governing Title I loans. In line with the efforts of the Government to combat inflation, an amendment effective May 10, 1948 requires the borrower on a Class 1 or Class 2 loan to make a cash down payment of 10 percent of the cost of the work. A second amendment effective as of the same date requires the lending institution to obtain a statement signed by the dealer or contractor showing the type and extent of the improvements and a brief description of the materials used. The program has been relatively free from abuse by unethical
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federal housing administration
dealers, and it is felt that these amendments have done much to counteract any tendency to evade the intent of the regulations.
On a Class 3 loan the borrower is required to have a 5 percent equity in the property.
With the enactment of the Housing Act of 1948 in August, two additional amendments to the regulations became necessary. One increased from $5,000 to $10,000 the maximum amount of a loan to repair or convert an existing structure so as to further its use for two or more families. The other amendment increased the maximum amount of a Title I Class 3 loan from $3,000 to $4,500, providing the means of producing a better low-cost home.
Insurance Operations Under Title I
The number of loans insured under Title I in 1948 totaled 1,359,776 with net proceeds of $621,612,484. This volume exceeded that of 1947 by almost 9 percent in number of loans and almost 17 percent in dollar amount. Included in the figures for 1948 are 2,407 Class 3 loans for $7,405,046, made for the purpose of constructing low-cost homes in rural and suburban areas. Since the beginning of Title I activity in 1934, 8,735,620 loans with net proceeds of $3,338,550,288 have been insured. It is estimated that the total amount outstanding as of December 31,1948 was $880,800,000.
Banks and other lending institutions making Title I loans during the year numbered 3,898. More insured institutions were active on a monthly basis during 1948 than in previous years. Active institutions by months during the year varied from 2,530 to just under 3,000, while during 1947 the range was from 2,081 to 2,450 except for December which showed 2,835.
New contracts of insurance totaling 464 were issued during the year, with 239 of them insuring savings and loan and building and loan associations. This type of institution is becoming progressively more active under Title!. At the end of the year 5,812 lending institutions with 3,280 branches held contracts of insurance, thus affording 9,092 outlets for this type of financing, exclusive of the thousands of dealers available.
Each year as of April 30 lending institutions report on the status of their outstanding Title I loans. As of April 30, 1948, 2,142,387 loans were reported outstanding with balances totaling $769,030,000. Of these 29,374 loans, or only 1.37 percent, were more than 90 days past due.
The unpaid balances on these past due notes totaled $12,092,000, representing 1.57 percent of total outstanding balances. While the amount of notes past due over 90 days was slightly more than double
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that of the preceding April, the ratio to total amount outstanding increased only 0.29 percent, since the total amount outstanding almost doubled that reported in 1947.
Claims and Recoveries
The past year showed a heavy increase in the number of claims paid on defaulted loans. A total of 38,482 claims were paid, amounting to $14,345,659, as against 17,511 claims for $5,829,750 in 1947. However, an increase in claims was to be expected, considering the tremendous increase in loans insured in 1947 and 1948. While the number of claims more than doubled, the ratio of claims paid to loans insured for the entire period of operations since 1934 increased only 0.02 percent. This percentage was 2.24 at the end of 1948 and 2.22 at the end of 1947.
The total of $74,766,871 in claims paid since 1934 is offset by total cash recoveries of $40,840,706 ($30,539,311 in cash and $10,301,445 anticipated from claims in process of collection), leaving net unrecovered claims of $33,926,115 or 1.02 percent of the net proceeds of loans insured.
After a claim on a defaulted note is paid, the FHA makes every effort to effect collection of the obligation. This is done by correspondence, by personal contact with the debtor through the staffs of the FHA field offices, and by reference of cases to the Department of Justice for legal action when such a course is deemed advisable. If all efforts fail the case is held in suspense as uncollectible, although periodic attempts at collection on such accounts result in some recoveries.
Total recoveries in 1948 amounted to $2,838,077 (including interest of $335,033). One fact noticed during the latter part of the year was that, while the increase in claims paid caused the number of individual collections to increase (although not proportionately), the average amount collected per item decreased. This undoubtedly reflects the economic conditions prevailing during the year. The direct cost of collections for 1948 was $516,660, or an average of 18 cents per dollar recovered. For the year 1947 the cost was 19 cents per dollar recovered, and the cumulative direct collection cost since 1934 is 14 cents for each dollar recovered.
For detailed statistics of Title I operations see pages 240 through 252.
Financial Position
From the establishment of the Federal Housing Administration in 1934 through December 31, 1948, its gross revenues under all titles of the National Housing Act from fees, insurance premiums, and in
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FEDERAL HOUSING ADMINISTRATION
come on investments amounted to $351,110,297, while operating expenses were $182,335,841. Administrative expenses during the first three fiscal years of its existence, 1935 through 1937, were met from funds advanced through the Reconstruction Finance Corporation by the United States Treasury. During the next three fiscal years, 1938 through 1940, partial payments of operating expenses were met from income. Since July 1, 1940, FHA operating expenses have been paid in total by allocation from its insurance funds.
Gross income during the calendar year 1948 under all insurance operations of the FHA totaled $65,690,760. Expenses of administering the Federal Housing Administration during 1948 amounted to $21,824,605, leaving an excess of gross income over operating expenses of $43,866,155 to be added to the various insurance funds.
At the end of 1948 the Federal Housing Administration had capital and operating reserves of $200,369,176 in all funds as follows:
Title I Insurance Fund and Title I Claims Account______________$28, 742, 988
Mutual Mortgage Insurance Fund_________________________________ 122, 458, 280
Housing Insurance Fund_________________________________________ 4, 708, 670
War Housing Insurance Fund_____________________________________ 41, 339, 975
Housing Investment Insurance Fund______________________________ 1, 000, 000
Administrative Expense Account_________________________________ 2, 219,163
200, 369,176
Of this amount the Government had contributed $16,000,000 as paid-in surplus ($10,000,000 allocation to the Mutual Mortgage Insurance Fund, $5,000,000 to the War Housing Insurance Fund, and $1,000,000 to the Housing Investment Insurance Fund) and $64,600,-854 expended appropriations for administrative expenses and for Title I claims prior to the time that such expenditures were met from FHA income. The remainder, $119,768,322, had been built up from income.
Participation payments from group accounts, in the amount of $5,295,432 for 55,079 families financing their homes under the mutual mortgage insurance program of the Federal Housing Administration, were accrued or paid during the year 1948. The first participation payments were made as of January 1, 1944, and during the 5 years following that date total payments of $13,590,041 were made on 182,989 insured loans. These payments were made in connection with small-home mortgages insured through the Mutual Mortgage Insurance Fund under the provisions of Section 203 of the National Housing Act. To be eligible for a participation payment, a mortgage must be in a group account which has developed a credit balance exceeding all actual and estimated charges and must have matured or been prepaid in full.
831481—49-
-13
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Publications
The following are the principal new or revised FHA publications issued in 1948. Unless otherwise indicated, they can be obtained, without charge, from the Federal Housing Administration, Washington 25, D. C.
Annual report: Fourteenth annual report of the Federal Housing Administration; year ending December 31, 1947. Government Printing Office, Washington 25, D. C. 35 cents.
The FHA Plan of Home Ownership: FHA 2098, revised November 1948.
Insured Mortgage Portfolio (issued quarterly) : Vol. 12, Nos. 3 and 4; Vol. 13, Nos. 1 and 2. Government Printing Office, Washington 25, D. C. Single copy 15 cents, annual subscription 50 cents.
National Housing Act as amended, and provisions of other laws pertaining to the Federal Housing Administration, including all amendments to August 10, 1948: FHA 107, revised September 15, 1948.
Principles of Planning Small Houses.—FHA Form 2219, revised June 1948 (formerly Technical Bulletin No. 4). Government Printing Office, Washington 25, D. C. 15 cents.
Rules and Regulations
Property Improvement loans under Title I of the National Housing Act: regulations governing Classes 1 and 2 loans (including all amendments through October 25, 1948) : FH-20, October 1948.
Mutual Mortgage Insurance; administrative rules and regulations under Section 203 of the National Housing Act, including all amendments through October 15, 1948: FHA Form 2010.
Multifamily Rental Housing Insurance; administrative rules and regulations under Section 207 of Title II of the National Housing Act: FHA Form 2012, revised August 26, 1948.
Administrative Rules and Regulations under Section 609 of the National Housing Act: revised September 3,1948.
Administrative Rules and Regulations under Section 611 of the National Housing Act: FHA Form 2900, issued August 23, 1948.
Insurance for Investments in Rental Housing for Families of Moderate Income; administrative rules and regulations under Title VII of the National Housing Act: FHA Form 3000, issued November 12, 1948.
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Section II
STATISTICS OF INSURING OPERATIONS
Under the provisions of Titles I, II, and VI of the National Housing Act, a record volume of $3,340,865,390 of insurance was written by the Federal Housing Administration during 1948, bringing the cumulative amount written since the beginning of operations to $14,569,243,203. Of the total dollar volume of insurance written during the year, about 63 percent was written under the home mortgage sections of the act, and 18 percent under the rental housing sections, while the remaining 19 percent was accounted for by property improvement loans under Title I. On a cumulative basis, relative activity under each of the three programs has been somewhat different. Home mortgage insurance operations have accounted for about 68 percent of the total amount of insurance written since the beginning of operations, rental housing for about 9 percent, and property improvement loans for approximately 23 percent.
The following is an analysis of the volume of insuring operations and of the characteristics of the individual cases insured under each of these three programs.
Home Mortgage Insurance under Titles II and VI
During 1948 home mortgages secured by one- to four-family structures were insured by the Federal Housing Administration under Section 203 of Title II and Section 603 of Title VI of the National Housing Act. One- to seven-family home mortgages were insured under Section 603 pursuant to Section 610, which provides for the insurance of mortgages in connection with the sale by the Government of specified types of publicly financed housing. In addition, a few production loans were insured under Section 609 of Title VI, which provides for credit to manufacturers of prefabricated houses. For a discussion of Section 609 operations see page 163.
Volume of Business
A total of $2,108,669,650 of home mortgage insurance was written during 1948, involving 297,644 mortgage contracts and 318,335 dwelling units. As Table 4 shows, $1,424,614,084, or about 68 percent of this total, was secured by newly constructed homes containing 203,978 dwelling units. The average mortgage amount per dwelling unit in 1948 was $6,624, while in 1947 the comparable average amounted to
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HOUSING AND HOME FINANCE AGENCY
$5,960. The 1948 volume of home mortgage operations brought the cumulative amount of insurance written under this program to $9,-924,298,727 involving 1,984,744 mortgages and 2,113,640 units.
Table 4.—Yearly volume of all home mortgages insured by FHA: Number of units and amount of-mortgages on new and existing homes, by sections, 1935-48
Year Grand total12 new and existing New construction
Sec. 203 Sec. 603 Total, new
Units Amount Units Amount Units Amount Units Amount
JQ35 25, 453 83, 920 110,850 116, 315 160,449 173,867 208,044 230,545 189, 398 157,161 103,418 85, 771 150,114 318, 335 $93,882,012 308,945,106 424, 372,999 473,246,124 669, 416,154 736,490,344 890,138,634 958,461,005 762,170, 318 707,437,001 474, 343,990 422,009,490 894, 715,900 2,108, 669,650 5,091 21, 415 38,479 50,592 103,186 127, 455 157, 541 104, 958 9,186 327 1,585 11,1431 10, 643 29,348 $22, 331,303 95,060,335 168,866, 553 227,399, 275 461,018,197 561, 542,477 693,695,100 490,044,149 45,184, 400 1,758,050 7,600,450 62,968,857 69,701,400 215,413,484 5,091 21,415 38,479 50,592 103,186 127,455 161,509 179,963 140,432 106, 319 54, 829 22, 523 71, 384 203,978 $22,331,303 95,060,335 168,866, 553 227, 399,275 461,018,197 561,542, 477 707,126,350 750,829,315 552,218,446 483, 740, 388 257, 243,300 120,148, 509 476,927, 200 1,424,614,084
1936
1937
1938
1939
1940
1941 3,968 75,005 131, 246 105,992 53, 244 11,380 60,741 174, 630 $13,431, 250 260, 785,166 507,034,046 481,982, 338 249, 642, 850 57,179, 652 407, 225, 800 1, 209, 200, 600
1942
1943
1944
1945
1946
1947 _
1948
Total
2,113,640 9,924,298, 727 670,949 3,122, 584,030 616,206 3,186,481, 702 1, 287,155 6, 309,065,732
Year Existing or refinanced construction
Sec. 203 Sec. 603 Secs. 603-610 Total, existing or refinanced
Units Amount Units Amount Units Amount Units Amount
1935 20, 362 62,505 72,371 65,723 57, 263 46,412 46,535 49,179 46,043 48,568 47, 284 58,952 70, 603 110, 297 $71, 550, 709 213,884, 771 255, 506,446 245,846,849 208, 397,957 174, 947, 867 183,012,284 201, 401,278 199, 329, 738 214,610,007 211, 699, 500 284,388,033 375, 965, 750 664, 939, 966 20, 362 62,505 72, 371 65,723 57, 263 46, 412 46, 535 50, 582 48,966 50,842' 48,589 63, 248 78, 730 114,357 $71, 550,709 213,884, 771 255, 506, 446 245,846,849 208, 397,957 174,947,867 183,012, 284 207,631,690 209,951,872 223, 696, 613 217,100, 690 301,860,981 417, 788, 700 684,055, 566
1936
1937
1938
1939
1940
1941
1942 1,403 2,923 2, 274 1,305 4,296 8,119 2,989 $6, 230,412 10, 622,134 9,086,606 5,401,190 17,472,948 41, 801,850 15,725, 250
1943
1944
1945
1946
1947 8 1,071 $21,100 3,390,350
1948
Total
802,097 3, 505, 481,155 23,309 106, 340, 390 1,079 3,411,450 826, 485 3, 615, 232,995
1 For yearly volume of all home mortgages insured by sections, see Table 1.
2 Excludes 3 manufactured-housing loans covering 524 units for $1,871,972 insuredunder Sec. 609.
The long-range Section 203 program accounted for about 42 percent of the total dollar amount of FHA home mortgages insured in 1948. Practically all mortgages secured by existing or refinanced construction were processed under this section. Except for insurance written pursuant to Section 610, mortgages on existing homes may be insured under Section 603 only in connection with the refinancing of existing Section 603 mortgages. In such cases, the refinanced mortgage may not exceed the original principal amount and the unexpired term of the preceding mortgage.
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Status of Processing.—Home mortgage insuring operations during 1948 involved the processing of 47(5,821 applications, bringing the cumulative number processed since the beginning of operations to 3,246,321. In addition to these, 13,601 applications were under examination as of December 31, 1948. About 85 percent of the applications processed during 1948 resulted in commitments to insure; and, of those passing through the commitment stage, 74 percent were insured.
In spite of the expiration on April 30, 1948 of legislative authority to issue new-construction commitments under the provisions of Section 603, total commitments issued under this section for the year amounted to about 26 percent of all home mortgage commitments issued. A total of 73,414 Section 603 commitments and 164,609 Section 203 commitments were outstanding as of the year encl.
State Distribution
Totals for the year.—With nearly $353,800,000 in home mortgages on properties located within the State, California led all other States in amount of insurance written on one- to four-family home mortgages during 1948. In Texas, which was the second leading State, the $165,600,000 in home mortgages insured amounted to less than half of the amount written on California properties. The next four leading States were Michigan with $138,500,000, Washington with $98,700,000, Florida with $92,900,000, and New York with $91,300,000 (Table 5). The six States mentioned accounted for a total of $940,700,000, or approximately 45 percent of the total amount of insurance written under these sections of the act. The percentage distribution of the volume of insurance written during the year by geographical divisions shows that the Pacific States accounted for 23 percent of the total, the East North Central States for 17 percent, and the West South Central States for 15 percent. The New England States ranked lowest and accounted for less than 2 percent of the total amount of home mortgage insurance written during 1948.
Both for the United States and for the six leading States combined, about two out of every three home mortgages insured during 1948 involved new construction. Only in the West North Central and New England States did as many as one out of two home mortgages cover newly constructed homes.
The average home, mortgage insured in 1948 under Sections 203 and 603 (based on cases tabulated in Washington during 1948) was $7,094. Only in the District of Columbia, where it resulted from the prevalence of multifamily construction, did the average exceed $10,000. In only six States or Territories did the average amount per mortgage come to less than $6,200.
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Cumulative totals.—On a cumulative basis, the ranking of States is somewhat different. The six States with the largest dollar amounts of home mortgages insured accounted for 47 percent of the total amount written in the country. Included were California with
Tabt.w 5.—State distribution of all home mortgages: Number and face amount of home mortgages insured by FHA under Secs. 203 and 603, for the year 19Ji8
State location of property Total i Sec. 603 Sec. 203
Total construction2 New construction Existing construction
Number Amount Number Amount Number Amount Number Amount
Alabama 4,701 5,273 4,837 46,054 3,240 2,260 426 421 12,181 5, 422 1,193 8, 375 8, 335 2,455 5,136 3,097 6,716 723 4,212 1,303 19,102 2,775 2,335 7,059 823 2,455 807 395 8, 575 1,561 12,234 4,851 169 9,899 12,093 3,629 9,676 243 2,933 750 7,633 24,406 2,381 175 7,785 14,945 1,679 1,699 720 59 581 3,147 2 $31,207,100 32,825, 500 28, 573,450 353,799, 300 22, 354,600 17,562, 350 3, 456,800 4,247,600 92,907,700 36,686,000 7,076,850 65,249,000 57,232,250 16, 433,700 33,960, 300 21, 391,300 47, 659. 600 4,399,450 33,156,900 9,362,400 138,523,122 21,826,200 14,789,150 48,913,900 4, 576,900 16,609,750 6,165,850 2,669, 700 61,746,450 11,324, 300 91,274, 200 34,907,050 1,178, 450 73,943, 960 77,924,300 25,445, 650 69,787,600 1,884,400 18,058,050 4,482, 650 53, 655,000 165,586, 750 16, 598,450 1,197,157 52,930,400 98, 650, 650 10,701,250 13,464,000 4,481,800 510,500 5,123,300 16, 568,900 12,800 2,023 3,753 1,095 35,916 1,394 630 262 289 9,662 2,875 160 3,101 3,906 648 2,380 1,220 2,796 196 2,837 725 10,708 1,624 1,388 1,530 94 1,087 332 199 4,116 944 8,925 3,398 68 4,995 5,152 1,681 6,368 56 1,468 200 5,475 14,039 1,232 56 4,056 3,174 151 787 221 1 143 2,396 2 $14,209, 350 24,092,350 7,267,400 283,691,700 9,951,900 3,882,400 2, 295, 250 2,913,800 74,705,200 19,791,850 1,072,200 23,836,800 28,957,000 4,785, 550 16,917, 900 9,058,050 20, 590, 650 1,288,500 23,837,350 5,405,700 82, 599,272 13,144,900 9,390, 600 11,693, 300 646,100 8,241,450 2, 574,800 1.445, 500 32, 470,150 7, 305,100 67,315,350 24,945, 850 486, 950 38,623, 550 35,756,650 12,738,150 48,531,050 456,200 10,230,600 1,488,250 39, 514,750 103,458,350 9,240,750 379,900 27,472,000 24,440, 600 1,077,450 6,067,700 1,673,000 7,000 1,085,700 10,865,800 12,800 1,010 524 1,461 1,269 714 152 134 38 1,314 896 256 830 803 180 772 260 1,602 72 345 42 1,521 285 288 852 105 195 174 20 832 380 508 375 38 1,246 1,715 231 746 82 267 130 693 3,121 340 30 597 1,02o 234 269 113 10 270 375 $7,192, 650 3, 677,650 8,880, 500 9,994,150 5,181,000 1,412,000 978,000 357,500 10,183,700 6,458,200 1,700,100 7,045,200 5,907, 950 1,396, 300 5,773,850 1,971,950 11,642, 650 487, 300 2,209,200 322,800 12,033,650 2,248,800 1,902,050 6, 531,050 678, 650 1,383,850 1,405,200 140, 400 6,296,100 2, 615,100 4,197,800 2,856,850 284,600 9,452,200 11,933,250 1,762,000 5, 843,450 679, 500 1,804,600 881,900 5,166,150 20, 582,900 2, .506,750 228,650 4, 533,150 7,057, 600 1,801, 500 2,230, 500 687, 600 89, 600 2,506, 700 3,231,200 1,668 996 2,281 8,869 1,132 1,478 30 94 1,205 1,651 777 4,444 3, 626 1,627 1,984 1,617 2,318 455 1,030 536 6,873 866 659 4,677 624 1,173 301 176 3,627 237 2,801 1,078 63 3,658 5,226 1,717 2, 562 105 1,198 420 1,465 7,246 809 89 3,132 10,746 1,294 643 386 48 168 376 $9,805,100 5,055, 500 12,425,550 60,113,450 7,221,700 12,267,950 183, 550 976,300 8,018,800 10,435,950 4, 304, 550 34, 367,000 22,367,300 10, 251,850 11,268, 550 10, 361,300 15,426, 300 2,623, 650 7,110,350 3,633,900 43,890, 200 6,432, 500 3, 496, 500 30,689,550 3, 252,150 6,984.450 2,185,850 1,083, 800 22,980, 200 1, 404,100 19,761,050 7,104, 350 406,900 25,868,210 30,234,400 10,945, 500 15,413,100 748,700 6,022,850 2,112, 500 8,974,100 41, 545,500 4,850,950 588, 607 20,925, 250 67,152,450 7,822,300 5,165,800 2,121,200 413, 900 1, 530,900 2,471,900
Arizona ...
Arkansas
California - -
Colorado ...
Connecticut ..
Delaware.
District of Columbia.. Florida
Georgia
Idaho -
Illinois
Indiana
Iowa
Kansas.
Kentucky _
Louisiana.
Maine, .
Maryland..
Massachusetts
Michigan _
Minnesota _
Mississippi.. -
Missouri
Montana.
Nebraska. _ .
Nevada ... _
New Hampshire
New Jersey
New Mexico _
New York
North Carolina _
North Dakota..
Ohio. .. ... _
Oklahoma ...
Oregon. .....
Pennsvlvania
Rhode Island...
South Carolina South Dakota.. -
Tennessee...
Texas
Utah ..
Vermont ..
Virginia
Washington
West Virginia
Wisconsin
Wyoming ..
Alaska _
Hawaii.. ...
Puerto Rico Virgin Islands
Total3
293,936 2,085,054,739 161,934 1,213,930,472 29,741 218,325,950 102,261 652,798,317
1 Excludes 920 mortgages for $3,390,350 insured under Sec. 603 pursuant to Sec. 610, and 3 manufactured-about housing loans for $1,871,972 insured under Sec. 609.
2 Includes 2,800 refinanced cases amounting to approximately $15,000,000.
3 Cases tabulated in Washington during the period Jan. 1,1948 through Dec. 31,1948.
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$1,704,000,000, Michigan with $738,800,000, Illinois with $587,300,000, Texas with $567,000,000, Pennsylvania with $526,400,000, and Ohio with $503,200,000 (Table 6). The East North Central States accounted for the largest cumulative volume of insurance written, almost 23 percent of the total, followed by the Pacific States with about 22 percent, and the Middle Atlantic States with about 15
Table 6.—State distribution of all home mortgages: Number and face amount of home mortgages insured by FHA under Secs. 203 and 603, cumulative through 191,8
State location of property Total i
Number Amount
Alabama... __ . _ 24, 577 15, 595 18,530 342,219 20,675 20,641 4,727 5, 586 54,204 32, 780 8,057 104,681 66,940 16,787 31,324 17,895 30,374 5, 998 33,014 11,267 142,480 20,197 12,837 48,719 6,126 17,210 4, 368 3,154 87, 528 6,923 91,150 21,985 1,389 95,909 48, 505 20, 582 111,450 5,056 15,245 5,110 37,902 118, 951 19,363 2,883 44,182 76,181 15.077 18, 492 6,917 552 2,947 5,789 2 $119,851,022 76,348,624 84,284,467 1,703,964,243 97,499,124 112,253,813 24, 993, 850 37, 862,100 276,855,346 153,736,902 33,100,955 587,338,182 311,513,733 75, 503,649 144,410,467 92,127, 556 165, 573,745 24,218,250 169,770,335 57,890,069 738, 775,479 98,325,408 53,964,789 237,528,153 26,669,041 78,094,487 23,774,355 13, 904,386 451,260,492 34,258,025 496,297,108 112,364,523 5,518, 795 503,178,321 239, 545,238 96,304,200 526,357,972 24,965, 570 69,633,482 19,284, 580 187,409,338 567,014,389 91,939, 775 11,297,571 230,521,349 363,734,342 72,329,699 97,804,666 27,780,401 2,958,860 16,047,940 32,710, 750 12, 800
Arizona
Arkansas
California
Colorado .......
Connecticut..
Delaware. ._ . . ...
District of Columbia
Florida
Georgia .......
Idaho _ ... ...
Illinois .. -. . . . .
Indiana . . . .
Iowa
Kansas . . . .
Kentucky . ._ . .
Louisiana . ..
Maine .
Maryland . .
Massachusetts ...
Michigan ..
Minnesota.. ...
Mississippi
Missouri . . ...
Montana ___ _
Nebraska. . . .
Nevada . ...
New Hampshire .....
New Jersey .. _
New Mexico...
New York
North Carolina. .
North Dakota
Ohio .. .
Oklahoma
Oregon ....... ..
Pennsylvania
Rhode Island . _
South Carolina ...
South Dakota ......
Tennessee. .. .. ...... __
Texas ......
Utah . _
Vermont ....
Virginia. . .. .
Washington . .
West Virginia . .
Wisconsin
Wyoming .
Alaska. _
Hawaii . .
Puerto Rico
Virgin Islands
Total2
1,981,032 9,900,662,716
Sec. 603 Sec. 203
Number Amount Number Amount
9,479 $49, 576,050 15,098 $70,274,972
6,066 36,336, 850 9,529 40,011,774
4,855 24,388, 600 13, 675 59,895,867
116,889 669, 598,300 225,330 1,034,365,943
4,970 28,655,150 15,705 68, 843,974
7,360 36, 603,850 13, 281 75,649,963
2.612 14,475,300 2,115 10,518, 550
2, 663 19, 504,300 2,923 18,357, 800
25, 505 152,928,340 28, 699 123,927,006
12, 577 65,791,600 20,203 87,945,302
518 3,048, 750 7, 539 30,052,205
20,047 113,309,000 84,634 474,029,182
14,389 82,750,150 52, 551 228,763,583
2,447 13,103,150 14,340 62, 400, 499
10,113 56; 098, 550 21,211 88,311,917
4,481 25,690,400 13,414 66,437,156
12,052 72,839, 924 18,322 92,733,821
1,232 6,414,300 4,766 17,803,950
12,952 75,409,700 20,062 94,360,635
2,880 15,801,085 8,387 42,088,984
38,882 229,018,472 103,598 509, 757,007
4,110 26,268,250 16,087 72,057,158
3,989 21,854,900 8,848 32,109,889
6,851 36,642,350 41,868 200,885, 803
326 2,790, 650 5,800 23, 878, 391
5, 558 29,021,280 11,652 49,073,207
1,918 10,121,150 2,450 13,653, 205
316 2,032, 950 2,838 11,871,436
14,801 91, 999,850 72, 727 359.260,642
2,458 15,233,950 4,465 19,024,075
18,913 119,418,850 72,237 376,878,258
8,091 48,399,800 13, 894 63, 964,723
123 842,700 1,266 4,676,095
23,222 134,357,350 72, 687 368, 820, 971
16,954 96,141,100 31,551 143,404,138
6,006 33, 893,850 14, 576 62,410,350
25,311 145,119,100 86,139 381,238,872
1,228 6,463, 200 3,828 18, 502,370
5,908 29, 849,900 9,337 39,783, 582
496 3,255,150 4,614 16,029, 430
15,199 90, 558,000 22,703 96,851,338
49,207 261,702,075 69,744 305, 312, 314
7,508 39, 802,400 11,855 52,137,375
279 1,341,700 2,604 9,955, 871
17,691 95.360, 988 26, 491 135,160,361
18,136 95, 981, 950 58,045 267, 752, 392
1,236 5. 934,250 13,841 66, 395,449
4,136 23,215,050 14,356 74, 589,616
1,008 5,717,250 5,909 22,063,151
1 7,000 551 2,951,860
447 2, 893,100 2,500 13,154,840
2,847 14,252,000 2, 942 18,458, 750
2 12, 800 —
577,245 3,281,826,714 1,403, 787 6,618,836,002
1 Excludes 924 mortgages for $3,411,450 insured under Sec. 603 pursuant to Sec. 610, and 3 manufactured-housing loans for $1,871,972 insured under Sec. 609.
2 Cases tabulated in Washington through Dec. 31,1948.
183
HOUSING AND HOME FINANCE AGENCY
percent. Less than 3 percent of the total amount of home mortgages insured since the beginning of operations has involved properties located in the New England States.
Financial Institutions
Originations and holdings.—During 1948, Section 203 mortgages were originated by almost 4,000 individual financial institutions, while Section 603 mortgages were originated by more than 1,900 institutions. As of December 31, 1948, over 8,900 institutions held Section 203 insured mortgages in their portfolios, while 3,800 institutions held Section 603 mortgages.
Table 7 shows the number of institutions, by type, originating and holding mortgages insured under these sections of the act, with the volume of activity for each type of institution.
The number and amount of originations under Sections 203 and 603 tabulated in Washington totaled 1,981,032 mortgages for $9,900,662,-716. Of this volume, 294,187 mortgages for $2,086,644,839 were originated during 1948. As might be expected, the number and
TYPE OF INSTITUTION ORIGINATING, TRANSFERRING OR HOLDING HOME MORTGAGES
(BASED ON DOLLAR AMOUNT OF MORTGAGES INSURED UNDER SECTIONS 203 AND 603)
FOR THE YEAR 1948
"^"CUMULATIVE AMOUNT HELD AS OF DECEMBER 31, 1948, AND DIFFERS FROM INSURANCE IN FORCE DUE TO LAG IN TABULATION
Chart III
184
4.9% '3.1%
; 10.6%
22.4%
: ALL OTHERS 2 .5%,
////////////////// FEDERAL AGENCIES '////// 11 .7% '/////
SAVINGS BANKS 10.1%
SAVINGS AND LOAN. ASSOCIATIONS .4%
■ INSURANCE COMPANIES ^^54.9%
27.5%
| 13.7%
I 17. 8 %
'MORTGAGE COMPANIES 2 6%
’STATE BANKS
888811 6% 88
[NATIONAL BANKS
ORIGINATED ($2,087,000,000)
PURCHASED
($887,000,000)
SOLD
HELD ($5,564,000,000)*
21.3%
15.8% :
13.5%:
18.3%
10.2%
51.6%
37.2%
8.6%
■69% j
8.7%
2.9%
- ..."
7.1%
3%
FEDERAL HOUSING ADMINISTRATION
Table 7.—Type of institution originating and holding all home mortgages: Number and face amount of Secs. 203 and 603 mortgages originated for the year 1948 and held in portfolio as of Dec. 31,1948
Type of institution as classified Dec. 31,1948 Number of institutions Mortgages originated 1 Mortgages held 2 Per- • cent-age dis- tribution 3
Originating Holding Number Amount Percentage distribution 2 Number Amount
Sec.203
National bank _ .. 1,143 2,764 23,451 $155,466, 507 17.8 170 404 $813 9RR R9O 25 1
State bank 1,274 3^ 397 18' 218 122, 264, 950 14.0 123 489 595 499 577 18 4
Mortgage company... 352 380 34j 952 225,860,410 25.9 13’053 81’457’473 2 n
Insurance company 359 493 33^ 347 222,831,650 25.6 218’ 544 1 112’ 768’ 389 34 3
Savings and loan association. 685 1,535 14i 073 89,914, 700 10.3 55,' 010 ’ 268; 672’, 333 8.3
Savings bank . ... 129 249 4,625 33,256, 750 3.8 55, 569 285 379 850 8 K
Federal agency 4 2,062 8’ 699’ 121 _ 3
All other4 29 119 3,516 22,625,050 2.6 15,034 70,941; 398 2.2
Total 3,971 8,941 132,182 872,220,017 100.0 653,165 3,236,684, 961 100.0
Sec. 603
National bank 413 1,011 28,014 $215,464,450 17.8 63, 556 $373,938 887 16 1
State bank 464 1,286 22,691 163, 846,650 13.5 48,368 285,603 634 12 .3
Mortage company 274 280 46; 864 348; 872; 800 28.7 15,371» 110,178,350 4.7
Insurance company. _ 243 320 32,741 245, 519,172 20. 2 161,359 964,380 020 41 4
Savings and loan association. 437 711 17; 199 13L355;700 10.8 33,7781 208,494; 252 9.0
Savings bank .. .. 84 140 4,057 30,324,450 2.5 32,346 197,669,529 8 5
Federal agency _ 4 14; 237 101,037,850 4 3
All other4 20 49 10,439 79,041,600 6.5 13; 251 86,301,210 3.7
Total 1,935 3,801 162,005 1,214,424, 822 100.0 382,266 2,327,603,732 100.0
Total’
Natinna.1 bank _ 51,465 $370,930,957 17.8 233,960 $1,187,205 707 21 .3
State bank .. . . . 40,909 286, Hi; 600 13.7 171,857 881,103,211 15 8
Mortgage company . . 81,816 574;733;210 27. 5 28,424 191,635,823 3 5
Insurance company __ 66,088 468; 350, 822 22.4 379,903 2,077,148,409 37 2
Savings and loan association. __ _ _ __ 31; 272 22L 270^00 10. 6 88,788 477,166 585 8 6
Savings bank 8; 682 63; 58L 200 3.1 87,915 483,049’, 379 8. 7
Federal as-ermy .. 16; 299 109,736,971 2.0
All other4 13, 955 101,666,650 4.9 28,285 157,242,608 2.9
Total 294,187 2,086,644,839 100.0 1,035,431 5, 564,288,693 100.0
1 Total originations for the year do not agree with insurance written for the year shown elsewhere, due to lag in tabulation.
2 Less than face amount in force, due to lag in tabulation.
3 Based on amount of mortgage.
4 Includes industrial banks, finance companies, endowed institutions, private and State benefit funds, etc.
5 Excludes mortgages insured under Sec. 603 pursuant to Sec. 610 and those insured under Sec. 609.
amount of mortgages originated by the various types of institution through 1948 have not been in proportion to the number of institutions in each category. For both Section 203 and Section 603, the largest number of institutions originating or holding mortgages as of December 31, 1948, were the State banks, but (as shown in Chart III) these institutions ranked fourth in the amount of insurance originated and third in the amount held at the year end.'
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HOUSING AND HOME FINANCE AGENCY
Mortgage companies have originated some $2,474,315,650, or more than one-fourth, of the total amount of home mortgages insured by the Federal Housing Administration since the beginning of operations. In 1948, these institutions originated 81,816 mortgages under Sections 203 and 603 amounting to $574,733,210, or, as the chart and table show, about 27.5 percent of thg total amount written under these sections. Insurance companies ranked second, originating 66,088 mortgages for $468,350,822, or 22.4 percent of the total amount. National banks, ranking third in volume, together with State banks, which ranked fourth, brought the amount written for all commercial banks to 92,374 mortgages for $657,042,557, or 31.5 percent of the total amount.
The institutions holding the greatest volume of FHA-insured home mortgages on December 31, 1948 were the insurance companies with 379,903 mortgages for $2,077,148,409—more than one out of every three mortgages held in portfolio as of that date. These institutions had in their portfolios almost one-third more FHA mortgages than they had originated since the beginning of operations. National banks, as of the year end, held 233,960 mortgages for $1,187,205,707, or about 21.3 percent of the total amount held. National banks and State banks combined brought the holdings of all commercial banks to about the same as that of insurance companies. Mortgage companies, which originated the greatest volume of mortgages, held only 3.5 percent of the total.
Transfers.—Table 8 shows, for the year 1948, the participation in the secondary market of financial institutions buying and selling mortgages insured under Sections 203 and 603. Including resales, a total of 133,924 of these mortgages with an original face amount of $886,573,530 were transferred during the year. Some 1,165 separate institutions purchased 51,730 Section 203 mortgages totaling $304,-879,152, while 1,145 institutions sold these mortgages. Under Section 603, 82,194 mortgages totaling $581,694,378 were purchased by 689 institutions and sold by 878 institutions.
With sales of mortgages aggregating $458,354,492, mortgage companies accounted for over half the dollar volume of home mortgages sold during 1948. These institutions frequently originate FHA mortgages with the intention of selling them and acting as servicing agent for the purchasers. As the table and chart show, they purchased only 2.6 percent of the dollar amount of mortgages transferred during the year. State banks, which sold 25,597 mortgages with original face amount of $162,329,161, ranked second-in volume of sales, accounting for 18.3 percent of the total amount sold. National banks were third with 13,757 mortgages for $90,444,727 or 10.2 percent of
186
FEDERAL HOUSING ADMINISTRATION
Table 8.—lype of institution purchasing and selling all home mortgages: Number and face amount of home mortgages transferred {including resales) under Secs. 203 and 603, for the year 191/8
Number of institutions Mortgages purchased Mortgages sold
Type of institution as Per- Per-
classified Dec. 31, 1948 Purchasing Selling Number Amount cent-age dis-tri- Number Amount cent age dis-tri-
bu- bu-
tion1 tion 1
Sec. 203
National bank 330 235 5,362 $29, 279, 784 9.6 4,896 $28, 274, 299 9.3
State bank _ .
445 278 9,095 50, 984,078 16.7 11,445 66, 580, 211 21.8
Mortgage company
53 329 1,213 6, 768, 900 2.2 26,480 157, 777', 842 51.8
Insurance company. _ __
185 176 29,854 380 180, 976,850 2, 249, 750 59.3 .8 4,300 2.381 26, 727; 000 12, 942, 800 8.7 4 2
Savings and loan association.._ 55 97
Savings bank. _ ... 70 9 4,340 .545 26,186, 540 2,859,150 5, 574,100 8.6 J) 147 101 1,980 ' 939; 800 359,450 11, 277,750 .4
Federal agency... . ... 2 2
Allother 2... ... .. 25 19 941 1.9 3.7
Total _ 1,165 1,145 51, 730 304,879,152 100.0 51, 730 304,879,152 100.0
Sec. 603
National bank .. . 164 159 3,707 $25,362,400 4.4 8,861 $62,170,428 10. 7
State bank ... _
257 176 7,830 2,428 42,824 163 51, 784, 950 16, 879,850 305, 890, 978 1,098,850 8.9 2.9 52.5 .2 14,152 95, 748, 950 300, 576,650 33, 746,850 35, 533, 250 16.5 51.6 5.8 6.1
Mortgage company . ___ 48 272
Insurance company. _ 127 125 4,639 4,956
Savings and loan association... 33 112
Savings bank. 43 12 8, 569 14,343 2,330 63,462,800 101,404, 550 15,810, 000 11.0 17.4 2.7 251 319 7,366 1,907; 350 1,101,350 50, 909, 550 .4 .1 8.8
Federal agency 2 2
All other 2 .. 15 20
Total 689 878 82,194 581, 694,378 100.0 82,194 581,694,378 100.0
Total3
National bank _ __ 9,069 16,925 3, 641 72,678 543 $54, 642,184 102, 769, 028 23,648, 750 486,867,828 3,348,600 89, 649,340 6.2 11 6 13, 757 25, 597 68,130 8,939 7,337 398 420 9,346 $90, 444, 727 162,329,161 458,354,492 60,473,850 48,476, 050 2,847,150 1, 460, 800 62,187,300 10. 2 18.3 51.6 6.9 5.5
State bank _ _ ..
Mortgage company _ _ ... 2.6 54.9 4
Insurance company .... _ .
Savings and loan association...
Savings bank .. . __ ... . 12,909 14,888 3, 271 10.1 11 7
Federal agency ... 104, 263, 700 21, 384,100
All other2 _ 2.5 7?1
Total . 133, 924 886, 573, 530 100.0 133,924 886, 573, 530 100.0
1 Based on amount of mortgage.
2 Includes industrial banks, finance companies, endowed institutions, private and State benefit funds etc 3 Excludes mortgages insured under Sec. 603 pursuant to Sec. 610 and under Sec. 609.
the dollar amount. National and State banks combined brought the sales of ail commercial banks to 28.5 percent of total sales.
The dominant type of purchasing institution in 1948 was insurance companies. These institutions bought 72,678 mortgages for $486,-867,828, or 54.9 percent of the total amount transferred. Again approaching their prewar share of the market, Federal agencies acquired a total of 14,888 mortgages with an original face amount of $104,263,700—11.7 percent of the total amount transferred. Nearly
187
HOUSING AND HOME FINANCE AGENCY
all ($100,435,250) of these mortgages were purchased by the Federal National Mortgage Association. Most of the FHA home mortgages purchased by Federal agencies in 1948 were mortgages insured under Section 603. As the table shows, about 17.4 percent of the volume of Section 603 mortgages transferred were purchased by Federal agencies, while only 0.9 percent of the Section 203 mortgages transferred were acquired by these agencies. Yearly purchases by Federal agencies of mortgages insured under the two sections combined, amounting to less than one-half of one percent of the total purchase in 1946 and 1947, rose to 11.7 percent in 1948.
Terminations and F'oreclosures
Of the 1,983,820 mortgages insured under Sections 203 and 603 through December 31, 1948, 896,500, or 45.2 percent, have been terminated. Some 121,305 of these terminations occurred during 1948— 28.4 percent below the number terminated during 1947 and 31.8 percent under the 177,908 insurance contracts terminated in 1946.
Disposition.—An FHA-insured mortgage is terminated whenever it is paid off in full prior to maturity, is superseded by a new FHA mortgage, matures according to the terms of the mortgage contract, or is foreclosed by the mortgagee. Table 9 shows the cumulative number and dollar amount of all home mortgages insured, terminated, and in force, as of December 31, 1948. When a mortgage
Table 9.—Disposition of all home mortgages insured by FHA: Number and amount of mortgages insured, terminated, and in force, by sections, cumulative through Dec. 31,1948
Disposition Total i Sec. 203 Sec. 603 Secs. 603-610
Number Amount Number Amount Number Amount Number Amount
Mortgages insured. 1,984,744 $9,924,298,727 1,405,065 $6,628,065,185 578,755 $3, 292,822,092 924 $3,411,450
Mortgages terminated: Prepayments in full
750,976 129,639 3,175 10,303 1,898 510 3,334,465,141 574,803,272 6, 766,349 52,090,901 8,489,401 2,193,109 623,855 87,136 3,175 4,071 1,413 386 2,747,938,687 385,420,905 6, 766,349 19,422,951 6,361,701 1,709; 109 127,120 42,503 586,521,454 189,382,367 1 5,000
Prepayments by superses-sion
Matured loans.. Properties acquired by FHA.
6,232 485 124 32,667,950 2,127,700 484,000
Withdrawals... Other terminations
Total terminations
896, 501 3,978,808,173 720,036 3,167,619,702 176,464 811,183,471 1 5,000
Mortgages in force
1,088,243 5,945,490, 554 685,029 3,460,445,483 402,291 2,481, 638,621 923 3,406,450
। Excludes mortgages insured under Sec. 609.
188
FEDERAL HOUSING ADMINISTRATION
is foreclosed, the title to the property may be held by the mortgagee or may, at his discretion, be transferred to the Federal Housing Administration in exchange for debentures and certificates of claim.
'Yearly trend.—Table 10 shows the yearly trend of terminations of mortgage insurance contracts, with special emphasis on titles acquired by mortgagees and foreclosures in process as of the end of each year. The 45.2 percent of the total mortgages insured under Sections 203 and 603 which had been terminated by the end of 1948 included over half of the total number of mortgages insured under Section 203 and some 30 percent of the Section 603 insured cases. The 1948 increase of 323 in titles acquired by mortgagees under these sections brought the cumulative number acquired since the beginning of operations to 12,508, or about 0.63 percent of the total number insured under these sections of the act—0.39 percent of the mortgages insured under Section 203 and 1.21 percent of those insured under Section 603. As of the close of 1948, 263 cases were in process of foreclosure, 116 more than at the end of 1947, but still only 0.02 percent of the number of insured mortgages in force.
State distribution.—The State distributions of Section 203 and Section 603 mortgages insured, terminated (including titles acquired by mortgagees), and in force are presented in Tables 11 and 12.
In four States or Territories, the cumulative ratio of mortgages terminated to mortgages insured under Section 203 exceeded 60 percent. Over 70 percent of the mortgages insured under Section 203 on properties located in North Dakota have been terminated. Hawaii was second with 66 percent, followed by California with 63 percent. Minnesota was fourth with 62.5 percent. Only in Puerto Rico, Arkansas, Louisiana, and New York have terminations been lower than 40 percent.
In the 8-year period during which insuring operations have been carried on under Section 603, cumulative terminations of Section 603 mortgages have remained relatively low, with the number of terminations exceeding 45 percent of the number of mortgages insured in only four States—Connecticut, Delaware, Massachusetts, and West Virginia.
In relation to the number of mortgages insured, the number of titles acquired was higher under Section 603 than under Section 203—about 1.21 percent for Section 603 as compared to slightly under 0.39 percent for Section 203. In West Virginia and Connecticut the Section 603 ratio exceeded 21 percent. In addition to these two States, three
189
HOUSING AND HOME FINANCE AGENCY
others showed a ratio greater than 5 percent—Maryland with 6.94 percent, Iowa with 5.97 percent, and Utah with 5.27 percent. Under Section 203, the four States showing the highest percentages of titles
Table 10.—Yearly trend of terminations of all home mortgage insurance contracts: Total terminations, titles acquired by mortgagees, and foreclosures in process under Secs. 203 and 603, 1935-48
Year Terminations 1 Titles acquired by mortgagees2 Foreclosures in process as of end of year
Number for the year Cumulative through end of year Annual increase Cumulative through end of year Number Percent of insured mortgages in force
Number Percent of total insured Number Percent of total insured
Sec. 203
1935 95 95 0.41 2 2 0.01 (3 4 5) (».)
1936 1,362 1,457 1.45 30 . 32 .03 (3) (3)
1937 5,065 6, 522 3.22 218 250 .12 (3) (3)
1938 8i 871 15,393 4.93 696 946 .30 548 0.18
1939 12,865 28,258 6.07 1,149 2,095 .45 808 .18
1940 22,829 51, 087 8.06 1,452 3,547 .56 1,046 .18
1941 30i 033 8L 120 9.74 1,122 4,669 .56 750 .10
1942 37,340 118,460 12.06 572 5,241 .53 530 .06
1943 75i 609 194,069 18.75 133 5,374 .52 164 .03
1944 103,595 297; 664 27.52 29 5,403 .50 99 .01
1945 104,879 402,543 35.68 30 5,433 .48 102 .01
1946 123; 734 526; 277 44.04 41 5,474 • 46 59 .01
1947 107i 466 633; 743 49.83 15 5,489 .43 62 .01
1948 86i293 4 720; 036 51.25 39 5,528 .39 93 .01
Sec. 603
1941 .
1942 812 812 1.12 1 1 (3) 160 0.22
1943 3,250 4,062 2.18 841 842 0.45 156 .09
1944.. 8,207 12,269 4.28 2, 762 3,604 1.26 721 .26
1945 12,979 25,248 7.50 2,133 5,737 1.70 827 .27
1946 54,174 79; 422 22.64 797 6,534 1.86 50 .02
1947 62,030 141,452 34.06 162 6,696 1.61 85 .03
1948 35; 012 4 176,464 30.49 284 6,980 1.21 170 .04
Total
1935 95 95 0.41 2 2 0.01 (3) (3)
1936 1,362 1,457 1.45 30 32 .03 (3) (3)
1937 5; 065 6; 522 3.22 218 250 . 12 (3) (3)
1938 8,871 15; 393 4.93 696 946 .30 548 0.18
1939 12,865 28,258 6.07 1,149 2,095 .45 808 .18
1940 22; 829 5i; 087 8. 06 1,452 3,547 .56 1,046 .18
1941 30,033 8L 120 9.70 1,122 4,'669 .56 750 .10
1942 38; 152 119; 272 11.31 573 5,242 .50 690 .07
1943 78,859 198;131 16.23 974 6,216 .51 320 .03
1944 HL 802 309; 933 22.66 2,791 9,007 .66 820 .08
1945 117,858 427; 791 29.20 2,163 11,170 .76 929 .09
1946 , .. 177; 908 605, 699 39.19 838 12,008 .78 109 .01
1947 169; 496 775; 195 45.95 177 12,185 .72 147 .02
1948 « 12i;305 4 896; 500 45.19 323 12,508 .63 263 .02
1 Include terminations of mortgage insurance after acquisition of titles by mortgagees.
2 Include titles transferred to FHA and those retained by the mortgagees with termination of mortgage insurance, and titles to 44 foreclosed properties under Sec. 203, and 263 foreclosed properties under Sec. 603, which are subject to redemption or held by mortgagees pending final disposition.
3 Less than 0.005 percent.
4 Of the cumulative number of terminated mortgages, FHA refinanced 87,136 Sec. 203 cases and 42,503 Sec. 603 cases. A refinanced mortgage involves the same property as covered by the original FHA insurance contract.
5 Excludes one mortgage insured under Sec. 603 .pursuant to Sec. 610, terminated during 1948.
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FEDERAL HOUSING ADMINISTRATION
acquired by mortgagees were Massachusetts with 1.86 percent, Kansas with 1.65 percent, Vermont with 1.42 percent, and Delaware with 1.18 percent.
Table 11.—State distributions of terminations of mortgage insurance contracts and titles acquired by mortgagees: Home mortgages insured by FHA under Sec. 203, 1935-48
Terminations
Location of property Total mortgages insured Number As a percent of mortgages insured Insured mortgages in force Dec. 31, 1948
Total Titles acquired 1 2 Total Titles acquired
Alabama . _____ 15, 098 6,045 40 40.04 0 26 9 053
Arizona 9. 529 4,484 25 47.06 .26 5’ 045
Arkansas _ __ 13,675 4. 582 49 33. 51 .36 9 093
California _ _ _____ _ __ 225,330 141, 977 418 63. 01 19 83’ 353
Colorado _ _ ._ 15, 705 8. 612 39 54. 84 25 7’ 093
Connecticut 13, 281 5,355 40 40. 32 .30 7,926
1 Delaware _ ______ _ _ 2,115 1.099 25 51. 96 1 18 1 016
District of Columbia 2,923 1.564 2 53.51 .07 L359
Florida 28, 699 14. 470 172 50. 42 .60 14, 229
Georgia. _ _ _ _____ 20. 203 10,069 87 49. 84 .43 10 134
Idaho 7, 539 4,001 20 53. 07 .27 3, 538
Illinois 84, 634 48. 294 202 57. 06 .24 36, 340
Indiana 52, 551 25, 613 145 48. 74 .28 26,938
Iowa 14,340 7,808 30 54. 45 .21 6, 532
Kansas 21,211 11,236 349 52. 97 1.65 9, 975
Kentucky 13,414 6.396 78 47. 68 .58 7,018
Louisiana 18,322 7,085 48 38. 67 .26 11,237
Maine 4. 766 2.130 45 44.69 .94 2,636
Maryland 20, 062 11. 736 71 58. 50 .35 8,326
Massachusetts 8, 387 4. 889 156 58. 29 1.86 3, 498
Michigan 103, 598 49, 670 528 47. 94 .51 53, 928
Minnesota______________________ _ _. 16. 087 10, 054 81 62. 50 . 50 6,033
Mississippi 8, 848 4. 779 61 54.01 .69 4,069
Missouri 41,868 19.367 198 46. 26 .47 22, 501
Montana 5,800 2.881 10 49. 67 . 17 2, 919
Nebraska 11,652 6, 432 45 55. 20 .39 5, 220
Nevada. 2, 450 1,200 48.98 1,250
New Hampshire 2, 838 1,462 22 51.52 .78 1,376
New Jersey 72, 727 34, 214 544 47.04 .75 38, 513
New Mexico 4, 465 2, 337 4 52. .34 .09 2,128
New York __ __. ___ 72, 237 28, 693 639 39. 72 .88 43, 544
North Carolina 13,894 7, 495 53 53. 94 .38 6,399
North Dakota 1,266 891 8 70.38 .63 375
Ohio 72, 687 43, 488 174 59.83 .24 29,199
Oklahoma 31, 551 13,090 135 41.49 .43 18, 461
Oregon 14, 576 7, 346 23 50. 40 .16 7,230
Pennsylvania I 86,139 42,696 235 49. 57 .27 43, 443
Rhode Island 3, 828 1,976 26 51.62 .68 1,852
South Carolina 9,337 4,016 51 43.01 .55 5,321
South Dakota 4,614 2, 585 21 56.03 .46 2,029
Tennessee 22, 703 11.081 124 48.81 .55 11,622
Texas 69, 744 31,782 170 45. 57 .24 37, 962
Utah 11.855 6, 375 38 53.77 .32 5, 480
Vermont 2,604 1,493 37 57.33 1. 12 1, 111
Virginia 26, 491 11,243 84 42. 44 .32 15, 248
Washington 58, 045 25, 462 88 43. 87 .15 32, 583
West Virginia 13, 841 5, 767 18 41.67 .13 8,074
Wisconsin _ _ 14,356 8, 570 52 59. 70 .36 5, 786
Wyoming 5, 909 3, 520 16 59. 57 .27 2,389
Alaska.__ ___ 551 284 2 51.54 36 267
Hawaii. . _ 2, 500 1,649 65.96 851
Puerto Rico _ 2, 942 693 23. 56 2,249
Total 2 1, 405,065 720,036 5,528 51.25 0.39 2 685,029
1 Includes titles transferred to FHA and those retained by the mortgagees with termination of mortgage insurance, and titles to 44 foreclosed properties which are subject to redemption or held by mortgagees pending final disposition.
2 Includes 1,278 insured cases not yet tabulated by States as of Dec. 31, 1948.
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HOUSING AND HOME FINANCE AGENCY
Table 12.—State distributions of terminations of mortgage insurance contracts and titles acquired by mortgagees: Home mortgages insured by FHA under Sec. 603,1941-48
Location of property Total mortgages insured Terminations Insured mortgages in force Dec. 31, 1948
Number As a percent of mortgages insured
Total Titles acquired 1 Total Titles acquired
Alabama 9,479 2,642 275 27.87 2.90 6,837
Arizona 6,066 396 3 6.53 . 05 5,670
Arkansas 4,855 1, 558 38,354 2 32.09 .04 3,297
California 116,889 5 32.81 (2) 78, 535
Colorado 4,970 1,168 1,592 23. 50 21.63 3,802
Connecticut 7,360 3,632 49.35 3, 728
Delaware 2,612 1,350 — 51. 68 — 1, 262
District of Columbia 2,663 700 1 26. 29 . 04 1,963
Florida 25,505 3,349 65 13.13 .25 22,156
Georgia 12, 577 3,820 52 30.37 41 8, 757
Idaho 618 99 19.11 419
Illinois 20,047 8,660 6 43. 20 .03 11,387
Indiana 14,389 4,082 10 28.37 .07 10,307
Iowa 2,447 903 146 36.90 5.97 1, 544 6,616
Kansas 10,113 3,497 83 34. 58 82
Kentucky 4,481 1, 284 1 28. 65 . 02 3,197
Louisiana 12,052 4, 590 297 38.08 2.46 7, 462
Maine 1,232 551 5 44. 72 . 41 681
Maryland 12, 952 5, 504 899 42. 50 6.94 7,448
Massachusetts 2,880 1,308 2 45.42 .07 1,572
Michigan 38,882 9,867 665 25.38 1.71 29,015 2,884
Minnesota 4,110 1,226 2 29.83 . 05
Mississippi 3,989 603 175 15.12 2.55 3,386 4,231
Missouri 6,851 2,620 38. 24
Montana 326 73 — 22.39 2.05 253
Nebraska 5, 558 2, 421 114 43.56 3,137 1,287
Nevada 1,918 631 — 32.90 —
New Hampshire 316 75 1 23.73 .32 241
New Jersey 14,801 4,986 123 33.69 .83 9,815
New Mexico 2,458 339 312 13.79 1.65 2,119
New York 18, 913 4,040 21.36 14, 873
North Carolina 8,091 1,562 3 19.31 .04 6, 529
North Dakota 123 9 _ 7.32 114
Ohio 23, 222 9,061 74 39.02 .32 14,161
Oklahoma ; 16, 954 4,269 209 25.18 1.23 12, 685
Oregon 6,006 1,566 1 26. 07 .02 4,440 15, 541
Pennsylvania 25,311 9,770 18 38.60 .07
Rhode Island 1,228 501 40.80 727
South Carolina 5,908 1,247 15 21.11 . 25 4, 661
South Dakota 496 91 — 18. 35 405
Tennessee 15,199 49,207 2,403 35 15.81 .23 12,796
Texas 12,423 147 25. 25 .30 36,784
Utah 7,508 2,585 • 396 34.43 5. 27 4,923
Vermont 279 102 9 36. 56 3.23 177
Virginia 17,691 6, 553 823 37.04 4.65 11,138
Washington 18,136 7,610 139 41.96 .77 10, 526
West Virginia u— 1,236 559 275 45.23 22.25 677
Wisconsin 4,136 1,592 — 38.49 2,544
Wyoming 1,008 158 — 15.67 850
Alaska 1 16.55 1
Hawaii 447 74 — 373
Puerto Rico 2,847 1 . 04 2,846
Virgin Islands 2 2
Total 8 578,755 176,464 6,980 30.49 1.21 8 402, 291
1 Include titles transferred to FHA and those retained by the mortgagees with termination of mortgage insurance and titles to 263 foreclosed properties which are subject to redemption or held by mortgagees pending final disposition.
a Less than 0 005 percent.
8 Includes 1,510 insured cases not yet tabulated by States as of Dec. 31, 1948.
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FEDERAL HOUSING ADMINISTRATION
Mortgage Characteristics
As shown in Table 1, on page 166, the Federal Housing Administration insured 296,724 home mortgages in 1948 under the provisions of Sections 203 and 603 of the National Housing Act. As in the earlier years of operations under Section 603, the great majority of the homes securing mortgages insured in 1948 under this section were newly constructed—the 1948 volume of 160,904 new homes representing 98 percent of all homes covered by mortgage insurance under Section 603 during the year. The 28,779 new dwellings covered by mortgages insured under Section 203 accounted for some 22 percent of the 1948 total of all homes securing mortgages insured under this section—the highest proportion in any year since 1942. To a considerable extent, the revival of new-home activity under this section may be attributed to the expiration, on April 30,1948, of FHA’s authority to issue commitments for the insurance of new-home mortgages under the emergency provisions of Section 603. However, it should be noted that the 160,904 new-home mortgages insured under Section 603 during the year (including 110,667 from commitments outstanding on April 30) was 45 percent over the previous Section 603 peak of 111,183 new-home mortgages insured in 1943.
Typically, the dwelling securing a Section 203 new-home mortgage insured in 1948 was a one-family structure of 5.4 rooms, the average floor area being 972 square feet.1 The property was valued by the Federal Housing Administration at $8,721, including the value of the house, other physical improvements such as garages (which were reported in about one out of every two cases), and land, which on the average accounted for $1,049 or about 12 percent of the estimated total valuation. Included in the average land value were rough grading, terracing, and the construction of any necessary retaining walls. The typical new-home owner financed his purchase with a loan of $7,058 which he contracted to amortize over a 20-year period with monthly payments of $58.08. These payments represented about one-sixth of his $4,000 effective annual income, which FHA estimated would prevail for approximately the first one-third of the mortgage term. The monthly payment included payment to principal, interest at not more than 4^ percent, the FHA insurance premium of one-half of 1 percent, hazard insurance, taxes and special assessments, and miscellaneous items, including ground rent, if any.
1 The characteristics of the mortgages, homes, and mortgagors insured under Section 203 are analyzed on the basis of a sample of 15,740 mortgages secured by new homes and 40.804 existing-home mortgages, which were selected from those insured in the first 10 months of 1948.
