[7th Annual Report, Housing and Home Finance Agency, Calendar Year 1953]
[From the U.S. Government Publishing Office, www.gpo.gov]
"~jth
ANNUAL REPORT HOUSING AND HOME FINANCE AGENCY
Calendar Year
1953 ★
Office of the Administrator Home Loan Bank Board Federal Housing Administration Public Housing Administration
THE HOUSING 1626 K Street N Albert M. Co THE HOME LO 101 Indiana Ave Walter W. Me William K. D THE FEDERAL 1001 Vermont A Guy T. O. He THE PUBLIC H 1201 Connecticu Charles E. Sit THE NATIONA 1626 K Street N Housing and Chairman, He Federal Housi Public Housir Secretary of 2^ Administratoi Secretary of C Secretary of L Secretary of I designee) Secretary of E DATE DUE
1
L_
' GAYLORD agriculture ( of Veterar ommerce (c abor (or hi deal th, Edu tefense (or t or his desigi is’ Affairs (c >r his designe s designee) cation, and iis designee) ice) jr his design -e) Welfare (or PRINTED IN U.S.A. ee) his
-.—...
, '• .>-w>
l : / ■ •!
*...’ li.. ■ ■ j
• . ♦ V. ?
<•/* v'*
______<;
K^’ ' -y——rj
LIBRARY
MBSBKa38!F.nT'>an"-f—jy —-J
oa^nf'jQ fa o «,..■ *-> ' •■
ANNUAL REPORT
HOUSING AND HOME
FINANCE AGENCY
Part I
Overall Report of the Housing and Home Finance Agency, Office of the Administrator, page 1
Part II
Home Loan Bank Board, page 129
Part III
Federal Housing Administrator, page 167
Part IV
Public Housing Administration, page 365
UNITED STATES GOVERNMENT PRINTING OFFICE, WASHINGTON : 1954
For sale by the Superintendent of Documents, U. S. Government Printing Office Washington 25, D. C. - Price $1.25
U0D5
u. s.
/ff
—1th
HD
729?
•qth, 13S3
LETTER OF TRANSMITTAL
Sirs: I have the honor to transmit herewith the Seventh Annual Report of the Housing and Home Finance Agency covering the housing activities of the Federal Government for the calendar year 1953.
In this Seventh 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.
Sincerely,
Albert M. Cole,
Administrator..
The Speaker of the House of Representatives,
Washington 25, D. C.
President, United States Senate,
Washington 25, D. C.
II
TABLE OF CONTENTS
CONTENTS OF PART I
Overall Report of the Housing and Home Finance Agency Office of the Administrator
Page
INTRODUCTION____________________________________________________ XIII
CHRONOLOGY OF SIGNIFICANT EVENTS IN HOUSING, 1953__ XIV
ORGANIZATION AND STRUCTURE OF THE HOUSING AND
HOME FINANCE AGENCY___________________________________________ XVII
SECTION 1. THE OVERALL HOUSING PICTURE IN 1953
Chapter I. Salient Developments in the HHFA_______________ 1
A. A year of review and development____________________ 1
B. Housing progress____________________________________ 4
Chapter II. Housing in the Economy in 1953_________________ 7
A. Housing production_____________________________________ 7
B. Materials and labor supply_____________________________ 9
C. Costs, prices, and wages______________________________ 10
D. Home financing________________________________________ 13
Chapter III. Housing Supply and Needs______________________ 19
SECTION 2. ACTIVE OPERATING PROGRAMS OF THE HHFA
Chapter IV. Slum Clearance and Urban Redevelopment________ 24
A. Types of Federal assistance to localities___________ 24
B. Types of projects eligible for Federal aid__________ 25
C. Major policy developments in 1953___________________ 25
D. Operations____________________________________________ 26
E. Coordination and liaison______________________________ 29
F. State legislation and litigation______________________ 30
Chapter V. The Secondary Mortgage Market: Federal National Mortgage Association___________________________________ 32
A. General scope of operations___________________________ 32
B. The purchasing program________________________________ 34
C. The mortgage sales program____________________________ 38
D. Other liquidation_____________________________________ 41
E. Status of purchasing authority________________________ 41
F. Administration________________________________________ 42
Chapter VI. Defense Housing and Community Facilities______ 44
A. Defense housing_______________________________________ 44
B. Defense community facilities and services___________ 48
Chapter VII. Other Active Programs__________________________ 50
A. College housing program_______________________________ 50
B. School construction program___________________________ 52
C. Special housing aids in disaster areas______________ 53
SECTION 3. PROGRAMS IN LIQUIDATION
Chapter VIII. Housing Research Program____________________ 55
Chapter IX. Other Programs in Liquidation_________________ 58
A. Alaska housing loans__________________________________ 58
B. Prefabricated housing loans___________________________ 59
C. Lanham Act housing____________________________________ 61
D. Advance planning of non-Federal public works__________ 62
E. Maintenance and disposition of World War II public works__ 64
III
233993
TABLE OF CONTENTS
Page
SECTION 4. SPECIAL STAFF ACTIVITIES IN THE OFFICE OF
THE ADMINISTRATOR
Chapter X. Staff Functions____________________________________ 66
A. The scope of staff functions in general__________________ 66
B, International housing activities_________________________ 67
C. Special problems and approaches in housing of minorities- 69
CHARTS
Chart 1. Housing and Home Finance Agency—Office of the Administrator_________________________________________________ XVIII
Chart 2. Housing and Home Finance Agency--------------------- XX
Chart 3. Private nonfarm housing starts----------------------- 7
Chart 4. Permanent nonfarm dwelling units started------------- 8
Chart 5. Prices and production of building materials--------- 10
Chart 6. Homebuilding costs---------------------------------- 11
Chart 7. Average weekly earnings in building construction-------- 12
Chart 8. Nonfarm mortgage recordings and FHA and VA home loans______________________________________________ 14
Chart 9. Outstanding mortgage debt on 1- to 4-family nonfarm homes__________________________________________________________ 15
Chart 10. Outstanding mortgage debt on total nonfarm housing— Dec. 31, 1953__________________________________________________ 17
Chart 11. Housing conditions by family income—1950------------ 23
Chart 12. Federal National Mortgage Association--------------- 33
Chart 13. Status of FNMA authorization------------------------ 42
APPENDIXES:
A. STATISTICAL AND FISCAL TABLES-------------------------------------- 73
1. The Housing Economy:
Table 1. Permanent nonfarm dwelling units started: 1925-53------ 73
Table 2. Permanent privately owned nonfarm dwelling units started: 1935-53______________________________________________________ 74
Table 3. FHA and VA starts compared with total permanent privately owned nonfarm starts: 1935-53------------------------- 75
Table 4. Dollar volume of new construction put in place: 1925-53-_ 76
Table 5. Boeckh indexes of dwelling unit construction cost: 1925-54, 77
Table 6. Indexes of production of selected construction materials: 1925-53______________________________________________________ 78
Table 7. Indexes of wholesale prices of selected building materials and other commodities: 1950-53------------------------------— 79
Table 8. Estimated mortgage debt on 1- to 4-family nonfarm homes: 1925-53________________________________________________________ 80
Table 9. Nonfarm real estate foreclosures: 1926-53------------ 81
Table 10. FHA and VA home loans compared with total recordings: 1939-53________________________________________________________ 81
2. Housing Programs—Federal agencies (tables relating to HLBB, FHA, and PHA will be found in other parts of this report):
Table Ila. FNMA home financing activity during 1953 and at end of 1953_______________________________________________ 82
Table 11b. FNMA participation in defense, military and disaster housing program during 1953 and at end of 1953---------------- 83
Table 11c. FNMA home financing activity, by month: 1953------ 84
Table lid. FNMA home financing, by calendar year: 1938-53---- 84
Table lie. FNMA sales and purchases, by month: 1952-53------- 85
IV
TABLE OF CONTENTS
A. STATISTICAL AND FISCAL TABLES—Continued
2. Housing Programs—Continued Page
Table 12a. Slum clearance and urban redevelopment under Title I, Public Law 171: 1949-53_______________________________________ 87
Table 12b. SCUR operations and Federal assistance, by locality: through December 1953_________________________________________ 88
Table 13a. Lending activity under the college housing program: 1950-54_______________________________________________________ 95
Table 13b. Applications and construction activity under the college housing loan program: 1950-54_________________________________ 96
Table 14. Number of projects under Title II of the school construction program: 1950-54_________________________________________ 97
Table 15. Defense community facilities under Public Law 139: 1951-53_______________________________________________________ 98
Table 16. First and second advance planning programs: 1944-53_ 99
Table 17. Lending activity of the Alaska housing authority under
Public Law 52: 1949-53____________________________ 100
Table 18. FHA insuring activity in Alaska under Public Law 52: 1949-53_________________________________________________________ 101
Table 19. FNMA authorizations in Alaska under Public Law 52: 1949-53_________________________________________________________ 102
Table 20. The prefabricated housing lending program: 1946-53__ 103
Table 21a. Veterans Administration, summary of home loan guaranty operations: 1944-53______________________ 104
Table 21b. Characteristics of VA loans closed: 1948-53_________ 105
Table 22. Summary of the farm housing program under Public Law 171: 1949-53__________________________________________________ 106
Table 23. HHFA Programs in the Federal Budget_________________ 107
B. EXECUTIVE MESSAGES AND FEDERAL LEGISLATION AFFECTING HOUSING IN 1953______________________________ 108
A. Executive messages__________________________________________ 108
B. The Congress and Federal legislation_______________________ 109
C. PUBLICATIONS OF THE HHFA_________________________________ 125
V
CONTENTS OF PART II
HOME LOAN BANK BOARD
Page
SECTION 1. HOME LOAN BANK BOARD_________________________________ 131
1953 A record year______________________________________________ 131
Federal Savings and Loan Advisory Council_______________________ 131
Legislation_____________________________________________________ 133
Administrative expenses_________________________________________ 133
SECTION 2. FEDERAL HOME LOAN BANK SYSTEM_________________ 135
Origin and purpose______________________________________________ 135
General comments________________________________________________ 135
Cash and investment securities__________________________________ 135
Lending operations of the Federal Home Loan Banks-------------- 136
Delinquent advances_____________________________________________ 137
Interest rates on advances____________________________________ 138
Deposits of members_____________________________________________ 138
Interbank deposits______________________________________________ 139
Consolidated Federal Home Loan Bank obligations_________________ 139
Capital structure of the Federal Home Loan Banks_______________ 140
Capital stock of the Federal Home Loan Banks____________________ 140
Legal reserve_________________________1________________________ 140
Comparative balance sheets______________________________________ 141
Income and expense______________________________________________ 141
Dividends of Banks______________________________________________ 142
Required liquidity of Banks_____________________________________ 142
Growth in membership____________________________________________ 142
Liquidity of members____________________________________________ 143
Home Loan Bank Board supervision of Banks_______________________ 144
Examination of Banks____________________________________________ 144
Management of Banks_____________________________________________ 145
SECTION 3. FEDERAL SAVINGS AND LOAN INSURANCE COR-
PORATION______________________________________________________ 149
Introduction____________________________________________________ 149
Insurance coverage______________________________________________ 149
Membership______________________________________________________ 150
Insurance protection for the investor___________________________ 150
Insurance settlements___________________________________________ 151
Condition of the Corporation____________________________________ 151
Operations of the Corporation___________________________________ 151
Assets and liabilities of insured associations------------------ 152
SECTION 4. FEDERAL SAVINGS AND LOAN SYSTEM_______________________ 155
Introduction____________________________________________________ 155
Granting of charters and branches_______________________________ 156
Number and assets_______________________________________________ 156
Savings activity________________________________________________ 157
Lending activity________________________________________________ 158
Liquidity and reserves__________________________________________ 158
VI
TABLE OF CONTENTS
Page
CHARTS
Chart 1. Federal Home Loan Bank Districts___________________ 134
Chart 2. Federal Home Loan Bank advances outstanding as a percent of assets of member institutions______________ 137
Chart 3. Number and assets of member institutions of the Federal Home Loan Bank System______________________________ 143
Chart 4. Primary lending areas of insured savings and loan associations___________________________________________ 148
Chart 5. Source and distribution of cumulative gross income of the
Federal Savings and Loan Insurance Corporation___ 152
Chart 6. Assets of insured and uninsured savings and loan associations______________________________________________ 154
Chart 7. Number and assets of Federal Savings and Loan Associations_________________________________________________ _ 157
TABLES
Table 1. Federal Home Loan Banks—Comparative consolidated statement of condition as of Dec. 31, 1953, and Dec. 31, 1952________________________________________________________ 158
Table 2. Federal Home Loan Banks—Summary of lending operations, 1932-53______________________________________________ 159
Table 3. Federal Home Loan Banks—Comparative consolidated statement of operations for the calendar years 1953 and 1952----------------------------------------„--------------- 160
Table 4. Federal Home Loan Banks—Schedule of interest rates on new advances and interest rates paid on members’ time deposits, Jan. 1, 1954______________________________________ 161
Table 5. Federal Savings and Loan Insurance Corporation—Number and assets of insured savings and loan associations, by type, Dec. 31, 1953, and Dec. 31, 1952______________________ 162
Table 6. Federal Savings and Loan Insurance Corporation—Statement of condition as of Dec. 31, 1953, and Dec. 31, 1952_ 164
Table 7. Federal Savings and Loan Insurance Corporation—Statement of operations for the calendar years 1953 and 1952_ 165
VII
CONTENTS OF PART III
FEDERAL HOUSING ADMINISTRATION
Page
FUNCTIONS OF THE FEDERAL HOUSING ADMINISTRATION. 169
SECTION 1. GENERAL REVIEW__________________________________________ 171
Legislative changes________________________________________________ 171
Repayment of Government advances___________________________________ 172
Interest rates_____________________________________________________ 173
Debentures_________________________________________________________ 173
FHA advisory committees____________________________________________ 173
Older homes and neighborhoods______________________________________ 173
Minority groups_________________.________________________________ 174
Technical studies__________________________________________________ 175
Market analyses____________________________________________________ 176
Actuarial analysis_________________________________________________ 176
Credit controls____________________________________________________ 177
Financial position______________.________________________________ 177
Aggregate insurance volume_________________________________________ 178
Mortgage insurance_______________________________________________ 184
Prefabricated housing______________________________________________ 186
Property improvement loan insurance________________________________ 187
Property management________________________________________________ 189
Organization and personnel_________________________________________ 191
Publications_______________________________________________________ 192
SECTION 2. STATISTICS OF INSURING OPERATIONS_______________________ 193
Home mortgage insurance____________________________________________ 194
Volume of business____________________________________________ 197
Status of processing__________________________________________ 200
State distribution____________________________________________ 201
Terminations and foreclosures_________________________________ 205
Termination experience________________________________________ 212
Home mortgages in default_____________________________________ 216
Financial institution activity_______________________________ 216
Characteristics of home mortgage transactions_________________ 224
Trends in characteristics in FHA home mortgage transactions. _ 225
Property characteristics______________________________________ 238
Mortgagors’ incomes and housing expense_______________________ 253
Characteristics of Section 903 home mortgage transactions___ 262
Project mortgage insurance_________________________________________ 268
Volume of business____________________________________________ 268
State distribution____________________________________________ 271
Terminations__________________________________________________ 274
Defaults of project mortgages_________________________________ 277
Financial institution activity________________________________ 277
Characteristics of projects___________________________________ 281
VIII
TABLE OF CONTENTS
SECTION 2. STATISTICS OF INSURING OPERATIONS—Con. Page
Property improvement loan insurance_____________________________ 296
Annual volume of business__________________________________ 296
State distribution_________________________________________ 300
Financial institution activity_____________________________ 304
Loan characteristics_______________________________________ 306
Type of property and improvement___________________________ 308
Claims by type of property and improvement_______________ 312
Payments received prior to default_________________ _ 313
SECTION 3. ACCOUNTS AND FINANCE_________________________________ 315
Combined funds__________________________________________________ 315
Title I: Property Improvement Loans___________________________ 321
Title I Housing Insurance Fund__________________________________ 328
Title II: Mutual Mortgage Insurance Fund______________________ 333
Title II: Housing Insurance Fund______________________________ 341
Title VI: War Housing Insurance Fund__________________________ 347
Title VII: Housing Investment Insurance Fund__________________ 355
Title VIII: Military Housing Insurance Fund___________________ 357
Title IX: National Defense Housing Insurance Fund_____________ 360
Administrative Expense Account_____________ _ _ _ 364
CHARTS
Chart 1. Volume of FHA insurance written, 1934-53_____________ 179
Chart 2. Private nonfarm dwelling units started, FHA and total, 1935-53_____________________________________________ 184
Chart 3. Federal Housing Administration, organizational chart_ 190
Chart 4. Federal Housing Administration, insuring office basic organization chart______________________________________________ 190
Chart 5. Federal Housing Administration per annum employees by months, 1934-53_________________________________________________ 191
Chart 6. Home mortgages insured by FHA, 1935-53_________________ 197
Chart 7. Number of home mortgages insured under all sections, 1953------------------------------------------------------------ 204
Chart 8. Yearly termination rates of FHA home mortgages, 1935-53________________________________________________________ 208
Chart 9. Originations of FHA home mortgages by type of institution, 1952 and 1953_____________________________________________ 217
Chart 10. Holdings of FHA home mortgages by type of institution as of Dec. 31, 1953_____________________________________________ 219
Chart 11. Originations and holdings of FHA home mortgages by type of institution, 1953___________________________ 220
Chart 12. Purchases and sales of FHA home mortgages by type of institution, 4953___________________________________ 221
Chart 13. Characteristics of FHA mortgages, homes, and mortgagors—single-family home mortgages insured under Section 203—selected years 1940-53__________________ 226
Chart 14. Amount of mortgage—FHA-insured mortgages on singlefamily homes, Section 203, 1953_____________________ 232
Chart 15. Property value—FHA-insured mortgages on single-family homes—Section 203, 1953_____________________________ 239
Chart 16. Range of calculated areas by property values—FHA-insured mortgages on single-family homes, Section 203, 1953------------------------------------------------ 249
Chart 17. Mortgagor’s annual income—FHA-insured mortgages on 1-family owner-occupied homes—Section 203, 1953_______________ 254
IX
TABLE OF CONTENTS
CHARTS—Continued Page
Chart 18. Range of housing expense by income for new home buyers—FHA-insured mortgages on single-family homes—Section 203, 1953------------------------ 259
Chart 19. Mortgage payment and housing expense by mortgagor’s income-—FHA-insured mortgages on single-family homes, Section 203, 1953_______________________ 260
Chart 20. Total monthly mortgage payment—FHA-insured mortgages on single-family homes—Section 203, 1953-- 261
Chart 21. Project mortgages insured by FHA, 1935-53------ 270
Chart 22. Volume of project mortgages insured in 1953 (number of dwelling units)-------------------------------. 273
Chart 23. Trend of characteristics of new rental projects—1935-53__ 283
Chart 24. Projects and dwelling units by type of project—Commitments issued in 1953 to insure new project mortgages-. 285
Chart 25. Average mortgage per unit by type of project—Commitments issued in 1953 to insure new project mortgages. _ 289
Chart 26. Size of dwelling unit by type of project—Commitments issued in 1953 to insure new project mortgages- 291
Chart 27. Monthly rental or charges by type of project—Commitments issued in 1953 to insure new project mortgages. _ 293
Chart 28. Volume of loans tabulated compared with estimated volume of loans received under Title I, Section 2—1952-53. 297
Chart 29. Insured property improvement loans outstanding and claims paid by FHA—1934-53--------------------- 298
Chart 30. Number of property improvement loans insured by FHA under Title I, Section 2, during 1953---------- 301
Chart 31. Types of institutions originating property improvement loans and receiving claim payments under the 1950 Reserve—Title I, Section 2, 1950-53____________ 305
Chart 32. Type of improvement financed by FHA-insured property improvement loans—Title I, Section 2, 1953----- 309
Chart 33. Payments made prior to default—Claims paid on property improvement loans—Title I, Section 2, 1953----- 314
X
CONTENTS OF PART IV
PUBLIC HOUSING ADMINISTRATION
Page
FOREWORD__________________________________________________________ 367
INTRODUCTION______________________________________________________ 369
Chapter I. The Low-Rent Public Housing Program___________________ 371
A. Federal-local participation_______________________________ 371
B. Size of national program—Congressional limitations________ 374
C. Limitation for 1953-54____________________________________ 375
D. Stoppage of local programs________________________________ 376
E. Development progress in 1953______________________________ 378
F. Managing low-rent housing_________________________________ 380
G. Occupancy requirements____________________________________ 381
H. Families housed—Incomes and rents_________________________ 383
I. Federal annual contributions______________________________ 384
Chapter II. Recent Developments in the Financing of Low-Rent
Public Housing__________________________________________________ 387
A. Method of financing_______________________________________ 387
B. Construction loans and permanent financing________________ 387
C. Attorney General’s opinion on security of new housing authority bonds_________________________________________________________ 388
D. Sales of housing bonds in 1953____________________________ 389
E. Refunding of bonds held by PHA under Act of 1937__________ 390
F. Temporary financing_______________________________________ 391
Chapter III. War and Emergency Housing_________________________ 393
A. Description of programs___________________________________ 393
B. Management________________________________________________ 394
C. Disposition of Lanham Act Housing in 1953_______________ 396
D. Other emergency housing___________________________________ 399
Chapter IV. Administration______________________________________ 401
A. Organization_____________■______________________________ 401
B. Central office—Field office relationships_________________ 402
C. Budget and personnel______________________________________ 402
D. Management improvement activities___________________ 403
CHARTS:
Chart 1. Local housing authorities with PHA programs, Dec. 31, 1953_________________________________________________________ 373
Chart 2. Housing Act of 1949: Dwelling units placed under construction and completed, by calendar year_________________________ 376
Chart 3. Housing Act of 1949: Dwelling units put under construction by month, November 1949-December 1953________________________ 378
Chart 4. Housing Act of 1949: Dwelling units completed by month, August 1950-December 1953__________________________ 379
Chart 5. Housing Act of 1949: Dwelling units under construction and completed, June 1950-December 1953_________________ 386
Chart 6. Status of active defense assignments at year-end___ 395
Chart 7. Public War Housing (Lanham constructed) current workload and removals by type of disposition, as of Dec. 31, 1953_______________________________________________ 398
Chart 8. Units administered by PHA, and number of administrative employees—Dec. 31st of each year—-1942-53__________ 403
XI
TABLE OF CONTENTS
STATISTICAL AND FISCAL TABLES Page
Table 1. Number of dwelling units owned or supervised by the Public Housing Administration by program—as of
Dec. 31, 1953______________________________________ 405
Table 2. Number of active projects and dwelling units owned or supervised by the Public Housing Administration by program and by State—as of Dec. 31, 1953----------------------- 406
Table 3. Disposition responsibility of the Public Housing Administration: Total number of dwelling units and number disposed of, by program, type of structure and accommodation, and method of disposition—as of Dec. 31, 1953___________________________________________________________ 407
Table 4. Housing Act of 1949: Number of presently active dwelling units processed through stages, by State—as of Dec. 31, 1953___________________________________________________________ 408
Table 5. Housing Act of 1949: Reservations issued, places with approved preliminary plans, and projects processed through selected progress stages, by State—as of Dec. 31, 1953— 409
Table 6. Combined balance sheet—as of June 30, 1953----------- 410
Table 7. Combined statement of investment of United States Government—as of June 30, 1953_________________________________ 412
Table 8. Combined statement of deficit—as of June 30, 1953---- 413
Table 9. Combined statement of income and expenses for the fiscal year ended June 30, 1953_______________________________________ 414
Table 10. Combined statement of sources and application of funds for the fiscal year ended June 30, 1953------------------------ 415
Table 11. Statement of the status of financing and annual contribution commitments—-as of June 30, 1953-------------------------- 416
Table 12. Statement of financing commitments—as of June 30, 1953—United States Housing Act program_________________________ 417
Table 13. Statement of development costs and loans for locally owned projects—as of June 30, 1953_____________________________ 418
Table 14. Statement of annual contributions by States for fiscal year ended June 30, 1953, and cumulative and maximum annual contributions payable under contracts—as of June 30, 1953_______________________________________________________ 419
Table 15. Statement of income and expenses per unit month of availability for all federally owned projects in the United States Housing Act program for the fiscal year ended June 30, 1953__________________________________________________ 420
Table 16. Statement of accrued annual contributions for locally owned projects eligible for contributions in fiscal year ended June 30, 1953-------------------------------------------- 421
Table 17. Statement of operating receipts, operating expenditures and residual receipts for locally owned projects eligible for annual contributions in fiscal year ended June 30, 1953___________________________________________________________ 422
Table 18. Statement of income and expenses per unit month of availability for fully active family dwelling projects in the public war housing program for the fiscal year ended June 30, 1953__________________________________________________ 423
Table 19. Statement of administrative expenses by object and source of funds for the fiscal year ended June 30, 1953--------------- 423
XII
INTRODUCTION TO PART I
In Part I of the Seventh Annual Report of 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 overall activities of 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 Parts II, III, and IV, respectively, of this report. The material presented in Part I deals with both the housing economy in 1953 and HHFA programs and activities. It is preceded by a chronology of significant events in housing in 1953 and is followed by three appendixes : Appendix A contains various statistical and fiscal tables— in addition pertinent statistical tables are included in the text; Appendix B lists Executive messages and Federal legislation affecting housing in 1953; Appendix C lists HHF A publications.
XIII
CHRONOLOGY OF SIGNIFICANT EVENTS IN HOUSING, 1953
1-5 FHA permits lenders to charge a new service charge of one-half of one percent per year.
1-16 Executive Order 10427 transferred disaster relief program from HHFA to Federal Civil Defense Administration.
1-24 Administrator announced relaxation of the restrictions placed on the disposal of Lanham Act World War II war housing and veterans’ reuse housing in order to facilitate disposition of the Federal Government’s interest.
3-10 Public Law 5, 83d Congress, approved, increasing Title I loan insurance authorization of FHA to $1,750 million and providing for repayment to the Treasury by June 30, 1954, of $8.3 million Government investment in Title I fund.
3-11 Albert M. Cole became Administrator of HHFA.
Office of Defense Mobilization announced that as of June 30, 1953, a new Defense Materials System would replace the Controlled Materials Plan. 4-13 FNMA suspended temporarily the purchase on an over-the-counter basis of mortgages insured by FHA or guaranteed by VA except mortgages covering defense, military, Alaska, or disaster housing and mortgages covered by commitment contracts or delivered against purchase receipts. 4-16 Guy T. O. Hollyday became Commissioner of FHA.
4-18 Administrator announced the removal of the remaining credit controls on Government-assisted private housing which were imposed in October 1950 under authority of the Defense Production Act.
5-2 FHA and VA increased maximum interest rates on 1- to 4-family homes to 4% percent. The maximum interest rate on FHA-insured Section 207 multi-unit housing was raised to 4% percent.
6-10 FHA Commissioner announced formation of a group of specialists to advise him on home repair and improvement financing under Title I.
FHA Commissioner announced appointment of advisory committee of national housing leaders to advise on overall FHA programs.
6-19 Executive Order 10462 transferred to the HHFA Administrator the President’s authority to extend deadline dates relating to the disposition of Lanham Act housing.
6-25 Administrator announced plans for a study of the Government’s long-range housing activities as the basis for recommendations to be made to the President for legislative recommendations to the Congress.
6-30 Public Law 94, Housing Amendments of 1953, signed by President. (See Appendix B for details.)
7-1 Public Law 101 approved. Extended VA direct home loan program to June 30, 1954, and provided an additional $100 million authorization. Authorized increases in interest rates on direct loans up to 4^ percent.
James W. Follin became Director, Division of Slum Clearance and Urban Redevelopment.
FHA made first repayment of Title I insurance fund to the Treasury in amount of $8% million.
XIV
HOUSING AND HOME FINANCE AGENCY
7-7 Charles E. Slusser became Commissioner of PHA.
As part of his housing study, Administrator began series of “shirtsleeve” conferences in communities throughout the country to discuss housing at the grassroots level.
7-10 FHA Commissioner announced increases in interest rates on FHA debentures.
7-27 FNMA began selling and purchasing FHA-insured and VA-guaranteed mortgages on a one-for-one basis.
7-29 FNMA began accepting applications for advance commitments for the purchase at par of eligible Section 213 cooperative housing mortgages.
7-31 First Independent Offices Appropriation Act, 1954, approved. Law enacted new requirements for consideration of code enforcement and rehabilitation in administration of slum clearance and redevelopment program, restricted commencement of construction of low-rent public housing to 20,000 dwelling units in fiscal year 1954, and prohibited any new contracts for Federal aid to such housing. Required study of public housing program and report to Appropriations Committees by February 1,1954. Required liquidation of housing research program not later than April 30,1954.
FHA made final payment in amount of over $18 million to the Treasury as repayment of funds advanced by the Treasury for FHA mortgage insurance operations.
8-3 John C. Hazeltine became Commissioner, Division of Community Facilities and Special Operations.
8-4 Walter W. McAllister became Chairman of HLBB.
Administrator announced a new interest rate of 3% percent for college housing loans in accordance with the provisions of the Housing Amendments Act of 1953. At the same time he announced the removal of provision restricting college housing loans to defense related purposes.
8-14 FHA announced experiments in conjunction with the National Association of Home Builders in the trade-in house field.
9-12 In Executive Order 10486, the President established an Advisory Committee on Government Housing Policies and Programs.
10-7 Office of Defense Mobilization designated Administrator to present supply and requirements information with respect to housing construction, alteration, and repair.
12-14 President’s Advisory Committee on Government Housing Policies and Programs presented its report to the President.
XV
ORGANIZATION AND STRUCTURE OF THE HOUSING AND HOME FINANCE AGENCY
A. Structure and Programs
The Housing and Home Finance Agency is the permanent agency established to carry out the principal nonfarm housing and mortgage financing functions of the Federal Government. It was created under Reorganization Plan No. 3 on July 27, 1947, succeeding the National Housing Agency in which housing and related activities were consolidated on a temporary basis during World War II.
The Housing and Home Finance Agency consists of the Office of the Administrator, three constituent operating agencies, and the National Housing Council.
Office of the Administrator
The Administrator is the principal housing official in the Federal Government. Fie is responsible for the general coordination and supervision of all programs throughout the Housing and Home Finance Agency. In addition, he is directly responsible for the administration of the following specific programs:
Active In Liquidation
Slum clearance and urban redevelop- Housing research.
ment. Alaska housing.
Secondary mortgage market. Loans for prefabricated housing.
Housing loans to educational institu- Lanham Act housing.
tions. Postwar emergency housing.
Defense housing. Advance planning programs.
Defense community facilities. War public works.
These operating programs will be discussed in detail in subsequent sections of this report.
The chart of page XVIII shows the organization of the staff of the Office of the Administrator, which assists him in carrying out the above responsibilities. There were no significant changes during the year.
294078—5‘
2
XVII
HOUSING AND HOME FINANCE AGENCY
XVIII
HOUSING AND HOME FINANCE AGENCY ___________________OFFICE OF THE ADMINISTRATOR_ SPECIAL ASSISTANTS_ADMINISTRATOR
Racial Relations _ _ _ ____________
Congressional Liaison DEPUTY ADMINISTRATOR FEDE?5^d^AaTJ^NAL
Compliance ___________________ MOR I GAGE
International Housing ■ ASSOCIATION
________I , , I —------------------------ I ______________ __________________ DIVISION DIVISION---------DIVISION OF______DIVISION
OF OF PLANS AND OF
LAW ADMINISTRATION _____PROGRAMS____ INFORMATION
_____I I —-----------------------------—I— DIVISION g/s^M---------------------------COMMUNITY
OF CLEARANCE FACILITIES
HOUSING AND URBAN AND SPECIAL
RESEARCH REDE^LT°P' OPERATIONS
__________ ___________ DIVISION OF FIELD __________
COORDINATION
.. 1ZZZ____________
OFFICE OF THE ADMINISTRATOR, FIELD SERVICE
Chart 1.
OFFICE OF THE ADMINISTRATOR
HHFA Constituent Agencies
The Home Loan Bank Board serves home financing institutions of the savings and loan type through the Federal Home Loan Bank System, which provides a credit reserve, and through the Federal Savings and Loan Insurance Corporation, which provides insurance for investors in these institutions.
The Federal Housing Administration provides Government insurance for mortgages and property improvement loans made by approved lending institutions under the various FHA programs. These include sales, rental, cooperative, military, and defense housing.
The Public Housing Administration makes loans to local housing authorities to build low-rent housing and administers the Federal system of subsidy assistance for such housing. Operating responsibility for the following programs has also been delegated to the PHA by the Administrator: management of federally financed defense housing built under the Lanham Act during World War II, arid subsequently used for veterans; management of temporary housing provided under Public Law 139 for defense needs following the Korean outbreak; and the liquidation of the Government’s interest in World War II and postwar veterans’ housing, and housing of various earlier programs.
National Housing Council
The National Housing Council, an overall policy coordinating body, is composed of the HHFA Administrator, who serves as chairman, the heads of the three HHFA constituent agencies, and the heads, or their designees, of the Veterans’ Administration, and the Departments of Agriculture, Commerce, Labor, Defense, and Health, Education, and Welfare, each of which has functions related to the housing field.
B. HHFA Personnel
During the calendar year 1953, the Housing and Home Finance Agency operated with an average staff of 11,704 employees, as compared with 12,441 in the preceding year. The following table shows the actual fulltime employment within HHFA at the beginning and end of the calendar year.
Jan. 1, 1953 Dec. 31,1953
Office of the Administrator i__
Home Loan Bank Board___________
Federal Housing Administration. Public Housing Administration..
Total..._________________
1,607
433
5,443
4,946
1,209
477
5, 231
4,081
12,429
10,998
’Includes 719 employees of Federal National Mortgage Association on Jan. 1 and 548 on Dec. 31.
XIX
HOUSING AND HOME FINANCE AGENCY
HOUSING AND HOME FINANCE AGENCY
NATIONAL HOUSING COUNCIL EXECUTIVE COUNCIL
Housing and Home Finance ____________________________ Housing and Home Finance
Administrator, Chairman Administrator, Chairman
Chairman Home Loan Bank Board - OFFICE OF THE ADMINISTRATOR — -4 Deputy Administrator
Federal Housing Commissioner __________________________ Chairman, Home Loan Bank Board
Public Housing Commissioner Federal Housing Commissioner
Secretary of Defense Public Housing Commissioner
Secretary of Agriculture _________
Secretary of Commerce
Secretary of Labor
Secretary of Health, Education, and Welfare -------------------
Administrator of Veterans Affairs _______________________ FEDERAL
NATIONAL MORTGAGE ASSOCIATION
HOME LOAN BANK BOARD
includes Federal Home Loan Bank System FEDERAL HOUSING PUBLIC HOUSING
Federal Savings and Loan Insurance ADMINISTRATION ADMINISTRATION
Corporation
Federaf Savings and Loan
Operations
•g mvhD
OFFICE OF THE ADMINISTRATOR
C. Major Personnel Changes
The year witnessed changes in the top officials of the Housing and Home Finance Agency. The following major appointments were made:
Albert M. Cole, Administrator, Housing and Home Finance Agency, on March 11,1953.
-Guy T. O. Hollyday, Commissioner, Federal Housing Administration, on April 16,1953.
James W. Follin, Director, Division of Slum Clearance and Urban Redevelopment, on July 1,1953.
Charles E. Slusser, Commissioner, Public Housing Administration, on July 7,1953.
John C. Hazeltine, Commissioner, Division of Community Facilities and Special Operations, on August 3,1953.
Walter W. McAllister, Chairman, Home Loan Bank Board, on August 4,1953.
XXI
SECTION 1: THE OVERALL HOUSING PICTURE IN 1953
Chapter I
SALIENT DEVELOPMENTS IN THE HHFA
A. A Year of Review and Development
During the year 1953 the Nation’s housing problems and methods for meeting them were brought into sharper focus than ever before. A comprehensive review and reappraisal of Federal housing activities produced a new concept of an integrated approach to the whole housing field to replace the piecemeal efforts of the past. New proposals were advanced to insure a dynamic housing industry that would meet the housing demands of all Americans within the productive means of a sound economy.
At the same time, 1953 was a year in which existing programs were employed by the Administration to make a maximum contribution to the filling of current housing needs.
The new integrated approach resulted largely from a broadscale survey of housing problems and activities conducted by the HHFA Administrator and by the President’s Advisory Committee on Housing Policies and Programs.
The initial phases of the study consisted of a series of “shirtsleeve” conferences held by the new HHFA Administrator soon after his appointment in March as head of the Government’s principal agency in charge of housing and home financing activities. In Washington and in key* cities across the Nation, the Administrator met with private and public leaders in housing, mortgage, finance, construction, and community development.
Ultimately, a 23-man President’s advisory committee1 was appointed to undertake a review of all Government housing programs,
1 Members of the President’s Advisory Committee on Housing Policies and Programs: Albert M. Cole, Administrator, Housing and Home Finance Agency, Chairman.
George L. Bliss, President, Century Federal Savings and Loan Association, New York City.
Ernest J. Bohn, Director, Cleveland Metropolitan Housing Authority, Cleveland, Ohio.
Ehney A. Camp, Jr., Vice President and Treasurer, Liberty National Life Insurance Company, Birmingham, Ala.
Miles L. Colean, Economist and Author, Washington, D. C.
A. R. Gardner, Past President and Executive Consultant, Federal Home Loan Bank of Chicago, Chicago, Ill.
Richard J. Gray, President, Building and Construction Trades Department, A. F. of L., Washington, D. C.
R. G. Hughes, First Vice President, National Association of Home Builders, Pampa, Tex.
1
HOUSING AND HOME FINANCE AGENCY
and to prepare recommendations for improvement on the basis of its studies. With the HHFA Administrator as chairman, the committee brought together all the major housing interests around a common table. To accomplish its objectives the committee functioned through four subcommittees covering housing credit facilities; Federal Housing Administration and Veterans’ Administration programs; urban redevelopment, rehabilitation, and conservation; and housing for low-income families. A five-man executive committee coordinated the studies and reviewed the organization of Federal housing activities.
In its report to the President,2 the committee stated its basic policy:
It is the conviction of this committee that the constant improvement of the living conditions of all the people is best accomplished under a strong, free, competitive economy, that every action taken by Government in respect to housing should be for the purpose of facilitating the operation of that economy to provide adequate housing for all the people, to meet demands for new building, to assure the maintenance, restoration, and utilization of the existing stock of housing, and the elimination of conditions that create hazards to public safety and welfare and to the economic health of our communities, and that only those measures that prove to be successful in meeting these objectives should be continued.
Out of the deliberations of the advisory committee came three basic concepts for a new housing program that would integrate the aspirations of all varied housing interests.
All are interdependent and essential parts of a comprehensive and coordinated movement to better our housing and urban standards. In general, they aim to broaden the effective range of private industry toward meeting all housing requirements through the free enterprise system, and to extend a helping hand to local communities in carrying out coordinated, overall housing and urban improvement programs that they initiate and execute.
Rodney M. Lockwood, Past President, National Association of Home Builders,'Detroit, Mich.
William A. Marcus, Senior Vice President, American Trust Company, San Francisco, Calif.
Norman P. Mason, Treasurer, William P. Proctor Company, North Chelmsford, Mass.
Robert M. Morgan, Vice President and Treasurer, The Boston Five Cents Savings Bank, Boston, Mass.
Thomas W. Moses, Attorney, Pittsburgh, Pa.
Aksel Nielsen, President, Title Guaranty Company, Denver, Colo.
Robert B. Patrick, Financial Vice President, Bankers Life Insurance Company, Des 'Moines, Iowa.
James W. Rouse, The Moss-Rouse Company, Baltimore, Md.
Bruce C. Savage, Bruce Savage Company, Indianapolis, Ind.
■John J. Scully, Vice President, The Chase National Bank of the City of New York.
Alexander Summer, Alexander Summer Company, Teaneck, N. J.
James G. Thimmes, Chairman, CIO Housing Committee, Pittsburgh, Pa.
Ralph T. Walker, Past President, American Institute of Architects, New York City.
Paul R. Williams, Los Angeles, Calif.
Ben H. Wooten, President, First National Bank, Dallas, Tex.
W. Herbert Welch, Executive Director.
2 Recommendations on Government Housing Policies and Programs: A Report of the President’s Advisory Committee on Housing Policies and Programs, December 1953. Superintendent of Documents, U. S. Government Printing Office, Washington 25, D. C.
.2
OFFICE OF THE ADMINISTRATOR
Recommendations of the committee included:
1. Launching a multisided program of urban renewal of our cities which will both rid them of slums and undertake the conservation and restoration of sound housing and neighborhood values.
2. Bringing good housing and improved housing standards within the practical reach of all groups. This means among other things making the total supply of existing units available on equal terms with new units instead of discriminating against older housing, in order to make it easier for people of limited means to obtain houses which can meet their needs.
3. Treating the problem of housing for low-income families as part of the total housing market, to be served privately as far as possible, and made an integral part of the community housing supply instead of as a special segment completely dependent upon Government subsidy and control.
Underlying the recommendations were several factors which emerged during the course of review more clearly than ever before. One was a major change which has been taking place in the homebuilding market, a change which has profound implications for both the housing industry and the housing consumer. During the immediate postwar years, most of the housing production was absorbed by the millions'of newly created families and by the deferred needs of the war period. Other important and particular market requirements have had to wait. Now the postwar backlog has largely been met and deferred long-run needs can and must be met. Further, to sustain present high levels of building, the housing industry will have to adjust its production, to direct more of it to such specific market areas as minority groups and large families needing moderate-cost housing.
A second factor is a new consideration for our supply of existing housing. Partly of necessity, most building effort has been directed towards producing new homes and increasing the supply. Improvement and marketability for older homes would greatly reduce development of new slums, enhance the opportunities and choice of families seeking better homes, and facilitate the movement of families, through their own resources, from slum and blighted areas into better homes. As families improved their housing, cities would be able to improve their standards.
A third is the need for the steady, reliable flow of adequate financing to maintain a high rate of housing production. This includes adjustment of interest rates, amortization periods, and downpayments to current conditions, and means for maintaining a flow of investment funds through the secondary mortgage market from major sources to serve all areas of the Nation and all basic types of housing market
3
HOUSING AND HOME FINANCE AGENCY
demands through private channels, with minimum Government participation.
B. Housing Progress
During 1953 housing production continued at high levels. A total of 1,104,000 new, permanent, nonfarm homes were placed under construction. Thus, despite a small drop in volume below the previous year caused by a stringency in mortgage funds, 1953 was the third largest homebuilding year in our history. It was the fifth consecutive year in which more than 1,000,000 homes were built.
Under the new administration, the basic home financing programs of the Federal Government—those of the Federal Housing Administration, the Home Loan Bank Board, and the Veterans’ Administration—expanded their support of the large volume of home production. The number of units covered by home and project mortgages insured by the FHA was substantially higher than in 1952. Assets of savings and loan associations reached an all-time high, as did the funds they made available in mortgages for home purchase and construction. Both in number and amount, home loans guaranteed by the VA were" higher than in 1952.
In addition, several major actions were taken by the administration and Congress to meet specific housing problems. One involved alleviation of the shortage of mortgage funds resulting from the adjustments which took place in the general economy. In the early part of the year, authorized maximum interest rates on FHA-insured and VA-guaranteed mortgage rates were low in relation to returns available to lenders from competing investments. To place such loans in line with the changing money market and thus maintain an adequate flow of mortgage financing during the adjustment period, maximum permissible rates on Government-backed mortgages were increased, and the Congress authorized the charging of certain discounts in addition to those previously allowed. Allowable interest rates on single family home mortgages insured by FHA were raised from 414 to 41/2 percent, and those on multifamily projects insured by FHA were increased from 4 to 4f4 percent. Interest rates on VA-guaranteed home loans were increased from 4 to 41/2 percent, equal to the FHA rate for comparable types of loans.
Another measure aimed to supplement the availability of advance financing for homebuilders without increasing the Government’s mortgage holdings. This was a program to dispose of FHA-insured and VA-guaranteed mortgages held by the Federal National Mortgage Association on a “one-for-one” basis. Sales increased substantially beginning in July, when Congress enacted specific authority for FNMA to make firm commitments for future purchase of mortgages
4
OFFICE OF THE ADMINISTRATOR
up to a total of $500,000,000. Mortgage lenders could obtain such advance contracts in amounts equal to the price they paid for mortgages purchased from FNMA. During the rest of the year such purchases decreased FNMA holdings while creating a substantial reserve of contracts to purchase future mortgages.
During the year, HHFA also undertook an acceleration of local community action to clear slums and rehabilitate blighted areas. As local community responsibilities in code enforcement, rehabilitation, and neighborhood maintenance received new emphasis from the HHFA, strong local movements were developed and national attention was focussed on expanded activities in this field. At the same time the federally assisted program of slum clearance and urban rehabilitation authorized by the Housing Act of 1949, swung into full-scale operation; by the end of the year, 154 projects in 108 localities were well underway, with demolition already started in 32 slum areas.
The problem of adequate housing for low-income families was a matter that clearly called for extensive reexamination and study, and it received major attention from the new administration and the President’s advisory committee during the general review of housing policies and programs. Pending the administrative review, and recommendations on low-income housing which Congress requested the HHFA Administrator to make early in 1954, Congress authorized 20,000 public housing units to be started in fiscal year 1954. All of these had to be in projects already under contract, and no new commitments could be undertaken by the Public Housing Administration during the year.
Programs in Liquidation
Another major activity of the new administration was speeding up of liquidation and termination of housing operations which had served their original purpose and were no longer needed. Efforts of the HHFA Administrator and the Public Housing Commissioner to accelerate disposition of World War II and veterans emergency housing built under the Lanham Act resulted in a very substantial reduction in the Government’s holdings of such units. By the end of 1953, 69,000 units—twice as many as in 1952—had been sold, transferred to localities or otherwise removed.
The HHFA also prepared for termination of the defense housing and community facilities and services program authorized by Public Law 139 (82d Cong.). During the year the construction peak for defense housing was passed, and most of the 92,500 units which had been approved for private construction in critical defense housing areas were either built or in the final stages of completion. The pro
5
HOUSING AND HOME FINANCE AGENCY
gram of community facilities for such areas reached the construction or completion stage.
The HHFA Administrator ordered the loan operations of the Alaska housing program to be placed in liquidation, after determination that it had largely accomplished the objective of helping overcome the acute housing shortage in that region. A substantial volume of housing, much of it stimulated by the program, had been built, and authorization for FHA builder commitments on terms equal to those formerly applicable only to loans made by the Alaska Housing Authority will help provide adequate construction financing from non-Government sources. The authority for FNMA to purchase FHA-insured mortgages in Alaska continued during the year.
In accordance with the Independent Offices Appropriation Act for 1954, the HHFA Administrator began the orderly liquidation of the program of housing research. Under this program, a number of research projects into the technical and economic phases of housing had been undertaken, and by the end of 1953 many studies had been completed, and termination of active research projects was going forward speedily.
Legislative Developments
In addition to authorizing increased maximum interest rates and the charging of certain discounts for certain types of Government-backed mortgages, and the FNMA “one-for-one” plan, Congress also approved a number of modifications in housing legislation. Among them were standby authority for the President to liberalize FHA mortgage provisions on lower-cost owner-occupied housing if economic conditions warrant, permitting smaller downpayments and longer maturities; increased maximum permissible mortgage amounts on certain types of rental housing built with FHA mortgage insurance ; strengthening the FHA Mutual Mortgage Insurance Fund; and authorization of repayment by FHA to the United States Treasury of funds provided to FHA to carry out the provisions of some of its programs when it was first getting started. By the end of the year FHA had repaid $64,200,000, or about 75 percent of these funds to the Treasury.
6
Chapter II
HOUSING IN THE ECONOMY IN 1953
A. Housing Production
Starts Volume
Despite some tightness in the mortgage market, especially during the first half of the year, home-building activity during 1953 reached a total volume of about 1,104,000—the third highest total on record and the fifth consecutive year to top the one million mark. This high total was achieved in the face of a midyear decline in the rate of private starts, which at the time became the cause of some concern. By the end of the year, the starts rate had climbed back to the first quarter levels.
PRIVATE NONFARM HOUSING STARTS
seasonally adjusted annual rate
MILLIONS OF STARTS 2.0 ---------------------------------------------------------------
|. 5 --——---------------r---------------------------------------
I o --------- -------------Z5**—
REGULATION X ’
IMPOSED REGULATION X
SUSPENDED
0.5-------------------------------------------------------------
0 Li 1111111111111 i-Li l 11111111111111 li 11111111111 1950 1951 1952 1953
SOURCE: Bureau Of Labor Statistics,
Chart 3.
The slightly more than 1,068,000 privately owned dwelling units started in 1953 represented virtually no change from the 1952 level. During 1953, nearly two-fifths of these private starts were financed under FHA and VA programs. In contrast with the stability in private home building, publicly owned starts were two-fifths less than in
7
HOUSING AND HOME FINANCE AGENCY'
1952, reflecting congressional limitations upon the federally aided low-rent housing program.
The proportion of nonfarm starts in rural locations continued to rise, reaching 49 percent in 1953. Since the end of World War II, 44 percent of all nonfarm starts have been located outside urban areas (incorporated communities of 2,500 or more), while in the decade of the twenties this proportion was 20 percent.
The trend towards sales-type housing also continued. Single-family homes accounted for 85 percent of all nonfarm homes started in 1953. This was the highest proportion since 1947 and was far above the ratio of the twenties, when single-family homes made up 61 percent of all starts.
PERMANENT NONFARM DWELLING UNITS STARTED
TnOUSANPS °F STARTS---------- gy 0Wf|ERSH|P -------------------------
TOTAL UNITS / \—
iooo-------------/--------——--------------------------.——
5OO f . -—-V------------------------—/C..---------/ ......—-- -
/ PRIVATELY /
/ : OWNED X. J
PUBLICLY OWNED
nl 1 t t i t ■ < » । i । । । i । • • - i hii-ALa.....mil
1920 1925 1930 1935 1940 1945 1950 53
10001-------------BY URBAN OR RURAL NONFARM LOCATION--------------
e 0 0------------------------------------------------------n------
n n n n 1=1 urban
600 ----- - - - -'-p-------- ■ RURAL NONFARM---------------p nT —
400 ----- ------ :---------=-F|------p-.............
~hffllilirllilllj^
1920 1925 1930 1935 1940 1945 1950 '53
1200 1----------------BY TYPE OF STRUCTURE------------------------
000 —-— ----------------------------------------------------------
I-FAMILY /
4 00 ---------------------------------------\------1--------------
//X \ J ------------------.
72 OR MORE FAMliy
0 I < I 1 I I I I I I—I l**N ■)
3. 848 ' 3,178 +21
9,179 10, 966 -16
10,947 10, 514 +4
4,998 4, 543 +10
5, 794 5, 773 (>)
264.023 249,091 +6
3,730 3,430 +9
2,435 2, 315 +5
56, 703 r 57,938 —2
529 651 -19
1,849 1,813 +3
675 >■651 +4
1,925 1,790 +8
2,835 2, 818 +1
2, 340 2, 072 +13
3,026 r 2, 994 +3
2,641 ' 2, 485 +6
1,007 910 +11
T Revised (i. e. differs from figure in HHFA 1952 Annual Report).
1 Less than one-half of 1 percent, plus.
2 Including sheathing.
3 Shipments.
Source: Department of the Interior, Department of Commerce, trade associations.
The good production record resulted in an adequate supply of materials for the high level of housing construction in 1953. There were virtually no materials shortages, and none of any magnitude.
9
HOUSING AND HOME FINANCE AGENCY
PRICES AND PRODUCTION OF BUILDING MATERIALS
INDEX: 1947-49=100 140 -----------------—------------------------------------------
120 -------------------------------------------------
PRODUCTION ,00 —-——-----------------------------------------------------
80 ---------X--------------------J----\-----1- -——————
60 -----------\--------f—\/---------------------------------
^PRICES
40 ---------------------------------------------------------
20------------------------------‘---------------------------
J I I I I I I I I I I I I I I I I I I I I I I I I I I I I 1925 1930 1935 1940 1945 1950 1953
SOURCES'. Bureau of Foreign ond Domestic Commerce and Bureau of Labor Statistics
Chart 5.
On the labor front, there was as a general rule no difficulty in securing building mechanics. Employment by building construction contractors, as reported by the Bureau of Labor Statistics, averaged 2,047,000 workers in 1953, a decrease of 1 percent from 1952 and of 2 percent from 1951, the record year. Peak employment in 1953 was reached in October, 2 months later than generally occurs. In that month the 2,205,000 workers in building construction (compared with 2,223,000 and 2,241,000 in the high months of 1952 and 1951) represented more than 3.5 percent of the month’s total employed civilian labor force.
C. Costs, Prices, and Wages
Construction costs were relatively stable during 1953. After a rise of less than 2 percent from an index of 120.1 in January to a new all-time high of 122.4 in July, the residential cost index (1947-49=100) compiled by E. H. Boeckh and Associates showed a slight decline back to 121.3 by December. The maximum variation during the year from low to high was the smallest in any year since 1939.
10
OFFICE OF THE ADMINISTRATOR
HOMEBUILDING COSTS
INDEX: 1947-49= 100 140 ----------------------------------------------------------------
120 ----------------------—............................... —
100 ------------------------,--------------------_ Z*-^_________
Z
80 --------------------------—------------------J______________
60 --------------------------—------___________________________
40 ------------------------------------------------------------
20 ----------------------—---------------—----------------------
0 II Illi I.......I I I I I I J.1 I I I I | I I I I I | |
1925 1930 !935 1940 1945 1950 1953
SOURCE.' E.H.Boeckhand Associates
Chart 6.
Boeclch indexes of residential construction costs
[Base: 1947-49=100]
January___________________________________
February_________________:________________
March_____________________________________
April_____________________________________
May_______________________________________
June______________________________________
July______________________________________
August____________________________________
September_________________________________
October___________________________________
November__________________________________
December__________________________________
Monthly data
Annual data
1953 1952 Year Index Percent variation from low to high during year
120.1 117.7 1953 121.2 +2
120.1 117.6 1952 119.1 +2
120.3 117.6 1951 116.0 +3
1950 107.7 +11
120.4 118.0 1949 102.1 +6
120.8 118.3 1948 104.8 +6
121.5 119.4 1947 93.2 +18
1946 77.0 +16
122.4 119.8 1945 70.1 +5
122.1 120.2 1944 65.4 + 10
121.9 120.4 1943 60.2 +5
1942 57.6 +5
121.4 120.2 1941 54.6 +5
121.5 119.9 1940 50.5 +8
121.3 119.8 1939 48.9 +1
Source: E. H. Boeckh and Associates.
Wholesale prices of building materials rose only fractionally (1.4 percent) between 1952 and 1953 to reach a level of 0.3 percent above the previous peak reached in 1951. The following table presents the 1953 data with those for 1952.
294078—54----3
II
HOUSING AND HOME FINANCE AGENCY
Indexes of wholesale prices of building materials
Item 1953 index (1947- 1953 percent change Item 1953 index (1947-49=100) 1953 percent change from 1952
49 = 100) 1952
All building materials 119.9 +1.4 Heating equipment . . 114. 8 +.9
Lumber. 119.4 -.7 Structural clay products 128.1 +5.0
Softwood plywood 110. 7 -8.0 Concrete ingredients 117.4 +3.3
Millwork... . 131.7 +3.5 Gypsum products 121.1 -j-2.9
Paint and paint materials 106.7 — .6 Insulation materials. _ 108.0 +2.4
Plumbing equipment 116.0 -1.2 Building paper and board 121.4 +5.2
Source: IT. S. Department of Labor.
With respect to labor costs, the average union hourly wage rates in the building trades increased from mid-1952 to mid-1953 by about 12 cents an hour (4.7 percent) compared with a 15-cent increase (6.2 percent) from 1951 to 1952, according to data collected and averages estimated by the Bureau of Labor Statistics. The averages reported were:
1953 1952
July 1 July 1
All building trades___________________________________________________________
Journeymen____________________________________________________________________
Helpers and laborers--------------------------------------------■-------------
$2. 69
2. 88
1.95
$2. 57 2.76 1.84
Actual average hourly earnings of construction wmrkers engaged on private and public contract building-construction projects, also as reported by the Bureau of Labor Statistics, were $2.48 in 1953 compared with $2.31 in 1952—an increase of 17 cents an hour or 7.4 percent.
AVERAGE WEEKLY EARNINGS IN BUILDING CONSTRUCTION
too-----------------------------------------------------------
80 --------------------------- -------------------------------
1953
* PRICES
» 60--------------/----------------------------* *---——-------—
or CURRENT
£ PRICES
(A
(E S
< 40---------------------— -------------------------------------
o
20----------------------—--------------------------------------
ol—I---1--1—I---1—I—I—I—I—I—I—I—I—I—I—I—I-------------1---1--
1935 1940 1945 1950 1953
SOURCE: Bureau of Labor Statistics
Chart 7.
12
OFFICE OF THE ADMINISTRATOR
D. Home Financing
The Mortgage Market Situation
An increasingly tight mortgage market prevailed during the first part of 1953, continuing the trend of 1952 and reflecting conditions in the general market for investment funds. The flow of savings to lending institutions continued at a historically high level but did not increase in proportion to the increased demand. Interest yields on all types of investments advanced substantially, both through issuance of new securities bearing higher interest rates and through the sale at a discount of securities bearing lower interest rates than those demanded in the market at that time. In the case of new conventional mortgages, the yields were generally increased through higher interest rates. The VA-guaranteed 4 percent loans and, to a lesser extent, the FHA-insured 4^ percent loans became increasingly difficult to obtain and in most cases were available only at discounts, which were substantial in many parts of the country.
The situation with respect to VA-guaranteed and FHA-insured mortgages was gradually improved with the increase, early in May, of the maximum interest rate for both insured and guaranteed loans to 4^ percent and by the $500-million “one-for-one” program of the Federal National Mortgage Association, which was authorized by the Congress at the end of June. Under the “one-for-one” program, a lender purchasing mortgages from FNMA could receive a contract enabling him to sell an equal amount of mortgages to FNMA within 1 year. These contracts removed uncertainties about future marketability of the mortgages, giving lenders a firm basis for making advance financing commitments to builders.
During the last half of 1953, there was a gradual easing of the general money market situation, with greater availability of investment funds and declining interest rates. Many large lenders became more active in the mortgage market; discounts on FHA-insured and VA-guaranteed loans became less frequent and smaller; and advance commitments for mortgage financing were forthcoming more readily from private sources, in addition to those from the FNMA “one-for-one” program. The year ended on a note of confidence that there would be an adequate supply of mortgage funds for the coming 12 months.
Volume of Mortgage Lending
Despite the financing difficulties which were encountered during a good part of 1953, 1,068,000 privately financed new housing units were started and nonfarm mortgage recordings of $20,000 or less
13
HOUSING AND HOME FINANCE AGENCY
reached an all-time high of $19.7 billion. This volume of financing was 10 percent more than in the year before. The gain in dollar volume over 1952 partly reflected an increase in the average amount—up 5 percent to $6,241—while the number of these recordings increased 4 percent to 3.2 million.
NONFARM MORTGAGE RECORDINGS AND FHA AND VA HOME LOANS
BILLIONS OF DOLLARS
20 -----—--------------------------------------- - ' - , ~I
TOTAL NONFARM MORTGAGE KEY RECORDINGS OF $20,000 OR LESS r—
■ OTHER RECORDINGS VA GUARANTEED ----------------1“^“ “ . '
FHA INSURED (I-to 4-FAMILY HOMES)
12-------------------------— —ir~T ~ ~ :
8 --------------------- i : ~ ' T - - : ~ - : = : " . ““
4 nnHnnfl rii’ii 1 T IT J L, U m a Lra m L JwWSBBII
1939 40'42 '43 '44 *45 *46 *47 '48 '49 50 51 52 53
SOURCES: Home Loon Bonk Board, Veterans Administration and Federal Housing Administration
Chart 8.
The Government home mortgage insurance and guaranty programs played about the same role in homebuilding and financing programs in 1953 as in 1952, as indicated by the following figures:
Year Percentage of total private units started Percentage of dollar amount of total recordings of $20,000 or less
Under FHA Under VA FHA plus VA FHA-insured home loans VA-guar-anteed home loans FHA plus VA
1952 26 13 39 11 15 26
1953 24 15 39 12 15 27
Sources: Home Loan Bank Board, Federal Housing Administration, Veterans Administration, Bureau of Labor Statistics.
The large amount of home mortgage lending in 1953 was accounted for principally by the major institutional lenders. Savings and loan associations were by far the largest single source of home mortgage money, with commercial banks second. The amounts of mortgage
14
OFFICE OF THE ADMINISTRATOR
recordings of $20,000 or less by each type of lender in 1953, compared with 1952 and as a percent of the total, are as follows:
Type of lender Amount in millions (1953) Percent increase from 1952 Percent of total
1953 1952
Savings and loan associations _ _ _ _ . $7,365 14 37 36
Insurance companies - _ . _ 1, 480 4 8 8
Commercial banks. _ ... _ _ _ 3, 680 2 19 20
Mutual savings banks .. _ L327 17 7 6
Individuals.. . . . 2,840 3 14 15
Miscellaneous _ _ 3,055 15 15 15
Total 19,747 10 100 100
Source: Home Loan Bank Board.
Net Increases in Outstanding Mortgage Debt
Related to, but distinguished from the volume of gross mortgage lending, is the net increase—net of repayments—in outstanding residential mortgage debt. The net increase in the outstanding mortgage debt on 1- to 4-family nonfarm homes was $7.2 billion during 1953, bringing the total outstanding at year-end to $65.9 billion. In addition to the debt on 1- to 4-family homes, there were mortgages on multifamily housing amounting to an estimated $9.7 billion outstanding, making a total mortgage debt of about $75.6 billion on nonfarm housing at the end of 1953.
OUTSTANDING MORTGAGE DEBT ON 1- TO 4-FAMILY NONFARM HOMES
| BILLIONS 80 r------------------------------------------------------------------—-----—--------------
60 --------------------------------------------------------------------------------
40 ----------------------------------------------------------------------- A 7 .
o t 1 l ■ ■ ■ 1______।__।__i__
1925 1930 1935 1940 1945 1950 1953
End of Year EST
SOURCE: Home Loon Bonk Board, Federal Housing Administration .Veterans Administration.
Chart 9.
15
HOUSING AND HOME FINANCE AGENCY
FHA-insured mortgages outstanding at the end of the year totaled $16.0 billion, including $12.0 billion on 1- to 4-family homes, and project mortgages of $4.0 billion. VA-guaranteed home loans outstanding amounted to an estimated $16.1 billion. In total, Government-insured and -guaranteed loans amounted to $32.1 billion, and accounted for a little over two-fifths of all nonfarm home mortgage debt, with a slightly higher proportion of the 1- to 4-family segment than of the multifamily debt.
The net increases in nonfarm residential mortgage debt during 1953, as well as the estimated amounts and distribution of such debt outstanding at the end of 1953, are shown in the following table.
Estimated nonfarm residential mortgage debt
[Billions of dollars]
Type of holder Total debt FHA-insured VA-guar-anteed Conventional
Total amount outstanding—Dec. 31,1953
Total.. - $75.6 $16.0 $16.1 $43.5
Savings and loan associations— . 21. 9 1.0 4.0 3. 6 16.9 7.4
Life insurance companies _ _ . 17.0 6.0
Commercial banks __ - - 12. 9 3. 9 3.1 6.0 4.9
Mutual savings banks. _ 11.3 3. 5 2. 9
FNMA ~ 2. 5 . 6 1.8
Individuals and others 10.0 1.0 . 7 8.3
Percent distribution of amount outstanding on Dec. 31,1953
Total _- . _ - 100 100 100 100
Savings and loan associations __ 29 6 25 39
Life insurance companies Commercial banks _ 23 17 38 24 22 19 17 14
Mutual savings banks 15 22 18 11
FNMA ~ 3 4 11
Individuals and others 13 6 4 19
Net increase during 1953
Total __ . -. . -. $7.7 $1.3 $1.5 $4.9
Savings and loan associations - - 3.5 0.1 0. 6 2.8
Life insurance companies -- 1.5 .3 .2 .9
Commercial banks- - - -. .7 .3 (') .4
Mutual savings banks 1.4 .4 .7 .4
FNMA “ .- .2 .3 (-.1) . 1
Individuals and others - .4 (') .3
1 Less than $50 million.
Note.—Caution should he exercised in using the data for the “Individuals and others” category. The data on life insurance company holdings of conventional loans are preliminary.