831481—49---14
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Section 203 trends.—These and other characteristics associated with the typical Section 203 insured single-family home mortgage transaction are shown in Table 13, together with comparable data for selected years since 1940. The 1948 data indicate a continued strong upward trend in the median or average amounts associated with all of
Table 13.—Characteristics of mortgages, homes, and mortgagors: Based on FHA-insured mortgages secured by new and existing single-family homes, Sec. 203, for selected years 1940-48
Year New homes Existing homes New homes Existing homes New homes Existing homes New homes Existing homes
Mortgage principal 1 Duration in years 2 Loan as a percent of FHA value 3 1-family as a percent of 1- to 4-family
1948 $7, 058 6,201 5, 504 (4) 4,692 2 4, 410 $5,969 5,363 4,697 4,317 4,076 2 3,902 20.1 20.2 21.0 (4) 23.5 •23.0 19.3 19.1 18.9 18.0 18.1 817.5 80.1 81.2 84.1 (4) 86.7 84.8 76.5 77.3 78.6 78.9 77.9 75.3 98.0 97.5 98.7 (4) 99.4 99.0 94.4 94.1 93.6 95.9 93.2 92.7
1947
1946
1944
1942 - . ---
1940
1948 ..
Property valuation 16 Land valuation 2 7 Number of rooms 18 Percent with garages
$8,721 7,574 6,558 (4) 5,368 5, 028 $7,579 6, 769 5,934 5,484 5,272 4,600 $1,049 893 761 (<) 635 662 $970 915 833 924 935 948 5.4 5.3 5.5 (4) 5.5 5.6 5.6 5.7 5.9 8 6. 3 6.3 6.3 55.1 56.1 58. 1 W 70.3 75.6 70.5 73.1 83.4 84.2 85.5 87.2
1947
1946 . . . ... _
1944
1942
1940 . .
1948
Mortgagor’s effective annual income 19 Total monthly payment1 10 Payment as a percent of income 3 910 Ratio of property valuation to annual income 3 6 9
$4,000 3,643 3,313 C) 2,416 2,416 $3,731 3,614 3,101 3,120 2,751 2,490 $58.08 50.84 46.18 (4) 37.46 8 35.15 $49. 76 45.25 40.83 8 40. 50 37.80 8 34. 56 16.1 15.7 15.3 W 16.8 17." 2 14.4 14.5 14.3 14.5 15.1 15. 1 2.04 1.97 1.81 (<) 1.98 1.97 1.87 1.83 1. 71 1.64 1.72 1.70
1947. _
1946
1944 . _
1942
1940
1 Data shown are medians.
2 Data shown are averages (arithmetic means).
3 Based on arithmetic means.
4 Data not available.
8 Estimated.
6 FHA property valuation includes valuation of the house, all other physical improvements, and land.
7 The value of the land is estimated by FHA as including rough grading, terracing, and retaining walls, if any.
8 Excludes bathrooms, toilet compartments, closets, halls, and similar spaces.
9 Based upon the FHA estimate of the earning capacity of the moitgagor that is likely to pievail during approximately the first third of the mortgage term.
10 Includes monthly payment for first year to principal, interest, FHA insurance premium, hazard insurance, taxes and special assessments, and ground rent and miscellaneous items if any.
those characteristics which are measured in terms of dollars—including the mortgage principal, which had increased more than $850 over the 1947 median of $6,201; property valuation, which was 15 percent above its 1947 level; land valuation, up $156 or 17 percent; mortgagor’s effective income, up $357 or about 10 percent; and total monthly payment, which had increased by 14 percent, from $50.84 in
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FEDERAL HOUSING ADMINISTRATION
1947 to $58.08 in 1948. This upward trend is shown graphically in Chart IV for the typical valuation, mortgage amount, income, and land value associated with Section 203 new-home mortgages.
It should be noted that, although increasing at the rate of 0.4 percent per year since 1946, payment as a percent of income is still below the prewar level. This comparison, however, makes no allowance for the
CHARACTERISTICS OF MORTGAGES, HOMES, AND MORTGAGORS FHA-INSURED NEW SINGLE-FAMILY HOME MORTGAGES
195
DOLLARS
--- 9,000
--- 8,000
--- 7,000
--- 6,000
--- 5,000
--- 4,000
--- 3,000
— 2,000
--- I ,000
0
7,000
6,000
5,000
4,000
3,000
2,000 -
1,000 -
___0
LAND VALUATION
MORTGAGOR'S INCOME
MORTGAGE AMOUNT
PROPERTY VALUATION
1940 1941 1942 1946 1947 1948
Chart IV
DOLLARS
9,000 -
8,000 -
SECTION 203, FOR SELECTED YEARS 1940-1948
HOUSING AND HOME FINANCE AGENCY
marked increase in income taxes and other taxes which has occurred since 1940. It is also of interest to note that the ratio of property valuation to income reached 2.04 in 1948—0.07 above 4947. The 4948 homes were very slightly larger than those securing new-home mortgages insured under Section 203 in 4947, 5.4 rooms compared with 5.3; but 1 percent fewer homes had garages.
The typical 1948 property valuation estimated by the Underwriting Division for existing homes securing Section 203 insured mortgages was $7,579—up about 12 percent over the 1947 median of $6,769. Included in this figure was an average land value of $970—$55 higher than for the preceding year. The typical mortgagor contracted to repay the $5,969 loan necessary to finance his purchase with a monthly payment of $49.76 over a period of slightly more than 19 years. This payment represented about 14.4 percent of his $3,731 annual income. This is 0.1 percent below the comparable percentage for 1947, while the ratio of property valuation to income reached a new postwar high of 1.87.
Continuing a trend first observed in 1946, the typical room count for existing homes declined to 5.6 rooms—the average floor area being 1,075 square feet, or about 100 square feet larger than for the newly constructed dwellings. Also declining for the third consecutive year was the ratio of loan to value, which averaged 76.5 percent or 3.6 percent below the ratio for new-home mortgages.
Section 603 trends.—Selected characteristics of the one-family new-home mortgages insured during the year under Section 603 and of the dwellings securing these mortgages are given in Table 14.1 This table presents comparable information for the 3 years in which the Veterans’ Emergency Housing Program has been in operation—1946, 1947, and 1948.2
Unlike the Section 203 mortgages insured during 4948, which were processed on the basis of the estimated long-term valuation of the properties involved, the mortgages insured under the provisions of Section 603 were processed on the basis of the estimated necessary current cost of the properties. The typical one-family home securing a Section 603 new-home mortgage insured during the year had an estimated current cost of $8,476, including the cost of the house, other physical improvements, and land, which averaged $898. To finance his purchase, the buyer contracted to repay a loan of $7,424 at the rate
1 The characteristics of the mortgages and homes insured under Section 603 are analyzed on the basis of a sample of 45,219 new-home mortgages which were insured during the first 10 months of 1948.
- For information on the characteristics of mortgages and homes committed or insured under the Section 603 War Housing Program, 1941-45, see the 14th annual report of the Federal Housing Administration covering the year 1947.
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Table 14.—Characteristics of mortgages and homes: Based on FHA-insured mortgages secured by new single-family homes, Sec. 603 VEH, 191/6-1/8 1
Year Mortgage principal2 Duration in years 3 Loan as a percent of cost4 1-family as a percent of 1- to 4-family Total monthly payment2 3
1948 $7,424 24.4 85.1 92.9 $52 28
1947 6i 914 24.3 84. 5 95. 4 49 18
1946 6i 733 24.2 84.3 94.1 48.19
Necessary Percent Monthly
current Land val- N umber with ga- rental
cost 2 s uation 3 7 of rooms2 « rages value 3 3
1948 $8,476 $898 5.1 51.6 $64. 77
1947 8,020 835 5.2 49. 9 61.14
1946 7,860 1,071 5.2 40.8 60. 81
11946 data based on firm commitments issued; 1947-48 data, mortgages insured.
2 Data shown are medians.
2 Data shown are averages (arithmetic means).
4 Based on arithmetic means.
s Includes monthly payment for first year to principal, interest, FHA insurance premium, hazard insurance, taxes and special assessments, and ground rent and miscellaneous items if any.
« FHA estimate of necessary current cost of the property includes the cost of house, all other physical improvements, and land.
7 The value of the land is estimated by FHA as including rough grading, terracing, and retaining walls, if any.
s Excludes bathrooms, toilet compartments, closets, halls, and similar spaces.
»The monthly rental value is estimated on the basis of typical year-around tenant occupancy, excluding any premium obtainable because of local housing shortages or newness of the individual property.
of $52.28 a month over a term of 24.4 years. The homes insured under this section were slightly smaller than the new homes covered by Section 203 insured mortgages, the median size being 5.1 rooms. Only about 52 percent had garage facilities. These dwellings had an estimated monthly rental value of $64.77, the estimate being based on typical year-around tenant occupancy,' excluding any premium obtainable because of local housing shortages or the newness of individual properties.
As noted in connection with Section 203 transactions, practically all of the characteristics of the Section 603 insured contracts were higher in 1948 than in 1947. The median necessary current cost increased by 6 percent from $8,020 to $8,476; mortgage principal by 7 percent from $6,914 to $7,424, average loan-cost ratio from 84.5 to 85.1 percent; and total monthly payment from $49.18 to $52.28—an increase of 6 percent. The dwellings were very slightly smaller in 1948 than those covered by insurance written in the preceding year, while the percent with garages increased from 49.9 to 51.6.
It should be noted with respect to the Section 603 operations in 1946 and 1947 that, since the 1946 data are based on commitments issued and the 1947 data on mortgages insured during the respective years, there is a considerable amount of duplication in the cases covered by the statistics for the two years. Because of a shorter construction time for
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HOUSING AND HOME FINANCE AGENCY
homes built in Southern States, and, consequently, a shorter period of time between date of commitment and date of insurance, a higher proportion of the cases insured in 1947 were in Southern States than was true of commitments issued in 1946. This condition influenced the extent of the change between 1946 and 1947 in national medians for many of the characteristics described in this analysis or covered by the tables showing data on Section 603 operations for these 2 years. This is particularly true of necessary current cost, mortgage principal, land valuation, and 1-family structures as a percent of total.
Amount of mortgage.—The distributions of the mortgage amounts involved in the purchase of new and existing single-family homes securing mortgages insured under Section 203 in 1948 are shown in Table 15, together with comparable data for selected years since 1941.
The median new-home mortgage insured in 1948 was $7,058—14 percent above the comparable 1947 figure of $6,201 and more than $2,600 above the 1941 median loan of $4,419. Only about 47 percent of the new-home mortgages insured in 1948 under Section 203 were for less than $7,000, a markedly smaller proportion than the 65 percent under this amount in 1947. In 1941, the last year prior to the war, less than 5 percent of the new-home mortgages amounted to as much as $7,000.
Table 15.—Amount of mortgage principal: Based on FHA-insured mortgages secured by new and existing single-family homes, Sec. 203, for selected years 1941-48
Mortgage principal New homes,1 percentage distribution Existing homes, percentage distribution
1948 1947 1946 1942 1941 1948 1947 1946 1944 1942 1941
Less than $2,000__ m 0.1 0.1 0.1 0.3 0.3 0.6 1.0 2.4 2.8 5.2
$2,000 to $2,999 0.2 .5 ’ 1.1 3.7 8.0 1.8 4.0 7.6 14.3 18.0 22.4
$3 000 to $3,999 1.7 4.2 7.1 19.2 28.6 7.4 11.6 19.2 24.2 26.9 26.4
$4,000 to $4^999 7.4 14.6 22.6 38.8 31.4 17.8 23.4 28.9 24.5 24.4 21.4
$5 000 to $5,999 16.8 25.2 31.4 30.1 21.4 23.0 24.1 21.3 15.8 13.6 10.9
$6^000 to $6^999 21.4 20.4 25.0 5.0 5.8 20.0 17.0 11.0 9.0 6.7 6.1
$7,000 to $7,999 18.9 17.9 9.5 1.6 2.4 12.6 9.2 4.7 3.8 2.9 2.6
$8,000 to $8,999 - 19.3 11.9 2.4 .8 1.2 8.0 4.9 2.7 2.1 2.0 1.9
$9 000 to $9^999 ___ .. 6.5 2.3 .4 .2 .3 3.3 1.8 1.2 1.1 .8 .9
$16,000 to $10,999 3.6 1.3 .2 .2 J 2.5 1.4 1.1 1.1 .8 y 11
$11 000 to $11,999 1.8 .5 .2 .1 / ' I 1.0 .6 .2 .3 .2 j
$12 000 to $12,999 __ _ 1.1 .4 (2) .1 I Q f -9 .6 .4 .5 .4 i 11
$13;000 to $16^000 1.3 .7 .1 / 3 I 14 .8 .7 .9 .5 } 11
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Average mortgage $7,184 $6,345 $5, 548 $4,670 $4,483 $6,181 $5,561 $4,929 $4, 586 $4, 298 $4,129
Median mortgage 7,058 6,201 5,504 4,692 4,419 5,969 5,363 4, 697 4,317 4,076 3,847
i Data not available 1943-45.
2 Less than 0.05 percent.
Increasing at nearly the same rate indicated in the preceding paragraph for new’ homes, the typical mortgage amount for Section 203 existing-home mortgages reached $5,969 in 1948—$600 above the 1947 level and more than $2,100 higher than the 1941 figure of $3,847. The
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FEDERAL HOUSING ADMINISTRATION
proportion of these Ioans involving amounts of less than $6,000 declined from 86 percent in 1941 to only 50 percent in 1948.
New-home mortgages secured by single-family structures and insured under the Section 603 Veterans’ Emergency Housing Program have a statutory limitation of $8,100, compared with $16,000 for mortgages insured under Section 203. As a result, the distributions of the mortgages insured under this section, which are shown in Table 16, are much more concentrated than the distributions of Section 203 insured mortgages previously discussed. In 1948, almost one out of every four mortgages insured under Section 603 involved an amount of $8,000 to $8,100, with 80 percent reported in the range between $6,500 and the $8,100 limit. Comparatively, this range accounted for 65 percent of the mortgages insured in 1947. The 1948 median amount for mortgages insured under this section was $7,424—an increase of $510 over the 1947 figure and $366 above that for new-home mortgages insured in 1948 under Section 203.
Table 16.—Amount of mortgage principal: Based on FHA-insured mortgages secured by new single-family homes, Sec. 603 VEH, 1946-481
Mortgage principal New homes, percentage distribution
1948 1947 1946
Less than $3,500 _ _ _ 0.1 0.4 (2)
$3 500 to $3,999 _ 1.2 .3 0.3
$4 000 to $4399 .. - 1.1 1.2 1.1
$4’500 to $4’999 - -- .8 2.1 3.3
$5’660 to $5499 2.8 6. 6 8. 7
$5500 tO $5’999 -------- --------------- - _ . 5. 0 9. 0 10. 2
$6’000 to $6,499 _ _ - _ .. - _ _ _ 9.1 15.3 18 8
$6’500 to $6^699 ------ ---_ _ 14.4 17.7 17.4
$7 000 to $7399 - - - - - - -- --------- 18. 0 17. 8 16. 8
$7 500 to $7,999 -- - - -- -- 23 2 16. 0 16.9
$8’000 to $8100 -- - - - -- ’- 24.3 13. 6 6 5
100 0 100 0 100 0
Average mortgage principal $7,139 $6,783 $6,619
Median mortgage principal $7, 424 $6,914 $6,733
11946 data based on firm commitments issued; 1947-48 data, mortgages insured.
2 Less than 0.05 percent.
Monthly mortgage payment.—Table 17 presents the percentage distributions of the total monthly mortgage payments for new and existing single-family home mortgages insured under Section 203 and for new-home mortgages insured under Section 603 in 1948. Comparable data are included for Section 603 for 1946 and 1947—years in which the great bulk of new-home mortgage insurance was written under that section. The 1948 distributions of the monthly payments involved in mortgages insured under both sections are shown graphically in Chart V.
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HOUSING AND HOME FINANCE AGENCY
Table 17.—Total monthly mortgage payment: Based on FHA-insured mortgages secured by single-family homes, Secs. 203,1948, and 603 VEH, 1946-481
Total monthly mortgage payment2 Sec. 203, percentage distribution 1948 Sec. 603, percentage distribution new homes
New homes Existing homes 1948 1947 1946
Less than $25.00.. -- . 0.2 1.2 (3) 0.2 (3)
$25.00 to $29.99 .7 3.0 1.5 1.0 0.3
$30.00 to $34.99 2.6 6.5 1.9 2.6 2.6
$35.00 to $39.99 6.7 11.6 4.3 9.4 11.6
$40.00 to $44.99 8.1 14.0 10.8 17.2 20.4
$45.00 to $49.99 11.4 14.4 20.4 23.9 23.5
$50.00 to $54.99 . 13.1 12.5 27.1 23.2 15.9
$55.00 to $59.99 11.7 10.7 24.9 16.6 21.6
$60.00 to $64.99 11.8 7.5 8.0 3.3
$65.00 to $69.99 11.5 5.7 .8 .9 .2
$70.00 to $74.99 8.5 3.8 4.3 4.3 4.6
$75.00 to $79.99 5.0 2.4
$80.00 to $89.99 4.6 2.9
$90.00 to $99.99 2.1 1.5
$100.00 or more 2.0 2.3
100.0 100.0 100.0 100.0 100.0
Average payment - - - $58.70 $52.18 $51.41 $48.62 $48.11
Median payment . 58.08 49.76 52.28 49.18 48.19
1 1946 data based on firm commitments issued; 1947-48 data, mortgages insured.
2 Includes monthly payment for first year to principal, interest, FHA insurance premium, hazard insurance, taxes and special assessments, and ground rent and miscellaneous items, if any.
3 Less than 0.05 percent.
4 Includes all payments of $70 or more.
DISTRIBUTION OF TOTAL MONTHLY MORTGAGE PAYMENT
FHA-INSURED SINGLE-FAMILY HOME MORTGAGES
Chart V
200
PERCENT
LEGEND
NEW HOMES
EXISTING HOMES
SECTIONS 203 AND 603, 1948
SECTION 603
PERCENT1
-----50
------40
-----30
-----20
------10
0
50-
40 -
30 -
20-
10-
0
SECTION 203
LESS $3000 $4000 $5000 $6000 $7000 $8000 $9000 $100 00 ' LESS $3000 $40 00 $5000 $6000 $7000
THAN TO TO TO TO TO TO TO OR । THAN TO TO TO TO OR
$30 0 0 3 9 9 9 4 9 99 69 9 9 6 9 9 9 79 9 9 89 9 9 9 9 99 MORE | $3000 3999 4999 5999 6999 MORE
TOTAL MONTHLY MORTGAGE PAYMENT
FEDERAL HOUSING ADMINISTRATION
About 60 percent of the 1948 buyers of new single-family dwellings who financed their purchases with Section 203 insured mortgages contracted to repay their loans at the rate of $45.00 to $69.99 per month, including the payment to principal, interest, FHA insurance premium, hazard insurance premiums, taxes and special assessments, and miscellaneous items, including ground rent, if any. Reflecting a typical mortgage term differential of more than 4 years, the Section 603 payment distribution is concentrated within a somewhat lower range, with more than 72 percent of the payments reported between $45.00 and $59.99—even though the Section 603 median mortgage was more than $350 above that for Section 203. This condition is of course reflected in the median monthly payments, which were $58.08 and $52.28, respectively, for Section 203 and Section 603 mortgages insured during the year. It may be noted that the typical payment under Section 603 was about $3 higher than in 1947.
Payments on Section 203 insured existing-home contracts ranged somewhat lower than those given above in connection with new-home purchases. The median payment was $49.76, with about two out of every three mortgages requiring repayment at the rate of from $35 to $59.99 per month.
Property Characteristics
Valuation for single-family home.—The distributions of FHA property valuation, including the valuation of the house, all other physical improvements, and land, are shown in Table 18 for new and existing homes securing mortgages insured under Section 203 in selected years between 1940 and 1948. More than 60 percent of the 4948 new-home valuations were reported in the range from $6,000 to $9,999,. with an additional 26 percent between $10,000 and $13,999. The table clearly shows the marked increase which has occurred in the valuation of new dwellings during the eight years since 1940. In that year, with only about 6 percent of the new homes valued at $8,000 or more, the median value was $5,028. The corresponding figure reached $6,558 in 4946, increased by more than $1,000 to $7,574 in 1947, and by nearly $1,200 more to its 1948 level of $8,721—some 73 percent over 1940. Less than 1 in 12 of the new homes covered by Section 203 mortgages insured during 1948 were valued by the FHA at less than $6,000.
Comparable increases, though at a somewhat lower rate, are apparent in the existing-home property valuation distributions shown in the table. The 1948 median of $7,579 represented an increase of about 65 percent over the 4940 level of $4,600. More than 62 percent of the existing dwellings covered by mortgages insured in 1948 were valued between $6,000 and $9,999, with 18 percent below, and the remaining 20 percent above, this range.
201
HOUSING AND HOME FINANCE AGENCY
Table 18.—Property valuation: Based on FHA-insured mortgages secured by new and existing single-family homes, Sec. 203, for selected years 1940-48
FHA property valuation 1 New homes, percentage distribution 2 Existing homes, percentage distribution
1948 1947 1946 1942 1940 1948 1947 1946 1944 1942 1940
(3) (3) 0.1 (’) (3) 0.7 0.4 1.1
$2,000 to $2, 999 (3) 0.9 3.1 0.2 0.6 1.6 4.1 4.9 9.8
$3,000 to $3', 999 0.1 0.5 2.3 9.5 18.6 1.2 3.0 7.3 13.8 16.6 21.8
$4,000 to $4,999 1.0 3.4 10.0 26.8 26.8 4.7 8.2 16.8 20.7 22.1 22.5
$5,000 to $5,999 6.7 14.3 20.2 33.7 23.6 11.7 18.0 24.6 20.7 20.8 17.3
$6,000 to $6,999 14.1 20.3 27.9 20.7 16.5 19.0 22.5 20.3 16.2 14.9 10.8
$7,000 to $7,999 16.0 17.8 22.4 4.4 5.7 17.9 17.4 12.1 9.8 8.3 6.1
$8,000 to $8,999 15. 7 16.8 11. 1 1.8 2.6 15. 1 11.5 7.0 5.2 4.3 3.6
$9,000 to $9,999 15.6 12.7 3.4 .9 1.2 10.1 7.2 3.4 2.8 2.4 1.9
$10,000 to $10,999 11.8 7.2 1.5 .5 .7 7.1 4.5 2.5 1.8 1.8 1.5
$11,000 to $11,999 7.1 2.9 .5 .2 .3 4.2 2.2 1.1 1.0 1.0 .9
$12,000 to $13,999 7.4 2.4 .5 .3 .4 4.9 2.7 1.8 1.5 1.2 1.3
$14,000 to $15,999 2.7 .9 .2 .2 .2 1.9 1.1 .7 .7 .6 .7
$16,000 or more 1.8 .8 (’) .1 .2 2.0 1.1 .8 1.0 .7 .7
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Average valuation $8, 965 $7,817 $6, 597 $5,385 $5,199 $8,075 $7,190 $6, 269 $5,809 $5, 568 $5,179
Median valuation $8, 721 $7, 574 $6, 558 $5,368 $5,028 $7, 579 $6, 769 $5,934 $5,484 $5, 272 $4,600
1 FHA property valuation includes valuation of the house, all other physical improvements, and land.
2 Data not available for 1943-45.
3 Less than 0.05 percent.
Cost of single- and two-family homes —As previously mentioned in this report, mortgages insured under the Section 603 Veterans’ Emergency Housing Program in the period between May 22, 1946, and the end of 1948 were processed on the basis of the necessary current cost, rather than the long-term valuation of the properties. As in 1947, about 53 percent of these homes involved 1948 costs of from $7,000 to $8,999 (Table 19). The proportion costing $9,000 or more,
Table 19. —Necessary current cost: Based on FHA-insured mortgages secured by new single-family homes, Sec. 603 VEH, 1946-48 1
Necessary current cost2
New homes, percentage distribution
1948 1947 1946
1 1946 data based on firm commitments issued; 1947-48 data, mortgages insured.
2 FHA estimate of the necessary current cost of the property includes the cost of house, all other physical improvements, and land.
3 Less than 0.05 percent.
202
Less than $4,000 ... _ _ . (3) (3)
$4,000 to $4,499 . 1.1 0.2 0.2
$4,500 to $4,999 . .6 .8 .5
$5,000 to $5,499 .7 1.3 2.4
$5,000 to $5,999 _ . . 1.6 3.3 4.1
$6,000 to $6,999 8.6 16. 2 16.8
$7,000 to $7,999 22.6 27. 5 30.2
$8,000 to $8,999 30.2 25.3 27.3
$9,000 to $9,999 24.3 16.9 11 9
$10,000 to $10,999 . . 7.6 6.6 5.5
$11,000 or more. __ ___ __ ___ __ 2.7 1.9 1.1
Total.- ___ _ . _______ 100.0 100.0 100.0
Average cost $8,387 $8,476 $8,025 $8,020 $7,852
Median cost _ $7,860
FEDERAL HOUSING ADMINISTRATION
however, increased from 18 percent in 1946 to 25 percent in 1947 and, more markedly, to 35 percent in 1948. This increase is reflected in the 1948 median cost of $8,476—$456 above the $8,020 reported in 1947. Only about 13 percent of the homes securing 1948 insured mortgages cost less than $7,000. This was slightly more than half of the comparable proportion for mortgages committed in 1946. Chart VI shows the distribution of current costs for new homes insured under this section in 4948 together with the distributions of valuation for new and existing homes securing Section 203 insured mortgages.
DISTRIBUTION OF PROPERTY VALUATION AND NECESSARY CURRENT COST
FHA-INSURED SINGLE - FAMILY HOME MORTGAGES
Chart VI
The distribution of the current costs of two-family structures covered by Section 603 mortgages insured in 1948 is presented in Table 20. With nearly 80 percent reported as costing from $11,000 to $14,999 in 1948, their median cost reached $13,603—nearly $750 higher than the corresponding figure for 1947.
Loan-value ratio under Section 203.—Section 203 of the National Housing Act provides that the maximum insurable mortgage amount shall not exceed 80 percent of the estimated property valuation, with the exception of single-family owner-occupied homes approved for mortgage insurance prior to the beginning of construction and valued at not more than $11,000. For properties in this valuation range, the
203
LESS >5000 16.000 >7,000 >8,000 >9,000 >l0,000 >11000>12,000 IM.000 >16,000 'LESS >5,000 >6,000 >7.000 >8,000 >9,000 >10,000 >11,000 >12,000
THAN TO TO TO TO TO TO TO TO TO OR I THAN TO TO TO TO TO TO TO OR
>5,000 5,999 6,999 7,999 8,999 9,999 10,999 11,999 15,999 15,999 MORE | >5,000 5,999 6,999 7,999 8.999 9,999 10,999 11,999 MORE
PROPERTY VALUATION I NECESSARY CURRENT COST
PERCEN?
------ 30
------25
------ 20
------ 15
------10
------- 5
SECTION 603
SECTIONS 203 AND 603, 1948
PERCENT
30-----
25-----
20-----
15-----
10-----
5— i
LEGEND
NEW HOMES
EXISTING HOMES
SECTION 203
HOUSING AND HOME FINANCE AGENCY
Table 20. —Necessary current cost: Based on FHA-insured mortgages secured by new 1- and 2-family homes, Sec. 603 VBH, 1948
i FHA estimate of the necessary current cost of the property includes the cost of house, all other physical improvements, and land.
2 Less than 0.05 percent.
maximum mortgage amount may represent 90 percent of the first $7,000 valuation and 80 percent of the balance up to $11,000. At the discretion of the Commissioner, the loan-value ratio may be as high as 95 percent, provided the mortgage amount does not exceed $6,000.
Table 21 shows the distributions of the loan-value ratios involved in Section 203 new- and existing-home mortgages insured in 1948 for all mortgages and in relation to selected property-valuation intervals. More than 35 percent of the new-home mortgages insured during the year involved loan-value ratios of from 86 to 90 percent, with an additional 48 percent reporting mortgage amounts which represented from 76 percent to 85 percent of the property valuation.
With respect to Section 203 insured mortgages, more than half of the purchasers of new single-family dwellings valued between $5,000 and $9,999 financed their homes with loans representing 81 to 90 percent of the property valuation. Some 49 percent of the insured mortgages on properties valued between $10,000 and $10,999 also came within this category. For properties valued at $11,000 or more, nearly three out of every four secured mortgages of from 76 to 80 percent. The small proportion of 81- to 90-percent mortgages on properties in the $11,000 range involved properties valued at exactly $11,000, with
204
Necessary current cost > Percentage distribution of structures Necessary current cost1 Percentage cumulation of structures
1-family 2-family 1-family 2-family
Less than $,4000 (2) Less than $4,000 (2)
$4,000 to $4,999 .7 — Less than $5,000 1. 7 —
$5,000 to $5,999 2.3 Less than $6,000 4.0 —
$6,000 to $6,999 8. 6 0.3 Less than $7,000 12. 6 0.3
$7,000 to $7,999 : 22.6 Less than $8,000 35. 2
$8,000 to $8,999 30.2 . 6 Less than $9,000 65. 4 .9
$9,000 to $9.999 24.3 3.2 Less than $10,000 89.7 4.1
$10,000 to $10,999 7.6 3.8 Less than $11,000. 97.3 7.9
$11,000 to $11,999.. 2.1 15.2 Less than $12,000 99.4 23.1
$12,000 to $12,999 . 4 15. 4 Less than $13,000 99.8 38.5
$13,000 to $13,999. (2) .1 21.8 Less than $14,000 99.9 60.3
$14,000 to $14,999 24.5 Less than $15,000. 99. 9 84.8
$15,000 to $15,999 (2) 9.4 Less than $16,000 99.9 94.2
$16,000 to $16,999 (2) ■.1 2.4 Less than $17,000 99.9 96 6
$17,000 to $17,999 (2) 1.6 Less than $18,000 99.9 98.2
$18,000 or more.. (2)J 1. 8 All groups 100.0 100.0
Total 100.0 100.0 Median cost $8, 476 $13,603
Average cost $8, 387 $13, 411
FEDERAL HOUSING ADMINISTRATION
mortgages representing a maximum of 90 percent of the first $7,000 valuation and 80 percent of the balance.
Table 21.—Percentage distribution of ratio of loan to value by property valuation: Based on FHA-insured mortgages secured by new and existing singlefamily homes, Sec. 203,191/8
FHA property valuation 1 Percentage distribution Median loanvalue ratio Ratio of loan to value Total
50 percent or less 51 to 55 percent 56 to 60 percent 61 to 65 percent 66 to 70 percent 71 to 75 percent 76 to 80 percent 81 to 85 percent 86 to 90 percent
New homes
0.1 77.7 9.5 4.8 4.8 9.5 61.8 4.8 4.8 100.0
$4,000 to $4,999 1.0 78.5 .6 .6 4.9 7.4 8.6 55.2 3.7 19.0 100.0
$5^000 to $5^999 6.7 86.5 .6 0.4 .6 .8 3.1 3.4 29.1 6.1 55.9 100.0
$6,000 to $6,999 14.1 86.6 .4 .3 .9 1.0 2.6 4.5 21.9 11.3 57.1 100.0
$7,000 to $7,999 16.0 86.3 1.0 .5 1.0 1.0 3.1 5.1 21.3 13.6 53.4 100. 0
$8,000 to $8,999 15.7 84.9 1.4 .4 1.3 2.1 3.1 8.4 19.8 17.3 46.2 100.0
$91)00 to $9,999 15.6 83.0 1.8 1.1 1.1 2.1 3.8 7.6 21.5 27.5 33.5 100.0
$10,000 to $10,999 11.8 80.8 2.5 .7 1.8 2.2 4.2 7.4 32.5 31.0 17.7 100.0
$11000 to $11,999 7.1 77.7 1.7 1.3 1.7 2.2 8.0 9.3 74.4 1.0 .4 100.0
$12,000 to $13,999 7.4 77.5 2.0 1.1 1.4 3.7 9.5 10.0 72.3 100. 0
$14^000 to$15,999 ... 2.7 77.6 1.9 1.1 1.9 3.3 8.4 9.6 73.8 100.0
$16',000 or more 1.8 77.3 4.8 3.3 4.8 5.1 5.1 10.2 66.7 — 100.0
Total 100.0 81.0 1.5 .7 1.3 1.9 4.3 7.0 33.1 15.0 35.2 100.0
Existing homes
Less than $4,000 . 1.4 77.1 2.2 1.6 2.2 6.0 11.1 13.7 61.7 0.2 1.3 100.0
$4,000 to $4,999 4.7 77.4 3.2 .9 1.4 4.4 10.7 12.0 61.1 1.5 4.8 100.0
$5,000 to $5,999 11.7 78.5 1.1 1.1 2.3 2.1 8.4 6.8 57.6 3.8 16.8 100.0
$6,000 to $6,999 19.0 78.5 1.6 1.0 1.8 2.9 8.8 8.3 50.8 5.4 19.4 100.0
$7,000 to $7,999 17.9 78.2 1.8 L4 2.4 3.1 9.6 8.7 53.3 6.1 13.6 100.0
$8,000 to $8,999 15.1 77.9 2.6 1.3 2.8 4.0 10.2 9.8 51.5 6.0 11.8 100. 0
$9,000 to $9,999 10.1 77.7 2.1 2.6 1.8 4.6 10.1 10.5 52.9 5.7 9.7 100.0
$10,000 to $10,999_-_; 7.1 77.5 3.4 1.8 4.1 3.7 10.8 8.5 58.5 5.2 4.0 100.0
$11,000 to $11,999- 4.2 77.1 3.8 2.8 3.8 4.3 10.1 11.5 63.4 .2 .1 100.0
$12,000 to $131)99 4.9 77.1 4.2 1.8 4.1 3.6 11.2 10.3 64.8 100.0
$14,000 to $15,999 1.9 77.1 4.8 3.0 3.6 4.2 13.5 7.6 63.3 100.0
$16,000 or more 2.0 76.9 4.2 2.1 3.1 5.7 13.4 10.5 61.0 — 100.0
Total 100.0 77.9 2.3 1.5 2.5 3.5 9.9 9.2 55.2 4.5 11.4 100.0
1 FHA property valuation includes valuation of the house, all other physical improvements, and land.
About 55 percent of all existing-home transactions involved mortgage financing of 76 to 80 percent. Approximately one in six of the mortgages secured by existing homes involved loans of 81 to 90 percent, all being on properties originally approved for mortgage insurance prior to the start of construction and valued at not more than $11,000.
Loan-cost ratio under Section 603.—The distribution of the ratio of mortgage amount to necessary current cost by cost groups is shown in Table 22 for new single-family home mortgages insured under Section 603. Together with the distribution of loan-value ratios for
205
HOUSING AND HOME FINANCE AGENCY
Table 22.—Percentage distribution of ratio of loan to cost by necessary current cost: Based on FHA-insured mortgages secured by new single-family homes, Sec. 603 VEH, 19Jt8
Necessary current cost1
Less than $4,000____________
$4,000 to $4,999____________
$5,000 to $5,999____________
$6,000 to $6,999____________
$7,000 to $7,999____________
$8,000 to $8,999____________
$9,000 to $9,999____________
$10,000 to $10,999__________
$11,000 to $11,999__________
$12,000 or more_____________
Total_________________
Percentage distribution Median loancost ratio Ratio of loan to cost Total
50 percent or less 51 to 55 percent 56 to 60 percent 61 to 65 percent 66 to 70 percent 71 to 75 percent 76 to 80 percent 81 to 85 percent 86 to 90 percent
(2)
1.7 88.4 0.1 6.4 2.1 97.4 160.0
2.3 87.9 0.2 0.8 0.7 3.4 14.0 80.9 100.0
8.6 88.0 (2) 0.1 .1 .3 1.1 2.5 12.2 83.7 100.0
22.6 88.2 . 1 0.1 .1 .2 .3 .7 2.5 8.2 87.8 100.0
30. 2 87.9 .2 . 1 .2 .3 .6 1.2 3.9 12.4 81.1 100.0
24.3 84.6 .3 .3 .3 .6 .7 3.0 12.6 44.8 37.4 100.0
7.6 77.4 .9 .4 1.4 1.6 4.4 24.0 61.4 5.9 100.0
2.1 70.4 2.1 1.9 2.9 5.7 42.9 44.5 100.0
.6 63.2 6.3 8.6 16.0 43.7 25.4 — 100.0
100.0 87.1 .3 .2 .4 .8 1.8 4.1 9.7 18.4 64.3 100.0
1 FHA estimate of the necessary current cost of the property includes the cost of house, all other physical improvements, and land.
2 Less than 0.05 percent.
new single-family home mortgages insured under Section 203, this distribution is shown in Chart VII.
Mortgages insured under Section 603 in 1948 were processed under regulations permitting loans up to 90 percent of the necessary current cost but not to exceed $8,100 for single-family dwellings. Nearly
DISTRIBUTION OF LOAN-VALUE RATIO BY PROPERTY VALUATION AND OF LOAN-COST RATIO BY NECESSARY CURRENT COST, 1948 FHA-INSURED NEW SINGLE-FAMILY HOME MORTGAGES
Chart VII
206
SECTION 203 SECTION 603
ioo%
-80----
60----
-40----
■20----
86 - 90 %
86-90%
100%
— 80-
— 60 -
---40
— 20 '
___0
\ 70% OR LESS |
fz/-"z5
>76 - 80% \
^5/ -85%,'.
^81-85%',
76-80%
f 70% OR £.£55 [
LESS $5,000 $ 6,000 $ 7,000 $8,000 $9,000 $10,000 $11,000 $'2,000 $'4,000 $16,000 • LESS $5,000 $ 6,000 $7,000 $8,000 $9,000 $10,000 $11,000 $12,000
THAN TO TO TO TO TO TO TO TO TO OR I THAN TO TO TO TO TO TO TO OR $5,000 5,999 6,999 7,999 8,999 9,999 10,999 11,999 13,999 15,999 MORE I $5,000 5,999 6,999 7,999 8,999 9,999 10,999 11,999 MORE
PROPERTY VALUATION
NECESSARY CURRENT COST
FEDERAL HOUSING ADMINISTRATION
two-thirds of all the mortgages insured during the year provided for loans of 86 to 90 percent of the estimated cost, with four out of every five in the cost groups below $9,000 falling in this category. For properties costing more than $9,000, the $8,100 mortgage limitation served to reduce the permitted loan-cost ratio, the maximum ratio for a $12,000 home being 67.5 percent. It is interesting to note that the median loan-cost ratio for Section 603 insured mortgages secured by homes costing from $5,000 to $9,999 was consistently between 1.4 and 3 percent above the corresponding median loan-value ratios for Section 203 insured mortgages.
Value- and cost-group averages.—The averages for selected characteristics of the new and existing single-family homes securing 1948 Section 203 insured mortgages are shown in Table 23 by property valuation intervals. The average valuation for new homes increased from $3,700 in the less than $4,000 group to $18,265 for those properties valued at $16,000 or more. Correspondingly, the median amount of mortgage increased from $3,125 to $13,819, the over-all loan-value ratio of 81 percent varying between a maximum of 86.6 percent for homes in the $6,000 value range down to 77.3 percent for the small proportion of properties appraised at $16,000 or more. Increasing progressively throughout the range of valuations, average land value varied between $410 and $2,616, representing from 10 to 14 percent of the average property valuation; estimated monthly taxes ranged from $3.19 up to $16.32; monthly mortgage payment was between $24.67 and $111.49; and monthly rental value was between $33.05 and $131.87, typically about 20 percent above the amount of the mortgage payment. In size these new homes varied between an average of 3.8 rooms for homes valued at less than $4,000 to 6.3 rooms for structures in the highest valuation group; floor area, reported for the first time in 1948, ranged upward from 741 square feet for homes in the $5,000 value group to a maximum of 1,759 square feet. About half of these properties provided garage facilities.
Reflecting the greater concentration of properties in the lower value groups (55 percent of the cases in the sample being valued at less than $8,000 as compared with 38 percent for new homes), nearly all of the characteristics shown in the table had lower over-all averages for existing homes than those for new construction which were discussed in the preceding paragraphs. The only exceptions to this were room count and size of structure—the existing homes averaging about one-third of a room and 100 square feet larger—and the fact that 70 percent included garage facilities, compared with 55 percent of the new homes. Within individual valuation groups, the average value, mortgage principal, and loan-value ratio are uniformly lower, and
207
HOUSING AND HOME FINANCE AGENCY
Table 23.—Average characteristics by property valuation: Based on FHA-insured mortgages secured by new and existing singlefamily homes, Sec. 203, 1948 Average__________________________________ Median Ratio of Percentage FHA property FcHmatpH Tnfai FctimatpH_________________loan-value land to ofstruc-
valuation 4 d Hon Property Mortgage • Land monthlv monthlv mo rental Number Floor area ratio total value tures with tl0n valuation principal2 valuation3 p“ymentyS value* of rooms7 (sq.ft.)3 (percent) (percent) garages
_______1__________________________________________________________________________________________!________________
New homes
Less than $4,000_ 0.1 $3,700 $3,125 $410 $3.19 $24.67 $33.05 3.8 («) 77.7 11.1 4.8
$4,000 to $4,999_ 1.0 4,523 3,594 451 3.56 29.99 37.66 4.2 (’) 78.5 10.0 15.6
$5,000 to $5,999___ 6.7 5,497 4,693 599 4.10 36.45 46.15 4.2 741 86.5 10.9 24.6
$6,000 to $6,999___ 14.1 6,405 5,490 743 4.86 43.54 52.67 4.4 809 86.6 11.6 42.1
$7,000 to $7,999__ 16.0 7,412 6,357 787 5.93 50.05 61.25 4.6 866 86.3 10.6 49.2
$8,000 to $8,999__ 15.7 8,397 7,202 918 7.48 56.09 67.59 4.8 928 84.9 10.9 53.8
$9,000 to $9,999__ 15.6 9,389 7,805 1,094 9.06 62.40 75.62 5.1 999 83.0 11.7 58.3
$10,000 to $10,999_ 11.8 10,274 8,364 1,238 10.04 66.73 79.63 5.3 1,086 80.8 12.0 65.1
$11,000 to $11,999__ 7.1 11,343 9,016 1,358 10.57 71.31 85.14 5.5 1,163 77.7 12.0 66.7
312,000 to $13,999__ 7.4 12,691 9,957 1,582 11.39 79.05 94.67 5.7 1,272 77.5 12.5 73.7
814,000 to $15,999_ 2.7 14,712 11,614 1,942 13.08 92.25 108.94 6.0 1,398 77.6 13.2 85.7
816,000 or more__ 1.8 18,265 13,819 2,616 16.32 111.49 131.87 6.3 1,759 77.3 14.3 89.5
Total________ 100.0 8,965 7,058 1,049 7.95 58.70 70.84 4.9 972 81.0 11.7 55.1
Existing homes
Less than $4,000_ 1.4 $3,335 $2,577 $475 $3.78 $24.96 $33.20 4.7 839 77.1 14.2 45.2
$4,000 to $4,999 __ 4.7 4,428 3,461 561 4.22 30.75 40.54 4.8 908 77.4 12.7 51.7
85,000 to $5,999__ 11.7 5,396 4,439 653 4.99 36.37 47.76 ■ 4.8 887 78.5 12.1 57.5
86,000 to $6,999__ 19.0 6,355 5,212 737 5.79 42.19 54.54 4.8 920 78.5 11.6 64.3
87,000 to $7,999_ 17.9 7,339 5,875 851 6.88 47.85 61.71 5.0 979 78.2 11.6 ■ 69.3
$8,000 to $8,999___ 15.1 8,330 6,565 967 8.09 53.73 68.81 5.2 1,043 77.9 11.6 73.6
89,000 to $9,999___ 10.1 9,284 7,360 1,078 8.96 59.19 75.68 5.4 1,118 77.7 11.6 78.1
810,000 to $10,999_ 7.1 10,240 8,244 1,208 9.96 64.85 82.55 5.6 1,213 77.5 11.8 . 81.2
$11,000 to $11,999_ 4.2 11,275 8,711 1,343 10.46 70.15 88.85 5.8 1,283 77.1 11.9 83.1
$12,000 to $13,999_ 4.9 12,633 9,853 1,602 12.01 78.56 98.66 6.1 1,442 77.1 12.7 84.6
$14,000 to $15,999_ 1.9 14,698 11,470 2,004 14.16 91.34 114.24 6.5 1,656 77.1 13.6 89. S
816,000 or more__ 2.0 18,374 13,975 2,698 18.20 114.48 142.09 6.9 1,967 76.9 14.7 92.1
Total________ 100.0 8,075 5,969 970 7.67 52.18 66.87 5.2 1,075 77.9 12.0 70.5
i FHA property valuation includes valuation of the house, all other physical improvements, and land.
2 Data shown are medians.
3 The value of the land is estimated by FHA as including rough grading, terracing, and retaining walls, if any.
4 Includes real-estate taxes, special assessments if any, and water rent provided its nonpayment results in a lien against the property.
3 Includes monthly payment for first year to principal, interest, FHA insurance premium, hazard insurance, taxes and special assessments, and ground rent and miscellaneous items if any.
«The monthly rental value is estimated on the basis of typical year-around tenant occupancy, excluding any premium obtainable because of local housing shortages or newness of the individual property.
7 Excludes bathrooms, toilet compartments, closets, halls, and similar spaces.
3 Area of spaces in the main building above basement or foundations, measured at the outside surfaces of exterior walls. Garage space or finished spaces in attic are excluded.
o Data not significant.
208
CY
FEDERAL HOUSING ADMINISTRATION
the average rental value and proportion with garage uniformly higher, for existing properties than for new homes.
The averages for selected characteristics of the new single-family home mortgages insured under Section 603 in 1948, and of the properties securing these mortgages, are shown in Table 24 for specific current cost groups. As the average current cost increased from $4,285 in the lowest cost group to $12,879 in the highest, the average mortgage principal varied between $3,733 and $8,100, the median loancost ratio declining from 88.4 percent for transactions involving homes in the $4,000 cost range to 63.4 percent for those in which the properties had an estimated cost of $12,000 or more.
Table 24.—Average characteristics by necessary current cost: Based on FHA-insured mortgages secured by new single-family homes, Sec. 603 VEH, 1948
Necessary cun-ent cost 1 Percentage distribution Average Median loancost ratio (percent) Ratio of land to total cost (percent)
Necessary current cost i Mortgage principal 2 Land valuation 2 Estimated monthly taxes 4 Total monthly payment 8 Estimated monthly rental value 8
Less than $4,000 (’)
$4,000 to $4,999 1.7 $4,285 $3,733 $929 $4.42 $29.34 $36.43 88.4 21. 7
$5,000 to $5,999 2.3 5,546 4,135 525 4.90 35.62 46.30 87.9 9. 5
$6,000 to $6,999 8.6 6, 554 5,807 642 5.65 42. 36 53.75 88.0 9.8
$7,000 to $7,999 22.6 7,509 6, 640 796 6. 77 47.43 60.04 88.2 10.6
■$8,000 to $8,999 30.2 8,457 7,481 8,100 880 8.31 53.15 65.84 87.9 10. 4
$9,000 to $9,999 24.3 9,364 1,003 9.41 56.58 70.57 84.6 10. 7
$10,000 to $10,999 7.6 10, 321 8,100 1,200 10.25 57. 57 74.62 77.5 11. 6
$11,000 to $11,999 2.1 11,357 8,100 1,242 10.33 57. 53 78.99 70.5 10.9
$12,000 or more .6 12,879 8,100 1,388 10.49 59.37 84.97 63.4 10.8
Total 100.0 8,387 7,424 898 8.05 51.41 64.77 87.1 10.7
i FHA estimate of the necessary current cost of the property includes the cost of house, all other physical improvements, and land.
2 Data shown are medians.
if any16 value of the land ’s estimated by FHA as including rough grading, terracing, and retaining walls, 1 Includes real-estate taxes, special assessments if any, and water rent provided its nonpayment results in a lien against the property.
• Includes monthly payment for first year to principal, interest, FHA insurance premium, hazard insurance, taxes and special assessments, and ground rent and miscellaneous items if any.
«The monthly rental value is estimated on the basis of typical year-around tenant occupancy, excluding any premium obtainable because of local housing shortages or newness of the individual property.
7 Less than 0.05 percent.
The monthly mortgage payment varied between $29.34 and $59.37, of which about one-sixth was attributable to estimated monthly taxes. Cental value ranged between $36.43 and $84.97 per month, the over-all average of $64.77 being about 26 percent above the average mortgage payment ($51.41) for all groups. Land valuation typically represented 10.7 percent of the estimated current cost, ranging between 9.5 and 11.6 percent for all cost groups except the $4,000 to $4,999 interval, in which the average land value of $929 represented 21.7 percent of the $4,285 average cost.
831481—49----15
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HOUSING AND HOME FINANCE AGENCY
Number of rooms.—The median size of the new single-family homes securing mortgages insured under Section 203 in 1948 was 5.4 rooms— 0.1 larger than in 1947. Table 25 shows the distribution of the number of rooms within the various valuation intervals for both new and existing homes. For new homes valued below $7,000, the median size ranges from 4.3 to 4.8 rooms, compared with a variation of 5.0 to 5.2 rooms for existing structures in the same valuation interval. The difference is not as marked in the case of valuations between $7,000 and $11,999—new-home medians of 5.1 to 6.1 rooms being only slightly below the 5.4 to 6.2 room count that was typical of the existing dwellings. This is also true of the higher valued homes, except for the group valued above $16,000, where the existing-home median of 7.3 rooms is 0.6 rooms above that for new dwellings.
Table 25.—Rooms by property valuation: Based on FHA-insured mortgages secured by new and existing single-family homes, Sec. 203, 19J/8
Percent- Median Percentage distribution of rooms
FHA property valuation 1 age dis- number
tribution of rooms2 3 rooms 4 rooms 5 rooms 6 rooms 7-9 rooms Total
New homes
0.1 4.3 42.8 28.6 23.8 4.8 100.0
$4,000 to $4,999 . 1.0 4.6 11.1 68.7 15.3 3.7 1.2 100.0
$5,000 to $5)999 . 6.7 4.6 3.1 75.6 19.2 1.8 .3 100.0
$6,000 to $6,999 . ... 14.1 4.8 2.2 56.7 37.0 3.6 .5 100.0
$7)000 to $7)999 16.0 5.1 .6 46.5 42.5 10.0 .4 100.0
$8^000 to $8,999 15.7 5.3 .3 36.8 43.7 18.2 1.0 100.0
$9,000 to $9,999 . 15.6 5.6 .2 23.7 44.4 30.3 1.4 100.0
$16,000 to $10,999 11.8 5.9 .3 16.8 38.3 41.9 2.7 100.0
$11,000 to $11,999 7.1 6.1 .3 10.1 36.0 48.1 5.5 100.0
$12,000 to $13,999 . 7.4 6.3 .2 6.4 29.7 54.7 9.0 100.0
$14 000 to $15)999 2.7 6.5 2.8 20.6 56.4 20.2 100.0
$16,000 or more 1.8 6.7 — 3.0 15.1 42.1 39.8 100.0
Total 100.0 5.4 .9 34.0 37.4 24.5 3.2 100.0
Median valuation — $6,306 $7,431 $8, 756 $10, 484 $12, 971 $8,721
Existing homes
Less than $4,000 . . . 1.4 5.0 12.9 37.9 26.2 17.7 5.3 100.0
$4,000 to $4,999 . . . 4.7 5.2 5.5 38.8 33.3 16.7 5.7 100.0
$5)000 to $5)999 11.7 5.1 2.0 45.8 33.5 13.6 5.1 100.0
$6)000 to $(1999 . _ ... __ 19.0 5.2 1.2 40.0 38.6 14.9 5.3 100.0
$7)000 to $7,999 . ... 17.9 5.4 .5 31.9 41.8 18.5 7.3 100.0
$8)000 to $8)999 15.1 5.6 .4 22.6 42.6 25.0 9.4 100.0
$9)000 to $9)999 10.1 5.8 .3 15.4 42.2 30.6 11.5 100.0
$16,000 to $10,999 7.1 6.1 .3 9.7 37.7 35.6 16.7 100.0
$11)000 to $11)999 4.2 6.2 .4 5.4 35.1 40.3 18.8 100.0
$12)000 to $13,999 4.9 6.5 .2 2.7 24.9 43.7 28.5 100.0
$14)000 to $15,999 1.9 6.8 .2 1.8 13.3 43.0 41.7 100.0
$16)000 or more 2.0 7.3 .5 .6 6.1 36.4 56.4 100.0
Total 100.0 5.6 1.1 27.1 37.1 23.6 11.1 100.0
-
Median valuation — $5, 565 $6, 767 $7, 718 $8, 799 $9, 781 $7,579
1 FHA property valuation includes valuation of the house, all other physical improvements, and land.
2 Excludes bathrooms, toilet compartments, closets, halls, and similar spaces.
Table 26 shows the room-count distribution for the new single-family homes covered by Section 603 mortgages insured during the year. The
210
federal housing administration
median size of 5.1 rooms for all homes is very slightly smaller than the comparable figure based on cases insured in 1947. Within the individual cost groups, the typical room-count follows the same general pattern discussed above in connection with Section 203 dwellings. The distributions of the number of rooms by property valuation and current cost intervals are shown in Chart VIII.
Table 26.—Rooms by necessary current cost: Based on FHA-insured mortgages secured by new single-family homes, Sec. 603 VEH, 1948
Necessary current cost1
Total
Median necessary current cost
Less than $4,000. $4,000 to $4,999... $5,000 to $5,999.. $6,000 to $6,999... $7,000 to $7,999... $8,000 to $8,999... $9,000 to $9,999... $10,000 to $10,999. $11,000 to $11,999. $12,000 or more..
Percentage distribution Median number of rooms Percentage distribution of rooms2
3 rooms 4 rooms 5 rooms 6 rooms 7-9 rooms Total
(3)
1.7 5.2 6.7 31.4 61.9 100 0
2.3 4.5 6.7 86. 5 6.2 0 6 100.0
8.6 4. 7 1.4 71.1 26.6 . 9 (3) 100.0
22.6 4.9 .9 55.2 38. 1 5.8 (3) 100.0
30.2 5. 1 . 4 46.3 38.8 14.5 (3) 100. 0
24.3 5.5 .2 29.0 42.3 27.2 1.3 100. 0
7.6 5.8 . 1 17.6 38.2 43.7 .4 100.0
2. 1 6.0 .3 13. 1 34.2 51.3 1. 1 100.0
.6 6.1 8.3 36.3 49.6 5.8 100.0
100.0 5.1 .8 44.0 37.9 16.9 .4 100.0
$6, 963 $8, 047 $8,571 $9, 395 $9, 624 $8, 476
1 FHA estimate of the necessary current cost of the property includes the cost of house, all other physical improvements, and land.
2 Excludes bathrooms, toilet compartments, closets, halls, and similar spaces.
3 Less than 0.05 percent.
DISTRIBUTION OF ROOMS BY PROPERTY VALUATION AND BY NECESSARY CURRENT COST, 1948 FHA-INSURED NEW SINGLE-FAMILY HOME MORTGAGES
Chart VIII
211
LESS $5,000 $ 6,000 $7,000 $ 6,000 $ 9,000 $10,000 $n. OOO $12,000 $14,000 $16,000 | LESS $5,000 $ 6,000 $ 7,000 $ 8,000 $ 9,000 $ '0,000 $ II.000 $12,000
THAN TO TO TO TO TO TO TO TO TO OR I THAN TO TO TQ TO TO TO TO OR $ 5,000 5,999 6,999 7,999 8,999 9,999 10.999 11,999 13,999 15,999 MORE । $ 5,000 5,999 6,999 7,999 8,999 9,999 10,999 11,999 MORE
I I PROPERTY VALUATION I NECESSARY CURRENT COST
SECTION 203 SECTION 603
’.5 ROOMS
6 ROOMS '
7-9 ROOMS
100%
-80 —
-60 —
-40 —
-20 —
0
,4 rooms'.
5 ROOMS'-
f6 ROOMS'-
-7^-9 ROOM:
100
-80 -
-60-
-40-
-20-
0
j rooms]
HOUSING AND HOME FINANCE AGENCY
Floor area— Nearly 43 percent of the new homes covered by Section 203 insured mortgages had calculated floor areas of from 700 to 899 square feet, with more than 64 percent reporting areas of less than 1,000 square feet. These areas include spaces in the main building above the basement or foundations, measured at the outside surfaces of the exterior walls. They are exclusive of garage space or finished spaces in the attic. Table 27 shows the percentage distribution of calculated floor areas by property valuation intervals for both new and existing homes. Within specific value groups, the typical exist-ing-home areas ranged from 49 to 214 square feet above corresponding new-home medians. Only about half of the existing dwellings had areas under 1,000 square feet. The relationship between new- and existing-home areas and FHA property valuations for Section 203 cases is shown graphically in Chart IX.
AVERAGE FLOOR AREA BY PROPERTY VALUATION
FHA-INSURED SINGLE-FAMILY HOME MORTGAGES
Chart IX
Floor area group averages.—Table 28 presents data covering the average floor area, property valuation, and number of rooms by calculated floor area for new and existing Section 203 homes. With the minor exception of the small proportion of homes involving floor areas of less than 600 square feet, the estimated FHA valuation increases steadily (although at a decreasing rate) from a minimum of $6,481 for new homes in the 600 to 699 square-feet interval to a maxi-
212
LEGEND
| NEW HOMES
EXISTING HOMES
SECTION 203, 1948
LESS $ 5,000 $6,000 $7,000 $ 8,000 $9,000 $10,000 $11,000 $'2,000 $14,000 $16,000
THAN TO TO* TO TO TO TO TO TO TO OR
$5,000 5,999 6,999 7,999 8,999 9,999 10,999 11,999 13,999 15,999 MORE
PROPERTY VALUATION
* NEW HOME DATA NOT SIGNIFICANT
SQUARE FEET
-----1500
-----1000
------500
_________11
SQUARE FEET
1500 —
1000 —
500 —
FEDERAL HOUSING
ADMINISTRATION
Table 27.—Percentage distribution of calculated floor area by FHA valuation: Based on FHA-insured mortgages secured by new and existing single-family homes, Sec. 203, 1948
p Median Calculated floor area in 100 square feet
FHA property valuation i dfetri'-6 far®a Less 600 700 800 900 1,000 1,100 1,200 1,300 1,400 1,500 1,600 1,700 1,800 1,900 2,000
bution \ U 2V than to to to to t0 t(> to to to to to to to to or Total ' 600 699 799 899 999 1,099 1,199 1,299 1,399 1,499 1,599 1,699 1,799 1,899 1,999 more
New homes
Less than $4,000_________ 0.1 (3)
$4,000 to $4,999--------- 1.0 700 8.6 42.9 H.5 14.3 14.3 2.8 _’*2?8' ”2?8 166’6
$5,000 to $5,999--------- 6.7 738 4.2 28.3 46.2 16.2 3.4 1.1 0.3 .3 ___________100 0
$6,000 to $6,999--------- 14.1 788 2.6 8.1 44.5 30.4 10.3 3.0 .8 _ .3 . 100 0
$7,000 to $7,999--------- 16.0 855 .3 6.6 24.2 34.3 22.3 8.1 2.7 1.1 .1 0.1 0.1 0.1 100 0
$8,000 to $8,999--------- 15.7 910 . 5 1.8 23.4 22.1 23.7 13.6 8.3 3.7 1.6 . 8 . 2 .1 6.2 100 0
$9,000 to $9,999--------- 15.6 972 . 3 . 9 12.2 22.0 20.5 17.5 12.7 8.0 3.7 1.4 . 3 . 4 .1 100 0
$10,000 to $10,999------- 11.8 1,081 __ .1 4.3 17.1 14.0 18.0 19.7 15.0 5.5 2.5 2.3 .9 .1 .3 6.1 6.1 100.0
$11,000 to $11,999------- 7.1 1,156 .2 .4 2.9 7.5 11.1 18.0 17.5 20.0 9.8 5.5 4.2 1.8 .9 .... .2 100.0
$12,000 to $13,999------- 7.4 1,249 ------ 1.4 3.9 7.7 12.9 15.4 17.6 12.7 13.5 7.1 2.9 2.5 .8 .4 1.2 100.0
$14,000 to $15,999------- 2.7 1,374 __________ 1.2 2.4 4.1 12.9 15.3 18.2 13.5 12.4 7.6 7.6 1.2 1.2 2.4 100.0
$16,000 or more---------- 1.8 1,686 -------------- 1.2 1. 2 5.9 1.2 5.9 7.0 16. 5 12.9 14.1 10.6 3. 5 20.0 100.0
Total----------------- 100.0 912 .9 4.6 20.6 22.0 16.2 11.2 8.7 6.4 3.4 2.2 1.5 .8 .6 .3 .1 .5 100.0
Existing homes
Less than $4,000--------- 1.4 787 15.2 18.4 18.9 15.2 7.8 9.4 5.7 3.3 2.9 0.8 0.4 0.8 ... 0.8 0.4 100 0
$4,000 to $4,999---------- 4.7 836 6.3 15.6 21.7 17.8 10.7 8.6 5.4 4.6 3.2 2.2 .7 1.2 0.5 .7 .3 6.5 100.0
$5,000 to $5,999--------- 11.7 818 1.9 12.8 31.3 21.7 11.2 6.1 4.1 3.5 2.1 1.7 1.0 .9 .5 .4 .2 .6 100 0
$6,000 to $6,999--------- 19.0 858 1.0 7.6 25.3 27.9 14.0 7.8 4.9 4.0 2.4 1.6 1.1 .7 . 5 . 4 . 2 . 6 100.0
$7,000 to $7,999--------- 17.9 904 .4 4.8 18.8 25.3 16.2 12.1 6.5 4.7 3.6 2.2 1.7 1.3 .8 .4 .3 .9 100.0
$8,000 to $8,999--------- 15.1 980 .3 2.0 16.5 17.9 16.8 14.6 9.2 7.9 4.2 3.4 2.2 1.5 1.1 .6 .5 1.3 100.0
$9,000 to $9,999--------- 10.1 1,057 .3 .8 10.2 15.4 14.8 14.9 12.1 9.4 6.7 5.0 3.0 1.9 1.6 1.1 1.0 1.8 100.0
$10,000 to $10,999 -.---- 7.1 1,147 .3 .3 3.9 11.4 14.6 13.7 12.4 11.3 10.1 5.4 4.6 3.0 2.4 2.1 1.2 3.3 100 0
$11,000 to $11,999------- 4.2 1,222 .2 .4 1.4 6.9 11.3 13.3 13.7 13.0 10.9 7.8 5.8 4.4 2.8 2.0 2.0 4.1 100.0
$12,000 to $13,999------- 4.9 1,375 .3 .2 .8 2.7 4.5 9.5 11.9 11.0 12.0 10.7 8.9 6.5 4.3 4.5 3.3 8.9 100.0
$14,000 to $15,999------- 1.9 1,588 ...-- .2 .4 1.1 4.6 6.8 8.7 9.3 9.3 10.7 11.4 8.2 5.0 5.2 19.1 100.0
$16,000 or more---------- 2.0 1,876 __ .2 ____ .4 . 2 1.8 1.9 2.8 4.4 6.7 8.7 8.3 7.1 9.8 7.3 40.4 100.0
Total----------------- 100.0 972 .9 4.7 16.3 18.5 13.3 10.9 8.0 6.8 5.1 3.7 2.8 2.2 1.5 1.3 1.0 3.0 100.0
i FHA property valuation includes valuation of the house, all other physical improvements, and land.
2 Area of spaces in the main building above basement or foundations, measured at the outside surfaces of exterior walls. Garage space and finished spaces in attic are excluded.
3 Data not significant.
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HOUSING AND HOME FINANCE AGENCY
mum of $14,568 for structures containing 1,700 to 1,999 square feet. The average valuation of existing dwellings follows much the same pattern, though at a somewhat lower level. It is interesting that for dwelling areas below 1,400 square feet there is little difference in the average number of rooms for new and existing homes. For larger areas, however, the average number of rooms in existing units runs somewhat higher than the new-home averages.
Table 28.—Average characteristics by calculated floor area: Based on FHA-insured mortgages secured by new and existing single-family homes, Section 203, 1948
Calculated floor area (square feet)' New homes, average Existing homes, average
Percentage distribution Calculated floor area (square feet) FHA valuation 2 Number of rooms3 Percentage distribution Calculated floor area (square feet) FHA valuation 2 Number of rooms3
Less than 600 - 0.9 524 $6,624 3.6 0.9 526 $5, 764 3.9
600 to 699 4.6 668 6,481 4.0 4.7 663 6,138 4.1
700 to 799 20.6 756 7,321 4.2 16.3 751 6, 865 4.3
800 to 899 22.0 844 7,966 4.5 18.5 845 7,289 4.6
900 to 999 16.2 945 8, 553 4.9 13.3 945 7,834 4.9
1,000 to 1,099 11.2 1,048 9,351 5.2 10.9 1,045 8,347 5.2
1,100 to 1,199 8.7 1,142 10,089 5.5 8.0 1,146 8, 826 5.5
1,200 to 1,299 6.4 1,242 10, 653 5.7 6.8 1,244 9,032 5.7
1,300 to 1,399 3.4 1,345 11, 239 5.9 5.1 1,344 9,494 6.0
1,400 to 1,499 2.2 1,443 12,029 5.9 3.7 1,444 9, 862 6.2
1,500 to 1,699 2.3 1,576 12, 854 6.1 5.0 1,587 10, 531 6.5
1,700 to 1,999 1.0 1,804 14, 568 6.3 3.8 1,825 11,335 6.8
2,000 or more .5 2,705 14,315 6.3 3.0 2, 457 13, 201 7.6
Total 100.0 972 8, 774 4.8 100. 0 1,075 8,281 5.2
1 Area of spaces in the main building above basement or foundations measured at the outside surfaces of exterior walls. Garage space and finished spaces in attic are excluded.
2 FHA property valuation includes valuation of the house, all other physical improvements, and land.
3 Excludes bathrooms, toilet compartments, closets, halls, and similar spaces.
Famity units.—Of the new 1- to 4-family homes securing mortgages insured in 1948,98 percent of the Section 203 cases and about 93 percent of those processed under Section 603 were single-family dwellings. This is an increase of 0.5 percent over 1947 for Section 203, but a decrease of 2.5 percent in the case of Section 603. As Table 29 shows, the proportion of dwelling units in Section 603 two-family structures increased from 7.3 percent in 1947 to 11.5 in 1948, the proportion in single-family dwellings declining by nearly 5 percent to 85.7 or some 10 percent less than the corresponding figure for cases insured under Section 203.
The distributions for existing-home mortgages insured under Section 203 (94.4 percent of the structures were single-family dwellings, accounting for 88.6 percent of the total units insured) show but little change from 1947.
214
FEDERAL HOUSING ADMINISTRATION
Table 29.—Structures and dwelling units: Based on FHA-insured mortgages secured by 1- to 4-family homes, Sec. 203 for selected years, 1940-48 and Sec. 603 VEH, 1946-48
Year Structures, percentage distribution Dwelling units, percentage distribution Average dwelling units
1-family 2-family 3-family 4-family Total 1-family 2-family 3-family 4-family Total
Sec. 203 new homes
1948 98.0 1.7 0.1 0.2 100.0 95.6 3.4 0.3 0.7 100.0 1.02
1947 97.5 2.2 .1 .2 100. 0 94.6 4.4 .3 .7 100.0 1.03
1946 98.7 1.0 .1 .2 100.0 96.9 2.1 .2 .8 100. 0 1.02
1942 99.4 .5 (') . 1 100.0 98. 7 .9 . 1 .3 100.0 1.01
1940 99.0 . 7 .1 .2 100.0 97.7 1.5 .2 .6 100.0 1.01
Sec. 603 new homes 2
1948 92.9 6.3 0.3 0.5 100.0 85.7 11.5 0.9 1.9 100.0 1.08
1947 95.4 3.8 .2 .6 100. 0 90.1 7.3 .5 2.1 100.0 1.06
1946 94.1 5.2 .1 .6 100.0 87.9 9.7 .3 2.1 100.0 1.07
Sec. 203 existing homes
1948 94.4 4.9 0.3 0.4 100.0 88.6 9.2 0.8 1.4 100.0 1.07
1947 94.1 5.0 .3 .6 100.0 87.5 9.2 .8 2.5 100.0 1.08
1946 93.6 5.8 .3 .3 100.0 87.4 10.9 .7 1.0 100.0 1.07
1944 95.9 3.5 .3 .3 100.0 91.3 6.7 .9 1.1 100.0 1.05
1942 93.2 5.8 .7 .3 100.0 ' 86.1 10.8 1.8 1.3 100.0 1.08
1940 92.7 6.1 .7 .5 100.0 85.0 11.3 1.8 1.9 100.0 1.09
1 Less than 0.05 percent.
2 1946 data based on firm commitments issued; 1947-48 data, mortgages insured.
Borrower Characteristics
Annual income trends.—The median income of the purchasers of new single-family homes with 1948 Section 203 insured mortgages was $4,000—10 percent higher than for the preceding year. The increase for existing-home buyers was only about 3 percent, from $3,614 in 1947 to $3,734 in 4948. For purposes of comparison it may be noted that between 1940 and 1947 the income of typical FHA new-home mortgagors increased by about 51 percent, while, based on reports issued by the Bureau of the Census, the income of all nonfarm families more than doubled—from about $1,400 to $2,863—in the period between 1939 and 1947.
As shown in Table 30 and Chart X, more than three out of four of the FHA mortgagors had effective incomes, estimated by the Underwriting Division as the income that is likely to prevail during approximately the first third of the mortgage term, in 4948 of between $3,000 and $6,999—divided about equally between the $3,000 to $3,999 and $4,000 to $6,999 intervals. In 1940, less than 10 percent of the purchasers of new homes and only about 20 percent of the existing-home buyers had incomes above the level of the 1948 medians.
215
HOUSING AND HOME FINANCE AGENCY
Table 30.—Mortgagor's effective annual income: Based on FHA-insured mortgages secured by new and existing single-family homes, Sec. 203, for selected years 1940-48
Mortgagor’s effective annual income 1 New homes, percentage distribution Existing homes, percentage distribution
1948 1947 1946 1942 1940 1948 1947 1946 1944 1942 1940
Less than $1,500 (2) 0.1 0.2 1.5 5.1 0.1 0.1 0.3 0.6 1.5 5.2
$1,500 to $1,999 0.6 1.2 2.7 17. 6 23.4 .9 1.7 4.2 5.1 14.0 20.5
$2,000 to $2',499 5.1 11.3 16.0 37.0 28.3 6.5 12.2 19.4 26.4 27.9 25.0
$2,500 to $2>99 7.7 11.2 15.8 14.7 15.4 9.9 12.9 14.8 13.7 13.0 13.9
$3,000 to $3,499 17.8 19. 8 19.7 12.8 11.9 19.4 20.5 19.3 17.1 15.5 11.6
$3,500 to $3,999 18.7 18.9 17.6 7.0 6.2 18.8 17.1 14.5 12.8 9.2 6.9
$4,000 to $4,999 24.7 19.7 16.3 5.2 5.2 21.8 17.5 13.8 11.5 8.2 7.1
$5,000 to $6,999 17.2 12.1 8.4 2.8 3.1 14.2 11.7 8.7 7.4 6.2 5.8
$7,000 to $9,999 6.3 4.5 2.4 1.0 .9 6.2 4.5 3.5 3.7 2.8 2.5
$16,000 and over 1.9 1.2 .9 .4 .5 2.2 1.8 1.5 1.7 1.7 1.5
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Average income $4, 404 $3, 978 $3,619 $2, 721 $2, 665 $4, 308 $3, 941 $3, 640 $3, 539 $3, 229 $3,012
Median income 4,000 3,643 3,313 2, 416 2,416 3, 731 3,614 3,101 3,120 2,751 2,490
1 Based upon the FHA estimate of the earning capacity of the mortgagor that is likely to prevail during approximately the first third of the mortgage term.
2 Less than 0.05 percent.
DISTRIBUTION OF MORTGAGOR’S EFFECTIVE ANNUAL INCOME FHA-INSURED SINGLE-FAMILY OWNER-OCCUPIED-HOME MORTGAGES
Chart X
Income group averages.—Averages for selected characteristics by monthly income groups for mortgagors financing their purchases of new or existing single-family homes with Section 203 insured mortgages are shown in Table 31. The monthly effective incomes for new-home buyers averaged $367.36, ranging from about $132 to $1,182.
216
LESS $2,000 $2,500 $3,000 $ 3,500 $ 4,000 $ 5,000 $7,000 $10,000
THAN TO TO TO TO TO TO TO OR
$2,000 2,499 2,999 3,499 3,999 4,999 6,999 9,999 MORE
MORTGAGOR’S EFFECTIVE ANNUAL INCOME
LEGEND
I NEW-HOME BUYERS ___
EXISTING HOME BUYERS
SECTION 203, 1948
PERCENT
20--------
15-------
10-------
5-------
0
PERCENT
------- 20
--------15
--------10
---------5
________ 0
FEDERAL HOUSING ADMINISTRATION
Paralleling the average incomes, FHA property valuation for these owner-occupied dwellings varied between $5,443 and $13,714, averaging $8,943. Within specific income groups, the ratio of average valuation to average annual income varied between 3.4 in the lowest income group and 1.0 in the case of incomes exceeding $1,000 per month.
Table 31.—Average characteristics by mortgagor's monthly income: Based on FHA-insured mortgages secured by new and existing single-family, owner-occupied homes, Sec. 203, 1948
Mortgagor’s effective monthly income 1 Percentage distribution Average
Mortgagor’s monthly income 1 FHA valuation 2 Mortgage principal Total monthly mortgage payment 3 Total monthly housing expense 4 Monthly rental value Mortgage as a percent of FHA valuation Ratio FHA valuation to income
New homes
Less than $150 - -- 0.1 $131. 71 $5,443 $3,593 $29. 57 $44. 71 $45.14 66.0 3. 4
$150 to $199.99 2. 3 172. 60 5,953 4, 731 37.23 54. 45 48.96 79.5 2. 9
$200 to $249.99 11.1 214.81 G, 719 5339 43.47 61.99 54.96 80.9 2. 6
$250 to $299.99 19.2 262. 44 L 684 6,227 50.42 70. 66 61.72 81.0 2.4
$300 to $349.99 20. 5 310. 67 8,480 6, 892 56.10 76. 73 68. 58 81.3 2.3
$350 to $399.99 12.0 361.00 9,234 7, 526 61.71 82.95 73.01 81. 5 2.1
$400 to $499.99 18.1 421. 71 9; 979 8, 015 65.62 87.69 77.89 80.3 2.0
$500 to $599.99 9.0 516.43 10,744 8, 612 71.12 93.28 84.17 80.2 1. 7
$600 to $799.99 5.1 651.83 12', 035 9, 577 79.73 103.48 92.67 79.6 1.5
$800 to $999.99 1.4 834.69 12, 814 10,079 83.88 108. 07 94. 55 78. 7 1.3
$1,000 or more 1.2 1,181.90 13, 714 10; 518 88.98 114.42 103.18 76.7 1.0
Total 100.0 367.36 8,943 7,211 58. 92 79.89 70.92 80.6 2.0
Existing homes
Less than $150 - 0.2 $125.38 $4,913 $3, 269 $29.05 $44. 73 $42.91 66.3 3.3
$150 to $199.99 3.0 171.34 5,477 4,053 34.53 51.86 46.80 74.0 2. 7
$200 to $249.99 14.2 215.39 6,229 4, 755 39.81 59.39 53.02 76.3 2. 4
$250 to $299.99 20.9 262. 08 7, 022 5, 363 45.08 65.83 59. 34 76.4 2.2
$300 to $349.99 20.3 310. 39 7, 724 5,902 49.72 70. 73 64.39 76.4 2.1
$350 to $399.99 11.0 361.28 8, 394 6,410 53.96 75.84 69. 34 76.4 1.9
$400 to $499.99 14.9 421.57 8,998 6,918 58.47 80.92 73. 60 76.9 1.8
$500 to $599.99 7.5 518. 54 10,113 7,711 65.70 89.39 81.36 76.2 1.6
$600 to $799.99 5.1 653. 38 11, 603 8,936 75. 81 101.20 92.99 77.0 1.5
$800 to $999.99 1.4 839.41 13,334 10,222 87.87 116.00 105.49 76.7 1.3
$1,000 or more 1.5 1,250.33 14, 362 10, 861 94. 35 123.95 113.31 75.6 1.0
Total 100.0 358. 85 8,110 6,198 51.82 73.18 67.10 76.4 1.9
1 Based upon the FHA estimate of the earning capacity of the mortgagor that is likely to prevail during approximately the first third of the mortgage term.
2 FHA property valuation includes valuation of the house, all other physical improvements, and land.
3 Includes monthly payment for the first year of mortgage to principal, interest, FHA insurance premium, hazard insurance, taxes and special assessments, and ground rent and miscellaneous items, if any.
4 Includes total monthly mortgage payment for first year of mortgage; estimated monthly cost of maintenance; regular operating expense items such as water, gas, electricity, and fuel for heating; and monthly payment on secondary loan if mortgagor is a veteran of World War II who is financing home-purchase with aid of an additional loan guaranteed by the Veterans’ Administration.
Mortgage principal, monthly payment, housing expense, and rental value all varied directly with the average monthly income. Monthly housing expense averaged about $20 higher per month than the mortgage payment and nearly $9 above the monthly rental value.
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HOUSING AND HOME FINANCE AGENCY
Comparable data are included in the table for purchasers of existing dwellings. In nearly every case these averages run somewhat below the corresponding new-home figures, but the over-all pattern is very similar.
Loans With VA-Guaranteed Second Mortgages
Section 505 of the Servicemen’s Readjustment Act of 1944 authorizes the Veterans’ Administration to guarantee second mortgages on properties securing FHA-insured first mortgages in cases where the mortgagors are veterans of World War II. These second mortgages may be in any amount up to $4,000, not exceeding 20 percent of the purchase price of the property. They must be amortized within 25 years at an interest rate not exceeding 4 percent.
According to reports of the Veterans’ Administration, some 93,624 second mortgages amounting to $136,941,226 were guaranteed during 1948, bringing the cumulative total through the year end to 155,983 mortgages totaling $212,614,702. This represents an average amount of $1,363 for each second-mortgage loan guaranteed by that Administration.
Of the 296,724 home mortgages insured by the Federal Housing Administration in 1948 under Sections 203 and 603 of the National Housing Act, 59,343 for $392,585,531 were identified by FHA insuring offices as being secured by properties on which there were VA-guaran-teed second mortgages. This brought the FHA cumulative total of known loans of this type to 107,119 amounting to $668,987,499—an average of $6,245. Excluded from this total are all mortgages insured by the FHA which involve veterans as mortgagors where no second mortgage is guaranteed by the Veterans’ Administration. Also excluded are an unknown number of cases in which first mortgages insured by the FHA for nonveteran borrowers have been assumed by veterans of World War II who have been assisted in financing their purchases through VA-guaranteed second mortgages.
The following analysis presents in some detail the characteristics of the first mortgages insured by the FHA under either Section 203 or Section 603 which were secured by properties also covered by VA-guaranteed second mortgage loans.1
1 The characteristics of the mortgages, homes, and mortgagors insured under Sections 203 and 603, with secondary financing guaranteed by the Veterans’ Administration, are analyzed on the basis of a sample of 4,782 new- and 9,091 existing-home mortgages insured under Section 203 and 8,096 new-home mortgages insured under Section 603. The mortgages were selected from those insured in the first 10 months of 1948.
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FEDERAL HOUSING ADMINISTRATION
Mortgage principal.—The typical new-home “505” first mortgage insured under Section 203 in 1948 amounted to $6,442—more than $600 under the comparable figure for all new-home mortgages insured under this section during the year. A similar disparity may be observed for existing-home mortgages, those cases involving VA-guaranteed secondary financing having a median first mortgage of $5,454 compared with $5,969 for all cases. The difference is not quite so large for Section 603 insured mortgages, the $7,018 median “505” mortgage being $406 below the figure for all new-home cases insured under this section. As Table 32 shows, nearly 39 percent of the Section 603 “505” mortgages were in the $7,000 interval, with only about 45 percent amounting to less than $7,000, as compared with 63 percent of the new- and 85 percent of the existing-home “505” mortgages insured under Section 203.
Table 32.—Amount of mortgage principal: Based on FHA-insured mortgages with second mortgages guaranteed by the Veterans’ Administration, secured by single-family homes, Secs. 203 and 603 VEH, 1948
Section 203-505
Mortgage principal
New homes
Existing homes
Section 603-505—New homes
Less than $4,000,.. $4,000 to $4,999.... $5,000 to $5,999.... $6,000 to $6,999.... $7,000 to $7,999.... $8,000 to $8,999___
$9,000 to $9,999___
$10,000 or more___
Total________
Average mortgage. Median mortgage.
Percent
1.4
10.0
24.9
26.9
18.2
12.8
3.3
2.5
100.0
$6, 583
$6, 442
Percent
9.1
25.4
30.3
19.9
8.3
3.9
1.3
1.8
100.0
$5, 603 $5, 454
Percent
0.1
1.6
12.5
31.3
38.7
1 15.8
100.0
$6, 949
$7, 018
1 Statutory limitation $8,100.
Value- and cost-group averages.—The averages for selected characteristics of new and existing single-family home mortgages insured under Section 203 during 1948, with second mortgages guaranteed by the Veterans’ Administration, are shown in Table 33 by property valuation intervals. Comparable averages by necessary current cost groups are presented in Table 34 based on new-home “505” mortgages insured under Section 603.
A comparison of Table 33 with Table 23 on page 208, which presents comparable data for all Section 203 mortgages insured during 1948, reveals that veterans financed homes of an estimated property valuation which averaged $1,000 less than the valuation for all homes.
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HOUSING AND HOME FINANCE AGENCY
Table 33.—Average characteristics by property valuation: Based on FHA-insured mortgages, with second mortgages guaranteed by the Veterans’ Administration, secured by new and existing single-family homes, Sec. 203, 194-8 KHA nronertv Percentage --------------------------Axerag.--------------------------- Median Ratio of P5^®ge
1 i distribu- Tana Estimated Total Estimated Mumhor Floor area loan-value land to f„TOswith
valuation' . v»l™Hnn3 monthly monthly monthlyren- " (square ratio total value tu„TrZ
valuation principal2 valuation3 taxes 4 payment5 tai value6 of rooms ’ feet) s garage
New homes
Less than $4,000_ (®) ______________________________________________________________________________________
$4,000 to $4,999__ 1.3 $4,543 $3,670 $471 $3.00 $30.59 $37.95 4.1 727 79.3 10.4 8.6
$5,000 to $5,999_ 12.1 5,509 4,750 598 3.82 36.28 46.05 4.1 737 87.2 10.9 26.3
$6,000 to $6,999_ 21.6 6,415 5,540 697 4.66 43.32 52.72 4.4 810 87.1 10.9 48.7
$7,000 to $7,999_ 20.9 7,387 6,401 803 5.36 50.01 61.14 4.5 850 86.7 10.9 50.9
$8,000 to $8,999_ 17.4 8,371 7,233 950 6.93 55.89 67.48 4.7 884 85.6 11.3 56.0
$9,000 to $9,999_ 11.3 9,373 7,837 1,156 8.43 62.33 74.01 5.1 993 83.7 12.3 66.1
$10,000 to $10,999..__ 7.7 10,250 8,415 1,268 9.34 67.41 78.81 5.3 1,076 81.8 12.4 67.0
$11,000 to $11,999.... 3.7 11,346 9,078 1,439 9.89 70.76 85.64 5.5 1,147 77.9 12.7 72.7
$12,000 to $13,999.... 2.7 12,592 9,873 1,612 11.03 79.30 95.43 5.6 1,246 77.7 12.8 82.4
$14,000 to $15,999--. .8 14,650 11,571 1,956 12.11 90.97 104.03 6.0 1,488 77.7 13.4 88.2
$16,000 or more__ .5 17,976 13,900 2,528 18.88 117.92 137.20 6.4 1,657 77.7 14.1 91.7
Total____ 100.0 7,924 6,442 916 6.33 52.62 63.65 4.7 897 85.4 11.6 53.0
Existing homes
Less than $4,000_ 1.5 $3,381 $2,665 $438 $3.08 $23.68 $31.35 4.4 786 77.8 13.0 41.3
$4,000 to $4,999_ 6.7 4,436 3,541 531 3.36 29.70 39.51 4.5 812 78.5 12.0 43.8
$5,000 to $5,999_ 19.8 5,425 4,520 639 4.64 36.06 46.65 4.5 827 79.4 11.8 52.2
$6,000 to $6,999_ 26.8 6,352 5,329 714 5.42 42.27 54.05 4.7 863 79.5 11.2 60.4
$7,000 to $7,999_ 19.3 7,318 5,953 841 6.20 47.71 61.18 4.8 918 78.9 11.5 68.3
$8,000 to $8,999_ 12.2 8,297 6,634 954 7.48 53.72 68.20 5.0 1,004 78.6 11.5 71.8
$9,000 to $9,999__ 6.1 9,285 7,442 1,085 8.23 58.98 74.56 5.3 1,098 78.3 11.7 76.8
$10,000 to $10,999— 3.3 10,255 8,297 1,198 9.38 64.29 81.78 5.5 1,179 77.9 11.7 79.2
$11,000 to $11,999—. 1.7 11,298 8,906 1,342 9.94 69.50 88.88 5.7 1,230 77.6 11.9 78.7
$12,000 to $13,999— 1.5 12,670 10,044 1,635 11.94 79.14 99.41 6.1 1,365 77.4 12.9 85.9
$14,000 to $15,999— .5 14,683 11,526 2,027 13.81 89.56 114.58 6.5 1,708 77.3 13.8 85.1
$16,000 or more__ .6 18,600 14,200 2,706 19.57 114.48 143.37 7.2 2,063 77.5 14.5 91.8
Total____ 100.0 7,019 5,454 818 | 6.08 45.79 58.64 | 4.8 942 78.9 11.7 63.1
1 FHA property valuation includes valuation of the house, all other physical improvements, and land.
2 Data shown are medians.
3 The value of the land is estimated by FHA as including rough grading, terracing, and retaining walls if any. 4 Includes real-estate taxes, special assessments if any, and water rent provided its nonpayment results in a lien against the property. 5 Includes monthly payment for first year to principal, interest, FHA insurance premium, hazard insurance, taxes and special assessments, and ground rent and miscellaneous items, if any.
8 The monthly rental value is estimated on the basis of typical year-around tenant occupancy, excluding any premium obtainable because of local housing shortages or newness of the individual property. ’ Excludes bathrooms, toilet compartments, closets, halls, and similar spaces.
8 Area of spaces in the main building above basement or foundations, measured at the outside surfaces of exterior walls. Garage space and finished spaces in attic are excluded.
9 Data not significant.
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FEDERAL HOUSING ADMINISTRATION
More than 55 percent of the “505” properties were valued under $8,000, compared with less than 38 percent of the larger group. Reflecting this lower valuation, the selected characteristics nearly all average somewhat lower for the veterans’ mortgages than the comparable averages based on all Section 203 insured transactions. Notable exceptions are land value and mortgage principal, which generally average higher for the veterans’ cases in specific valuation intervals even though, due to the larger proportion of “505” transactions in the lower valuation groups, the average loan and land values for all “505” loans were lower than the comparable figures for all cases.
Table 34.—Average characteristics by necessary current cost: Based on FHA-insured mortgages with second mortgages guaranteed by the Veterans’ Administration secured by new single-family homes, Sec. 603 VEH, 1948
Necessary current cost1 Percentage distribution Average Median loancost ratio Ratio of land to total cost (percent)
Necessary current cost1 Mortgage principal 2 Landvaluation 3 Estimated monthly taxes 4 Total monthly payment 8 Estimated monthly rental value 6
Less than $5,000 0.2 $4,668 $4,406 $305 $4.31 $27.42 $38.42 87.6 6.5
$5,000 to $5,999 3.1 5', 580 5', 104 558 4. 78 35.85 46.55 88.0 10.0
$6,000 to $6,999-.. 14. 8 6,531 5,775 630 5.45 42.10 53.88 88.0 9.6
$7,000 to $7,999 26.4 1,464 6; 546 757 6. 09 46.62 58.93 87.9 10.1
$8,000 to $8,999 28.0 8,443 7,442 917 7.69 51.90 65.38 87.6 10.9
$9,000 to $9,999 18.8 9,372 7,958 978 8.79 55.70 71.30 83.7 10.4
$10,000 to $10,999 6.6 10, 320 8,100 1,131 10.03 57.17 74.40 77.2 11.0
$11,000 to $11,999 1.5 11,314 8,100 1,295 10.18 57.82 75.88 71.0 11.4
$12,000 or more .6 13, 457 8,100 1,570 10. 77 60. 72 86.89 61.0 11.7
Total 100.0 8,176 7,018 855 7.25 49.71 63.33 87.0 10.5
1 The FHA estimate of the necessary current cost of the property includes cost of the house, all other physical improvements, and land.
2 Data shown are medians.
3 The value of the land is estimated by FHA as including rough grading, terracing, and retaining walls, if any.
4 Includes real-estate taxes, special assessments if any, and water rent provided its nonpayment results in a lien against the property.
3 Includes monthly payment for first year to principal, interest, FHA insurance premium, hazard insurance, taxes and special assessments, and ground rent and miscellaneous items if any.
6 The monthly rental value is estimated on the basis of typical year-around tenant occupancy, excluding ny premium obtainable because of local housing shortages or newness of the individual property.
Similar comparisons may be made for existing-home mortgages insured under Section 203. Three out of four of these properties involving VA-guaranteecl secondary financing were valued below $8,000, compared with about one out of two for all existing-home transactions. Generally speaking, the various averages have about the same relationship to each other as described above in connection with new-home mortgages. It may be noted that, except for properties valued above $12,000, land value averages slightly lower for the “505” properties than for all Section 203 existing homes.
A comparison of Table 34 showing characteristics of Section 603-“505” mortgages with Table 24 on page 209, which is based on all Sec
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HOUSING AND HOME FINANCE AGENCY
tion 603 insured new-home transactions, reveals a higher concentration of the veterans’ properties in the lower cost groups comparable to that mentioned above in connection with Section 203. Within specific cost groups, the various characteristics of the “505” cases generally average somewhat lower than the comparable figures for al] Section 603 transactions.
Income group averages.—Characteristics of property, mortgage, and mortgagor for various borrower-income groups are presented in Tables 35 and 36 for new and existing homes with mortgages insured
Table 35.—Average characteristics by mortgagor’s monthly income: Based on FHA-insured mortgages with second mortgages guaranteed by the Veterans’ Administration, secured by new and existing single-family, owner-occupied homes, Sec. 203, 191/8
Mortgagor’s effective monthly income 1 Percentage distribution Average Mortgage as a percent of FHA valuation
Mortgagor’s monthly income 1 FHA valua, tion 2 Mortgage principal Total monthly mortgage payment 3 Monthly taxes and assessments4 Total monthly housing expense 6 Monthly rental value 6
New homes
Less than $150.00 0.1 $140.00 $4.360 $3. 660 $28. 40 $2. 00 $44. 80 $38.00 83.9
$150 to $199.99... 3. 2 175.61 5.698 4.762 36. 47 3.95 56. 09 47. 81 83.6
$200 to 249.99 15.6 215. 77 6. 290 5.256 40.75 4. 34 62.84 51. 60 83.6
$250 to $299.99... 24.4 262.78 7.138 6. 018 47.77 5. 39 72.14 58.45 84.3
$300 to $349.99 21.6 310. 59 7.769 6.532 52.37 6.15 77. 56 64.22 84.1
$350 to $399.99.... 11.4 362. 29 8.570 7.154 57. 56 7. 00 84.38 68.82 83.5
$400 to $499.99 14.3 421.68 9.346 7.731 62.52 7. 98 91.75 73.38 82.7
$500 to $599.99 5. 8 517.05 9.941 8.144 66.28 8.82 96.80 78. 50 81.9
$600 to $799.99... . 2.6 642. 74 11.321 9.149 76.60 12.00 111.56 87. 94 80.8
$800 to $999.99 .6 835.38 12. 200 9.769 79.35 10. 77 115. 85 86. 73 80.1
$1,000 or more .4 1,119. 52 12. 638 10.148 90.67 11.48 118. 81 99. 52 80.3
Total 100.0 328. 73 7. 899 6. 588 52.67 6. 33 78. 45 63.88 83.4
Existing homes
Less than $150.00 ... 0.2 $128.33 $4.250 $3. 289 $26.83 $2. 50 $44.61 $36. 00 77.4
$150 to $199.99... 4.7 172. 81 5.109 4.037 32.86 3.93 52.81 43.35 79.0
$200 to $249.99... 21.6 214. 97 5, 824 4.667 37.33 4. 72 60. 83 49. 22 80.1
$250 to $299.99 26.4 261. 48 6) 609 5. 273 42. 96 5. 55 68.06 55. 71 79.8
$300 to $349.99... 20.4 309. 72 7.227 5.731 46. 82 6.11 73.01 59.89 79.3
$350 to $399.99 9.6 361. 40 7. 787 6. 218 51.18 7.13 78.96 64.67 79.9
$400 to $499.99 10.6 420. 45 8.328 6.627 54.44 7.63 84.19 68.54 79.6
$500 to $599.99 3. 6 516.37 9.320 7.424 63.24 9.13 86.90 76.17 79.7
$600 to $799.99 1.9 652. 33 10. 853 8.562 70.14 9.70 107. 47 87.24 78.9
$800 to $999.99 .5 840. 89 12. 738 9. 962 86.20 13. 93 127.96 102. 44 78.2
$1,000 or more .5 1,236.04 15.050 11.423 94.13 16. 67 145.50 119.15 75.9
Total 100.0 307. 94 7.039 5. 604 45.66 6.08 71.64 58.66 79.6
’Based upon the FHA estimate of the earning capacity of the mortgagor that is likely to prevail during approximately the first third of the mortgage term.
2 FHA property valuation includes valuation of the house, all other physical improvements, and land.
3 Includes monthly payment for the first year to principal, interest, FHA insurance premium, hazard nsurance, taxes and special assessments, and ground rent and miscellaneous items if any.
4 Includes real-estate taxes, special assessments if any, and water rent provided its nonpayment results in a lien against the property.
6 Includes total monthly mortgage payment for first year, estimated monthly cost of maintenance, regular operating expense items such as water,, gas, electricity, and fuel for heating; and monthly payment on secondary loan.
6 The monthly rental value is estimated on the basis of typical year-around tenant occupancy, excluding any premium obtainable because of local housing shortages or newness of the individual property.
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FEDERAL HOUSING ADMINISTRATION
under Section 203 and for new-home mortgages insured under Section 603, each in conjunction with a “505” second mortgage guaranteed by the Veterans’ Administration. Some 43 to 52 percent of the veterans purchasing homes with FHA-insured mortgages had annual effective incomes below $3,600. A larger proportion of purchasers with incomes below this amount are found among existing-home buyers than among those investing in new homes.
Data on all Section 203 cases (Table 31, page 217) indicate that, while veterans using “505” loans had an income typically lower than that for all mortgagors, this over-all difference is registered for the most part in the highest income group. Most of the income groups show comparatively little variation in average income within the group as between veteran and combined veteran and nonveteran groups. However, some 65 percent of the veteran “505” new-home cases were in the group with incomes of less than $350 per month, while 53 percent of the over-all group fell in the same division. About 2.6 percent of all new-home buyers were in the $800 to $1,000 income group, compared with only 1 percent of those who had second mortgages guaranted by the Veterans’ Administration.
Table 36.—Average characteristics by mortgagor's annual income: Based on FHA-insured mortgages with second mortgages guaranteed by the Veterans' Administration, secured by new single-family, owner-occupied homes, Sec. 603 VEH, 1948
Mortgagor’s effective annual income 1 2 Percentage distribution Average Ratio of cost to income Mortgage as a percent of cost
Mortgagor’s annual income 1 Necessary current cost3 Mortgage principal Total monthly mortgage payment 3 Monthly taxes and assessments 4 Total monthly housing expense 5 Monthly rental value
Less than $2,000 0.5 $1,832 $5, 729 $4,897 $32.85 $2.88 $47.97 $46.94 3.13 85.5
$2,000 to $2,499 7.6 2,318 6, 688 5, 775 40.79 4. 67 59.45 53.38 2.89 86.3
$2,500 to $2,999 14.3 2,701 7,455 6,431 45.31 6.00 65.83 59.42 2.76 86.3
$3,000 to $3,499 29.2 3.139 8,124 6,940 49.13 6.78 71.27 62.90 2.59 85.4
$3,500 to $3,999 24.8 3,666 8,474 7, 215 51.39 7.49 75.16 65.31 2.31 85.1
$4,000 to $4,499 9.3 4,179 8,714 7,354 52. 52 8.06 77.39 67.40 2.09 84.4
$4,500 to $4,999 7.8 4,725 9,065 7,453 53.37 8.11 78.63 68.69 1.91 82.2
$5,000 to $5,999 3.7 5,325 9,061 7,503 54.03 8.52 79. 98 68.22 1.70 82.8
$6,000 to $6,999 1.8 6,131 8,999 7,531 54. 57 8.33 81.02 69. 52 1.47 83.7
$7,000 to $9,999 .9 7,825 9,364 7,575 54.39 8. 44 82.87 71.35 1.20 80.9
$10,000 or more .1 12,686 9,743 8,014 57.86 8.43 85.29 74.57 .77 82.3
Total 100.0 3,545 8,185 6,953 49.40 7.00 72.20 63.47 2.31 85.0
1 Based upon the FHA estimate of the earning capacity of the mortgagor that is likely to prevail during, approximately the first third of the mortgage term.
2 The FHA estimate of the necessary current cost of the property includes the cost of the house, all other physical improvements, and land.
’Includes monthly payment for the first year to principal, interest, FHA insurance premium, hazard insurance, taxes and special assessments, and ground rent and miscellaneous items if any.
4 Includes real-estate taxes, special assessments if any, and water rent provided its nonpayment results in a lien against the property.
8 Includes total monthly mortgage payment for first year; estimated monthly cost of maintenance; regular operating expense items such as water, gas, electricity, and fuel for heating; and monthly payment on secondary loan.
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HOUSING AND HOME FINANCE AGENCY
All characteristics listed for the two groups bear generally the same relationships. FHA valuation and amount of mortgage principal are almost consistently lower in the veteran group. The amount of the FHA-insured mortgage excludes the second mortgage guaranteed by the Veterans’ Administration. This group of veterans obtained a higher ratio mortgage loan than that for the total group, and, because of the second mortgage payments, their housing expense was also higher than that for other groups.
A comparison of Table 35 with Table 31 shows much the same picture for existing-home buyers. More than 73 percent of the veteran purchasers of existing homes had incomes of less than $350 per month as compared with 59 percent of the total group of existing-home buyers. As noted for the new-home buyers, the ratio of the mortgage amount to the FHA valuation and the housing expense are both higher for veteran purchasers within the various income groups than for the total buyers.
Rental Housing Mortgage Insurance under Titles II and VI
Volume of Business
The volume of insurance written in 1948 under FHA’s rental housing programs reached an all-time high of $608,711,284, which represents about one-fifth of the total amount of insurance written under all titles during the year. Nearly all of these rental-project mortgages were insured under the Veterans’ Emergency Housing provisions of Section 608. Only $2,848,500 of insurance was written on public housing-disposition mortgages under Section 608 pursuant to Section 610, while no rental-project mortgages were insured under Section 207 or the War Housing provisions of Section 608.
As of the end of 1948, FHA had insured rental housing mortgages totaling $1,304,522,216, three-fourths of which represented insurance written in the last 2% years under the Section 608 Veterans’ Emergency Housing Program. Table 37 shows the yearly volume of insurance written under the various rental housing programs from 1935 through 1948.
Practically all of this FHA rental housing insurance covered the financing of new construction, with less than 2 percent utilized for refinancing purposes. More than 200,000 new dwelling units are provided in the rental projects built or being constructed with the aid of FHA mortgage insurance, 77,800 of which are covered by rental-project mortgages insured in 1948.
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FEDERAL HOUSING ADMINISTRATION
Table 37/—Yearly volume of all rental-project mortgages insured by FHA; Number of units and amount of mortgage on new and existing or refinanced construction, by sections, 1935-48
Year Grand total1 new and existing New construction
Secs. 207 and 210 Sec. 608 Total, new
Units Amount Units Amount Units Amount Units Amount
1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946. 1947 1948 Total.. 738 624 3,023 11, 930 13. 462 3, 559 3,741 5,842 20,179 12,430 4, 058 2,232 46, 604 79,184 $2, 355,000 2,101,000 10, 483,000 47, 638, 050 51,851,466 12, 948, 690 13, 565,000 21, 214, 705 84, 621,970 56, 095, 906 19,816, 951 13,174, 988 359, 914, 206 608, 711,284 738 624 3, 023 11, 930 13, 462 3, 446 3, 296 1,163 41 200 41 $2,355,000 2,101,000 10, 483, 000 47, 638, 050 51, 851, 466 12. 488, 690 12, 014,000 4,110,000 139, 000 950, 000 224, 000 2 32, 000 4, 295 19, 994 9, 655 2, 937 1, 538 46, 446 77,808 $15, 422, 705 83, 907, 970 46,105,100 14, 952, 936 10,665,011 358, 570, 206 605, 799, 784 738 624 3, 023 11, 930 13, 462 3, 446 3, 296 5, 458 20,035 9, 655 3,137 1, 579 46, 446 77,808 $2,355,000 2,101,000 ■ 10,483,000 47, 638,050 51, 851, 466 12, 488,690 12, 014,000 19, 532, 705 84, 046, 970 46,105,100 15,902,936 10, 889, on 358, 602, 206 605, 799,784
207,606 1,304, 522. 216 37, 964 144,386, 206 162, 673 1,135, 423, 712 200, 637 1, 279, 809,918
Year Existing or refinanced construction
Secs. 207 and 210 Sec. 608 Secs. 608-610 Total, existing or refinanced
Units Amount Units Amount Units Amount Units Amount
1935
1936
1937
1938
1939
1940 113 445 384 144 2,181 691 653 $460,000 1, 551,000 1, 682, 000 575, 000 7,175,806 2,856,015 2, 285, 977 113 445 384 144 2,775 921 653 158 1,376 $460, 000 1, 551, 000 1, 682, 000 575,000 9, 990, 806 3,914, 015 2, 285, 977 1, 342,000 2,911,500
1941
1942
1943
1944 594 230 $2, 815, 000 1, 058, 000
1945
1946
1947 158 10 1,342, 000 63, 000
1948 1, 366 $2, 848, 500
Total..
4,611 16, 585, 798 992 5, 278, 000 1, 366 2, 848, 500 6,969 24, 712, 298
1 For yearly volume of home mortgages insured by sections for total construction, see Table 1.
2 Increase in amount of a mortgage insured prior to 1947.
Some 1,428 applications—three under Section 2’07 and 1,425 under Section 608—for insurance of new rental-project mortgages totaling $651,293,624 and involving 81,197 dwelling units were received during 1948. In addition to these, one application was received for the refinancing of a Section 608 mortgage for $63,000 covering 10 units, and seven applications totaling $2,784,400 and covering 1,286 units were received under Section 608 pursuant to Section 610. A total of 1,494 commitments for $611,940,934 covering 77,392 dwelling units were issued under the rental-project sections of the act during 1948, and 785 commitments involving 39,118 units for $307,591,700 were outstanding as of the year end.
831481—49-
■16
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HOUSING AND HOME FINANCE AGENCY
State Distribution
Between the enactment of the Veterans’ Emergency Housing Act of 1946 and the close of 1948, mortgage insurance had been written on 2,856 Section 608 VEH rental projects located in 45 States, the District of Columbia, and Hawaii. About two-thirds of these projects were insured during 1948. Table 38 shows by State location the number of projects, face amount of mortgages, and number of dwelling units covered by insurance written under the Veterans’ Emergency Housing provisions of Section 608 during the year 1948 and cumulative through the end of 1948. Over half of the $605,862,784 of mortgage insurance written during 1948 was on projects located in the five States of New York, New Jersey, Maryland, Virginia, and California.
The State distributions for the previous Section 608 War Housing and the long-range Sections 207 and 210 rental programs, not included here, were shown in FHA’s Fourteenth Annual Report for the year 1947, on pages 62 and 44, respectively.
Financial Institutions
The extent of participation by various types of financial institutions in originating and holding rental housing mortgages insured under Sections 207 and 210, and the Section 608 Veterans’ Emergency Housing and War Housing Programs is shown in Table 39. For all programs combined, life insurance companies were the leading type of institution, accounting for 34 percent of the total amount of mortgages originated, and 44 percent of the total amount held at the end of 1948. State banks were the second leading type of institution, having originated almost 30 percent of the amount of rental housing insurance written and holding 24 percent of the face amount outstanding at the end of 1948. Life insurance companies and State banks together accounted for approximately two-thirds of the financing of rental housing mortgages under all programs, on the basis of mortgages either originated or held at the end of 1948, although the relative extent to which each type participated under the separate programs varied.
Under the Section 608 Veterans’ Emergency Housing Program— currently the most active and also the largest of FHA’s rental programs—State banks, life insurance companies, and national banks, in that order, have been the leading types of originating mortgagees, collectively financing almost 80 percent of the dollar volume of mortgages insured through December 31, 1948.
Af the Section 608 VEH mortgages in force at the close of 1948, the largest proportions were held by life insurance companies (41 percent of the dollar amount) and State banks (27 percent). Savings banks
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Table 38.—Volume of all rental-project mortgages: Number, face amount, and units of FHA-insured mortgages under all rental housing programs, with State distribution of mortgages insured under Sec. 608 VEH, 191/8 and cumulative through 191/8
Location of projects Year 1948 Cumulative through 1948
Projects Amount Units Projects Amount Units
Section 608—Veterans’ Emergency Housing: Alabama.. . ... 51 $15, 992,100 3,113,850 963,300 58,431,812 606,100 5,336,100 4,021,400 11,904,900 27, 594,300 22,776, 000 1,046, 500 10,818, 648 3,105,292 76, 500 3,169,300 2, 774,400 14, 709,100 2,358 434 71 $25,097,300 4,073, 600 5,389,000 62,677,212 2,762, 400 9,515,900 6,516,800 19, 960,100 45,123,100 35,151, 700 3,505,300 46,387,148 10, 223,892 76, 500 5,561,900 9,331,400 15,382,500 120,000 90,833,600 12,054, 200 16,737,653 1,730,470 1,060, 000 11,061,800 90, 000 1,812,800 1,039,300 101,400 135,679,750 3,645
Arizona __ 27 34 609
Arkansas California.. ... _. .. 10 457 122 8,419 76 636 36 493 754 9,077 381 1,154 826
Colorado Connecticut 6 10 22 21
Delaware 3 502 4
District of Columbia 19 1,508 33 2,579 6,436 4,104 430
Florida.. . 130 4,034 2,674 124 209
Georgia. _. ... 25 42
Idaho.. _ __ 2 4
Illinois ._ _ . 44 1,390 379 109 5,436 1,329
Indiana... _ ... . ... ._ . .. . 23 37
Iowa . ... 1 15 1 15
Kansas. .... __ 11 410 27 756
Kentucky. 18 370 55 1,245 1,897 28
Louisiana. ... 44 1,801 47
Maine . 1
Maryland _ . ... 77 59,995,100 6, 841,300 10,034,753 1,041,070 964, 600 10, 215,400 90, 000 1, 779,800 1,039,300 101,400 76, 913, 750 7,342 850 122 11,374
Massachusetts _ 8 17 1,468 2,096 279
Michigan. ... ... 64 1,228 166 117
Minnesota 12 22
Mississippi.. .. . ... _ 7 131 8 143
Missouri*. ___ . 32 1,336 20 36 1,452 20
Montana.. ... . 1 1
Nebraska .. ..... .. 13 250 14 258
Nevada. ... 10 168 10 168
New Hampshire. . 2 26 2 26
New Jersey . .. _ 112 9,642 200 17,506
New Mexico
New York __ .. 150 100,129,400 6,102,400 45,000 5, 783,070 9,521, 500 10,863, 900 24,621,350 738,000 4, 636,000 541,100 4, 522,500 25,065,317 12,194 740 242 141, 579,900 10,723,700 45, 000 17,407 1,356 11
North Carolina . ... _ . 20 26
North Dakota . 1 11 1
Ohio.. _ 26 625 71 16, 014, 970 15,127, 900 14,351,800 1,950 2,110 1,844
Oklahoma. _. 29 1,259 1,352 2,981 114 70
Oregon. . _ . _ 37 62
Pennsylvania 66 99 33, 048,450 738, 000 4,079
Rhode Island 2 2 114
South Carolina _. 5 574 12 6, 035,100 541,100 754
South Dakota _____ 4 77 4 77
Tennessee . ........ 21 662 22 4,642, 700 34,823,117 481, 700 678
Texas. 124 3,165 170 4,318 64
Utah . ._ _ 1
Vermont
Virginia 71 37,672, 200 14,808, 787 4,889 1,929 133 77,097, 500 26,743,187 10,044
Washington . . 29 62 3,583
West Virginia
Wisconsin. 15 2,161,485 50,400 270 38 8,291,185 50,400 1,060 8
Wyoming.. 1 8 1
Alaska
Hawaii _ _ . 35 3,144,300 546 45 4,350,600 793
Puerto Rico
Total L _ 1,855 605,862, 784 77,807 2,856 973,743,034 125, 741
Sections 207 and 210 1 2 3 _ 379 160,972,004 42,575
Section 608—War Housing 2 4 495 166,958, 678 37,924
Section 608-610—Public housing disposition. . 6 2,848, 500 1.366 6 2,848, 500 1,366
Grand total—all rental-project mortgages . . . . . . 1,861 608,711,284 5 79,184 3,736 1,304,522,216 207, 606
1 Cumulative includes 125,573 new units provided with insured mortgages totaling $973,047,034.
2 See 1947 annual report for State distribution of insurance written cumulative through Dec. 31, 1947.
3 Cumulative includes 37,964 units in new and rehabilitation projects insured for $144,386,206.
4 Cumulative includes 37,025 new units provided with insured mortgages totaling $164,444,573.
6 Includes 11 units, not shown above, reported in 1948 for a war housing project insured prior to 1948.
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Table 39.—Type of institution originating holding and all rental-project mortgages: Number and face amount of Secs. 207 and 608 mortgages financed through 1948 and held in portfolios as of Dec. 31, 1948
Type of institution as classified Dec. 31,1948 Number of institutions Mortgages orginated Mortgages held
Originating Holding Number Amount Percentage distribution 1 Number Amount Percentage distribution >
Secs. 207 and 210 2
National bank _ _ _ 18 3 37 $4, 591,400 6,901, 869 1,991, 750 98,381,876 800,000 13,793,484 932,300 2.8 3 $60, 700 2, 513,219 431,000 0.2
State bank _ 16 5 25 4.3 7 6.4
Mortgage company 13 1 14 1.2 1 1.1
Life insurance company 26 16 212 61.1 48 21,033,177 800,000 54.0
Other insurance company 1 1 1 .5 1 2.0
Savings bank.. ... _. ... 12 6 25 8.6 13 9,436,000 64,000 24.2
Savings and loan association 5 1 8 .6 1 .2
Federal agency . 3 1 25 18, 949, 500 14, 629,825 11.8 1 35,000 .1
All other 5 2 32 9.1 5 4, 579,000 11.8
Total 99 36 379 160, 972,004 100.0 80 38,952,096 100.0
Sec. 608—Veterans’ Emergency Housing Program
National bank 74 64 563 $154, 762,178 327,765,420 81, 576, 240 294,916,963 1,343,300 74,003,402 20,056, 502 15.9 413 $121,626, 592 262,510,448 32, 555,800 12.5
State bank 71 63 653 33.7 499 27.0
Mortgage company 95 43 378 8.4 95 3.3
Life insurance company _ _ 74 80 913 30.3 1,398 19 395,010,065 2,164,100 127,791,220 11,208,702 40.6
Other insurance company ... 4 4 10 .1 .2
Savings bank _ _ 29 36 133 7.6 276 13.1
Savings and loan association 46 33 115 2.0 69 1.2
Federal agency... 1 4 446,700 19,551,629 .1
All other 5 8 91 19,319,029 2.0 77 2.0
Total 398 332 2,856 973, 743,034 100.0 2,850 972,865,256 100.0
Sec. 608—War Housing Program 2
National bank _ _ . 26 12 52 $13,265,197 46,656,356 33, 974, 299 50,024, 859 108, 000 8.0 50 $8, 536,097 5.7
State bank . 23 10 106 27.9 27 14, 770,900 3, 970, 900 9.9
Mortgage company . .. 37 8 134 20.3 12 2.7
Life insurance company 18 38 119 30.0 251 95,353,175 415, 200 21,938,387 63.9
Other insurance company.. 1 3 1 .1 3 .3
Savings bank.. ' 7 , 11 39 9,897,600 5, 721,242 5.9 65 14.7
Savings and loan association Federal agency. 17 12 25 3.4 15 3, 522,400 2.4
All other 5 2 19 7,311,125 4.4 5 636,625 .4
Total.. _ 134 96 495 166, 958, 678 100.0 428 149,143, 684 100.0
Total3
National bank.. _ ... 652 $172, 618, 775 381,323, 645 117, 542,289 443,323,698 2, 251, 300 97,694,486 26,570,044 18, 949, 500 41,399,979 13.3 466 $130, 223,389 279, 794,567 36,957,700 511,396, 417 3, 379,300 159,165,607 14, 795,102 481,700 11.2
State bank ... ... 784 29.3 533 24.1
Mortgage company. 526 9.0 108 3.2
Life insurance company 1,244 34.1 1,697 44.0
Other insurance company. ___ 12 .2 23 .3
Savings bank .. 197 7.5 354 13.7
Savings and loan association 148 2.0 85 1.3
Federal agency 25 1.4 5 .1
All other 142 3.2 87 24, 767i 254 2.1
Total_ _ 3,730 1,301,673, 716 100.0 3,358 1,160,961,036 100.0
1 Based on amount of mortgages.
2 Type of institution holding mortgages at date of termination or as of Dec. 31, 1948.
3 Excludes mortgages financed and held under Sec. 608 pursuant to Sec. 610.
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FEDERAL HOUSING ADMINISTRATION
ranked third, holding 13 percent, followed closely by national banks with 12.5 percent.
As apparent from Table 39, national and State banks, mortgage companies, and savings and loan associations, have been sellers of Section 608 VEH mortgages, holding lesser amounts than they originated. Conversely, life insurance and other insurance companies, as well as savings banks, have been active purchasers of these mortgages. At the end of 1948, the four mortgages totaling $446,700 held by a Federal agency—The Federal National Mortgage Association— had been purchased in the secondary market as provided for under Title III of the National Housing Act.
The difference between the total amounts of mortgages originated and mortgages held at the end of 1948, which is substantial under the long-range Section 207 program, is due to the termination of insurance, as explained in the following text and table.
Terminations and Foreclosures
As shown in Table 40, of the 3,736 rental-project mortgages in the amount of $1,304,522,216 insured under all sections of the act, 3,364 mortgages with original face amounts aggregating $1,163,809,536 were still in force as of December 31, 1948. Only 372 mortgages for $140,712,680, or about 10.8 percent in dollar amount, had been terminated through the year end. As might be expected, the proportion of mortgages terminated is substantially higher for mortgages in-
Table 40.—Disposition of all rental-project mortgages insured by FHA: Number and amount of mortgages insured, terminated, and in force, by sections, cumulative throivgh Dec. 31,191/8
Total Secs. 207 and 210 Sec. 608 Sec. 608-610
Disposition Projects Amount Projects Amount Projects Amount Projects Amount
Mortgages insured 3,736 $1,304,522,216 379 $160,972,004 3,351 $1,140,701,712 6 $2,848,500
Mortgages terminated: Prepayments in full. Prepayments by su- 308 25 110,835,375 9,671,600 253 96,250,608 8,032,000 55 14,584,767 1,639, 600
13 12
Mortgages assigned tn FTTA 1 2 3,170,000 14,824,605 1, 406,900 804,200 1 3,000,000 12,752,100 1,406,900 578,300 1 170,000 2,072,505
Properties acquired by FRA 2 10 17 2
7 7
Other terminations. 11 8 3 225,900
Total terminations 372 140,712,680 299 122,019,908 73 18,692,772
Mortgages in force.... 3,364 1,163,809,536 80 38,952,096 3,278 1,122,008,940 6 2,848, 500
1 Under Secs. 207 and 210, property was sold with reinsurance.
2 Under gees. 207 and 210, of the properties acquired by FHA, 9 projects were sold with mortgage held by FHA, 7 projects were sold by FHA with reinsurance, and 1 project was sold by FHA without reinsurance. Of the acquired Sec. 608 projects, 1 was sold with reinsurance, the other is operating under FHA supervision.
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sured under Sections 207 and 210 than for those insured under the other rental housing sections.
Project Gharac teris tics
During 1948 commitments were issued by FHA under the Veterans’ Emergency Housing provisions of Section 608 for the insurance of mortgages on 1,486 new projects containing 75,216 dwelling units. Over four-fifths of these units were covered by commitments issued during the first 4 months of the year prior to the expiration of the Section 608 insurance authorization on April 30. The rest were covered by commitments issued after the revival of the insurance authorization on August 10. Most of the sites selected for these projects are located in metropolitan districts, with the six districts of New York, Philadelphia, Baltimore, Washington, Chicago, and Los Angeles accounting for more than half of the units.
The typical rental project covered by Section 608 commitments issued during 1948 was a garden-type development consisting of 2-story walk-up structures and containing 22 apartments.1 The mortgage on this project averaged $1,785 per room, with the land valued at $1,015 per dwelling unit. The typical apartment of 4y2 rooms—living room, dining alcove, two bedrooms, kitchen, and bath —rents for about $87 per month. Included in this rental are a range, a refrigerator, laundry facilities, heat, hot and cold water, and janitor and grounds maintenance services.
Yearly trends.—Selected characteristics of the rental projects and dwelling units provided under the several rental housing programs of FHA are presented in Table 41. Data are shown for the prewar Section 207 projects covered by mortgage insurance written from 1935 through 1941, the wartime Section 608 projects with mortgages insured from 1942 through 1946, and the postwar Section 608 projects covered by commitments issued during 1947 and 1948 under the Veterans’ Emergency Housing Program.
Although the size of the median Section 608 VEH project increased from 20.3 to 22.5 units between 1947 and 1948, it was still only about one-half the size of the typical wartime Section 608 project of 41 units and slightly less than one-third as large as the typical Section 207 prewar project of 72 units.
In projects underlying Section 608 VEH commitments issued in 1948, walk-up structures continued to predominate, although to a lesser degree than in 1947. Units in walk-up structures represented 76.7
1 cyaracteristlcs of the mortgages and projects insured under Section 608 are analyzed on tbe basis of 1,463 projects containing 74,822 units covered by commitments issued during 1948.
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FEDERAL HOUSING ADMINISTRATION
Table 41.—Trend of characteristics of FHA rental housing projects and divelling units under Sec. 207 and Sec. 608, 1935-48
Median
Year and program 1 Size of project (units) Percent of units in walk-up projects Land value 2 Size of dwelling unit (rooms) Monthly rental per unit Mortgage per room 3
1935 41 Sp.p, 207 72.2 84.4 (4) 3.86 $53.09 $1,011
1942 4o" Sp.c 60S War - - -- 41.0 79.4 $640 3.98 56.45 1,207
20.3 83.6 949 4.71 5 84. 13 1, 767
1948’ Sec.’ 608 VEH 22.5 76.7 1,015 4. 67 87. 56 61, 785
i Data on Sec. 207 and Sec. 608 war rental projects based on mortgages insured; Sec. 608 VEH data based on FHA commitments issued.
2 Includes estimated cost of land improvements.
3 Mortgage allocable to dwellings.
< Data not available. .
s Based on units in projects securing mortgages in excess of $200,000.
e Based on commitments issued January-April 1948, subject to a maximum limitation of $1,800 per room. For commitments issued after revival of Sec. 608 on August 10 (subject to a revised maximum of $8,100 per family unit), the median is $7,790 per unit.
percent of the total in 1948, compared to 83.6 percent in the preceding year. A substantial increase—from 3 to 13 percent—in the proportion of dwelling units in elevator-type projects offset declines in the proportions of walk-up, row house, and semidetached units in 1948.
The $1,015 land value for the typical dwelling unit in 1948 rental projects is about 7 percent higher than the 1947 figure of $949, and nearly 60 percent higher than the median land value of $640 for Section 608 war projects. The latter increase reflects the over-all rise in land prices and development costs since the end of the war.