Source: Home Loan Bank Board, Federal Reserve Board, Life Insurance Association of America, Federal National Mortgage Association, Federal Housing Administration, Veterans Administration.
The net increases in mortgage investment shown in the above table for savings and loan associations and for mutual savings banks are almost equal to the net savings inflows for those classes of lenders and reflect a consistent policy of specialization in mortgage investment
16
OFFICE OF THE ADMINISTRATOR
followed throughout 1953. The net residential mortgage investments of life insurance companies represented about one-third of their net growth of assets during 1953, an allocation indicating the response of insurance companies to heavy industry financing demand, a demand whose intensity began to diminish at year end. Commercial banks in their nonbusiness loan activity tended toward investments in State, local, and Federal Government securities, and despite a substantial growth of time deposits, their net gain in mortage investments during 1953 was less than in any year since 1949. However, the commercial banks showed slight gains compared with 1952 in their net acquisitions of VA-guaranteed and FHA-insured loans, in contrast to a slight decline in net acquisitions of conventional mortgage loans.
Total purchases by the Federal National Mortgage Association amounted to $0.5 billion during 1953, virtually the same as in the year before. However, because of the rise in sales of FNMA-held mortgages, the net increase in FNMA’s portfolio was substantially less— $0.2 billion in 1953 against $0.4 billion in the preceding year. In addition to purchases actually made, there was a net increase of $0.3 billion in outstanding commitments during the year, reflecting the defense housing program and the “one-for-one” program.
There is little information available on the mortgage holdings of individuals and others. However, it appears that this group increased its investment in home mortgages by about $0.4 billion during 1953,
OUTSTANDING MORTGAGE DEBT ON TOTAL NONFARM HOUSING - DEC. 31. 1953
HOLDER
SAVINGS AND LOAN ASSOCIATIONS
LIFE INSURANCE COMPANIES
COMMERCIAL BANKS
MUTUAL SAVINGS BANKS
FNMA
INDIVIDUALS AND OTHERS
SOURCES: HomeLoon Bonk Boord, Federal Reserve Board, Federal Notional Mortgage Association; Life Insurance Association of America.
Chart 10.
17
HOUSING AND HOME FINANCE AGENCY
approximately the same gain as in the previous year. The other mortgagees included in this group are primarily real estate and mortgage companies. They were the largest originators of VA loans, having originated over one-third of the total in 1953; and in the FHA field, they were second only to commercial banks, accounting for approximately one-third of the 1953 total originated, but loans originated by these lenders generally are sold to institutional lenders.
Nonfarm Real Estate Foreclosures
Total nonfarm foreclosures numbered 21,500 in 1953. This was an increase of about one-sixth over each of the 2 preceding years, and was approximately equal to the 1950 total. However, the current level is still far below prewar, despite the sharp increase in mortgage indebtedness. Foreclosures in 1953 were only one-fifth of those in 1939 and about 15 percent of those in 1929. Properties acquired by FHA under Section 203 were less than in 1952, and claims paid by VA were also down. Similarly, the number of loans in default under both of these programs were fewer at the end of 1953 than a year ago, despite increases in the total number outstanding. However, the current levels of all of these indicators are so low that the interpretation of changes is difficult and uncertain.
18
Chapter III
HOUSING SUPPLY AND NEEDS
Section 301b of the Housing Act of 1948, as amended, requires that the Administrator of HHFA shall “prepare and submit to the President and to the Congress estimates of national urban and rural nonfarm housing needs and report with respect to the progress being made toward meeting such needs.”
A New Look at Our Housing Inventory
During the year, the Bureau of the Census released the final report on the state of the housing inventory as it was at the time of the 1950 decennial census. In most respects the final figures showed no significant differences from the picture presented by the preliminary data. During the decade, home ownership increased; there were marked increases in the number of homes having private bath and private flush toilet; there was a sharp rise in the number of dwellings equipped with mechanical refrigerators, cook stoves using gas or electricity, and heating equipment utilizing gas or oil for fuel. The table on page 20 summarizes some of the salient features of our housing inventory in 1950.
Despite the gains which have been made on many fronts, the final 1950 census figures indicate that deficient units—dwellings which either had basic structural shortcomings or lacked plumbing—bulked somewhat larger in our nonfarm inventory than had been previously indicated.
The preliminary Census Bureau figures on the 1950 inventory, which were used in our 1952 evaluation of the situation, showed that there were roughly 2% milion occupied dilapidated dwelling units in nonfarm areas. The final report now indicates, however, that there were actually 2,823,000 dilapidated units in 1950 or some 350,000 more than had earlier been thought.
19
HOUSING AND HOME FINANCE AGENCY
Selected characteristics of nonfarm housing in the United States which are comparable in the censuses of 19^0 and 1950
[In thousands]
Item Number of dwelling units
1940 1950
Total dwelling units 29,683 39,625
OccupaneyjStatus: Occupied dwelling units
27, 748 37,105
Owner-occupied
11,413 16,335 19,802 17,304
Renter-occupied
Toilet facilities: Number reporting ..
29, 244 39,007
With private flush toilet
21,124 8,120 30,603 8,404
No private flush toilet..
Shared flush toilet
1,814 6,306 1,815 6, 589
Other or none
Bathing facilities: Number reporting .
29,197 38, 589
With private bathtub or shower
19, 726 9,472 1,706 29,178 9,411 1, 711
No private bathtub or shower.
Shared bathtub or shower
No bathtub or shower
7,766 7.700
Water: Number reporting
29, 353 39, 040
Piped running water inside structure 1
24,456 34, 834 29, 975 4, 859
Hot and cold piped running water inside structure
Only cold piped running water inside structure . .
No piped running water inside structure 1
4,897 4,206
Piped running water outside structure. _ _ ..
1,199 3.698 895 3,311
No piped running water
Heating fuel: Number reporting
26, 946 35, 750
Coal .... ......
16, 553 3,103 3, 723 3, 219 348 12, 774 1,935 11, 544 8, 595 902
Wood
Gas . .
Liquid fuel . ..
Other ..
Cooking fuel: Number reporting . .
27, 341 36,463
Gas
16, 510 1.652 9,179 23,791 5,395 7, 277
Electrical —
Other
Refrigeration equipment: Number reporting
27, 269 14, 058 36, 438 30,194
With mechanical equipment
Persons per room in occupied dwelling units: Number reporting
27,429 36, 549
0.75 or less _
15,499 9, 973 1,957 22,140 12, 373 2,036
0.76 to 1.5
1.51 or more . _ _
i In 1940, the data on running water relate to the dwelling unit rather than structure. Source: U. S. Bureau of the Census.
20
OFFICE OF THE ADMINISTRATOR
In evaluating the quality of our housing stock, these 2.8 million units, which the Census identified as being in such bad condition that “the dwelling unit does not provide adequate shelter or protection against the elements or it endangers the safety of the occupants,” represent the hard core of the problem. In addition to these units, however, there are many others which while not dilapidated were deficient in some other respect. There were, for example, 2,281,000 not dilapidated occupied nonfarm units which had no running water; another 4,269,000 units had running water but lacked private bath or toilet; still another 1,322,000 units had as their main deficiency the lack of hot running water.
In aggregate, the number of units with some type of structural or plumbing deficiency totaled nearly 10.7 million units. Not all, by any means, of these deficient units, especially those whose only lack is hot running water, are necessarily substandard. Even among the substandard units, there are many which, by means of rehabilitation, could be brought up to standard. It is, however, among the deficient units that the bulk of our housing problems lie.
An analysis of the Census figures on deficient dwellings shows a heavy concentration of units with low values or low rentals. Over half of the owner-occupied units had values of less than $3,000. Among rental units some 70 percent of the deficient units had contract rentals of less than $30 a month.
Percentage distribution of value or contract rent on nonfarm dwelling units in 1950, by quality of housing
Value Owner-occupied
Units reported as deficient Units reported as not deficient
Less than $3,000 Percent 52 28 14 3 2 1 Percent 3 11 25 22 25 14
$3,000-$4,999
$5,000-$7,499
$7,500-$9,999
$10,000-$14,999
$15,000 or more
Total
100 100
Tenant-occupied
Monthly contract rent Units reported as deficient Units reported as not deficient
Percent Percent
Less than $30_ 71 20
$30-$49 23 45
$50-$74 5 25
$75-$99 . 1 7
$100 or more (’) 3
100 100
1 Less than one-half of 1 percent.
Second, far more families with low income live in deficient units than in good units. According to recently released Census material, more than half of the occupants of dwellings whidh had some reported deficiencies in 1950 had incomes in the previous year of less than $2,000. Another fourth had incomes ranging between $2,000 and $3,000. This contrasts sharply with the occupants who had no reported deficiencies in the 1950 Census, where only one-fifth of the
21
HOUSING AND HOME FINANCE AGENCY
families had incomes of less than $2,000 and only one-third had incomes of less than $3,000.
Percentage distribution of income of nonfarm families by quality of housing
Income in 1949 Those living in deficient dwellings Those living in dwellings with no reported deficiencies
Under $2,009 _ _ 52 20
$2,000-$2,999 23 17
$3jOOO-$3,999 14 22
$4^000-$5,999 9 25
$6j000-$9^999 2 12
$10,000 or over - (1) 4
Total 100 100
1 Less than 1 percent.
Third, dwellings which the Census found to have structural or plumbing deficiencies in 1950 had a higher proportion of aged families than did units with no reported shortcomings. Thus 14 percent of our poorer houses had families whose head was 65 years of age or older. This is more than half again as many as are found in housing with no deficiencies.
Percentage distribution of age of head of nonfarm households by quality of housing
Age of head of household
65 years or older___________________________________________________
Under 65____________________________________________________________
Total_________________________________________________________
Living in deficient dwellings Living in dwellings with no reported deficiencies
14 9
86 91
100 100
Finally, there is also evidence that there is more overcrowding among residents who live in poor housing, especially rented housing, than among those living in good housing. While Census data do not permit a direct determination of the degree of crowding in substandard housing, it is possible to ascertain it for families of different incomes. Since the data clearly demonstrated that low income and unsatisfactory housing go hand in hand, it seems reasonable to infer that the housing arrangements of families with incomes under $3,000 are representative of those living in such unsatisfactory housing. On that premise, we find that among renters better than one-fifth of those with incomes under $3,000 live in dwelling units with more than 1 person per room. This compares with only 2 percent for the families with incomes of $3,000 and more. Among homeowners this disparity is not so striking, but even there the low-income families tend to be
22
OFFICE OF THE ADMINISTRATOR
more crowded than do families in the middle and upper-income brackets.
Percentage distribution of families with more than 1 person per room, by 1949 income
Income in 1949 < • -1 Renters Owners
Less than $2,000 _ _ . .... 22.0 10 6
$2,000-$2,999 22. 9 13 9
$3,000 and over. _ _ _ 2.2 9.1
Percent of all families having more than 1 person per room 13.9 10.3
HOUSING CONDITIONS BY FAMILY INCOME-1950
Half of the families earning less than $2,000, and one-third of the families earning between $2,00C and $li, COO I i ve in deficient housing.
OCCUPANT'S INCOME 0 Millions of nonfarm dwelling units *
IN 1949 |-----------4-------------°_________!±____________'6
LESS THAN $2,000
Z>Z>
$2,000 to $4,000
$4,000 to $6,00 0 j
■XWW2Ws| ■ Z "/Jp e f1c 1 e n t
$6,000 to $10,000 /vz?A':<::::-»R29%Km
fzXln 01 ZZ •
Vi Def ic lent
HVZU %:ZZ:Zt>\/ V-.
Income not reported
• Excludes 950,000 units for which condition or facilities were notreported
SOURCE: US. Bureau of the Census
Chart 11.
Close scrutiny of our backlog of substandard housing makes it clear that this segment of our housing problem presents opportunities for constructive action. There is, for example, the vast potentiality for rehabilitation, especially among those dwellings whose only deficiencies are the lack of hot water or inside private toilet and bath, as well as a pressing need for the clearance of completely worn out units. This is a most important aspect of the job since it can afford a means through which many such dwellings can be brought up to modern standards of comfort and convenience.
The high degree of crowding, especially among low-income renters, indicates the need for larger quarters for many of them in new or rehabilitated units at rentals or sales prices within their range. There is also a need for small units, both for rent and for sale, properly designed to meet the special requirements of older-person families.
23
SECTION 2. ACTIVE OPERATING PROGRAMS OF THE HHFA
Chapter IV
SLUM CLEARANCE AND URBAN REDEVELOPMENT
A. Types of Federal Assistance to Localities
Title I of the Housing Act of 1949 authorizes the HHFA Administrator to make advances to assist local public agencies in making surveys and plans for the acquisition of blighted, deteriorated or deteriorating areas, and for the clearance, preparation, and sale or lease of such land for primarily private redevelopment. The Act also authorizes loans to localities to finance the undertaking of these operations. To obtain funds for advances and loans, the Administrator is authorized, with the approval of the President, to borrow not more than $1 billion from the Secretary of the Treasury.
Title I further provides for Federal capital grants of not more than two-thirds of the net project costs, i. e. deficits, incurred in carrying out local slum clearance and urban redevelopment projects. The balance of the net project costs must be met by the locality, either in cash or in the form of non-cash local grants-in-aid, such as parks, public facilities, etc., acceptable under the Act. The Administrator is authorized, with the approval of the President, to make contracts for capital grants not exceeding a total of $500 million. Funds for capital grant payments are provided by appropriations, $28 million having been appropriated to date.
All advances and loans are repayable with interest at not less than the applicable going Federal rate. (Under the Housing Amendments of 1953 [Public Law 94, 83d Cong.], the applicable going Federal rate was redefined to permit its determination for purposes of contracts for Title I advances and loans, at 6-month intervals by the Secretary of the Treasury. Before the amendments the applicable going rate fluctuated between 2.76 and 3.25 percent. For the latter portion of the year, the rate was fixed at 3.125 percent.) With the approval of the Administrator, local public agencies may pledge their rights under Title I loan contracts as security for borrowings from private sources for project expenditures if such borrowings can be obtained at interest rates lower than required under the Act.3
3 The first such borrowing, in connection with The Bottoms Project, Murfreesboro, Tenn., was effected in September 1953, at a rate of 1.85 percent. Private sales of notes later in the year for projects in Jersey City, Newark, and Perth Amboy, N. J., were at between 1.25 and 1.34 percent.
24
OFFICE OF THE ADMINISTRATOR
Title I originally provided that , not more than 10 percent of the authorized Federal loan or capital grant assistance could be expended in any one State. This provision was modified in the Housing Amendments of 1953 authorizing contracts for capital grants aggregating not to exceed an additional $35 million of the total $500 million authorization in states where more than two-thirds of the maximum capital grants permitted under the 10 percent limitation has been obligated.4
B. Types of Projects Eligible for Federal Aid
Four categories of project areas are eligible for assistance under Title I: (1) slum or deteriorated or deteriorating predominantly residential area, (2) other deteriorated or deteriorating area, (3) predominantly open area, and (4) open area. Eligibility for Federal aid with regard to the latter three types of areas is predicated primarily on the need to expand the areas available for new housing.
C. Major Policy Developments in 1953
Major developments during 1953 in the slum clearance and urban redevelopment program authorized under Title I of the Housing Act of 1949 were the new emphasis on housing code enforcement to complement clearance projects, and the acceleration of progress of local public agencies toward the clearance of slums and blighted areas under plans completed in earlier years.
During the year, considerable momentum was gained in community efforts to conserve existing housing resources through development and enforcement of more adequate codes and regulations, rehabilitation of existing structures, and other conservation measures utilizing, particularly, voluntary efforts of local citizens. This broadening of the attack on urban blight and decay was recognized in certain provisions of the 1954 First Independent Offices Appropriations Act, approved July 31, 1953. Under these provisions, the Administrator, before approving any local program under Title I, is required to give consideration to the’ efforts of the locality to enforce local codes and regulations relating to adequate standards of health, sanitation, and safety of dwellings and to the feasibility of achieving slum clearance objectives through rehabilitation of existing dwellings and areas.
Under policies adopted pursuant to these provisions, program approvals after June 30, 1953, are withheld until the Division of Shim Clearance and Urban Redevelopment receives from the locality adequate information about its code enforcement program and evidence that slum clearance objectives cannot feasibly be achieved solely through rehabilitation of existing dwellings and areas. With respect
4 Late in the year, $20 million of the $35 million of capital grant authorization under this amendment was earmarked for New York City.
25
HOUSING AND HOME FINANCE AGENCY
to the code modernization and enforcement requirements, emphasis has been placed on progressive improvement. This is in recognition of the fact that few if any localities have adopted codes and established enforcement methods which they themselves consider adequate for their own needs. Every locality is required to demonstrate, with its first application for financial assistance for a project, that it has a definite program for improvement of existing codes and regulations, and to report on the actual accomplishment under such program at designated stages of the planning of the project. If satisfactory accomplishments are shown, Federal financial aid is continued. If progress is inadequate, further Federal financial aid is withheld.
D. Operations
1. Participating Localities
At the end of the year, there were local slum clearance projects in various stages of planning or completion in 180 different communities (160 in 28 States, 1 in the District of Columbia, and 19 in Puerto Rico and Hawaii) compared to 153 cities a year ago. Also at the close of 1953, some 45 additional communities (including localities in 2 additional States and Alaska) were holding reservations of Title I capital grant contract authorization as an indication of their intention to in-itiate a local slum clearance and redevelopment program with one or more projects.
Participation in the Title I program was proportionately more extensive in the case of the larger cities in the continental United States. Program approvals were outstanding at year end for all but 1 of the cities above 500,000, for somewhat more than half (or 46 of 88) of the cities between 100,000 and 500,000, and for about one-fourth (or 30 of 126) of the cities between 50,000 and 100,000. In contrast, only 68, or fewer than 1 in 50, of the 3,651 incorporated places with populations between 2,500 and 50,000 had received approval for planning or development operations in connection with a local slum clearance project.
2. Project Progress
In general, 1953 witnessed a steady growth in the number of local •slum clearance and urban redevelopment projects progressing into the more advanced stages of final planning and development. As of December 31,1953, development operations—the acquisition, clearance, improvement, and sale of land for redevelopment, and the relocation of families-—had been approved for 60 projects in 39 different communities. A year ago the total was 24 projects in 16 cities. The preparation of final plans and cost estimates for the undertaking of projects had been approved for an additional 94 projects located in 79 communities, against a total of 76 projects in 60 localities at the end of
26
OFFICE OF THE ADMINISTRATOR
1952. Surveys for the identification and delineation of eligible project areas had been approved for 105 other projects in 95 cities.5 The overall accomplishment in 1953 in comparison to earlier years is summarized in table 12a in Appendix A.
In 32 of the 60 projects approved for development, the demolition of existing structures had been commenced at year end as a prelude to preparation of the land for sale or lease at fair value for redevelopment, almost wholly by private enterprise, for modern uses conforming to and supporting local plans for community growth and redevelopment. Redevelopment of assembled and cleared land had commenced in 9 project areas in 7 cities. In Baltimore, Chicago, Little Rock, Norfolk, and Philadelphia, tenants had already taken occupancy of newly constructed or rehabilitated dwellings provided in connection with local slum clearance projects.
3. Project Characteristics
Of the 154 project areas approved for final planning or development as of December 31, 1953, all but 16 are blighted, deteriorated or deteriorating slum areas, typically at or near the central sections of communities. Of the 16 exceptions, 7 are blighted built-up areas in predominantly nonresidential use and 9 are blighted predominantly open areas.
The 754 project areas embrace more than 5,700 acres of land. More than half are under 25 acres. About one-fourth are smaller than 10 acres. Only 17 are larger than 100 acres. The smallest project area, located in Shelton, Conn., consists of 2 acres. The largest area, the Diamond Heights project in San Francisco, Calif., contains 325 acres. The 9 predominantly open project areas aggregate some 843 acres.
Plans for redevelopment of the project areas call for a variety of new uses conforming to local plans for community growth and redevelopment. The major emphasis is on new housing, which will be the exclusive or predominant reuse of the land in 84 of the areas. Residential redevelopment is also planned for part of the land in 11 of the 70 project areas to be redeveloped primarily or exclusively for nonresidential purposes as follows: industrial, 29 areas; commercial, 27 areas; and public and semipublic, 14 areas. Most of the projects for predominantly residential reuse will also provide for some commercial or public redevelopment.
The great bulk of the contemplated residential redevelopment will be privately financed housing. Public housing will be the exclusive reuse in one project, and will predominate in another. Some land will be devoted to public housing in a secondary relationship under the rede
B These totals are exclusive of approvals in communities which terminated their local slum clearance and urban redevelopment programs in 1953 as a result either of local decisions or of adverse court rulings on the validity of State enabling legislation.
294078—54---4
27
HOUSING AND HOME FINANCE AGENCY
velopment plans for 8 additional projects. The density patterns to be established under the plans for residential redevelopment will permit the construction of up to approximately 51,000 new dwelling units, with about 17 privately financed units for every public housing unit contemplated. About three-fifths of the privately financed dwelling units will be for rental occupancy.
The approval of Federal assistance for local project undertakings is conditioned on the existence of a feasible method for temporary relocation and the availability for permanent relocation of decent, safe, and sanitary dwellings within the means of the families to be displaced. Before clearance, the 154 projects were estimated to contain approximately 80,000 dwelling units, some 80 percent of which were substandard. About 73,000 families were housed in these areas, with more than half of them eligible for admission to public low-rent housing projects.
4. Project Financing
Estimates of gross project costs—the total outlay by the local public agency in carrying projects to completion—aggregate $452.2 million for the 154 projects. About one-third of this figure, or $146.3 million, is expected to be recovered from the sale or lease of the cleared and improved land, leaving overall net project costs, or deficits, estimated st $305.9 million. Federal capital grants aggregating $196.1 million will help meet this deficit, the balance to be provided by localities in cash ($47.1 million) and donations of land, site improvement and demolition work, or facilities supporting the new uses contemplated under the redevelopment plans.
Outlays of considerable magnitude are anticipated in connection with the ultimate redevelopment of the project areas. As summarized immediately below, these outlays aggregate almost $500 million in the case of 52 of the 53 projects for which Title I capital grants had been approved as of the close of the year. (In the case of one project the data were not available.)
Type of construction
Housing ($257.7 million private, $13.6 million public)_____________________________
Commercial_________________________________________________________________________
Industrial_________________________________________________________________________
Puolic and semipublic ($79.1 million in the areas, $28.6 million in supporting facilities outside the areas)--------------------------------------------------------------------
Site improvements__________________________________________________________________
Amount (in milions)
$271.3
53.5
48.0
107.7
16.7
Total-------------------------------------------------------------------------
497.2
Cumulative Title I assistance approved for specific projects in communities represented in the overall program at the close of the year includes:
28
OFFICE OF THE ADMINISTRATOR
$105.2 million of capital grants for 53 projects in 33 cities. $104.1 million of temporary loans for 40 projects in 29 cities. $9.9 million of advances for surveys and plans in 167 cities.
Contracts for Title I capital grants had been executed for 39 of the 53 projects with capital grants approved. The 39 signed contracts .aggregate $87.2 million in capital grants. Some $8.7 million had been disbursed to 7 projects in partial payment of the Federal capital grant commitment.
In the cases of 12 of these 39 projects, funds for project expenditures were available from State and local sources, making it unnecessary for the local public agencies to finance operations with a Federal loan. For the other 27 projects, the contracts for Title I assistance include loans aggregating $63.3 million. Almost half of this amount, or $30.8 million, had been disbursed for 21 projects. However, the balance outstanding at the close of the year had been reduced to $21.9 million through repayments representing funds obtained in borrowings from non-Federal sources at lower interest rates as well as from the sale of land in the project areas. Disbursements of Federal funds under Title I loan contracts were obviated in an additional amount of $4.3 million borrowed initially from non-Federal sources under the above-summarized features of the contracts. All told, some $10.9 million had been borrowed from non-Federal sources within the framework of Title I loan contracts to finance project expenditures.
5. Summary of Operations
The localities participating in the Title I program, the number and type of local program operations approved, and Federal assistance approved and disbursed are summarized in table 12b in Appendix A.
E. Coordination and Liaison
Discussion and consultation with FHA, PHA, and officials of other agencies at the national level took place on frequent occasions, to assure coordination concerning problems of interest to more than one constituent agency or division. Particular attention was given to the role of FHA-insured loans in connection with rehabilitation and renovation of existing structures both within and near slum clearance project areas, in keeping with the objectives of the provisions added to Title I of the Housing Act of 1949 by provisions of the 1954 First Independent Offices Appropriations Act.
Attention was also given to the role of FHA mortgage insurance as one of the Federal aids which can be utilized locally to expand the supply of housing available for the relocation of families displaced by
29
HOUSING AND HOME FINANCE AGENCY
slum clearance projects or as a result of strengthened enforcement of local occupancy and housing codes. FHA mortgage insurance has been demonstrated to be generally essential to stimulate the construction of new housing open to displaced racial minority families. After joint study, procedures were established to assure the most effective use of FHA insurance in solving rehousing problems.
At the local level, representatives of redevelopment agencies increasingly consulted FHA field officials on questions relating to the design and feasibility of residential redevelopment of proposed clearance areas. Such meetings reflected the earlier establishment of procedures for joint field study and exchange of information on such problems.
Under the Act, eligible families displaced from slum clearance and redevelopment project areas have priority for admission into federally aided low-rent public housing projects. In a number of communities, such units are relied upon to facilitate relocation of families so that clearance operations can proceed. Discussions were held with PHA officials to coordinate scheduled relocation needs with the construction of the 20,000 low-rent units authorized by Congress for fiscal 1954.
A program contemplating integration of the services of FHA, PHA, and the Division of Slum Clearance and Urban Redevelopment was evolved in connection with aspects of the plans of Puerto Rican agencies and departments for the social and economic development of the Commonwealth. This program was developed in meetings of the HHFA Administrator and his staff with Insular officials. As a result of the agreements reached, closer working relationships have been achieved in the field.
The Division sought the assistance and advice of organizations of local government officials and nationally recognized standards-making authorities in connection with the new provisions of the law relating to positive local programs for adoption and enforcement of codes and regulations. Working relations were maintained in the field of building codes and allied regulations with such groups as the Building Officials Conference of America, Pacific Coast Building Officials Conference, and Southern Building Code Congress. Contact with standards-making authorities was maintained through the Division’s liaison membership in the Joint Committee on Building Codes. In the field of minimum housing standards, relationships were established and maintained with national public and private agencies.
F. State Legislation and Litigation
At the end of 1953 a total of 32 States, along with the District of Columbia, Alaska, Hawaii, Puerto Rico, and the Virgin Islands, had:
30
OFFICE OF THE ADMINISTRATOR
enabling legislation authorizing local public agencies to undertake slum clearance and urban redevelopment programs.6
During 1953, the statutes of several jurisdictions were changed by amendments designed in most instances to assure full local participation in the Federal Title I program. In Kansas, an earlier statute was repealed and a new statute enacted. Although Texas has no enabling legislation, at least one city in the State (San Antonio) has amended its home-rule charter to provide for slum clearance and urban redevelopment activities.
Favorable decisions by the courts of last resort in 7 States were rendered during the year. The States were Illinois, Maryland, New York, Ohio, Oregon, Pennsylvania, and Virginia. In addition, there were favorable decisions in the Federal courts under the statutes of Illinois and the District of Columbia, and the Supreme Court of the United States had been requested to review the District of Columbia ■case. At the end of 1953, cases were pending in several other jurisdictions. An unfavorable decision was handed down by the Supreme Court of Georgia holding the statute of that State to be unconstitutional under the existing wording of the State Constitution. Subsequently the Georgia legislature voted an amendment for submission to the voters which would permit the enactment of slum clearance and urban redevelopment legislation for the State. 9
9 The States are Alabama, Arkansas, California, Colorado, Connecticut, Delaware, Illinois, Indiana, Kansas, Kentucky, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Nebraska, New Hampshire, New Jersey, New York, North Carolina, Ohio, Oregon, Pennsylvania, Rhode Island, South Carolina, South Dakota, Tennessee, Virginia, Wisconsin, and West Virginia.
31
Chapter V
THE SECONDARY MORTGAGE MARKET: FEDERAL NATIONAL MORTGAGE ASSOCIATION
The Federal National Mortgage Association (FNMA) administers the Government’s limited secondary market operations for the purchase and sale of certain types of FHA-insured and VA-guaranteed home mortgages. The Association, originally a subsidiary of the Reconstruction Finance Corporation, was transferred to the Housing and Home Finance Agency on September 7, 1950, pursuant to Reorganization Plan No. 22 of 1950 for the purpose of coordinating the functions performed by FNMA with other Federal housing programs..
A. General Scope of Operations
The Association’s operations were initially directed toward providing a nationwide secondary market for FHA-insured mortgages and toward assisting in establishing the acceptability to investors of certain new types of FHA-insured mortgages. In July 1948 these activities were expanded under the law to include certain types of VA-guaranteed mortgages. The extent of the assistance rendered by FNMA in supporting the VA-guaranteed home loan program is evident from the fact that since July 1, 1948, the Association has purchased 345,804 VA-guaranteed mortgages aggregating $2,586 million and constituting approximately 70 percent of all the Association’s purchases since that date. Beginning in July 1951 and continuing throughout 1953, a large part of FNMA’s purchasing authority was also utilized to assist in providing the financing required for the production of defense, military, and disaster housing. In the 2% years during which FNMA has participated in the defense program, it purchased 40,453 mortgages covering defense, military, and disaster housing, totaling $422 million, which provided for 55,120 units of those types of housing, and at the end of 1953, commitments totaling $410 million were still outstanding.
In carrying out these programs, the Association—from the date of its inception in 1938 through 1953—has purchased 539,031 mortgages with unpaid principal balances amounting to $3,944 million. At the same time, it endeavored to sell the mortgages in its portfolio with the objective of revolving its prescribed purchasing authorization, thereby furnishing needed financing assistance to the maximum
32
ORGANIZATION AND FUNCTION CHART OF THE FEDERAL NATIONAL MORTGAGE ASSOCIATION Chartered on February 10, 1938, under Title III of the National Housing Act, as amended. Provides a Government-financed market for the purchase and sale of eligible FHA-insured and VA-guaranteed mortgages
HOUSING AND HOME FINANCE
ADMINISTRATOR
(Chairman of the Board of Directors!
I '
BOARD OF DIRECTORS
Determines matters of policy consistent with controlling legislation, executive orders, and public interest I ' -------
OFFICE OF THE PRESIDENT
Carries out or directs the business and affairs of the Association in consonance with general policies established by the Board of Directors ----------------1.........."'ll— 1 ---------. I . , OFFICE OF THE GENERAL COUNSEL OFFICE OF THE CONTROLLER
Serves as the legal office of the Asso- Responsible for the maintenance of all u . OFFICE OF THE SECRETARY-TREASURER
ciation in discharging the responsibility accounting records of the Association, Maintains records of all meetings of Board of Directors and certain other corporate
of the General Counsel as the Associ- the preparation and interpretation of all actions; is responsible for all disbursements of funds and for effecting cus-
ation’s principal consulting officer in financial and statistical records and re- *?dy of cash- valuable documents, and papers received by the Association in
all matters of legal significance or lated reports, and the certification of *"e cont’uct of '*s business; responsible for all administrative services including
_________import vouchers for payment by the Treasurer procurement and maintenance functions —________। ......—r r । - I - - I_______________
LOAN ADMINISTRATION BRANCH AUDIT BRANCH BUDGET BRANCH PERSONNEL BRANCH
Responsible for the supervision and di- Responsible for the audit and verifica- Responsible for the coordination and di- Responsible for the administration of
rec ion of purchase, admimstrat.on, and tion of accounts and records of the As- rection of all activities in connection personnel policies, procedures and
sale of all mortgages in the Associ- sociation and its contract servicers, and with the formulation, consolidation, and standards and the direction of the As-
ation s portfolio, and for the disposition reporting of deviations from compliance presentation of the Association's sociation’s personnel activities including
of security acqu.red through foreclosure with Association policies and rules and budget; maintains controls on disburse- position classification, recruitment
or otherwise other apphcable general or specific ment of funds placement, promotions, and related per-
________________________________ Governmental standards and statutes __________________'_____________ ___________sonnel functions
AGENCY OFFICES
.Responsible for the purchase, servicing, and sale of mortgages for the Association and all activities in connection therewith, including supervision of contract servicers, disposition of acquired properties, disbursement of funds, examination of mortgage purchases, and maintenance of necessary records and books of account; maintain contacts with lending institutions
Chart 12.