The mortgage per room of $1,785 for the typical Section 608 project approved in 1948 was only one percent more than the 1947 median of $1,767. It was 48 percent higher than the median for Section 608 war projects, however, and 77 percent higher than the median for Section 207 prewar projects. These latter increases reflect the change in the maximum amount of mortgage attributable to dwelling use, in line with increases in construction and land costs, from the $1,350 per room permitted for Section 207 prewar projects and Section 608 war projects to the $1,800 per room permitted for Section 608 VEH projects committed through April 30, 1948. Section 207 mortgages, moreover, could not exceed 80 percent of the FHA estimate of long-term value, while those committed under Section 608 were limited to 90 percent of the estimated replacement cost of the project.
The size of the median dwelling unit in Section 608 VEH projects did not change significantly from 1947 to 1948 (4.71 and 4.67 rooms respectively), and continued to be slightly more than a half room larger than the median war housing unit and about one room larger than the typical Section 207 unit. The median monthly rental of
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HOUSING AND HOME FINANCE AGENCY
$87.56 approved in 1948 is about 4 percent above the 1947 rental and more than $30 higher than the median rental for the prewar Section 207 and wartime Section 608 apartments. The rentals shown for the Section 207 and Section 608 war dwelling units are based on rentals reported at the time the projects were completed and initially occupied.
A more detailed discussion of the characteristics of the Section 608 projects covered by commitments issued in 1948 is presented in the following sections:
Size of project.—Section 608 projects approved by FHA in 1948 were small, as evidenced by the 22.5 dwelling units in the median project. Individual projects, however, ranged in size from the prescribed minimum of eight units to one project of 630 units. As shown in Table 42, three of every five projects have fewer than 25 units, but these provide only about one-fifth of the total number of units. On the other hand, projects with 200 or more units, representing only 6 percent of total projects, contain 35 percent of the units.
Table 42.—Size of project: Based on FHA commitments to insure mortgages secured by rental housing projects, Sec. 608 VEH, 191,8
Although three-fifths of the projects have fewer than 25 units and three-fourths less than 50 units, further analysis reveals that approximately 40 percent of these projects are actually component parts of larger projects being developed by the same sponsor.
Type of structure.—Two-story walk-up structures are by far the most popular in the rental projects approved by FHA in 1948, predominating in nearly 65 percent of the projects, which projects contained over 50 percent of the dwelling units (Table 43).
Elevator projects, representing only 3 percent of the projects, provided 13 percent of the units, while the 10 percent of the projects of the row-house type included 9 percent of the units.
232
Percentage distribution
Number of dwelling units per project ~
Promts ”3^
8 to 9________________________________________________________________________________ 8.7 1.6
10 to 24-------------------------------------------------------------------------- 51.9 17.8
25 to 49---------------------------------------------------------------------- 15. 0 9. 7
50 to 99--------------------------------------------------------------------------- 10.6 14.3
100 to 149-------------------------------------------------------------------------- 5.0 12.1
150 to 199-------------------------------------------------------------------------- 2.8 9.5
200 to 299-------------------------------------------------------------------- 4.0 18.9
300 or more------------------------------------------------------------------- 2. 0 16.1
Total------------------------------------------------------------------- 100.0 100.0
Median Average
Units per project------------------------------------------------------------- 22.5 51.1
FEDERAL HOUSING ADMINISTRATION
Elevator projects are by far the largest, averaging nearly 214 units per project, contrasted with an average of 46% units for walk-up projects and 42 units for row-house projects.
Table 43.—Tyne of structure: Based on FHA commitments to insure mortgages secured by ental housing projects, Sec. 608 VEH, 1948
Type of structure Percentage distribution Average number of units per project
Projects Dwelling units
Walk-up total. _ _ _ . ... . _. 84.4 76.7 46.5
1- and 2-story combined . 2.0 2.4 61.9
2-story . .. . 64.7 51.6 40.8
2- and 8-storv combined .. . _ _ _ ■ 3.5 8.9 131.2
3-story 14.1 13.6 49.4
4-story ... . .... .1 .2 16. 0
Row house 10.9 9.0 42.4
Semidetached (2-family). .. 1.6 1.2 36.9
Elevator . 3.1 13.1 213.8
Total. _ 100.0 100.0 51.1
Land value per dwelling unit.—The typical dwelling unit covered by an FHA commitment issued in 1948 has a land value of $1,015 including costs of installing utilities and landscaping. As shown in Table 44, land values range from less than $400 to more than $2,000 per unit, with approximately half of the units contained in projects with land values averaging between $800 and $1,199 per unit. Less than 3 percent of the units have land values of $2,000 or more.
Table 44.—Land value per dwelling unit: Based on FHA commitments to insure mortgages secured by rental housing projects, Sec. 608 VEH, 1948
Land value per dwelling unit 1
Percentage distribution Average number of units per project
Projects Dwelling units
3.0 2.4 41.4
8.1 6.9 43.5
15.0 14.2 49.5
22.9 24.5 54.5
23.6 25.2 54.8
16.7 17.4 53.3
9.2 6.7 37.2
1.5 2.7 91.3
100.0 100.0 51.1
$1,008 $1,015 —
Less than $400___________________________________________________
$400 to $599_____________________________________________________
$600 to $799_____________________________________________________
$800 to $999_____________________________________________________
$1,000 to $1,199_________________________________________________
$1,200 to $1,499_________________________________________________
$1,500 to $1,999_________________________________________________
$2,000 or more___________________________________________________
Total______________________________________________________
Median land value per unit_______________________________________
1 Including estimated cost of land improvements.
On the basis of the average number of dwelling units per project in the various land value classes, higher land values tend to typify the larger projects, except for projects with land values of $1,500 to $1,999 per unit.
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HOUSING AND HOME FINANCE AGENCY
Size of dwelling unit.1—Apartments of 4% and 5 rooms are the most popular in Section 608 projects approved in 1948, accounting for nearly 54 percent of the total units. These are followed by the 3)^-and 4-room units representing almost 35 percent of the total. The median unit has 4.67 rooms. (See Table 45.)
Dwelling unit sizes range from 2-room efficiency apartments consisting of a living room-bedroom-dining space combination, kitchenette, dressing closet, and bath to 6-room dwellings which generally include a living room, dining room, three bedrooms, kitchen, and bath.
Table 45.—Size of dwelling unit: Based on FHA commitments to insure mortgages secured by rental housing projects, Sec. 608 VEH, 1948
Number of rooms per dwelling unit1
Distribution of dwelling units (percent)
Median monthly rental
Less than 3________________________________________________________________
3__________________________________________________________________________
3J4________________________________________________________________________
4__________________________________________________________________________
Wi_________________________________________________________________________
5__________________________________________________________________________
5*/2-----------------------------------------------------------------------
6__________________________________________________________________________
Total-----------------------------------------------------------------
Median number of rooms_____________________________________________________
2.3
3.7
18.9
15.9
26.3
27.5
2.1
3.3
100.0
4.67
$69.87 71.76 82.24 78. 74
87.41 94.01
112. 21
108. 72
87.56
1 FHA rom count excludes baths, dressing closets, and hall space.
Monthly rental.—Almost half of the dwelling units in Section 608 projects covered by commitments issued in 1948 are approved for monthly rentals of $80 to $99, nearly 30 percent have rents of less than $80, while rents of $100 or more are reported for the remaining 20 percent of the units. (See Table 46.)
The median monthly rental is $87.56. Rentals range, however, from a low of $32 for a 3-room unit to more than $150 for 6-room apartments in the elevator-type projects.
Charges for equipment, services, and utilities furnished by the sponsor are included in most of the reported rentals. For 65 percent of the dwelling units, the indicated rentals provide a full complement of range, refrigerator, and laundry facilities, heat, hot and cold water, janitor service, and grounds maintenance. Gas or elec-
1 FHA room count excludes baths, dressing closets, and hall space. Typical unit compositions are as follows :
3%-room units—living room, dining alcove, kitchen, 1 bedroom, and bath ;
4-room units—living room, dining room, kitchen, 1 bedroom, and bath ; or living room, kitchen, 2 bedrooms, and bath ;
4%-room units—living room, dining alcove, kitchen, 2 bedrooms, and bath;
5-room units—living room, dining room, kitchen, 2 bedrooms, and bath.
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FEDERAL HOUSING ADMINISTRATION
Table 46.—Monthly rental: Based on FHA commitments to insure mortgages secured by rental housing projects, Sec. 608 VEH, 191)8
Monthly rental Distribution of dwelling units (percent) Median number of rooms
Less than $60.00 __ -- - — 3.1 3.84
$60 to $69 99 -- - 8.8 3.94
$70 to $74 99 - - - - 8.5 4.13
$75 to $79 99 9.0 4.33
$80 to $84 99 - - - - 13.0 4. 55
$85 to $89.99 - 14.6 4.93
$90 to $94 99 - --- 11.0 4.84
$95 to $99 99 -- - 11.2 4.81
$100 io $109.99 11.5 5.08
$116 to $124 99 -- -- 6.8 5. 27
$125 or more - _______ _______ __ ______ __________ 2.5 5.24
Total _ _ __ ___________ ___________ ______ 100.0 4.67
$87. 56
tricity for cooking, for refrigeration, and often for lighting, is included in the rentals of 10 percent of the units in addition to the full complement of equipment, services, and utilities. In 12 percent of the units, the tenants are required to supply their own ranges, refrigerators, heat, and hot water.
Rentals by dwelling size groups.—Monthly rentals reported for Section 608 projects approved in 1948 generally tend to increase as the size of the dwelling unit increases. This is evident from the distribution of the dwelling units by monthly rental for the various unit size groups shown in Table 47 and Chart XI. The principal rental range for the 31/2-room units is between $60 and $84; for the 4i/2-room units, between $80 and $99; and for the 5y2- and 6-room units, between $100 and $125. As indicated in Table 45, median rentals by size of unit vary from $69.87 for units of less than 3 rooms to $112.21 for 5^-room apartments, with typical rents of $87.41 and $94.01 for the 4^- and 5-room units, respectively.
Monthly rentals reported for dwelling units of the same size tend to vary considerably, as is apparent in Table 47. The 4-, -4%-, and 5-room units all have reported rentals ranging from less than $60 to more than $125. Differences in construction and land costs, and differences in the amount of equipment, utilities, and services covered by the rent are the major factors contributing to this marked spread in rentals for the same size units.
The effect on rentals of the inclusion of equipment and services is illustrated clearly by the example of the 4%-room units. The full complement of range, refrigerator, heat, hot and cold water, and other services is provided for only 19 percent of these units with $70 to $79 rentals, compared with 84 percent in the $90 to $99 rental range and 95 percent in the $110 and $124 bracket.
235
HOUSING AND HOME FINANCE AGENCY
DISTRIBUTION OF DWELLING UNIT GROUPS BY MONTHLY RENTAL, 1948
FHA COMMITMENTS TO INSURE SECTION 608 VEH RENTAL - PROJECT MORTGAGES
MONTHLY RENTAL
Chart XT
DISTRIBUTION OF MONTHLY RENTAL GROUPS BY SIZE OF DWELLING UNIT, 1948
FHA COMMITMENTS TO INSURE SECTION 608 VEH RENTAL - PROJECT MORTGAGES
3 ROOMS 3'z2 ROOMS 4 ROOMS 4'z2 ROOMS 5 ROOMS
OR LESS OR MORE
SIZE OF DWELLING UNIT
Chart XII
236
100 %
80-
60 -
40-
20 -
5 ROOMS OR MORE
100%
— 80
— 60
— 40
— 20
4'/2 ROOMS
4 ROOMS
3'/2 ROOMS
3 ROOMS OR LESS"
LESS THAN $ 70 $ 70 TO $ 79 $ 80 TO $ 89 $ 90 TO $ 99 $ 100 OR MORE
100%
80-
60 —
40-
20-
$ 100 OR MORE
$ 90 - $ 95
$ 80 - $ 89
$ 70 - $ 79
100%
— 80
— 60
— 40
— 20
LESS THAN $ 70
FEDERAL HOUSING ADMINISTRATION
Table 47.—Monthly rental by size of dwelling unit: Based on FHA commitments to insure mortgages secured, by rental housing projects, Sec. 608 VEH, 1948
Number of rooms per dwelling unit1 Percentage distribution Monthly rental per dwelling unit
Less than $60 $60 to $69.99 $70 to $79.99 $80 to $84.99 $85 to $89.99 $90 to $94.99 $95 to $99.99 $100 to $109.99 $110 to $124.99 $125 or more Total
(percentage distribution of dwelling units)
2.3 10. 5 40.0 4.9 35.6 9.0 100.0
3 3. 7 23.9 20.6 30.6 7. 5 3.6 7.5 5.2 1.1 100.0
3J4 18.9 3.6 16.1 22.7 16.9 11.6 8.8 16.4 2.0 1.9 100.0
4' 15.9 7.4 9.9 39.1 10.8 12.3 8.0 3.1 6.1 3.0 0.3 100.0
4J4 26.3 .3 7.3 16.7 19.7 12.6 12.6 11.0 13.6 3.0 3.2 100.0
5 27.5 .5 1.9 3.9 6.4 24.9 15.4 15.0 17.6 11.9 2.5 100.0
5^ 2.1 1.0 1.6 5.8 6.9 26.3 57.3 1.1 100.0
6 3.3 9.3 .8 2.4 7.3 34.6 20.0 25.6 100.0
Total 100.0 3.1 8.8 17.5 13.0 14.6 11.0 11.2 11.5 6.8 2.5 100.0
1 FHA room count excludes baths, dressing closets, and hall space.
An example of the influence of construction costs on rents is the three and one-half-room apartments, a substantial proportion of which are included in high-cost elevator projects. Almost 30 percent of the three and one-half-room units have rentals of $90 or more and the median rental for this group—$82.24—is about $4 more than the median for the four-room units.
Size of dwelling by rental groups.—Size of dwelling units is influenced to a lesser extent by differences in rentals. The median unit sizes shown for the several rental groups in Table 46 range only from 3.84 rooms for units with rents of less than $60 monthly to 5.27 rooms for apartments in the $110 to $124 rental—a differential of only about one and a half rooms.
Table 48 and Chart XII present the distribution of the dwelling units by size of unit for each of the rental ranges. Almost 70 percent of the
Table 48.—Size of dwelling unit by monthly rental: Based on FHA commitments to insure mortgages secured by rental housing projects, Sec. 608 VEH, 1948
Monthly rental Percentage distribution Number of rooms per dwelling unit 1
Less than 3 3 3J4 4 4H 5 5H 6 Total
(percentage distri bution of dwel ing uni ts)
3.1 7. 7 27.9 8.8 21.1 36.5 2.4 4.4 100.0
$60 to $ 69 99 8. 8 10. 7 34.8 17.9 21.8 6.0 100.0
$70 to $79.99 17.5 .7 6.5 24.5 35.5 24.9 6.0 0.1 1.8 100.0
$80 to $84.99 13.0 6.4 2.2 24.5 13.2 39.8 13.6 .3 100.0
$85 to $89.99 ' 14. 6 1.4 .9 15.0 13.3 22.6 46.6 .2 100.0
$90 to $94.99 11.0 2.6 15.2 ir.6 30.2 38.6 1.1 .7 100.0
$95 to $99.99 11.2 1.8 27.7 4.5 25.9 36.7 1.3 2.1 100.0
$100 to $109.99--. 11.5 .4 3.3 8.4 31.2 41.9 4.8 10.0 100.0
$110 to $124.99 6.8 5.3 7.1 11.6 48.4 17.9 9.7 100.0
$125 or more .... 2.5 2.1 34.5 28.1 1.0 34.3 100.0
Total _ . _ . 100.0 2.3 3.7 18.9 15.9 26.3 27.5 2.1 3.3 100.0
1 FHA room count excludes baths, dressing closets, and hall space.
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HOUSING AND HOME FINANCE AGENCY
units in the $85 to $89 group represent 4i/2- and 5-room apartments. These unit sizes continue to predominate in substantially the same degree in the $90 to $94, $95 to $99, and $100 to $109 groups, despite the increase in rent.
Mortgage allocable to dwellings.—Section 608 commitments issued during 1948 were subject to two different limitations on the maximum amount of mortgage allocable to dwelling purposes—(1) $1,800 per room for commitments issued through April 30, and (2) $8,100 per dwelling unit for commitments issued after August 10. Table 49, therefore, presents percentage distributions of the number of projects and units on the mortgage per-room basis for the January-April commitments and the mortgage per-unit basis for the August-December commitments.
The median mortgage amount for the January-April commitments (covering over four-fifths of the units committed during the year) is $1,785 per room, only slightly below the $1,800 maximum effective during that period. Close to 70 percent (67.7) of the total units are in projects having mortgage amounts of $1,750 or more per room, including more than 40 percent at the $1,800 maximum. Only 5 percent of the units have mortgage amounts of less than $1,500 per room, while only 2 percent are below the statutory maximum of $1,350 per room prescribed in the prewar Section 207 and the wartime Section 608.
The median mortgage amount for commitments issued after August 10, 1948, is $7,790—about $300 less than the maximum permissible mortgage of $8,100 per unit. Nearly 70 percent (67.6) of the units are in projects with mortgages of $7,500 or more, including 20 percent at the $8,100 maximum. Mortgages of less than $6,500 per unit typify almost 15 percent of the units.
As indicated in 1 able 49, there is almost no correlation between the size of the project and the average mortgage per room or per unit for projects underlying Section 608 commitments issued in 1948. However, projects with the highest average mortgage per room ($1,750 to $1,800) and per unit ($7,500 to $8,100) are decidedly larger than projects with lower average mortgage amounts per room or per unit.
Ratio of mortgage amount to replacement cost.—The typical Section 608 project approved for FHA insurance in 1948 had a mortgage principal averaging 89 percent of the FHA estimate of the cost of the project including land, or 1 percent below the maximum 90 percent ratio permitted by law. For projects providing 60 percent of the dwelling units, the ratio of mortgage principal to cost of the project is 89 to 90 percent. Some 17 percent of the units are in projects with mortgages
238
FEDERAL HOUSING ADMINISTRATION
Table 49.—Mortgage allocable to dwellings: Based on FHA commitments to insure mortgages secured by rental housing projects, Sec. 608 VEH, 1948
Average amount of mortgage i Percent of projects Percent of dwelling units Average number of units per project
PER ROOM 2 (commitments issued January-April 1948):
Less than $1,500 _ - - - - 8.2 5.2 30.8
$1 500 to $1 549 - -- 3.1 2.9 43.8
$1’550 to $1 599 _ - 6.9 4.4 30.3
$1 '600 to $1 649 - - 8.5 4.3 24.4
$1’650 to $1699 - - - - 9.5 5.4 27.5
$1’700 to $1749 - 11.9 10.1 41.0
$1’750 to $1’799 -- -- -- 22.2 25.5 55.1
$1’800 r ’ - - --- ----- 29.7 42.2 68.3
Total -- - - - - - - 100.0 100.0 48.1
Average Median
Amount of mortgage per room $1, 734 $1, 785
Per dwelling unit3 (commitments issued Aug.-Dec. 1948):
2.8 2.8 66.3
$5 000 to $5 999 - - - - 8.4 4.2 32.7
$6 000 to $6 499 - - -- - -- -- -- 19.6 7.9 26.6
$6’500 to $6 999 -- --- - - - - - 7.6 7.1 61.6
$7’006 to $7’499 -- --- 12.4 10.4 55.3
$7’500 to $7 999 - - 22.0 30.4 91.5
$8 000 to $8 099 13.2 17.1 85.5
$8’100 --- -- - 14.0 20.1 94.7
Total -- - 100.0 100.0 66.0
Average Median
Amount of mortgage per unit $7,464 $7, 790
i Dwelling units and rooms not producing income (e. g. janitor units) are included in the computation of this average.
2 Through Apr. 30,1948, the amount of mortgage allocable to dwellings could not exceed $1,800 per room.
3 Under Public Law 901, which revived Sec. 608 on Aug. 10, 1948, the amount of mortgage allocable to dwellings cannot exceed $8,100 per family unit.
averaging less than 85 percent of the project cost. Projects with the highest ratios of mortgage to cost (87.5 to 90 percent) tend to be somewhat larger in size. (See Table 50.)
Table 50.—Ratio of mortgage amount to replacement cost: Based on FHA commitments to insure mortgages secured by rental housing projects, Sec. 608 VEH, 1948
Mortgage as a percent of replacement cost Percentage distribution Average number of units per project
Projects Dwelling units
Less than 70 0.9 0.3 17.5
70 to 79.9 _ 8.5 6.5 39.1
80 to 82.4 4.6 3.0 33.0
82.5 to 84.9 8.4 7.4 45.0
85 to 87.4 _ 13.2 9.5 36.9
87.5 to 89.9 143.2 148.1 56.9
90 21.2 25.2 60.9
Total _ _ ... 100.0 100.0 51.1
Median ratio _ _ - 89.0 89.3
1 29.9 percent of all projects and 35.1 percent of all dwelling units had a ratio of mortgage to replacement cost of from 89.0 to 89.9 percent.
239
HOUSING AND HOME FINANCE AGENCY
Property Improvement Loan Insurance LJnder Title I
The terms and financing charges prescribed by the regulations of the Commissioner for each class of loan under the Title I program are outlined on page 174 of this report, and a discussion of the changes made in the regulations during the year appears on the same page.
Volume of Business
The 1,359,776 property improvement loans insured during 1948 with net proceeds to borrowers amounting to $621,612,484 followed the yearly trend maintained since 1946 in surpassing the number and amount insured in any previous year. An increase of 9 percent in number and 16.4 percent in amount over the volume of loans insured in 1947 was registered.
Property improvement loans represented 18.6 percent of the total amount of insurance written by FHA during 1948 under all titles of the National Housing Act. The 1948 volume brought the cumulative loans insured since 1934 under Title I to 8,735,620 with net proceeds of $3,338,550,288. Insurance claims had been paid on 261,979 of these loans for $74,766,871. Table 51 shows the yearly trend of loans insured, claims for insurance paid, and ratio of amount of claims paid to loans insured.
240
MILLIONS OF DOLLARS (NET PROCEEDS)
' 700 ----
600 -----
500 -----
400 -----
300 -----
200 -----
100 ----
FHA TITLE I LOANS INSURED
MILLIONS OF DOLLARS (NET PROCEEDS ---- 700
---- 600
— 500
---400
--- 300
---200
--- 100
1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948
* AMENDMENT EXPIRED MARCH }!, I93T RE-ENACTED FEBRUARY J. 1939
Chart XIII
FEDERAL HOUSING ADMINISTRATION
Table 51.—Trend of property improvement loans insured and claims paid: Volume of loans insured, claims paid, and the gross FHA loss ratio under Title I, 193-i-J/8
Period For the year Cumulative Amount of claims paid as percent of loans insured
Loans insured Claims paid Loans insured Claims paid
Number Net proceeds Number Amount Number Net proceeds Number Amount
1934 72,658 $27, 405, 525 72, 658 $27, 405, 525
1935 635, 747 201, 258,132 1,288 $447, 448 708, 405 228,663; 657 1,288 $447, 448 0.196
1936 617, 697 221, 534,922 25,315 5,884, 885 1,326,102 450,198, 579 26, 603 6,332, 333 . 141
1937 L.._ 124, 758 54,344,338 28, 824 6, 890, 897 1,450,860 504, 542, 917 55, 427 13, 223, 230 2. 621
1938 382,325 150, 709,152 29, 433 6,016,306 1, 833,185 655, 252,069 84, 860 19, 239, 536 2.936
1939 513,091 203, 994, 512 18, 566 4, 728,346 2,346, 276 859, 246, 581 103, 426 23,967, 882 2. 789
1940 662,948 241, 734,821 18, 672 6, 543, 568 3, 009, 224 1,100, 981, 402 122,098 30, 511,450 2. 771
1941 687, 837 248,638, 549 21,900 7, 265,059 3, 697, 061 1,349, 619, 951 143, 998 37, 776, 509 2. 799
1942 432, 755 141,163,398 22, 691 7,132, 210 4,129,816 1, 490, 783,349 166, 689 44, 908, 719 3.012
1943 308,161 87,194,156 15, 243 3, 718, 643 4, 437,977 1, 577, 977, 505 181,932 48, 627, 362 3.082
1944 389, 592 113,939, 150 8,009 1,939,261 4, 827, 569 1, 691,916, 655 189, 941 .50, 566, 623 2. 989
1945 501, 401 170,823, 788 6, 791 1, 588, 875 5,328, 970 1, 862, 740,443 196, 732 52,155, 498 2.800
1946 799, 284 320, 593,183 9. 254 2, 435, 964 6,128, 254 2,183,333, 626 205,986 54, 591, 462 2.500
1947 1, 247, 590 533, 604,178 17, 511 5, 829, 750 7,375, 844 2,716,937,804 223, 497 60,421,212 2.224
1948 1.359, 776 621,612,484 38, 482 14,345, 659 8, 735,620 3, 338, 550, 288 261,979 74, 766, 871 2.240
i Title I expired Apr. 1, 1937 and was renewed by amendment of Feb. 3, 1938.
Chart XIII depicts graphically the yearly amount of property improvement loans insured since the beginning of operations in 1934. The rapidly increasing volume of insurance written annually since 1945 reflects the backlog of necessary improvements which had accumulated during the war years, and the more general availability of
FHA TITLE I CLAIMS PAID
AND RECOVERIES* ON DEFAULTED NOTES
* INCLUDES ONLY ACTUAL CASH RECOVERIES
AND CASH RECOVERIES FROM THE DISPOSAL OF REAL PROPERTIES
Chart XIV
831481—49----17
241
MILLIONS OF DOLLARS
LEGEND
1 CLAIMS
I CASH RECOVERIES
MILLIONS OF DOLLARS
| 14,345,659 rzyj;
HOUSING AND HOME FINANCE AGENCY
building materials and labor which had been scarce during the same period.
The relationship between the yearly volume of claims paid and recoveries made is presented in Chart XIV. Collections and recoveries have followed in general the trend of claims paid, with a time lag of approximately 1 year. That this trend did not hold during the war years may be attributed to the general increase in employment and the rise in family incomes during the period. From 1942 claim payments on defaulted loans declined sharply, while Chart XIV shows an increasing volume of recoveries recorded through 1945.
Table 51 shows that despite the increasing volume of claims paid from 1945 through 1947 the gross* ratio of amount of claims paid to net proceeds of loans insured declined from 2.80 percent in 1945 to 2.50 percent in 1946 and to 2.22 percent in 1947. Even with the increase in 1948 over 1947 of 146.1 percent in the dollar volume of claims paid, the sharp increase in the volume of loans insured limited the gross claim ratio to only 2.24 percent.
Insurance claims paid by the close of 1948 numbered 261,979 and amounted to $74,766,871. Recoveries—consisting of cash collections of $29,768,740, $770,571 from the disposal of real properties, and a net estimated $10,301,445 recovery from defaulted notes in process of collection—totaled $40,840,756 or 55 percent of the $74,766,871 of claims paid. When these recoveries were deducted from claims paid, a net claim amount of $33,926,115 remained unrecovered at the end of 1948, resulting in a net loss ratio of 1.02 percent as compared to 1.04 percent at the previous year end and 1.22 percent at the end of 1946.
State Distribution
From 1934 through 1948 more than one-half billion dollars ($510,-394,670) of Title I loans were insured to improve properties located in New York State, exceeding by far the insurance written for any of the other States. California, with $342,359,526, ranked second, as in the past. It was followed by Michigan with $249,711,972, Pennsylvania with $213,987,736, and Illinois with $206,001,203. These five States together accounted for $1,522,455,107 or 45.6 percent of the $3,338,550,288 United States total. In four other States—Ohio, New Jersey, Texas, and Massachusetts-—net proceeds of Title I loans ranged from $100,000,000 to nearly $200,000,000. Borrowers in each of the nearly 3,100 counties in the United States have improved properties with the proceeds from FHA loans insured under Title I.
Table 52 shows property improvement insurance written and claims paid distributed by State location of property, with the percentage relationships between the two and the average amounts for each item.
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FEDERAL HOUSING ADMINISTRATION
Table 52.—State distribution of property improvement loans insured and insurance claims paid: Volume of loans insured and insurance claims paid under Title I by FHA, cumulative 1934-48
Location of property Loans insured Insurance claims paid Amount claims paid as percent loans insured Average
Number Net proceeds Percent of net proceeds Number Amount Percent of amount Loan insured Claim paid
Alabama 118,817 53, 541 66, 646 908, 034 57, 087 123, 041 12, 989 49,417 153,140 111, 595 44,171 549, 660 312, 363 122,146 73,940 90, 773 76, 638 37, 398 149, 956 274,415 694,361 188, 573 59,075 225, 215 21, 550 51,403 11,205 25, 486 378, 639 14, 203 990, 628 82, 517 15,131 544, 304 124, 058 105, 619 575, 268 43, 914 46,142 12, 670 165, 816 364, 450 71, 043 12, 732 110, 751 210, 493 40, 293 148, 960 8,493 357 859 20 3 5,622 $36,310, 540 24, 053, 409 21, 839, 749 342, 359, 526 20,919, 004 49, 862, 246 5, 584, 649 21,975,759 64,110, 558 37, 764, 007 16,339, 838 206,001, 203 98, 236, 626 40,183, 220 21, 533, 237 29, 869, 723 25, 053, 096 14, 572,945 58,447,447 105, 704, 809 249, 711, 972 63,146,007 21,170, 256 70,039, 521 8, 984,123 17,945, 056 4, 981, 558 10. 016, 500 177, 699, 594 6, 487, 419 510, 394, 670 29, 258, 576 5, 884, 864 183, 538, 583 39,052, 778 37, 901, 375 213, 987, 736 17, 731, 476 16, 251, 211 4, 705, 651 50, 445, 202 127, 620, 466 23, 085, 220 5, 267,481 52, 302, 719 73, 798, 159 15, 909, 608 56, 315, 682 4, 018, 391 323, 051 436, 017 17, 199 3, 541 -602,965 1.1 .7 .7 10.3 .6 1.5 .2 .7 1.9 1.1 .5 6.2 2.9 1.2 .6 .9 .8 .4 1.7 3.2 7.5 1.9 .6 2.1 .3 .5 . 1 .3 5.3 .2 15.3 .9 .2 5. 5 1.2 1.1 6.4 .5 .5 .1 1.5 3.8 .7 .2 1.6 2.2 .5 1.7 .1 (>) 0) (*) (>) (■) 3, 735 1,316 3, 069 24,937 1,204 3, 220 414 1, 460 6,498 4,481 1,319 11, 505 9,684 2, 961 2,014 2,857 2, 760 1,199 4, 159 8,760 21, 479 3, 765 2, 935 7,130 548 1,389 234 1,084 16, 500 782 33, 559 2,921 408 12, 411 3, 657 2, 860 16, 639 1,276 2,162 323 4, 472 11,336 1, 270 666 3,225 6,514 1,126 3,232 178 25 6 $832, 394 422, 865 699, 969 8, 222, 725 331, 248 1, 050, 243 153, 832 472, 559 2, 046, 974 1,030, 499 347, 483 3,142,828 2, 330, 210 783, 983 449, 935 790, 543 580, 867 409, 764 1,179,873 2, 646,232 5, 571, 690 1, 086, 211 716, 704 1, 628, 495 191, 091 381, 972 86, 301 339, 004 4, 613, 822 248,104 12, 002, 465 708, 371 103, 879 3, 552, 961 823,195 774,1’81 4, 502, 551 383, 061 474, 719 87, 422 1, 390, 809 2, 203, 483 324, 296 240, 601 1, 285, 244 1, 557,748 413, 219 1, 032,338 63,106 6, 677 2,873 1.1 .6 .9 11.0 .4 1.4 .2 .6 2.7 1.4 .5 4.2 3.1 1.1 .6 1.1 .8 .6 1.6 3.5 7.5 1.5 1.0 2.2 .3 .5 .1 .5 6.2 .3 16.0 .9 .1 4.8 1.1 1.0 6.0 .5 .6 .1 1.9 2.9 .4 .3 1.7 2.1 .6 1.4 .1 (>) (') 2.29 1.76 3.21 2.40 1.58 2.11 2.75 2.15 3.19 2.73 2.1.3 1.53 2.37 1.95 2.09 2. 65 2.32 2. 81 2.02 2.50 2.23 1.72 3.39 2.33 2.13 2.13 1.73 3.38 2.60 3.82 2.35 2.42 1.77 1.94 2.11 2.04 2.10 2.16 2.92 1.86 2. 76 1.73 1.40 4. 57 2.46 2.11 2.60 1.83 1.57 2.07 .66 $306 449 328 377 366 405 430 445 419 338 370 375 314 329 291 329 327 390 390 385 360 335 358 311 417 349 445 393 469 457 515 355 389 337 315 359 372 404 352 371 304 350 325 414 472 351 395 378 473 905 508 860 1,180 $223 321 228 330 275 326 372 324 315 230 26.3 273 241 265 223 277 210 342 284 302 259 289 244 228 349 275 369 313 280 317 358 243 255 286 225 271 271 300 220 271 311 194 255 361 399 239 367 319 355 267 478
Arizona
A rkansas
California --
Colorado _ -
Connecticut _
Delaware - -
District of Columbia. Florida
Georgia.. --
Idaho
Illinois -
Indiana
Iowa
Kansas
Kentucky
Louisiana
Maine
Maryland _ -
M assachusetts _ _
Michigan __
Minnesota
Mississippi
Missouri.- _
Montana
Nebraska __
Nevada. -
New Hampshire New Jersey
New Mexico
New York .. ...
North Carolina
North Dakota __ ..
Ohio ... ..
Oklahoma .. _
Oregon
Pennsylvania _ .
Rhode Island
South Carolina South Dakota Tennessee
Texas . .
Utah . . .
Vermont _ .
Virginia
Washington
West Virginia
Wisconsin
Wyoming . .. .
Alaska -
Hawaii .
Puerto Rico
Canal Zone. _
Adjustments 315 45, 252 (')
Total
8, 735, 620 3, 338, 550, 288 100.0 261, 979 74, 766, 871 100.0 2. 24 382 285
1 Less than 0.05 percent.
In only 20 States have claims for insurance amounted to more than $1,000,000 since the payment of the first claims on defaulted Title I loans in 1935. Claims paid in New York of $12,002,465 are not considered excessive in view of the large volume of loans insured, and the
243
HOUSING AND HOME FINANCE AGENCY
resulting loss ratio of 2.35 percent of net proceeds only slightly exceeds the national average of 2.24 percent. Claims paid through 1948 on defaulted Title I loans financing improvements to properties in California amounted to $8,222,725, in Michigan to $5,571,690, Pennsylvania $4,502,551, Ohio $3,552,961, New Jersey $4,613,822, Texas $2,203,483, and Massachusetts $2,646,232. The data shown in Table 52 are based upon loans insured by location of the property improved. This distribution may vary considerably from a tabulation of loans insured by location of head office of the institution financing the loan because of the many institutions which operate on a national and regional scale.
Financial Institutions
The number of lending institutions participating in the Title I program has declined from more than 6,200 active prior to April 1937 to approximately 3,900 under the current reserve established in 1947. However, this reduction has been more than offset by the many branch offices servicing localities some distance from the head offices of the financial institutions and the many dealers who have serviced thousands of borrowers in every State.
Table 53 shows the volume of loans insured and claims paid, distributed by type of institution financing the loans. The three lead-
Table 53.—Type of institution originating property improvement loans and receiving claim payments: Number and net proceeds of Title I loans insured and insurance claims paid by FHA, cumulative 1934-48
Type of institution Loans insured Claims paid Amount of claims paid as percent of loans insured
Number Net proceeds Percent of net proceeds Average net proceeds Number Amount Percent of amount Average claim
National banks State chartered 3,446,659 $1,359, 248,947 40.7 $394 88, 745 $25,661, 434 34.3 $289 1.89
banks 1 2, 246,520 902,138, 694 27.0 402 67,140 18, 261,078 24.4 272 2.02
Finance companies. Savings and loan 2,952,807 1, 026, 224,165 30.8 348 104,922 30,111,422 40.3 287 2.93
associations 76,189 36,370,377 1. 1 477 718 252,156 .3 351 .69
Others 13, 445 14, 568,105 .4 1,084 454 480,781 .7 1,059 3.30
Total 8, 735, 620 3,338, 550, 288 100.0 382 261,979 74, 766,871 100.0 285 2.24
i Includes State banks, industrial banks, and savings banks.
ing types of institutions, national banks, State chartered banks, and finance companies, have financed 98.5 percent of all property improvement loans insured since the inception of the program in 1934. As shown in the table national banks led all other types, reporting 40.7 percent of the net proceeds of loans insured as compared to 30.8 percent for finance companies and 27 percent for State chartered banks.
244
FEDERAL HOUSING ADMINISTRATION
This last group includes all financial institutions operating under State charters, such as State banks, savings banks, and industrial banks.
Table 54. —Type of institution originating property improvement loans and receiving claim payments: Title I loans insured and insurance claims paid by the FHA under the July 191,1 reserve, cumulative July 1, 191,1 through Dec. 31, 191,8
1 Includes State banks, industrial banks, and savings banks.
Type of institution Number of institutions Loans insured Average net proceeds Number of institutions Claims paid claims iercent nsured
Number Net proceeds Percent of net proceeds Number Amount Percent of amount Average claim
Amount of paid as p of loans ii
National banks.._ 1,616 1 883,078 $380,954, 434 45.2 $431 416 4,020 $1,675, 773 29.4 $417 0.4
State chartered
banks 1 1,654 476,225 221, 221, 498 26.2 465 374 2,406 1,081,625 18.9 450 .5
Finance com-
panies Savings and loan 77 476,070 223,668,111 26.5 470 27 5,853 2, 924,106 51.2 500 1.3
associations Others 517 34 34,411 3,730 16,316, 913 1,633, 735 1.9 .2 474 438 26 2 71 4 27,284 1,062 .5 384 266 .2 .'1
Total 3,898 1,873,514 1 843, 794,691 100.0 450 845 12,354 5, 709,850 100.0 462 .7
TYPE OF INSTITUTION FINANCING PROPERTY IMPROVEMENT LOANS
AND RATIO OF CLAIMS PAID TO LOANS INSURED
1934-1948
Chart XV
245
— 2.93%
CLAIM RATIO
- - 3%
— 2%
— 1%
0%
OTHERS
FINANCE COMPANIES
STATE CHARTERED BANKS
NATIONAL BANKS
1.89%
2.02%
^tNS,SII’ ~............ 4°7y- -4 L........ 27.0% -I L.............. 30.8% ■ - J 17%
—-----------------------------------TOTAL LOANS INSURED « 100% -----------------------------
CaMoVu10 34.3% ♦ 24.4% + 40.3% + 1.0% • 100%
CLAIM RATIO
3% —
2% -
1%
0%
HOUSING AND HOME FINANCE AGENCY
FHA claim payments to finance companies have not been proportionate to loans insured by these companies. In fact, Table 53 indicates that claims paid have equaled 2.93 percent of the dollar amount of loans insured for finance companies, as compared to 2.02 percent for State chartered banks and only 1.89 percent for national banks. Data on subsequent recoveries from cash collections, real properties acquired, and repossessed equipment after payment of claims are not available by type of institution. The net loss ratio of 1.02 percent for all institutions is discussed on page 242.
Characteristics of Insured Loans
The typical Title I borrower obtained a larger loan for property improvements in 1948 than in 1947—$456 as indicated by the average Joan reported in 1948 and $428 during the previous year. The average loan was written with a maturity of 3 years and a monthly,payment of approximately $15. The principal improvements financed from the proceeds of the typical loan included heating installations and repairs, additions and alterations, exterior finishing—consisting mainly of siding and painting work—and insulation.
Type of property and improvement.—In Table 55 are shown the types of property improved and the major types of improvement financed by Title I loans under the current reserve in operation since June 1947, for the period through the 1948 year end.
Only the major improvements financed are reported to FHA by the lending institution financing the loan. As an example, loans reported as financing roofing perhaps included miscellaneous minor repairs such as plumbing, heating, or painting.
Single-family dwellings were improved with four-fifths of the dollar amount insured, as shown in Table 55. Multifamily dwellings accounted for $91,000,000 of the $844,000,000 total amount insured, commercial and industrial properties $36,000,000, farm improvement loans $25,000,000, and miscellaneous.properties $17,000,000. In this last category were 19,210 loans for $11,206,502 reported as financing the erection of garages.
An increasing number of requests from insured lenders prompted the Commissioner to order a tabulation of insurance claims paid under Title I from July 1, 1947 through December 31, 1948, distributed by type of improvement financed by the insured loans. This tabulation, which is summarized in Table 56, affords participating institutions the opportunity of comparing their portfolio experience with that of other
246
FEDERAL HOUSING ADMINISTRATION
Table 55.—Type of property and type of improvement financed: Property improvement loans insured by FHA under the July 1947 reserve, cumulative July J, 1947 through Dec. 31,1948
Major type of improvement 1 Type of property improved
Singlefamily dwellings 2- to 4-family dwellings Commercial and industrial Farm homes and buildings Others 2 Total Percent of total
Number of loans insured
New residence construction ■_ 2,458 2,458 27, 516 177,427 227, 524 130,664 165,113 163,098 410,605 398, 792 170,317 0.1
New nonresidence struct, ion con- 2,489 5, 656 1,648 3,936 1,608 2,680 8,410 1,975 4,600 3, 779 3, 894 4, 588 21, 248 1. 5
Additions and alterations. Exterior finish 150,169 202, 339 111,717 14, 630 18,459 13, 577 12,689 12, 793 34,955 15,120 7, 412 3', 078 490 9.5 12.1
Interior finish i; 171 5,254 5,533 5, 975 7, 255 3,411 263 7.0
Roofing. _ _____ 145; 084 141, 586 360, 585 374,144 153, 994 478 8.8
Plumbing 506 8. 7
Heating __ _ __ _ _ __ 680 21. 9
Insulation . 298 21.3
Miscellaneous._ _ ... 900 9.1
Total. _ 1, 642,076 87.6 129, 635 6.9 33,002 1.8 40,860 2.2 27, 941 1.5 1, 873, 514 100.0 100.0
Percent of total
Net proceeds of loanswisured
New residence construction $7,460,916 $7, 460, 916 20,634, 242 130,970,145 122, 500, 803 64,039, 722 58,156,898 71, 015,401 195, 883,814 113, 352,553 59, 780,197 0.9
New nonresidence struction ___ con- $3, 892,461 8, 290,223 1, 585,433 4,655,052 1,116, 459 2,605,137 8, 528,074 1,068, 578 3, 952, 648 $3, 746, 936 3, 520,177 2, 932,461 859,324 2,423,083 3, 447,328 3, 291,037 2,480,978 2,380, 592 $12, 994,845 2,020, 680 275, 230 182,335 2.4
Additions and alterations. Exterior finish 100, 524,067 103, 212,405 48, 739, 327 48, 941, 477 55, 779, 424 158,112,337 104,021, 759 47,989, 905 $16, 614, 998 14,495,274 9, 603,684 5, 491, 597 8, 790,832 25, 392,068 5,663,027 4, 898, 744 15.6 14.5
Interior finish.. 7.6
Roofing 184, 282 392,680 560, 298 118, 211 558,308 6.9
Plumbing _ 8.4
Heating.I.. ... 23.2
Insulation 13.4
Miscellaneous 7.1
Total. _ _ 674, 781,617 80.0 90, 950, 224 10.8 35,694,065 4.2 25,081,916 3.0 17, 286, 869 2.0 843, 794,691 100.0 100.0
Percent of total
Average net proceeds
New residence construction $3,035 $3,035 750
New nonresidence struction. con- $1,564 1,466 962 $992 $612
669 $1,136 785 904 656 738
Exterior finish . 510 639 562 538
Interior finish 436 707 1,183 694 734 693 490
Roofing. _. . 337 433 461 386 352
Plumbing.__ __ . . 394 687 972 623 776 435
Heating ... . 438 726 1,014 541 551 824 477
Insulation 278 375 342 397 284
Miscellaneous.. 312 661 859 698 620 351
Total. _ __ 411 702 1,082 614 619 450
1 Type of improvement to which major portion of the proceeds of the loan was devoted.
2 Includes 19,210 loans for $11,206,502 reported as financing garages.
insured lenders, and may serve as a guide for planning future lending policies. Also shown in the table are average claims paid, net proceeds of these claims, and the proportion amortized prior to payment of claim by FHA.
247
HOUSING AND HOME FINANCE AGENCY
Table 56.—Claims paid by improvement financed: Insurance claims paid under Title I by type of improvement financed July 1, 194"t-Dec. 31, 1948, under the July 1941 reserve
Major type of improvement Claims paid Loans insured
Number Percent Amount Percent Net proceeds Percent
New nonresidence construction 162 1.3 $108, 966 1. 9 $118 002 1 9
Additions and alterations. . 838 6. 8 586,369 10.3 631, 919 10 5
Exterior finish 2,172 17. 6 1 288 127 22 5 1 341 664 22 1
Interior finish. . 741 6 0 336 612 5 9 ’368’ 257 6 1
Roofing.. 1, 212 9. 8 490 841 8 6 518’779 8 6
Plumbing ._ 927 7. 5 410, 720 7 2 444’ 670 7 3
Heating _ _ 2, 607 21.1 1 312 557 23 0 1 385 806 22 9
Insulation 2, 752 22.3 849, 566 14 9 891’ 295 14 7
Miscellaneous 943 7.6 326,092 5.7 355^ 877 5.9
Total 12,354 100.0 5, 709, 850 100.0 6,056, 269 100.0
Average claim Average net Percent paid off
paid proceeds prior to claim
New nonresidence construction • $673 $728 7 7
Additions and alterations 700 754 7.2
Exterior finish.__ _ ._ .. ._ 593 618 4 0
Interior finish 454 497 8 6
Roofing . 4 05 428 5 4
Plumbing 443 480 7 6
Heating ... _ 5 03 532 5 3
Insulation.. ... .... 309 324 4 7
Miscellaneous 346 377 8.4
Total 462 490 5.7
RATIO OF CLAIMS PAID TO AMOUNT OF LOANS
INSURED BY TYPE OF IMPROVEMENT
JULY 1947 RESERVE OF TITLE I
Chart XVI
248
CLAIM RATIO 1.20% -
1.00%
.80%-
.60%-
.40%-
.20%-
.00% |
I 05%
0 84%
___0.75 %
067%
(AVERAGE LOSS RATIO -■ 0. 68% )
CLAIM RATIO -1.20%
1.00%
-.80%
- .60%
-.40%
-.20%
.00%
ADDITIONS ANO ALTERATIONS I
MISCELLANEOUS
INT | FINISH
PLUMBING
HEATING
INSULATION
ROOF-
ING
EXTERIOR FINISH
0 58%
0.53%
0 50%
0 44%
LOANS INSURED <—14.5%-»| |<6.9%| |—I3.4%->| |<---23.2%------->| 8 4%.| |<7.6%^ |<-IO.4%.| |__15.6% -J
-----------------------------------------TOTAL LOANS INSURED = 100% —--------------------------;___________J
CLAIMS PAID 22.5% + 8.6% + 14.9% + 23.0% + 7.2% + 5.9% + 7.6% + 10.3% - 100%
THRU DECEMBER 1948
FEDERAL HOUSING ADMINISTRATION
Many lending institutions that have financed heating installations and repairs, exterior finishing, and insulation, both by purchasing loans from dealers and by making loans direct to borrowers, have experienced a very low claim volume in these markets, despite the fact that 60 percent of the dollar volume of claims paid during this period reimbursed lenders for loans financing these types of improvements.
The ratio of claims paid to amount of loans insured by type of improvement financed are shown in Chart XVI; also shown are the average gross loss ratio for all types of improvements, and the percentage distribution of claims paid. The horizontal axis of each type of improvement is determined by the percentage distribution of loans insured as indicated at the bottom of the chart, while the percent of claims paid by type of improvement is added to facilitate comparisons in each category.
Size of insured loan.—A distribution of property improvement loans by amount of net proceeds by class of loan is shown in Table 57. The great majority of property owners (98.5 percent) who obtained such
Table 57.—Size of loan: Percentage distribution of the number and net proceeds of Classes 1, 2, and 3 property improvement loans'1 insured under Title I by FHA under the July 191)1 reserve during 191)8
Net proceeds of loan V Number, percentage distribution Net proceeds, percentage distribution
Classes 1, 2, and 3 Class la Class lb Class 2a Class 2b Class 3 Classes 1. 2, and 3 Class la Class lb Class 2a Class 2b Class 3
Less than $100 $100 to $199 $200 to $299 4.6 20.2 20.4 15.3 9.6 7 8 8.4 4.5 5.2 1.8 .9 1.1 .2 (*) (2) 4.7 20.5 20. 7 15.4 9.6 7.8 8.2 4.5 5. 1 1.7 .8 1.0 0.4 1. 2 1.4 1.2 1.0 2.6 3.3 4.7 14. 5 15.3 14.5 17.0 12.9 4.4 5.6 0.4 2.5 6.8 12.0 14. 5 14 9 20.0 10.7 8.4 3.3 2.1 3.0 1.4 1.2 5. 7 8.8 7.8 8.0 7.9 11.3 7.8 14. 1 9 4 6.0 9.4 2.6 0.8 6.6 10 8 11.3 9.2 9.1 12.3 R. 7 12.8 6.4 4.2 6.0 1.3 .3 .2 0 8 6.9 11.4 11.8 9.4 9.3 12.5 8.9 13. 1 6 3 3.9 5.7 (2) 0.1 . 1 . 2 .2 .6 1.1 1.9 7.9 11.7 14.6 20 2 19.6 8.6 13.2 (2) 0.6 2.2 5.6 8.5 10.4 18. 5 12.3 12 8 7.2 6.2 10 0 5.7 0.1 .8 2.0 2.5 3.4 4.1 7.3 6.6 15.4 ■ 15.1 12.4 22.9 7.4
$300 to $399 $400 to $499
$500 to $599 $000 to $799 $800 to $999 $1,000 to $1,499 $1,500 to $1,999 $2,000 to $2,499 $2,500 to $2,999 $3,000 to $3,999 $4,000 to $4,999
” 6.T .6 1.9 8.7 80.6 8.1
(2) 0.4 1.3 7.7 78.9 11.7
$5,000 or more Total Percent distribution. .
100.0 100.0 100.0 98.2 100.0 .3 100.0 1. 2 100.0 . 1 100.0 .2 100.0 100.0 100.0 95.1 100.0 1.4 100.0 1.9 100.0 .4 100.0 1.2
Size of loan
Median amount of loan Average amount of loan
$331 $327 $2,151 $593 $788 $3,481 $456 $442 $2,188 $742 $1,038 $3, 076
' A Class 1 (a) loan is used to finance the repair, alteration, or improvement of an existing structure: Class 1 (b) loan to finance the repair, alteration, or improvement of an existing structure used or to be used as a multifamily dwelling; Class 2 (a) loan to finance the construction of a new structure to be used exclusively for other than residential or agricultural purposes; Class 2 (b) loan to finance the construction of a new structure to be used in whole or in part for agricultural, nonresidential purposes; and a Class 3 loan to finance new small homes.
2 Less than 0.05 percent.
249
HOUSING AND HOME FINANCE AGENCY
loans borrowed funds insured by FHA to improve or repair existing structures.
The typical borrower during the past year received $456 for all property improvements, and as many loans were written with net proceeds below $331 as were written above that sum. Slightly more than 6 of every 10 loans were written with net proceeds below $400, and more than 4 of every 10 loans showed net proceeds of less than $300. Less than 10 percent of all classes of loans were written with net proceeds amounting to $1,000 or more.
Duration of loan.—There has been only slight variation in the yearly trend of duration of loans insured under Title I since the abolition of the Federal Reserve Board restrictions in 1945. The average duration of 33.7 months recorded in 1948 for all classes of loans compares with the 30.1-month average duration recorded in 1947. The differentia] may be attributable to the longer maturities of the Class 3 new small-home loans, which were reported in considerable volume for 1948—the first year since the war that this has been true; these loans are permitted a maximum term of 20 years, 5 months.
Table 58 shows a distribution of number and net proceeds of Title I loans by duration for each class of loan. More than half of the loans, accounting for nearly 62 percent of the total net proceeds insured, were reported to have a maturity of 3 years.
Table 58.—Duration of loan: Percentage distribution of the number and net proceeds of Classes 1, 2, and 3 property improvement loans1 insured by the FHA under the July 1947 reserve during 1948
Duration 2 Number, percentage distribution Net proceeds, percentage distribution
Classes 1, 2, and 3 Class la Class lb Class 2a Class 2b Class 3 Classes 1, 2, and 3 Class la Class lb Class 2a Class 2b Class 3
6 months 12 months . . _ 1.5 11.7 9.0 10.1 4.7 52.8 9.8 .4 1.4 11.8 9.1 10.2 4.8 62.7 (3) 1.7 1.0 1.5 . 5 9.2 5.7 80.4 0.5 5.9 5.5 7.2 2.8 48.8 29.3 1.4 9.6 7.5 10.5 3.0 50.9 12.0 5.1 1.2 6.8 5.2 7.5 3.2 61.7 11.9 2.5 1.3 7.1 5.4 7.7 3.4 75.1 (3) .4 .3 .6 .2 7.4 5.0 86.1 .2 3.2 3.5 5.5 2.3 53.5 31.8 .7 3.9 3.3 8.2 3.4 57.9 13.1 9.5
—
18 months . _ _
24 months __ ...
30 months _ _ .. (3) . 1 . 1 99.8 (3) .1 .1 99.8
'< (months 48 months. . _
60 or more. —
Tutal
100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Median duration (months) Average duration (months)
36.3 36.2 73.5 36.4 36.3 144.8 33.7 31.8 70.0 33.9 35.6 150.8
1 A Class 1 (a) loan is used to finance the repair, alteration, or improvement of an existing structure; Class 1 (b) loan to finance the repair, alteration, or improvement of an existing structure used or to be used as a multifamily dwelling; Class 2 (a) loan to finance the construction of a new structure to be used exclusively for other than residential or agricultural purposes; Class 2 (b) loan to finance the construction of a new structure to be used in whole or in part for agricultural, nonresidential purposes; and a Class 3 loan to finance new small homes.
2 The period stated for each particular interval is shown in order to emphasize the month of heavy concentration.
3 Less than 0.05 percent.
250
FEDERAL HOUSING ADMINISTRATION
Table 59.—Claims paid on Title I loans: Number of payments made prior to default on claims paid during 19J/8 under the July 1944 and July 1947 reserves, distributed by duration of loan
Payments made prior to default Maturity Total claims paid 1 Average claim paid
6-23 months 24-30 months 31-36 months
Number Percent Number Percent Number Percent Number Percent Amount Per- cent
(1 177 1. 7 112 1.0 989 9.2 1, 278 11.9 $687,488 17 4 $538
1 104 .9 76 . 7 524 4. 9 704 6. 5 357; 465 9.0 508
2 115 1.1 69 .6 539 5.0 723 6. 7 337', 355 8. 5 467
3 113 1.1 73 .7 530 4.9 716 6. 7 304,370 7. 7 425
4 . 91 .8 63 .6 496 4.6 650 6.0 297,465 7. 5 458
5._ . 85 .8 70 .7 433 4.0 588 5.5 251,026 6.4 427
6-10 451 4.2 301 2.8 1,758 16.3 2,510 23.3 908,189 22. 9 362
11-15.. 153 1.4 269 2. 5 1,177 11.0 1,599 14.9 446,513 11.3 279
16-20 32 .3 197 1.8 859 8.0 1,088 10.1 246, 284 6.2 226
21-25.. 103 1.0 444 4.1 547 5.1 90,672 2.3 166
26-30 14 . 1 204 1. 9 218 2.0 25,457 .6 117
31-35 — 144 1.3 144 1.3 6,344 .2 44
Total 1,321 12.3 1,347 12.5 8,097 75.2 10,765 100.0 3,958, 628 100.0 368
1 Data based on claims paid during January, May, August, and November, 1948.
Number of payments prior to claim.—-The statistics presented in Table 59 showing a distribution of claims paid by number of payments
PAYMENTS MADE ON TITLE I LOANS PRIOR TO PAYMENT OF CLAIM UNDER THE 1944 AND 1947 RESERVES
Chart XVII
251
LOAN MATURITIES
6 - 23 MONTHS
24 - 30 MONTHS
31 - 36 MONTHS
LEGEND
PERCENT OF NUMBER
30
25
20
15
10
5
0
PERCENT OF NUMBER
31.4 7.
23.3 %
30 -
25-
20 -
15 -
10 -
5 -
0
11.9 7.
14.9 7.
/2 8%7
Z2 5%/
10.17.
TO 3%m
5.17.
III 0%|
j 16 3%|
|234%|
(5X3;
|9 2%|
| 8 0%|
2.0%
1.3%
| I 9% |
11 3%|
0 1-5 6 -10 11-15 16- 20 21-25 26-30 JI - 35
PAYMENT RECEIVED PRIOR TO CLAIM
HOUSING AND HOME FINANCE AGENCY
made prior to default are based on a 4-month claim experience, January, May, August, and November of 1948, covering loans insured by FHA under the July 1944 and the July 1947 reserves of Title I. Chart XVII includes only the number of claims paid during the same period.
Of the total number of claims paid during the period covered, 11.9 percent represented loans on which no payments had been made and 43.3 percent represented loans on which five or less payments had been made. For both number and dollar amount of claims paid the 6-10 payment group appears to represent the heaviest concentration of claims paid, 23.3 percent of number and 22.9 percent of amount.
An average amount of $368 was paid by FHA on the 10.765 claims shown in Table 59. However, for those claims on which no payments were made prior to default an average amount of $538 was paid by FHA.
252
Section III
ACCOUNTS AND FINANCE
Gross Income and Operating Expenses, 1948
Gross income for the year 1948 under all insurance operations totaled $65,690,760 and was derived from fees, insurance premiums, and income on investments. Expenses of administering the agency during the year 1948 totaled $21,824,605. This left $43,866,155 to be added to the various insurance funds.
Cumulative Gross Income and Operating Expenses, by Years
From the establishment of FHA in 1934 through 1948, gross income totaled $351,110,297, while operating expenses totaled $182,335,841. Gross income and operating expenses for each calendar year are detailed below:
Income and operating expenses through Dec. 31,1948
Calendar year Income from fees, premiums, and investments Operating expenses Calendar year Income from fees, premiums, and investments Operating expenses
1934 $113,423 1, 539, 839 4,143,033 6,554,282 10,022,449 14,411,396 21,240,966 26,877,350 27, 298,702 $1,759,318 10,362,413 11,472,221 9,334, 864 11,432,341 12, 975,198 13,299,859 13, 913, 430 11, 786,065 1943 26,575,968 29, 596,417 29, 850,168 36,739,935 50,455,609 65,690, 760 11,136,146 10,919,456 10,593, 517 12, 557, 587 18,968,821 21,824,605
1935 1944
1936 1945
1937 1946
1938 1947
1939 1940 1941 1942 1948
Total _
351,110, 297 182,335, 841
Note.—Operating expenses include charges for depreciation on furniture and equipment.
The above income was derived from the following insurance operations: Title I (property improvement loans), $48,722,986; Title II (small-home mortgages), $208,957,323; Title II (rental housing projects), $6,799,181; and Title VI (war and veterans’ emergency housing) , $86,630,807. An analysis of gross income by calendar year under each insurance fund is given in Statement 1.
Statement 1.—Income from fees, insurance premiums, and investments under Titles I, II, and VI by calendar years, 1934-1948
Examination fees Initial premiums Renewal premiums Prepayment premiums Income on investments Total
Title I: 1939 $34, 750 146,363 128, 270 55, 891 3,035 580 60 $1, 268,064 4, 251, 135 4, 959, 945 2,310, 497 1, 295, 477 1,640,128 2,309,364 $1,302, 814 4, 418, 342 5,188, 096 2, 537, 265 1, 540, 472 1, 892,501 2, 516,920
1940 $20, 844 99, 881 170.877 241, 960 251, 793 207, 496
1941
1942
1943
1944
1945
253
HOUSING AND HOME FINANCE AGENCY
Statement 1.—Income from fees, insurance premiums, and investments under Titles I, II, and VI by calendar years, 1934-194-8—Continued
Examination fees Initial premiums .Renewal premiums Prepayment premiums Income on investments Total
Title I—Continued.