OFFICE OF THE ADMINISTRATOR
33
HOUSING AND HOME FINANCE AGENCY
-extent possible within its legal limitations. FNMA’s cumulative sales, numbering 171,055 mortgages, totaled $1,043 million or about 26 percent of the Association’s total purchases. In addition, repayments to FNMA and other credits have amounted to $439 million. As a result of these operations, FNMA’s mortgage portfolio at the end of 1953 amounted to $2,462 million. The balance of the Association’s $3,650 million authorization at the end of 1953 consisted of $469 million in outstanding commitments, $169 million in outstanding advance contracts, and $550 million which was available for the purchase of other mortgages.
B. The Purchasing Program
1. Summary
During the year 1953, the Association purchased 53,165 mortgages totaling $542 million. The dollar amount was only $4 million more than the purchases made in the previous year, reflecting in large measure the purchase of defense, military, and disaster housing mortgages. Nondefense and nondisaster housing mortgages were eligible for purchase over-the-counter until April 10, 1953. Such mortgages, except for those covering Alaska housing, could be delivered after that time pursuant only to (a) Purchase Receipts or to (b) Advance Contracts to Purchase issued in connection with FNMA sales programs, each of which will be more fully described under “The Mortgage Sales Program.” Of the total purchases during the year 1953, $255 million were made pursuant to commitment contracts previously entered into by the Association, and the remainder ($287 million) were made on an over-the-counter basis. Included in the purchases during 1953 were 27,175 mortgages in the amount of $306 million covering defense, military, and disaster housing, and 792 mortgages aggregating $24 million covering housing in Alaska.
On December 31, 1953, outstanding commitment contracts of all types aggregated $638 million which included $169 million in Advance Contracts to Purchase (issued in connection with the one-for-one sales program) ; $410 million on defense, military, and disaster housing; $23 million on Alaska housing; $30 million on cooperative housing (FHA Section 213) ; and $6 million covering FHA Section 608 mortgages under the former commitment procedure.
2. Types of Mortgages Purchased
During the year 1953 the Association’s purchases were confined to eligible mortgages insured by FHA under Sections 8, 203, 207, 213, 608, 803, 903, or 908 of the National Housing Act, as amended, or eligible mortgages guaranteed by VA under Section 501 of the Servicemen’s Readjustment Act of 1944, as amended. Purchases during 1953 included 30,928 FHA-insured mortgages amounting to $355
34
OFFICE OF THE ADMINISTRATOR
million and 22,237 VA-guaranteed mortgages amounting to $187 million—a total of 53,165 mortgages aggregating $542 million. In dollar volume, 35 percent of FNMA purchases during the year 1953 were VA-guaranteed mortgages as compared with 69 percent in 1952, 89 percent in 1951, 95 percent in 1950, and 62 percent in 1949. About 71 percent of the total dollar volume of VA mortgage purchases during the year 1953 were made in the first 4 months of the year prior to the discontinuance by FNMA of the purchase of over-the-counter submissions of nondefense and nondisaster housing mortgages.
3. Purchase of Defense, Military, and Disaster Housing Mortgages
The Association’s authority under the Housing Act of 1952 (Public Law 531, approved July 14, 1952) to issue commitments to purchase defense, military, and disaster housing mortgages was extended by the Housing Amendments of 1953 (Public Law 94, 83d Cong., approved June 30, 1953) for 1 year to July 1, 1954. Under the present law FNMA is authorized to purchase over-the-counter and to issue commitment contracts covering the following types of eligible FHA-insured or VA-guaranteed mortgages:
(a) Defense housing programed by the Housing and Home Finance Administrator in an area determined by the President of the United States or his designee to be a critical defense housing area;
(&) Military housing with respect to which the Federal Housing Commissioner has issued a commitment to insure pursuant to Title VIII of the National Housing Act, as amended; or
()
Uncollected GAO claims .
Plans completed.. . .. . . _
1,115 782.3 14.5
Construction started Active, awaiting contract _
588 518 7 2 598 370.0 410.1 1.4 .8 690.5 5.6 8.9 (’) (■) 12.7
Abandoned .. . ...
Uncollected GAO claims
Potential reserve (construction not yet started)
1 Less than $50,000.
Source: Office of the Administrator, HHFA.
E. Maintenance and Disposition of World War II Public Works
Under the Lanham Act, approved in October 1940, the Federal Government aided in providing urgently needed public works in war-congested areas where local governments were unable to meet such needs. Federal aid consisted of direct Federal construction (principally of schools, hospitals, recreation facilities, and water and sewer facilities) and of grants and loans to local communities. The program
64
OFFICE OF THE ADMINISTRATOR
was transferred from the General Services Administration to HHFA in 1950 under Reorganization Plan No. 17, and it is now administered by the Division of Community Facilities and Special Operations in the Office of the Administrator.
The grant aspects of the program have been terminated; HHFA is now concerned with servicing outstanding loans and with the maintenance and disposition of the remaining Federal projects. Title IT of the Lanham Act directed that after the end of the emergency which had been declared by the President on September 8, 1939, property acquired or constructed under the Act should be “disposed of as promptly as may be advantageous under the circumstances and in the public interest.” Public Law 815, 81st Congress, directed that schools constructed under the Lanham Act be transferred to local educational agencies. Public Law 176, 83d Congress, authorized the transfer of projects to other Federal agencies.
During 1953, HHFA disposed of 65 projects, leaving 80 projects on hand at the end of the year. These remaining projects are not of the type for which there might be several prospective purchasers. In the case of a sewer or waterworks, for example, the only possible purchaser is a municipality or a private company regularly engaged in similar operations. The usual competitive forces which determine sales price are therefore missing, and each disposition must be worked out on a case basis by such methods as will result in the maximum recovery of Federal funds. While some of the remaining federally owned projects are available for immediate disposition, most of them either have been leased with option to purchase or are reserved for other Federal agencies.
Status of projects on hand, Dec. 31,1953
Federally constructed properties on hand, total_______________________
Reserved for other Federal agencies__________ . ______________________
Leased with option to purchase (Title still held by U. S. Government)_
Available for disposal________________________________________________
Sewer______________________________________________________________
Schools____________________________________________________________
Water______________________________________________________________
Original loans outstanding (secured by bond issues).
Number of projects Cost (000)
80 $15,317
24 2,013
43 7,813
13 5,491
8 2,188
4 1,614
1 1,688
17 ' 1,022
1 Amount of loans still outstanding.
Source: Office of the Administrator, HHFA.
65
SECTION 4: SPECIAL STAFF ACTIVITIES IN THE OFFICE OF THE ADMINISTRATOR
Chapter X
STAFF FUNCTIONS
A. The Scope of Staff Functions in General
In addition to the operating programs described in Section 2 of this report, certain service functions and advisory and analytical activities are carried on by the staff of the Office of the Administrator. Two of these activities, relating to international housing matters and minority group housing, are described at some length in parts B and C of this chapter. The other major staff functions and divisions of the Office of the Administrator, as organized during 1953, are:
1. The Division of Law serves the Administrator in development of legislative policy for the entire Agency; prepares or reviews public regulations of the Agency; prepares legal opinions and briefs with respect to basic legal problems in Agency programs and activities; provides a central Legislative Reference Service and prepares material for use in connection with pending legislation and testimony before Congressional committees.
2. The Division of Plans and Programs assists the Administrator in formulating basic policies and programs of the Agency, and evaluates existing programs for their effectiveness in accomplishing the Government’s objectives. It is concerned with assuring consistency among all housing programs, and between these programs and related Government programs and policies. This work is carried out in part through the preparation of special studies, reports and recommendations for the Administrator. It also requires consultation and close working relationships with other agencies such as the Bureau of the Budget, the Federal Reserve Board, the Veterans Administration and the Treasury on a wide variety of basic policy matters: mortgage interest, premium and discount rates, secondary mortgage market policies, etc. This Division is responsible for defense housing programming and for plans for Agency participation in civil defense, mobilization, anti-inflationary and antirecession programs of the Government. For these purposes the Division maintains liaison with the Department of Defense, the Office of Defense Mobilization, the Federal Civil Defense Administration, and the Council of Economic Advisers.
3. A Statistical Staff provides the Administrator and the entire Agency with statistical reports and analyses on basic housing data and
66
OFFICE OF THE ADMINISTRATOR
program statistics. The Staff gathers and issues monthly in the publication “Housing Statistics” current data on housing production, construction costs, home financing, and the progress of HHFA programs. This Staff also supplies analyses and estimates of such subjects as national urban and rural nonfarm housing needs, and the general housing situation. In connection with its work, the Staff maintains liaison with the Bureau of the Census, Bureau of Labor Statistics, the Veterans Administration and the Bureau of the Budget’s Office of Statistical Standards.
4. The Division of Administration prepares the Agency budget and handles Agency problems in connection with accounting, audit, personnel, administrative services, and administrative management functions, including liaison with and coordination of reports to the central staff agencies of the Federal Government.
5. A Compliance and Special Investigations Staff follows up complaints or allegations of violations of law or regulations with respect to investigations in the Agency as a whole. In addition, this Staff conducts investigations for OA operating programs and for those constituents which do not themselves have trained investigators. This Staff also assists the Attorney General and other Federal officials in the development of evidence in civil proceedings and criminal prosecutions.
6. The Division of Information provides a central point of housing information for the public, industry, Congress and other Federal agencies. This service involves practically continuous contact with dozens of technical and general magazines, newspapers and press services.
7. A Special Assistant to the Administrator aids individual Members of Congress in matters relating to Agency programs, and arranges or expedites the preparation of special reports and replies to inquiries and requests for information from Members of Congress and Congressional committees.
B International Housing Activities
An International Housing Activities Staff assists the Administrator by providing staff services to public and private United States agencies on housing matters which relate to the international responsibilities of the United States Government. These services include:
1. Exchange of housing technology and experience between the housing industry in other countries and in the United States;
2. Consultation with and information to the Department of State regarding official United States policy and position as guidance to U. S. delegations to international conferences on housing and town planning;
67
HOUSING AND HOME FINANCE AGENCY
3. Assistance to visitors from foreign countries by providing information on U. S. housing developments, conducting training programs, and arranging itineraries;
4. Providing such services to the Foreign Operations Administration as recommendations and information on projects in other countries, including recruitment of qualified technical personnel for overseas service.
During 1953, through its exchange of ideas and methods of housing, HHFA was able both to provide other countries with latest developments in housing in the United States and to assist United States officials and private citizens who needed information about foreign housing activities, or who went abroad on housing problems not directly connected with the HHFA.
HHFA assisted the Department of State in connection with such international conferences as the Tenth Inter-American Conference of the Organization of American States, United Nations Social Commission, the United Nations Economic and Social Council, United Nations General Assembly, the Asian Conference of the International Labor Organization, and United Nations Seminar on Housing. In addition, HHFA officials participated in the Ad Hoc Inter-American Committee Meeting on Low-Cost Housing and the Construction Committee of the International Labor Organization.
Information on American housing practices was provided by HHFA to about 100 visitors from foreign countries, who came as representatives of their governments, as private citizens, or under auspices of some national or international organization. Several hundred inquiries and requests for information from foreigners were handled by mail.
In addition to helping the Foreign Operations Administration select personnel for foreign housing and planning missions, HHFA assisted in drafting policies and programs for these missions to help overcome serious housing problems in countries receiving technical assistance under FOA programs. The HHFA also provided technical assistance while the missions were in progress, and reviewed and evaluated progress and results. Prior to 1953, technicians recruited for overseas duty were on the payroll of HHFA, but during the year their transfer was undertaken to FOA, which assumed administrative responsibility.
FOA also depends on HHFA for training foreign nationals who are brought to this country for instruction in housing and town planning, either under the auspices of the FOA or the United Nations. In 1953, HHFA conducted training programs, and planned studies, itineraries, and programs for about 50 such individuals.
68
OFFICE OF THE ADMINISTRATOR
During the year a seminar in aided self-help methods of solving housing problems was held under HHFA auspices in Puerto Rico, in connection with a project conducted by the Caribbean Commission. The seminar was attended by housing officials and technicians from nations and territories throughout the Caribbean area.
C. Special Problems and Approaches in Housing of Minorities
Traditional practices in the housing market of differentiating and segmenting the supply of housing on the basis of race or color have tended generally to exclude nonwhites from the better housing and newly developed neighborhoods, and to restrict them generally to the poorer housing and the more crowded, blighted, and slum areas. Thus, in acquiring decent housing, Negroes and other racial minorities experience special difficulties quite beyond those which confront others.
This plight of Negro and other racial minorities challenge our free economy and our democratic society to see to it that the housing market so functions that a dollar in a non white hand will buy the same housing value as will a dollar in a white hand.
To meet these special problems and assure equitable distribution of benefits to all racial groups, the housing agencies of the Federal Government have utilized the skills of specialized personnel experienced in inter group adjustment and the application of sound planning and economics. In the central offices, some of these specialists serve as policy advisers to the Administrator; others assist the field office staffs to carry out Agency policies. This activity, maintained in the Washington and field offices of HHFA and constituent agencies, has come to be considered as the racial relations service.
Concerted effort to expand and improve the housing and home financing available to racial minorities has increasingly become recognized as a major area of housing stress during the past decade, as well as one of the most complicated problem areas. The prime objective of this effort is to assure equal opportunity for all of our citizens to acquire, within their means, good and well-located homes, without regard to any such factors as race or religion.
The racial relations function in the central and field offices of the HHFA and its constituents is the development of a body of policy, procedures, principles, techniques, and experience and their implementation throughout the Agency to assure equitable participation by minorities in Agency programs and operations. As a measure to facilitate this function, Frank S. Horne was designated in 1953 as Assistant to the Administrator for Minority Studies, to conduct special studies and develop for the Administrator proposals for new approaches to the housing problems of minorities; and Joseph R. Ray, Sr., a representative from industry, was appointed Assistant to the Administrator and directing head of the OA Racial Relations Service.
69
HOUSING AND HOME FINANCE AGENCY
The minority housing problem received heightened emphasis during 1953:
1. As of December 31, 1953, for example, Negro families occupied 106,225 of the 282,830 low-rent public housing dwellings, or some 3S percent of the total program completed. Of the 966 occupied projects in the entire public housing program, including low-rent, war, and defense housing, in which Negroes were housed, 22 percent were occupied on an open occupancy basis, including white and nonwhites alike.
Further, as of December 31, 1953, Negroes employed at both skilled and unskilled trades in the construction of these projects had been paid cumulative wages of over $133.6 million (or over 14 percent of the total such wages paid), largely due to the implementation of specific nondiscrimination employment policy and procedures adopted by the Government in the 1930’s. There are, in addition, some 5,000 or more Negroes employed at all levels and types of jobs in the adminstration, management, and maintenance of public housing programs all over the Nation, as a result of Agency liaison through the Racial Relations Service with the Fair Employment Board of the Civil Service Commission and with the President’s Government Contract Committee.
2. As the Slum Clearance and Urban Redevelopment program expanded its scope and volume during the year, increasing attention was focused upon improving procedures and operations to assure fair treatment of minority groups, which are the groups most extensively affected by the program. Procedures, designed to conserve and expand the living space available to racial minorities, were developed in connection with the operations of slum clearance and urban redevelopment programs and public low-rent housing programs. More careful appraisals of minority group considerations were required in regular program review, in order to ease the displacement impact upon minorities and assure their relocation in suitable housing. Closer liaison was effected in the day-to-day operations of DSCUR, FHA, and local public agencies, with the objective of producing and supplying suitable standard housing to these displaced families at rents and prices they can afford.
3. Supported by the Federal agencies and assisted by the racial relations services, private capital and enterprise stepped up investment and production of homes available to Negroes:
( 329,000
1930 _______________ 330 000 330 000 236 000 S’ 000 ™ XX XX 316,000 51-000 142,000
1931________________ 254 000 254 000 174 000 loooo ™ xx XX 227,000 29,000 74,000
1932_______________ I34000 134 00O 64 000 mono xx XX 187,000 22,000 45,000
1933_____________93 000 93 000 45 000 4R 000 ™ XX XX 118,000 7,000 9 000
1934________________ 126000 126 000 49 000 77 000 xx XX 76,000 5,000 12,000
y . BE BE IE 4E 41 -I la § B BE SE EE BE 4# »:E IE BE
'+ S:X S?:X XX E:E 'BE ’BE ‘BE Bffi BE BE
.................... -S XX M ?:S is S® SX 1945..._________ ’..209 300 208 100 132 700 75 mn ?’ on ’S 100 117,700 10,600 13,500
j»:............----- xx BE :E xE S s s s xx
iQf;n * 1,025,100 988,800 556,600 432,200 36,300 32 200 4 100 704 300 3fi’5AA 104’Qnn
1950---------------- 1 1,396,000 1 1,352,200 > 785,600 > 566,600 43 800 42’200 1 600 > 1 154 100 44 800 W7?S
1951---------------- 1,091,300 1,020,100 531,300 488 800 71 200 64 000 ’ 200 ’ 900 i on In
O«3----------------- 1,127,000 1,068,500 554 600 513 900 58’, 5W> 55 000 3 500 942’500 4 5 WO nS
I953 ’-------------- 1,104,500 1,068,900 531,500 537:400 3^ 600 31,’So I’, 700 g 900 M, 4W 2W
___________________________________Percent change 1953 from—
S:::":-:::::-:::::--::: (,)+<.8| ft$| 4»:‘| 2gg| -+J?| ^»|
i All-time high. » Preliminary, also breakdown data by type include HHFA estimates for November and December. »Less than +0.05 percent.
Source: U. S. Department of Labor,
HOUSING AND HOME FINANCE AGENCY
74
Table 2.—Permanent privately owned nonfarm dwelling units started: 1935-53
Number of starts in— Percentage of total starts in—
Total private-------------------------------------------------------------------
Year Pnonfarmt Sales-tvne Rental-type structures
staT 1-family 2-family Multifamily “ffiestype____________________________„
starts structures structures structures
U-iamuy; Total 2-family Multifamily
1935 ’_______________________________________ 215,700 182,200 7,700 25,800 84 16 4 12
1936---------------------------------------- 30-1,200 238,500 13,300 52,400 78 22 4 17
1937_________________________________________ 332,400 265,800 15,300 51,300 80 20 5 15
1938_________________________________________ 399,300 316,400 18,000 64,900 79 21 5 16
1939----------------------------------------- 458,400 373,000 19,700 65,700 81 19 4 14
1940--------------------------------------- 529,6C0 447,600 25,600 56,400 85 15 5 11
1941_________________________________________ 619,500 533,200 28,400 57,900 86 14 5 9
1942----------------------------------------- 301,200 252,300 17,500 31,400 84 16 6 10
1943_________________________________________ 183,700 136,300 17,800 29,600 74 26 10 16
1944_________________________________________ 138,700 114,600 10,600 13,500 83 17 8 10
1945_________________________________________ 208,100 184,600 8,800 14,700 89 11 4 7
1946_________________________________________ 662,500 590,000 24,300 48,200 89 11 4 7
1947_________________________________________ 845,600 740,200 33,900 71,500 88 12 4 8
1948_______________________________________ 913,500 763,200 2 46,300 104,000 84 16 5 11
1949_________________________________________ 988,800 792,400 34,700 161,700 80 20 4 16
1950_______________________________________ 2 1,352,200 21,150,700 42,200 159,300 85 15 3 12
1951--------------------------------------- 1,020,100 892,200 40,100 87,800 87 13 4 9
1952_______________________________________ 1,068,500 939,100 45,900 83,500 88 12 4 8
1953 3_____________________________________ 1,068,900 936,900 41,400 90,600 88 12 4 8
Percent change 1953 from—
1952--------------------------------------- (<) —0.2 —9.8 +8.5 xx xx xx xx
1951--------------------------------------- +4.8 +5.0 +3.2 -j-3.2 xx xx xx xx
1 Data for 1925-34 are given in Table 1 of this report.
2 All-time high.
3 Preliminary, also breakdown data by type include HHFA estimates for November and December.
4 Less than +0.05.
Source: U. S. Department of Labor.
OFFICE OF THE ADMINISTRATOR
294078—54----7
75
Table 8,—FHA and VA starts compared with total permanent privately owned nonfarm starts: 1935-53 Units in FHA starts i Units in Units in BLS private starts AS 3 TrivatVJtarts8
Year----------------------------------------VA starts —------——----------------------------------------------------
1- to 4 familv Proicei (family
Total homes housing 2 homes) 2 Total 1-family 2-family Multifamily FHA starts VA starts Cumulative data
1935-53 --------------- 3,484,918 2,848,215 636,703 1,153,524 11,610,300 9,845,200 491,600 1,273,500 30 XX
Annual data
1935---------------------- 13,964 13,226 738 xx 215,700 182,200 7,700 25,800 6 XX
J966---------------------- 49,376 48,752 624 xx 304,200 238,500 13,300 52,400 16 xx
|937-------------------------------- 66,980 3,023 XX 332,400 265,800 15,300 51,300 18 xx
J938------------------------------- 106,811 11,930 xx 399,300 316,400 18,000 64,900 30 XX
Joao------------------- Im’no? 13,462 XX 458,400 373,000 19,700 65,700 34 XX
1940------------------------------- 176,645 3,446 XX 529,600 447,600 25,600 56,400 34 xx
1941------------------------------- 217,091 3’206 xx 619,500 533,200 28,400 57,900 36 xx
1°42------------------- 165,662 160,204 5,458 xx 301,200 252,300 17,500 31,400 55 xx
1943-------------------- 20,035 XX 183,700 136,300 17,800 29,600 <80 XX
1944------------------- oo’onl 9,655 . XX 138,700 114,600 10,600 13,500 67 xx
wl!--------------------- S’™ ^'827 2,262 6,000 208,100 184,600 8,800 14,700 20 3
1946------------------- 69,2:3 1,911 ’83,000 662,500 590,000 24,300 48,200 10 13
t947-------------------- 229.035 178,269 50,766 < 211,000 845,600 740,200 33,900 71,500 27 <25
948 ------------------- 294 059 216,449 77,610 8102,000 913 500 763 200 <46 300 104 000 32 12
1949------------------- 363,802 252,626 111,176 < 105,000 988,800 792,400 34,700 ‘ 161 700 36
1950------------------- ’486,631 4163,436 ’200,000 < 1,352,200 < 1,150,700 42,200 159,300 36 15
1951--------------------- 263,523 186,924 76,599 148,634 1,020,100 892,200 40,100 87,800 26 15
1952 -------------------- 279,901 229,085 50,816 141,274 1,068,500 939,100 45,900 83,500 26 13
1953 -------------------- 251,969 216,509 35,460 156,616 1,068,300 932,900 41,500 93,900 24 15
________________________________________Percent change 1953 from—
1952------------------- -10.0 -5.5 -30.2 +10.9 (•) -0.7 -9.6 +12.5 XX XX
1951------------------- -4.4 +15.8 -53.7 +5.3 +4.7 +4.6 +3.5 +6.9 XX xx
1 Based on FHA first compliance inspection.
2 Includes single-family and multifamily structures under sections 207. 213. 608, 611, 803, and 908.
2 Based on VA first compliance inspection since June 1950, prior data were estimated.
< All-time high.
*Estimated.
8 Less than —0.05.
Source: Federal Housing Administration, Veterans’ Administration, and U. S. Department of Labor.
HOUSING AND HOME FINANCE AGENCY
76
Table 4.—Dollar volume of new construction put in place: 1925-53
[In millions of dollars]
Nonfarm buildings All other construction1 Ownership
Residential Nonresidential
Year construe-_____________________________________________________
activHv Private Public Private Public
activity private Public--------------------------------------private public
Industrial Other Industrial Other
1925--------------------------- 11,439 5,515 XX 513 1,547 (2) 573 1,726 1,565 9,301 2,138
1926--------------------------- 12,082 5,606 xx 727 1,786 (2) 603 1,825 1,541 9,938 2,144
1927--------------------------- 12,034 5,160 xx 696 1,838 (2) 596 1,931 1,813 9,625 2,409
1928--------------------------- 11,641 4,770 xx 802 1,771 (2) 638 1,813 1,847 9,156 2,485
1929------------------------- 10,793 3,625 xx 949 1,745 (2) 659 1,988 1,827 8,307 2,486
1930---------------------------- 8,741 2,075 xx 532 1,471 (2) 660 1,805 2,198 5,883 2,858
1931---------------------------- 6,427 1,565 xx 221 878 (2) 612 1,104 2,047 3,768 2,659
1932---------------------------- 3,538 630 xx 74 428 (2) 415 544 1,447 1,676 1,862
1933-------------------------- 2,879 470 xx 176 230 2 228 355 1,418 1,231 1,648
1934---------------------------- 3,720 625 1 191 265 11 352 428 1,847 1,509 2,211
1935---------------------------- 4,232 1,010 9 158 314 2 326 517 1,896 1,999 2,233
1936---------------------------- 6,497 1,565 61 266 447 4 697 703 2,754 2,981 3,516
1937---------------------------- 6,999 1,875 93 492 593 2 548 943 2,453 3,903 3,096
1938-------------------------- 6,980 1,990 35 232 532 12 660 806 2,713 3,560 3,420
1939-------------------------- 8,198 2,680 65 254 532 23 947 923 2,774 4,389 3,809
1940---------------------------- 8,682 2,985 200 442 583 164 451 1,044 2,813 5,054 3,628
1941--------------------------- 11,957 3,510 430 801 681 1,280 366 1,214 3,675 6,206 5,751
1942-------------------------- 14,075 1,715 545 346 289 ’3,437 248 1,065 ’ 6,430 3,415 10,660
1943------------------------- 8,301 885 ’ 739 156 77 1,870 140 861 3,573 1,979 6,322
1944-------------------------- 5,259 815 211 208 143 1,230 131 1,020 1,501 2,186 3,073
1945---------------------,---- 5,633 1,100 80 642 378 755 182 1,115 1,381 3,235 2,398
1946------------------------- 12,000 4,015 374 1,689 1,652 113 241 2,282 1,634 9,638 2,362
1947--------------------------- 16,689 6,310 200 1,702 1,440 96 503 3,804 2,634 13,256 3,433
1948--------------------------- 21,678 8,580 156 1,397 2,224 196 1,105 4,652 3,368 16,853 4,825
1949--------------------------- 22,789 8,267 359 972 2,256 177 1,891 4,889 3,978 16,384 6,405
1950-------------------------- 28,454 ’ 12,600 345 1,062 2,715 224 2,160 5,077 4,271 21,454 7,000
1951--------------------------- 30,895 10,973 595 2,117 3,035 946 2,523 5,439 5,267 21,564 9,331
1952--------------------------- 32,638 11,100 654 ’2,320 2,694 1,667 2,452 5,698 6,053 21,812 10,826
1953.................... ’34,843 11,905 554 2,226 ’ 3,450 1,758 ’ 2,559 ’ 6,034 6,357 ’ 23,615 . ‘11,228
Percent change 1953 from—
1952............................ +6.8 +7.3 -15.3 -4.1 +28.1 +5.5 +4.4 +5.9 +5.0 +8.3 +3.7
1951-------------------------- +12.8 +8.5 -6.9 +5.1 +13.7 +85.8 +1.4 +10.9 +20.7 +9.5 +20.3
1 Includes public utilities, highways, sewer and water systems, conservation, farm structures, etc. 3 Amount negligible, Included in private industrial building. » All-time higb.
Source: U. S. Departments of Commerce and Labor.
OFFICE OF THE ADMINISTRATOR
Table 5 —Boeckh indexes of dwelling unit construction cost: 1925-54
[1947-49=100]
Year Residences Apartments, hotels, and office buildings Month Residences Apartments, hotels, and office buildings
1925______________________
1926______________________
1927______________________
1928______________________
1929______________________
1930______________________
1931______________________
1932 _____________________
1933______________________
1934______________________
1935______________________
1936 _____________________
1937______________________
1938______________________
1939______________________
1940______________________
1941______________________
1942______________________
1943______________________
1944______________________
1945______________________
1946______________________
1947______________________
1948______________________
1949______________________
1950______________________
1951______________________
1952______________________
1953___________________
47.9
48.4
47.7
47.9
50.0
48.7
44.9
38.0
38.0
41.3
40.3
41.7
46.6
48.0
48.9
50.5
54.6
57.6
60.2
65.4
70.1
77.0
93.2
104.8
102.1
107.7
116.0
119.1
1 121.2
50.6
51.0
50.3
50.5
51.7
50.9
46.9
40.0
41.1
45.2
44.5
45.8
51.1
53.2
53.9
54.8
57.3
60.4
62.8
67.0
71.3
78.0
91.7
103.5
104.8
109.6
118.0
122.0
1 125.8
1952
January______________
February_____________
March________________
April________________
May__________________
June_________________
July-----------------
August_______________
September____________
October______________
November_____________
December_____________
1953
January______________
February_____________
March________________
April________________
May__________________
June______________
July_________________
August_______________
September____________
October______________
November_____________
December_____________
1954
117.7
117.6
117.6
118.0
118.3
119.4
119.8
120.2
120.4
120.2
119.8
119.8
120.0
119.8
119.9
120.4
120.8
122.0
122.7
123.4
123.7
123.8
123.6
123.6
January______________
120.1
120.1
120.3
120.4
120.8
121.5
> 122. 4
122.1
121.9
121.4
121.5
121.3
120.4
1 All-time high.
Sources: U. S. Department of Commerce and E. H. Boeckh andjassociates (20 city average).
123.8
123.7
124.0
124.2
124.8
125.8
127.0
127.2
1 127.4
127.1
127.3
127.3
126.4
77
HOUSING AND HOME FINANCE AGENCY
78
Table 6.—Indexes of production of selected construction materials: 1925-53
[1939=100]
Cast-iron Asnhalt
Composite t nmhar Hardwood T,ripk rPmPTit Wire soil pipe Soft-wood Gypsum Gypsum Warm air
Year index* Lumber floorillg Brick Cement nails23 and plywood board3 lath3 Prepared furnaces*
fittings roouug
1925_________________ 134.0 * 142.6 138.9 *212.4 132.2 114.7 137.1 («) (») (’) («) («)
1926________________ 133.3 138.2 147.2 210.7 134.6 110.3 126.1 (6) (*) (’) («) (’)
1927________________ 128.9 129.5 135.8 200.5 141.7 106.8 129.6 («) (*) (’) («) (’)
1928 __________________ 129.5 127.8 142.4 186.7 144.2 105.6 134.7 27.6 147.4 35.7 107.0 (*)
1929 ______________ 129.2 134.7 111.8 161.7 139.6 97.2 96.0 35.8 162.3 36.2 116.7 (*)
1930 ___ ... ___ ___ 102.4 102.1 94.4 108.2 131.8 70.9 67.2 30.5 109.5 30.0 81.6 («)
1931____________________ 73.4 69.5 61.2 68.1 102.6 56.3 49.5 23.5 89.3 20.0 66.1 («)
1932 ___________________ 46.2 42.8 34.2 29.6 62.8 40.0 31.7 20.9 51.3 11.3 66.7 («)
1933 ____________________ 50.9 57.1 34.9 27.3 51.9 66.2 33.9 39.0 50.6 10.3 72.4 («)
1934_____________________ 55.2 59.8 32.0 29.7 63.6 45.9 29.8 38.4 51.6 11.2 70.3 («)
1935 65.9 75.9 52.3 48.3 62.8 65.8 48.4 48.0 63.3 22.2 76.3 (*)
1936 ____________________ 91.0 96.1 88.4 80.7 92.3 88.4 83.1 70.0 83.9 42.1 94.4
1937________________ 93.8 100.9 93.6 88.7 95.0 80.6 84.9 72.5 93.9 65.0 87.7 89.3
1938 _____ 82.2 81.4 88.8 74.8 86.2 71.5 66.1 65+ 90.5 71.2 101.4 79.7
1939 _ 1O0.0 160.0 100.0 100.0 100.0 100.0 100.0 10< . 0 11)0.0 100.0 100.0 100.0
1940 „ ______ 106.4 108.4 117.4 86.3 106.5 96.2 106.7 120.0 141.4 127.5 95.5 121.0
1941 129.2 127.1 127.6 104.5 134.2 113.2 110.5 160.0 227.0 162.2 124.1 129.4
1942 " ' 126.9 126.4 84.9 71.7 149.5 122.5 76.1 184.0 357.4 84.3 158.8 64.0
1943'_____ 101.3 119.2 46.1 40.5 109.1 114.4 40.3 149.5 407.3 55.5 150.4 45.1
1944'_______ . ■" 92.1 114.5 45.1 39.7 74.4 91.1 44.4 148.5 362.5 55.1 143.2 70.0
1945 ... 89.8 97.8 45.6 48.4 84.1 86.5 54.3 122.2 365.9 52.7 144.0 83.1
1946'_______________ 125.1 121.9 58.3 103.0 134.0 89.6 108.3 144.1 486.1 101.1 178.3 160.8
1947 137 7 123.1 111.0 106.3 152.6 118.6 155.2 169.9 521.9 150.1 *204.5 201.8
1948 146.3 128.1 146.6 123.6 168.0 127.5 171.9 195.4 659.4 220.1 175.6 182.6
1949 137 2 119.7 136.1 116.8 171.6 108.5 151.6 197.7 616.5 177.1 153.5 159.8
1950 ......... 160.3 137.0 * 174.0 130.6 184.9 129.8 * 204.9 259.8 732.6 * 245.7 187.5 * 260.0
1951 ■ ’ 160.0 129.6 169.3 136.9 201.4 128.2 184.8 238.7 819.5 242.9 171.0 210.9
1952' - --------- 6 12g g 162 2 122.1 2G3.8 96.7 175.1 315.4 793.2 206.2 168.0 199.9
19531”ZZ"”"IZZ"Z"“"” * 165.7 135.8 162.3 122.5 * 216.0 78.5 181.3 **372.6 *892.4 216.5 163.1 238.3
Percent change 1953 from—
1952 ___________________ +5.8 +4.5 +0.1 +0.3 +6.0 -18.8 +3.5 +18.1 +12.5 +5.0 -2.9 +19.2
i951 +3.6 +4.8 -4.1 -10.5 +7.2 -38.8 -1.9 +56.1 +8.9 -10.9 -4.6 +13.0
1950?..._______________ +3.4 -0.9 -6.7 -6.2 +16.8 -39.5 -11.5 +43.4 +21.8 -11.9 -13.0 -8.3
1 Covers 15 materials in addition to the 11 listed. 4 Production estimate. 6 Not available.
* Shipments * All-time high. 7 Beginning March 1953, estimates based on Douglas fir plywood.
* All-time high was 131.1 in 1923.
Source: U. S. Department of Commerce.
OFFICE OF THE ADMINISTRATOR
Table 7.—Indexes of wholesale prices of selected building materials and other commodities: 1950-53
[1947-49 = 100]
Commodity—group, subgroup, or class Annual Percent change 1953 over 1952
1953 1952 1951 1950
All commodities except farm and food 114.0 113.2 115.9 105.0 +0.7 +1.4
All building materials 119.9 118.2 119.6 109.5
LUMBER AND WOOD PRODUCTS
Lumber 119.3 120. 5 123.6 114.5 -1.0
Douglas fir 117.2 127.3 128. 6 117.6 -7.9
Southern pine 115.8 116.9 115.7 108.0 —0.9
Other softwoods 132.6 128.2 130.0 118.9 +3.4 +2.0 +3.5 +4.1 +0.4 +7.0
Hardwood 114.8 112. 5 122. 4 114.8
Millwork 131. 5 127. 0 130.1 114. 6
Plywood 109.3 105. 0 115.1 106.5
Softwood plywood 110.7 110.3 121.1 113.8
Hardwood plywood 108.4 101.3 110.8 101.4
CHEMICAL AND ALLIED PRODUCTS
Prepared paint __ 111.1 110.4 109. 0 99. 3 +0.6 -4.1
Paint materials 96.2 100.3 108.8 90.9
METAL AND METAL PRODUCTS
Structural steel shapes 138.2 131.1 128.4 121.1 +5.4 +4.3 -1.2
Hardware (finish) 130.8 125. 4 125. 8 114. 2
Plumbing equipment 116.0 117. 4 122. 5 108. 2
Enameled iron fixtures 126.1 122.4 130.0 115. 5 +3.0 -12.2
Vitreous china fixtures 107.1 122.0 128.3 114.1
Brass fittings _ _ 114. 7 112. 2 114. 8 100. 5 +2.2 +0.9 +4.2
Heating equipment 114. 8 113. 8 114. 6 105.1
Metal doors, sash and trim 122.6 117.7 121.0 110.0
NONMETALLIC MINERAL ITEMS
Concrete ingredients 117.4 113.0 113.0 106.8 +3.9 +5.0 +2.6 +5.0 +2.8 +2.4
Portland cement 122.2 116.4 116.4 108.0
Concrete products 115.4 112. 5 112.3 105. 5
Structural clay products 128.1 122.0 121.4 112.6
Gypsum products 121.0 117. 7 117.4 104.6
Insulation materials 107.9 105.4 104.1 101.1
OTHER ITEMS
Building paper and board 121.4 115.5 113.4 107.6 +5.1
Source: U. S. Department of Labor.
79
HOUSING AND HOME FINANCE AGENCY
Table 8.—Estimated mortgage debt on 1- to 4-family nonfarm homes: 1925-53
Loans held at end of year, by type of mortgagee Loans held by
At end Total all Sayings Life in- Mutual Com- Home Owners Federal National Individ- and loan associa-
of year mort- and loan associations ($000,000) savings mercial Loan Mortgage uals and lions as a percentage of total
gagees ($600,000) panies ($000,060) banks ($Cu0,00P) banks ($i.00,000) Corporation ($000,0U0) Association ($000,000) others ($000,000)
standing
1925 12,984 14,809 16,433 17,904 18,912 18,891 18,104 16,655 15,352 15,630 15,437 15,385 15, 518 15, 765 16,337 17,346 18,358 18,226 17,835 17,947 18, 543 23,059 28,161 33, 261 37,496 3,994 4, 570 5,214 837 1,547 1,713 1,376 XX XX 5, 230 5,668 6,116 6,418 6,611 6, 537 6,212 5,707 5,345 4,707 4,502 4,539 4,686 4,734 4, 825 5,010 5,192 4,969 4.933 5,091 5,501 6,398 7,151 7,697 8,052 8,445 8,833 1 9,125 30.8
1926. 1,062 1,254 1,445 1,626 1, 732 i;796 1,927 2,145 XX XX 30.9
1927 1,922 2,139 2, 286 2,341 2,436 2,446 2,354 2,190 2,089 2,082 2, 111 2,119 2,128 2,162 2,189 2,128 2,033 1,937 1,894 2,033 2,283 2,835 3,364 4,312 5,331 1 6,180 XX XX 31.7
1928 5; 757 6,182 6,082 5, 596 4, 891 4, 215 3,525 3,127 3,122 3,291 3,433 3, 616 3,919 4,349 4,349 4, 355 4,617 5,156 6,840 8,475 XX XX 32.2
1929 2,207 2,199 2,085 1,887 1,707 XX XX > 32.7
1930 XX XX 32.2
1931 1'775 XX XX 30.9
1932 1,724 1,599 1,379 1,281 1,245 1,246 1,320 1,490 1,758 1,976 2,255 2,410 2,458 2,258 2, 570 3,459 4,925 5,970 XX XX 29.4
1933 132 XX 27.5
1934 ij 450 1,541 1,634 2,379 1 2, 897 2,763 2,378 2,169 2,038 1,956 XX 22.3
1935 XX 20.3
1936 XX 20.3
1937 i; 786 1,910 2,096 2,363 2, 672 2, 752 2,706 2,703 2,875 4, 576 6,303 7,396 7,956 9,481 10,275 1 11,250 XX 21.2
1938 80 22.1
1939 144 22.1
1940 178 22.6
1941 1,777 1,567 1,338 1,091 852 203 23.7
1942 206 23.9
1943 60 24.4
1944 50 25.7
1945 7 27.8
1946 836 6 29.7
1947 486 4 30.1
1948 9i 841 11,117 13,104 14,801 17,590 369 198 29.6
1949 231 806 29.6
1950 45,072 51,872 58,155 8', 392 10, 814 1 11,800 10 1,328 1,818 2,210 29.1
1951 XX 28. 5
1952 1 * 3 4 XX 30.2
1953 3 1 65,100 1 21,042 (9 (9 (9 XX 1 2,367 (9 32.3
1 All-time high.
3 Preliminary.
3 Estimate, very preliminary.
4 Not available.
Source: Home Loan Bank Board.
80
OFFICE OF THE ADMINISTRATOR
Table 9.—Nonfarm real estate foreclosures: 1926-53
Year Number Year Number Month Number Month Number
1925 (i) 1940 75, 556 1952 1953
1926 68,100 1941 58; 559 January . 1, 444 January 1,640
1927 91,000 1942 41,997 February _ L367 February 1, 577
1928 116,000 1943 25,281 March 1, 562 March 1 771
1929 134, 900 1944 17,153 April 1,495 April 1 846
1930 150, 000 1945 12, 706 May i; 539 May 1, 769
1931 193,800 1946 3 10,453 June 1', 669 June 1 793
1932 248,700 1947 10, 559 July.... L511 July 1 907
1933 2 252,400 1948 13; 052 August. _ . L 552 August 1,777
1934 230,350 1949 17,635 September 1' 486 September 1 820
1935 228,713 1950 21', 537 October 1, 490 October L823
1936 185,439 1951 18,141 November 1,435 November 1 779
1937 151,366 1952 18,135 December L 585 December 1 971
1938 118; 357 1953 2i; 473
1939 106,410 1954
1 Not available.
2 All-time high.
2 All-time low.
Source: Home Loan Bank Board.
Table 10.—FHA and VA home loans compared with total recordings: 1939-53
Year Estimated amount nonfarm mortgage recordings of $20,000 or less ($000) Federal Housing Administration and Veterans’ Administration Other recordings of $20,000 or less
Total home loans insured and guaranteed FHA home loans insured VA home loans partially guaranteed
Amount ($000) Percent of total recordings Face amount ($000) Percent of total recordings Principal amount ($000) Percent of total recordings Amount ($000) Percent of total recordings
1939 3, 506, 563 694, 764 20 694, 764 20 XX 2 811 799 80
1940 4, 031;368 762; 084 19 762, 084 19 XX 3 269’ 284 81
1941_ 4, 73L 960 910; 770 19 910 770 19 XX 3’ 821 ’ 190 81
1942 3; 942; 613 973,271 25 973, 271 1 25 XX XX 2’ 969’ 342 75
1943 3,861301 763; 097 20 763,097 20 XX 3 098’ 304 80
1944 4, 605; 931 707; 363 15 707 363 15 3’ 898* 568 85
1945 5, 649,819 666,485 12 474 245 8 2192 240 3 4’983’ 334 1 88
1946 10, 589,168 2, 724, 256 26 421,949 4 2, 302’ 307 22 7’ 864* 912 74
1947 IL 728; 677 4', 180; 841 1 36 894 675 8 3 286 166 28 7’ 547’ 836 64
1948 11', 882’, 114 3,997, 010 34 2,116, 043 18 1,880, 967 16 7 885’ 104 66
1949 IL 828; 001 3; 633; 433 31 2, 209, 842 19 1,423 591 12 8’ 194’ 568 69
1950 16,179; 196 15; 565; 676 34 12, 492 367 15 3,073 309 19 10’ 613’ 520 66
1951 16; 405; 367 5, 542,913 34 1,928,433 12 13 614 480 22 io’ 862? 454 66
1952 18; 017; 677 4; 663; 382 26 1, 942,307 11 2,721 075 15 13’ 354’ 295 74
1953 119; 747; 408 5; 352; 723 27 2, 288, 627 12 3, 064, 096 16 114,394; 685 73
Percent change 1953 from—
1952 +9.6 +14.8 XX +17. 8 XX +12. 6 XX +7 8
1951 +20.4 —3.4 XX +18.7 XX -15.2 XX +32.5 XX
1 All-time high.
2 Activity in 1944 is included in the 1945 annual total.
Source: Home Loan Bank Board, Federal Housing Administration, Veterans Administration.
81
HOUSING AND HOME FINANCE AGENCY
Table Ila.—FNMA home financing activity during 1953 and at end of 1953
[In millions of dollars]
National Housing Act (FHA) and Servicemen’s Readjustment Act (VA) by section of law Advance commitments and purchase authorizations Commitments canceled Purchases Repayments Sales (net) Discounts Other credits At end of 1953
Undisbursed commitments Mortgage portfolio
During calendar year 1953
Total _ 733.3 45.0 542.5 93.7 213.7 7.4 7.7 XX XX
FHA - insured mort- gages— Total.. 549.1 40.3 355.1 17.5 32.3 .4 3.6 XX XX
Sec. 8, NHA 5. 5 .4 5.1 . 8 . 1 (1) XX XX
Sec. 203, NHA 69. 5 .2 60. 5 7.1 15.6 . 1 .4 XX XX
Sec. 207, NHA 10. 8 17.1 1.2 XX XX
Sec. 213, NHA 32.1 . 1 13.9 . 2 XX zx
Sec. 603, NHA 5. 0 2. 0 . 1 .3 XX XX
Sec. 608, NHA . 1 5.7 .3 5. 8 1.5 XX XX
Sec. 803, NHA. 136.1 27.2 51. 6 . 3 8. 4 . 2 XX XX
Sec. 903, NHA. . . 261.9 6.1 189. 9 3.8 . 4 (i) .2 XX
Sec. 908, NHA 33.1 6.3 11.3 0) XX XX
VA - guaranteed mort-
Total 184.2 4.7 187.4 76.2 181.4 7.0 4.1 XX XX
Sec. 501, SRA (home). Sec. 501, SRA (multiple dwelling) Sec. 502, SRA 183.7 .6 4.8 186.8 .6 75.5 .2 181.2 7.0 4.1 XX XX XX
. 1
Sec. 505 (a), SRA 3 .1 3 .1 .4 .2 (1)
Cumulative (Feb. 10,1938-Dec. 31 , 1953)
Total .. 5,203. 7 791.3 3,943. 7 XX 395.3 1,035.5 XX 7.4 43.9 468.7 169.2 2,461.6
Outstanding advance contracts XX XX XX XX
Total XX XX XX 637.9
FHA - insured mort- gages— Total . 2,269. 9 454.7 1,357.6 165.4 542.6 . 4 28.2 457.6 621.0
Sec. 8, NHA 29. 7 . 4 28. 7 1.4 .3 (i) . 6 27.0 145.5 16.6
Sec. 203, NHA 691.4 121.3 549.0 115.3 284.1 . 1 4. 0 21.1 14.5
Sec. 207, NHA 39.3 1. 6 23. 2 4. 9 .4 1.3
Sec. 210, NHA .9 .6 .3 .2 . 1
Sec. 213, NHA 46.1 . 1 16.3 .3 29.7 16.0 79.6 17.6 42.7 263.4 12.6
Sec. 603, NHA 367.2 27.7 339.5 38.1 209. 7 . 1 12.0
Sec. 608, NHA 323.9 251.4 66.3 .8 37.3 10.6 6 2
Sec. 803, NHA 251.2 29. 7 53.5 .3 10.3 . 2 168.0 177.1 40.4
Sec. 903, NHA 457.1 11. 8 268. 2 4.1 . 5 (1) . 2
Sec. 908, NHA 63.1 10.1 12.6 (*)
VA - guaranteed mort-
gages Total ... _ 2,933.8 336.6 2,586.1 229.9 492.9 7.0 15.7 11.1 1,840.6
Sec. 501, SRA (home). Sep. 501 SR A (multi- 2,890. 7 326.8 2,552. 8 226.6 477.3 7.0 15.5 11.1 1,826.4
pie dwelling)' 11.0 1.9 9.1 .8 .7 7. 6
Sec. 502, SRA 2.0 . 1 1.9 .3 (') (‘) 1. 6
Sec. 505 (a), SRA 30.1 7.8 22.3 2.2 14.9 (') .2 5.0
1 Loss than $0.05 million.
3 Represents adjustment from prior years.
Source: Office of the Administrator, Housing and Home Finance Agency.
82
OFFICE OF THE ADMINISTRATOR
Table 11b.—FNMA participation in defense, military, and disaster housing program during 1953 and at end of 1953
[In millions of dollars]
National Housing Act (FHA) and Servicemen’s Readjustment Act (VA) by section of law Advance commitments and purchase authorizations Commitments canceled Purchases Sales (gross) Repayments and other credits At end of 1953
Undisbursed commitments Mortgage portfolio
During calendar year 1953
Total 483.5 45.0 305.6 11.0 6.9 XX XX
Defense—Total 347.5 17.3 246.9 2.2 6.2 XX XX
Sec. 8, NHA (i) (1) XX XX
Sec. 203, NHA 9.2 .2 2.1 .7 .3 XX XX
Sec. 207, NHA 5.3 6.5 .6 XX XX
Sec. 803, NHA 4.0 XX XX
Sec. 903, NHA 261.9 6.1 189.9 .6 3.9 XX XX
Sec. 908, NHA 33.2 6.3 11.3 (>) XX XX
Sec. 501(b), SRA 33.9 4.7 37.1 .9 1.4 XX XX
Disaster—Total 3.9 .4 7.0 .3 .4 XX XX
Sec. 8, NHA _ 3.9 .4 3.5 .2 XX XX
Sec. 203, NHA 2 3.0 .5 XX
Sec. 501 (b), SRA 3.0 3.0 .3 .2 XX XX
Military—Total 132.1 27.3 51.7 8.5 .3 XX XX
Sec. 207, NHA .1 .1 (’) XX
Sec. 803, NHA. _ 132.0 27.3 51.6 8.5 .3 XX XX
Cumulative (July 16,1951 -Dec. 31, 1953)
Total 890.2 58.7 421.8 14.8 7.8 409.7 399.2
Defense—Total 639.1 28 6 352.7 4.0 7.0 257.8 341.7
Sec. 8, NHA (') (») (i)
Sec. 203, NHA 18.5 1.1 9.7 2.5 .4 7.7 6.8
Sec. 207, NHA 11.9 ,.5 6.6 .6 4.8 6.0
Sec. 803', NHA 16.6 16.6
Sec. 903, NHA 457.2 11.9 268.2 .6 4.2 177.1 263.4
Sec. 908, NHA 63.2 10.1 12.6 (') 40.5 11.1 12.6
Sec. 501 (b), SRA 71.7 5.0 55.6 .9 1.8 52.9
Disaster—Total 16.5 .4 15.5 .4 .5 .6 14.6
Sec. 8, NHA 11.9 .4 10.9 .1 .3 .6 10.5
Sec. 203, NHA .6 (') .6 (1) .6
Sec. 501'(b), SRA 4.0 (>) 4.0 .3 .2 (1) 3.5
Military—Total 234.6 29.7 53.6 10.4 .3 151.3 42.9
Sec. 207, NHA .1 (’) .1 (1) .1
Sec. 803, NHA 234.5 29.7 53.5 10.4 .3 151.3 42.8
1 Less than $0.05 million.
* Represents adjustment from previous years.
Source: Office of the Administrator, Housing and Home Finance Agency.
83
HOUSING AND HOME FINANCE AGENCY
Table 11c.—FNMA home financing activity, by month: 1953 [In millions of dollars]
Month Advance commitments and purchase authorizations Commitments canceled Undisbursed commitments at end of month Purchases Repayments Discounts Other credits Mortgage portfolio at end of month
Sales (net)
Total... 733.3 45.0 468.7 542.5 93.7 213.7 7.4 7.7 —
January 61.2 2.3 320.8 61.0 6. 4 9 9 5 2 285 9
February 53.0 7.6 313.1 53.1 7.1 2.8 .4 2,328.7
March 99.2 9.5 321.9 80.9 8.0 7 3 5 2 393 8
April 77.4 5.6 325.7 68.0 7.9 3 5 1 9 2’ 448 5
May 75.7 4.3 356.8 40.3 8.0 3 1 4 2’ 477 3
June 227.7 11.5 542. 2 30.8 9 1 . 8 5 2 497 7
July 22.6 . 5 525 8 3R 5 7 3 13 9 ^97 K
August 20.2 .5 512 3 33 2 3* 1 10 0 V/ 5 2 541 3
September.... 31.2 .2 517.0 26.3 8.1 18.1 .7 .9 2, 539.8
October . 23.9 1.3 501 0 33 6 7 9 41 3 9 59A 4
November.... 20.6 .7 490.9 30.0 7.7 56.5 2.1 .3 2,489. 7
December 20.6 1.0 468.7 41.8 8.1 59.0 2.4 .4 2,461.6
1 Less than $0.05 million.
Source: Office of the Administrator, Housing and Home Finance Agency.
Table lid.—FNMA home financing, by calendar year: 1938-53
[In millions of dollars]
Year Advance commitments and purchase authorizations Commitments canceled Undisbursed commitments (at year end) Purchases Sales (gross) Repayments and other credits Mortgage portfolio at end of year
1938 102.2 2.5 17.5 82.2 1.9 80.3
1939 69.9 5. 5 7.8 74.1 .4 7.2 146.8
1940 51.1 2.5 8.4 48.0 0) 13.7 181.1
1941 42.3 2.1 6.3 42.3 (') 16.6 206.8
1942 18.4 1.1 .4 23.2 19.1 210.9
1943 1.2 .1 (*) 1.5 126.6 21.3 64.5
1944 .2 0) .2 (>) 12.3 52.4
1945 .1 (>) .1 38.6 6.5 7.4
1946 .1 (>) (>) (>) 1.8 5.6
1947 . 8 (*) .7 .1 1.3 4.4
1948 431.9 8.0 226.7 197.9 3.0 199.3
1949 1,356.1 1,069.7 86.5 824.1 672.2 19.8 23.3 828.4
1950 364.4 485.1 1,044.3 469.4 56.6 1,346. 7
1951 684.1 252.8 239.1 677.3 111.1 63.4 1,849. 5
1952 642.3 20.6 322.9 537.9 55.9 89.8 2,241.7
1953 733.3 45.0 468.7 542.5 221.1 101.4 2,461.6
1 Less than $0.5 million.
Source: Office of the Administrator, Housing and Home Finance Agency.
84
OFFICE OF THE ADMINISTRATOR
Table lie.—FNMA sales and purchases, by month: 1952-53 [In thousands of dollars] Veterans Administration Sec. 505 (a) 1 SSS8 : ! ! 1 i ; i 1 i i : : : i : i i : : : ; i : : i i । HH : : : i ! ; ; i I : i i i H : : :
Sec. 502 SEES i i i : : : : : : r i i ! ! ': i i i : ; i i i ; i i i i i i i
Sec. 501
1 Eh SgsSgggJgggs ssSi-'—jiSSs" sUss#"'*"’'4'*'4*®"
Federal Housing Administration Sec. 908 I ! i i i ; i : i i 1 i B s it i i ci" 1 1 i : 1,149 2,491
Sec. 903 I . ^c-cfooc.-ctooci" I
Sec. 803 1 1 ! i i i । ih i ; r F-F -F^'oo tFciro
Sec. 608 1 ! i s a is Ha jg : ! j : !
Sec. 603 co ! ; ! i ■. i ; i ! i i i i i ; : i i : i : i : HiH 1 1 i 1 i
Sec. 213 Si* i i is a : w «w- co l i i i
Sec. 207 22S i : ; i : i
Sec. 203 r-Vo n rH FciFw® oar-'ooo'cocir-i cicf-Fiocf
s cocfj-w" -tcfw w-t
8 Eh
§§^SE2^SS S8g*lS^S?8?gS5
Year and month 1952 January fl N : ; : : li : ; i ! ! : ; i i i December 1953 January February ; ; : : i June July ii n : i i
85
HOUSING AND HOME FINANCE AGENCY
86
Table He.—FNMA sales and purchases, try month: 1952-53—Continued
[In thousands of dollars]
Federal Housing Administration Veterans Adminrstration
FNMA _____________________________________________________:_________________________________________
Year and month total
Total Sec. 8 Sec. 203 Sec. 207 Sec. 213 Sec. 603 Sec. 603 Sec. 803 Sec. 903 Sec. 908 Total Sec. 501 Sec. 502 Sec. 505 (a)
Sales (gross)
1952 _____________________________________________________________________________________________________
January______ 4,172 2,307 5 2,246 ___________ 56 ______________________________ 1,865 1,782 ____ 83
February_____ 5,006 1,831 ___ 1,812 _____________ 19 ______________________________ 3,175 3,134 _____ 41
March________ 2,517 1,552 9 1,543 _____________________________________________ 965 938 _____ 27
April________ 2,248 1,618 ___ 1,609 _____________ 9 _______________________________ 630 616 _____ 14
May__________ 4,291 3,692 18 3,604 ___________ 70 ______________________________ 599 419 _____ 180
June_________ 5,078 3,947 14 3,763 ___________ 137 _______________ 33 __________ 1,131 958 _____ 173
July_________ 3,312 2,747 ___ 821 _______________ 40 1,886 __________________ 565 542 _____ 23
August_______ 2,536 2,014 ___ 2,007 _____________ 7 _______________________________ 522 430 _____ 92
September____ 3,702 3,104 35 976 ____________ 117 1,976 __________________ 598 516 _____ 82
October______ 5,668 4,007 49 2,023 86 _____ 3 ----------- 1,846 _____________ 1,661 1,545 ____ 116
November_____ 3,492 786 ____ 786 _________________________________________________ 2,706 2,706 ____________
December_____ 13,899 8,128 103 3,309 ___________ 18 4,689 ____ 9 ----------- 5,771 5,723 ____ 48
1953
January______ 9,870 7,267 4 1,556 __________________ 5,707 -------------------- 2,603 2,594 ---- 9
February_____ 2,786 804 42 581 ____________ 78 95 _____ 8 ----------- 1,982 1,971 ____ 11
March________ 7,296 4,572 5 4,381 _______________________________ 186 --------- 2,724 2,667 ---- 57
April________ 3,498 873 18 855 ______________________________________________ 2,625 2,579 ---- 46
May__________ 3,130 1,212 ___ 1,204 _____________ 8 ------------------------------- 1,918 1,902 ---- 16
June_________ 810 228 ____ 229 ______________________ [-1]1 ____________________ 582 559 6 17
July_________ 266 231 ____ 231 _________________________________________________ 35 35 -------------
August_______ 11,036 579 ____ 301 _______________ 63 ---------------- 215 --------- 10,457 10,457 ------------
September___ 18,778 960 944 16 17,818 17,817 1
October_____ 43,512 1,300 1,093 207 42,212 42,191 21
November_____ 58,689 12,148 ___ 1,791 _____________ 1,687 ------- 8,581 89 ------ 46,541 46,507 ---- 34
December____ 61,455 2,539 2,499 40 58.916 58,907 9
* Represents adjustment from previous year.
Source: Office of the Administrator, Housing and Home Finance Agency.
OFFICE OF THE ADMINISTRATOR
87
Table 12a.—Slum clearance and urban redevelopment under Title I, Public Law 111: 1949-53 [This table excludes all data for program operations invalidated or abandoned through December 1953] Number local program opera- Title T assistance approved
Lions appioveo. Number ________________________________________________________________________________________
Period ‘frant1 Prel™E^nniDg Final ad’ Project loans Capital grants
reserva- Prelimi- ™ , Project a mm> s (000) (000)
tions nary develop- _____________________-------------------------------------------
planning p a g ment
Approved Disbursed Approved Disbursed Approved Disbursed Approved Disbursed
Cumulative data from July 15,1949 through—
1953, December_____________ 211 197 133 60 $4,922 $4,075 $5,001 $3,566 $104,068 $30,758 $105,207 $8,673
Annual data
1950*____________________ 138 60 10 5 $2,046 $459 $733 $326 0 0 0 0
1951 _______________________ 32 49 29 2 1,389 1,641 1,007 645 $282 0 $402 0
1952 ________________________ 28 50 49 17 1,032 1,368 1,935 1,344 33,608 $9,715 53,696 0
1953________________________ 13 38 45 36 455 607 1,326 1,251 70,178 21,043 51,109 $8,673
Semiannual data
1950:
First half1__________ 111 19 8 3 $567 0 $420 0 0 0 0 0
Second half__________ 27 41 2 2 1,479 $459 313 $326 0 0 0 0
1951:
First half_______________ 17 30 11 1 590 870 342 233 0 0 $275 0
Second half______________ 15 19 18 1 799 771 665 412 $282 0 127 0
1952:
First half ______________ 18 22 25 8 515 693 971 435 18,541 $4,063 43,097 0
Second half____________ 10 28 24 9 517 675 964 909 15,067 5,652 10,599 0
1953:
First half - 7 16 20 19 239 359 636 837 55,487 7,901 44,174 $7,818
Second half__________ 6 22 25 17 216 248 690 414 14,691 13,142 6,935 855
1 Includes 1949 activity.
Source: Office of the_Administrator, Housing and Home Finance Agency.
HOUSING AND HOME FINANCE AGENCY
88
Table 12b.—Slum clearance and urban redevelopment operations and Federal assistance, by locality: through December 1953
Local program operations TTnrUroi Titb t
approved (number) * ederal—Title I assistance approved
Capital-----------------------------------------------------------—____________________________
State and locality rSS-V, Preliminary planning Final planning „ . . . „ ,
Fetiona' Prelimi- pjna] Develop- advances advances Project loans Capital grants
planning Panning ment-------------------------------------------------------------------
Approved Disbursed Approved Disbursed Approved Disbursed Approved Disbursed
Total_______$246,468,095 197 133 60 $4,922,465 $4,075,282 $5,001,389 $3, 566, 305 $104,068,159 $30,757,669 $105, 206, 540 $8,673,042
Alabama------------ 5,341,030 8 6 2 124,596 107,515 262,840 203,090 5,454,000 523,600 1,662,338 Z_
Birmingham_______ 2,500,000 1 2 1 34,546 34,096 100,330 64,000 4,058,000 _ 858 780
Cullman__________ 41,300 1 _____________ 6,088 ____________________________
Florence_________ 180,250 1 1 ______ 10,600 10,600 30,160 23,985 ____
Gadsden__________ 349,160 1 _____________ 20,750 18,000 __________________
Huntsville_______ 124,110 2 _____________ 14,562 6,840 ______________
Mobile___________ 850,000 1 1 ______ 22,000 21,929 45,830 44,055 _____ .
Montgomery------ 1,296,210 1 2 1 16,050 16,050 86.520 71,050 1,396,000 523,600 803,558
Arkansas---------- 1,411,080 2 2 1 53,013 39,465 101,307 100,087 1,334,446 1,200,254 980,385
Little Rock----- 1,275,000 1 2 1 37,013 35,527 101,307 100,087 1,334,446 1,200,254 980 385 ~
Texarkana_________ 136,080 1 16,000 3,938 ....._______L... """"""
California---------- 11,271,270 10 2 2 914,124 662,682 277,468 243,098 21,071,000 ____ 6,346,000
Calexico___________ 40,390 1 6,569 2,850 ___________________
Colton___________ 35,210 1 _____________ 19,144 ____________________________
Los Angeles_____ 4,089,330 1 191,135 59,692 _____________________
Redlands ________ 73,570 1 _____________ 21,068 20,068 ____________ ..
Richmond__________ 107,730 2 192,566 152,857 _______________ ___
Sacramento________ 364,630 2 151,964 129,230 ___________________
San Bernardino____ 179,340 1 33,915 10,850 ..
San Francisco---- 6,346,000 1 2 2 297,763 287,135 277,468 243,098 21,071,000 __ 6,346,666
Upland----------- 35,070 __________________________________________________________________________________________
Colorado: Denver____ 2,248,540 1 ____________ 21,500 20,000 _________________________________________________
Connecticut--------- 3,904,256 11 5 ______ 192,530 168,457 153,274 90,172 ________________________________
Bridgeport_______ 656,880 1 _____________ 17,850 16,140 _____________________
East Haven_______ 58,800 1 _____________ 21,300 15,000 ___________________ .
Hartford_________ 832,000 1 1 ______ 21,500 21,500 49,150 27,737 ____________Z-ZZIZ "Z
Middletown_______ 74,830 ___________________________________________ .. .