1946 $225 $5. 799,165 $184, 994 _ $5,984,384
1947 90 9, 739, 643 157,084 — 9, 896, 817
1948 25 13, 222, 493 222, 857 — 13, 445,375
Total 369, 289 46, 795, 911 1,557,786 — 1 48, 722,986
Title II, Sec. 203:
1934 763, 654 424, 843 54,082 $113, 423 113,423
1935 $523 284,962 1, 528,064
1936 1, 662,068 1, 541, 664 544,865 27, 938 344,923 4,121, 458
1937 1, 777,320 2,112, 038 1,952,844 148,211 486,346 6, 476, 759
1938 3,150, 015 2,058, 703 3, 382, 523 240, 691 562, 451 9,394,383
1939 3, 617,173 2, 622,316 5,123, 529 416,116 596, 640 12,375, 774
1940 4,360, 609 3, 601, 555 6, 919, 909 614, 281 659, 795 16,156,149
1941 4, 887, 262 4,310, 312 9, 455, 651 981, 488 751, 423 20,386,136
1942 2,125, 095 3,415, 243 12, 522, 503 806, 617 1,010, 557 19, 880,015
1943 878,173 1,135, 344 13, 626, 210 350,211 1,383, 430 17,373,368
1944 939, 268 1,079,164 14, 245, 705 386, 933 1, 810,199 18, 461, 269
1945 1, 570, 674 1, 072, 934 11,692,037 1,413,420 2, 580, 528 18, 329, 593
1946 2, 287,171 1, 701,304 10, 773, 475 2, 477, 805 2, 431, 926 19, 671, 681
1947 2,912, 594 2, 259, 403 9, 669,806 2,133,140 2,642, 270 19, 617, 213
1948 6, 282, 719 4,347,133 9, 773, 281 1, 669, 407 2,999, 498 25, 072,038
Total 37, 213, 795 31, 681, 956 109, 736, 420 11,666,781 18,658,371 208,957, 323
Title II, Sec. 207-210:
1935 11, 775 11,775 11, 775
1936 9, 800 21, 575
1937 555 53, 250 23, 718 19, 456 77, 523
1938 319, 506 219, 254 69, 850 1,700 628, 066
1939 139, 252 259,164 296, 805 35, 887 732, 808
1940 22, 921 64, 555 502, 807 31, 914 44, 278 666,475
1941 39, 087 60,379 456, 929 13, 350 47,116 616, 861
1942 15,227 27, 255 517, 455 28, 527 40, 217 628, 681
1943 714 2, 875 520,118 37, 676 63, 433 624,816
1944 -8, 410 37, 516 474, 639 88, 985 63,455 656,185
1945 2,584 19,975 416, 441 179, 472 63,389 681, 861
1946 2,199 12, 603 314,084 272, 698 63, 370 664,954
1947 -925 100 217, 349 179, 624 65, 595 461, 743
1948 24, 720 — 170, 897 46, 967 83, 274 325, 858
Total 557, 430 778, 501 3,992, 867 880,913 589, 470 6, 799,181
Title VI, Sec. 603-608-
609-611:
1941 511, 432 97, 277 130 77, 418 686, 257
1942 2, 416,050 1, 657, 266 66,936 2,688 109, 801 4, 252,741
1943 2,816,805 2,926, 904 1,107, 478 5,059 181, 066 7,037,312
1944 1, 683, 069 2, 707, 731 4,167, 756 9,534 18, 372 8, 586,462
1945 756,368 1, 299, 204 5,938,411 188, 286 139, 525 8,321, 794
1946 1,321, 632 401, 758 6, 430, 413 2,017, 230 247, 883 10. 418, 916
1947 9,133, 257 4, 269, 438 5, 272, 845 1, 482, 754 321, 542 20, 479, 836
1948 8, 238,196 9,034, 748 8, 440, 335 755, 783 378, 427 26, 847, 489
Total 26, 876, 809 22, 394,326 31, 424,174 4, 461,464 1, 474,034 86, 630,807
Total income:
1934 763, 654 436, 618 54, 082 113, 423 113,423
1935 523 284, 962 1, 539, 839
1936 1, 662, 068 1, 551, 464 556, 640 27, 938 344, 923 4,143, 033
1937 1, 777, 875 2,165, 288 1, 976, 562 148, 211 486,346 6, 554, 282
1938 3, 469, 521 2, 277,957 3, 452,373 240, 691 581, 907 10,022, 449
1939 3, 791,175 4,149, 544 5,420, 334 417,816 632, 527 14, 411, 396
1940 4, 529, 893 7, 917, 245 7, 443, 560 646,195 704, 073 21, 240, 966
1941 5, 566,051 9, 427, 913 10, 012,461 994, 968 875, 957 26, 877,350
1942 4, 612, 263 7, 410, 261 13, 277, 771 837, 832 1,160, 575 27, 298, 702
1943.__.__ 3, 698, 727 5, 360, 600 15, 495, 766 392, 946 1, 627,929 26, 575, 968
1944 : 2, 614, 507 5, 464, 539 19,139, 893 485, 452 1. 892,026 29, 596, 417
1945 2, 329, 686 4, 701, 477 18, 254, 385 1, 781,178 2, 783, 442 29, 850,168
1946 3, 611, 227 7, 914, 830 17, 702, 966 4, 767, 733 2, 743,179 36, 739, 935
1947 12,045,016 16, 268, 584 15, 317, 084 3, 795, 518 3, 029, 407 50, 455, 609
1948 14, 545,660 26, 604, 374 18,607,370 2, 472,157 3,461,199 65, 690, 760
Total 65,017, 323 101, 650, 694 146, 711, 247 17,009,158 20, 721,875 351,110, 297
Minus figures caused by adjustments relating to prior years.
1 In addition, cash recoveries and other income in the amount of $15,441,071 have been collected on claims paid on insurance granted on and after July 1, 1939, and credited to the Title I Insurance Fund.
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FEDERAL HOUSING ADMINISTRATION
Administrative Expenses
The current fiscal year is the ninth in which the Federal Housing Administration has met all expenses of administration by allocation from its insurance funds.
The amount which may be used for administrative expenses during a fiscal year is fixed by Congress. Under the terms of the National Housing Act the amount expended for the administration of each title and section is charged against the corresponding insurance fund.
Administrative expenses during the fiscal year ended June 30, 1948, covering operating costs, as well as furniture and equipment purchased, have been charged against the titles and sections of the act as follows:
Administrative expenses, fiscal year 1948 (July 1,1941 to June 30,1948)
Title and section Amount Percent
Title I - - ________ $1,419,105 7.07
Title II: Sec. 203 - _ ------ - - 6, 979, 512 34.80
Sec. 207-210 - 93,821 .47
Title VI: Sec. 603 7,426,042 37.03
Sec. 608 -- 4,081,460 20.35
Sec. 609 56,829 .28
Total _ -- -- 20,056,769 100. 00
Government C orporation Control Act
Section 501(b) of the Housing Act of 1948 (Public Law 901, 80th Congress) made the Federal Housing Administration subject to the Government Corporation Control Act (Public Law 248, 79th Congress) and provided that the audit, required under Section 105 of that act to be made by the General Accounting Office in accordance with principles and procedures applicable to corporate transactions, shall begin with the fiscal year commencing July 1,1948.
The changes in fiscal and accounting procedures which were necessary in order to comply with the regulations under the Government Corporation Control Act have been effected.
Capital and Operating Reserves of Combined FHA Funds
During the year it was administratively determined that operating reserves to meet possible future insurance losses, expenses, and other charges should be established, and allocations were made for this purpose from the surplus of the insurance funds. These reserves amounted to $151,475,127 as of December 31, 1948, of which the sum of $28,652,006 was allocated from income received during 1948.
255
HOUSING AND HOME FINANCE AGENCY
Figures in the financial statements as of December 31, 1947 have been revised to reflect these reserves and to place them on a comparable basis with those of December 31, 1948.
The combined capital and operating reserves of all FHA funds on December 31, 1948 amounted to $200,369,176, and consisted of $48,-894,049 capital and $151,475,127 operating reserves, as shown in Statement 2.
Statement 2.—Comparative statement of financial condition, all FHA funds combined, as of Dec. 31, 191,1 and Dec. 31, 191,8
Dec. 31,1947 Dec. 31,1948 Increase or decrease—
ASSETS Cash with U. S. Treasury Investments: U. S. Government securities (amortized) Other securities (stock in rental housing corporations) Total investments Loans receivable: Mortgage notes and contracts for deed Less reserve for losses Net loans receivable Accounts and notes receivable Accrued assets: Interest on U. S. Government securities Interest on mortgage notes and contracts for deed.. Total accrued assets Commodities, supplies, and materials: Supplies held for use... __ - -- --- $37, 478, 876. 92 $41,134, 755. 74 $3, 655, 878. 82
132, 026, 868.11 50,205.00 143, 647, 823. 58 110,305.00 11, 620, 955. 47 60,100.00
132,077,073.11 143, 758,128. 58 11,681,055. 47
24, 800, 923.14 413,187.32 21, 699, 923. 71 360, 683.13 -3,100, 999. 43 -52, 504.19
24, 387, 735. 82 21, 339, 240.58 -3,048,495.24
72, 787. 66 60,139. 28 -12.648.38
672,072. 59 82, 555. 97 521,742.41 70, 548. 26 -150,330.18 -12,007. 71
754, 628. 56 592, 290. 67 -162,337. 89
100,245.67 84,017. 73 -16,227.94
Land, structures, and equipment: Furniture and equipment Less reserve, for depreciation Net furniture and equipment Acquired security or collateral: Real estate (at cost plus expenses to date) Less reserve for losses Net real estate Defaulted Title I notes Less reserve for losses Net defaulted Title I notes Net acquired security or collateral Deferred charges: Prepaid expenses Total assets - .
1,417,324. 72 736, 691. 67 1, 587,168.19 820,452. 73 169, 843.47 S3, 761.06
680, 633.05 766, 715.46 86,082.41
5, 808,620. 61 305, 369. 79 2, 947,044. 4.3 503, 492. 52 -2,861,576.18 198,122. 73
5, 503,250. 82 2, 443, 551.91 -.3,059,698.91
13. 578,197.16 9,337,694. 67 23, 875, 947. 50 13,574, 503.00 10, 297, 750. 34 4, 236,808. 33
4, 240, 502.49 10,301,444.50 6,060,942.01
9, 743. 753.31 12, 744, 996. 41 3,001,243.10
25, 754. 51 2,656. 87 -23,097. 64
205, 321,488.61 220,482,941.32 15.161,452. 71
LIABILITIES Accounts payable: Bills payable to vendors and Government agencies Group account participations payable Total accounts payable Accrued liabilities: Interest on debentures
1, 515, 770. 90 1, 684,276.67 1,903, 874.56 1, 223,375.22 388,103. 66 -460,901.45
3, 200,047. 57 3,127, 249. 78 -72, 797.79
415,360.93 208, 993.35 -206, 367. 58
256
FEDERAL HOUSING ADMINISTRATION
Statement 2.—Comparative statement of financial condition, all FHA funds combined, as of Dec. 31, 191/7 and Dec. 31, 191/8—Continued
Dec. 31, 1947 Doc. 31,1948 Increase or decrease—
liabilities—continued Trust and deposit liabilities: Excess proceeds of sale Deposits held for mortgagors and lessees Undistributed receipts General fund receipts in process of deposit Employees’ pay roll deductions for taxes, etc Unexpended advance from NHA Total trust and deposit liabilities Bonds, debentures, and notes payable: Debentures payable (issued) Debenture claims in process Total bonds, debentures, and notes payable Deferred and undistributed credits Total liabilities OPERATING RESERVES Reserves for contingent losses, expenses, and other charges -- - - $733, 931. 43 323,326. 96 15, 894.00 294, 844. 72 655,424.58 42, 692.43 $1, 048, 565. 79 229, 254.62 6, 522. 59 212,328.44 675, 346.02 $314,634. 36 -94,072.34 -9,371.41 -82, 516. 28 19, 921.44 -42,692.43
2,066,114.12 2,172,017.46 105, 903.34
32, 955, 236. 23 39,850.00 14,103, 686.23 446,300.00 -18, 851,550.00 406,450.00
32, 995,086.23 14, 549, 986. 23 -18,445,100.00
92, 389. 50 55, 519.46 -36, 870.04
38,768,998. 35 20,113, 766. 28 -18, 655,232.07
122, 823,121.19 151,475,126. 73 28, 652,005. 54
CAPITAL Paid-in capital (allocation from U.S. Government) __ _ Earned surplus (deficit —) Total capital Total liabilities, operating reserves, and capital- Contingent liability for certificates of claim on proper-ties on hand -
80,074,911.66 -36,345, 542.59 80, 600, 853. 77 -31, 706, 805.46 525,942.11 4, 638, 737.13
43, 729,369.07 48,894,048.31 5,164, 679. 24
205, 321,488.61 220,482, 941.32 15,161,452. 71
. 157,377.19 77,448.37 -79,928.82
The capital and operating reserves of each fund are given below :
Fund
Capital and operating reserves
Title I Insurance Fund and Title I Claims Account------------- $28, 742,988
Mutual Mortgage Insurance Fund-------------------------------- 122, 458, 280
Housing Insurance Fund---------------------------------------- 4, 708, 670
War Housing Insurance Fund____________________________________ 41, 339, 975
Housing Investment Insurance Fund_____________________________ 1, 000, 000
Administrative Expense Account-------------------------------- 2,119, 263
Total
200,369,176
Combined Income and Expenses, all FHA Funds
Total income from all sources during the year 1948 amounted to $66,720,920 while the total expenses amounted to $23,752,309 leaving a net income, before adjustment of valuation and operating reserves, of $42,968,611. Increases in valuation and operating reserves for the year amounted to $38,329,874, leaving $4,638,737 net income for the period. Cumulative income from June 27, 1934 through December 31, 1948 was $356,735,481, and cumulative expenses were $208,938,440,
831481—49----18
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HOUSING AND HOME FINANCE AGENCY
leaving net income of $147,797,041 before adjustment of valuation and operating reserves.
Statement 3.—Combined statement of income and expenses for all FHA funds, through Dec. 31,1947 and Dec. 31,1948
- June 27, 1934 to Dec. 31, 1947 Jan. 1,1948 to Dec. 31,1948 June 27,1934 to Dec. 31, 1948
Income: Interest and dividends' Interest on U. S. Government securities. „ Interest on mortgage notes and contracts for deed Interest, other Dividends on rental housing stock $16,697,349.29 65,851.71 4,270,601.74 1,461.07 $3,460,922.06 9, 726. 60 987,661.72 276.13 $20,158, 271.35 75,578.31 5,258,263.46 1,737.20
21,035,263.81 4,458, 586. 51 25,493, 850.32
Insurance premiums and fees: Premiums Fees . . _ 217,687,196. 59 50, 471,663.65 47,683,901.86 14, 545,659.88 265,371,098.45 65,017,323.53
268,158,860.24 62,229, 561.74 330,388,421.98
Other income: Profit on sale of investments Miscellaneous income 561,866.36 258, 570.63 32,771.79 561,866.36 291,342.42
820,436. 99 32, 771.79 853,208.78
Total income 290,014, 561.04 66, 720,920.04 356,735,481.08
Expenses: Interest expense: Interest on debentures 1,980,030.29 463,656.66 2,443,686.95
Administrative expenses: Operating costs (in-_ eluding adjustments for prior years) 159,476,251.54 21,725,975.88 181,202,227.42
Other expenses: Depreciation on furniture and equipment.. Miscellaneous expenses 1,037,137.68 162,656.63 96,475.75 36,671.56 1,133.613.43 199,328.19
1,199,794.31 133,147.31 1,332,941.62
Losses and charge-offs: Loss on sale of acquired properties Loss on equipment Loss on defaulted Title I notes 3,806,877. 90 4.277,234.13 14,445.943.12 -116,530.79 66.29 1,545,993.32 3,690,347.11 4,277,300.42 15, 991,936.44
22.530,055.15 1,429,528.82 23,959. 583.97
Total expenses 185,186,131.29 23, 752,308. 67 208,938,439.96
Net income before adjustment of valuation and operating reserves 104,828, 429. 75 42,968,611.37 147,797,041.12
Increase (—) or decrease (+) in valuation and operating reserves: Reserve for loss on loans receivable Reserve for loss on acquired security or collateral ... -413,187.32 -9,643,064.46 -8,294, 599.37 -122,823,121.19 +52, 504.19 —4,434,931.06 -5,295,441.83 -28,652,005.54 -360,683.13 -14,077,995.52 -13,590.041.20 -151,475,126.73
Group account participations distributed Reserves for contingent losses, expenses, and other charges
Net adjustment of valuation and operating reserves -141,173,972.34 -38,329,874.24 -179, 503,846.58
Net income (or loss —) -36,345, 542. 59 4,638,737.13 -31,706, 805.46
Analysis of Earned Surplus (or Deficit —)
Balance at beginning of period _ . . —$36, 345, 542. 59 4,638,737.13
Net income (or loss —) for the period Balance at end of period —$36,345, 542. 59 -$31,706,805.46
-36,345, 542. 59 -31,706,805.46 -31,706, 805.46
258
FEDERAL HOUSING ADMINISTRATION
Title I: Property Improvement Loan Insurance
Loans Insured and Claims Paid
Operations under Title I cover the insurance of qualified institutions against loss on loans made to finance the alteration, repair, and improvement of existing structures, and loans not exceeding $3,000 for the construction of new structures other than residential, and loans not exceeding $4,500 for the construction of new structures for residential use.
Loans aggregating 8,735,620 in number and $3,338,550,288 in amount (net proceeds) had been reported for insurance under Title I through December 31, 1948. Through that date 261,979 claims had been paid for $74,766,871, or approximately 2.2 percent of the total net proceeds of loans insured, as shown on Statement 4. For the calendar year 1948, the comparable figures were 1,359,776 loans insured for an aggregate of $621,612,484, and 38,482 claims paid for $14,345,659.
Statement 4.—-Summary of Title I notes insured, claims for insurance paid, and recoveries on defaulted notes purchased, by calendar years, 1934-1948
Year Notes insured (net proceeds) Claims for insurance paid Recoveries on defaulted notes purchased
Total recoveries Cash receipts Proceeds from real property
On notes On sales of repossessed equipment
1934 $27 405 525
1935 201'258’ 132 $447,448 $9,916 $9,916
1936 221', 534,922 5,884,885 293; 207 272, 694 $20, 513
1937 54 344^ 338 6, 890,897 942,295 913,758 28, 537
1938 150 709 152 6,016,306 1, 552,417 1,489,044 63,373
1939 203, 994, 512 4; 728; 346 1,941,953 1,919,524 22,429
1940 241 734,821 6; 543, 568 1,902, 540 1,888,681 13, 859
1941 248,638, 549 7', 265,059 2, 539, 496 2,335,107 11,853 $192, 536
1942 141,163,398 7,132,210 2, 831, 754 2, 795,685 -1,524 37,593
1943 87,194,156 3, 718,643 4,168,859 4,024,096 717 144,046
1944 113; 939,150 1,939,261 3, 597,858 3, 558,901 -159 39,116
1945 170,823, 788 1,588,875 2,851,513 2, 775, 337 1,093 75,083
1946 320; 593; 183 2,435,964 3,058,351 2, 772,487 7, 270 278, 594
1947 ... 533,604,178 5, 829, 750 2,346,108 2, 345,022 239 847
1948 621, 612,484 14,345,659 2, 503,044 2,499, 536 752 2,756
Total 3,338, 550,288 74, 766,871 30, 539,311 29, 599, 788 168, 952 770, 571
Notes—In addition to the above recoveries, $2,825,104 interest on outstanding balances of Title I notes, $75,578 interest on mortgage notes, and $257,908 miscellaneous income had been collected through Dec. 31, 1948.
Equipment in the total amount of $4,475,117 (claim amount) had been repossessed by FHA. However, only the cash recovery of $168,952 from sales is shown as a recovery, the balance of $4,306,165 having been treated as a loss. Of this amount $3,979,654 represents equipment transferred to other Government agencies without exchange of funds; $321,084 loss on sale of equipment; $2,634 available for transfer; and $2,793 destroyed as worthless.
Recoveries
Upon payment of insurance claims under Title I, the notes and other claims against the borrowers become the property of the Federal Housing Administration and are turned over to the Liquidation Section
259
HOUSING AND HOME FINANCE AGENCY
of the Title I Division for collection or other disposition. Where it becomes necessary to repossess equipment under a security instrument held in connection with a defaulted note, the Bureau of Federal Supply is authorized to pick up such equipment and dispose of it for the account of the Federal Housing Administration.
Real properties acquired under Title I are managed and sold by the Property Management Section of the Federal Housing Administration, which also handles the acquisition, management, and disposition of real properties acquired under Titles II and VI.
Through December 31, 1948, there had been acquired under the terms of Title I insurance a total of 397 real properties with a claim balance of $824,082. All but one of these had been sold at a net loss of $53,511, including all expenses (such as taxes, repairs, and sales commissions) incurred by FHA in acquiring, managing, and disposing of the properties.
Insurance losses under Title I through December 31, 1948 amounted to $33,920,115. These losses represented 1.02 percent of the total amount of loans insured ($3,338,550,288). A summary of Title I transactions through December 31, 1948, follows:
Summary of Title I transactions for the period June 27, 1934 to Dec. 31, 1948
Total Title I transactions to Dec. 31, 1948 Percent to notes insured
Total notes insured _ . . . . . _ $3,338, 550, 288 100. OCO
Total claims paid ___ ... . _ 74,766, 871 2 240
Recoveries:
Cash collections: On notes 29, 599, 788 168, 952 .887
On sale of repossessed equipment _ .005
Total cash . _ _ _ _ _ _ . 29, 768, 740 770, 571 .892
Real properties (after deducting losses) .023
Total recoveries 30, 539,311 .915
Net notes in process of collection 10, 301,445 .309
Losses:
Loss on sale of real properties 53, 511 .002
Loss on repossessed equipment . ... 4,306,165 .131
Loss on defaulted Title I notes 15,991,936 .477
Reserve for loss on defaulted Title I notes 13, 574, 503 .400
Total losses 33,926,115 1.016
Note—Included in the loss on repossessed equipment is $3,979,654 representing the cost (claim amount) of equipment repossessed by FHA and subsequently transferred to other Government agencies for their use Although the Federal Government has received the benefit of the residual value of this equipment, the cost to Title I is shown as a loss, since, the equipment was transferred without exchange of funds.
In addition to the above recoveries, $2,825,104 interest on outstanding balances of Title I notes, $75,578 interest on mortgage notes, and $257,908 miscellaneous income had been collected through December 31, 1948.
260
FEDERAL HOUSING ADMINISTRATION
Title I Insurance Fund and Title I Claims Account
Prior to July 1, 1939, there was no provision in the National Housing Act for collecting premiums on insurance granted under Title I. An amendment to the act on June 3, 1939, authorized I HA to charge financial institutions a premium on loans insured under this title on and after July 1, 1939. The present premium rate is three-fourths percent per annum of the net proceeds of the loan, except on Class 1 (b) loans in excess of $2,500, Class 2 (b) loans having maturities in excess of 7 years and 32 days, and Class 3 loans covering the construction of small homes; on these the premium rate is one-half percent
per annum.
Fees and insurance premiums collected on Title I loans insured since July 1, 1939, have been credited to the Title I Insurance Fund, which was established pursuant to the amendment of June 3, 1939. Recoveries on claims paid in connection with insurance granted on and after July 1, 1939 have also been credited to this fund in accordance with an amendment to the act of June 28,1941.
Section 2(f) of the act provides that moneys in the Title I Insurance Fund shall be available for defraying the operating expenses of the Federal Housing Administration under this title, and any amounts which are not needed for such purpose may be used for the payment of claims in connection with the insurance granted under this title.
Until sufficient funds from premiums and recoveries had accumulated in the Title I Insurance Fund, expenses and insurance, claims relating to this title were paid from moneys allocated by the Federal Government. Since July 1, 1940, however, all Title I operating expenses have been paid out of moneys in the Title I Insurance Fund. From July 1, 1940 through June 30, 1944, a portion of the insurance claims was met from income while the remainder was paid from funds advanced through the Reconstruction Finance Corporation by the Federal Government. Since July 1, 1944, all insurance claims have been paid from income and recoveries.
In order to provide a more complete financial report of Title I operations from the initiation of the program in 1934 to December 31, 1948, combined statements have been prepared for the Title I Insurance Fund and the Title I Claims Account. The Title I Claims Account reflects the transactions with respect to insurance claims paid out of allocations by the Federal Government prior to July 1, 1939.
The total capital and operating reserves of the combined Title I Insurance Fund and Title I Claims Account as of December 31,1948, as shown on Statement 5 was $28,742,988, consisting of capital in the amount of $8,527,895 and operating reserves of $20,215,093.
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HOUSING AND HOME FINANCE AGENCY
Statement 5.—Comparative statement of financial condition, Title I Insurance Fund and Title I Claims Account, as of Dec. 31, 191ft and Dec. 31, 1948
Dec. 31, 1947 Dec. 31, 1948 Increase or decrease —
ASSETS Cash with U. S. Treasury Loans receivable: Mortgage notes and contracts for deed Less reserves for losses Net loans receivable Accounts and notes receivable _ $18,213, 243.72 $18, 460, 660.14 $247,416.42
250, 224.10 3, 753.36 201, 744. 92 3,026.00 -48,479.18 -727.36
246,470.74 198, 718. 92 -47, 751.82
567.37 -567.37
Accrued assets: Interest on mortgage notes and contracts for deed .
1,024.84 884.86 -139.98
Acquired security or collateral: Real estate (at cost plus expenses to date) Less reserve for losses. . . ...
721.38 106.00 721.38 106.00
Net real estate..
615.38 615.38
Defaulted Title I notes Less reserve for losses Net defaulted Title I notes Net acquired security or collateral Total assets LIABILITIES Trust and deposit liabilities: Deposits held for account of mortgagors and lessees _ _
13,578,197.16 9,337,694.67 23,875, 947.50 13,574, 503.00 10. 297, 750.34 4,236,808.33
4, 240,502.49 10,301,444. 50 6,060,942.01
4,240, 502.49 10,302,059.88 6,061,557.39
22,701,809.16 28,962,323.80 6, 260, 514.64
, 509.96 15,894.00 292, 781.44 2,177. 93 6, 522.59 210,635. 56 -332.03 -9,371.41 -82,145.88
Undistribut "i receipts General fund receipts in process of deposit Total liabilities OPERATING RESERVES Reserves for contingent losses, expenses, and other charges _ _ _ ._
311,185. 40 219,336.08 -91,849.32
13,891, 764.68 20, 215, 093.02 6,323,328.34
CAPITAL Paid-in capital (allocations from U. S. Government) __
28,911,609. 25 -20,412,750.17 28,438,137. 59 -19, 910, 242.89 -473,471.66 502, 507.28
Earned surplus (deficit —) Total capital Total liabilities, operating reserves, and capital
8,498,859.08 8,527,894.70 29,035.62
22,701,809.16 28,962,323.80 6, 260,514.64
The resources of the Title I Insurance Fund, on which present and future Title I operations depend for capital, amounted to $28,552,342, of which $8,337,249 represented capital and $20,215,093 operating reserves. The financial condition of each of the Title I funds as of December 31,1948 is shown below:
262
FEDERAL HOUSING ADMINISTRATION
Combined Title I Insurance Fund and Title I Claims Account statement of financial condition as of Dec. 31, 1948
Title I Insurance Fund Title I Claims Account Combined Title I
ASSETS Cash with U. S. Treasury — Loans receivable: Mortgage notes and contracts for deed Less reserve for losses Net loans receivable Accrued assets: Interest on mortgage notes and contracts for deed Acquired security or collateral: Real estate (at cost plus expenses to date). Less reserve for losses Net real estate Defaulted Title I notes Le«s reserve for losses Net defaulted Title I notes Net acquired security or collateral Total assets LIABILITIES Trust and deposit liabilities: Deposits held for account of mortgagors and lessees Undistributed receipts General fund receipts in process of deposit Total liabilities OPERATING RESERVES Reserves for contingent losses, expenses, and other charges CAPITAL Paid-in capital (allocations from U. S. Government) Earned surplus (deficit —) Total capital Total liabilities, operating reserves, and capital $18, 242, 712. 78 $217,947.36 $18, 460, 660.14
168,140. 58 2, 522. 00 33, 604.34 504.00 201, 744. 92 3,026. 00
165, 618. 58 33,100.34 198, 718. 92
743.11 111. 75 884. 86
721.38 106.00 — 721.38 106. 00
615.38 — 615. 38
22,331, 663. 79 12,187, 765.00 1, 544, 283. 71 1,386, 738. 00 23, 875, 947. 50 13, 574, 503. 00
10,143, 898. 79 157, 545. 71 10,301,444. 50
10,144, 514.17 157, 545. 71 10,302,059. 88
28, 553, 588.64 408, 735.16 28, 962,323. 80
1, 246. 97 930. 96 6, 522. 59 210, 635. 56 2,177. 93 6, 522. 59 210,635. 56
1, 246. 97 218,089.11 219, 336.08
20, 215, 093.02 20, 215,093. 02
8,337, 248. 65 20,100, 888. 94 -19, 910, 242.89 28, 438,137. 59 -19, 910, 242. 89
8,337, 248. 65 190, 646. 05 8, 527, 894. 70
28, 553, 588. 64 408, 735.16 28, 962,323. 80
For the year 1948 Title I income totaled $13,822,860, while expenses and losses amounted to $2,760,837, leaving $11,062,023 net income before adjustment of valuation and operating reserves. After increasing the valuation reserves by $4,236,187 and the operating reserves for contingent losses, expenses, and other charges by $6,323,328, there remained $502,508 net income for the year.
263
HOUSING AND HOME FINANCE AGENCY
Statement G.—Income and expenses, combined Title I Insurance Fund and Title I Claims Account, through Dec. 31, 191,1 and Dec. 31, 191,8
June 27, 1934 to Dec. 31, 1947 Jan. 1, 1948 to Dec. 31, 1948 June 27,1934 to Dec. 31, 1948
Income: Interest and dividends: Interest on mortgage notes and contracts for deed Interest, other $65, 851.71 2. 493,963. 97 $9, 726. 60 335,033.38 $75, 578.31 2,828, 997.35
2, 559,815. 68 344, 759. 98 2,.904, 575.66
Insurance premiums and fees: Premiums Fees 34, 908,346. 29 369, 264. 30 13, 445,350. 51 25. 00 48, 353, 696.80 369, 289.30
35, 277, 610. 59 13, 445, 375. 51 48, 722,986.10
Other income: Miscellaneous income 225,183. 40 32, 724.18 257, 907.58
Total income 38,062, 609. 67 13, 822, 859. 67 51, 885, 469.34
Expenses: Administrative expenses: Operating costs (including adjustments for prior years) 16, 273, 365. 60 1,196, 808. 05 17, 470,173.65
Other expenses: Miscellaneous expenses 162,033. 68 19,164. 54 181,198.22
Losses and charge-offs: Loss on sale of acquired properties Loss (or profit —) on equipment Loss on defaulted Title I notes 53, 792. 21 4,307,012. 52 14, 445, 943.12 -280.86 -847. 97 1, 545, 993. 32 53, 511.35 4,3C6,164.55 15, 991, 936.44
18, 806, 747.85 1, 544, 864. 49 20,351,612.34
Total expenses 35, 242,147.13 2, 760,837. 08 38, 002, 984. 21
Net income before adjustment of valuation and operating reserves 2,820, 462. 54 11,062,022. 59 13, 882,485.13
Increase (—) or decrease (+) in valuation and operating reserves: Reserve for loss on loans receivable Reserve for loss on acquired security or col- lateral Reserves for contingent losses, expenses, and other charges -3, 753.36 -9, 337, 694. 67 -13, 891,764.68 +727.36 -4, 236, 914.33 -6,323,328. 34 -3,026.00 -13, 574,609.00 -20, 215, 093.02
Net adjustment of valuation and operating reserves -23, 233, 212. 71 -10, 559,515.31 -33, 792, 728.02
Net income (or loss —) -20, 412, 750.17 502, 507. 28 -19, 910, 242.89
Analysis of Earned Surplus (or Deficit —)
Balance at beginning of period_________________
Net income (or loss —) for the period______
Balance at end of period_________________
-20, 412,750.17 502, 507. 28
-20, 412, 750.17 -19, 910, 242.89
-20, 412, 750.17 -19,910,242. 89 -19,910, 242.89
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The cumulative income and expenses of each of the Title I funds as reflected in the combined figures through December 31, 1948 on Statement 6 are shown below:
Title I Insurance Fund and Title I Claims Account statement of income and expenses, June 21, 1931, to Dec. 31, 191,8
Title I Insurance Fund Title I Claims Account Combined Title I
Income: Interest and dividends: Interest on mortgage notes and contracts for deed Interest, other $38,184.25 1,065,080.11 $37,394.06 1,763,917. 24 $75, 578.31 2,828,997.35
1,103, 264.36 1,801,311.30 2,904,575. 66
Insurance premiums and fees: Premiums Fees 48,353,696.80 369,289.30 — 48,353,696.80 369, 289.30
48,722,986.10 — 48, 722,986.10
Other income: Miscellaneous income 103,682.16 154, 225.42 257,907.58
Total income 49, 929,932.62 1, 955, 536.72 51,885,469.34
Expenses: Administrative expenses: Operating expenses (including adjustments for prior years) 10,854,959.65 6, 615,214.00 17,470,173.65
Other expenses: Miscellaneous expenses 181,198. 22 — 181,198.22
Losses and charge-offs: Loss on sale of acquired property Loss on equipment Loss on defaulted Title I notes 23,804.18 46,803.31 6,417, 681. 24 29,707.17 4, 259, 361.24 9, 574,255.20 53,511.35 4,306,164. 55 15, 991, 936. 44
6,488,288. 73 13,863,323.61 20,351,612.34
Total expenses 17, 524,446. 60 20,478, 537.61 38,002, 984.21
Net income (or loss —) before adjustment of valuation and operating reserves 32,405, 486.02 -18, 523,000. 89 13,882, 485.13
Increase (—) or decrease (+) in valuation and operating reserves: Reserve for loss on loans receivable Reserve for loss on acquired security or collateral- Reserves for contingent losses, expenses, and other charges -2, 522.00 -12,187,871.00 -20, 215,093.02 -504.00 -1,386,738.00 -3, 026.00 -13,574,609.00 -20,215,093.02
Net adjustment of valuation and operating reserves -32,405,486.02 -1,387, 242.00 -33, 792, 728.02
Net income (or loss —) -19, 910; 242.89 -19, 910,242.89
Title I Insurance Liability Limitation
Section 2(a) of the National Housing Act provides that the total liability which may be outstanding under Title I at any time, plus the amount of claims paid in respect of all insurance granted under this title, less the amount collected from insurance premiums and other sources and deposited in the Treasury of the United States under the Title I Insurance Fund, may not exceed in the aggregate $200,000,000. The maximum insurance liability was increased during 1948 from $165,000,000 to $200,000,000 by amendment of the National Housing Act approved August 10, 1948.
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Calculations of estimated liability are prepared regularly in order to determine that such insurance liability is kept within the limitation prescribed. In addition, a report is obtained once a year from financial institutions of the outstanding balances of Title I loans in their portfolios, which report serves, among other things, as the basis for checking the calculations of the Federal Housing Administration’s insurance liability.
As of December 31, 1948, the net estimated charges against the liability limitation of $200,000,000 were $173,078,898, which left $26,921,-102 as the unallocated amount available for use as reserves.
Statement 7.—Insurance reserves under Title I, authorized, established, released, and remaining unallocated at Dec. 31, 1948, as provided under Secs. 2 and 6, National Housing Act
Item Gross reserves established Reserves released Charges against liability limitation as at Dec. 31, 1948 Summation
Outstanding contingent liability Claims paid Total
Basic liability limitation established by Congress Insurance reserves: Sec. 2: 20 percent, original act 10 percent, amendment Apr. 3, 1936... 10 percent, amendment Feb. 3, 1938.__ 10 percent, amendment June 3, 1939-.- 10 percent, reserve of July 1, 1944 10 percent, reserve of July 1,1947 Sec. 6: 20 percent, amendment Apr. 22, 1937.- 10 percent, amendment Apr. 17, 1936-. Total Estimated reserves for backlog of loan reports not included above (90,212 loans at $460) Collections from insurance premiums and other sources (deduct) Net charges against liability limitation Total unallocated amount available for use as reserves ... $66,331, 508 17, 257, 563 27,302,148 86,075,183 85,514,314 84,379,469 297,366 11,913 $50,769,728 10,647,672 18,041,547 54,363,766 246, 498 6,339 $11,297,980 68,359,444 78,669,619 $15, 561,780 6,609,891 9,260,601 20,413,437 17,154,870 5,709,850 50,868 5, 574 $15,561, 780 6, 609,891 9,260,601 31,711,417 85,514,314 84,379,469 50,868 5, 574 $200,000,000
367,169,464 134,075, 550 158,327,043 74, 766,871 233,093, 914 4,149, 752 237, 243,666 64,164, 768 173,078,898 173,078,898 26, 921,102
Title II: Mutual Mortgage Insurance Fund
The Mutual Mortgage Insurance Fund was established by Section 202 of the National Housing Act as a revolving fund for carrying
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out the provisions of Title II with respect to insurance under Section 203 (mortgages on one-to four-family homes) and Section 207 (rental housing projects). Subsequently, an amendment to the act approved February 3, 1938 established the Housing Insurance Fund to carry the insurance on rental housing projects insured under Section 207 after that date.
In accordance with Section 202 of the act, the Mutual Mortgage Insurance Fund was originally allocated the sum of $10,000,000 by the Federal Government. It has been credited with all income received in connection with insurance granted under Section 203, and that received with respect to insurance granted prior to February 3, 1938 under Section 207.
Section 205 of the act provides that mortgages insured under Section 203 shall be classified into groups in accordance with sound actuarial practice and risk characteristics. Each group account is credited with the income and charged with the expenses and losses of the mortgages in the group. If such income exceeds the expenses and losses, the resultant credit balance is distributed in the form of participation payments to mortgagors of the group upon payment in full of their mortgages, or upon termination of the group account. A group account is terminated when the amounts to be distributed are sufficient to pay off the unpaid principal of the mortgages remaining in the group, or when all outstanding mortgages in the group have been paid.
In the event that the expenses and losses of a group account exceed the income, no participation payments can be made and the deficit balance is absorbed by the General Reinsurance Account.
The General Reinsurance Account was established by Section 205 (b) of the act and, in accordance with this section, was credited with the original allocation of $10,000,000 provided by Section 202 of the act. In addition, Section 205 (c) of the act provides for the transfer to this account, upon the termination of each group account, of an amount equal to 10 percent of the total insurance premiums theretofore credited to the group. This account was provided as a secondary reserve to absorb the ultimate deficits of any group accounts which lack sufficient funds to meet all expenses and losses relating to the mortgages in the group; and to cover general expenses of mutual mortgage insurance not charged against group accounts.
Limitation on Title II Insurance Liability
Under the provisions of Section 203 (a) of the act, the aggregate amount of principal obligations of all mortgages insured under Title II outstanding at any one time may not exceed $5,000,000,000. The
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limitation was increased from $4,000,000,000 on December 30, 1948, by the President under authority granted him in Section 203(a) of the act. This authorization applies to the insurance granted on all mortgages insured under Section 203 for small homes and for rental housing projects under Sections 207 and 210. The Title II outstanding insurance liability at December 31, 1948 was calculated as follows:
Outstanding insurance liability under Title II
Total liability authorized----------1------------------------$5, 000, 000, 000
Estimated outstanding balance of insurance in force:
Small homes------------------------------$2, 890, 531, 546
Rental and group housing----------------- 32, 365, 744
Commitments (small-home and rental housing)_____________________________________ 1,229,812,336
Estimated insurance liability at Dec. 31, 1948------------ 4,152, 709, 626
Unused authorization for insurance_______________________ 847, 290,374
Mutual Mortgage Insurance Fund Capital
As of December 31, 1948, the assets of the Mutual Mortgage Insurance Fund totaled $131,349,976, against which there were outstanding liabilities of $8,891,696. Operating reserves for possible future insurance losses, expenses, and other charges had been established out of surplus in the amount of $94,383,293, and the fund had net capital of $28,074,987, making total capital and operating reserves of $122,458,280.
Statement 8.—Comparative statement of financial condition, Mutual Mortgage Insurance Fund, as of Dec. 31, 1947 and Dec. 31, 1948
Dec. 31, 1947 Dec. 31, 1948 Increase or decrease —
ASSETS Cash with U. S. Treasury Investments: IT. S. Government securities (amortized) Loans receivable: Mortgage notes and contracts for deed Less reserve for losses Net loans receivable ccounts and notes receivable ccrued assets: Interest on IT. S. Government securities Interest on mortgage notes and contracts for deed Total accrued assets $4,387,367. 59 $5,061, 516. 65 $674,149.06
114,087,438.16 124,163,649.81 10, 076, 211.65
2,122, 664. 08 31,839.96 1,668, 945.16 25,106.13 -453, 718.92 -6,733.83
2, 090, 824.12 1, 643,839. 03 -446,985.09
75.00 141. 24 66.24
577,649. 67 9,046. 46 467,167. 81 7,007. 72 -110,481.86 -2,038.74
586, 696.13 474,175. 53 -112,520.60
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federal housing administration
Statement 8.—Comparative statement of financial condition, Mutual Mortgage Insurance Fund, as of Dec. 31, 1947, and Dec. 31, 1948—Continued
Dec. 31, 1947 Dec. 31, 1948 Increase or decrease —
assets—continued Acquired security or collateral: Real estate (at cost plus expenses to date) Less reserve for losses _ _ _ $7,819.85 1,166. 52 $7,819. 85 1,166. 52
Net acquired security or collateral Total assets LIABILITIES Accounts payable: Bills payable to vendors and Government agencies _ -
— 6, 653.33 6,653.33
$121,152, 401.00 131,349, 975. 59 10,197, 574. 59
102.22 1, 684, 276. 67 361.88 1, 223,375. 22 259.66 -460, 901.45
Group account participations payable Total accounts payable Accrued liabilities: Interest on debentures Trust and deposit liabilities: Excess proceeds of sale Deposits held for mortgagors and lessees Total trust and deposit liabilities Bonds, debentures, and notes payable: Debentures payable (issued)
1, 684,378.89 1, 223, 737.10 -460, 641. 79
111,668.04 111,650.22 -17. 82
90, 693.86 43,443. 70 56,632. 58 35, 732.12 -34, 061.28 -7, 711. 58
134,137. 56 92,364. 70 -41, 772. 86
7,444, 536. 23 7,443,686. 23 13, 250.00 -850. 00 13, 250. 00
Total bonds, debentures, and notes payable .. Deferred and undistributed credits Total liabilities OPERATING RESERVES Reserves for contingent losses, expenses, and other charges
7,444, 536. 23 7,456,936. 23 12,400.00
9,046.46 7,007. 72 -2,038. 74
9,383, 767.18 8,891,695.97 -492,071.21
89, 516, 579. 52 94,383, 292.64 4,866, 713.12
CAPITAL Paid-in capital (allocations from U. S. Government). Earned surplus (deficit —)._. Total capital Total liabilities, operating reserves, and capital Contingent liability for certificates of claim on properties on hand.. . __ .
41, 990, 003. 99 -19,737, 949.69 41,990, 812. 56 -13, 915, 825. 58 808. 57 5,822,124.11
22, 252, 054. 30 28,074,986. 98 5,822, 932. 68
121,152, 401.00 131,349,975. 59 10,197, 574. 59
664. 61 664.61
Income and Expenses
During the year 1948 the income to the fund amounted to $25,416,-942, while expenses and losses amounted to $9,438,230, leaving $15,978,712 net income before adjustment of valuation and operating reserves. After providing $4,861,146 for increases in valuation and operating reserves, and $5,295,442 for participation payments, the net income for the year was $5,822,124.
The cumulative income of the Mutual Mortgage Insurance Fund from June 27, 1934 to December 31, 1948 amounted to $211,753,597, which cumulative expenses amounted to $116,669,816. After alloca-
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HOUSING AND HOME FINANCE AGENCY
ing $94,409,565 to valuation and operating reserves and providing $13,590,041 for participation payments the cumulative net loss amounted to $12,915,825.
Statement 9.—Income and expenses, Mutual Mortgage Insurance Fund, through Dec. 31, 191)1 and Dec. 31, 191)8
June 27, 1934 to Dec. 31, 1947 Jan. 1, 1948 to Dec. 31, 1948 June 27,1934 to Dec. 31, 1948
Income: Interest and dividends: Interest on U. S. Government securities Interest, other Dividends on rental housing stock Insurance premiums and fees: Premiums Fees __ _ $15, 265, 902. 39 1,986, 562. 30 156. 00 $2,999, 497. 63 334,164. 88 $18, 265,400.02 2, 320, 727.18 156.00
17, 252, 620. 69 3,333,662. 51 20, 586, 283.20
137, 749,355. 73 30,934, 601.02 15, 800, 514. 58 6, 282, 718. 70 153,549,870.31 37, 217,319.72
Other income: Profit on sale of investments , Miscellaneous income Total income Expenses: Interest expense: Interest on debentures Administrative expenses: Operating costs (including adjustments for prior years) Other expenses: Miscellaneous expenses Losses and charge-offs: Loss on sale of acquired properties
168, 683, 956. 75 22, 083, 233. 28 190, 767,190.03
392, 970. 60 7,106. 43 46.69 392, 970.60 7,153.12
400,077.03 46.69 400,123.72
186,336, 654. 47 25,416. 942. 48 211, 753, 596.95
1, 904, 460. 84 501, 546.17 2,406,007.01
102,926, 730. 20 8,941, .567. 46 111, 868,297.66
202. 95 17, 507. 02 17, 709. 97
2, 400, 191.32 -22,389. 92 2,377, 801.40
Total expenses Net income before adjustment of valuation and operating reserves Increase (—) or decrease (+) in valuation and operating reserves: Reserve for loss on loans receivable Reserve for loss on acquired security or collateral. Group account participations distributed Reserves for contingent losses, expenses, and other charges Net adjustment of valuation and operating reserves
107, 231, 585. 31 9, 438, 230. 73 116,669,816.04
79,105, 069. 16 15,978,711.75 95,083, 780.91
-31, 839. 96 -8, 294. 599. 37 -89, 516, 579. 52 +6, 733. 83 -1,166. 52 -5, 295,441. 83 -4,866, 713.12 -25,106.13 -1,166.52 -13,590,041.20 -94,383, 292.64
-97, 843,018. 85 -10,156, 587. 64 -107,999,606.49
Net income (or loss —)
-18, 737, 949. 69 5, 822,124. 11 -12,915,825.58
Analysis of Earned Surplus (or Deficit —)
Balance at beginning of period
Net income (or loss —) for the period Total -18, 737, 949. 69 5,822,124.11 -12, 915, 825. 58
-18, 737,949. 69 -1,000,000.00 5,822,124.11 -12,915,825.58 -1,000,000.00
Transfer to Housing Insurance Fund.. Balance at end of period
-19,737,949.69 5, 822,124.11 -13, 915, 825. 58
Investments
Section 206 of the act provides that excess moneys in the fund not needed for current operations shall be deposited with the Treasurer of
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the United States to the credit of the fund, or invested in bonds or other obligations of, or in bonds or other obligations guaranteed as to principal and interest by, the United States; or the Commissioner may, with the approval of the Secretary of the Treasury, purchase debentures issued under the fund, provided that such purchases are made at a price which will produce an investment yield of not less than the yield obtainable from other authorized investments.
During 1948, $4,900 of series A 3-percent Mutual Mortgage Insurance Fund debentures matured and were paid. No calls for the redemption of debentures under the Mutual Mortgage Insurance Fund were issued during 1948.
Purchases of United States Treasury bonds and notes made during the year increased the holdings of the fund by $10,000,000 (principal amount). Special 2-percent United States Treasury notes in the amount of $17,000,000 were converted into cash and the proceeds reinvested in 2y>-percent United States bonds, series 1967-72. These transactions resulted in an increase of the average annual yield from 2.42 percent to 2.49 percent. On December 31, 1948, the fund held United States Treasury bonds and notes in the amount of $124,163,650, as follows:
Investments of the Mutual Mortgage Insurance Fund, Dec. 81, 1948
Series Interest rate (percent) Purchase price Par value Book value (Am rtized)
1951-52 2 $4,000, 000.00 $4,000,000.00 $4,000,000. 00
1951-54 2% 544,843. 75 550,000.00 548, 048. 55
1952-54 T/i 2,300,000. 00 2,300, 000.00 2,300, 000. 00
1954-56 2)4 1,500,000. 00 1, 500,000. 00 1, 500, 000. 00
1955-60 2% 4, 441, 634. 03 4, 389,500.00 4,410,305. 57
1956-59 23/4 5,305, 584. 59 5,242,850.00 5,271,167.73
1962-67 T/i 5,000, 000.00 5,000,000.00 5,000,000.00
1963-68 2)4 4, 500,000. 00 4, 500, 000.00 4, 500,000. 00
1964-69 15,000,000. 00 15,000, 000.00 15,000,000.00
1965-70 2)4 13, 000,000. 00 13,000,000. 00 13, 000,000. 00
1966-71 2)4 10,850,000.00 10, 850, 000. 00 10, 850,000.00
1967-72 2)4 57, 788, 289.86 57,667,000. 00 57, 784,127.96
Average annual yield 2. 49 124, 230,352. 23 123, 999,350. 00 124,163, 649. 81
Properties Acquired under the Terms of Insurance
Four small homes insured under Section 203 were acquired in 1948 by the Commissioner under the terms of insurance. During 1947 no foreclosed property had been transferred to the Commissioner, and in 1946 there had been one. Through 1948, a total of 4,071 small homes had been acquired under the Mutual Mortgage Insurance Fund for which debentures and cash adjustments had been issued in the amount of $18,736,495. Statement 10 shows the turnover of Section 203 acquired properties since the acquisition of the first such property in 1936.
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HOUSING AND HOME FINANCE AGENCY
Statement 10.—Turnover of properties acquired under Sec. 203 of Title II contracts of insurance by years, and cumulative through Dec. 31,191/8
Properties acquired
Properties sold, by years
Properties
Year
Num- 1936-
1939
1940
1941
1942 1943
1944 1945
1936.
1937.
1938.
1939.
1940.
1941.
1942.
1943.
1944.
1945.
1946
1947.
1948.
13
98
324
753
1,123
1,044
502
168
33
8
11
13
2
67
139
7
99 278
5
50 331 611
6
28
110
448
754
6 28 46 257 355
2
3
14
29
139
140
2
3
2
8
27
26
Total..-. 4,071
24 208 384 997 1,346 692 327 67 20
Notes.—On the 4,069 properties sold, the average time between acquisition and sale by the Federal Housing Administration was 6.35 months.
The number of properties sold has been reduced by 17 properties repossessed because of default on mortgage notes. All 17 reacquisitions had bp*m resold by Dec. 31, 1948.
Through December 31, 1948, 4,069 acquired properties insured under Section 203 had been sold at prices which left a net charge against the fund of $2,377,801, or an average of approximately $584 per case. One Section 207 rental housing project, insured under the Mutual Mortgage Insurance Fund prior to February 3,1938, had been acquired and sold during 1941 at no loss to the fund.
Statement 11.—Statement of profit and loss on sale of acquired properties, Mutual Mortgage Insurance Fund, through Dec. 31, 191/8
Item Section 203 (4,069 properties) Section 207 (1 property) Total Title II (4,070 properties)
Proceeds of sales:1 Sales price Less commission and other selling expenses Net proceeds of sales Income: Rebates, deficiency judgments, etc Rental and other (net) Mortgage note income Total income Total proceeds of sold properties Expenses: Debentures and cash adjustments Interest on debentures Additions and improvements Taxes, water rent, hazard insurance, and other expenses Repairs and maintenance Settlement expense Total expenses $18,809, 936 893,305 $1,000,000 $19,809,936 893,305
17,916,631 1,000,000 18,916,631
51,451 256, 784 2,468, 293 — 51,451 256,784 2,468,293
2, 776, 528 — 2, 776,528
20,693,159 1,000,000 21,693.159
$18,728,718 2,626,952 23,859 415, 011 691,128 $942,145 18,387 5,012 1,669 $19,670,863 2, 645,339 23,859 420,023 691,128 1,669
22,485, 668 967,213 23,452,881
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FEDERAL HOUSING ADMINISTRATION
Statement 11.—Statement of profit and loss on sale of acquired properties, Mutual Mortgage Insurance Fund, through Dec. 31, 1948—Continued
Item Section 203 (4,069 properties) Section 207 (1 property) Total Title II (4,070 properties)
Net profit (or loss —) before distribution of liquidation profits Less distribution of liquidation profits: Certificates of claim • Increment on certificates of claim Refunds to mortgagors Loss to Mutual Mortgage Insurance Fund Average loss to Mutual Mortgage Insurance Fund -1,792, 509 394,316 29,785 161,191 32, 787 31, 532 1,255 -1,759, 722 425,848 31,040 161,191
2,377, 801 — 2,377,801
584
1 Analysis of terms of sales:
Terms of sales Number of properties N umber of notes Cash Mortgage notes Sales price
Properties sold for all cash Properties sold for cash and notes (or contracts for deed)__. Properties sold for notes only Total .. 713 3,340 17 3,330 17 $4, 470, 860 1,858,433 $13, 419, 666 60, 977 $4,470,860 15, 278,099 60,977
4,070 3,347 6, 329, 293 13,480, 643 19,809,936
On December 31, 1948, two properties insured under the Mutual Mortgage Insurance Fund were held by this Administration. The cost of these properties was:
Mutual Mortgage Insurance Fund, statement of properties on hand at Dec. 31, 1948 {2 properties)
Expenses:
Debentures and cash adjustments________________________________$7, 777
Interest on debentures_________________________________________ 43
Total cost of properties on hand___________________________________ 7, 820
Certificates of Claim and Refunds to Mortgagors
Section 204(f) of the act provides that if the net amount realized from any property acquired by the FHA under the terms of insurance, after deducting all expenses incurred in handling, dealing with, and disposing of such property, exceeds the face value of debentures issued and the cash paid in exchange for such property plus all interest paid on such debentures, such excess shall be applied to the certificate of claim issued to the mortgagee, and any excess remaining after paying the certificate of claim and increment thereon shall be refunded to the mortgagor.
Certificates of claim issued in connection with the 4,069 Section 203 properties which had been acquired and sold through 1948 totaled $1,657,927. The net proceeds of sale in 1,518 cases had been sufficient to provide an excess for the full or partial payment of certificates of
831481—49----19 273
HOUSING AND HOME FINANCE AGENCY
claim after deducting all expenses incurred by the Federal Housing Administration in handling, dealing with, and disposing of such properties and the amount of the debentures plus interest thereon. The amount paid or to be paid on these certificates of claim totaled $394,316 (approximately 24 percent), while certificates of claim totaling $1,263,611 (approximately 76 percent), had been or will be canceled.
In addition there were excess proceeds on approximately 15 percent (or 620) of the 4,069 sold properties amounting to $161,191 for refund to mortgagors. The refund to mortgagors on these 620 cases averaged $260.
Mutual Mortgage P anticipation Payments
In carrying out the mutual provisions of Title II the Administration had established through 1948 a total of 264 group accounts, of which 144 had credit balances for distribution, and 120 had deficit balances. The 144 group accounts with credit balances represented 8 from which participation payments at the time of termination of the group had been made, 11 from which payments will be made, and 125 from which participation shares are being currently disbursed to mortgagors who pay their mortgages in full prior to maturity.
Of the 120 deficit-balance groups at December 31, 1948, 56 had been terminated with deficits totaling $92,806, and these deficits had been charged against the General Reinsurance Account. The income of the remaining 64 groups had not yet been sufficient to offset the expenses and reserves for losses.
The credit balances of the 8 group accounts which had matured and from which participation payments had been made amounted to $137,318, and these balances were shared by 2,560 mortgagors. The payments ranged from $2.12 to $48.22 per $1,000 of original face amount of mortgage. The credit balances of the 11 groups from which participation payments will be made amounted to $147,655 on December 31, 1948, and will be shared by approximately 1,652 mortgagors.
The first participation payments in connection with insured loans prepaid in full were made as of January 1, 1944, and during the five years following that date total payments of $13,590,041 were made or accrued on 182,989 insured loans.
The credit balances of the 125 groups, from which participation payments are being made as insured loans are paid in full, amounted to $44,596,366 on December 31, 1948. On that date there were still in force in these group accounts approximately 373,381 insured mortgages on which the original face amount had been $1,661,225,968.
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FEDERAL HOUSING ADMINISTRATION
Title II: Housing Insurance Fund
The insurance risks on rental and group housing insured under Sections 207 and 210 after February 3,1938 are liabilities of the Housing Insurance Fund which was established by the amendment to the National Housing Act approved on that date. Appraisal fees, insurance premiums, interest on investments, and income from projects acquired under the terms of insurance are deposited with the Treasurer of the United States to the credit of the Housing Insurance Fund. Foreclosure losses and general operating expenses of the Federal Housing Administration under Sections 207 and 210 since February 3,1938, are charged against the fund.
This is not a mutual insurance fund in the sense that any portion of the net income from operations will be shared by mortgagors in the form of participation payments. Any increase in the fund resulting from operations is retained as a general reserve to meet possible insurance losses and future expenses of the fund. However, in accordance with Section 207 (h) of the act, the excess proceeds, if any, from the sale of an acquired project, after deducting all costs incident to the acquisition, handling, and final disposition of such project, are applied to the mortgagee’s certificate of claim and increment thereon, and any balance is credited to the Housing Insurance Fund. Prior to the enactment of the amendments to the National Housing Act of August 10, 1948, any excess remaining after payment of the certificate of claim and increment thereon was refunded to the mortgagor.
Housing Insurance Fund Capital and Net Income
Assets of the Housing Insurance Fund as of December 31, 1948 totaled $8,830,280, against which there were outstanding liabilities of $4,121,611. Operating reserves for possible future insurance losses and expenses in the amount of $536,766 had been established out of surplus, and the capital of the fund amounted to $4,171,903, making total capital and operating reserves of $4,708,669. Included in the capital and operating reserves is the sum of $1,000,000 which was transferred in accordance with Section 207 (f) of the act from appraisal fees collected under the Mutual Mortgage Insurance Fund.
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HOUSING AND HOME FINANCE AGENCY
Investments
Section 207 (p) of the National Housing Act provides that excess moneys not needed for current operations under the Housing Insurance Fund shall be deposited with the Treasurer of the United States to the credit of the Housing Insurance Fund or invested in bonds or other obligations of, or in bonds or other obligations guaranteed as to principal and interest by, the United States, or with the approval of the Secretary of the Treasury used for the purchase of debentures issued under Section 207 and Section 204. During 1948, upon the request of the FHA, the Treasury redeemed at par $2,000,000 of 2-percent special United States Treasury notes and the proceeds were used to redeem, by call, $2,000,000 of series D 2%-percent debentures. On December 31, 1948, the fund held United States Treasury bonds and notes in the amount of $2,438,322, as follows:
Investments of the Housing Insurance Fund, Dec. 31, 19J/8
Series Interest rate (percent) Purchase price Par value Book value (amortized)
1955-60.... 27/S 2J4 $948, 783. 28 1,500,000.00 $930, 750.00 1,500,000.00 $938,322.43 1,500,000.00
1962-67. .
Average annual yield
2.60 2,448,783. 28 2,430,750.00 2,438,322. 43
Property Acquired under the Terms of Insurance
No additional rental housing projects were acquired by the FHA Commissioner under the terms of insurance in 1948. Through 1948, a cumulative total of 16 rental housing projects and one mortgage note insured under the Housing Insurance Fund had been acquired, in exchange for which debentures and cash adjustments had been issued in the amount of $14,661,895. The 16 projects and the mortgage note had been sold at an estimated loss to the Housing Insurance Fund of $47,795.
In addition to the rental housing projects acquired under the Housing Insurance Fund, one Section 207 project, insured under the Mutual Mortgage Insurance Fund, had been acquired and sold at no loss to that fund.
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FEDERAL HOUSING ADMINISTRATION
Statement 14.—Statement of profit and loss on sale of acquired projects, Housing Insurance Fund, through Dec. 31, 191,8
Sections (1 mortgage note) 207-210 (16 projects) Total Housing Insurance Fund (16 projects and 1 mortgage note)
Proceeds of sales:1 Sales price (or proceeds of mortgage note) _ Less commissions, $2,989,981 $12,109,904 4,539 $15,099,885 4,539
Net proceeds of sales Income: Rental and other income (net)
2,989,981 12,105,365 15,095,346
1,791,364 1,662,085 1,791,364 2,090,978
Mortgage note income.- . __ 428,893
Total income ... _
428,893 3,453,449 3,882,342
Total proceeds of sold properties Expenses: Debentures and cash adjustments Interest on debentures Additions and improvements
3,418,874 15,558,814 18,977,688
2,930,182 300,201 11,731,713 2,082,783 172,566 39,094 474,543 872,588 15, 688 14,661,895 2,382, 984 172, 566 39,094 474,553 872, 588 18,179
Equipment __ . _
Taxes, hazard insurance, and other expense Repairs, maintenance, and operation 10
Settlement expense,. ... 2,491
Total expenses _
3,232,884 15,388,975 18,621,859
Net profit before distribution of liquidation profits Less distribution of liquidation profits: Certificates of claim .
185, 990 15,728 1,789 168,473 169,839 179,622 15,077 22,935 355,829 195,350 16,866 191,408
Increment on certificates of claim Refunds to mortgagors Loss to'Housing Insurance Fund . _ __
47,795 47,795
Average loss to Housing Insurance Fund
2,811
1 Analysis of terms of sales:
Terms of sales Number Cash Mortgage notes Sales price
Projects sold for cash Projects sold for cash and mortgage notes (or contracts for deed) Projects sold for mortgage notes or contracts for deed only 2 13 2 $3,062,401 228,789 $10,149,283 1,659,412 $3,062,401 10,378,072 1,659,412
Total 17 3,291,190 11,808,695 15,099,885
Certificates of Claim and Refunds to Mortgagors
Certificates of claim issued in connection with the 16 projects and one mortgage note which had been sold under the* Housing Insurance Fund through 1948 totaled $290,400- Net proceeds of sale had been sufficient to provide an excess for the full or partial payment of 14 certificates of claim, and the remaining 3 certificates of claim had been or will be canceled in full. The amount paid or to be paid on these certificates totaled $195,350, and the amount canceled, $95,050. In addition there were excess proceeds on 6 projects for refund to mortgagors in the amount of $191,408,
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HOUSING AND HOME FINANCE AGENCY
Statement 12.—Comparative statement of financial condition, Housing Insurance Fund, as of Dec. 31, 191/7 and Dec. 31, 191/8
Dec. 31, 1947 Dec. 31, 1948 Increase or decrease —
ASSETS Cash with U. S. Treasury Investments: U. S. Government securities (amortized) Other securities (stock in rental housing corporations) .. . $271, 910.16 $665, 587.33 $393,677.17
4, 439, 429. 95 7,050. 00 2,438,322.43 5, 850. 00 -2,001,107. 52 -1, 200.00
Total investments Loans receivable: Mortgage notes and contracts for deed Less reserve for losses Net loans receivable _ _
4,446, 479.95 2, 444,172. 43 -2,002,307. 52
5, 958,843.32 89, 383. 00 5. 783, 765. 81 86, 756.00 -175, 077. 51 -2,627. 00
5,869,460.32 5,697,009. 81 -172, 450. 51
Accrued assets: Interest on U. S. Government securities . Interest on mortgage notes and contracts for deed___ Total accrued assets .
11,649. 46 14, 604. 72 9,366. 83 14,143. 94 -2, 282.63 -460. 78
26, 254.18 23, 510. 77 -2, 743.41
Total assets ... _ _ _ .
10,614,104.61 8, 830, 280. 34 -1, 783, 824.27
LIABILITIES Accrued liabilities: Interest on debentures Trust and deposit liabilities: Excess proceeds of sale Deposits held for mortgagors and lessees Total trust and deposit liabilities Bonds, debentures, and notes payable: Debentures payable (issued)
81,652. 99 54,153. 01 -27,499.98
99, 654.16 36, 904. 91 106, 738. 02 22,319. 65 7, 083. 86 -14,585.26
136, 559.07 129,057. 67 -7, 501.40
5, 938, 400.00 3,938, 400.00 -2,000,000.00
Total liabilities ... _ __ ■_
6,156, 612.06 4,121,610. 68 -2,035,001.38
OPERATING RESERVES Reserves for contingent losses, expenses, and other charges .
284,194.13 536, 766.04 252, 571. 91
CAPITAL Paid-in surplus (allocations from U. S. Government) Earned surplus (deficit —)-.__
4,173, 298. 42 4,171, 903. 62 -1, 394.80
Total capital. _
4,173, 298. 42 4,171,903. 62 -1,394.80
Total liabilities, operating reserves, and capital _ _
10, 614,104.61 8,830, 280.34 -1,783, 824. 27
Net income of the Housing Insurance Fund during 1948, before adjustment of valuation and operating reserves, amounted to $249,945.
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FEDERAL HOUSING ADMINISTRATION
Statement 13.—Income and expenses, Housing Insurance Fund, through Dec. 31, 1947 and Dec. 31, 1948
Feb. 3, 1938 to Dec. 31,1947 Jan.1,1948 to Dec. 31,1948 Feb. 3,1938 to Dec. 31,1948
Income: Interest and dividends: Interest on U. S. Government securities Dividends on rental housing stock $489,129.33 968.32 $83,151.52 122.38 $572, 280. 85 1,090. 70
490, 097.65 83, 273.90 573,371.55
Insurance premiums and fees: Premiums Fees...- 4,980,397.03 529,184.90 207,170.70 24, 720.00 5,187, 567. 73 553,904. 90
5,509, 581. 93 231,890.70 5, 741,472.63
Other income: Profit on sale of investments Miscellaneous income. 15,942. 63 18,179. 00 — 15,942.63 18,179. 00
34,121.63 — 34,121.63
Total income _ 6,033,801.21 315,164. 60 6,348,965. 81
Expenses: Interest expense: Interest on debentures 75, 569. 45 -37,889. 51 37,679.94
Administrative expenses: Operating costs (including adjustments for prior years) 6, 537,620.86 101,928.22 6,639, 549. 08
Other expenses: Miscellaneous expenses 420.00 — 420.00
Losses and charge-offs: Loss on sale of acquired properties 46, 613. 77 1,180.98 47, 794. 75
Total expenses 6,660, 224. 08 65, 219. 69 6, 725,443. 77
Net income (or loss —) before adjustment of valuation and operating reserves -626,422.87 249,944. 91 -376,477.96
Increase (—) or decrease (+) in valuation and operating reserves: Reserve for loss on loans receivable Reserves for contingent losses, expenses, and other charges -89,383.00 -284,194.13 +2,627. 00 -252, 571. 91 -86, 756.00 -536, 766.04
Net adjustment of valuation and operating reserves -373, 577.13 -249, 944.91 -623, 522.01
Net income (or loss —) -1,000,000. 00 -1,000,000.00
ANALYSIS OF EARNED SURPLUS (OR DEFICIT -)
Balance at beginning of period Net income (or loss —) for the period -$1,000, 000.00 -$1,000, 000.00
Total Transfer from Mutual Mortgage Insurance Fund -1,000, 000. 00 1, 000,000. 00 — -1,000,000. 00 1,000, 000. 00
Balance at end of period -
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HOUSING AND HOME FINANCE AGENCY
The certificate of claim issued in connection with the only rental housing project acquired under the Mutual Mortgage Insurance Fund amounted to $31,532. This certificate of claim had been paid in full, with increment thereon in the amount of $1,255.
Title VI: War Housing Insurance Fund
The insurance risks on privately financed emergency housing loans insured under Title VI are liabilities of the War Housing Insurance Fund, established by the amendment to the National Housing Act of March 28, 1941. Section 603 of Title VI authorizes the insurance of small-home mortgages (one- to four-family) ; Section 608 the insurance of naortgages on rental and group housing; Section 609 the insurance of loans to finance the manufacture of housing; and Section 610 the insurance under Sections 603 and 608 of any mortgage executed in connection with the sale by the Government of permanent war housing acquired or constructed with public funds under the Lanham Act and certain related war acts. Section 611, added to Title VI by an amendment approved August 10, 1948, authorizes the insurance of mortgages, including construction advances, on projects of 25 or more single-family dwellings.
The M ar Housing Insurance Fund was originally allocated the sum of $5,000,000 by the Federal Government. It has been credited with all income received in connection with insurance granted under Title VI, and has been charged with all expenses and losses relating to such insurance.
This is not a mutual fund, and any balance remaining in the fund after all Title VI expenses and insurance claims have been met will revert to the General Fund of the Treasury.
Limitation on Title VI Insurance Liability
As of December 31. 1948, Section 603(a) of the National Housing Act provided that the aggregate amount of principal obligations of mortgages insured under Title VI shall not exceed $5,750,000,000, except that with the approval of the President such aggregate amount may be increased to $6,150,000,000. This limitation applies to insurance granted on mortgages insured under Section 603 for small homes; under Section 608 for rental housing projects; under Section 609 on loans to finance the manufacture of housing; and under Section 611 for group housing.
In addition to the above authorization, the act provides that the aggregate amount of principal obligations of all mortgages insured pursuant to Section 610 (mortgages insured under Section 603 or 608 in connection with the sale of Government housing acquired or con
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FEDERAL HOUSING ADMINISTRATION
structed with public funds under the Lanham and certain related war acts) shall not exceed $750,000,000.
The status of the Title VI insurance limitation at December 31,1948 was calculated as follows:
Status of Title VI insurance limitation
Secs. 603, 608, 609, and 611 Sec. 610
Aggregate principal amount of obligations which may be insured under limitation as of Dec. 31,1948. _ . .. ... $5, 750,000,000 $750,000,000
Amount chargeable against insurance limitation to Dec. 31,1948: Mortgages insured _
4,435,395, 776 195, 238, 548 6, 259,950
Less: Mortgages reinsured . _
Net mortgages insured .
4, 240,157, 228 6,259,950
Commitments for insurance. . ._ ... . .
858, 575, 211 547,680 2,096, 204
Less: Commitments for reinsurance ...
Net commitments. ... _
858,027, 531 2,096,204
Total chargeable against limitation ...
5,098,184, 759 8,356,154
Unused insurance limitation . _. ... ...
651,815,241 741,643, 846
War Housing Insurance Fund Capital
Assets of the War Housing Insurance Fund as of December 31,1948, totaled $45,699,064, against which there were outstanding liabilities of $4,359,089. Operating reserves for possible future insurance losses and expenses had been established out of surplus in the amount of $36,339,975, and the fund had net capital of $5,000,000, making total capital and operating reserves of $41,339,975.
Statement 15.—Comparative statement of financial condition, War Housing Insurance Fund, as of Dec. 31,1947 and Dec. 13,1948
Dec. 31,1947 Dec. 31, 1948 Increase or decrease —
ASSETS Cash with U. S. Treasury Investments: U.S. Government securities (amortized) Other securities (stock in rental housing corporations) Total investments Loans receivable: Mortgage notes and contracts for deed Less reserve for losses Net loans receivable Accounts and notes receivable Accrued assets: Interest on U. S. Government securities Interest on mortgage notes and contracts for deed... Total accrued assets $9, 519,170.11 $12,211,814. 52 $2, 692, 644. 41
13, 500,000.00 43,155.00 17,045,851.34 104, 455.00 3, 545, 851.34 61, 300.00
13, 543,155.00 17,150, 306.34 3, 607,151.34
16,469,191.64 288, 211.00 14,045,467.82 245, 795.00 -2,423, 723.82 -42, 416.00
16,180,980. 64 13, 799, 672. 82 -2, 381,307. 82
25. 25 4,610.41 4, 585.16
82, 773.46 57,879. 95 45,207. 77 48, 511.74 -37, 565. 69 -9,368.21
140,653. 41 93, 719. 51 -46, 933.90
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HOUSING AND HOME FINANCE AGENCY
Statement 15.—Comparative statement-of financial condition, War Housing Insurance Fund, as of Dec. 31, 1947 and Dec. 31, 1948—Continued
Dec. 31, 1947 Dec. 31, 1948 Increase or decrease —
assets—C ontinued Acquired security or collateral: Real estate (at cost plus expenses to date) Less reserve for losses Net acquired security or collateral Deferred charges: Prepaid expenses Total assets _ _ _ $5,808,620.61 305,369.79 $2,938, 503. 20 502,220.00 -$2,870,117.41 196, 850.21
5, 503,250. 82 2,436, 283. 20 -3,066,967.62
25, 754. 51 2, 656.87 -23,097.64
44, 912,989. 74 45,699, 063. 67 786,073.93
LIABILITIES Accounts payable: Bills payable to vendors and Government agencies _ _
80, 822.14 58, 516.67 -22,305.47
Accrued liabilities: Interest on debentures Trust and deposit liabilities: Excess proceeds of sale Deposits held for mortgagors and lessees Total trust and deposit liabilities Bonds, debentures, and notes payable: Debentures payable (issued) Debenture claims in process Total bonds, debentures, and notes payable Deferred and undistributed credits Total liabilities ± OPERATING RESERVES Reserves for contingent losses, expenses, and other charges . - - -
222,039. 90 43,190.12 -178,849.78
543, 583.41 240, 468.39 885,195.19 169,024. 92 . 341, 611.78 -71,443.47
784,051.80 1,054, 220.11 270,168.31
19, 572,300.00 39, 850.00 2, 721, 600.00 433,050.00 -16,850,700.00 393, 200.00
19, 612,150.00 3,154, 650.00 -16, 457, 500.00
83,343.04 48, 511.74 -34,831.30
20, 782,406.88 4,359,088. 64 -16,423, 318.24
19,130,582. 86 36,339, 975.03 17, 209, 392.17
CAPITAL Paid-in capital (allocations from U. S. Government) Earned surplus (deficit —)
5,000,000.00 5,000,000.00 —
Total capital - - -
5,000,000.00 5,000,000.00
Total liabilities, operating reserves, and capital. Contingent liability for certificates of claim on properties on hand ..
44, 912, 989. 74 45,699,063.67 786,073.93
157,377.19 76, 783. 76 -80, 593.43
Income and Expenses
During the year 1948 the fund earned $27,165,953 and had expenses of $9,802,127, leaving $17,363,826 net income before adjustment of valuation and operating reserves. After increasing the valuation reserves by $154,434, the net income for the year, amounting to $17,-209,392, was added to the operating reserves for contingent losses, expenses, and other charges.
The cumulative income of the War Housing Insurance Fund from its establishment March 28, 1941, to December 31, 1948, amounted to $86,747,449 while cumulative expenses were $49,659,459, leaving $37,-087,990 net income before adjustment of reserves. Valuation reserves
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FEDERAL HOUSING ADMINISTRATION
were increased by $748,015, and the remainder, $36,339,975, was reserved for contingent losses, expenses, and other charges.
Statement 16.—Income and expenses. War Housing Insurance Fund, through Dec. 31, 191)1 and Dec. 31, 191)8
Mar. 28, 1941 to Dec. 31,1947 Jan. 1, 1948 to Dec. 31,1948 Mar. 28, 1941 to Dec. 31,1948
Income: Interest and dividends: Interest on U. S. Government securities _ Interest, other „ Dividends on rental housing stock Insurance premiums and fees: Premiums Fees __ _ $942, 317. 57 -209, 924. 53 336. 75 $378,272.91 318,463.46 153. 75 $1,320, 590.48 108, 538.93 490. 50
732, 729. 79 696, 890.12 1, 429, 619. 91
40,049,097. 54 18, 638,613.43 18,230,866.07 8,238,196.18 58, 279, 963.61 26, 876, 809.61
Other income: Profit on sale of investments Miscellaneous income Total income , Expenses: Administrative expenses: Operating costs (including adjustments for prior years) Losses and charge-offs: Loss on sale of acquired properties Total expenses Net income before adjustment of valuation and operating reserves Increase (—) or decrease (+) in valuation and operating reserves: Reserve for loss on loans receivable Reserve for loss on acquired security or col- lateral ......
58,687, 710.97 26, 469,062. 25 85,156, 773. 22
152,953.13 8,101.80 .92 152,953.13 8,102. 72
161,054.93 .92 161,055.85
59, 581,495.69 27,165, 953.29 86, 747,448.98
38,551,051.44 9,897,167. 90 48,448, 219. 34
1,306,280.60 -95,040.99 1,211,239. 61
39, 857,332.04 9, 802,126. 91 49, 659,458. 95
19, 724,163.65 17, 363, 826.38 37,087, 990.03
-288,211.00 -305,369.79 -19,130, 582.86 +42, 416.00 -196, 850.21 -17,209,392.17 -245, 795.00 -502, 220.00 -36,339, 975.03
Reserves for contingent losses, expenses, and other charges Net adjustment of valuation and operating reserves Net income (or loss —)
-19, 724,163. 65 -17,363, 826.38 -37,087, 990.03
Analysis of Earned Surplus (or Deficit —)
Balance at beginning of period_______
Net income (or loss —) for the period
Balance at end of period_______
Investments
Section 605(a) of Title VI contains a provision similar to that under Title II with respect to the investment of moneys not needed for current operations by the purchase of United States Government securities or the retirement of debentures.
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HOUSING AND HOME FINANCE AGENCY
During 1948 excess funds not needed for current operations were used to retire series H 2%-percent War Housing Insurance Fund debentures in the amount of $17,045,950 of which $17,022,050 were called for redemption and $23,900 were purchased from RFC.
In addition, $5,500,000 of special 2-percent United States Treasury notes were redeemed by the Treasury upon the request of the FHA and $9,000,000 principal amount of 2i/2-percent United States bonds, series 1967-72, were purchased, a net increase in holdings of $3,500,000 during the year. On December 31, 1948, the fund held United States securities in the total amount of $17,045,851, as follows:
Investments of the War Housing Insurance Fund, December 31, 1948
Series Interest rate (percent) Purchase price Par value Book value (amortized)
1952-54 .. .. 2H 2^ 2 J.4 $400,000 4,000,000 12,646,875 $400,000 4. 000,000 12,600,000 $400,000 4,000,000 12, 645,851
1966-71
1967-72
Average annual yield
2.48 17,046,875 17,000,000 17,045,851
Properties Acquired under the Terms of Insurance
During the year the Federal Housing Administration acquired title, under the terms of insurance, to 116 small homes (187 units) insured under Section 603 and sold 732 (804 units). Through December 31, 1948, a total of 6,232 Section 603 properties (8,768 units) had been acquired at a cost of $32,060,381 (debentures and cash adjustments).
Through December 31,1948, 5,807 properties (8,278 units) had been sold at prices which left a net charge against the fund of $1,211,999, or an average of $209 per case. There remained on hand for future disposition 425 properties having 490 living units.
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FEDERAL HOUSING ADMINISTRATION
Statement 17.—Statement of profit and loss on sale of acquired properties, War Housing Insurance Fund, through Dec. 31, 191,8
Sec. 603 (5,807 properties) See. 608 (1 project and 1 mortgage note) Total, Title VI (5,809 properties)
Proceeds of sales:1 Sales price (or proceeds of mortgage note) Less commissions and other selling expenses $31, 59-1, 575 1,081,382 $1,338,624 $32, 933,199 1,081,382
Net proceeds of sales 30, 513,193 1,338, 624 31,851,817
Income: Rebates, deficiency judgments, etc Rental and other (net) Mortgage note income 49, 891 3,2x5,688 1,835, 629 49,891 3, 215, 688 1,835, 629
Total income - 5,101, 208 5,101, 208
Total proceeds of sold properties 35,614,401 1,338,624 36, 953, 025
Expenses: Debentures and cash adjustments Interest on debentures _ Additions and improvements Taxes, water rent, hazard insurance, and other expenses Repairs, maintenance, and operation Furniture and equipment Settlement expense 30,088,142 2, 718,120 99, 286 ♦ 918,667 1,936, 429 90,543 1, 296, 210 16,899 2 5,184 31,384,352 2,735,319 99, 286 918, 669 1.936, 429 90,543 5,184
Total expenses 35.851, 187 1,318, 295 37,169, 782
Net profit (or loss —) before distribution of liquidation profits Less distribution of liquidation profits: Certificates of claim _ Increment on certificates of claim Refunds to mortgagors -237,086 312,859 25,112 606,942 20,329 19.389 181 -216, 757 362, 248 25, 293 606,942
Loss to War Housing Insurance Fund 1,211,999 2 -759 1,211,240
Average loss to War Housing Insurance Fund,. 209
1 Analysis of terms of sales:
Terms of sales Number of properties Number of notes Cash Mortgage notes Sales price
Properties sold for all cash... Properties sold for cash and notes (or contracts for deed) Properties sold for notes only Total 1, 675 4,008 126 2,636 1 $9, 403, 291 1,473,388 $20,619, 525 1, 436, 995 $9,403, 291 22,092, 913 1, 436,995
5,809 2,637 10, 876, 679 22, 056, 520 32, 933,199
2 Excess remaining to credit of War Housing Insurance Fund in accordance with Sec. 608 (d).
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HOUSING AND HOME FINANCE AGENCY
Statement 18.—Statement of properties on hand, War Housing Insurance Fund, as of Dec. 31, 1948
Sec. 603, 425 properties, 490 units Sec. 608, 1 property, 220 units Total, 426 properties, 710 units
Expenses: Debentures and. cash adjustments (issued, authorized, and claims in audit) Interest on debentures Taxes and assessments Water rent Hazard insurance ; Additions and improvements Maintenance and operating expense Repairs Operating equipment Furniture Undistributed expense Other expense $1,972,239 173, 700 127,402 2 31,221 1,695 178,321 55,444 3,052 6,525 804 882 $897, 592 69,206 44,476 7,287 119,481 1,938 14,768 $2, 869,831 242,906 171, 878 2 38, 508 1,695 297,802 55,444 4,990 6,525 804 15,650
Total expense Income: Rental and other, net 2, 551,287 492,789 1,154,748 274, 743 3,706,035 767,532
Net cost of properties on hand 2,058,498 880,005 2,938,503
The turnover of Section 603 properties acquired and sold, by calendar year, is given below:
Turnover of properties acquired under Sec. 603 of Title VI through Dec. 31, 1948
Properties acquired Properties sold, by years Properties on hand Dec. 31, 1948
Year Number 1943 1944 1945 1946 1947 1948
1943 498 2, 542 2,062 998 16 116 29 220 36 110 685 187 139 1,178 1,050 431
1944 386 317 302 5 140 350 210 9 23 117 158 55 2 93
1945
1946 .. ..
1947
1948
Total
6,232 29 256 982 2,798 1,010 732 425
No additional rental housing projects were acquired during 1948. Previously title had been transferred to the FHA Commissioner on two projects and one mortgage note insured under Section 608. One of these projects and the mortgage note had been settled with no loss to the fund, and the remaining project was operating under FHA supervision.
Certificates of Claim and Refunds to Mortgagors
Section 604(f) of the act provides that if the net amount realized from any property conveyed to the Commissioner under Section 603, after deducting all expenses incurred in handling, dealing with, and disposing of such property, exceeds the face value of the debentures issued and the cash paid in exchange for such property plus all interest paid on such debentures, such excess shall be applied to the certificate
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FEDERAL HOUSING ADMINISTRATION
of claim issued to the mortgagee and any excess remaining after paying the certificate of claim and increment thereon shall be refunded to the mortgagor.
Certificates of claim in the total amount of $749,636 had been issued through 1948 in connection with the 5,807 small-home properties which had been acquired and subsequently sold. The proceeds of sale were sufficient to provide for the payment in full or in part of 3,082 certificates in the amount of $342,859, or approximately 46 percent. Certificates of claim canceled or to be canceled amounted to $406,777, or approximately 54 percent. In addition, the proceeds of sale were sufficient to pay refunds of $606,942 to 1,954 mortgagors, or an average of $311 per case.
With respect to the excess proceeds, if any, from the sale of an acquired project insured under Section 608, the act provides that any amount remaining after the payment of the certificate of claim shall be credited to the War Housing Insurance Fund.
Certificates of claim totaling $19,578 had been issued in connection with the two Section 608 acquisitions which had been disposed of by December 31, 1948. Of this amount $19,389 had been paid, and $189 canceled. Excess proceeds of $759 had been credited to the fund, as provided in the act.
Title VII: Housing Investment Insurance Fund
The Housing Investment Insurance Fund was created by Section 710 of the National Housing Act as amended August 10,1948 (Housing Act of 1948, Public Law 901, 80th Congress), which provides that this fund shall be used by the Administrator as a revolving fund for carrying out the rental housing yield insurance program authorized by Title VII and for administrative expenses in connection therewith.
Section 710 further provides that the Secretary of the Treasury shall make available to the Administrator such funds as the Administrator may deem necessary, but not to exceed $10,000,000, which amount was authorized to be appropriated out of any money in the Treasury not otherwise appropriated.
One million dollars has been allocated to the fund by the Secretary of the Treasury pursuant to the request of the Federal Housing Commissioner and the remaining $9,000,000 is being retained in the United States Treasury. Up to December 31,1948, no applications for insurance under Title VII had been submitted and consequently no income had been received.
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HOUSING AND HOME FINANCE AGENCY
Statement 19.—Comparative statement of financial condition, Housing Investment Insurance Fund, as of Dec. 31, 191/7 and Dec. 31, 191/8
Dec. 31, 1947 Dec. 31, 1948 Increase or decrease —
ASSETS Cash with U. S. Treasury $1, 000.000. 00 $1,0v0, 000.00
Total assets..-
1,000. 000.00 1,000. 000.00
CAPITAL Paid-in capital (allocation from U. S. Government) Total capital
_____ 1,000, 000.00 1.000,000. 00
1,000, 000. 00 1,000,000.00
Administrative Expense Account
Since the establishment of the Federal Housing Administration in 1934 a separate account, known as Salaries and Expenses, Federal Housing Administration, has been maintained to reflect the receipt and disbursement of all moneys allocated for administrative expenses. Until the income of the insurance funds was sufficient to cover administrative expenses, allocations were made to this account by the Reconstruction Finance Corporation, in accordance with provisions contained in the National Housing Act and in subsequent appropriation acts. Since July 1, 1937, a portion of the allocations and since July 1, 1940, all allocations to salaries and expenses have been macle from FHA insurance funds. The total capital of the salaries and expenses account as of December 31, 1948 amounted to $2,119,263.
Statement 20.—Comparative statement of financial condition, Administrative Expense Account, as of Dee. 31, 191/7 and Dec. 31, 191/8
Dec. 31, 1947 Dec. 31, 1948 Increase or decrease —
ASSETS Cash with U. S. Treasury Accounts and notes receivable Commodities, supplies, and materials: Supplies held for use. _ _ _ _ - _ _ _ . $5,087,185.34 $3, 735,177.10 -$1, 352, 008.24
72,120.04 55,387. 63 -16,732.41
100, 245. 67 84,017. 73 -16,227. 94
Land, structures, and equipment: Furniture and equipment Less reserve for depreciation ... Net furniture and equipment Total assets
1,417, 324.72 736, 691.67 1,587,168.19 820, 452. 73 169,843.47 83, 761.06
680, 633.05 766, 715. 46 86,082. 41
5, 940,184.10 4, 641,297.92 -1,298, 886.18
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Statement 20—Comparative statement of financial condition, Administrative Expense Account, as of Dec. 31, 191,7 and Dec. 31, 191,8—Continued
Dec. 31, 1917 Dec. 31, 1918 Increase or decrease —
LIABILITIES Accounts payable: Bills payable to vendors and Government agencies Trust and deposit liabilities: General fund receipts in process of deposit Employees’ payroll deductions for taxes, etc Unexpended advance from National Housing Agency J Total trust and deposit liabilities Total liabilities CAPITAL Earned surplus (deficit —) Total capital Total liabilities and capital $1, 434, 846. 54 $1,844, 996.01 $410,149. 47
2,063. 28 655,424. 58 42,692.43 1,692. 88 675,346.02 -370.40 19, 921.44 -42, 692.43
700,180. 29 677,038. 90 -23,141.39
2.135,026.83 2, 522,034. 91 387,008.08
3,805,157. 27 2,119, 263.01 -1, 685, 894. 26
3,805,157. 27 2,119,263.01 -1, 685,894. 26
5,9-10,184.10 4,641,297.92 -1, 298, 886.18
Statement 21.—Income and expenses, Administrative Expense Account, through Dec. 31,191,1 and Dec. 31, 191,8
June 27, 1934 to Dec. 31, 1947 Jan. 1, 1948 to Dec. 31, 1948 June 27. 1934 to Dec. 31, 1918
Expenses: Administrative expenses: Operating costs (including adjustments for prior years) -$4,812, 516.56 $1, 588, 504.25 —$3, 224, 012.31
Other expenses: Depreciation on furniture and equipment 1,037,137.68 96,475.75 1,133,613.43
Losses and charge-offs: Loss (or profit—) on equipment .. -29, 778.39 914.26 -28, 864.13
Total expenses -3,805,157.27 1, 685,894. 26 -2,119,263.01
Net income (or loss—) ... 3,805,157. 27 -1,685,894. 26 2,119, 263.01
Analysis of Earned Surplus (or Deficit-)
Balance at beginning of period $3,805,157.27 -1,685,894.26
Net income (or loss—) for the period Balance at end of period $3,805,157.27 $2,119,263.01
3, 805,157. 27 2,119,263.01 2,119, 263.01
8314S1—49---20
289
PART IV
OF THE
Second Annual Report
HOUSING AND HOME FINANCE AGENCY
Covering the Activities of the
PUBLIC HOUSING ADMINISTRATION
LETTER OF TRANSMITTAL
Raymond M. Foley,
Administrator, Housing and Home Finance Agency.
Dear Mr. Foley: I am submitting herewith the annual report of the Public Housing Administration for the year ending December 31, 1948.
Sincerely yours,
John Taylor Egan, Commissioner.
Chapter I
1948: SUMMARY OF OPERATIONS
The Public Housing Administration had responsibility in 1948 for six public housing programs in which the Federal Government had a direct financial interest either as the owner of the housing, as a maker of direct loans to public agencies for housing purposes, or as an agency entitled to receive net operating revenues.
At the start of the year, these six programs together amounted to 915,938 dwelling units in 5,014 housing projects.
Problems connected with the operation of this large stock of housing were the main concern of the Administration throughout the year. A highly significant development during 1948, however, was a marked reduction in the number of housing units in PHA programs. One program, that of the Defense Homes Corporation, was concluded during the year. Other programs were reduced through disposition actions. The net effect of disposal activities was to remove nearly 200,000 housing units from the PHA work load during the year.
At the year’s end, the five remaining programs embraced 710,156 units in 3,517 projects.
Purposes of the programs
Although all PHA programs are characterized by public ownership or operation of the housing involved, they vary in scope and purpose. All but one—the United States Housing Act program— are due to be liquidated by eventual disposal of holdings. This work was advanced during 1948. The United States Housing Act program, on the other hand, is a permanent program and the major peacetime responsibility of PHA. Its purpose is to help local housing authorities to clear slums and to build and operate low-rent housing for low-income families who could not otherwise obtain decent, safe, and sanitary housing.
Of the short-term programs, three owe their origin to the nation’s urgent wartime housing needs. The public war housing program, developed under the Lanham Act, is the major program in this group. Under it, both permanent and temporary housing were built by the Federal Government to house war workers. Since the war, veterans have been given preference in this housing. The permanent war
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housing must be disposed of by sale to private purchasers or otherwise and the temporary war housing be removed. The Defense Homes Corporation program, initiated by the Federal Loan Administrator and later transferred to PHA’s predecessor agency for administration and liquidation, consisted of permanent housing built in certain congested areas during the defense emergency. All DHC properties have been disposed of and the corporation’s affairs are now in the hands of the Reconstruction Finance Corporation. The third program in the wartime group is the homes conversion program, inaugurated by the Home Owners’ Loan Corporation and transferred to PHA’s predecessor in the consolidation of Government housing agencies early in the war. The housing in this program is privately owned but leased to the Government which converted the properties into accommodations for war workers.
Another program—the veterans’ reuse housing program—was created immediately after the war to provide temporary relief to veterans who were unable to find housing because of the postwar housing shortage. This purpose was achieved primarily by reusing surplus Government-owned temporary structures by relocating them and converting them into veterans’ dwellings.
One PHA program dates back to the economic emergency of the 1930’s. This is the subsistence homesteads and Greentowns program, formerly administered by the Farm Security Administration and later transferred to PHA’s predecessor. Virtually all of the homesteads have been disposed of and plans are proceeding for sale of the three Greentown communities.
Integrated administration
As may be seen, each of the programs was created in response to a particular pressing problem. Although the programs are diverse in many respects, they are administered by PHA through an integrated organizational structure based on functions common to all, principally management and disposition. This organization avoids the duplication which would result from a series of parallel organizations devoted exclusively to one program and results in substantial economies.
The organization became more tightly knit during 1948 as the result of an internal reorganization which centralized in PHA’s central office in Washington many of the functions and duties formerly performed by regional offices. The regional offices themselves were abolished. Field work necessary to the programs is now handled by ten small field offices located in New York, Philadelphia, Chicago, Detroit, Richmond, Atlanta, Fort Worth, San Francisco, Seattle, and Los Angeles.
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Operating earnings are adequate to meet administrative expenses for all programs. The only appropriated funds required annually are those needed to make the annual contributions to the operation of the low-rent housing projects under the United States Housing Act.
The role of local agencies
PHA follows the policy of carrying out its operations wherever possible through local housing authorities. These are local public bodies, created by the local governing body of a community under State enabling statutes.
Local housing authorities were originally established to participate in the United States Housing Act program. During the war, however, they proved to be useful instrumentalities for meeting emergency housing needs on the local level. In the Lanham Act program, for instance, many local authorities undertook responsibility for managing the Federally owned war housing projects under lease arrangements with PHA. Local authorities also sponsored many of the veterans’ reuse housing projects.
Only five States—Iowa, Kansas, Oklahoma, Utah, and Wyoming— have no legislation of any kind permitting establishment of local housing authorities. Twto other States, Maine and South Dakota, have laws authorizing local authorities to engage in war housing programs only. The 41 other States and the District of Columbia, Alaska, Hawaii, Puerto Rico, and the Virgin Islands have statutes authorizing local authorities to participate in the low-rent housing program. These States include about 93 percent of the population of the continental United States.
In total, about three-fifths of the housing in all PHA programs is managed by local housing authorities. Ninety-nine percent of the low-rent housing, 62 percent of the war housing and 25 percent of the veterans’ reuse housing is managed by the local housing authorities.
At the end of March 1948, there were 482 local housing authorities assisting in operation of PHA programs. They served a total of 589 urban localities. Authorities were active in 82 percent of the cities with a population of 100,000 or more. More than three-fourths of the localities served, however, had populations of less than 50,000.
Results of operations
There are three major phases involved in the housing programs administered by PHA. These are the development phase, which includes the planning and construction of the housing, the management phase when it is occupied and in use, and the disposition phase in the programs where this is applicable.-
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Development activities were not extensive during 1948. No new authority was granted during the year for developing new permanent housing. The only development actions were concerned with completion of the veterans’ reuse housing program and development work connected with the five low-rent housing projects which were in preconstruction or construction stages during the year.
Management activity, on the other hand, continued at a high level in all programs. Although much of the housing was managed by local housing authorities and other local groups, PHA exercised management supervision to assure that its standards were complied with and that the purposes of the various programs were carried out. In projects managed directly by PHA, the Administration was concerned with the details of operations. Direct management responsibilities were incurred in connection with 117,676 active units in PHA programs at the end of the year and indirect management responsibilities affected 550,988 active units.
For all programs, veterans and servicemen occupants totalled 392,-550 at the end of the year, representing about 61 percent of all occupied units. The proportion was highest, of course, in veterans’ reuse housing, which showed a veteran and serviceman occupancy of 98 percent. In war housing, veterans and servicemen were 61 percent of all occupants and in low-rent housing they were 35 percent.
The extent of disposition activity during the year is reflected by the net reduction in 1948 of about 200,000 units in all programs.
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Chapter II
UNITED STATES HOUSING ACT PROGRAM
The United States Housing Act program remained relatively stable in size through 1948. With the authorizations of the 1937 statute to provide Federal aid to local low-rent housing long since committed, it was impossible for PHA to enter into any new assistance contracts. The sole development activity during the year was in connection with five projects which had been programmed before the war but not constructed. Reactivation of three of these projects was made possible by the use of local supplementary funds which were required in excess of the Federal commitment. Construction of 153 other deferred projects continued to be blocked by the high level of construction costs which prevented building within the cost limits set in the Act. Except for this small amount of development work, the year’s activities were concentrated on management aspects of the continuing program of 190,882 active units in 632 projects.
The active USHA program may be classed in three categories, according to the origin of the projects. Those developed by local housing authorities under the original United States Housing Act of 1937 are known as Public Law 412 projects. Those built under the wartime legislation authorizing use of low-rent housing funds for projects used to house war workers during the emergency are known as Public Law 671 projects. All but eight of these projects consisting of 1,854 units had been converted to low-rent use by the close of 1948. The third group consists of projects built by the Public Works Administration before enactment of the United States Housing Act and now administered as part of the USHA program. The size of these component parts of the program is shown in the table below.
Active United States Housing Act program, as of Dec. 31,191/8
Projects
Units
Public Law 412
Public Law 671
PWA__________
>387
199
50
1 120.953
51. 250
21,604
i Includes 1,502 units in 4 projects under construction and 1,423 undeveloped units in 8 rural projects.
The inactive portion of the program consists of 153 projects of 20,921 units which are classed as deferred.
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Extent of Federal aid
Under the United States Housing Act, the PHA is authorized to provide financial assistance to communities to provide housing for “families * * * in the lowest income group * * * who cannot afford to pay enough to cause private enterprise * * * to build an adequate supply of decent, safe, and sanitary dwellings for their use.” This assistance takes two forms. One is loans to local housing authorities to cover up to 90 percent of the capital cost of developing projects. The other is an annual contribution, or subsidy, to help cover the difference between operating income and the operating and amortization costs. The purpose of these yearly payments is to enable the authorities to keep rents within the means of low income families.
Excluding the PWA projects which were financed directly by the Federal Government and all other projects not yet permanently financed, the PHA has entered into loan and annual contribution contracts for 315 permanently financed PL 412 projects with a total development cost of $464,241,278. While loan commitments were made in maximum amounts reflecting 90 percent of development costs, the Federal Government actually has currently outstanding loans totaling only $284,185,000, or about 61 percent of total development costs. This was made possible by the ability of local housing authorities to finance more than the required 10 percent from other sources at more favorable terms than offered by Federal loans. In fact, 100-percent private financing has been obtained for six projects since the war. The low interest rates on private loans in turn reduce the cost of amortizing the projects. This directly affects the amount of annual contribution required from the Federal Government to bridge the gap between rental income and the expense of operating and paying for the projects.
The annual contributions are paid in cash from annual appropriations. Under the Act, the maximum contribution payable in any one year is set by applying the going Federal rate of interest at the time the assistance contract is made plus 1 percent to the project development cost. The actual amount paid is restricted to the actual need for such contributions each year. Under existing contracts for permanently financed Public Law 412 projects in 1948, the maximum annual contributions which could have been paid if needed amounted to $14,782,065. During 1948, however, the actual contributions paid amounted to only $3,311,646.07, or 22 percent of the maximum commitment. This represents a contribution of $2.79 a
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month for each dwelling unit. The low level of Federal annual contributions paid during the year is primarily a reflection of the relatively high level of tenant incomes which enabled them to pay more rent than otherwise would be the case.
It should be pointed out that local contributions to the operation of the projects are required in addition to the Federal contribution. The local contributions are in the form of tax exemption and must be at least 20 percent of the Federal contribution actually paid.
Development activity
At the beginning of 1948, a total of 157 projects containing 23,150 units were classed as deferred. Included in this total were 102 urban developments of 16,690 units and 55 rural projects with 6,460 units. These projects were programmed before the war but construction was postponed during the emergency.
When wartime controls were dropped, these deferred projects theoretically could have been reactivated since the Federal loan funds were earmarked and available for them. Local housing authorities soon discovered, however, that they could not go ahead with their deferred projects because building costs had risen above the maximum permissible cost for dwelling facilities set by the 1937 Act. These limits were established at $4,000 per unit or $1,000 per room for projects in cities of less than 500,000 population and $5,000 per unit or $1,250 per room in cities of more than 500,000 population. By the end of 1948, building costs had risen more than 100 percent above their 1937 level, effectively blocking reactivation of deferred projects.
On July 31,1947, Public Law 301, Eightieth Congress, was approved authorizing construction of deferred projects regardless of the statutory cost limits provided the excess costs were paid by the State or local political subdivision. The reactivation of only one deferred project was begun in 1947. This was a 232-unit project in Milwaukee, put under construction in 1948, which required a local capital commitment of $1,145,988, representing about 41 percent of the estimated total development cost. The Federal loan commitment for this project was $1,607,000.
During 1948, two other deferred projects were reactivated under the provisions of Public Law 301. They comprised 1,990 dwelling units to be constructed at an estimated total development cost of $23,374,000. The Federal loan commitments for these two projects amounted to $12,581,000, which left $10,793,000 or approximately 46 percent to be raised locally. Federal and local commitments for each of these projects are shown in the following table:
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Project No. Name and location Number of units Federal commitment Local commitment Total development cost
Ill 2-9 N.Y 5-8 Wis 2-1 Dearborn Homes, Chicago, Ill... Jacob Riis Homes, New York, N. Y. Hillside, Milwaukee, Wis 800 1,190 232 $4, 860, 000 7, 721, 000 1, 607, 000 $4, 964, 000 5,829,000 1,145, 988 $9,824, 000 13, 550,000 2, 752,988
In addition to tlie three projects reactivated pursuant to Public Law 301 and put under construction in 1948, construction was begun on two other deferred projects located in the cities of Ponce and San Juan, P. R., consisting of 280 and 200 dwelling units, respectively.
Jacob Riis Homes in New York was 97 percent occupied by the end of the year and construction was under way on the other projects. Removal of ineligible families
The stated purpose of the United States Housing Act is to assist in providing housing for families “in the lowest income group.” This purpose implies a responsibility to see that only members of this group are admitted to projects and that they remain only as long as they are actually low-income families. A system of income limits, both for admission and continued occupancy, is established locally for each project, subject to PHA approval, to assure compliance with this requirement. In ordinary circumstances, tenant families whose incomes rise above the permissible maximum are required to move immediately to make way for eligible low-income families.
The general rise in family incomes during the war years affected families in low-rent projects as well as others. Many of them consequently became ineligible for continued occupancy. Wartime conditions, however, made it impractical to remove them, both because rent control regulations prohibited removal in many cases and because enforced removals would have had a disruptive effect on war production in which thousands of these families were engaged. This was generally true in the Public Law 412 projects built before the war. The Public Law 671 projects, of course, were devoted to housing war workers during the war years and were not subject to income limits during that period.
The situation was equally difficult in the years just after the war. A considerable number of ineligible families were still living in the Public Law 412 projects, but removing them was extremely difficult in the face of widespread housing shortage. At the same time, the Public Law 671 projects began to be converted from war use to low-rent use. Many families who had been eligible occupants as war workers became ineligible when the new income limits went into effect.
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Although the stringent housing shortage made summary removal of these ineligible families difficult, PHA and the local housing authorities felt they had no alternative under law but to make every possible effort to remove all the ineligibles. In order to minimize hardship, a plan was adopted in 1947 which would have spread removals over a period of time, avoiding mass evictions and giving each ineligible tenant at least six months and usually longer to locate another home. This plan was interrupted shortly after its inception, however, by passage of Public Law 301, Eightieth Congress, on July 31, 1947. This Act restricted initiation of court actions to evict tenants ineligible because of excess income unless the local housing authority determined that it would not result in undue hardship for the occupants or other housing facilities were available to them. This restriction was originally enacted to remain in force until March 1,1948, but was later extended to April 1,1949.
As a result of this Federal law, very little progress was made in removing the ineligibles. Meanwhile, incomes kept on rising, adding new families to the roster of ineligibles.
The statutory barrier to evictions finally was lifted by the Special Session of the Eightieth Congress. In the Housing Act of 1948 (Public Law 901), approved August 10, 1948, Congress reaffirmed the right of PHA or local housing authorities “to maintain an action or proceeding to recover possession of any housing accommodations operated by it where such action is authorized by the statute or regulations under which such housing accommodations are administered * * This enactment in effect repealed the limitation set forth in Public Law 301 and restored the conditions of occupancy as provided in the United States Housing Act and embodied in assistance contracts and lease agreements with local housing authorities.
The Commissioner of PHA thereupon notified local housing authorities of the action of Congress and advised them that continued occupancy by families whose incomes exceeded approval limits would constitute a violation of their contracts unless a waiver of the contract provisions was granted by PHA. At the same time, he urged the authorities to renew their efforts to carry out orderly removal programs.
The full effect of this renewed activity, of course, would not be felt until after the close of 1948. The extent of the problem and the progress made toward meeting it under the handicaps experienced during the year are shown in the table below.
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Percent of tenants in United States Housing Act developments ineligible and progress in removal1 during 191,1 and 191,8
Month Families ineligible at end of month Change in list of ineligibles during month Cumulative notices to vacate served Average excess income of high income tenants served vacate notices during month
Number Percent of all families in reporting developments Average anticipated net annual income Number added Number removed
December 1948 42,701 24 $3,365 1,640 1,893 39, 594 $1, 240
November 43,169 24 — 1, 621 2,862 37, 888
October 43, 677 25 3.304 1, 521 1.946 35,157
September 45, 404 25 2,385 2,230 33, 880 845
August 45, 053 25 3,296 1,909 2,269 31, 949 906
July 4.3, 828 25 3,276 1,827 2,562 29, 6.33 862
June 41,714 25 3,239 2,145 2,794 27, 019 878
May 43, 547 25 3,195 2, 293 2,493 25,751 831
April 43, 525 25 3. 177 1,978 2,409 24,197 803
March. 42, 817 25 3. 122 3,849 2,536 22,396 818
February 42,182 24 3,145 1, 549 1,938 20,616 814
January 43, 001 24 3,166 1,694 1, 895 19, 298 895
December 1947 43,889 25 3, 138 1,563 1, 791 17, 797 955
November 43, 949 25 3,134 1,673 1,966 15, 713 999
October 42, 576 25 3,135 1,470 2,267 12,650 1.117
September 41. 560 25 3,086 2,198 2, 680 10, 808 1, 236
August .... 42, 290 26 3,095 1, 481 2,437 9, 179 1,347
July 44, 226 26 3,074 3,326 4,185 6,461 1,532
June March December 1946 44,783 28
4/, 5// 29
39, 790 25 —
1 Monthly data not available until July 1947; reporting coverage varies from month to month; data prior to July 1947 cover only tenants ineligible because of excess income; Public Law 671 developments excluded for months during wh’ch still in war use.
Occupancy
As vacancies occurred, through removal of ineligible tenants and otherwise, eligible low-income families were admitted, with preference generally being given to families of veterans and servicemen.
The income trends of new admissions into urban continental projects showed some increase over the preceding year. The median net annual income anticipated by families moving into Public Law 412 and PWA projects during 1948 was $1,502 which was nine percent above the 1947 median. For families moving into Public Law 671 projects in low-rent use, the median net annual income anticipated was $1,710 or a change of only two percent over the preceding year.
The median monthly rental for families admitted to the Public Law 412 and PWA projects during 1948 was $26.84 including utilities and $31.06 including utilities in the Public Law 671 projects in low-rent use.
The average size of families moving into all low-rent projects was reported as 3.4 persons.
Payments in lieu of taxes
The United States Housing Act requires that local governments must make annual contributions to the operation of low-rent projects
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amounting to at least 20 percent of the annual Federal contribution paid. This local contribution may, and uniformly does, take the form of tax exemption for the projects as provided by State statutes. In practically all cases, the value of local tax exemption is much more than 20 percent of the Federal contribution. At the same time, local governments must provide all customary services to the projects such as school facilities, police and fire protection, street and sewer maintenance, and other services which represent an expense to it.
As experience with the program demonstrated that the local contributions were exceeding the amounts required, the practice was adopted of authorizing local housing authorities to make certain payments in lieu of taxes to the local taxing bodies as at least partial compensation for services rendered. Some cooperation agreements between local authorities and their local governments provided or were amended to provide for these payments. Some agreements set payments at percentages of annual shelter rents, ranging from 2 to 5 percent, or equivalent dollar amounts. Other agreements made no mention of payments in lieu of taxes.
Later on, in the light of accumulating experience, supplemental or . increased payments up to a limit of 10 percent of shelter rents were authorized, including the amounts set by contracts. These payments, however, could not reduce the value of the local contribution to less than 20 percent of the actual Federal contribution plus 10 percent of the maximum Federal contribution. This formula established a margin of safety assuring that payments in lieu of taxes above contracted amounts could be made only if the local contributions were at least 50 percent greater than required by law.
In appropriating funds to PHA for annual contributions for the fiscal year beginning July 1,1947, Congress included in the appropriation act a proviso that “no part of this appropriation shall be used to pay any public housing agency any contribution occasioned by payments in lieu of taxes in excess of the amount specified in the original contract between such agency and the Federal Public Housing Authority.” An identical proviso was included in the appropriation act for the fiscal year beginning July 1, 1948.
Financial policies of local authorities
During the latter months of 1947, the Commissioner had established a committee to examine the existing policies on accumulation of reserve funds by local housing authorities. These reserves are designed to cover repairs, maintenance, replacements, vacancy and collection losses, and other expenses which could reasonably be expected to occur during the anticipated 45- to 60-year life of low-rent housing projects.
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When the committee began its work, it soon concluded that the establishment of reserves was too closely related to other budgetary policies of local housing authorities to be isolated for examination. It was necessary also to consider such matters as estimates of average annual expenses, rent schedules, and annual budgets. Consequently, the scope of the committee’s activities was broadened to include these subjects and to make a thorough evaluation of the decade of experience gained in the United States Housing Act program.
The committee completed its work early in 1948 and made certain recommendations for policy changes to the Commissioner, which he approved on March 19,194’8. These are described below.
1. Estimates of average annual expense.—At the beginning of the USHA program, local authorities were required to estimate annual expense for the whole life of a project so that constant rents could be maintained which would meet expenses with the help of no more than the maximum Federal contribution. This policy later was changed to call for two estimates, one for the first 10 years of the project’s life and another for the remainder.
The committee observed that this policy was useful and valid only if operating cost levels remained constant. Even during the relatively short period for which the program has been in operation, however, some costs have risen as much as 100 percent, demonstrating the difficulty in making long-range estimates.
The committee therefore recommended that average annual expense estimates be made for 5-year periods in order to obtain realistic estimates which could be used in establishing rent schedules and controlling local authority annual budgets.
2. Astimates of average annual rent.—A similar recommendation was made by the committee on estimates of average annual rent. This estimate, too, formerly had been prepared as a level average rent for the entire life of the project. The changed policy now calls for a 5-year estimate based on a schedule of rents appropriate for the income group which the local authority proposes to house.
These rents are to be fixed to require the lowest Federal contribution consistent with achieving the program’s objectives. In the early years of a project's life, the schedules are to require substantially less than the maximum contribution so that in later years, when repair, maintenance, and replacement expenses are higher, no material increases in rents will be required.
3. Operating reserves.—Two major reserve funds were maintained in the past for low-rent projects. Ihese were a reserve for repairs, maintenance, and replacements and a reserve for vacancy and collection losses. Both reserves were established as a matter of business
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prudence to cover costs which might be incurred in years when expenses were above normal or income was below normal. Both of these reserves were set up on the basis of estimates covering the full life of the projects.
Since both of these reserves were concerned with anticipated operating expenses, it was decided to combine them into one reserve to be known as the operating reserve. Furthermore, a ceiling was set on the size of this single reserve, limiting it to an amount equal to one-half of the annual operating expense of a project as shown in its 5-year estimate of average annual expense.
For existing locally owned projects, the reserve accumulations are to be reduced to the new amount in a single reserve over a 5-year period. Reserves held for Federally owned projects were reduced in one step in the 1949 fiscal year. New projects would build up their reserve to the maximum over a 5-year period.
Previous reserves were estimated to amount to $38,151,000 for project fiscal years ending in 1948. Under the new policy, they will be reduced by the end of 1953 to $22,782,000, a reduction of 41 percent in the 5-year period.
4. Working capital reserve.—The working capital reserve was established for locally owned projects to provide funds for certain operating costs which must be prepaid (such as insurance premiums) to obtain the most favorable prices. For local authority fiscal years ending in calendar year 1947, these reserves totaled $3,127,000. The committee recommended continuing the already established policy of eliminating this reserve wherever contractual commitments would permit, with a consequent reduction in development cost and a corresponding saving in annual contributions for the life of the project.
The effect of the new policies initiated as a result of this reexamination of the financial arrangements of local housing authorities cannot be measured until the close of the fiscal year on June 30, 1949.
831481—49----21
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Chapter III
PUBLIC WAR HOUSING PROGRAM
The public war housing program consists of Federally owned housing, both permanent and temporary, built under the terms of the Lanham Act and related legislation for the primary purpose of housing in-migrant war workers in congested military and war production centers during the war. Statutory responsibility for the development, management, and disposal of this housing is vested in the Administrator of the Housing and Home Finance Agency. The PHA carries out these responsibilities under authorities delegated to it by the Administrator and under policies he establishes.
Since the end of the war, veterans, servicemen, and their families have been given preference in filling vacancies in war housing remaining in active use. Tenants originally admitted as war workers, however, have been allowed to remain in the demobilization period. Veterans also enjoy preferences in sales of permanent war housing.
Because national policy calls for the Government to divest itself of its interests and responsibilities in this emergency program, activities under it during 1948 were confined to management of units remaining in active use and disposition of terminated units. The total program was reduced by 61,094 units in 1948 as a result of disposition activity.
Management activity
At the close of 1948, there were 318,264 war housing units under active management, as compared with 361,802 on January 1, 1948. Of those under management at the end of the year, 304,729 were family dwelling units, including 141,884 permanent and demountable units and 162,845 temporary family dwelling units. In addition, there were 6,531 dormitory units under management and 7,004 stopgap units of various types including trailers.
At the same time, a total of 20,919 temporary, dormitory, and stopgap units were carried under inactive management. That is, the units had been terminated and occupancy intake had been halted pending disposal of the units.
Occupancy in war housing continued at high levels throughout the year. At the end of 1948, occupancy was estimated at 99 percent for the permanent family dwelling units and 95 percent for the temporary family dwelling units.
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HOUSING AND HOME FINANCE AGENCY
Disposal of permanent war housing
The war housing program has included 191,117 permanent and demountable dwelling units subject to disposition. About 30,805 of these units were disposed of before 1948, leaving a total disposition work load of 160,312 such units at the start of 1948. Some 17,846 permanent units were disposed of by various means through the year, reducing the disposition work load to 142,466 permanent units.
This housing, located in nearly every State of the Union, consists of a wide variety of physical types and sizes ranging from single detached units to large multiple-dwelling structures. Section 301 of the Lanham Act requires that it “shall be disposed of as promptly as may be advantageous under the circumstances and in the public interest.”
The policies governing disposal of permanent war housing in 1948 were promulgated by the HHFA Administrator on August 27, 1947, in his Public Regulation No. 1. The regulation stresses encouragement of home ownership, especially by veterans. To achieve this purpose, the regulation provides that all permanent war housing projects offered for sale shall be subdivided to the smallest feasible offering. Wherever possible, individual units are offered for sale to individual purchasers who will use the units themselves. Because of the nature of the projects, however, it is not always possible to subdivide to this extent. In some cases, entire developments must be offered for sale as entities.
The regulation also established three categories of preferred purchasers. In the order in which they have priority, they are:
1. Veterans living in a unit to be sold who intend to continue occupying the unit after purchase.
2. Veterans who intend to occupy a dwelling to be sold.
3. Nonveterans living in a unit to be sold who intend to continue occupying the unit after purchase.
In cases in which nondivisible multiple-unit structures are offered for sale, structures containing up to four units may be sold to a preferred purchaser who intends to occupy one of the units or to groups of preferred purchasers.
All sales to preferred purchasers are made at fixed prices based on the long-term value or use of the property as determined by PHA after competent fee appraisal and after review of the FHA valuation for mortgage insurance. Projects which cannot be disposed of to preferred purchasers at fixed prices may be offered for sale to investors on a competitive bidding basis. Under section 610 of the National Housing Act, the Federal Housing Administration is authorized to
308
PUBLIC HOUSING ADMINISTRATION
insure mortgages by approved lenders for up to 90 percent of the appraised value of the property.
Two important changes were made in Public Regulation No. 1 during 1948. One related to the sales price set for sales to veterans of structures containing up to four units and the other pertained to disposal of vacant land in Lanham Act projects.
The new section on sales prices to veterans provides: “Whenever the preferred purchaser is a veteran buying a dwelling containing not more than four-family dwelling units, the purchase price shall not exceed the apportioned cost of such dwelling and of the land and appurtenances allocated thereto, together with the apportioned share of the cost of all utilities and other facilities provided for and common to the project of which such dwelling is a part.” In other words, the sales price in these cases shall be either the fair market value or the prorated cost of the building, whichever is lower. This change in the regulation was made pursuant to legislation enacted during the year (Public Law 689, Eightieth Congress) to cover a few Lanham Act projects in which the appraised value resulted in sales prices higher than the original cost of the project.
The amendment of Public Regulation No. 1 affecting disposal of vacant land was promulgated on December 23, 1948. Prior to the change, vacant land no longer needed by PHA was declared surplus to the War Assets Administration for appropriate disposal. The amendment, occasioned by the impending termination of WAA’s functions, established the following procedure: “The PHA shall make such inquiry among other Federal agencies as it deems appropriate under the circumstances concerning their need for such land, and a first preference in its disposition may be given to such agencies. Vacant land which is disposed of other than by transfer to Federal agencies shall be sold through competitive bidding after public advertisement.”
If a State or local governmental agency requests the land, it may be sold or transferred to it at full market value without advertisement or competitive bidding. If the land is a part of a project being subdivided for sale and is suitable for development as residential sites, the land can be sold to veterans at prices based on its long-term value.
PHA continued to encounter many problems in its efforts to dispose of permanent war housing under Public Regulation No. 1. Such problems, of course, could be expected to arise in a program involving so many interests. In actual practice, the “public interest” mentioned by the Lanham Act resolved itself into a diversity of interests. The Government’s foremost interest is in disposing of its holdings expeditiously, equitably, and with due regard for its obligation to obtain a fair return. The community concerned also has a strong in
309
831481—49——22
HOUSING AND HOME FINANCE AGENCY
terest, since its welfare and future development prospects are affected. A third interest is represented by the occupants themselves, many of whom feel they have acquired an overriding interest in the houses by virtue of their long residence. Still another interest comes from the desire of veterans to obtain homes of their own and their legitimate claim for preferred consideration when the Government they served in wartime has homes to sell.
The policies established to govern the disposition program are intended to balance these varied interests against one another and produce a disposal program which is as fair to all concerned as possible. The task is not simple. Such complicated problems require procedures and policies that may appear to be cumbersome and time consuming. The alternative, however, would be a ruthless disregard for one or more of the interests mentioned above.
PHA has continued to carry out the many preliminary steps which go before offering a project for sale. By the end of the year, community consultations covering 114,632 units on hand had been completed, disposition plans had been determined for 108,492 of these units; appraisals had been ordered for 36,832 units, appraisals for 34,570 units and insurance commitments for 19,158 units had been received; sales prices had been established on 16,958 units; and 7,384 units had been offered to priority purchasers. Sales contracts covering 3,612 units had been completed by the close of the year but title to these dwellings had not been transferred to the purchasers.
Disposition of temporaries
Disposal of temporary housing constructed under the Lanham Act differs markedly from disposal of permanent war housing. Temporary housing, consisting of family dwellings, dormitories, trailers, and portable shelters, is not built to last for a long period and the communities where it is located understand that it is not to form a permanent part of the localities’ housing stock.