New Ha ven_______ 883,263 1 1 ______ 29,300 29,300 49,434 26,960 ________ZZZZZZZZZZZZ ZZZZZZZZZZZZZ ZZZZZZZZZZZZ
OFFICE OF THE ADMINISTRATOR
89
New London_______ 213,520 1 1 ...... 12,300 12,300 16,690 __________________
Norwalk__________ 163,660 1 _____________ 11,745 11,745 ____________________________________________
Norwich__________ 164,173 1 _____________ 20,240 7,085 ________________________________________ .. .
Shelton---------- 127,800 1 1 _______ 5,500 4,850 4,000 3,825 ________________________ ___
Stamford_________ 399,770 1 1 _______ 24,965 24,965 34,000 31,650 ________________________________
Waterbury________ 259,140 1 _____________ 16,320 15,682 ________________________________________________
Willimantic______ 70,420 1 _____________ 11,510 9,890 _________________________________________________
Delaware: Wilmington_ 508,830 1 _____________ 21,284 21,284 _________________________________________________
District of Columbia:
Washington------- 6,385,186 1 1 1 170,185 169,785 149,500 122,674 8,833,391 3,550,000 6,385,186 _
Illinois------------ 21,602,141 14 13 3 113,873 97,486 181,135 96,736 _______________ 10,930,825 _____
Cairo------------ 208,180 1 ___..... 1 3,525 _________________________________________________________
Chicago__________ 17,692,371 1 5 2 ________________ 20,673 _________________________ 10,930,825 _____
Chicago Heights-- 132,860 1 1 ______ 11,195 11,195 45,836 45,087 ________________________________
Cook County______ 500,000 _____________ ______ . . . _____ .. ... ________________ ... ________ ________
Danville--------- 333,970 1 1 ______ 16,400 14,494 11,460 10,500 ________________________________
East St. Louis___ 629,370 _____________________ .... _ . .... . .. .... ____________________
Galesburg________ 182,140 1 2 ______ 7,715 7,640 5,107 4,850 ________________________________
Granite City----- 241,780 1 _____________ 9,150 8,760 _________________________________________________
Kankakee_________ 102,830 1 1 ______ 6,850 6,850 13,995 ________________________________________
Lincoln---------- 88,200 1 _____________ 3,816 2,500 ________________________________________________
Peoria___________ 700,000 1 _____________ 15,700 10,100 ________________________________________________
Robbins---------.. 26,110 1 1 ______ 4,000 4,000 50,387 34,379 ________________________________
Rock Falls------- 51,240 1 1 ______ 6,340 5 960 23,600 1,920 ________________________________
Rockford_________ 401,520 1 _____________ 15,450 11,600 ________________________________________________
Urbana___________ 99,400 _________________________________________________________________________________________
Villa Grove______ 29,890 1 _____________ 2,250 1,905 ________________________________________________
Waukegan__.______ 182,280 1 1 ______ 11,482 11,482 10,077 ________________________________________
Indiana: New Albany_v_ 239,000 ___________________'.____________________,___________________________________________
Kansas: Kansas City- 1,102, 570 1 ____________ 66, 300 52,218 ________________________________________________
Kentucky------------ 4,452,550 7 4 _______ 118,254 103,019 49,651 38,884 ________________________________
Covington________ 343,840 ......_ . . .... ..... .... _________________________________
Henderson-------- 150,000 1 _____________ 10,479 6,619 ____________________________________ ____________
Lexington-------- 448,700 1 1 ______ 18,165 18,165 16,150 13,324 ___________________________-____
Louisville------- 2,469,320 1 _____________ 28,570 25,127 ________________________________________________
Middlesborough---- 128,030 1 1 7,831 6,780 4,370 930 _________________________________
Newport----------- 212,100 1 1 17,703 17,703 11,196 6,695 __________________________________
Owensboro--------- 249,270 1 1 16,500 16,500 17,935 17,935 _________________________________
Paducah----------. 389,340 1 _____________ 19,006 12,125 ________________________________________________
Paris____________ 61,950 _________________________________________________________________________________________
Louisiana----------- 3,737,930 2 2 ______ 137,386 130,539 152,198 78,957 ________________________________
New Orleans------ 2,897,930 1 1 ______ 117,386 111, 122 95,078 78,957 _________________________________
Shreveport------- 840,000 1 1 ______ 20,000 19,417 57,120 ________________________________________
HOUSING AND HOME FINANCE AGENCY
90
Table 12b. Slum clearance and, urban redevelopment operations an d Federal assistance, by locality: through December 1953_Continued
Local program operations approved (number) Federal—Title I assistance approved
Capital------------------------------------------------------------------------------
State and locality reserva- p . Preliminary planning Final planning p .
tion Prelimi- Final Develop- advances advances Project loans Capital grants
planning P^tag ment —-----------------------------------------------------------------
APProve(i Disbursed Approved Disbursed Approved Disbursed Approved Disbursed
Maine: PorHand.... $395,000 1 1 ------ $14,787 $14,787 $14,427 $5 760
Maryland: B.iitaore- ------- \ ’777777?........ 7777777777777777?.................... yZw
Massachusets-------- 11,485,107 14 8 ------- 354,775 282,416 272,325 143,510
Brookline-------- 7’Rto I 2 ------- 142’ 000 142-000 130>200 41,500 _______________1________
wrooKime--------- 82,810 1 ------------- 12,000 9,212
ch“readge-------- 125300 1 2 ------ 30,650 30,300 20,600 18,556 zzzzzzzzzzzzz zzzzzzzzzzzzz zzzzzzzzzzzzz zzzzzzzzzzzz
Clinton-----ZZZZZZZ 81’ 550 F 10 350 ....-
Fail River------- 670,110 3 ______......ZZ.Z 45’, 000 '"26,‘268
Haverhill-------- 261,870 1 11 000 ----------------------------------------------
Lawrence-------- 214,550 1 ' 15 000
Lowell___________ 436,380 ’ ---------------------------------------------------------
Medford---------- 80,920 1 ________ZZZZZZZ 16*669
Revere ---------- 81,900 1 1 ------ 12’850 11,175 16,000 ...
Woburnle--------- ?RRRon I I------- 25,836 25,835 33’150 26,736* zzzzzzzzzzzzz zzzzzzzzzzzzz
Worcester-------- stfii’n I I ---------------- 10,100 8-305 15,°00 3,855 _______________
W orcester------- 816,450 1 1 ------ 29,321 29,321 57,375 49 875
Michigan------------ 5, 509, 816__6_------------£ 32, 305 19, 718 ------------ $6, 686, 096 $5, 445, 681 4,761,096
Albion----------- 58,240 1 4 inn o 07c
Battle Creek----- 291,480 1 ____ 7 800 7 400
Detroit---------- 4,761,096 2 . F ’ ’ ° --------------------------UnUne)-----------------
Hamtramck________ 150,500 ' °85,000 5’445)081 4, 761,096 -
Port Huron------Z 164,’290 F ZZZZZZ 13'456 8’443 .......
• Ypsilanti-------- 84,210 1 ______ZZ..ZZZZZZ 6 955 ’
Minnesota----------- 7,228,279 ___3______3______2 82,529 | 80,394 108,977 65,758 6,838,711 366,050 4,165,739
Duluth., -------- 687,540 1 _____________ 15,070 ■ 13 790
St1pST----------- Mis’™ I 1 ------------------ 67,459: 66^604 39,*890" ZZZZZZZZZZZZ ZZZZ
St, Paul--------- 4,165,739 I 1 2 2 I---.....------ 69,087 65,758' 6,838,711 *366,6f»*l***4,*165,*739* ZZZZZZZZZZZZ
OFFICE OF THE ADMINISTRATOR
Missouri---------- 8,313,940 2 4 1 131,505 123,203 217,389 129,587 2,235,947 __ 1,179,631
Kansas City----- 2,490,180 1 3 ------ 76,320 74,803 112,095 68,903 2,235,947 1 179 631
St. Joseph_______ 627,760 ____________________________________ _ ’ ’ -------
St. Louis-------- 5,196,000 111 55,185 53," 400 105, 294 60,,694 ZZZZZZZZZZZZZ ZZZZZZZZZZZZZ ZZZZIZZZIZZZ
Nebraska: Omaha____ 1,195,320 ___________________________
New Hampshire------ 1,027,210 6 3 _____ 60,100 30,293’ 41,900 19,971'_____________1_______Z_______[
Dover----------- 175,000 1 1 10,000 10,000 8,900 8,580
Laconia_________ 100,000 _______________________________ _ _ ' "——————————
Manchester------ 380,000 3 1 28,166 13,028 17,666 11,391 "'
Nashua. -------- 315,300 1 1 9,500 7,265 16,000 _
Portsmouth------ 56,910 1 ____________ 12,500 _______________________ZZZ..ZZ.ZZZZZ ZZZZ'ZZZZIZ”
New Jersey--------- 12,645,970 17 12 6 325,951 254,726 410,781 282,395 12,659,275 5,515,515 8,749,819
Asbury Park------ 48,370 1 _____________ 4,550 3,550 '
Atlantic City--- 260,000 1 ____________ 19,635 19,516
Bayonne---------- 251,370 1 ____________ 34,645 26,230
Camden------------ 544,110 1 _________ 20,372
Elizabeth-------- 409,850 1 1 _____ 28,764 26,764 33,500
Hoboken---------- 430,780 1 _____ _____ 28,620 3,150 __.... 1Z_ZZZ_ZZZ_Z ZZ’ZZZZZZZZZZ
Jersey City ---- 3,028,000 1 2 2 29,800 27,411 67,274 64,829 "4,031,391 "2,"666,935 3, 027, 751
Long Branch------ 71,750 2 1 7,335 6,925 33,453
------ i 2 2 371675 37’675 121,176 121,176 7,124,937 1,150,666 ' 5,269,258 ZZZZZZZZZZZZ
New Brunswick----- 141,540 2 1 17,700 17,300 9,200 7,200
Passaic----------- 593,550 1 1 19,400 19,400 37,500 29,405
Paterson. -------- 577,500 1 1 20,650 19,525 17,565 ....
-------- 4o?’Sa I 2 2 24’700 24,700 59,786 59,785 1,502,947 1,404,580 452,816 ZZZZZZZZZZZZ
Plainfield------- 21,000 1 ____________ 16,800 7,525
Trenton--------- 515,340 i i ______ 15,305 15,055 31,327 zzzzzzzzzzzz zzzzzzzzzzzzz zzzzzzzzzzzzz zzzzzzzzzzzzz zzzzzzzzzzzz
New York----------- 58,043,258 15 12 8 181,590 150,615 363,135 315,359 ____________ 32,232,005 6,054,375
Albany---------- 516,300 1 1 ------ 10,500 10,500 26,950
Binghamton------ 253,140 1 1 ______ 22,404 20 114 7 735 - — —— ... .................
Buffalo---------- 1,574,040 i ______________ 20,000 _______________zzzzzzzzzzzz zzzzzzzzzzzzz zzzzzzzzzzzzz
--------- 52,22?’222 ? ? 7 47,500 47,450 252,500 252,500 .Z..Z-ZZZZZZZZZZZZZ "31,'666,237 6,"054,"375
Port Chester---- 331,768 111 4,800 3,650 9,000 8,650 . 331 768
Rochester...---- 916,440 1 ____________ 13,000 11,262
Schenectady----- ' 438,000 ___ 1 _________ _ 24 490 "' 23’616
Syracuse--------- 633,300 1 ____________ 9,666 9,960 ’ ’
Tarrytown------- 15,240 1 ____________ 6,664 4 914
Troy------------ 293,820 1 1 ------ 9,012 8, 720 15,'666 16,'666'ZZZZZZZZZZZZZ "1
Utica----------- 317,460 1 ------------ 15,650 12,145 _________
Yonkers.--753,750 1 1 ?2,100 21,900 26,560 20,590 ._r___,_____Z--,,-ZZZZZZl ZZZZZZZZZZZZ
91
294078—54----8
HOUSING AND HOME FINANCE AGENCY
92
Table 12b.—Slum clearance and urban redevelopment operations and Federal assistance, by locality: through December 1953—Continued
Local program operations „ . , m... T . . ,
approved (number) Federal—Title I assistance approved
Capital-------------------------------------------------------------------------—— -----------
State and locality Preliminary planning Final planning „ r, .. , .
tfon Prelimi' Final Develop- advances advances Project loans Capital grants
planning Pannin? ment - ■ ■
Approved Disbursed Approved Disbursed Approved Disbursed Approved Disbursed
Ohio--------------- $12,599,490 11 5 1 $428,860 $382,464 $86,079 $49,731 $3,097,968 __ $2,473,171 _____
Cincinatti------- 3,742,830 1 1 1 141,000 111,557 45,574 40,066 3,097,968 _ . 2,473,171
Cleveland________ 3,000,000 2 2 ______ 66,525 66,491 _______
Columbus--------- 1,304,170 2 1 ______ 62,370 62,364 40,505 9,665 . ____
Dayton--------- 1,347,080 1 26,775 25,693 ___________
Hamilton_________ 423,500 1 _____________ 13,870 12,430 __ .
Springfield------ 495,000 1 26,750 25,935 _______________
Steubenville_____ 200,000 1 18,040 4,745 .
Toledo----------- 1,100,610 1 1 ______ 38,650 38,369 ____________________
Warren___________ 163, 520 _______________________________ ___
Youngstown------- 822,780 1 _____________ 34,880 34,880 ______________1.1.11111111 IZZZZZZZZZZIZ 1111111111111 ZZIZZZZZZZZZ
Pennsylvania------- 25,232,070 15 16 3 410,652 320,328 604,051 421,175 7,741,671 $926,000 5,709,625 $245,402
Allegheny County_ 1,795,150 ___ .. . ________
Ambridge--------- 155,190 1 _____________ 7,562 7,562 ___
Beaver County____ 385,350 !___________________..._____________________
Beaver Falls----- 181,200 ______ 1 ___________________________ 12,757 12,757 .1 1 —————————————...........——
Bethlehem________ 302,820 ______ _________
Braddock--------- 195,720 1 _____________ 22,920 22,920 ...1_ ~
Carnegie_________ 85,540 _____________________________________
Chester---------- 304,010 ______ 1 ___________________________ 12,697 11,397 . .........
Clairton--------- 238,950 1 1 ______ 9,359 6,889 9,545 ______ _____
Delaware County__ 263,270 , 1 1 ______ 13,900 10,900 20,050 _____
Duquesne--------- 186,620 1 _____________ 9,095 ..
Easton----------- 203,490 1 _____________ 10,725 4,140 _____________ _
East Pittsburgh__ 28,420 _____________________________
Harrisburg------- 866,250 1 1 ______ 22,600 22,600 61,400 50, OOO ZZZZZZZZZZZ'Z
Homestead________ 176,540 ___________ ____ _ .. __
Johnstown-------- 511,210 1 1 ______ 22,470 20.150 12,650 11.111111111 1111*11
McKeesport------- 538,300 1 _____________ 14,900 13,700 _
McKees Rocks----- 148,400 1 1 ______ 21,300 18,193 13,441 12,701 . . ............
Munhall...___,___ 106,890 ____________________________________________________________
New Brighton_____ 33, 320 _________________________________________
OFFICE OF THE ADMINISTRATOR
93
Philadelphia 10,000,000 1 4 3 194,974 144,387 327,129 263,274 7,741,671 926,000 5,709,625 245,402
Pittsbuigh________ 6,100,000 _____ 1 ___________________________ 71,700 45,745 ---------------------------------
Rankin____________ 75,880 ________ 1 --------------------------- 19,765 --------------------------------------------
Reading___________ 425,000 1 _____________ 22,527 20,557 -------------------------------------------------
Rochester_________ 33,040 ------------------------------------------------------------------------------------------
Scranton__________ 957,390 _________________________________________________________________________________________
Sharon....,_______ 146,020 1 ______________ 8,320 -------------------------------------------------------------
Sharpsburg________ 77,770 ------------------------------------------------------------------------------------------
Tarentum__________ 93,660 ------------------------------------------------------------------------------------------
Turtle Creek______ 65,450 1 1 ______ 19,100 17,430 12,667 -----------------------------------------
West Homestead____ 31,220 ------------------------------------------------------------------------------------------
York______________ 520,000 1 2 ______ 10,900 10,900 30,250 24,401 ---------------------------------
Rhode Island_____________ 1,387,120 2 3 2 108,869 88,595 83,045 58,615 1,563,448 ----- 901,738 --------
Newport . _ . 221,550 1 1 ______ 10,400 10,400 33,250 26,325 ---------------------------------
Providence________ 1,165,570 1 2 2 98,469 78,195 49,795 32,290 1,563,448 ..... 901,738 --------
South Carolina: Columbia_ 499,380 1 ------------ 20,000 20,000 --------------------------------------------------
Tennessee___________ 9,908,259 9 8 2 103,155 91,700 511,118 383,782 10,033,300 4,196,000 5,526,259 --
Clarksville_______ 35,700 1 _____________ 6,620 6,431 --------------------------------------------------
Johnson City______ 192,290 1 1 ______ 11.685 11,680 34,700 33,613 ---------------------------------
Knoxville . 1,025,710 1 2 _______ 24,400 24,400 134,915 95,597 ---------------------------------
Lewisburg_________ 35,700 1 _____________ 7,000 6,487 --------------------------------------------------
Memphis 2,942,660 1 2 _______ 25,100 25,100 106,762 45,952 ---------------------------------
Murfreesboro' 319,059 2 1 1 12,430 10,312 39,370 34,990 1,724,000 996,000 319,059 -----
Nashville 5,207,200 1 1 _______________ 172,771 153,070 8,309,300 3,200,000 5,207,200 --
Tullahoma_________ 51,100 1 _____________ 7,920 -------------------------------------------------------------
Union City________ 80,010 1 1 ______ 8,000 7,290 22,600 20,560 ---------------------------------
Waverly___________ 18,830 ------------------------------------------------------------------------------------------
Texas: San Antonio__ 1,970,360 1 ------------- 70,500 28,900 -------------------------------------------------
Virginia 9,255,203 7 10 2 126,208 123,554 534,156 409,456 8,668,290 6,775,000 4,522,793 -
Alexandria _______ 342,750 1 1 ______ 12,165 12,165 39,482 26,756 ---------------------------------
Bristol 822,320 1 1 1 5,850 5,,850 35,500 34,920 1,490,000 ----- 822,320 --------
Danville'””.:_____ 333,480 1 1 ______ 16,500 15,831 14,680 -----------------------------------------
Newport News______ 280,000 1 2 ------ 15,100 14,300 30,284 -----------------------------------------
Norfolk___________ 3,700,473 _____ 1 1 _______________ 216,825 216,825 7,178,290 6,775,000 3,700,473 --
Portsmouth. ______ 1,050,600 1 1 ------ 18,700 17,515 51,160 41,607 ---------------------------------
Richmond 2,250,000 1 2 ______ 35,502 35,502 106,485 .54,500 --------------------------------
Roanoke___________ 475,580 1 1 ______ 22,391 22,391 39,740 34,848 ---------------------------------
HOUSING AND HOME FINANCE AGENCY/
94
&
Table 12b.—Slum clearance and urban redevelopment operations and Federal assistance, by locality: through December 1953—Continued
Local program operations „ , , ,
approved (number) Federal—Title I assistance approved
Capital ....................................................................... —-------
State and locality reserva- Preliminary planning Final planning n
tion Prelimi- Fjnai Develop- advances advances Project loans Capital grants
planning Pining ment-------------------------------------------------------------------
Approved Disbursed Approved Disbursed Approved Disbursed Approved Disbursed
West Virginia------- $2,539,100 1 _____________ $24,675 $18,990 ________________________________________________
Boone County_____ 175,350 ______________
Charleston-------- 419,860 1 _____________ 24,675 18,990 ‘ '
Clay County_______ 25,690 _____________________________________
Fayette County___ 76,650 __________________________
Greenbrier County_ 92,960 _____________________________________ ZZZ'Z '
Konawha County___ 773,000 ________________ ___________ "Z Z
Lincoln County___ 29, 260
Logan County_____ 271,390 ____________ZZZZZZZZ: ZZZZZZZZZZZZ ZZ..ZZZZZZ Z Z
McDowell County___ 257,110 ___________ ____Z _____'. Z Z .Z
Monroe County_____ 22,680 ____________ Z Z -------
Point Pleasant___ 46,550 ______________
Putnam County_____ 39,620 ____________ - ——- - —-
Raleigh County___ 137, 830
Summers County____ 38, 290
Wayne County______ 132,360 ______________ZZZZZZ ZZZZZZZZZZZZ ZZZZZ.ZZZZZZ ZZZZZZZZZZZZ ZZZZZZZZZZZZ ZZZZZZZZZZZZZ ZZZZZZZZZZZZZ ZZZZZZZZZZZZZ
Wisconsin: Milwaukee- 2,498,440 1 2 ___ 52,110 34,994 $60,700 $32,245 _______________________________
Alaska.__„___________ 67,550 __________________________________________________________________________________
Fairbanks--...____ 42,560 _______
Ketchikan_________ 24,990
Puerto Rico-----,--- 6,232,840 25 9 20 408,047 380,976 239,002 167,027 $6,585,034 $2,259,569 $3,802,680 _
Mayaguez---,----- 565,110 2 2 2 107,500 106,350 44,571 44,571 1,234,669 282,369 597,623 ...
Ponce------------ 1,057,600 1 2 3 91,426 91,426 42,481 39,481 490,225 223,500 262,667
Sanjuan----------- 1,152,060 3 2 1 70,580 61,000 140,380 82,975 ____________________
Puerto Rico Housing
Authority.------ 3,458,070 19 3 14 138,541 122,200 11,570 _____ 4,860,140 1,753,700 2,942,390 ____
Territory of Hawaii: Honolulu.. 1,230,000 2 2 1 52,802 51,179 126,931 108,226 1,265,582 ____ 387,582 ________
Source: Office of the Administrator, Housing and Home Finance Agency,
OFFICE OF THE ADMINISTRATOR
Table 13a.—Lending activity under the college housing loan program: 1950-54 [In thousands of dollars]
Period Status of $300 million authorization > Contracts executed
Released by the President Loans approved (net) Funds reserved Balance available for commitment Undisbursed commitments Loan repayments and retained earnings Balance outstanding
Bond purchases (loans) Construction advances (not repaid)
Cumulative data from April 1950 through—
1951, December 40, 000 16,895 3,150 19. 955 16,810 0 0 85
1952, December 100, 000 41,108 39,854 19,048 35,684 10 3,871 1, 543
1953, December 150, 000 92,805 38,868 18,456 63,883 129 24,058 4,829
.1953:
January 100, 000 43,800 43,184 13,026 36,355 10 5, 441 1,994
February 100, 000 46,181 42^ 844 10,985 37: <67 10 6+12 2, 692
March 100, 000 48,879 40,026 11,105 38,742 10 6:820 3:307
April 100, 000 66,072 26,463 7^ 475 55:364 10 L220 3:478
May 100 000 66,192 26,687 7,131 54:070 10 8:188 3: 924
June 100 000 86,421 13, 579 2 23 71,672 2 23 16: 228 4+11
July 150, 000 87,021 22,351 40,660 70; 390 32 12:131 4', 491
August 150, 000 89+13 28^ 550 31+89 70; 898 52 13: 276 5:420
September-- 150, 000 89,653 30,154 30, 257 68,824 64 14:989 5:820
October _ 150) 000 90, 713 35,868 23,497 67, 272 78 17:385 6:036
November 150,000 91,513 35,728 22, 856 65: 225 97 20:056 6', 212
December 150', 000 92^ 805 38', 868 18:456 63:883 129 24:058 4, 829
1954, January 150,000 92,145 43,689 2 14,076 2 57, 074 2 -90 27i 362 L 674
Percent change end of January 1954 from end of—
1953:
December 0.0 -0.7 +12.4 XX —10.7 XX +13.7 +58.9
January +50.0 +110.4 +1.2 XX +57.0 XX +402.9 +284.9
Net change during—
1952 +60, 000 +24, 213 +36, 704 —907 +18,874 +10 +3,871 +1,458
1953 +50; 000 +51,697 -986 -592 +28i 199 +119 +20; 187 +3i 286
Percent change, 1953 from—
1952 -16.7 +113.5 XX XX +49.4 XX +421.5 +125.4
1 Loan program approved Apr. 20, 1950, under Public Law 475. Program was suspended by Presidential request on July 18, 1950, and was reactivated in January 1951. Of the $300 million authorized for loans under Public Law 475, the President released $40 million for use during the fiscal year 1952; $60 million for the fiscal year 1953; and $50 million for the fiscal year 1954.
2 This column includes both repayments and earnings beginning June 1953.
2 Beginning January 1954 administrative expenses are included for July 1-December 31, 1953 accrual of $211,782.
Source: Office of the Administrator, Housing and Home Finance Agency.
95
HOUSING AND HOME FINANCE AGENCY
Table 13b.—Applications and construction activity under the college housing loan program: 1950-5If
Period Units in applications Units put under construction
Received Approved With reservation of funds Under review-no funds reserved Deferred or disapproved 1 Withdrawn or rescinded Total2 Started but not yet completed Completed
1951, December 1952, December 1953, December 1953: January Cumulative data from April 1950 through—
12,146 36,876 65,081 39, 969 42,141 44,924 47, 406 50, 697 52, 934 54,319 56, 358 58,850 60, 376 63, 454 65, 081 65, 410 5,015 12,643 28,858 13,451 14,412 15,432 20, 599 20, 599 26, 262 26,453 27, 540 27, 636 27, 907 28, 202 28,858 27, 871 805 12,108 12,233 12,894 12, 536 12,257 7,853 7,203 6,417 7,141 9,386 10, 747 11, 570 11, 579 12, 233 13, 307 3, 512 7,831 9,176 6,901 7,805 9,411 8,478 7,980 9,869 10,189 12, 655 12,849 12,887 14, 229 9,176 7,583 2, 491 2, 754 4,136 3, 975 4, 640 4,676 5,120 4. 980 4,830 4,980 1,221 1,972 2,241 2,241 4,136 4,734 323 1,540 10, 678 2,748 2,748 3,148 5, 356 5,456 5, 556 5, 556 5, 556 5,646 5, 771 7,203 10,678 11,915 910 6,360 18,457 6, 360 6,360 7, 712 7,712 8, 011 8,824 8,824 11, 000 13, 710 14, 642 17,044 18,457 20,205 (3) (3) 17,459 (3) (3) (3) (3) (3) (3) (3) (3) 13, 335 14,025 16,170 17,459 17,888 (3) (3) 998 (3) (3) (3) (3) (3) (3) (3) (3) 375 617 874 998 4 2, 317
February
March
April
May
June.
July
August
September
October
November
December
1954, January
1953: December January
Percent change end of January 1954 from end of—
+0.5 +63.7 -3.4 +107. 2 +8.8 +3.2 -17.1 +9.9 +14.5 +19.1 +11.6 +333.6 +9.5 +217. 7 +2.5 (3) XX (3)
1952
Net change during—
+24, 730 +28,205 +7, 628 +16,215 +11,303 +125 +4, 319 +1,345 +263 +1, 382 +1,217 +9,138 +4, 550 +12,097 (3) (3) (3) (3)
1953
1952
Percent change 1953 from—
+14.1 +112.6 -98.9 -68.9 +425. 5 +650. 9 +122.0 (3) (3)
1 Temporarily deferred because not directly related to the defense effort.
2 Total units covered by contracts on which construction has started.
3 Not available.
4 Beginning in January 1954, this figure includes units occupied or ready for occupancy in projects not yet completed and units in projects completed with final reports submitted; previous reports have included only the latter type of completions.
Source: Office of the Administrator, Housing and Home Finance Agency.
96
OFFICE OF THE ADMINISTRATOR
Table 14.—Number of projects under Title II of the school construction program: 1950-54
Period Recommended by Office of the Administrator, HHFA i Approved by Department of Health, Education, and Welfare Placed under construction
Total2 Non-Federal construction Sec. 202/205 Federal construction Total Not yet completed Completed
Sec. 204 Sec. 203 8
Cumulative data from September 1950 through—
1951, December 397 302 238 49 15 153 150 3
1952, December-. 1,040 958 865 73 20 475 396 79
1953, December 1,341 1,331 1, 217 94 20 1, 216 783 433
1953:
January 1,097 1,032 935 77 20 530 447 83
February . 1,132 1,082 982 80 20 589 493 96
March 1,202 1,157 1,054 83 20 671 562 109
April.. _ 1,231 1,191 1,083 88 20 759 607 152
May 1,280 1, 242 li 130 92 20 879 697 182
June _ 1,308 1,276 1,164 92 20 934 719 215
July 4 1,314 1, 289 L 177 92 20 994 746 248
August4 1, 320 1,302 1,190 92 20 1, 054 773 281
September. 1,326 1,316 L203 93 20 1,114 801 313
October. 1,331 1, 322 1,208 94 20 1,167 821 346
November 1,339 1,326 1,213 93 20 11190 788 402
December 1,341 1,331 1,217 94 20 1, 216 783 433
1954, January 8 1,344 1,334 1,219 95 20 li 237 565 672
Percent change end of January 1954 from end of—
1953:
December +0.2 +0.2 +0.2 +1-1 0 +1-7 -27.8 +55.2
January +22.5 +29.3 +30.4 +23.4 0 +133.4 +26.4 +709.6
Net change during—
1952 +643 +656 +627 +24 +5 +322 +246 +76
1953 +301 +373 +352 +21 0 +741 +387 +354
Percent change 1953 from—
1952 -53.2 -43.1 -43.9 -12.5 -100.0 +130.1 +57.3 +365.8
1 Recommended for approval based on HHFA’s review of the legal, financial, and engineering status; the Department of Health, Education, and Welfare is responsible for the educational standards review.
2 Authorized under Public Law 815, approved Sept. 23, 1950. The Department of Health, Education, and Welfare is authorized to direct the program with the cooperation of HHFA, to which certain specific functions are delegated under the act.
8 Data include 4 renovation projects approved for non-Federal construction.
4 Estimated.
8 Activity under Titles HI and IV is not included; by the end of January, projects given Titles III and IV fund reservations totaled 85 and 12 of these had been recommended by OA to DHEW.
Source: Office of the Administrator, Housing and Homa Finance Agency.
97
HOUSING AND HOME FINANCE AGENCY
Table 15.—Defense community facilities under Public Law 139: 1951-53
Item At end of— End of November 1953 from end of— Net change during 1953
December 1953 November 1953 December 1952 November 1953 December 1952
Number Number Number Pct. chg. Pct. chg. Number
Applications filed _ .. ... 292 291 223 0.3 +30. 9 +69
Applications approved __ 100 101 59 — 1.0 -j-69.5 +41
' ‘HHFA:
Sole responsibility 78 79 39 -1.3 +100.0 +39
Joint responsibility 22 22 20 0. 0 +10.0 +2
DHEW joint responsibility. — 31221 »(22) »f201 0. 0 +10.0 ’(+2)
Estimated construction cost—total funds: In thousands of dollars $000
Applications filed.. _ .. 151, 828 151, 583 115, 098 (!) +31.9 +36, 730
Applications approved . 47, 492 47, 557 37,114 -0.1 +28.0 + 10, 378
Sole responsibility: HHFA 17, 754 17, 819 8,245 -0.4 + 115.3 +9, 509
Joint responsibility: HH F A and DHEW. 29, 738 29, 738 28, 869 0.0 ‘ +3.0 +869
Portion of estimated construction cost from
Federal grant and loan funds:
Applications filed (2) (2) 75, 757 (2) (2) (2)
Applications approved. ... . _ . .. 24, 991 25,044 18, 363 -0.2 +36.1 +6, 628
“HHFA:
Sole responsibility 13, 349 13, 402 7, 268 -0. 4 +83.7 +6, 081
Joint responsibility. 6, G86 6, 686 6, 643 0.0 +0.6 +43
DHEW joint responsibility _ __ 4^ 956 4,956 4, 452 0.0 + 11. 3 +504
Portion of estimated construction cost from
applicants’ fund:
Applications filed _ _ . _ (2) (2) 38, 390 (2) (2) (2)
Applications anproved 22, 501 22, 513 18, 751 -0.1 +20.0 +3, 750
Sole responsibility: HHFA 4, 405 4,417 977 —0.3 +350. 9 +3, 428
Joint responsibility: HHFA and
DHEW _ 18, 096 18, 096 17, 774 0.0 +1.8 +322
HHFA balance available for projects ’320 298 6; 600 +7.4 -95.2 —6, 280
1 Less than 0.05 percent.
’Not available.