Section 313 of the Act states that temporary war housing shall be removed “as promptly as may be practicable and in the public interest.” The Act further specifies that removal shall take place not later than two years after the end of the emergency declared on September 8, 1939. Under Public Law 239, Eightieth Congress, this 2-year period would have expired on July 25,1949. A later enactment, Public Law 796, however, set the effective date for accomplishing removal as January 1, 1950. The only exceptions to this deadline are to be those temporary units which the HHFA Administrator, in consultation with the community, finds are needed for a longer period. Where he makes sucli a finding, he is empowered by the Lanham Act to
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PUBLIC HOUSING ADMINISTRATION
extend their use for one year and report the exception to Congress. Any subsequent 1-year extension must be based on a reexamination of the community’s need and likewise reported to Congress.
Under the statutory direction to remove this housing “as promptly as may be practicable,” the policy has been followed of terminating temporary projects wherever possible, halting the intake of the new tenants and thereby gradually vacating the units and making them available for disposal.
By December 31, 1948, a total of 235,802 temporary units including stop-gaps had been removed from a disposition workload of 432,519 temporary units. Approximately 40,000 units were reported removed during 1948. The bulk of those removed to this date, however, had been removed by transfer to other Federal agencies or other housing programs, such as the veterans’ temporary housing program, described in chapter IV of this report. Only 20,384 units have been removed by sale and 9,747 by demolition.
As the year closed, a stock of 196,717 temporary units remained on hand. Of these, 176,199 have not been terminated for active use.
This carry-over indicates the major point to be made concerning temporary war housing. Because of the continuing.housing shortage, much of the temporary housing still remains in active use. It cannot be removed until vacated. It will not be vacated until other permanent housing is available to the families who now occupy it.
With only 12 months remaining before the present deadline for removing temporary war housing, it appears inescapable that the HHFA Administrator will find it necessary to authorize extensions for a very substantial portion of the temporaries still in use at the encl of 1949.
Over half of the 378 communities with temporary war housing projects at the end of 1948 were located in seven States—California, Michigan, Washington, Texas, Ohio, Pennsylvania, and Oregon. The projects in these States accounted for 66 percent of the 187,000 temporary units and 63 percent of the 754 projects on hand.
The West Coast States alone—California, Washington, and Oregon—contained over 40 percent of the total projects and over 45 percent of the temporary units.
The largest single concentration of temporary housing is in Richmond, Calif., with 16,000 temporary dwelling units. The next ranking city is San Francisco. Other large temporary housing concentrations are in Los Angeles, Calif.; Arlington, Va.; Detroit and Willow Run, Mich., and Portland, Oreg.
Congress gave some consideration during 1948 to proposals for turning over all temporary housing to the municipalities where it is
311
HOUSING AND HOME FINANCE AGENCY
DISPOSITION OF PUBLIC WAR HOUSING ACCOMMODATIONS
STATUS BY TYPE OF ACCOMMODATION
AS OF DECEMBER 31, 1948
SSI ACTIVE (NOT YET AVAILABLE) AVAILABLE FOR DISPOSITION Q REMOVED FROM WORKLOAD
3 5 0 r~7 . . - 3 50 --------------------------350
family. dormitory
£ 3 0 0 --------—----- -------- 3 00 -------------------------- 3 00 z
o •••*•*•*• O
H • • * Z
§25° ——————- *.*•’.’•* - 2 50 -------—--------------- 2 50 §
2 s
O 2
0200------------------— 200------------------------------------200 §
° 150 — --------J||||— 150------------t------------------i5o°
5 M I# !
£ 10 0----------------.ij.gSg - I o0 -------------------------- 100 «
1 9 11 R 1
50-----------------:i!igg— 50 ------------------------------50
ol---SEE&SS--------ESifiSSS - 0 _____FT- • - -I____0
PERMANENT TEMPORARY PERMANENT TEMPORARY
DEMOUNTABLE CONVERTED
CONVERTED
312
PUBLIC HOUSING ADMINISTRATION
located. The only legislation enacted as a result, however, related to certain veterans’ temporary housing projects operated by educational institutions. (See chapter IV.)
Emergency housing at Vanport
On May 30,1948, flood waters of the Columbia River broke the protecting dikes around Vanport City, Oreg., and completely destroyed this Lanham Act war housing community managed by the Portland Housing Authority. About 18,000 residents of the project were made homeless by the disaster.
At its peak Vanport was the largest temporary development in the war housing program. It housed about 42,000 persons engaged in shipbuilding and other war industry in the Portland-Vancouver area and was the second largest city in Oregon. After the war, some 3,000 units were moved from the project to other West Coast communities for reuse in the veterans’ temporary housing program. Other structures were transferred to Vanport College, an institution offering education to veterans. When the flood struck, PHA acted immediately to aid the homeless families. Several hundred refugee families were given shelter in other temporary projects in the Portland area. In cooperation with the Federal Works Agency, which administers Federal disaster relief funds, PHA moved 507 stop-gap units into the area.
On June 11, the President signed Public Law 624, authorizing HHFA to spend up to $10,000,000 of Lanham Act reserve funds for emergency housing for the flood victims. Twelve days later, refugees began moving into the first of the 1,586 accommodations to be provided under the emergency authorization. More than 600 of these units were occupied at the end of 1948.
Some of the trailers proved inadequate for the larger refugee families, however, and steps were taken to provide better accommodations for them through conversion of barracks on Swan Island into 102 temporary family dwellings. Expenditure of $329,000 was authorized for this work and PHA authorized work to proceed on December 17. These units were slated to be completed and ready for occupancy in March 1949.
313
Chapter IV
THE VETERANS’ REUSE HOUSING PROGRAM
Construction activities were virtually completed in 1948 in the veterans’ reuse housing program, a program which provided more than a quarter million temporary housing accommodations for veterans, servicemen, and their families in a time of acute housing shortage.
This program was authorized by Congress in late 1945 and early 1946, in amendments adding a new Title V to the Lanham Act. The purpose of the program was to alleviate the distress of homeless veterans seeking to reestablish themselves in civil life. The method was to reuse various types of surplus Government-owned temporary structures, moving them to new sites where necessary and remodeling them into temporary accommodations for use until occupants could find permanent housing.
Authority to carry out this program was delegated to PHA by the Administrator of the Housing and Home Finance Agency. Under his policies, PHA allocated available temporary structures to public bodies and educational institutions which were the local sponsors of the emergency projects. These local groups provided sites for the housing and operated the converted units under standards established by PHA to assure compliance with the purposes of the authorizing statutes..
Most of the units in the program were completed and made ready for occupancy in 1947. By the start of 1948, 232,000 accommodations had been completed. During 1948, conversion work on the remaining portions of the program brought all but 2,700 accommodations to completion.
Since the housing needs of veterans who were attending colleges and universities to complete educations interrupted by the war represented a special area of need, more than half of the entire program— almost 150,000 accommodations—was alloted to these institutions.
The cost of relocating and converting over 181,000 accommodations, about two-thirds of the entire program, was paid by the Federal Government from funds appropriated for the purpose. For the remainder, however, the Government simply furnished the structures and the expenses of making them ready for reuse were borne entirely by the local sponsors.
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HOUSING AND HOME FINANCE AGENCY
Since this housing is temporary and of an emergency nature, it is subject to the same removal requirements as other temporary housing provided under terms of the Lanham Act. Legislation in effect at the end of 1948 required this removal to be accomplished by January 1, 1-950, unless the HHFA Administrator determines, in consultation with the community concerned, that the housing was required for use for a longer period. If he finds such a need to exist, he may extend the use for a year at a time, reporting his reexaminations of need and extensions to Congress.
The McGregor Act
The major development affecting the veterans’ reuse housing program during 1948 was enactment on June 28 of Public Law 796, Eightieth Congress, known as the McGregor Act. This law authorized the Government to relinquish all its contractual rights and interest in certain veterans’ temporary housing projects operated by educational institutions on lands which they owned or controlled. Under certain conditions, the Government could also exempt these projects from the removal obligation of the Lanham Act.
The law placed the initiative for obtaining a relinquishment upon the eligible institutions themselves. It provided that they could apply for relinquishment simply by furnishing appropriate evidence that the projects involved were on lands which they owned or controlled, showing that they had the legal power to accept and operate the housing under the terms of the law and agreeing to continue giving preference to students who were veterans of World War II or servicemen. If these conditions were met, the Government was required to surrender its interests in the housing without monetary consideration, including its previous right to receive net revenues from project operations. Many of the institutions indicated that they anticipated using the housing for several more years and planned to devote all income to project maintenance.
To obtain relief from the removal requirement of the Lanham Act, the institutions were required to obtain the consent of the local governing body having jurisdiction in the locality.
The McGregor Act specified that eligible institutions would have to submit their requests for relinquishment within 120 days of enactment of the statute to gain its benefits. The dead-line date for accepting applications was October 26,1948. When the Act was approved, some 720 educational institutions were eligible to submit applications as operators of 1,094 management projects accommodating 127,276 veterans. By the dead-line date, 710 institutions had asked for relinquishment of the Government’s interest in 1,076 projects containing 125,593 accommodations. This represented 99 percent of the accom-
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PUBLIC HOUSING ADMINISTRATION
modations eligible for relinquishment. By the year’s end, approvals had been granted covering 994 projects with a total of 116,107 accommodations. Applications still pending approval were delayed mainly by difficulties encountered in arriving at final settlements between PHA and the sponsoring institutions.
Size of program at end of 19Jf8
The size of the veterans’ program was reduced by almost 131,000 accommodations by the end of 1948. This reduction in the main was the result of actions under the McGregor Act. Approximately 15,000 accommodations were removed from the program, however, by terminations and cut-backs resulting from programming revisions. The effect of these two classes of actions on the program are shown in the chart below.
Final approval of the McGregor Act relinquishments still pending at the end of the year will futher decrease the 135,462 active accommodations in this program.
STATUS OF 266,000 ACCOMMODATIONS PROGRAMMED AS VETERANS' REUSE HOUSING
AS OF DECEMBER 31,1948
l50(— ACTIVE — — REMOVED FROM WORKLOAD —ll5o BY
w 22222
z jqqqqc
o XXXXX A
! H ™ A
s IOO-- §222s - — ZZZZX --/—\------------I 00
z 22222 x/zzz r- 1—A
° XXXXX transfer to \
o >8qqq< zzz/z EDUCATIONAL \
< 22222 7777/ INSTITUTIONS I
O 88888 '//// Gre9°r Bi")
S &222S 7/7/7 / other
150 M——5o
0__anra?___ Iwiiiil m 0
12-31-48.) DURING 1948—| BEFORE 1948
THOUSANDS OF ACCOMMODATIONS
317
Chapter V
LIQUIDATION OF EMERGENCY PROGRAMS
Defense Homes Corp oration
The Defense Homes Corporation was created by the Federal Loan Administrator on October 23, 1940, to provide permanent housing for defense workers in congested defense areas as a supplement to housing provided by private construction. It was transferred to the PHA’s predecessor agency in 1942.
The work of this corporation was concluded in 1948 by disposition of its remaining properties. It was thereupon transferred, with its capital stock, assets, and liabilities to the Reconstruction Finance Corporation for liquidation.
DHC’s contribution to defense housing was construction of 11,489 dwelling units in 25 projects located in 13 States and the District of Columbia. Of the units built, about 9,000 were family dwelling units in both individual detached structures and multi-family apartment developments. The remainder were single and double rooms in residence halls providing accommodations for about 2,980 occupants. The houses were sold to individuals at prices fixed by DHC on the basis of appraisals and the apartment developments were sold in competitive bidding. The final disposition action occurred on June 30,1948, when Lucy Diggs Slowe Hall and George Washington Carver Hall, dormitory residences for Negroes in Washington, D. C., were transferred to Howard University under special legislation enacted by the Eightieth Congress.
The outstanding DHC transactions during the year were the sale of Meridian Hill Hotel, consisting of 637 single and double rooms for 720 residents, to the Meridian Hill Corporation, and of Naylor Gardens, a 757-unit apartment development, to the Veterans’ Cooperative Housing Association. Both of these projects are located in Washington.
Meridian Hill Hotel was sold in competitive bidding for $2,750,000, the highest of 23 bids received. The purchasers made a cash down payment of $210,000 on March 25,1948. In accordance with the sales contract, they will make annual payments of $127,500. The Government holds a 20-year mortgage with an interest rate of 3 percent on the outstanding balance.
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HOUSING AND HOME FINANCE AGENCY
Title to Naylor Gardens was transferred to the Veterans’ Cooperative Housing Association on February 2,1948. The purchasers made a cash payment of $604,291, which represented a 10 percent down payment on the sales price of $5,125,000. The cooperative also signed a note agreeing to pay another $22,967 on February 15 and $17,211 each month thereafter on principal and interest. The transfer of title consummated a conditional sales agreement signed in 1947.
Terminating conversion leases
Disposal activities in the homes conversion program differ from such activities in other PHA programs in one major respect. In other programs, the Government sells buildings it owns. Homes conversion properties, on the other hand, are privately owned and held by the Government under lease. Liquidation of the program is to be accomplished either by terminating leases in advance of expiration through negotiations with the owners or by expiration of the leases. Since most of the leases were made to run for seven years, they had not yet begun to expire in 1948. Substantial progress had been made, however, in terminating leases by sale of unexpired leaseholds to the private owners of the leased properties.
A total of 8,842 properties were leased in this program and converted into 40,565 dwelling accommodations for war workers. By the start of 1948, lease terminations had reduced the program to 5,532 properties containing 34,243 dwelling accommodations. A total of 1,747 leases covering 9,740 dwelling units were terminated during the year, leaving 3,785 leases covering 24,503 units yet to be terminated. In total, 5,057 leases covering 25,062 units had been canceled by December 31, 1948. This represents 51 percent of the total units converted in the program and 57 percent of the properties leased.
Subsistence homesteads and Greentowns
Disposition of the subsistence homestead properties, which were among the nonfarm housing properties transferred by Executive Order from the Farm Security Administration to PHA’s predecessor agency in 1942, was nearly completed during 1948. PHA has followed the policy of selling the homesteads to individual tenants wherever possible, either by refinancing lease and purchase contracts or by selling units under direct management for cash. In taking these actions, PHA has honored the prior commitments made to tenants regarding the f oi m of sale. In some cases these commitments related to purchase prices. In others, arrangements were in existence for applying “rental ci edits to the purchase price. All such credits accumulated before 1944 were honored.
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PUBLIC HOUSING ADMINISTRATION
The program originally consisted of 5,401 units. By the start of 4948 only 2,682 units remained. By the close of the year, 2,280 units were still on hand, all but 30 of them in the Greentowns.
Work also progressed during the year toward the ultimate sale to private purchasers of the three Greentowns which also had been transferred from the Farm Security Administration in 1942. These model, planned communities are Greenbelt, Md., near Washington, D. C.; Greendale, Wis., near Milwaukee; and Greenhills, Ohio, near Cincinnati. Under terms of the Government Corporations Appropriation Act, 1948, the Administration was authorized to spend $39,500 from operation revenues for the land use surveys and other steps essential to preparing the towns for sale. A similar authorization to use $40,000 in the year beginning July 1, 1948, was contained in the Government Corporations Appropriation Act, 1949. As an additional aid to the contemplated sales, the Housing Act of 1948 (Public Law 901, Eightieth Congress, approved August 10, 1948) authorized the Federal Housing Administration to insure mortgages in connection with purchases of these communities. The maximum interest rate on such insured loans is 4 percent and the maximum maturity is established at 25 years. The mortgage may cover up to 90 percent of value.
Under present plans, Greenhills, Ohio, will be the first of the Greentowns to be offered for sale. An appraisal of this property was completed in the latter part of the year and work begun on a prospectus giving a detailed description of the community and the terms and conditions of sale.
At Greenbelt, Md., six parcels of land earmarked for use for semipublic purposes were offered for sale by competitive bidding during December 1948. These tracts, comprising 14.37 acres, were sold to five church groups for church and school purposes.
321
Chapter VI
ADMINISTRATIVE DEVELOPMENTS
Internal reorganization
The administrative machinery of PHA underwent a major change during 1948 in compliance with recommendations made to the Administration by the Appropriations Committee of the House of Representatives in its report on the Government Corporations Appropriation Bill, 1949. The Committee stated that “the great degree of operating freedom given the regional offices during the war is not conducive to economical operation and disposal of these projects, and * * * the new Commissioner should promptly take steps to secure a closer supervision of field operations, especially at project sites. * * * Meanwhile, the regional offices in the field should be closed at the earliest practicable date. * * *”
The decentralized form of organization referred to by the Committee had been adopted primarily in the early days of the defense housing program. In that period, the public housing agency was engaged in direct construction and management of war housing projects' at widely scattered points throughout the Nation. As in all wartime activities, speed was a prime consideration. The situation required prompt and responsible decisions on the spot when problems arose. To make this possible, wide authorities to act were delegated to regional offices closest to the scenes of activity.
The recommendations of the Congressional Committee embodied a reversal of that theory of operation. Instead of vesting important discretionary powers in its officers in the field, the PHA was to draw these powers into its central organization in Washington where closer supervision and control could be exercised. Since the Administration would still have many direct operating responsibilities in the field— mainly in connection with the management and disposal of war housing—it would continue to need some form of organization outside Washington. How to achieve a centralization of authority and at the same time strengthen supervision of field operations was the core problem of the reorganization.
Immediately upon receiving its direction from Congress', PHA began a thorough study of its organizational structure directed at the goals
323
HOUSING AND HOME FINANCE AGENCY
PUBLIC HOUSING ADMINISTRATION Field Offices
FORT WORTH
324
PUBLIC HOUSING ADMINISTRATION
the Committee had set up for it. In this study, the advice and assistance of the Office of the Administrator and the Bureau of the Budget were sought and obtained. By September, the PHA was able to announce and start putting into effect a new pattern of organization which was believed to offer a workable plan accomplishing the objectives the Committee had in mind. The main features of the new organization were the elimination of the five regional offices, centralization of operational control over all programs in the central office in Washington, and the consolidation there of all administrative, fiscal, and housekeeping functions.
Four major divisions were established in the central office. An administrative division, headed by an executive officer, contained the office services', personal property, statistics, personnel and planning, and document control branches. A fiscal division, directed by a comptroller, included the audit, finance and accounts, and budget and fiscal analysis branches. A management division, headed by an assistant commissioner, embraced plants and structures, occupancy, racial relations, labor relations, taxation, insurance, and construction inspection and claims branches. Reflecting the increasing emphasis on disposal of war housing, a disposition division was created under an assistant commissioner to include land apprasial and sales branches.
The centralized control over field operations is managed in Washington by three field operations divisions, each headed by an assistant commissioner with responsibility for field operations in specified areas of the country. Area A includes the Northeastern and North Central States, westward to the tier of states including Kansas, Nebraska, and the Dakotas. Area B consists of the Southern States westward to Colorado and New Mexico. Area C is made up of the Pacific Coast and Mountain States.
To handle actual operations in the field under the direct supervision of the assistant commissioners for field operations in Washington, 10 small field offices were established. These were to be located in New York, Philadelphia, Chicago, Detroit, Atlanta, Richmond, Fort Worth, San Francisco, Los Angeles, and Seattle.
These field offices came into being on December 6 in the cities where the former regional offices were situated—New York, Atlanta, Chicago, Fort Worth, and San Francisco. The staffs of the field offices in new locations were scheduled to move to their permanent stations in the early months of 1949.
The new organizational structure of PHA is shown in the accompanying chart and the geographical jurisdictions of the assistant commissioners for field operations and the field offices are indicated on the map.
831481—49---23
325
HOUSING AND HOME FINANCE AGENCY I
HOUSING AND HOME FINANCE AGENCT PUBLIC HOUSING ADMINISTRATION ORGANIZATION CHART
COMMISSIONER
__________ZZ=ZZZ I________
OFFICE OF THE LEGAL
CHIEF ECONOMIST DIVISION
----------1- ■■ 1 I ---------- 1__________________ ADMINISTRATIVE FISCAL MANAGEMENT DISPOSITION
DIVISION DIVISION DIVISION DIVISION
Office Personal Audit Finance and Plants and n^nnonnv Land Q ,
Services Property Branch-----Accounts Structures--C p and Appraisal Sales
Branch Branch Branch Branch Branch Branch Branch ---- Branch
Statistics Personnel and Budget and Racial Labor
Branch Planning Fiscal Relations---Relations
Branch Analysis Branch Branch
----------- --------------- Branch ___________ _____________
Document Control Taxation____Insurance
Branch Branch Branch
Construction
Insp. and Claims
-----------L_----------------------Z=ZL=—----------------------------- l____________________
FIELD OPERATIONS-------------------FIELD OPERATIONS-------------------FIELD OPERATIONS
DIVISION DIVISION DIVISION
—’— --------- —:-------:— ------------- ----------------1’ ’’ I ----------- ---------------
New York Philadelnhia Atlanta -----Richmond Los Angeles----San Francisco
Chicago ----- Detroit Ft. Worth Seattle
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PUBLIC HOUSING ADMINISTRATION
Under the previous form of organization, about 70 percent of the PHA administrative staff was located in the field, with about 30 percent in the Washington office. Under the new plan, the proportions are reversed, with 70 percent of administrative personnel in the central office and only about 30 percent remaining in the field.
Even more significant, however, is the fact that whereas only 15 percent of the major delegations of authority to act were retained in Washington under the former organization, 75 percent of these actions must be consummated in the central office under the centralized organization.
Administrative budget
The funds required for administrative expenses of the Public Housing Administration are derived from the operation of the programs under its jurisdiction. This use of the program receipts is authorized by the statutes establishing the programs. Each year, PHA presents a single administrative budget to Congress covering the anticipated administrative expenses for all programs for the next fiscal year and requests authority to expend stated sums for administrative costs. These funds are taken from the proceeds of the programs on the basis of estimates of the relative workload presented by each of them.
In the Government Corporations Appropriation Act, 1949, Congress authorized expenditure of $9,500,000 for administrative expenses in the fiscal year beginning July 1, 1948. This amount was about 17 percent less than the $11,500,000 available for this purpose in the preceding fiscal year.
Personnel trends
The total number of PHA administrative employees continued to decline during 1948. By the end of the year, this employment stood at 1,611, or 20 percent below the administrative employment of 2,023 on January 1.
The chart following indicates the employment trend for the past six years, divided between administrative employees in the field and those in the central office in Washington. The sharp rise shown in 1946 was due to the veterans’ reuse housing program which began in that year. The decline in 1947 reflected two factors, the completion of much of the veterans’ program and stringent economies undertaken for budgetary reasons.
In the last months of 1948, administrative employment in Washington exceeded that in the field for the first time. This was a result of the reorganization and centralization of functions in the central office.
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HOUSING AND HOME FINANCE AGENCY
FULL TIME PHA ADMINISTRATIVE EMPLOYMENT
BY CENTRAL OFFICE AND FIELD
JUNE 1943-DECEMBER 1948
3,500 ------------------ 3,500
3,000 ---------------------------------3,000
2,500 co
Id _____* \ Id
o FIELD*'' X >
| 2,000 \--------------------------- 2,000^
id IS
u. \ “
0- '.500 -^-------------------------------------------------------------------------------------------------------- 1,500 °
m ^>***>^_ CENTRAL OFFICE^ *
s ----_- ■_____— ™ 00
i 1,000 —— -- —---------------------------------1,000 0
500 ---------500
oLi ।________________। । I । । ।__________________ । । । I । । । । । । 0
JUN SEP DEC MAR JUN SEP DEC MAR JUN SEP DEC MAR JUN SEP DEC MAR JUN SEP DEC MAR JUN SEP DEC
H 1943 —H----1944---►!-»---1945----^|----1946-----------1947 ---------1948----I
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PUBLIC HOUSING ADMINISTRATION
Table 1.—Number of dwelling units owned or supervised by the Public Housing Administration1 by program, as of Dec. 31, 1948
Program Total Federally owned Locally owned
Number Net change since Dec. 31,1947
Total- ------- 716,156 -199, 782 409,087 286,148
Active _ - - - -
674,316 -179,997 388,168 286,148
Veterans’ Reuse Housing Under management Under construction _ .
135,462 -126, 111 1,603 2133,859
132, 735 2, 578 149 318,264 24, 503 -99,351 -18, 981 -7,779 -43,538 -9, 740 —2,001 +1,795 1,603 131,132 2,578 149
Not under construction _____
Public War Housing (Lanham constructed) ... Homes con version. __ _ 318,264 24, 503
Defense Homes Corporation
United States Housing Act Under management Under construction __ _ 193,807 41,518 152,289
190,882 1,502 1,423 120,953 51,250 21,604 2,280 20,919 20,921 +1,149 +1,356 -710 +1,852 -38 -19 -402 -17, 556 -2,229 41, 518 149,364 1,502 31,423 109,103 43,186
Not under construction._ _
Public Law 412 Public Law 671 PWA 11,850 8,064 21,604 2,280 20,919
Subsistence homesteads and Greenbelt towns Inactive—Public War Housing (Lanham constructed) _ Deferred—United States Housing Act—_ . __ —
1 Excludes units which have been sold to mutual housing associations, limited dividend corporations (PWA) and homestead associations on which PHA holds mortgages for collection.
2 This veterans’ housing is considered for this purpose as being disposed of to local bodies or educational institutions even though the improvements provided by PHA may not be wholly complete or title to them formally transferred.
3 Includes 1,423 rural units not yet built but which are parts of active rural projects.
329
HOUSING AND HOME FINANCE AGENCY
Table 2.—Number of active projects and dwelling units 1 owned or supervised by the Public Housing Administration by program and State, Dec. 31, 191/8
Total program Veterans’ reuse housing War housing 1 2 USHA’ Subsistence homesteads and Greenbelt towns
State Number of projects Number of units Number of projects Number of units Number of projects Number of units Number of projects Number of units Number of ■projects Number of units
Total __ _ 3,236 674,316 1,373 135,462 1,218 342, 767 636 193,807 9 2,280
Alabama-- - __ 71 16,441 16 2,360 1,357 1,288 17,923 1,488 2,118 147 36 8,877 4,684 484 19 5 204
Arizona. . _ 69 6,908 21 42 6 867
Arkansas . 22 2, 698 113, 530 11 3 8 926
California ___ 455 179 237 86,229 801 39 9, 378 770
Colorado. - . . _ 21 3,059 12 4 5
Connecticut ... 92 20, 061 20 55 11,712 1,780 4,639 5,812 476 17 6, 231 380
Delaware - n 2,307 3 6 2
Florida __ 73 13,378 18,272 15 1,415 26 32 7,324 11,342 84
Georgia 82 19 1,118 677 22 41
Idaho 24 1,237 17 5 2
Illinois __ 99 22, 517 47 5,745 2,007 2,429 646 18 3,371 4,709 1,049 7, 763 594 34 13,401 3,255
Indiana... . 68 9, 971 3,478 31 22 15
Iowa. ... 50 45 5
Kansas _ __ .. ... 34 8,409 17 17
Kentucky. _ __ 37 6,358 19 1,413 1,610 2 16 4,351 5, 772
Louisiana-.. ... - .. _ 28 9,123 7 8 1,741 2,040 12,326 2, 732 20,238 95 13
Maine .. ... 13 2,040 13
Maryland ___ 52 18,858 16, 725 5 358 33 13 5, 296 7, 913 5,177 1 878
Massachusetts 71 42 6,080 3,219 2,132 1,804 2,030 518 12 17
Michigan 114 28,634 35 71 8
Minnesota. . 46 2, 691 43 2 1 '464
Mississippi _ . 48 6,069 4, 231 1,375 4,405 1,992 1,457 18 9 2,114 886 19 2,148 1,315 2 3
Missouri.*_ 28 23 3 2
Montana ___ 21 12 5 324 4 533
Nebraska .. 43 32 1,189 8 2,138 1,597 3 1,078
Nevada 23 11 '395 12
New Hampshire 6 2 176 4 L281 5,209 635
New Jersey 123 19,432 1,722 45,647 71 5,195 1,087 20,357 1,657 18 33 9,017 1 11
New Mexico. 20 11 9
New York 115 76 18 6,627 3,953 21 18,663 2,964
North Carolina- __ 53 8i 574 341 20 18 15
North Dakota _ ... 14 14 '341
Ohio 156 39,815 4,085 12, 623 39,914 3,382 54 6,977 2,104 63 3 16,663 1,547 38 15,438 434 1 737
Oklahoma 35 30 2
Oregon 83 26 L074 4,048 654 54 10,949 22,580 800 3 600
Pennsylvania.. _ 143 24 73 46 13, 286 1,928 2, 547
Rhode Island.. . 11 4 2 5
South Carolina 38 6,292 1,036 10 537 13 3,208 134 15
South Dakota.. .... 21 19 902 2
Tennessee 50 11, 576 19 2,641 9,007 2, 579 438 9 1,967 15,318 5,067 21 6,956 10,471 1
Texas . ._ 184 34,796 7,646 817 80 59 45
Utah.. 39 21 18
Vermont... .. _ . ... 11 7 4 '379
Virginia... ... __ 75 29,103 31,016 3,352 7,226 1,386 17 2,585 1,494 1,018 4, 573 43 23, 525 14 2,991 3,608 1, 556 903 1 2
Washington __ 121 31 81 25, 914 9
West Virginia . Wisconsin 35 88 21 76 2 8 '776 1 115 11 3 1 1 2 635
Wyoming 26 19 521 7 865
District of Columbia ... 35 8,104 733 5 1,518 375 20 3,439 358 10 3,147
Alaska _ 20 8 12
Hawaii... ._ .... 11 3,614 5,744 116 7 2,006 132 2 1,247 2 361
Puerto Rico 27 1 26 5,612 116
Virgin Islands 1 1
1 See footnote 1, table 1.
2 Consists of Public War Housing (Lanham constructed) and homes conversion programs. ’Includes PWA projects.
330
PUBLIC HOUSING ADMINISTRATION
Table 3.—Number of dwelling units made available for disposition and disposed of, by program, type of structure and accommodations, and method of disposition, Dec. 31, 1948
Program Total disposition responsibility Made available for disposition Disposed of—
Total Veterans’ reuse Sale Reuse war housing Lease cancellation Transfer to other agencies Demolition Other and not reported
Total 976,365 658, 506 474, 937 90,518 69,806 32,606 32, 564 48,021 9,747 191, 675
Public War Housing
(Lanham constructed). 623,636 434,003 284,453 84,721 42, 267 32, 206 7,133 47, 487 9,747 60,892
Family dwelling 522,901 339,685 199, 794 44,193 30,968 21,982 827 37,145 6, 710 57,969
Permanent.. 102,164 78, 932 96, 298 19, 903 19,619 7,635 12,524 843 30 11,349 2,109 40
Demountable- __ 71,472 598 4,051 337
Temporary and stop- 341,187 618
gap 171,368 547 159, 964 308 43,587 8 10,809 17,088 625 172 23,559 128 6, 710 57,586
Converted (byPHA).
Dormitory.. _ __ 100, 735 94,318 84,659 40,528 11 299 10, 224 6,306 10,342 3,037 2,923
Permanent 1,669 1,632 84,952 7,734 1,308 75,838 7,513 1,102 206
Temporary 91,332 7,734 266,000 40,528 9; 572 625 10, 224 9, 578 764 3,037 2,899 24
Converted (by PHA). 6,100
Veterans’ reuse 140,024 49,565 130,538 25,062 1130, 538
Homes conversion 49,565 25,062
Subsistence homesteads
and Greenbelt towns. 5,401 3,151 3,121 3,101 6 14
United States Housing
Act 3,740 3,740 3, 740 3,109 400 231
Defense Homes Corpora-
tion 11,489 11,489 16,534 11,489 10,592 10,737 369 528
Surplus Property Act 16,534 16; 534 5,797
1 Includes 116,107 accommodations transferred to educational institutions under the McGregor Bill.
Table 4.—U. 8. Housing Act Program, statement of income and expense for fiscal year ended June 30,1948
Income:
Rents—project rental:
Directly operated:
Public Works Administration $916, 951
Leased (net):
Public Works Administration $1, 657, 716
Public Law 671 965, 066
Public Law 412. 1, 536, 062
, 4, 158, 844
Other project rental: Public Works Ad-
ministration 13, 300
Total rents 5, 089, 095
Interest:
U. S. Government bonds $194, 887
Obligations of local housing authorities. 7, 482, 803
Public Works Administration limited
dividend corporations 46, 088
Other 158
Total interest_____________________________________ 7, 723, 936
Other---------------------------------------------------- 855
Total income_____________________________________________ 12, 813, 886
331
HOUSING AND HOME FINANCE AGENCY
Table 4.—U. S. Housing Act Program statement of income and expense for fiscal year ended June 30, 1948—Continued
Expenses:
Direct operating expenses;
Projects:
Directly operated (exclusive of op-
erating reserves):
Public Works Administration__________________ $598, 612
Interest expense:
Applicable to development costs:
Projects:
Public Law 671________________ $703, 276
Public Law 412________________ 949, 146
Other__________________________________ 4, 598, 821
Total interest expense_________________________ 6, 251, 243
Administrative expenses:
Management__________________________ $1, 893, 940
Development_________________________ 306, 060
Total administrative expense________________________ 2, 200, 000
Grants, subsidies and contributions: Annual contributions______________________________________________ 3, 335, 655
Other expenses: Miscellaneous_______________________________«_______________ 11, 409
Total expenses before depreciation, losses and charge-offs and adjust-
justment of operating reserves____________________ 12, 396, 919
Net income (or loss *) before depreciation, losses and charge-offs and adjustment of operating reserves____________________________________________________________ 416, 967
Depreciation:
Structures and equipment:
Projects:
Public Works Administration. $1, 881, 491
Public Law 671________________ 709, 277
Public Law 412________________ 871, 048
Total depreciation
Losses and charge-offs: Collection losses__________________
_____ 3, 461, 816
$633
Property losses:
Cost of replacement______________ 701
Insurance proceeds_______________ 1 177
Net property losses____________ 524
i Deduct.
332
PUBLIC HOUSING ADMINISTRATION
Table 4.— U. S. Housing Act Program statement of income and expense for fiscal year ended June 30, 1948—Continued
Net income—Continued
Losses and charge-offs—Continued
Disposition of property:
Costs__________________________ $86, 768
Expenses_______________________ 3, 000
Proceeds_______________________ 1 87, 437
Net loss on disposition
2, 331
Total losses and charge-offs________________ $3, 488
Total depreciation and losses and charge-offs____________________________________ 3, 465, 304
Net income (or loss ’) before adjustment of operating reserves_____________________________________________ 1 3, 048, 337
Adjustment of operating reserves (increase or decrease1)_________________________________________________ 1 170, 702
Net income (or loss x) for the fiscal year_________________ 1 2, 877, 635
ANALYSIS OF UNRESERVED SURPLUS (OR DEFICIT fl
Undivided profits (or loss 9 (excluding grants,
subsidies, and contributions):
Balance at beginning of fiscal year_________ $2, 191, 964
Net income (or loss ’) for the year (above2) _ 458, 020
Balance before adjustments__________________________ 2, 649, 984
Adjustments to beginning balance______________________ 1 4, 434, 716
Balance at end of fiscal year____________________________ 1 1, 784, 732
Cumulative grants, subsidies and contributions:
Balance at beginning of fiscal year________ 1 $56, 211, 611
Grants, subsidies, and contributions for the
year (above):
Annual contributions2____________________ ’3, 335, 655
Balance at end of fiscal year________________________ 1 59, 547, 266
Total unreserved surplus (or deficit ’) at end of fiscal year_____________________________________________ 1 61, 331, 998
1 Deduct.
2 The sum of these items equals the total net income (or loss >) for the period.
333
HOUSING AND HOME FINANCE AGENCY
Table 5.—United States Housing Act Program, balance sheet, as of June 30,191/8, and Dec. 31, 191/8
ASSETS
June 30, 1948 Dec. 31, 1948
Cash: On hand and in banks $9,138,840 9,876,345 49,903 $110,702 2,250,645 49,903
With U. S. Treasury . .
Deposits with other Government agencies
Appropriated funds
19,065,088 664,345 2,411,250 3,529,868
Investments: U. S. Government bonds . ..
7,873,909 10 7,873,601 10
Stock in PWA limited dividend corporation
Loans receivable: Local housing authority obligations . ..
7,873,919 7,873,611
280,670,723 954,000 284,479,040 927,000
Mortgage loan notes—PWA limited dividend corporations
Accounts receivable: Receivable from local housing authorities: Rents receivable _. .
281,624,723 285,406,040
1,194,832 1,306,346 45,065 7,408 1,176 7,198 354,400 2,018,451 759,313 29,865 5,140 1,890 639 513,515
Reserves receivable .
Other receivables
Tenants: Tenants in possession
Vacated tenants
Miscellaneous.
Advances
Accrued assets: Interest receivable: U. S. Government bonds .
2,916,425 3,328,813
27, 241 2, 706,742 19,080 27,241 2, 779,187 4,655
Local housing authority obligations... . .
Mortgage loan notes: PWA limited dividend corporations
Commodities, supplies, and materials: Stores inventories, held for use... Land, structures, and equipment: Development costs: Projects: PWA (cost)
2,753,063 11,159 2,811,083
127,113,389 41,963,518 58,366,743 1 18,848,708 1 1,990,680 1 4,488,126 127,113,430 41, 930,614 58,387,388 1 19, 789,453 1 2,342,106 1 4,923,947
Public Law 671 (cost)
Public Law 412 (cost) .
Allowance for depreciation: Projects: PWA
Public Law 671 _
Public Law 412
Deferred and undistributed charges: Prepaid insurance: Fixed premium. . ...
202,116,136 200,375,926
3,878 155,940 400 155,940 711,500 781,992
Returnable premium.
Prepaid administrative expense
Undistributed charges 131,933
Total assets ... _
291,751 1,649,832
517,316,609 507,386,423
334
PUBLIC HOUSING ADMINISTRATION
Table 5.— United States Housing Act Program, balance sheet, as of June 30, 1848, and Dec. 31, 1948—Continued LIABILITIES, RESERVES, AND CAPITAL
June 30, 1948 Dec. 31, 1948
Liabilities: Accounts payable: Due other Government agencies... Management . Disposition Local housing authorities: Deficits—leased projects Decrease in reserves Other Miscellaneous $908 121,089 3,000 93, 539 107,025 3,201 58,701 $139, 737 3,000 228,411 191,703 3,447 58,701
387,463 624,999
Accrued liabilities: Accrued payments in lieu of taxes Trust and deposit liabilities: Tenants security deposits __ Unclaimed refunds , Tax and insurance deposits Miscellaneous 2,330 118 5, 273 410,735 580 118 5,273 156
7,721 . 6,127
Bonds, debentures, and notes payable: U. S. Treasury series “0” note: maturing June 30, 1953 Deferred and undistributed credits: Prepaid rents..-: Undistributed credits 362,000,000 2,880 877,355 348,000,000 7,413 25,569
880,235 32,982
Total liabilities . 363, 275,419 349,074,843
Reserves: Operating reserves Operating improvements Operating improvements—special war account Repairs, maintenance, and replacements Vacancy and collection losses Fire and other hazards ; Contingencies General 277,632 44,053 3,612,627 3,488,887 4,600 954,104 191,098 5,953,941 275,184 44,052
Total reserves... 8, 573,001 6,273,177
Capital: Capital stock and paid-in surplus: Capital stock ...... Paid-in surplus: Assets transferred from PWA 1,000,000 114,833,900 1,000,000 114.833.900
115,833,900 115,833,900
Appropriations: Expenditures: Expended: Annual contributions . Development (PWA) Assets transferred to other programs Deposits of general fund receipts Unexpended . 59, 547,267 31,442,443 1 687,034 1 733 664,345 61, 521,743 32, 572, 920 1 687,034 ‘ 747 3,529,869
90, 966,288 96,936,751
Earned surplus (or deficit >): Unreserved: Cumulative grants, subsidies and contributions: Annual contributions Undivided profits (or losses) 1 59,547,267 1 1,784,732 1 61, 521,743 789,495
1 61,331,999 1 60,732,248
Total capital 145,468,189 152,038,403
Total liabilities, reserves, and capital 517,316,609 507,386,423
1 Indicates negative item.
335
HOUSING AND HOME FINANCE AGENCY
Table 6.—U. S. Housing Act Program, statement of sources and application of funds, for the fiscal year ended June 30,1948
FUNDS PROVIDED
By realization of assets:
Sale of stock $100
Repayment of principal on loans:
Local housing authority obligations. 44, 079, 358
Mortgage loan notes 429, 642
Sale of real property 86, 768
Reimbursement for development costs
(from Lanham Act funds) 444, 996
, $45, 040, 864
By income:
Rents 5, 089, 095
Interest 7, 724, 437
Miscellaneous * 855
12, 814, 387
By borrowings and appropriations:
From U. S. Treasury 15, 000, 000
Annual contributions 4, 000, 000
— 19, 000, 000
Total funds provided 76, 855, 251
FUNDS APPLIED
To acquisition of assets:
Loans $48, 095, 075
Land, structures, and equipment 240, 864
—.—.—.—.—.—. 48, 335, 939
To expenses (excluding charges not requiring
funds):
Direct operating expenses 598, 612
Interest expense 6, 251, 243
Administrative expense 2, 200, 000
Annual contributions 3, 335, 655
Direct nonoperating expense •___ 11, 409
Losses and charge-offs 2, 855
— —.—. 12, 399, 774
To retirement of borrowings and capital:
Deposits of general fund receipts 112
Returned to general fund of U. S.
Treasury 3, 438, 389
3, 438, 501
By increase in working capital 12, 681, 037
Total funds applied 76, 855, 251
556
PUBLIC HOUSING ADMINISTRATION
Table 7.—Maximum development cost of all projects under the U. S. Housing Act, Dec. 31, 1948
Public Law 412
—----—--------------------------------------Public Law
Total all Active ®71.’ a2*'*ve’
projects ______________________ not Pe™a'
Total Deferred finlnned
Permanently Not perma- nnancea
financed nently financed
Maximum development cost of all projects-------- $934,692,183 $655,560,865 $464,241,278 $87,008,641 $104,310,946 $279,131,318
Locally owned projects:
Federal funds:
Bonds purchased:
Outstanding------------------------------ 280,658,000 280,658,000 280,658,000 ______
Retired---------------------------------- 3,527,000 3,527,000 3,527,000 ______________________________
Total bonds purchased------------------ 284,185,000 284,185,000 284,185,000 ___________J___ ..._________
Advance loa,n notes----------------------------- 3,821,040 3,398,940 ________ 146,075 3,252,865 422,100
Contingent liability on temporary loan notes__________
Funds not yet advanced--------------------- 122,616,822 ’ 99,520,’930 8,’§39,’490 5’957,425 84,’724,'615 23,'095,’892
Total Federal commitment----------------- 410,622,862 387,104,870 293,024,490 6,103,500 87,976,880 23,517,992
Non-Federal funds: ~
Bonds issued:
Outstanding-------------------2---------- 139,834,500 139,834,500 139,834,500 ______
Retired---------------------------------- 30,416,500 30,416,500 29,858,500 558,000 ___________________
Total bonds issued--------------------- 170,251,000 170,251,000 169,693,000 558,000 ___________________
Capital donations, etc--------------------- 2,042,303 2,042,303 1,523,788 518,515 _______
Temporary loan notes. --------------------- 232,861,992 24,424,000 -------- 18,098,400 6,325,600 208,437,992
Funds not yet advanced--------------------- 11,622,566 11,622,566 ________ 1,614,100 10,008^466 ____
Total non-Federal commitment------------- 416,777,861 208,339,869 171,216,788 20,789,015 16,334,066 208,437,992
Maximum development cost—locally owned projects- 827,400,723 595,444,739 464,241,278 26,892,515 104,310,946 231,955,984
Federally owned projects: - -
Expenditures to date.. ------------------- 100,318,002 58,387,388 58,387,388 41,930,614
Funds not yet advanced------------------------ 6,973,458 1,728,738 1,728,738 5^244,720
Maximum development cost—Federally owned projects_ 107,291,460 60,116,126 60,116,126 47,175,334
337
HOUSING AND HOME FINANCE AGENCY
Table 8a.—Development cost, loans, and annual contributions for locally owned projects under the U. 8. Housing Act Program, Dec. 31, 1948
Development cost PHA loan commitments Outstanding loans of local authorities
From PHA Temporary from others Permanent from others Total outstanding loans
All PHA-aided locally
owned projects.. . $782,851,589 $672,777,474 $284,479,041 $216,851,000 $139,834, 500 $641 1 fi4 J
Public Law 412 proj-
ects 563, 587,525 453, 513,410 283,954,153 24, 424,000 139 834 500 448 212 653
Public Law 671 proj-
ects 219,264,064 219,264,064 524,888 192, 427,000 192, 951,888
By State:
Alabama . 21,011,656 19,074, 282 13,429,471 2 265 000 810 000 16 504 471
Arizona. 3,439; 100 3; iso; 000 1,604,782 1, 070,000 163’ 000 2 837’ 782
Arkansas . _ 6^ 462,995 6; 009; 995 737,562 1,953,000 37’000 2 727 562
California. ... 48,680,025 47; 353; 525 2,323,109 36,777,000 470*000 39 570’ 109
Colorado . . 3,492,800 2; 992; 800 1 421 000 1 284 000 406 000 3111 000
Connecticut 27, 592,680 20,839,400 14,948,100 5’ 269; 000 5, 5097 0 00 25 726 100
Delaware. _. 2,059, 529 2,059; 529 1,701,000 1’ 701'000
Florida.. _. . . ... 22,843,630 20,306,739 17, 520, 500 983,000 1, 279, 000 19 782 500
Georgia.. 40,181+04 35; 408; 204 22,870 694 2, 504,000 7 547 000 32 921’694
Idaho .. . ' 922', 000 ' 826; 000 390,819 24,000 ’ 414’ 819
Illinois. .... 44,432, 916 41,547,924 11,855,300 25,534 000 1 133 000 38 522 300
Indiana.. 11' 362, 511 10; 168', 411 7,101,200 853,000 667’ 000 8 621 200
Kentucky 20,141, 000 15,479, 300 12,152,059 5,642; 000 17^794’ 059
Louisiana... 35, 528, 343 31,447,843 22,724,688 4,049,000 2,342 000 29 115 688
Maryland. .. _ 26,959; 345 21; 038; 525 5, 295, 225 12,957,000 5 160 000 23 412? 2^5
Massachusetts. 45; 224; 640 35; 060; 440 17,287, 252 10,113,000 7,858,000 35 258 252
Michigan _ 34, 248', 435 29,828; 435 2', 584; 000 16,101,000 2 680 000 21 365000
Mississippi ... 8,491+13 7,' 639; 613 4,753,252 760,000 275,000 5’ 788’ 252
Missouri... . . . 14,510,625 13' 762; 425 84+00 6, 992,000 * 7’, 076’ 000
Montana 2,472,000 2,193,000 1,730,000 ' 371; 000 172 000 2 273 000
Nebraska . 3,782,000 3; 333,' 000 553,000 2,704,000 37 2577 000
New Jersey 42,989, 600 38,154, 600 26,019,000 10,130,666 3,073 000 397 222’ 000
New Mexico. ... ' 361', 000 324,900 12,074 127074
New York. _ _ 78,751, 698 63,958,400 16,029; 000 4 064,000 49 243 000 69 336 000
North Carolina 13, 9,77, 524 12,318,259 6,338,472 329,000 3,418,000 085; 472
Ohio
Oregon . . __ 2, 517,000 2,517,000 1,856,000 1,856 000
Pennsylvania.. 68, 704,743 54, 596, 286 23,644,800 24,951', 000 12 868 000 61 463’800
Rhode Island. IL 210+77 10; 827', 577 1,223,000 6,831,000 ’ 125 000 8’ 179’ 000
South Carolina IL 756; 630 10', 577', 438 5,545,867 1, 515,000 472,000 7,532; 867
Tennessee. 23, 223,341 20,465,600 7, 331,000 1,400,000 11,907 000 20 638 000
Texas. 44; 258', 187 35,479; 837 23,017,845 7,702,000 7 871 500 38’ 591’ 345
Virginia. 15; 272,694 14; 552; 994 2,750,278 7,083,000 ’209,000 10’ 042? 278
Washington.. 7,466, 300 6; 955, 300 2, 660,254 3,482,000 360,000 6’ 502’ 254
West Virginia 7; IPG 679 6,25< 679 4, 473; 507 2,006, 000 6 479’ 507
Wisconsin 2,453, 728 2; 275; 128 1,078,000 1,078,000
District of Columbia. 15,328,326 11, 584,326 3,119,000 5,887', 000 3, 344,000 12,350,000
Hawaii 4,053,200 3,697,600 937,000 1,083,000 60,000 2 080.000
Puerto Rico 9,669,915 8,688; 160 11,931 7,921,000 7,935, 931
338
PUBLIC HOUSING ADMINISTRATION
Table 8b.—Development cost, loans, and annual contributions for locally owned projects under the U. S. Housing Act Program, Dec. 31,191,8
Maximum contributions under contract First annual contribution Second and subsequent annual contributions amount actually paid Total paid during 1948
Maximum commitment Amount actually paid
All PHA-aided locally owned projects $24, 649,455 $3, 718, 825
Public Law 412 projects 17,976, 881 3 563 034
Public Law 671 projects 6,672; 574 155 791
•
By State:
Alabama- ... 659,103 $33, 745 33 745
Arizona 110, 582
Arkansas 214,390
California 1,491,979 $389,433 $62, 670 15 098 77 768
Colorado . ' 10L 784
Connecticut 848, 643 87,758 87 758
Delaware - _ _ 72; 083
Florida 730, 077 14,470 14 470
Georgia - 1, 215, 590 33 116 33’ 116
Idaho _ 30,460 10,860 io’ 860
Illinois 1,339,771 41,317 41 ’ 317
Indiana 364,107 27, 787 27 787
Kentucky 667,530 153,398 153’ 398
Louisiana _ 1, IO/ 616 114,191 31,927 661 696 693’ 623
Maryland. __ ... - _ ... ' 808; 732 121, 414 121,414
Massachusetts 1,356,738 166,333 166 333
Michigan... .. 1,027; 453 28, 544 28’ 544
Mississippi.. ' 291', 478 15,851 A 851
Missouri _. 472; 728
Montana . 74,160 9 338 9 338
Nebraska .. 14i; 825 36, 671 36’ 671
New Jersey. „ 1,360,466 272, 557 272 557
New Mexico 12,635
New York ... __ 2,711,552 238, 500 238, 500 641 930 880 430
North Carolina ' 469,958 74,891 74T 891
Oregon... ... _ . 84; 205 60,865 7,636 7 636
Pennsylvania 2,160,490 93 094 93 094
Rhode’ Island ' 343; 983 247 ’ 247
South Carolina 378,937 119,929 119 929
Tennessee 764; 081 83,267 83, 267
Texas. _ ... 1,362; 306 252, 643 252, 643
Virginia ' 42L 769 32,810 31,135 31,135
Washington. _ . _ 223,338 78,456 78 456
West Virginia.. . 244', 526 15, 826 15’ 826
Wisconsin.. ... 82, 542
District of Columbia 459,848 2,182 2 182
Hawaii ... 145,491 3,150 3,150
Puerto Rico 293; 499 251,389 251 389
339
HOUSING AND HOME FINANCE AGENCY
Table 9.—Statement of capital funds and annual contributions committed under U. S. Housing Act, Dec. 31, 19^8
Public Law 671 projects—active not permanently financed $422,100 208,437,992 23,095,892 231,955,984 41,930,614 5,244,720 47,175,334 279,131,318 279,131,318 42,352, 714 236,778,604 1 1 1 1 1 1 7,188,912
Public Law 412 projects Deferred $3,252,865 6,325,600 84, 724,015 94,302,480 94,302,480 94,302,480 3,252,865 91,049,615 ! 1 1 1 1 1 2,975,399
Active Not permanently financed $146,075 18,098,400 5,957,425 24, 201,900 58,387,388 1,728,738 60,116,126 84,318,026 84,318,026 58,533,463 25,784,563 1 1 1 1 1 1 1 i 1 1 1 1 1 1 1 1 832,608
Permanently financed IQ I 1 05 QO । 'CO i I 00 i i00 OO । I gj ; j 293,024,490 293,024, 490 293,024,490 284,185,000 8,839,490 1 1 14,782,065
Total $284,185,000 3,398,940 24,424,000 99,520,930 411,528,870 58,387,388 1,728, 738 | 60,116,126 471, 644,996 471,644,996 345,971,328 125,673,668 1 i 1 1 1 1 1 1 1 1 1 • 1 1 1 1 1 1 1 1 1 18, 590,072
Total all projects $284,185,000 3,821,040 232,861,992 122,616,822 »Q QO QO 5 100,318,002 6,973,458 107,291,460 750,776,314 750, 776,314 388,324,042 362,452,272 376,677,000 376,677,000 25,778,984 28,000,000 25, 778,984 2,221,016
CAPITAL FUNDS Capital funds committed: For locally owned projects: Bonds purchased Advance loan notes Temporary loan notes (Federal contingent liability) Funds not yet advanced Total locally owned projects For Federally owned projects: Expenditures to date Funds not yet expended Total Federally owned projects Total capital funds committed Capital funds required and available: Capital funds committed Less: Total loans made and investment in Federally owned projects.. Net PHA loan commitment outstanding Unused borrowing authority available from U. S. Treasury Balance from corporate funds ANNUAL CONTRIBUTION FUNDS Maximum commitment on locally owned projects Maximum contribution authorized Less: Maximum contributions committed Uncommitted balance available for use in the event of sale of Federally owned projects to local housing authorities
340
Table 10.—.Income and expense statement of all Federally owned projects under United States Housing Act, fiscal year ended June 30,1948
PWA projects ----------------------------------Public Law 671 Public Law 412 r Diroptiv--------------------------projects leased projects leased u •l0lal
operated Leased Total
Number of developments---------------------------- 7 >43 > 50 21 2 32 i2103
Number of dwelling units-------------------------- 2,481 >19,167 >21,648 8,071 2 11,855 > 2 41, 574
Latest development cost - ------------------------ $12,625,241 $114,488,148 $127,113,389 $41,963,518 2 $58,366,744 2 $227,443,651
Average development cost per unit----------------- 5,089 > 6,019 > 5,912 5,199 2 4,903 > 2 5,484
Number of dwelling units in operation------------- 2,471 > 19,134 > 21,605 8,062 11,946 > 41,613
Income:
Dwelling rent schedule----------------------------- 896,990 7,698,237 8,595,227 3,257,979 4,647,831 16,501,037
Dwelling vacancy loss-------------------------------- 2,720 13,089 15,809 21,945 12,170 49,924
Dwelling income---------------------------------- 894,270 7,685,148 8,579,418 3,236,034 4,635,661 16,451,113
Commercial rental------------------------------- 7,233 115,924 123,157 20,967 _________ 144,124
Furniture rental------------------------------------------------------------------ 16,583 16 583
Other nondwelling rental----------------------------- 6,992 12,889 19,881 5,600 1,566 2L047
Sales and services to tenants------------------------ 4,811 33,606 38,417 20,810 33,897 93,124
Miscellaneous project income------------------------- 3,644 24,434 28,078 7,730 14,953 50,761
Interest on investments------------------------------------ 1, 660 1,660 __________ 522 2.182
Total operating income--------------------------- 916,950 7,873,661 8,790,611 3,307,724 4,686,599 16,784,934
Expense:
Direct operating expenses: Management..--------------------------------------- 81,662 755,530 837,192 332,663 433,959 1,603,814
Operating services.------------------------------ 36,293 450,612 486,905 175,172 194,705 856,782
Dwelling and commercial utilities---------------- 224,292 2,132,103 2,356,395 803,468 1,284,406 4,444 269
Repairs, maintenance, and replacements----------- 179,381 1,983,717 2,163,098 618,516 838,965 3,620,579
Sanitation and waste removal...------------------------- 4,214 4,214 905 6,127 11,246
Supplementary community services------------- 222 22,803 23,025 3,227 12 187 38 439
Housekeeping services________________________ 41 _____________ 41 ’ 41
Insurance------------------------------------ 8,968 60,921 69,889 37,130 39,'767‘ 146,786
Rents--------------------------------------------------- 174 174 9,992 __________ 10,166
Taxes--------------------------------------------------- 480 480 6,729 ______ 7 209
Contributions to pension and insurance funds____________ 53, 695 53,695 3 790 12 032 69 517
Cost of sales and services to tenants-------- 3,682 32,852 36,534 21,048 33; 868 9L450
Payments in lieu of taxes------------------- 61,224 544,463 605,687 293,441 202,271 1,101,399
1 Includes one development of 194 dormitory units as equivalent to 48 family dwelling units in computing average development cost per unit 2 Excludes one development of 95 units on which the cost of land is included in the latest development cost in the amount of $247,662. The cost of land is excluded in computing average development cost per unit.
HOUSING AND HOME FINANCE AGENCY
831481—49----24
341
PUBLIC HOUSING
ADMINISTRATION
Table 10.—Income and expense statement of all Federally owned projects under United States Housing Act, fiscal year ended June 30, 1948—Continued
PWA projects Public Law 671 Public Law 412 r, d t„t„i Directly Leased Total Preets leased projects leased
operated
Expense—C ontinued
Direct operating expenses—Continued Miscellaneous_________________________________________________ 2,153 2.153 1,294 --------- 3,447
Undistributed accrued pay roll_-_____________ 2,847 ----------------- 2,847 ---------------------------- 2,847
Total direct operating expenses____________________598, 612___6,043, 717__6, 642, 329_2,307,375__3,058, 287__12,007, 991
Direct nonoperating expenses:
Damage to persons and property___________________________ 30 30 ----------- 127 157
Operating improvements_______________________ 11,255 167,319 178,574 12,209 87,468 278,251
Operating improvements—special war account______________________________________ 17,292 ---------------- 17,292
Moving expense—other than structures_________ 153 _________________20 173 ____ 3,498_________626________4, 297
Total direct nonoperating expenses_________________11, 408____167, 369____178, 777____32,999______88, 221_____299,997
Interest and depreciation:
Interest on development costs of PHA-owned aided projects_______________________ 703,276 949,146 1,652,422
Depreciation of structures and equipment_ ___ 195,096 1,686, 395 1,881, 491 709, 277 __871,049___3,461,817
Total interest and depreciation____________________195,096__1, 686, 395_1,881, 491__1,412, 553 ._1,820,195__5,114, 239
Losses and charge-offs:
Collection losses____________________________ 633 4,052 4 685 6,835 4,488 16,008
Property losses—cost of replacements_________ 701 3,921 4,622 12,101 533 17,256
Property losses—insurance proceeds___________ 3 177 3 3,114 3 3, 291 3 16,651 _____3 993 3 20,935
Total losses and charge-offs________________ 1,157 4, 859 6,016 2, 285 _____4, 028_____12,329
Total expenses______________________________ 806, 273 7, 902, 340 8, 708, 613 3, 755, 212 4,970,731__17,434, 556
Net income (or loss 3) before adjustment or reserves______110,677____3 28, 679____81,998____3 447,488___3 284,132___3 649, 622
Provisions for reserves:
Repairs, maintenance, and replacements__________ 3 69,967 3 535,049 3 605,016 191,547 3 88,050 3 501,519
Operating improvements______________________________________ 6, 253 6,253 1, 200 3 2,582 4,871
Operating improvements—special war account_________________________________________ 27,388 ---------- 27,388
Vacancy and collection losses___________________ 12,097 45,390 57, 487 197, 283 16,358 271.128
Fire and other hazards__________________________ 600 ___________________ 600 ------------------------------ 600
Contingencies_______________________________________________ 4,321 4.321 22, 509 -----------------26.830
Total provisions for reserves__________________ 3 57, 270 3 479,085 3 536. 355 439,927 3 74, 274 3 170,702
Net income (or loss 3)_____________________________ 167,947 450,406 618, 353 3 887,415 3 209,858 3 478.920
3 Deduct,
342
PUBLIC HOUSING ADMINISTRATION
Table 11.—Income and expense statement of PWA projects under United States Housing Act, fiscal year ended June 30,1948
Managed by PHA Leased to local authorities 1
Number of developments 1 7 2,481 42 18, 973
Number of dwelling units
Operating income: Dwelling rent schedule
Average per unit per month
30. 25 .09 33.87 .06
Less: Vacancy loss..
Net dwelling rentals
30.16 .76 33. 81 .83
Other operating income
Total operating income
30. 92 34.64
Expense: Operating expense: Management
2.75 1.22 7. 56 6.05 .30 . 13 .02 . 10 3.32 1.98 9.37 8.73 .27 .26 .02 .25
Operating services
Dwelling and commercial utilities.