’ This number is the same as that shown under HHFA joint responsibility.
Source: Office of the Administrator, Housing and Home Finance Agency.
98
OFFICE OF THE ADMINISTRATOR
Table 16.—First and second advance planning programs: 1944-53
Item From 1944 through— Percent change Dec. 1953 from— Net change during 1953 percent change from 1952
December 1953 December 1952 December 1951 December 1952 December 1951 1953 1952
Number of applications with advances Approved, total number.. 7,740 7,835 7,883 -1.2 -1.8 -95 -48 XX
First advance planning... Second advance planning. do.... ....do 6,537 1,203 6, 552 1,283 6,566 1,317 -0.2 -6.2 -0.4 -8.7 -15 -80 -14 -34 XX XX
Paid out ....do 7,615 7,373 7,028 +3.3 +8.4 +242 +345 -29.9
First advance planning Second advance planning. do.... do.... 6,492 1,123 6,425 948 6,394 634 +1.0 +18.5 +1.5 +77.1 +67 +175 +31 +314 +116.1 -44.3
Repaid do 3,590 3,323 2, 956 +8.0 +21.4 +267 +367 -27.2
First advance planning Second advance planning. ....do.... ....do 2,980 610 2,893 430 2,726 230 +3.0 +41.9 +9.3 +165. 2 +87 +180 +167 +200 -47.9 -10.0
Estimated construction cost of public works in applications with advances
Approved, total millions of dol.. 3, 652 3,721 3,681 -1.9 -0.8 -69 +40 XX
First advance planning... Second advance planning. ....do do 2, 589 1,063 2, 612 1,109 2, 606 1,075 -0.9 -4.1 -0.7 -1.1 -23 -46 +6 +34 XX XX
Paid out do 3,369 3,152 2,828 +6.9 +19.1 +217 +324 -33.0
First advance planning Second advance planning. ....do ....do 2,587 782 2,542 610 2,500 328 +1.8 +28.2 +3.5 +23.8 +45 +172 +42 +282 +7.1 -39.0
Repaid do 1,510 1,308 1,076 +15.4 +40.3 +202 +232 -12.9
First advance planning... Second advance planning. ....do ....do.... 1,140 370 1,057 251 973 103 +7.9 +47.4 +17.2 +259.2 +83 +119 +84 +148 -1.2 -19.6
Amount of advances in applications
Approved, total millions of dol.. 64.9 68.9 72.0 -5.8 -9.9 -4.0 -3.1 XX
First advance planning Second advance planning. ....do.... ....do 46.2 18.7 47.3 21.6 47.6 24.4 -2.3 -13.4 -2.9 -23.4 -1.1 -2.9 -0.3 -2.8 XX XX
Paid out do.... 61.3 56.7 51.0 +8.1 +20.2 +4.6 +5.7 -19.3
First advance planning... Second advance planning. ....do ....do 45.9 15.4 45.1 11.6 44.6 6.4 +1.8 +32.8 +2.9 +140. 6 +0.8 +3.8 +0.5 +5.2 +60.0 -26.9
Repaid.. do 25.7 20.6 16.9 +24.8 +52.1 +5.1 +3.7 +37.8
First advance planning Second advance planning. ....do.... do 19.7 6.0 17.0 3.6 15.5 1.4 +15.9 +66.7 +27.1 +328.6 +2.7 +2.4 +1.5 +2.2 +80.0 +9.1
Source: Office of the Administrator, Housing and Home Finance Agency.
99
HOUSING AND HOME FINANCE AGENCY
Table 17.—Lending activity of the Alaska Housing Authority under Public Law 52:19^9-53
Disburse- Total Fir^’“°M®A°an
Appro- Undis- ment in loan commitments
priation Earned Loans bursed transit Funds commit------------------Loan Loan
Period torevolv- surplus outstand- commit- and ear- available ments XT K XT disburse- repayingfund ($000) ing ($000) ments marked ($000)2 made Number Amount Number ments ments
($000)1 ($ooo) funds (net) °C, (net) ($000) ®000)
($000) ($000) bOe™W' ($000)
Cumulative data, from April 23, 1949 through-
1950, December----------------- 10,000 (3) 1,594 2,972 0 5,434 4,566 12 4,480 381 1,594 0
1951, December..----------------- 13,875 (3) 5,224 1,065 2,441 5,145 6,400 14 5,693 480 5,315 89
1952, December-------------------- 19,000 (3) 10,743 844 127 7,281 12,759 18 12,021 897 11,913 1,165
1953, December-------------------- 19,000 219 11,863 32 200 7,124 17,784 19 17,048 1,297 17,753 5,890
January------------------------- 19,000 (3) 10,746 844 127 7,283 12,758 18 12,021 897 11,913 1,167
February-----------------------... 19,000 (3) 10,734 844 5,027 2,395 12,758 18 12,021 897 11,913 1,180
March--------------------------- 19,000 (3) 10,725 5,834 37 2,404 17,748 18 17,011 897 11,913 1,189
April--------------------------- 19,000 (3) 11,799 4,713 0 2,488 17,784 19 17,048 1,297 13,071 1,272
May----------------------------- 19,000 (3) 12,474 4,026 0 2,500 17,784 19 17,048 1,297 13,749 1,285
June---------------------------- 19,000 151 13,192 3,294 0 2,665 17,784 19 17,048 1,297 14,491 1,299
July-------------------------- 19,000 99 15,113 1,342 0 2,644 17,784 19 17,048 1,297 16,443 1,330
August-------------------------- 19,000 131 15,109 1,342 200 2,480 17,784 19 17,048 1,297 16,443 1,334
September----------------------- 19,000 148 14,667 657 200 3,624 17,784 19 17,048 1,297 17,127 2,460
October----------------------- 19,000 167 14,654 32 200 4,281 17,784 19 17,048 1,297 17,753 3,098
November------------------------ 19,000 194 12,268 32 200 6,694 17,784 19 17,048 1,297 17,753 5,485
December------------------------ 19,000 219 11,863 32 200 7,124 17,784 19 17,048 1,297 17,753 5,890
Percent change, end of December 1953 from end of —
1953, November______________________ 0 +12.9 —3.3 0 0 +6.4 0 0 0 0 0 +7 4
1952, December------------------------ 0 (’) +10.4 -96.2 +57.5 -2.2 +39.4 +5.6 +41.8 +44.6 +49.0 +405.6
Net change during—
1952..------------------------ +5,125 (2) +5,480 -143 -2.302 +2,090 +6,359 +3 +6,328 +412 +6,508 +1,031
1953---------------------------------- 0 (’) +1,115 -812 +73 -157 +5,025 +1 +5,027 +400 +5,840 +4,725
'Since July 1952, funds authorized total $20 million—$15 million Public Law 52, 2 Equal the sum of appropriation to revolving fund and earned surplus minus the sum
April 23, 1949 and $5 million under Public Law 531, July 14, 1952; funds appropriated of loans outstanding, undisbursed commitments, disbursements in transit and earmarked total $19 million—$10 million under Public Law 343, October 10, 1949; $3,875,000 under funds.
Public Law 253, November 1, 1951; $1,125,000 under Public Law 375, June 5, 1952; and 3 Not available. $4 million under Public Law 547, July 15, 1952. rT • JTT re-
source: Office of the Administrator, Housing and Home Finance Agency.
100
OFFICE OF THE ADMINISTRATOR
Table 18.—FHA insuring activity in Alaska under Public Law 52: 1949-53
Dwelling units in mortgages insured Commitments outstanding Dwelling units started 1
Period Total dwell- In 1- to 4-family structures In project Total dwell- In 1-to 4-fam- In project Total In 1-to 4-fam- In project
ing units Total New Existing structures ing units fly structures structures fly struc- structures
tures
Annual data
1949 2 792 43 8 35 749 XX XX XX 771 22 749
1950 1,590 1,224 617 128 28 100 1,462 985 XX XX XX 1,891 577 128 1,763 330
1951 239 115 124 XX XX XX 247
1952 199 77 122 418 XX XX XX 859 465 294
.1953 1, 259 989 724 265 270 XX XX XX 2,063 1,146 917
Percent change, 1953 from—
1952__ +104.1 +397. 0 +840.3 +117.2 -35.4 XX XX XX +140. 2 +146. 5 +211.9
Cumulative data 2
1952, December 4,223 4, 271 4,293 4,385 4,449 4,545 4, 588 4, 836 5, 061 5,161 5,366 5,414 5,482 609 228 381 3, 614 3,638 3,638 3,638 3,638 3,638 3,638 3,842 3, 842 3,884 3,884 3,884 3, 884 1,535 1,889 1,893 1,971 1,949 1,491 44 4, 098 4,205 4,229 4,271 4,479 4, 715 5,166 5, 539 5, 813 5,930 962 3,136 3, 240 3,264 3,306
1953: January 633 232 401 1,869 1,873 1,809 1,787 2,006 2, 018 1,991 1,827 1,805 1,700 1,711 20 964
February. _ 655 237 418 20 964
March .... 747 313 434 162 966
April 811 361 450 162 973 3, 506 3, 525 3, 525 3, 729 3,929 3,929 3,929 4,053 4,053
May. 907 447 460 2+68 2,464 2, 233 2, 069 2,005 1,900 1,911 162 1,190 1,641 1,810 1,884 2, 001 2, 081 2, 091 2,108
June 950 473 477 446
July 994 494 500 242
August 1,219 1,277 701 518 242
September 734 543 200
October L482 1,530 1,598 894 588 200 6, 010 6,144 6,161
November 913 617 200
December 952 646 1,858 L 658 200
Percent change end of December 1953 from end of—
1953, November 1952, December +1.3 +29.8 +4.4 +162.4 +4.3 +317.5 +4.7 +70.0 0 +7.5 -2.8 +21.0 -3.1 +11.2 0 +354. 5 +0.3 +50.3 +0.8 +119.1 0 +29.2
1 Data adjusted—based on estimated year-end inventory prepared as of Nov. 30, 1952.
2 Data reflected here begin Apr. 23,1949, under Public Law 52; however, 553 home units insured prior to that date are excluded.
Source: Federal Housing Administration.
101
HOUSING AND HOME FINANCE AGENCY
Table 19.—FNMA authorizations in Alaska under Public Law 52: 1949-53
Period Total FHA and VA FHA: Section 608 FHA: Section 207 FHA: Section 203 VA: Sec. 501-60 percent guaranteed
Dwelling units1 Number of mortgages Amount ($000) Number of mortgages Amount ($000) Number of mortgages Amount ($000) Number of mortgages Amount ($000) Number of loans Amount ($000)
1949 1950 1951 1952 1953 1952 1952, December 1953: January February-March April May June July... August September-October.... November. December- 1953, November 1952, December Annual data
1,248 561 886 1,054 1,591 138 22 60 635 1,147 11,142 6, 563 10,128 15, 904 22,954 77 6 0 0 0 10,402 6,404 137 118 103 0 0 6 6 4 0 0 9,322 6, 067 5,446 131 16 54 628 1,143 740 159 669 9, 710 18,025 0 0 0 1 0 O' 0 0 9 0
Percent change, 1953 from—
+50.9 +80.6 +44.3 0 -12.7 -33.3 -10.2 +82.0 +85.6 -100.0 -100.0
Cumulative from April 19492 through—
3,742 3,756 3,783 3,852 3,915 4,222 4, 594 4, 613 4,881 4,945 5, 099 5,290 5,339 855 867 894 922 985 1,292 1,462 1,481 1,550 1,614 1,768 1,959 2,002 43,737 43,946 44,077 45,064 45, 735 51,006 56,405 56,695 60,334 61, 529 63,893 66, 648 67,311 13 13 13 13 13 13 13 13 13 13 13 13 13 17,061 17,061 17,061 17,164 17,164 17,164 17,164 17,164 17,164 17,164 17,164 17,164 17,164 12 12 12 13 13 13 15 15 16 16 16 16 16 15, 389 15,389 15,389 15,873 15, 873 15,873 18, 296 18, 278 20, 835 20,835 20, 835 20,835 20,835 829 841 868 895 958 1, 265 1,433 1,452 1,520 1,584 1,738 1,929 1,972 11, 278 11,487 11,618 12,018 12,689 17,930 20,936 21, 244 22,326 23, 521 25, 885 28,640 29,303 1 1 1 1 1 1 1 1 1 1 1 1 1 9 9 9 9 9 9 9 9 9 9 9 9 9
Percent change end of December 1953 from end of—
+0.9 +42.7 +2.2 +134. 2 +1.0 +53.9 0 0 0 +0.6 0 +33.3 0 +35.4 +2.2 +137. 9 +2.3 +159.8 0 0 0 0
* All dwelling unit data were revised as of Jan. 31, 1953; data through May 1952 were estimated.
2 Data reflected here begin Apr. 23,1949, except that 91 units approved under sec. 203 prior to Public Law 52 are included.
Source: Office of the Administrator, Housing and Home Finance Agency.
102
OFFICE OF THE ADMINISTRATOR
Table 20.—The prefabricated housing lending program: 191/6-53 [In thousands of dollars]
Period Lending authority Outstanding principal balance Judg -ments receivable Loan commitments undisbursed Funds still remaining Loan commitments (net) Loan disbursements Repayments Charge-offs
1953, December 1951 1952 1953 1952— 1952, December.... 1953: January February March April May June July August September October November December 1953, November 1952, December Cumulative data beginning 1946 through end of—
51,980 8,139 4,770 6, 872 32,199 58, 510 51,638 35,355 tea r 3,374
Annual data
+24, 804 -367 -9, 789 +8, 508 -21,081 -1,203 0 +4, 548 +222 -7,115 -1,649 +3, 841 +13,846 +17,815 -12, 647 +4, 275 +3, 334 +12, 678 +11,390 +4,983 +8,837 +2,881 + 18,152 +9, 811 0 +3,365 +9
Percent change 1953 from—
XX XX -95.1 XX XX +280. 3 +77.3 -46.0 -99.7
Cumulative monthly data beginning 1946 through end of—
61, 769 61, 766 63, 738 61, 724 61, 723 61, 699 61,690 1 52,457 52, 457 52, 401 52, 406 52, 388 51,980 9,344 8, 658 8,505 8,370 8, 250 7,858 8,102 7,810 8, 943 9,245 9,242 8,670 8,139 4, 548 4,548 4, 548 4,548 4,548 4,548 4,548 4, 761 4, 761 4, 761 4, 779 4, 770 4,770 3,031 2,735 3, 010 7,019 6,798 6, 721 5, 854 9, 826 8, 539 7,893 7, 715 7,332 6,872 44,846 45,825 45, 675 41, 787 42,127 42, 572 43,186 1 30,060 30, 214 30, 502 30, 670 31, 616 32,199 45,832 46, 228 46, 736 50, 994 51, 041 51, 077 50, 737 58, 927 58,946 58,954 58,988 58,865 58, 510 42, 801 43, 493 43, 726 43, 975 44, 243 44, 356 44, 883 49,101 50,408 51, 061 51, 273 51, 533 51, 638 25, 544 26,923 27, 308 27, 693 28.080 28, 585 28, 868 33,166 33, 339 33, 690 33,887 34, 719 35, 355 3,365 3,365 3, 365 3. 365 3,365 3, 365 3, 365 3, 365 3, 365 3,365 3, 365 3, 374 3,374
Percent change end of December 1953 from—
-0.8 -15.8 -6.1 -12.9 0 +4.9 -6.3 +126. 7 +1.8 -0.6 -28. 2 +27. 6 +0.2 +20.6 +1.8 +38.4 0 +0.3
1 As of June 30,1953, the total lending authority was limited to refinancing existing loans or honoring commitments outstanding; also, statutory authority under sec. 102a expired, leaving the sec. 102a lending authority equal to the sum of outstanding principal balance and commitments undisbursed.
Source: Office of the Administrator, Housing and Home Finance Agency.
103
HOUSING AND HOME FINANCE AGENCY
Table 21a.—Veterans Administration, summary of home-loan guaranty operations: 1944-53
V “^32 § 88§§8888§ §8 88 §8 88 88
11 principa amount i end of per ($000) l T—< §§§§§§§§§ ci OO O CO CO s S§ 88 88 88 88 t-ToO- C»O' W05 M-T >00 :
■lip 1 11, 533, 918 SgfSWsSM t—< r—1 r—< CN T“< r-4 CN O 22 + 1 §3 88 §8 §g gg gg gf
1 clILlOUllL First ■usr 20, 967, 312 ^8§°822§§ 5S +1 gg §g Is ss gg gg gg gg g W
1. 11 a O jui uiuipa Total ($000) x 21, 544, 323 CO CN 22 + 1 23 22 §8 3g g g| g g
w ; 4 data from June 1944 through 2, 783, 538 ! I 1 sg 28 r—< 82 82 2S Mi i¥- f* «
Total2 3, 916, 355 gsagmgs) p 3 T-< O i ! 1 82 IS sg Ss gg fg gg gg
Units In assignments: proposed homes € !-!■! OO CN w § 28 df §¥ §¥
fl requests: proposed homes 3 € gs r-4 O +? ££ 8 88 S3 €< SS
i li New and proposed homes 2 € eeeesOiss *? gg a§ gg 8g gg gg gf
£ Total i 3, 440, 230 sfOHsSBfg +7 S§ §§ gg sE ® S3 g£ £s‘ gg
Period : : : g i : h 1 1 mH : : : : : : : I : : Hi!: mH: Hill : : : : : iiOi ■ i : i : : : H H H H H : : : : : : ; : : : H ! i H H H H H H : : H Ji Ji Ji Ji Ji .il.il.il.il.il S S g g i
1 Includes applications for existing home loans and for alteration and repair, not shown separately. 3 Partially estimated. 2 Includes second mortgage loans not shown separately 4 Includes primary loans closed under Sec. 501 and refinanced loans closed under Sec. 507. > Cumulative data reflect revisions not shown in annual data. » Not available. 2 Program authorized in June 1944; all 1944 activity included in 1945 data. « All-time high. ’Applications for second mortgage loans were terminated Oct. 20, 1950. '"Estimated by FRB
11 Semiannual high was 254,084 loans during first 6 months 1947.
Source; Veterans Administration,
104
OFFICE OF THE ADMINISTRATOR
Table 21b.—Characteristics of Veterans Administration loans closed: 19^8-53
Period First mortgage home loans closed—Sec. 501 Purchase price distribution of new and proposed homes 3
Number Percent
Total number 1 New and proposed construction Existing homes Less than $7,000 $7,000 to $9,999 $10,000 and over Less than $7,000 $7,000 to $9,999 $10,000 and over
Annual data
1948 3 256,000 108,000 142,000 24,000 46,000 38,000 22.2 42.6 35.2
1949 177, 765 83,880 89,619 17,116 41,302 25,462 20.4 49.2 30.4
1950 373,764 208,893 4160,176 4 34,437 126,052 48,404 16.5 60.3 23.2
1951 4 413,785 4 286,475 122,854 16, 721 4140,659 129,095 5.8 49.1 45.1
1952 306,008 192, 203 109, 496 9,047 68, 654 115,182 4.7 35.6 59.7
1953 321, 981 202, 897 115, 221 4,155 56,631 4142,148 2.0 27.9 70.0
Percent change, 1953 from—
1952 +5.2 +5.6 +5.2 -54.1 — 17. 5 +23 4 XX XX
1951 -22.2 -29.2 -6.2 -75.2 -59.7 +10.1 XX XX XX
Semiannual data
1948:
1st half 162, 400 69,300 4 90, 400 16, 500 30, 500 22 300 23.8 44 0 32 2
2d half 93i 600 38, 700 51, 600 7, 500 15, 500 15, 700 19.4 40.1 40.6
1949:
1st half 72, 255 33,360 37,011 6,131 15,407 11,822 18.4 46 2 35 4
2d half . 105i 510 50, 521 52, 608 10; 985 25,895 13,640 21. 7 51.3 27.0
1950:
1st half 156, 746 81, 453 73,090 16,034 48,051 17,368 19. 7 59 0 21 3
2d half 4 217,018 127, 440 87,086 1 18,403 78,001 31 036 14.4 61.2 24.4
1951:
1st half . __ _ 212, 683 140, 881 69, 623 10,131 4 78,443 52,307 7.2 55 7 37 1
2d half 201,102 4 145', 594 53; 231 6, 590 62, 216 4 76, 788 4. 5 42.7 52.7
1952:
1st half 160,862 102,477 56,162 5,308 38, 310 58 859 5.2 37 4 57 4
2d half 145i 146 89, 726 53,334 3, 706 30,124 55,977 4 1 33 5 62 3
1953: 1st half. 155,140 98, 694 54,151 3,000 30 088 65 647 3 0 30 5 66 5
2d half 166; 841 104;203 61,070 1,155 26, 543 76; 501 1.1 25; 5 7X4
1 Includes loans for alteration and repair, not shown separately in this table.
2 Prior to 1952, sec. 501 loans only are shown. Beginning 1952, data also include secs. 505 and 507 (less than of 1 percent of the total).
* Estimated.
4 All-time high.
Source: Veterans Administration.
105
HOUSING AND HOME FINANCE AGENCY
Table 22.—Summary of the farm housing program under Public Law 171: 1949-53
Applications Number of individuals receiving aid Dollar volume of loans and grants obligated
Period Received during period On hand at end of period Total Building loans Land loans 1 Repair grants s Total ($000) Building loans ($000) Land loans ($000) Repair grants ($000)
Cumulative from July 15,1949 through December—
1953 68,181 5,077 19,082 18,401 (648) 681 (108) 94,356 92,690 1,302 364
During the calendar year
1950 ‘ 29, 588 15,300 13, 566 9,727 9,434 8, 778 6,681 5,068 6,422 4,850 (253) 259 (51) 29,215 23,899 28,730 23,412 347 138
1951 (186) 218 (33) 368 119
1952 6,995 5,077 4, 787 4,600 (194) 187 (23) 26.150 25,498 15,050 554 98
1953 2,546 2,529 (15) 17 (1) 15,092 33 9
During the fiscal year
1950 21,747 11,807 9,094 9, 250 7,877 3,956 3,791 (147) 165 (32) 17,316 17,042 188 86
1951 14, 805 15, 584 11,065 5,396 4,214 3,416 5,154 (193) 242 (37) 24,236 23,751 355 130
1952 4,053 (181) 161 (29) 20, 876 20,364 422 90
1953 3,303 (127) 113 (10) 19,352 18,957 337 58
Semiannual data
1950:
1st half3 21, 747 11,807 3,956 3,791 (147) 165 (32) 17,316 17,042 188 86
2d half 7,841 9,434 2,725 2,631 (106) 94 (19) 11,899 11, 688 159 52
1951:
1st half 6,964 8, 336 9,094 8,788 2,671 2,397 2,523 2,327 (87) 148 (18) 12,337 12,063 196 78
2d half (99) 70 (15) 11,562 11,349 172 41
1952: (82) 91 (14)
1st half 7,248 6,318 9, 250 6,995 1,817 1,726 9,314 9,015 250 49
2d half 2,970 2,874 (112) 96 (9) 16,836 16,483 304 49
1953:
1st half 4,747 4,980 7, 877 446 429 (15) 17 (1) 2,516 2,474 33 9
2d half 5,077 2,100 2,100 (0) 0 (0) <12,576 12,576 0 0
1 Each individual received also a building loan.
1 Figures shown without parentheses indicate number of individuals who received a repair grant only. Figures shown in parentheses indicate number of individuals who received both a repair grant and a building loan.
’ The Farm Housing program was approved under Public Law 171 on July 15, 1949; all 1949 data are included in the first half of 1950.
4 Funds authorized for loans and grants during the fiscal year ending June 30, 1954, totaled $16.8 million; the unused authorization at the end of December 1953 amounted to $4.1 million.
Source: U. S. Department of Agriculture, Farmers Home Administration.
106
OFFICE OF THE ADMINISTRATOR
Table 23.—HHFA programs in the Federal budget
[This table presents a brief analysis of the portion of the overall Federal budget expenditures attributable to HHFA programs. Budgetary expenditures of the Government for the fiscal year 1953 were $74 billion, of which $384.6 million were attributable to HHFA programs. It will be noted that the bulk of the expenditures was for the acquisition of assets. Disposition of these assets in later years will result in the return of funds to the Treasury]
Receipts and expenditures for fis-
cal year 1953 (thcu-
Acqusition of assets: Use of funds by HHFA sands of dollars)
Purchase of mortgages 1________________________________________________________ $585, 709
Less sales and repayments 1________________________________________________ 157, 203
-------- $428, 506
Loans and advances to local governments 2______________________________________ 945,001
Less repayments____________________________________________________________ 933,192
--------11,809
Loans for production and sale of housing 2___________*_________________________ 24, 766
Less repayments____________________________________________________________ 17, 672
--------7,094
Collateral on insurance claims 4----------------------------------------------- 52,882
Less recoveries on sale of collateral______________________________________ 10,944
--------41,938
Construction of public defense housing__________________________________________________ 28. 638
Total acquisition of assets___________________________________________________________ 517. 985
Grants-in-aid to local governments 5________________________________________________________ 36,132
Expenses:
Administrative__________________________________________________________________ $27. 838
Nonadministrative_______________________________________________________________ 30,294
Payments direct to Treasury 8___________________________________________________ 4,224
FNMA fees to servicing agents___________________________________________________ 11,068
FHA participation dividends to mortgagors_______________________________________ 8, 064
Other____________________________________________________________________________ 2,026
Total expenses_______________________________________________________________________ 83, 514
Total applied to operations_______________________________________________________________ 637, 631
Source of funds
Receipts from disposition of property 7_____________________________________________________ 10,666
Operation of Public War Housing projects___________________________________________ $63,152
Less operating expenses________________________________________________________ 27,837
---------35,315
Interest on mortgages, loans and other investments_________________________________ 126,930
Less interest on borrowings 8__________________________________________________ 80,237
--------- 46,693
Fees and premiums ’_________________________________________________________________________ 126,818
Miscellaneous_______________________________________________________________________________ 33, 554
Total provided by operations______________________________________________________________ 253,046
Recapitulation
Total funds applied to operations________________________________________________________________ 637, 631
Less total funds provided by operations__________________________________________________________ 253,046
Net budgetary expenditure____________________________________________________________ 384, 585
Effect on United States Treasury
Funds provided by Treasury:
Net borrowings from (or guaranteed by) Treasury_______________________________$441,347
Appropriation_________________________________________________________________ 104, 486
Total funds provided by Treasury_____________________________________________________ 545,833
Funds provided to Treasury:
Dividends and repayment of appropriations______________________________________ $84, 535
Investment of insurance reserves in United States bonds____-___________________ 67, 450
Net increase in Treasury cash__________________________________________________ 9, 263
Total funds provided to Treasury____________________________________________________ 161,248
Net budgetary expenditures__________________________________________________________ 384, 585
i FNMA operations account for most of this item.
2 The 2 most important components of this item, in order of importance, are financing of low-rent housing under the United States Housing Act and loans for slum clearance and urban redevelopment.
3 These loans are made under the Alaska, prefabricated, and college housing loan programs. Substantial net repayments under the first 2 programs were outweighted by the heavy disbursements under the growing college housing program.
4 Accounted for by FHA insurance claims, chiefly from Title I Modernization and Improvement Loan Insurance and from Section 608 (multifamily) War Housing Insurance.
5 Consists of the following 3 items: Annual contributions for low-rent housing ($25.8 million), capital grants for slum clearance and urban redevelopment ($7.8 million), and capital grants for defense community facili-lities ($2.4 million).
8 Consists of recoveries from loans and properties under the advance planning programs and World War II public works (Lanham) program, which under existing law are covered directly into miscellaneous receipts of the Treasury.
7 Principally from sale of public war housing constructed under the Lanham Act.
8 Practically all of this item represents payments to U. S. Treasury.
1 About 95 percent of the fees and premiums were in connection with FHA and Federal Savings and Loan Insurance Corporation operations. About $6 million of this item was received to reimburse the Agency for inspection and audit expenses and on account of FNMA commitments to purchase mortgages.
294078—54---9
107
Appendix B
EXECUTIVE MESSAGES AND FEDERAL LEGISLATION AFFECTING HOUSING IN 1953
A. Executive Messages
Upon taking office on March 4, 1953, the new Administrator of the Housing and Home Finance Agency, the Honorable Albert M. Cole, stated that his one instruction from the President of the United States was to make a thorough study of the programs of the Agency and to come up with any appropriate recommendations for more efficient and effective methods for meeting housing problems. On September 12, 1953, the President by Executive Order 10486 provided for the establishment of the President’s Advisory Committee on Government Housing Policies and Programs to be headed by the Housing Administrator as Chairman. The committee was instructed to “make, or cause to be made, studies and surveys of the housing policies and programs of the Government and the organization within the executive branch for the administration of such policies and programs * * On December 14, 1953, the committee transmitted its report to the President.
In his first message to the Congress,1 2 his address on the “state of the Union,” President Eisenhower stated that “housing needs of our people call for intelligently planned programs.” The President also informed Congress in this address that steps would be taken to eliminate controls (some of which had been put into effect because of the Korean emergency) in an orderly manner. He stated that he would recommend the continuance of Federal control over rents in those communities in which serious housing shortages exist—the defense areas—but that in these and all areas the Federal Government should withdraw from the control of rents as soon as practicable. Each legislature should have full opportunity to take over within its own State responsibility for rent control, he said.
In another message to the Congress ’ the President recommended the enactment of legislation to establish a commission on governmental functions and fiscal resources to make a thorough study of grants-in-aid activities and the problems of finance and Federal-State relations which attend them. He stated that the commission should study and investigate all the activities in which Federal aid is extended to State and local governments, whether there is justification for Federal aid in all these fields, and whether there is need for such aid in other fields. Public Law 109, establishing the Commission on Intergovernmental Relations, was a result of this recommendation and was approved by the President on July 10, 1953.
One of the President’s first Executive orders3 established the President’s Advisory Committee on Government Organization to advise him with respect to changes in the organization and activities of the executive branch of the Government which would promote economy and efficiency in the operations of
1 H. Doc. 75, 83d Cong.
2 H. Doc. 114, 83d Cong.
3 Executive Order 10432, 18 F. R. 617.
108
OFFICE OF THE ADMINISTRATOR
the Government. This committee reported to the President on the operations of the Housing and Home Finance Agency, among other agencies, but the report of the committee was not made public. On July 10, the President approved Public Law 108 which established by law the Commission on Organization of the Executive Branch of the Government. This Commission was directed to study the organization and methods of operation of all Federal agencies, except the Judiciary and Congress, to determine what changes should be made to promote efficiency, economy, and improved service in the transaction of the public business.
Reorganization Plan No. 3 of 1953 which was sent to the Congress by the President on April 2, 1953,4 and became effective on June 12, 1953, established a new Office of Defense Mobilization which took over the functions of the National Security Resources Board and the major functions of the Office of Defense Mobilization established by the President by Executive Order No. 10193,. pursuant to the Defense Production Act of 1950, as amended. Effective July 1, 1953, the Office of Defense Mobilization (Defense Mobilization Order 28, later redesignated as Defense Mobilization Order VII-3) outlined its new basic policy on the control of materials and facilities by the use of priorities and allocations authority. Defense Mobilization Order VI1-5, effective October 7, 1953, designated supply and requirements agencies and provided that the Housing and Home Finance Administrator should present supply and requirements information to the Office of Defense Mobilization with respect to housing construction, alteration, and repair, except housing and community facilities owned property under the control of the Atomic Energy Commission, and housing on military reservations.
Further, Executive Order 10475, issued July 31, 1953, provided that the powers and functions conferred upon the President by the Housing and Rent Act of 1947, as amended, exclusive of certain provisions, should be administered by the Office of Defense Mobilization. The order also provided that such functions as consist of granting exceptions to persons engaged in national defense activities from the provisions of Section 4 of the Housing and Rent Act giving preferences to veterans in new housing should be performed in such consultation with the Housing and Home Finance Administrator or his repersentative as the Director of the Office of Defense Mobilization and the Housing Administrator should from time to time jointly determine.