Repairs, maintenance, and replacements .
Insurance . .
Public services
Collection losses
Miscellaneous
Subtotal: Operating expenses
18.13 24.20
Reserved from income for: Repairs, maintenance, and replacements
(2.36) (2.35) .03 .20
Operating improvements
Vacancy and collection losses .41 .02
Fire and other hazards ...
Contingencies .02
Subtotal: Reserved
(1. 93) (2.10)
Payments in lieu of taxes
2.07 • .38 6.58 .02 2.40 .74 7.42 (2)
Operating improvements... ...
Depreciation of structures and equipment... ...
Miscellaneous nonoperating expenses
Subtotal .
9.05 10.56
Total expense
25.25 32.66
Net income...
5.67 1.98
-
i Excludes one development, with 194 units, leased on a fixed-fee basis for which no income and expense data are included in the per unit-month tabulation.
2 Less than one-half cent.
343
HOUSING AND HOME FINANCE AGENCY
Table 12.—Income and expense statement of PHA permanently financed Public Law 412 projects by fiscal years ending in calendar years 1941-48
Average per unit per month for groups of projects by fiscal years
All projects with fiscal _______________________________________________________
year ending in 1948
Group 1—Projects completing 8th fiscal year in 1948
Item _________________ ■ _________________________________________________
npVnnh 1st fiscal 2d fiscal 3d fiscal 4th fiscal 5th fiscal 6th fiscal 7th fiscal 8th fiscal
Total l year end- year end- year end- year end- year end- year end- year end- yearend-
month ing 1941 ‘ ing 1942 ing 1943 ing 1944 ing 1945 ing 1946 ing 1947 ing 1948
Number of statutory projects------------- 163 _______________ 2 33
Number of developments___________________ 338 ---------------- ’ 55
Number of dwelling units_________________ 102,612 ____________ 23,157
Average development cost per unit________ 4,447 ____________... 4,727
Number of units available for occupancy-- 102,566 ____________ 23,149
Income (excluding PHA annual contribution):
Dwelling rent schedule __________ $35,020,122.99 $28.46 $19.31 $20.67 $23.51 $26.70 $27.88 $28.33 $30.60 $31.82
Less: Dwelling vacancy loss_____________ 71,669.13 .05 .57 .12 .24 .17 .09 .04 .04 .06
Net dwelling rental income__________ 34,948,453.86 28.41 18.74 20.55 23.27 26.53 27.79 28.29 30.56 31.76
All other income_______________________ 829,552.10 .67 .35 .51 .35 .33 .11 .71 1.04 1.09
Total income (excluding PHA annual contribution), 35,778,005.96 29.08 19.09 21.06 23.62 26.86 27.90 29.00 31.60 32.85
Expense:
Operating expense (excluding reserves):
Management _________________________ 4,116,608.52 3.35 2.40 2.67 2.58 2.66 2.76 2.97 3.45 3.83
Operating services__________________ 1,478.226.05 1.20 . 90 1.00 1.07 1.18 1.30 1.53 1.94 2.13
Dwelling utilities_ 8,317,391.19 6.76 4.55 4.82 5.54 6.02 5.79 5.89 6.87 7.99
Repairs maintenance, and’replacements_ 7,652,646.88 6.22 1.12 2.14 3.09 3.70 5.19 4.39 6.16 8.29
Public services ________________________ 122,648.62 .10 .02 .04 .09 .13 .13 .12 '.14 .14
Insurance 349,193.02 .28 .33 .47 .70 .50 .31 .31 .33 .35
Collection losses________________________ 36,798.85 .03 .02 .02 .03 .02 .03 .02 .02 .03
All other expense_____________________246,926.89 .20 .01 .06 .01 .01 .19 .31 .24 .18
Subtotal: Operating expense (excluding reserves)___________________________ 22,320,440.02 18.14 9.35 11.22 13.11 14.22 15.70 15.54 19.15 22.94
Reserved from income for:
Repairs maintenance, and replacements_ (1,618,993.14) (1.32) 4.55 3.57 2.43 2.18 .74 1.57 (.95) (3.02)
Vacancy and collection losses,._____ 212,464.74 .17 .55 .61 1.39 2.29 1.61 .22 .11 .11
Annual contribution allowance_______ 70,372.65 . 06 . 75 . 04 (.22) .04 (.24) .03 .12 . 02
344
PUBLIC HOUSING ADMINISTRATION
345
Contingencies for postwar improvements 13
All other reserves---------------- 106,873.74 .’osT UZZTZ1 ___.-------.'37---?50----
r’ Ee™d-------------------- (1,229,282.01) (1.00) 5.85 A22 JOO 4J51 2^24 U19 G 22) (2.56)
Payments in lieu of taxes------------ 821,363.19 .67 .48 .77 .93 1.98 2.15 2.17 .46 .76
Debt service: = : ----:
Interest paid non-Federal bonds (A bonds)-'_ 2,939,958.78 2.39 70 2 28 4 84 4 86 4 80 4M a qr
---------- "34:m2-83 5-88 4“ 8-g
4S:SM ' 3:l? ""i:” ~~ ....'A....................'rg ■■"Tg
Temporary notes retired_________ _____________________________________________
Reserved for debt service------------ 523,~739.~44 ?42 .*96 F 54 (.24) l.’i7 .'§1 i.T*2 .’96 .lA
service----------------- 15,630,241.15 12.70 14.48 14.58 13.65 15.15 15.08 15.19 15.26 15.40
Total expense---------------------- 37,542,762.35 30.51 30.16 30.79 31.29 35.86 35.17 35.09 34.65 36.54
.....—............ I'7«'’56-39 ” nr =rn ~nr nr “nr ==rr lse •«................................................................. •« ■»> 1944 1945 1946 1947 1948 1944 1 1945 1946 1947 1948
Number of statutory projects_______________ 163 29 11
Number of developments_____________________ 338 62 4 12
Number of dwelling units________________ 102,612 _____ 21,628 1 2,386
Average development cost per unit.-______ 4,447 4,830 3,902
Number of units available for occupancy_ 102,566 _____ 21,628 12, 360
Income (excluding PHA annual contribution): Dwelling rent schedule___________ $35,020,122.99 $28.46 $21.79 $27.36 $28.75 $29.95 $31.35 $32.88 $18.76 $20.94 $21.34 $21.76 $23.71
Less: Dwelling vacancy loss________ 71,669.13 .05 .28 .17 .12 .08 .06 .07 .29 .23 .08 .03 .05
Net dwelling rental income_____ 34.948,453.86 28.41 21.51 27.19 28.63 29.87 31.29 32.81 18.47 20.71 21.26 21.73 23.66
All other income__________________ 829,552.10 .67 .20 .38 .86 .37 .55 .64 .27 .20 .25 .27 .30
Total income (excluding PHA annual contribution)____________________ 35,778,005.96 29.08 21.71 27.57 29.49 30.24 31.84 33.45 18.74 20.91 21.51 22.00 23.96
Expense:
Operating expense (excluding reserves): Management______________________ 4,116,608.52 3.35 2.76 2.95 3.08 3.29 3.44 3.77 2.50 2.32 2.49 2.78 3.13
Operating services___________ 1,478.226.05 1.20 .84 .92 .93 1.09 1.34 1.44 .76 .78 .86 .95 .97
Dwelling utilities___________ 8,317,391.19 6.76 5.29 6.16 6.29 6.44 7.02 7.82 5.01 4.97 5.12 5.54 6.74
Repairs, maintenance, and replacements—. 7,652,646.88 6.22 2.16 3.29 4.07 4.90 6.46 6.77 2.15 3.80 3.96 5.24 4.96
Public services________________ 122,648.62 .10 .06 .23 .45 .27 .04 .05 .07 .14 .09 .11 .16
Insurance______________________ 349,193.02 .28 .47 .47 .30 .28 .30 .31 .33 .20 .14 .17 .19
Collection losses_______________ 36,798.85 .03 .04 .04 .06 .04 .03 .02 .02 .03 .01 .02 .03
All other expense______________ 246,926.89 .20 .01 _____ .01 .09 .19 .22 _____ .03 . 06 . 07 . 05
Subtotal: Operating expense (excluding reserves)_________..._________ 22,320.440.02 18.14 11.63 14.06 15.19 16.40 18.82 20.40 10.84 12.27 12.73 14.88 16.23
PUBLIC HOUSING ADMINISTRATION
349
Reserved from income for:
Repairs, maintenance, and replacements... (1,618,993.14) (1.32) 2.58 2.58 2.42 1.43 (.72) (1.00) 1.94 . 52 . 96 (1.11) (1.00)
Vacancy and collection losses__ 212,464.74 .17 1.78 .207 .205 .84 .15 .09 .104 1.22 1.30 .80 .64
Contingencies for postwar improvements______________________ .62 .65 _________________________________________
Annual contribution allowance__ 70,372.65 .06 .23 («) (.06) .15 .01 .10 .19 (.02) (.16) («) .08
All other reserves_____________ 106,873.74 . 09 ________________ .18 .13 (.03)_________________ .02 .01
Subtotal: Reserved___________________ (1,229,282.01) (1.00) 4.59 4.65 5.03 3.25 (.43) (.84) 3.17 1.72 2.10 (.29) (.27)
Payments in lieu of taxes_________________ 821,363.19 . 67 . 99 1.68 2.16 2.23 1.94 . 33 . 85 1.23 1.45 . 56 . 45
Debt service:
Interest paid non-Federal bonds (A Bonds)_ 2,939.958.78 2.39 1.32 2.54 2.16 2.47 2.39 2.30 1.52 2.98 3.20 2.73 2.85
Interest paid PHA bonds (B bonds)_ 7,234,542.93 5.88 3.34 6.67 6.75 6.64 6.63 6.62 1.56 3.35 3.11 3.43 3.20
Interest paid on temporary notes______________________j_______________________________________________________________
Non-Federal bonds retired (A bonds)_ 4,057,000.00 3.30 7.14 2.49 2.59 2.70 2.78 2.88 5.45 2.80 3.45 3.66 3.74
PHA bonds retired (B bonds)_______ 875,000.00 .71 («) __ .09 .48 .71 .75 _____ .45 _______ .02 .03
Temporary notes retired_______< ________________________________________________________ .50 _________________________
Reserved for debt service_____________ 523,739.44 . 42 1.06 1.26 1.09 . 66 . 52 . 42 1.01 .82 . 68 . 58 . 61
Subtotal: Debt service______ 15,630,241.15 12.70 12.86 12.96 12.98 12.95 13.03 12.97 10.58 10.40 10.44 10.42 10.43
Total expense_______________ 37,542,762.35 30.51 30.07 33.35 35.36 34.83 13.36 32.86 25.44 25.62 26.72 25.57 26.84
Deficit—current year operations___ 1,764,756.39 1.43 8.36 5.78 5.87 4.59 1.52 (3.59) 6.70 4.71 5.21 3.57 2.88
Special nonrecurring items:
Bond refunding____________________________ 774.52 (5) ________________ (5) __________________________________________
Earnings in excess of normal debt service 6_ (78,521.02) (.06)________________________________________________________
Operating improvements____________ 332,414.31 .27 .17 .98 .4 .52 .13 .50 .04 .35 1.00 .15 .14
Creation of working capital___________________________________________________________________________________________
Adjustments to previous years_____ (79,017.84) (.07)_____ .04 .19 (1.59) .01 (.17)_____ (.06) .17 .09 (.04)
Subtotal: Special nonrecurring items_ 175,649.97 .14 .17 .102 1.13 (.07) .14 .33 .04 .29 1.17 .24 .10
Total deficit—current year__________ 1,940,406.36 1.57 8.53 6.80 7.00 4.52 1.66 (.26) 6.74 5.00 6.38 3.81 2.98
Operating gain____________________ 951,361.93 . 78 ___._________________ .54 1.69 _______________________ .01
Annual contribution payable in respect to total deficit of current year_____________ 2,891,768.29 2.35 8.53 6.80 7.00 4.52 2.20 1.43 6.74 5.00 6.38 3.81 2.99
As percent of maximum annual contribution__ __ 19.9% 69.9% 56.6% 58.2% 37.5% 18.3% 11.8% 67.7% 51.3% 65.3% 39.0% 30.6%
Maximum annual contribution payable under contracts___________________________ 14,531,282.44 11.81 12.20 12.01 12.03 12.04 12.05 12.09 9.96 9.74 9.77 9.78 9.78
See footnotes at end of table.
HOUSING AND HOME FINANCE AGENCY
Table 12. Income and expense statement of PHA permanently financed Public Law 412 projects by fiscal years ending in calendar years 1941-48—Continued
Average per unit per month for groups of projects by fiscal years—Con.
All projects with fiscal year ending in 1948— " ' ~ '
Continued Group 5—Projects completing 4th fiscal Group 6—Projects completing
T. year in 1948 3d fiscal year fn 1948
Item ________________________________'
1st fiscal 2d fiscal 3d fiscal 4th fiscal 1st fiscal 2d fiscal 3d fiscal
Total 1 year end- year end- year end- year end- year end- year end- yearend-
month ing 19451 ing 1946 ing 1947 ing 1948 ing 1946 > Ing 1947 Ing 1948
____________________________________:--------__ Number of statutory projects..______j_______- 163 1 i
Number of developments_____________________ 338 1 7
Number of dwelling units________________ . 102 612 90 66
Average development cost per unit______________ / 447 — ZZ Z..ZZ’ 4 133 3 sis
Number of units available for occupancy________ 102,566 ________..... ’90 '66
Income (excluding PHA annual contribution):
Dwelling rent schedule --------------1------- $35,020,122.99 $28.46 $17.82 $18.53 $17.42 $17.87 $24.76 $26.89 $24.40
Less: Dwelling vacancy loss------------------ 71,669.13 .05 .12 .02 .10 .09 .01 .03 .01
Net dwelling rental income----------------- 34,948,453.86 28.41 17.70 18.51 17.32 17.78 24.75 26.86 24.39
All other income----------------------------- 829,552.10 .67 .05 .27 (.17) .01 .13 .14 .21
Total income (excluding PHA annual contribution)- 35,778,005.96 29.08 17.75 18.78 17.15 17.79 24.88 27.00 24^6(7
Expense: ~ ~ “ - —- -
Operating expense (excluding reserves):
Management—------------------------------- 4,116,608.52 3.35 3.36 2.86 2.84 2.92 2.86 3.46 3.66
Operatmg services-----------------------— 1,478,226.05 1.20 .22 .28 .29 .21 .50 .55 .63
Dwelling utilities------------------------ 8,317,391.19 6.76 3.15 3.70 3.96 4.03 6.47 5.84 5.65
Repairs, maintenance, and replacements---- 7,652,646.88 6.22 1.07 2.06 4.27 4.79 2.17 7 77 3 10
Public services--------------------------- 122,648.62 .10 .02 .04 .09 .13 .01
Insurance -------------------------------- 349,193.02 .28 .40 .40 .42 .42 .25 Z17 .’if
Collection losses------------------------- 36,798.85 .03 ------ .19 (.03)____________ .01 _______
All other expense------------------------- 246,926.89 .20 ______ .01 (s) ______________ .01 .11
Subtotal: Operating expense (excluding reserves)- 22,320,440.02 18.14 8.22 9.54 11.84 12.50 12.26 17 81 13 32
Reserved from income for:
Repairs, maintenance, and replacements---- (1,618,993.14) (1. 32) 3.14 2. 44 .23 .19 1. 97 (1.60) 2 69
Vacancy and collection losses------------- 212,464.74 .17 1.73 1.63 1.39 .06 2.47 2.65 1.15
350
PUBLIC HOUSING ADMINISTRATION
I 1 s i i S3 is i i •°6 lei 1 1 s ss ■ ds 4. 23 .01 5 8 isl £ 8 « 5 t develop-for which year, h projects
s i S i u 1 S3 :8 i i •od lU 1 1 3 ss 4 d8 S i i i i i ” i i i.i i i s is? 1 ” i”: : i £ 8 3 d ■g -g m ? . •
! cm ! 88 S3 is i i 'G lid 1 l% i i i 3 ss 3 SS § i i 8 i§? 1 cd led* £ 8 § d Rico for v les PR-4-2 ccounts for -3-1 (120 ui gs to debt
ife i ss S8 is i i •® lu I 1 S S3 d8 5 i i i i i 00 1 1 1 1 1 i i i i i i 5 ife? ! °° ! °° £ S § d 0 units) in Puerto ing unit; also inelut to development ai 5 units) and IND-pply excess earnin
ss igs i i' •ci lei 1 b 3 S§ dfi (fo;) 98 '6 s s is? ? 8 s d
opments (4,85 ,836 per dwell were charged 5-1, 2, 3 (1,071 contract to a
is! i 3S iS i is ’oi-lu 1 1 i i i : i i 2 S3 dk 8. 64 .11 3 2 2? □6 lode ? 8 2 d
is i ss ss is i :i ‘5 1® 1 ,'c I 52 3 dfi s i i i ci !il!! i s is^ i ® i®j ? 8 : d 4 Includes 22 develi ment costs average $1 income and expense 5 Less than cent, « Applies to FLA-I are permitted under
188 8fe SS iss is oild led • 1 3 25 2S ” 33 13 r-i ' ci £ 5 5 d
18S 128 1 r—1 52 §¥ KS Is3 i: Is l§§ h g i?' i* 15, 630,241.15 37,542,762. 35 S SS5 3 § Ssa is g eg' |g s SS8 ?! 14,531, 282. 44 s applicable to r to third fiscal ere charged to
i i : : i ; I i i i i i i i I i i i i i i । i i i i । of current year. H j varying period fiscal year, r this group prioi : and expense w
JH Subtotal: Reserved Payments in lieu of taxes Debt service: Interest paid non-Federal bonds (A bonds) Interest paid PHA bonds (B bonds) Interest paid on temporary notes Non-Federal bonds retired (A bonds) PHA bonds retired (B bonds) Temporary notes retired J-WOVl V4-CM v 0C1 V1LU-... Subtotal: Debt service Total expense Deficit—current year operations Special nonrecurring items: Bond refunding.. Earnings in excess of normal debt service ® Creation of working capital J Adjustments to previous years i iffi j i® 5 1 IS* HI HI ° Il'S" lii|! rr 2X0 pvivviiv VI AX1C4A.1LX1 HALL O/JLLLAIA Uli LU11L11UU LlUli O11VJ Maximum annual contribution payable under contn 1 Averages per unit per month are adjusted for the different accounts in respect to projects in their first 2 Excludes Ohio-2-1 (618 units) included in data foi year. 3 Includes GA-6-3A (179 units) for which income development accounts prior to fourth fiscal year.
351
HOUSING AND HOME FINANCE AGENCY Z V
Table 13.—Subsistence homestead and Greenbelt towns program, balance sheet, as of June 30,1948, and Dec. 31,1948
ASSETS
As of June 30, 1948 As of Dec. 31, 1948
Cash: On hand and in banks.. _. _ _ . $34,750 2,545,944 $5, 532 97,436
With U. S. Treasury
Appropriated funds
$2,580,694 1, 303,569 $102,968 1,268,800
Loans receivable: Subsistence homestead association mortgage notes
797,019 1,240,998 218,821 42,700 1 915,347 567, 691 1,190,998 201,137 37,000 1 873,713
Industrial cooperative mortgage notes ...
Mortgage loan notes—other _ _
Other loans... .
Allowance for losses . ...
Total loans receivable
1,384,191 1,123,113
Accounts receivable: Due from Government agencies _ _ ... _
104 32,910 65,998 1 65,998 2,448
Tenants accounts: Tenants in possession ___ ..... _ . __ _ 26,008 64,865 1 64,865 1,943 223
Vacated tenants .
Allowance for bad debts .. . . ... _. . .
Furniture sales . .
Miscellaneous ... _ .
Total accounts receivable
35,462 28,174
Accrued assets: Interest on industrial cooperative mortgage notes
185, 400 1,101 488 ’ 31,434 189,935 2,373 872 1 137,647
Interest on other mortgage loan notes.
Interest—other
Allowance for losses
Total accrued assets
155, 555 55, 533
Commodities, supplies, and materials: Stores inventories _ .
128,932 36,195, 406 1,595, 011 1 5,913,442 136, 741 36,162,675 518,912 ’ 6, 200,666
Land, structures, and equipment: Greenbelt towns projects. .. . _
Subsistence homestead projects. _ _ .
Allowance for depreciation—Greenbelt towns ... _.
Total land, structures, and equipment .
31,876,975 30,480,921
Deferred and undistributed charges: Prepaid expenses: Payments in lieu of taxes. . .
45,704 47,883 5,386 59,166 38,000 118,225
Insurance—fixed premiums ___ _ .. ...
Administrative
Undistributed charges . 2,400,465
Total deferred and undistributed charges
2,494, 052 220,777
Total assets
39,959,430 33, 417,027
LIABILITIES AND CAPITAL
Accounts payable: Management . . _ _ . _ . $231,506 19,713 32,388 $307,004 22,502 25,382
Disposition... .
Other.. _ _
Total accounts payable ... . .
$283, 607 $354,888
Trust and deposit liabilities: Deposits on lease and purchase agreements
2,404,585 38,954 97,463 81,382 5, 205 5,362
Deposits for maintenance and repair
Miscellaneous ' .
Total trust and deposit liabilities
2, 541, 002 91,949
’Deduct.
352
PUBLIC HOUSING ADMINISTRATION
Table 13.—Subsistence homestead [and Greenbelt towns program, balance sheet, as of June^SO, 1948?and Dec. 31?1948—Continued
As of June 30, 1948 As of Dec. 31, 1948
Deferred and undistributed credits: Prepaid rents 4,323 232 8,036
Prepaid interest .
Undistributed credits 135,847 109,432
Total deferred and undistributed credits 140,402 117,468
Total liabilities 2,965,011 564,305
Capital Paid-in capital: Appropriations: Expended . . 8,600,944 1,207,458 9,336, 543 1,216,250
Unexpended
Revenue receipts i 9,464,115 1 10, 208, 507
General fund receipts 1 8,207,633 1 11,060,151
Net appropriations 1 7,863,346 1 10,715,865
Assets transferred from Farmers Home Administration 62,468,467 62,799, 518
Assets transferred to other Federal agencies for disposition * 1,232,001 1 1, 734,823
Assets transferred to other Federal agencies for use 1 24,744 1 24,744
Assets transferred to other programs 17,457 1 9,402
Total paid-in capital 53,340,919 50,314,684
Deficit 1 16,346, 500 1 17,461,962
Totalcapital ... ... 36,994,419 32,852,722
Total liabilities and capital 39,959,430 33, 417,027
1 Deduct.
Table 14.—Subsistence homestead and Greenbelt towns program statement of income and expense for the fiscal year ended June 30,1948
Income:
Rents:
Greenbelt towns projects___________________$1, 464, 831
Subsistence homestead projects____ ________ 88, 514
Total rents___________________________________________ $1, 553, 345
Interest:
Subsistence homestead obligations______________ $27, 085
Industrial cooperative obligations______________ 17, 177
Other mortgage loans____________________________ 18, 686
Furniture sales contracts__________’________ 1, 272
Total interest_________________________________________ 64, 220
Other income_________________________________________________ 394
Total income_____________________________________ 1, 617, 959
353
HOUSING AND HOME FINANCE AGENCY
Table 14. —Subsistence homestead and Greenbelt towns program statement of income and expenses for the fiscal year ended June 30, 1948—Continued
Expenses:
Direct operating expenses:
Greenbelt towns projects___________________$1, 191, 897
Subsistence homestead projects_____________ 59, 742
Total direct operating expense_______________________ $1, 251, 639
Administrative expenses____________________ _______________ 158, 050
Depreciation—Greenbelt towns projects______________________ 574, 449
Losses and charge-offs:
Collection losses:
Greenbelt towns projects_______________ $4, 936
Subsistence homestead projects_________ 5, 699
Industrial cooperative loans—interest 1 1, 524
Total collection losses________________ 9, 111
Disposition of property:
Sales:
Cost_________________________________ 4, 033, 130
Expenses_____________________________ 11, 127
Proceeds_____________________________1 2, 665, 344
Net loss on sales____________________ 1, 378, 913
Dedications______________________________ 815, 839
Total losses and charge-offs_____________________
Total expenses
2, 203, 863
4, 188, 001
Net income (or loss r) before adjustment of reserves___ 1 2, 570, 042
Adjustment of reserves:
Provisions for bad debts___________________________ i 11, 439
Net income (or loss *) for the year_____________________i 2, 558, 603
Analysis of Earned Surplus (or Deficit *)
Balance at beginning of period________________________________ 1 12, 784, 981
Adjustments to beginning balance______________________________ 1 1, 002, 916
Net income (or loss ’) for the year (above)___________________ 1 2, 558, 603
Balance at end of period________________________________i 16, 346, 500
Deduct.
354
PUBLIC HOUSING ADMINISTRATION
Table 15. —Subsistence homestead and Greenbelt towns program statement of sources and application of funds for the fiscal year ended June 30,1948
Funds Provided
By realization of assets:
Repayments of principal of loans:
Subsistence homestead association mortgage notes---------------------------------------- $233, 074
Industrial cooperative mortgage notes_________ 631, 241
Mortgage loan notes—other_____________________ 380, 140
Total repayments_________________________ 1, 244, 455
Sales of property. ----------------------------- 2, 665, 344
Total realization of assets_________________________________ $3, 909, 799
By income:
Rents----------------------------------------------$1, 553, 346
Interest___________________________________________ 64, 220
Other---------------------------------------------- 394
Total income---------------------------------------- 1, 617, 960
By appropriations: Allotments—Farmers Home Administration_ 6
Total funds provided_____________________________________ 5, 527, 765
Funds Applied
To expenses (excluding charges not requiring funds):
Direct operating expenses___________________________$1, 251, 639
Administrative expenses_____________________________ 158, 050
Losses and charge-offs______________________________ 11, 127
Total expenses (excluding charges not requiring funds)_______ 1, 420, 816
To retirement of borrowings and capital: Deposits of general fund receipts------------------------------------------------------------- 4, 030, 400
To increase in working capital______________________________________ 76, 549
Total funds applied__________________________________________ 5, 527, 765
355
HOUSING AND HOME FINANCE AGENCY
Table 16.—Public war housing program, balance sheet, as of June 30, 191/8, and Dec. 31, 191/8
ASSETS
As of June 30, 1948 As of Dec. 31, 1948
Cash: On hand and in banks ... $240,401 1,527,083 $590, 586 780,128
With U. S. Treasury . _ _
Total cash
1,767,484 1,370, 714
Appropriated funds: Management
36,468,491 21,081,380 2,390,650 42,076,323 13,511,987 2,360,468
Disposition
Development ...
Total appropriated funds
59,940, 521 57,948,778
Investments: Other stock—Kays Creek Irrigation Co., Layton, Utah... Loans receivable: Mortgage loan notes . .
50 6, 750,482 50 8,528, 812
Accounts receivable: Government agencies . . _
39, 417 5, 658,367 299,922 78,515 248,209 201,081 1 201,081 534,119 453,921 31,973 5,323,041 238, 271 57,107 187,447 170, 814 i 170,814 477,165 330,416
Receivables from lessees and contractors: Rents receivable ...
Other receivables _ .
Other
Tenants accounts: Tenants in possession . _
Vacated tenants.
Allowance for had debts ... . . ... _
Unbilled
Miscellaneous .
Total accounts receivable . .
7,312,470 6,645,420
Advances: Local housing authorities
2,741,007 47,618 2,401,605 336,433
Other. .....
Total advances . _
2,788,625 2, 738,038
Accrued assets: Interest on mortgage loan notes..
12,101 116,678 1,224,062, 274 50,888 94,859 1,183,197,044
Commodities, supplies, and materials: Stores inventories
Land, structures, and equipment: Development costs _
Deferred and undistributed charges: Prepaid expenses: Payments in lieu of taxes
3,306,239 403 80,090 1,978,355 275 65,188 1,626,000 1,299,200
Insurance ...... ...
Land rental. _ . .
Administrative expenses .........
Undistributed charges* 2,527,369
Total deferred and undistributed charges
5, 914,101 4,969,018
Total assets ... . ... ...
1,308,664, 786 1, 265,543, 621
356
PUBLIC HOUSING ADMINISTRATION
Table 16. —Public war housing program, balance sheet, as of June 30, 1948, and Dec. 31, 1948—Continued
LIABILITIES AND CAPITAL
As of June 30, 1948 As of Dec. 31, 1948
Accounts payable: Management _ . $8,450,910 406, 720 180, 809 5,607 $8,355,689 542,048 543,517 45,361
Disposition ...
Local housing authorities: Deficits—leased projects
Other
Total accounts payable
9,044,046 9,486,615
Trust and deposit liabilities: Tenants’ security deposits
1,067,485 73, 626 441, 886 299,193 77,449 586,945
Unclaimed refunds
Other _
Total trust and deposit liabilities _ ...
1,582,997 963, 587
Deferred and undistributed credits: Prepaid rents ... .
239, 737 31,578 10, 706,027 344,914 31,577 9,499, 222
Disposition income ...
Undistributed credits
Total deferred and undistributed credits __
10,977,342 9, 875,713
Total liabilities
21,604,385 113,937,744 ■20,325,915 113,937,744
CAPITAL Paid-in capital: Paid-in surplus: Assets transferred from other Federal agencies Appropriations: Expended
1,833,011,382 51,909,016 1 294,054,117 1 168, 601, 628 1,855,847,053 49, 751,399 > 314,749,982 1 194,625,080
Unexpended... ... _
Revenue receipts _ _ _
General fund receipts ...
Net expended appropriations . _
1, 422,264,653 i 155,553,578 1 535,324 1,396,223,390 1 161,521,098 i 535,324
Assets transferred to other Federal agencies
Assets transferred to other programs
Total appropriations
1, 266,175, 751 i 93,053,094 1, 234,166,968 1 102,887,006
Earned surplus
Total capital. _ .
1,287,060, 401 1,245,217, 706
Total liabilities and capital _ . _
1,308,664, 786 1,265, 543,621
1 Deduct.
Note.—Contingent loss on “Offers to Purchase Real Property” accepted by PHA:
Total development cost of units covered by “Offer and Acceptances”_____________$10,572,672.97
Total sales price per “Offer and Acceptance”___________________________________ 6,885,302.75
Contingent Loss--------------------------------------------------------------------- 3,687,370.22
Contingent liability for unused accrued annual leave at June 30, 1948 was $1,736, 580.65 computed on a basis of 1,186,270 actual hours at an average annual salary rate of $3,045 or $1.4639 per hour.
831481—49---25
357
HOUSING AND HOME FINANCE AGENCY
Table 17. —Public war housing program statement of income and expense for the fiscal year ended June 30,1948
Income:
Rental of projects:
Directly operated:
Family dwelling------------------------------------$46, 674, 544
Dormitories________________________________________ 1, 5$$, $44
Stopgap-------------------------------------------- 1,359:741
Total directly operated_________________________________ 49, 623, 129
Leased (net):
Family dwelling---------------------------------- 24, 816, 407
Dormitories______________________________________ 1 206, 787
Stopgap------------------------------------------ 32, 125
Total leased________________________________________ 24, 641, 745
Contract managed________________________________________ 11, 336
Rented projects and project property____________________ 244, 270
Total rents----------------------------------------- 74, 520, 480
Interest on mortgage loan notes______________________________ 242, 187
Miscellaneous income_________________________________________ 67, 534
Total income_______________________________________ 74, 830, 201
Expenses:
Direct operating expenses:
Projects:
Directly operated:
Family dwelling________________________________ 29, 034, 262
Dormitories___________________________________ 2, 143, 149
Stopgap----------------------------------------- 1, 385, 030
Total directly operated________________________ 32, 562, 441
Contract managed______________________________________ 6, 695
Rented projects and project property__________________ 31, 868
Total projects___________________________________ 32, 601, 004
Excess property warehouse expense______________________ 71, 061
Total direct operating expense________________________ 32, 672, 065
Administrative expenses:
Public Housing Administration__________________________ 8, 066, 110
Office of Administrator, HHFA__________________________ 678, 000
Total administrative expenses__________________________ 8, 744, 110
358
PUBLIC HOUSING ADMINISTRATION
Table 17.—Public war housing program statement of income and expense for the
fiscal year ended June 30, 1948—Continued
Direct nonoperating expenses:
Projects:
Directly operated:
Family dwelling________________________________ $241, 203
Dormitories____________________________________ 676
Stopgap---------------------------------------- 733
Total direct nonoperating expense___:______ 242, 612
Losses and charge-offs:
Collection losses:
Directly operated projects:
Family dwelling____________________________________ 99, 226
Dormitories_________________________________________ 6, 745
Stopgap--------------------------------------------- 13, 033
Total directly operated__________________________ 119, 004
Rented projects and project property____________________ 4, 818
Total collection losses___________________________ 123, 822
Casualty losses:
Cost of property destroyed__________________________ 19, 319, 696
Cost of replacements________________________________ 97, 740
Total casualty losses______________________________ 19, 417, 436
Disposition of property:
Development costs:
Indirect costs—administrative expenses_______ 75, 000
Reuse for veterans’ housing program____________ 6, 414, 745
Reuse for Public Housing Administration______ 11, 353, 601
Sold------------------------------------------ 52, 548, 276
Demolished____________________________________ 21, 554, 606
Dedicated______________________________________ 4, 434, 403
Unallocated costs____________________________ 382, 188
Total development costs____________________ 96, 762, 819
Disposition expenses_________________________ 823, 813
Proceeds of sales____________________________ 1 15, 686, 528
Net disposition of property. „______________________ 81, 900, 104
Total losses and charge-offs____________________ 101, 441, 362
Total expenses------------------------------ 143, 100, 149
359
HOUSING AND HOME FINANCE AGENCY
Table 17.—Public war housing program statement of income and expense for the
fiscal year ended June 30, 194-8—Continued
Net income (or loss J) before adjustment of reserves_________1 $68, 269, 948
Adjustment of reserve________________________________________ 7, 394
Net income (or loss *) for the year__________________________ 1 68, 277, 342
Analysis of Earned Surplus (or Deficit !)
Balance at beginning of fiscal year__________________________ 1 8, 226, 574
Adjustment to beginning balance_____________________________ 1 16, 549, 178
Net income (or loss *) for the year (above)__________________ 1 68, 277, 342
Balance at end of fiscal year_________________________ 1 93, 053, 094
1 Deduct.
Table 18.-—Average income and expense per unit per month of entirely active projects in the public war housing program (Lanham constructed), by type of accommodation, calendar year ended Dec. 31,1948
Family dwellings Dormitories Stop-gap accommodations
Income: Dwelling rent schedule $32.47 .47 $23.41 5.65 $25.11
Less: vacancy loss ... 1.00
Dwelling rent income. 32.00 17.76 24.11
Other income-.. ... _ 2.23 . 13 1.48
Total operating income ___ ___ 34.23 17.89 25. 59
Expense: Management expense 3.08 4. 76 4.53
Operating services .75 2.01 2.80
Dwelling utilities 6. 75 3.37 5.19
Repairs, maintenance, and replacements 7.05 2.82 8.24
Public services ." 1.44 1.61 .87
Housekeeping services (1) 2. 58 .01
Other expenses 2 3 .61 2.76 1.63
Total operating expense before collection loss __ 19.68 69.91 23. 27
Collection loss . . .08 .13
Payments in lieu of taxes. 4.00 .41 1.64
Total operating expense -. 23.76 20.32 25.04
Net operating income . . . _ . __ 10. 47 3 (2.43) .55
Net nonoperating expense 4 .29 .09
Total expense.. __ . 24.05 20.32 25.13
Net project income . .. ... 10.18 3 (2.43) .46
i Less than $0,005.
2 Includes sales and services to tenants, insurance, rents, taxes, contributions to pensions and insurance funds, and miscellaneous.
3 Deficit.
* Includes operating improvements, property losses, etc.
360
PUBLIC HOUSING ADMINISTRATION
Table 19.—Public war housing program statement of sources and application of funds
for the fiscal year ended June 30, 1948
FUNDS PROVIDED
By realization of assets:
Repayment of principal of loans: Mortgage loan notes----------------------------------------- $366, 648
Sales of property----------------------------- 11, 253, 464
Total realization of assets_______________________________$11, 620 112
By income:
Rents---------------------------------------- $74,520,480
Interest_______________________________________ 242, 187
Other------------------------------------------ 67, 534
Total income--------------------------------------------- 74, 830, 201
By decrease in working capital_________________________________ 48, 654, 766
Total funds provided.
135, 105, 079
FUNDS APPLIED
To acquisition of assets: Land, structures, and equipment____________
To expenses (excluding charges not requiring funds):
667, 993
Direct operating expense_______________________$32, 672, 064
Administrative expense_________________________ 8, 744, 110
Direct nonoperating expense____________________ 242, 613
Losses and charge-offs_________________________ 996, 553
Total expenses (excluding charges not requiring funds).
To retirement of borrowings and capital:
Deposit of general fund receipts________________$87, 206, 678
Allotment rescission—Office of Administrator, HHFA-------------------------------------------- 4, 526, 154
Allotment rescission—Federal Works Agency_______ 48, 914
42, 655, 340
Total retirement of borrowings and capital_________________
91, 781, 746
Total funds applied_________________________________________
135, 105, 079
361
HOUSING AND HOME FINANCE AGENCY
Table 20.—Veterans’ reuse housing program, balance sheet, as of June 30, 191/8, and Dec. 31,191/8
ASSETS
As of .Tune 30, 1948 As of Dec. 31, 1948
Cash: On hand and in banks. $8,409 39,718 $9,111 38,000
With U. S. Treasury _
Total cash
48,127 47, 111
Appropriated funds
18,693,836 27,833,839
Accounts receivable: Due from local bodies __
15,015,272 20,315 2,243 321 > 321 37,164 7,189,357 950 2,586 931 1 931 74.766
Due from others. . .
Tenants accounts: Tenants in possession .. . _ ..
Vacated tenants _
Allowance for bad debts _
Miscellaneous
Total accounts receivable.. .
15,074, 994 7,267,659
Advances: Due from contractors _. _ _ _ _ _ . _
3,051,744 1,075,839 439,233 111,620
Due from local bodies _ _ _ _
Total advances _
4,127,583 550,853
Land, structures, and equipment: Development costs
11,444,735 20,092,994
Deferred and undistributed charges: Prepaid expenses: Payments in lieu of taxes
18,104 86,464 174, 000 26,178
Administrative expenses
Undistributed charges 43,069
Total deferred and undistributed charges 61,173 286,642
Total assets
49,450, 448 56,079,098
LIABILITIES AND CAPITAL
Accounts payable: Management _ ... $61,603 16,683 $189, 005 959
Administrative
Total accounts payable.. _ _ 78,286 189,964
Trust and deposit liabilities: Tenants security deposits ___________________
15,790 17,073 23,908 19,879 38,000
Unclaimed refunds. _
Miscellaneous.. .,
Total trust and deposit liabilities 56, 771 57,879
Deferred and undistributed credits: Prepaid rents __ __ _ _ _ _ __ _ __ _ _
2,544 10,204 4,744 8, 675
Undistributed credits .
Total 12,748 13,419
Total liabilities
147,805 439,135, 973 18,698,787 1 3,083,726 - > 4,734,017 261,262 442, 532,371 27,833, 516 > 15,614,852 > 5,216,323
CAPITAL Paid-in capital: Appropriations: Expended. _ .
Unexpended __ _
Revenue receipts
General fund receipts
Net expended appropriations 450,017,017 > 35,936 449, 534,712 > 35,936 5,062,457
Assets transferred to other government agencies
Assets transferred from other programs..
Total appropriations _ 449, 981,081 > 400,678,438 454,561, 233 > 398,743,397
Deficit -.
Total capital. .. .. 49,302,643 55,817,836
Total liabilities and capital
49,450,448 56,079,098
1 Deduct.
362’
PUBLIC HOUSING ADMINISTRATION
Table 21.—Veterans’ reuse housing program statement of income and expense for
the fiscal year ended June 30, 1948
Income:
Rents:
Directly operated projects___________________________ $719 626
Rented projects and project property_________________ 22 756
Leased projects—net return___________________________ 13 640’ 524
Transportation operation—net return__________________ 1 5 229
Total rents___________.___.___________ 14 377 677
Other income__________________________________ __ _ 97’310
Total income___________________________________ _ 14 474 gg7
Expenses:
Direct operating expenses: Directly operated projects.__ Administrative expenses: Public Housing Administration-Direct nonoperating expenses: Directly operated projects
499, 816
302, 700
4, 247
522
Losses and charge-offs:
Collection losses______
Disposition of property:
Sales: Proceeds____________„_______________________ 1 317 934
Reuse:
Administrative costs___________________________ 654 997
Field supervision and overhead_________________ 2, 306, 047
Unallocated costs______________________________ 2 327 688
Real property transferred______________________ 178, 205, 935
Total reuse-------------------------------- 183, 494( 667
Net loss on disposition of property____________ 183, 176, 733
Total losses and charge-offs___________________ 183, 177, 255
Total expenses----------------------------- 183, 984j 018
Net income (or loss !) before adjustments of reserves_____ 169, 509 031
Adjustment of reserves: Provision for bad debts___________ ’ ’ 52
Net income (or lossJ) for the year________________________ 1169, 509 083
ANALYSIS OF EARNED SURPLUS (OR DEFICIT J)
Balance at beginning of year________________________________1 229 619 897
Adjustments to beginning balance____________________________ 1 1’ 54g’ 45g
Net income (or loss1) for the year_________________1________1 lgg^ 509^ 083
Balance at end of period______________________________1 40g 678 438
’Deduct.
363
HOUSING AND HOME FINANCE AGENCY
Table 22.— Veterans' reuse housing program statement of sources and application
of funds for the fiscal year ended June 30, 1948
FUNDS PROVIDED
By realization of assets: Sales of property________________________ $317, 934
By income:
Rents_______________________________________$14, 377, 677
Other_______________________________________ 97, 310
Total income____________________________________________ 14, 474, 987
By appropriations: Allotments—Office of Administrator, HHFA_____________________________________________________ 27, 538, 221
By decrease in working capital-------------------------------- 54, 719, 231
Total funds provided____________________________________ 97, 050, 373
FUNDS APPLIED
To acquisition of assets: Land, structures, and equipment_________________________________________________________________
To expenses (excluding charges not requiring funds):
79, 525, 015
Direct operating expenses__________________________ 499, 816
Administrative expenses____________________________ 302, 700
Direct nonoperating expenses_________________________ 4, 247
Total expenses (excluding charges not requiring funds)______________________________________________________ 806, 763
To retirement of borrowings and capital:
Deposit of general fund receipts_________________ 4, 718, 595
Lapsed and rescinded appropriations______________ 12, 000, 000
Total retirement of borrowings and capital----------------
Total funds applied.
16, 718, 595
97, 050, 373
364
PUBLIC HOUSING ADMINISTRATION
Table 23.—Homes conversion program, balance sheet, as of June 30, 191/8 and
Dec. 31, 191/8
ASSETS
As of June 30, 1948 As of Dec. 31, 1948
Cash: On hand and in banks $110,793 197,819 $200,090 306,448
With U. S. Treasury
Total cash ...
308,612 506,538
Appropriated funds
4,057,116 3,140,019
Accounts receivable: Due from Government agencies
88 541,857 2,581 34,548 90,944 1 90, 944 83,197
Due from contract managers 5,933 4,608 38,261 93,211 1 93,211 78,898
Due from lessors
Tenants accounts: Tenants in possession. .. ._ . ...
Vacated tenants _ ..
Allowance for bad debts . . . .
Miscellaneous __
Total accounts receivable . .
662, 271 127,700
Advances.
352 93 19,156 6,693
Accrued assets: Accrued interest receivable
Loans receivable: Mortgage loan notes ... 80,383
Land, structures, and equipment: Costs: Leaseholds and improvements...
89,645,128 994,398 296,424 212,483 89,643,203 1,064,896 296,494 212,409
Operating improvements ... . .
Equipment ..
Furniture
Total cost ... _
91,148,433 > 38,087,325 1 32,938,435 1 420,464 91, 217,002 1 37,476,355 1 39, 639,271 1 445,926
Allowance for amortization: Active leaseholds and indirect costs .
Leaseholds cancelled ...
Allowance for depreciation
Net land, structures, and equipment
19, 702,209 13,655,450
Deferred and undistributed charges: Prepaid insurance.
25,513 267 132,500 281
Undistributed debits
Total deferred and undistributed charges
25,780 132, 781
Total assets.
24,775, 589 17,649, 564
LIABILITIES AND CAPITAL
Accounts payable: Development r. ... $39,449 598 20 $38,878 568
Management ’. ..
Disposition _
Total accounts payable ...
40,067 39,446
Accrued accounts: Accrued insurance expense
2,042 9,151 298,775
Trust and deposit liabilities: Tenants unclaimed refunds 8,622 191,034
Other .
Total trust and deposit liabilities ._ ...
199,656 307, 926
Deferred and undistributed credits: Prepaid rents ...
19,788 696 15,222 216,934
Undistributed credits
Total deferred and undistributed credits... . _
20,484 232,156
Total liabilities
260,207 581,570
i Deduct.
365
HOUSING AND HOME FINANCE AGENCY
Table 23.—Homes conversion program, balance sheet, as of June 30, 1948, and Dec. 31, 1948—Continued
LIABILITIES AND CAPITAL—Continued
As of June 30, 1948 As of Dec. 31, 1948
CAPITAL Paid-in capital: Appropriations: Expended $122,988,784 4,059,147 1 36,826,417 1 21,218,622 $125,285,929 3,139,950 1 38,204,365 1 24,145,579
Unexpended _
Revenue receipts
General fund receipts
Net appropriations
69,002,892 1 32, 200 1 3,952 193,966 66,075,935 1 32,458 1 3,952 193,966
Assets transferred to other programs .
Assets transferred to other Federal agencies for disposition
Assets transferred from other programs
Total paid-in capital
69,160,706 1 44,645,324 66,233,491 1 49,165,497
Earned surplus (or deficit1)
Total capital.. . _____
24,515,382 17,067,994
Total liabilities and capital
24,775, 589 17,649, 564
i Deduct.
Table 24.—Homes conversion program statement of income and expense for the fiscal year ended June 30, 1948
Income:
Rents:
Dwelling rent schedule__________________________________ $17, 238, 622
Dwelling vacancy loss___________________________________ 196, 336
Dwelling rents________________________________________ 17, 042, 286
Furniture rentals_____________________________________ 54, 179
Total rents____________________________________________ 17, 096, 465
Interest_____________________________________________________ 818
Other income_________________________________________________ 18, 286
Total income_________________________________________ 17, 115, 569
Expenses:
Direct operating expenses:
Contract managers operating expenses:
Legal, fiscal, and other fees_______________________ 4, 462
Management fees________________________________________ 1, 150, 695
Janitorial services____________________________________ 1, 314, 195
Heating_______________________________________________ 1, 469, 505
Other utilities________________________________________ 2, 611, 260
Repairs, maintenance, and replacements_________________ 1, 695, 510
Total contract managers expenses___________________ 8, 245, 627
366
PUBLIC HOUSING ADMINISTRATION
Table 24.—Homes conversion program statement of income and expense for the
fiscal year ended June 30, 1948—Continued
Expenses—Continued
Direct operating expenses—Continued
Fixed operating expenses:
Insurance______________________________________ $16, 860
Rental payments to lessors_____________________ 2, 790, 724
Payments to mortgagees_________________________ 610, 729
Taxes__________________________________________ 1, 544, 312
Total fixed operating expenses___________________ 4, 962, 625
Other direct operating expenses:
Liability and personal injury expense________________ 7, 432
Moving expenses other than structures________________ 272
Miscellaneous________________________________________ 512
Total other direct operating expenses____________ 8, 216
Total direct operating expenses__________________ 13, 216, 468
Administrative expenses_____________________________________ 482, 640
Amortization and depreciation:
Active leaseholds______________________________________ 8, 683, 202
Properties abandoned prior to completion___________________ 187, 188
Indirect costs_____________________________________________ 643, 419
Operating improvements_____________________________________ 152, 300
Equipment____________________________________________________ 44, 477
Furniture___________________________•__________________ 37, 318
Total amortization and depreciation__________________ 9, 747, 904
Losses and charge-offs:
Collection losses___________________________________________ 66, 141
Casualty losses:
Losses and replacements_____________________________ 11, 326
Insurance recoveries________________________________ 1 7, 418
Net casualty losses________________________________ 3, 908
Disposition losses:
Costs:
Leaseholds_______________________________________ 15, 277, 808
Operating improvements_______________________________ 207, 163
Equipment_____________________________________________ 62, 708
Furniture______________________________________________ 8, 937
Total costs______________________________________ 15, 556, 616
Allowance for prior amortization___________________ 1 9, 100, 909
1 Deduct.
367
HOUSING AND HOME FINANCE AGENCY
Table 24.—Homes conversion program statement of income and expense for the
fiscal year ended June 30, 1948—Continued
Expenses—Continued
Disposition losses—Continued
Costs—Continued
Unamortized value_______________________________ $6, 455, 707
Cancellation expenses___________________________ 76, 548
Proceeds________________________________________ » 2, 768, 748
Net loss on disposition_________________________ 3, 763, 507
Total losses and charge-offs____________________ 3, 833, 556
Total expenses_________________________________ 27, 280, 568
Net income (or loss J) before adjustment to reserve__________1 10, 164, 999
Adjustment to reserves: Provision for bad debts______________ 1 46, 465
Net income (or loss J) for the period________________________1 10, 118, 534
Analysis of Earned Surplus (Or Deficit !)
Balance at beginning of fiscal year__________________________1 34, 500, 725
Adjustments to beginning balance_____________________________ 1 26, 065
Adjusted balance_______________________________________ 1 34, 526, 790
Net income (or loss ’) for the period________________________1 10, 118, 534
Balance at end of period_______________________________1 44, 645, 324
1 Deduct.
Table 25.—Homes conversion program, statement of sources, and application of funds for the fiscal year ended June 30, 1948
FUNDS PROVIDED
By realization of assets:
Repayments of principal of loans________________ $21, 131
Lease cancellations_____________________________ 2, 753, 448
Total realization of assets__________________
By income:
Rents___________________________________________ 17, 096, 465
Interest on notes_______________________________ 818
Other___________________________________________ 18, 286
$2, 774, 579
Total income_____________________________________________
By decrease in working capital_________________________________
17, 115, 569
5, 699, 531
Total funds provided.
25, 589, 679
368
PUBLIC HOUSING ADMINISTRATION
Table 25.—Homes conversion program, statement of sources, and application of funds for the fiscal year ended June 30, 1948—Continued
FUNDS APPLIED
To acquisition of assets: Leasehold and improvements__________
To expenses (excluding depreciation and other charges
not requiring funds):
Direct operating expenses________________________ 13, 216, 467
Administrative expenses__________________________ 482, 640
Losses and charge-offs___________________________ 80, 457
Total expenses______________________________—------------
To retirement of borrowings and capital: Deposit of general fund receipts____________________________________________
Total funds applied
$88, 639
13, 779, 564
11, 721, 476
25, 589, 679
Table 26.—Full-time PHA employment, by ceiling unit, June 1943-Dec. 1948
Month and year Total Administrative Project site
Central office Field Development Management
1943
June - - - . 9,890 J, 612 2, 523 1, 218 4, 537
September _ 10', 455 1,474 2, 514 1,293 5,174
December . . 10,763 1,414 2,450 i;089 5 810
1944
March 10,152 1,300 2,321 850 5 681
June . -- 10i 046 1,197 2,295 714 5, 840
September - . - 9, 899 1' 123 2' 268 585 5 923
December _ _ ______ 9; 716 1,083 2,317 424 5,892
1945
March _ _ _ __ 9, 646 1,046 2,299 357 5 944
June. - 9; 370 1,071 2,393 283 5 623
September ___ 9', 152 1,079 2,433 240 5,400
December _ _ . 8i 659 li059 2,380 120 5,100
1946
March 9, 266 1,140 2,637 581 4, 908
June _ _ - __ 10^ 755 L 196 3,099 1, 561 4 899
September _ 11,212 1,167 3,098 2,189 4 758
December _ _ 10i 970 1,147 2,993 2,170 4,660
1947
March.. - __ 9,517 1,089 2, 744 1,218 4 466
June 8^ 298 985 2,409 674 4, 230
September _ _ - 6,537 631 1,434 427 4,045
December - - _ 6^294 614 1,404 283 3,993
1948
January _ . 6,110 588 1,343 243 3 936
February 6,022 582 1,318 224 3,898
March. 1 __ _ _ 5' 926 602 L306 192 3,826
April -- 5^ 839 600 1,296 142 3,801
May 5,804 615 1,287 137 3,765
June__ . _ _ 5, 723 633 1’283 101 3 706
July 5, 737 670 1,243 69 3 755
August -- -- 5, 715 685 1,209 63 3 758
September ___ _ __ __ 5, 664 798 1,083 32 3, 751
October. _ _ _ . 5, 563 869 958 23 3, 713
November _ . - 5,473 965 792 21 3,695
December 5,291 1,062 549 12 3,668
369
HOUSING AND HOME FINANCE AGENCY
Table 27.—Analysis of PHA administrative expense for fiscal year 1948
By objective classification:
Personal services___________________________________________ $9,284,961
Travel__________________________________________________________ 440,307
Transportation of things_________________________________________ 67, 666
Communication services_________________________________________ 164, 904
Rents and utility services______________________________________ 781, 309
Printing and binding_____________________________________________ 32, 124
Other contractual services______________________________________ 353, 618
Supplies and materials___________________________________________ 56, 904
Equipment_________________________________________________________ 18,084
Subtotal______________________________________________ 11,199,877
Transfers_______________________________________________ 30, 987
Total________________________________________________ 11,230,864
By source of funds:
Development funds:
Public war housing program_________________________ 291, 000
Veterans’ reuse housing program____________________ 738, 000
United States Housing Act program 1________________ 218, 200
Total development funds________________________ 1, 247, 200
Management income funds:
Public war housing program_________________________ 3, 540, 364
Veterans’ reuse housing program____________________ 718, 500
Subsistence homesteads and Greentown program_______ 139, 000
Homes conversion program___________________________ 555, 000
United States Housing Act program 2________________ 1, 981, 800
Total management income funds_____________ 6, 934, 664
Disposition funds:
Public war housing program___________________________ 2, 580, 000
Subsistence homesteads and Greentown program_________ 172, 000
Homes conversion program_____________________________ 297, 000
Total disposition funds_________________________________ 3, 049, 000
Total from all sources______________________________________ 11,230,864
1 Portion applicable to U. S. Housing Authority.
3 Portion applicable to operation of PWA projects.
370
PUBLIC HOUSING ADMINISTRATION
Table 28.—Cumulative expenditures for project development, by program and State, other than U. S. Housing Act Uno-rent projects, as of June 30, 1948
State Subsistence homestead and Greenbelt towns War housing Veterans’ reuse Total program
Alabama ______ _______ $2, 537, 863.64 $42,471, 877.24 $5 615 568 87 $50 625 309 75
Arizona _________ _ _ 118,933. 26 19 193,166.26 2 484,893.15 21’796’ 992 67
Arkansas.__ 14,507,610.24 1, 368,935.31 15 87g’ 545 55
California - 303', 227; 032. 70 29,342,208.92 332’ 569’ 241 62
Colorado . _ 121, 967.81 5; 817; 460.84 6,318,229.85 12 257’ 658 50
Connecticut . 55, 592,070.00 5,041,807.95 60’ 633’ 877 95
Delaware 6; 50i; 607.70 426,698.94 6 928’306 64
Florida . 32,264,234.36 3,468,081.64 35’ 732’ 31G 00
Georgia 36,538, 716.43 4,446,051.49 4o’ 984’ 767 92
Idaho . __ 3; 786,' 705.67 3,391,837.06 7’178’542 73
Illinois 556, 629.03 23', 995; 076.56 20,696,908.43 45’ 24s’ 614 02
Indiana 40; 129; 907.83 12,826,999.15 52’956’ 906 98
Iowa. _ 4,976,315. 54 11,468, 217.72 1 g’ 444’ 553 26
Kansas.. 38,094, 760.26 3,736,623.20 41’831’383 46
Kentucky 5, 944, 999.28 5,125,012.09 11070011 37
Louisiana _ 10,858,944.84 7,441,027.26 is’299’972 10
Maine . . 17, 985,391.89 1,022,313.81 19’007’705 70
Maryland . . 13,448,869.41 65; 539; 075.27 2 201,011.18 81 ’188 955 86
Massachusetts 14,105,026.44 16 783 475.16 3o’888’ 501 60
Michigan ._ . .. ._ . 1,366,353.76 85,450,037.12 15,887, 898.81 102’ 704’ 289 69
Minnesota _ - ' 318; 073.57 8, 512,165.15 s’830’ 23S 72
Mississippi 231,495.36 19,277; 273.00 4 217 238.98 23’ 726’ 007 34
Missouri - _ .. - 9,241,524.58 9,049,797.83 18’ 291’ 322 41
Montana _ i; 639; 166.53 4 281,321.96 5’920 4SS 49
Nebraska 10,709,026.00 2,971,699.81 13’ 680’ 725 81
Nevada __ __ 7; 293; 239.10 ' 704; 511.91 7997 751 01
New Hampshire . 6, 625,392.19 1,795,893. 57 8’421’285 76
New Jersey __ 3,169,219.25 24; 134; 790.93 20 438'399 52 47 742 409 70
New Mexico 6,994,340.84 874,159.11 7 868 499 95
New York 43,020. 53 43,066, 712.42 63 096 137.86 106’205’870 81
North Carolina 27,205,091.37 6,761,701.89 33’966’ 793 26
North Dakota 2,168,331.10 2,’ 168, 331 10
Ohio . _ 11,971,007.65 73, 756,464.90 23; 678; 684.04 109 406 156 59
Oklahoma 8; 362; 030.43 8,228,603.83 16’ 590 634 26
Oregon _ __ 64,088, 572.62 5 175 140.83 69’ 263’ 713 45
Pennsylvania 1, 809,464.99 104 460, 786.85 21 068 550.35 127’ 33s’ 802 19
Rhode Island .. 3,621,758.13 ’ 634,349.51 4’ 256’ 107 64
South Carolina. 26,428.22 2i; 164', 893.44 3,473, 795.27 24’, 665’, 116. 93
South Dakota. 2; 340; 543.12 3; 818; 567.06 6,159 110 18
Tennessee.. 2,875,893. 85 7; 773; 133.91 6,369,109.12 17 018 136 88
Texas 77,173,863.41 15,280, 521.61 92354’385 02
Utah 23; 902; 949.14 3,250,406.86 27 153 356 00
Vermont... ..... 1,793,561.80 909,257.40 2,702 819 20
Virginia 1,290,412.08 106,123,287.58 5,409,150.67 112 822 850 33
Washington ... 169,179,364.40 4, 935,597.31 174,114; 961. 71
West Virginia 4,236,613.12 7; 157,258.32 ' 555; 287.13 11^949 158 57
Wisconsin. io; 964; 378.32 13; 409; 829.66 8,478,460.68 32 852 668 66
Wyoming _ 3,224, 551. 87 2, 680,878.29 5 905’430 16
District of Columbia 21', 793; 784.89 3, 964,142.05 25, 757,926.94
Alaska 5,254, 703.75 873,445.13 6,128,148.88
Canal Zone . .. 1', 675', 141.71 1 675 141 71
Hawaii 13; 402; 897.25 1,077,022. 76 14,479,920.01
Puerto Rico .. ... L 257; 248.50 ' 21i; 485.45 4,468 733 95
Administrative expenses 29,877, 886.72 1 20, 910,911.90 50 788,798 62
Trailers 2. 42; 088; 522.39 42,088, 522.39
Advances ... 1,516,911.14 1 516 911.14
Undistributed costs 69,266.00 2,467, 564.46 10,124,861.42 12,661,691.88
Total 2 54,837,816.28 3 1,791,835,246.25 436, 590,298.49 2,283,263,361.02
1 Includes field supervision and inspection.
2 All projects developed by Farmers Home Administration and transferred to PHA.
3 Includes costs of $113,937,744.05 for projects developed by other Government agencies and transferred to PHA. Also includes $90,089,702.13 homes conversion program.
o
371
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University of Louisville Libraries