Executive Order 10425, dated January 16, 1953, provided for the extension of time relating to the disposition pursuant to the Lanham Act of certain war housing. On June 19, 1953, Executive Order 10462 delegated to the Housing Administrator the President’s authority in Section 611 of the Lanham Act to extend the time within which any action is required or permitted to be taken by the Administrator or others under the Lanham Act in connection with the disposition of war housing.
B. The Congress and Federal Legislation
1. Housing Amendments of 1953
The Housing Amendments of 1953, Public Law 94, Eighty-third Congress, approved June 30, 1953, increased the FHA mortgage insurance authorization by $1% billion and amended the mortgage insurance provisions of the National Housing Act in a number of respects. Provision was made for repayments by FHA of funds furnished by the Treasury to the FHA. Provisions of law were continued in effect for another year for assistance to the provision of defense
4 H. Doc. 120, 83d Cong.
109
HOUSING AND HOME FINANCE AGENCY
housing and community facilities and services. Public Law 94 also enacted a new formula for determining interest rates on Federal loans for slum clearance and urban redevelopment, college housing, and low-rent public housing, provided for the termination and dissolution of the corporate existence of the Home Owners’ Loan Corporation, and amended other provisions of law with respect to housing and community facilities.
Increase in FHA Mortgage Insurance Authorization
The general FHA mortgage insurance authorization was increased by Section ‘7 of Public Law 94 from $1,900 million to $3,400 million—an increase of $1% billion. This increase allowed the President to make allocations from that amount of additional authorization, from time to time, to the various FHA mortgage insurance programs as needed.
Changes in FHA Mortgage Terms
Discretionary Presidential authority—Section 203 low-cost homes.—Section 3 of Public Law 94 added a new subsection (g) to Section 203 of the National Housing Act to authorize the President to allow more liberal loan-to-value ratios and longer maturities for mortgages insured by the FHA to finance single-family, new homes where the mortgagor is the owner-occupant. The time and extent of any liberalization were to be determined by the President as being in the public interest, taking into account the general effect of the action upon conditions in the building industry and upon the national economy. However, the more liberal terms permitted by the President under this authority could not provide for a mortgage in excess of $12,000 or a maturity exceeding 30 years, and a downpayment of at least 5 percent was to be required.
Maximum mortgage amounts—Section 8 low-cost homes.—Section 8 of the National Housing Act provides FHA mortgage insurance for low-cost homes, particularly in outlying and suburban areas. Section 2 of Public Law 94 increased the mortgage ceilings permitted by Section 8 for mortgages insured under that section. This increase in maximum mortgage amounts was intended to encourage the construction of sound and satisfactory housing at moderate prices in outlying and suburban areas.
Following are the changes made by Public Law 94 in Section 8:
1. The basic maximum mortgage amount (where the mortgagor is the owneroccupant) was changed from $4,750, not exceeding 95 percent of value, to $5,700, not exceeding 95 percent of value. The maximum previously permitted in the law for high-cost areas ($5,600 or $8,000 where also a disaster area) was deleted.
2. The maximum mortgage amount where the builder is the mortgagor was changed from $4,250, not exceeding 85 percent of value, to $5,100, not exceeding 85 percent of value.
3. Section 8 of the Act provided that, in order to take advantage of the amounts permitted for an owner-occupant mortgage, the mortgagor must have paid on account of the property at least 5 percent of its value in cash or its equivalent. Section 2 of Public Law 94 changed this percentage to 5 percent of the Federal Housing Commissioner’s estimate of the cost of acquisition of the property. This amendment was not meant to result in costs being used as a factor in determining maximum mortgage amounts. The amendment was designed to eliminate inequities in certain cases where higher valuation on one of several properties with the same sales prices caused a higher cash payment and therefore a lower mortgage amount than on the other parcels of less value.
110
OFFICE OF THE ADMINISTRATOR
Maximum mortgage amounts—Section 207 rental housing.—Subsection 5(a) of Public Law 94 amended Section 207(c) of the National Housing Act to provide that the maximum amount of a mortgage insured by the FHA under Section 207 (the rental housing provision) should be $2,000 per room (up to $10,000) not exceeding 80 percent of value. The dollar limit was $7,200 per family unit, not exceeding 80 percent of value, if the number of rooms in the project did not equal or exceed 4 per family unit. However, if the number of bedrooms in the project is equal to or exceeds 2 per family unit and the mortgage does not exceed $7,200 per family unit, the mortgage could be in an amount not exceeding 90 percent of value.
This new formula was in place of the previous limitation of $8,100 per family unit (or $7,200 if the number of rooms is less than 4 per family unit) and 90 percent of the value of the property up to $7,000 and 60 percent of the value over $7,000 up to $10,000.
Increase in FHA mortgage maximums in Hawaii.—Section 25(a) of Public Law 94 allowed the FHA Commissioner to permit the maximum amounts of mortgages financing homes in Hawaii to be increased up to, but not exceeding, 50 percent, if he finds that, by reason of higher costs prevailing in the Territory, it is not feasible to construct dwellings in Hawaii without sacrifice of sound standards of construction, design, or livability. The increases allowed in such mortgage amounts were required to be no higher than the Commissioner finds necessary to compensate for the higher costs.
FHA loans in Alaska—Same terms for private lenders as for Alaska Housing Authority.—Section 214 of the National Housing Act was amended by Section 25(c) of Public Law 94 to permit private lenders in Alaska to make certain FHA-insured housing loans on terms equal to those made by the Alaska Housing Authority. By this amendment the FHA Commissioner was authorized to issue to other approved mortgagees the same commitments which are issued to the Alaska Housing Authority in any case where the mortgagor is regulated or restricted by the FHA as to rents, sales and capital structure.
Interest Rates 6—Increase in FHA statutory maximums.—Sections 213, 803, and 908 of the National Housing Act formerly provided that the interest rate on mortgages insured by the FHA under those sections might not exceed 4 percent. Provisions in the Act limiting the maximum interest rate on other FHA-insured mortgages permit FHA to establish interest rates up to 4% percent for rental housing and up to 5 percent for sales housing (6 percent under certain special circumstances). Because of this statutory 4-percent limit in Sections 213, 803, and 908, FHA could not increase by regulation the interest rate on cooperative housing and military and defense rental housing mortgages governed by these sections when the interest rates on mortgages under other FHA programs were increased early in May 1953. To avoid any market discrimination as to these 3 types of housing because of different interest rates, Public Law 94 (Secs. 6 and 10(c)) amended sections 213, 803, and 908 to provide higher maximum statutory rates for the 3 types. In the case of Section 213 cooperative housing mortgages the previous statutory maximum interest rates were increased from 4 percent to 4% percent, except that the statutory maximum for mortgages covering individual housing in FHA cooperative projects was 5 percent. Similarly, the statutory maximums in Sections 803 and 908 (military and defense rental housing) were raised from 4 percent to 4% percent, so that the statutory maximum interest rate for these 2 types of rental housing mortgages was the same as the Section 207 rental housing interest rate maximum.
6 See also Public Law 101, 83d Cong., infra.
Ill
HOUSING AND HOME FINANCE AGENCY
FHA Military and Defense Housing
Extension of Title VIII authorization.—Section 10(a) of Public Law 94 extended for 1 year, until June 30, 1954, the special Title VIII authority of the FHA to insure mortgages on privately financed rental housing for military and civilian personnel assigned to duty at military and AEG installations.
Prevention of “mortgaging out"—Title VIII military housing.—Section 10(b) of Public Law 94 added a new paragraph to subsection 803(b) of the National Housing Act, as amended, requiring the mortgagor under a Title VIII FHA-insured mortgage to agree to certify either (a) that the amount of the actual cost to him of the physical improvements on the property equaled or exceeded the proceeds of the mortgage, or (b) the amount by which the proceeds of the mortgage loan exceeded the actual cost of the physical improvements. In the latter case, the mortgagor would be required to agree to pay, within 60 days after the certification, any excess of the amount of the mortgage loan over the actual cost of the improvements. The excess would be paid to the mortgagee for application to the reduction of the principal amount of the mortgage, thereby reducing the contingent mortgage insurance liability of the FHA. Costs of offsite public utilities and streets and of organization and legal expenses are not considered part of the cost of the physical improvements. Also, the costs borne by the Defense Department for preparing plans and specifications and for improving the site are, of course, not considered as the mortgagor’s costs if they are not passed on to him. This amendment is designed to assure that the mortgagor-sponsors or builders of FHA Title VIII military rental housing have an actual investment in the housing over and above funds borrowed on mortgage security.
Extension of Title IX authorization—The Defense Housing and Community Facilities and Services Act of 1951 established the special Title IX liberal FHA mortgage insurance program to assist private enterprise in providing defense housing programed by the Housing and Home Finance Administrator as needed for military personnel or defense workers in critical defense housing areas. Section 16 of Public Law 94 extended the FHA authority to insure mortgages under Title IX for 1 year—until June 30, 1954.
Termination of certain Title IX commitments.—There were a few cases where FHA has made a commitment to insure a mortgage under Title IX but subsequently, because of changes in defense requirements or other circumstances, there is no longer a sufficient prospective market for the dwelling units in the property covered by such mortgage to avoid a default if the units are completed and the mortgage insured. To avoid larger eventual losses to the FHA if such units were to be placed under construction and completed, Public Law 94 (Sec. 11) authorized the Commissioner, in the interest of conserving the National Defense Housing Insurance Fund, to make such cash payment from that fund to the mortgagor or the mortgagee, or both, in any such cases in exchange for a release of the commitment, as the Commissioner determines to be necessary to reimburse the mortgagor or the mortgagee, or both, for monetary loss resulting from previous expenditures made or obligations incurred in reliance on such commitment.
Mortgage Insurance Funds
Repayments to Treasury.—Pursuant to the provisions of the National Housing Act special funds were created for carrying out the provisions of the various FHA insurance programs. The initial capital required to establish some of the FHA funds was furnished by the Treasury, as also were some of the moneys
112
OFFICE OF THE ADMINISTRATOR
required, during the early years, for administrative expenses. Section 9 of Public Law 94 provided that all of these funds furnished by the Treasury shall be deemed to be an indebtedness to the United States of the particular insurance fund involved. The indebtedness is to be repaid to the Treasury, with simple interest at the rate determined by the Secretary of the Treasury, as rapidly as possible without impairing the solvency of the several insurance funds involved. The amount of repayments to the Treasury, exclusive of the interest to be paid, is estimated to be about $57 million.
Flexibility in use of FHA insurance funds.—Section 8 of Public Law 94 authorized the Federal Housing Commissioner to transfer moneys among the various FHA insurance funds, except the Title I fund which serves the repair and improvement loan insurance program and the Title II mutual mortgage insurance fund. This authority was designed to expedite the repayment to the Treasury of moneys held by some of the insurance funds (as provided in Sec. 7). It will also permit temporary transfers from one fund with a strong cash position to provide moneys to pay maturing debentures payable from another fund temporarily short of cash.
Maturity of FHA Section 207 debentures.—Where there is a default on a rental housing mortgage insured by the FHA under Section 207 of the National Housing Act (the regular FHA mortgage insurance program for rental housing), the insurance claim is paid by the issuance to the mortgagee of FHA’s debentures, which are guaranteed as to principal and interest by the United States. These debentures bear an interest rate which is determined when the mortgage is insured, but which cannot exceed 3 percent annually. Under the former provisions of the law, these debentures mature 20 years from the date of their issuance. Subsection 5(b) of Public Law 94 amended Section 207(i) of the National Housing Act to reduce the term of future FHA debentures issued under that section from 20 years to 10 years.
FHA mutual mortgage insurance fund.—Title II of the National Housing Act provides the basic authority for the regular, permanent mortgage insurance programs of the Federal Housing Administration. One- to four-family home mortgages insured under Section 203 of this Title are administered in connection with the mutual mortgage insurance fund, the first of the mortgage insurance funds created by the National Housing Act, as enacted in 1934.
The fund consists of separate group accounts, and of the general reinsurance account. Depending upon the underwriting ratings and the maturities of the insurance contracts, mortgages which are endorsed for insurance under Section 203 in any calendar year are assigned to 1 of 10 possible group accounts which are established at the beginning of each calendar year. Each group account is credited with the fee and premium income from the mortgages assigned to it, and is charged with the expenses and insurance losses incurred on account of those mortgages.
The general reinsurance account is a secondary reserve to the individual group accounts, providing basic support for the insurance system and furnishing to the Federal Government its major protection against financial loss. Its purpose is to cover any deficits in individual group accounts whose resources are insufficient to meet their own expenses and insurance losses at the maturity of the accounts. The general reinsurance account derives its resources from the individual group accounts. Before the Housing Amendments of 1953, 10 percent of the premiums collected by a group account were earmarked for transfer to the general reinsurance account at the maturity of the group account.
The fund is mutual in the sense that mortgagors whose mortgages are assigned to a particular group account participate in a distributive share of the funds of
113
HOUSING AND HOME FINANCE AGENCY
that group account. Participating shares are payable to mortgagors when a group account is terminated. Insurance for any group account is terminated when (1) the available amounts in the group account are sufficient to pay off the remaining unpaid principal and interest of each mortgage assigned to such group account or (2) when all outstanding mortgages in the group have been paid. Upon such termination, under the law before Public Law 94 (a) the estimated losses arising from transactions relating to the particular group were charged to that account, (b) an amount equal to 10 percent of the total premium charges theretofore credited to such group account was now transferred to the general reinsurance account, and (c) the balance paid out to the mortgagees for the benefit and account of the mortgagors.
Section 4 of Public Law 94 made certain changes in the operation of the mutual fund in order to strengthen the fund. It provided statutory authority for increasing the resources of the general reinsurance account. The changes were as follows:
First: The Federal Housing Commissioner was required to establish a rate for the transfer to the general reinsurance account of not less than 10 percent nor more than 35 percent of the premiums collected hereafter in connection with an individual group account, instead of the previous provision for transferring only 10 percent at the maturity of the group account. However, in order to assure adequate protection to the Government at the earliest practicable time, the Commissioner was further directed to transfer to the general reinsurance account 100 percent of all such future premium charges until such time as he determines that the reserves in the general reinsurance account are sufficient to pay all estimated future deficits among individual group accounts.
Second: The Commissioner was required to transfer that portion of future premiums which is earmarked for the general reinsurance account semiannually after their receipt. With respect to past premiums, the amendment provided for a transfer, as of July 1, 1953, of 10 percent of the premiums theretofore credited to the group accounts. The law formerly provided for the transfer to take place at the maturity of the group account. The earlier periodic transfers of premiums serves to increase the resources of the general reinsurance account not only by making these premiums available sooner, but also by crediting to the reinsurance account, rather than to the group accounts, the income from their investment.
Third: The Commissioner was required to transfer to the general reinsurance " account all premium charges which are collected on account of the prepayment of mortgages, instead of 10 percent of such charges as is now provided. Before these new provisions in Public Law 94, the balance of these prepayment charges was retained in the individual group account and became available for distribution to terminating mortgagors as part of their participating shares. Thus, prepayment charges paid by mortgagors terminating earlier were in part distributed, more or less as a “windfall,” to mortgagors terminating later. This factor, together with the fact that all income derived from the investment of fees and premiums was credited to the group accounts, was largely responsible for the participating shares distributed to the terminating mortgagors being often substantially in excess of the total insurance premiums paid by them. By transferring all the prepayment charges to the general reinsurance account, such “windfalls” will be eliminated. The transfer of the prepayment fees to the general reinsurance account will make them available for the benefit of the entire home mortgage insurance system under Section 203 of the National Housing Act.
114
OFFICE OF THE ADMINISTRATOR
Fourth: The Commissioner was required under the provisions of Public Law 94 to limit the shares distributed to mortgagors so that they will never, under any circumstances, exceed the sum of the premiums paid by them. Any amounts in excess of this statutory limit will be transferred to the general reinsurance acount at the maturity of the individual group account.
Fees and Charges Relating to VA and FHA Mortgages
Section 504 of the Housing Act of 1950 requires the Federal Housing Commissioner and the Veterans’ Administrator to issue regulations limiting charges and fees imposed upon the builder or other seller, or the veteran or other purchaser, in connection with FHA-insured or VA-guaranteed mortgages financing the construction or sale of housing. Section 203 of Public Law 94 added a provision to Section 504 to the effect that the regulations limiting charges and fees shall not be construed to include any loss suffered by an originating lender in the bona fide sale or pledge of or an agreement to sell the mortgage.
FNMA Secondary Market for Housing Mortgages
Advance commitment authority.—The Federal National Mortgage Association’s authority to make advance commitments to purchase military, defense, and disaster housing mortgages was extended by Section 13(a) of Public Law 94 for 1 year—to July 1, 1954.
Section 14 of Public Law 94 made additional FHA Section 213 cooperative housing mortgages eligible for advance commitments to purchase by the Federal National Mortgage Association. Public Law 243, Eighty-second Congress, authorized the FNMA to enter into advance commitments to purchase FHA Section 213 mortgages financing cooperative housing with respect to which the Federal Housing Commissioner had issued, prior to June 29, 1951, a commitment to insure or a statement of eligibility for insurance. Section 14 of Public Law 94 amended Public Law 243 to change the deadline date which makes Section 213 mortgages eligible for advance commitments from “June 29, 1951,” to “September 1, 1953.” This made FHA Section 213 cooperative housing mortgages with respect to which the FHA had issued a commitment to insure or a statement of eligibility for insurance prior to September 1, 1953, eligible for advance commitments from the Association.
In addition, Section 14 of Public Law 94 exempted Section 213 cooperative housing mortgages from the statutory limitation which prohibits FNMA from purchasing mortgages which exceed $10,000 per family dwelling unit in original principal amount. This exemption applies, however, only in the case of mortgages covering housing in which the number of rooms equals or exceeds six for each family unit, and in which the number of bedrooms equals or exceeds three for each family unit.
The amount of advance purchase commitments which the Federal National Mortgage Association was authorized to make under Public Law 243 for Section 213 mortgages is limited to $30 million outstanding at any one time. The law further provides that not more than $3% million of this authorization is available for such commitments in any one State. Approximately $17% million of the authorization under Public Law 243 is unused and was made available for the additional cooperative housing mortgages made eligible by this section of Public Law 94.
Over-the-counter purchase authority.—The Housing Act of 1952 increased the total FNMA authorization by $900 million and limited that additional authorization to defense, military, and disaster mortgages. The limitation appears
115
HOUSING AND HOME FINANCE AGENCY
in the proviso to the first sentence of Section 302 of the National Housing Act. A portion of that additional authorization was estimated not to be needed for defense, military, or disaster mortgages. Subsection 13(b) of Public Law 94 repealed the proviso, thereby freeing approximately $400 million of this $900 million advance commitment authorization for over-the-counter purchases of other VA and FHA mortgages. The total FNMA authorization was not increased by this change.
Purcahse of FHA mortgages on dwellings in Guam or Hawaii.—Section 25(b) of Public Law 94 added a new provision to Public Law 52, Eighty-first Congress, to the effect that any FHA insured mortgages secured by dwellings in Guam or Hawaii may be offered to the Federal National Mortgage Association for purchase. In addition, this provision exempted such mortgages from the $10,000 per family dwelling unit limit, which applies to the principal amounts of other mortgages purchased by the Federal National Mortgage Association.
FNMA 1-for-l sale and purchase provision.—Section 12 made 3 changes in Section 301(a)(1)(E) of the National Housing Act. The first 2 amendments were purely technical and were designed to make it clear that the computation of the 50 percent purchase restriction is based upon the principal amount of the mortgage paid by the FNMA, which excludes any minor adjustments in the purchase price resulting from accrued interest and service charges. The third amendment provided express statutory authorization to the FNMA to enter into contracts, in connection with the sale of its mortgages, to purchase mortgages in amounts not exceeding the amounts being sold. Mortgage lenders will thus .be encouraged to purchase mortgages from FNMA if they know that they will later be able to sell it eligible mortgages. The legislation made 2 basic changes in the 1-for-l plan previously adopted by the FNMA without express statutory provisions. Under the nonstatutory plan the FNMA undertaking to purchase mortgages in the future was not a binding legal contract, and also, the purchases were necessarily subject to the 50 percent statutory limitation. Under the statutory 1-for-l plan, the purchase agreement can be made legally binding, and the 50 percent limitation can be waived by the FNMA. The authority of the FNMA to issue purchase contracts under this section expires July 1, 1954, and the amount of such contracts is limited to a total of $500 million. The purchase contracts will not be transferable without the approval of FNMA.
Government-Constructed Defense Housing, Prefabricated Housing, and Sites in Isolated Defense Areas
The authority in the Defense Housing and Community Facilities and Services Act of 1951 (Public Law 139, 82d Cong.) to provide Government-constructed temporary defense housing in critical defense housing areas was extended by Section 16 of Public Law 94 for 1 year (to June 30, 1954). However, similar authority with respect to permanent defense housing was not extended.
Section 16 of Public Law 94 also amended the Defense Housing Act to provide that after June 30, 1954, no prefabricated housing loan could be made by the Housing and Home Finance Administrator under Section 102a of the Housing Act of 1948, as amended, except where a commitment to make such a loan was issued by the Administrator on or before June 30, 1953, or where an existing loan held by the Administrator on June 30, 1953, is being refinanced.
Section 17 of Public Law 94 was a technical amendment made necessary by a provision in Section 16.
Title IV of the Defense Housing and Community Facilities and Services Act of 1951, which deals with the provision of sites for housing and community
116
OFFICE OF THE ADMINISTRATOR
facilities needed to serve new defense installations in isolated areas, was repealed by Section 19 of Public Law 94. Section 15 was a technical amendment of the Defense Housing Act made necessary by Section 19.
Defense Community Facilities and Services
Section 16 of Public Law 94 extended for 1 year, until June 30, 1954, the Federal aid for community services and facilities in critical defense housing areas provided by Title III of the Defense Housing and Community Facilities and Services Act of 1951. In addition, Section 18 of Public Law 94 added a provision to Section 315(e) of the 1951 act which makes it possible for the Housing and Home Finance Administrator to make a loan or grant to a relocated community when its former site has been requisitioned by the Atomic Energy Commission. New Ellenton, S. C., was cited as an example of a community eligible for such assistance.
Capital Grants for Slum Clearance and Urban Redevelopment
Subsection 106(e) of the Housing Act of 1949 contains a provision that not more than 10 percent of the Federal grants for slum clearance and urban redevelopment authorized under Title I of the Housing Act of 1949 shall be expended in any one State. The total capital grant authorization under that Title is $500 million so that contracts for capital grants entered into with local communities in any one State may not aggregate over $50 million.
Section 22 of Public Law 94 made available $35 million (out of the authorized $500 million) for contracts for capital grants which could be entered into without regard to the 10 percent limitation. However, the section also provided that no State would be eligible for any share of this $35 million unless contracts have been entered into with local public agencies in that State which call for capital grants exceeding two-thirds of the amount which the law presently permits for that State.
Interest Rate Determinations—Federal Loans
Title I of the Housing Act of 1949, as amended, provides for Federal aid in the form of loans and grants to local communities for slum clearance and urban redevelopment. Title IV of the Housing Act of 1950, as amended, provides for Federal loans to colleges for the construction of college housing. The United States Housing Act of 1937, as amended, provides for Federal aid in the form of loans and annual contributions to local communities for low-rent public housing. In the slum clearance and urban redevelopment program and in the low-rent housing program, under the law prior to the enactment of Public Law 94, the interest rate on the Federal loans could not be lower than the annual rate of interest specified in the most recently issued bonds of the Federal Government having a maturity of 10 years or more. In the college housing program, the rate was fixed by law at the annual rate of interest specified in the most recently issued bonds of the Federal Government having a maturity of 10 years or more, plus one-fourth of 1 percent.
Section 24 of Public Law 94 tied the interest rate in each of the 3 Housing Agency programs to a minimum base rate which will—
1. Reflect market yields, instead of interest rates specified in the bonds when issued;
2. Reflect the yield on obligations of the United States having 15 years or more to run to their maturity, instead of the rate on a bond which could have a maturity as low as 10 years;
117
HOUSING AND HOME FINANCE AGENCY
3. Reflect the average yield during a full 1-month period on all outstanding obligations of the United States having 15 years or more to run to their maturity instead of the rate on a single recent issue of bonds;
4. Retain the base rate, once it is specified by the Secretary of the Treasury, for a 6-month period, instead of varying from month to month as new bonds are issued (thus avoiding frequent changes in the applicable interest rate between the time housing or slum clearance loan contracts are first negotiated and the time they are approved) ; and
5. Adjust to the nearest one-eighth of 1 percent.
Under the new provisions, the Secretary of the Treasury determines the minimum base rate for these lending programs by estimating the average yield to maturity based on daily closing market bid quotations during the month of May on all outstanding marketable obligations of the United States having a maturity date of 15 or more years from May 1, and by adjusting the average annual yield to the nearest one-eighth of 1 percent. This determination will be made early in June and will become the minimum rate for these programs on all loan contracts approved during the following half-year period, from July 1 through December 31. A similar determination will be made by the Secretary of the Treasury early each December, based on market quotations during November. The base rate so determined will become the minimum rate for the three programs on all loan contracts approved during the following half-year period, from January 1 through June 30. Except for loan contracts approved before the first minimum rate was specified by the Secretary of the Treasury, the new provisions were first effective during the period July 1 to December 31, 1953.
Savings Provision—Obligations of Builders of Private Defense Housing
A technical provision was added by Section 20 of Public Law 94 to the Defense Production Act of 1950 to preserve obligations of builders of programed defense housing which they entered into when they were given special assistance, including the waiver of real estate credit controls, in the financing and sale of the housing. These builders agreed to hold the defense housing for in-migrant defense workers and military personnel for stated periods (varying from 2 to 4 years) at specified rentals or sales prices.
Dissolution of the Home Owners’ Loan Corporation
Section 21 provided for the termination of the corporate existence of the Home Owners’ Loan Corporation 180 days after the Home Loan Bank Board published a notice to that effect in the Federal Register. Provision was made for the filing of claims against the Corporation and for the Home Loan Bank Board to handle any remaining activities of the Corporation with respect to the execution of instruments or documents affecting title to real estate, satisfactions of liens or judgments in favor of the Corporation, or similar matters. The Board was authorized to delegate its functions with respect to the Corporation to any other Federal agency if the Bureau of the Budget approves.
2. FHA Title I Amendment (Home Modernization and Repair Loan Insurance)
Public Law 5, approved March 10, 1953, amended Title I of the National Housing Act to increase FHA Title I home modernization and repair loan insurance authorization by $500 million—from $1,250 million to $1,750 million. Section 2(a) of the National Housing Act was modified to make it clear that
118
OFFICE OF THE ADMINISTRATOR
the new dollar limitation governing the Title I insurance authorization refers to the aggregate of loan amounts advanced to borrowers exclusive of financing charges.
Public Law 5 also provided for the repayment to the Treasury on or after July 1, 1953, and before June 30, 1954, of the $8.3 million Government investment in the FHA Title I Fund.
3. Low-Rent Public Housing
The First Independent Offices Appropriation Act, 1954, Public Law 176, approved July 31, 1953, provided that the Public Housing Administration should not, with respect to low-rent public housing projects initiated after March 1,. 1949, (1) authorize during fiscal 1954 the commencement of construction of in excess of 20,000 dwelling units or (2) after the date of approval of the act enter into any new agreements or other arrangements which would bind the PHA. during fiscal 1954 or for any future years with respect to loans or annual contributions for any additional dwelling units unless thereafter authorized by Congress.
Public Law 176 also provided that during fiscal 1954 the Housing and Home Finance Administrator should make a complete analysis and study of the low-rent public housing program and, on or before February 1, 1954, transmit to the Appropriations Committees of Congress his recommendations with respect to the program.
Provisions were enacted by Public Law 176 to govern procedures by the Public Housing Administration and local housing authorities where low-rent public housing projects have been disapproved by local referenda after contracts have been entered into with the Public Housing Administration.
Previous provisions of fiscal year appropriations were reenacted by Public Law 176 requiring the occupants of low-rent public housing to be citizens of the United States (except for servicemen or veterans) and prohibiting the occupancy of low-rent public housing by a person who is a member of an organization designated as subversive by the Attorney General.
The Public Housing Commissioner was required by Public Law 176 during fiscal 1954 to make every effort to refund all local housing authority bonds held by the Public Housing Administration under the United States Housing Act of 1937. In addition, the record of expenditure of PHA and local housing authorities on any public housing project was required to be open to examination by responsible local authorities in the community, by the local housing authority, or by any firm of public accountants retained by either of the foregoing.
4. Liquidation of Housing Research Program
Public Law 176, Eighty-third Congress, approved July 31, 1953, the First Independent Offices Appropriation Act, 1954, provided that not to exceed $125,000 should be available to the Housing Administrator for liquidation of the housing research program not later than April 30, 1954.
5. Office of Assistant Commissioner for Cooperative Housing Abolished
The First Independent Offices Appropriation Act, 1954, Public Law 176, Eighty-third Congress, approved July 31, 1953, provided that the position of Assistant FHA Commissioner for Cooperative Housing established pursuant to Section 213(f) of the National Housing Act, as amended, was no longer authorized.
119
HOUSING AND HOME FINANCE AGENCY
6. Slum Clearance and Urban Redevelopment
Provisions were included in the First Independent Offices Appropriation Act, 1954, Public Law 176, Eighty-third Congress, approved July 31, 1953, that before approving any local slum clearance program under Title I of the Housing Act of 1949, as amended, the Housing Administrator should give consideration to the efforts of the locality to enforce local codes and regulations relating to adequate standards of health, sanitation, and safety for dwellings and to the feasibility of achieving slum clearance objectives through rehabilitation of existing dwellings.
A provision was also included in the same law that authority under Title I of the National Housing Act for the insurance by the Federal Housing Administration of home modernization and repair loans should be used to the utmost in connection with slum rehabilitation needs.
7. Lanham Act Projects
The First Independent Offices Appropriation Act, 1954, Public Law 176, Eighty-third Congress, approved July 31, 1953, authorized the Housing Administrator to transfer without reimbursement any Title II Lanham Act project (World War II community facilities) to other Federal agencies whenever the head of such agency so requests after determining that such facility is required for the continued operation of or is an integral of a project under the jurisdiction of that agency.
8. Disposition of Specific Housing Projects
Public Law 112 (H. R. 4978), approved July 13, 1953, repealed Public Law 868, Eighty-first Congress, which law authorized the conveyance to the State of Iowa, without consideration, of all right, title, and interest of the United States in lands and improvements located in Polk County, Iowa, and known as Fort Des Moines. The conveyance would have been made subject to the continued use by the City of Des Moines of veterans’ housing projects IOWA-V-13140, V-13077, and VN-13115 so long as they may be needed for veterans’ housing purposes.
Public Law 155 (S. 122), approved July 28,1953, directs the conveyance by the Secretary of the Interior, without consideration, to the city of Rupert, Idaho, all right, title, and interest of the United States to certain lands described in the act. The conveyance is to be subject to the continued use, without payment of ground or other rental therefor, of veterans’ temporary housing project IDA-V-10147, for so long as the project may be needed. The terms of contract between the United States and the city of Rupert for such project are not to be affected by the transfer. The conveyance is to be considered a purchase of the land for the purpose of and within the time limitation prescribed in Title VI of the Lanham Act for relinquishment and transfer of such housing projects without consideration under Section 601(b) of that Act. The lands conveyed are to be used for public purposes only.
Private Law 94 (H. R. 233), approved July 27, 1953, released all right, title, and interest of the United States in and to all fissionable materials in certain land located in Marion County, Indiana. (This land was acquired by the United States in 1942 in connection with war housing project IND-12101, but at the conclusion of hostilities was reconveyed to the former owner subject to entry by the United States for removal of any fissionable materials.)
Public Law 247 (H. R. 6354), approved August 8, 1953, authorized the Coast Guard to accept from the Department of the Navy, without reimbursement, the 50-unit defense housing facility at Cape May, N. J., and to operate this housing
120
OFFICE OF THE ADMINISTRATOR
for the use of Coast Guard and Navy personnel. These housing units were originally built under the Lanham Act for use by Navy personnel.
9. Veterans’ Preferences
Public Law 98, Eighty-third Congress, approved June 30,1953, amended Section 503 of the Lanham Act to clarify the authority of the Housing and Home Finance Administrator to give after July 1, 1953, to any Korean war veteran whose service commences after that time, the same preference for admission to housing provided under Title V of the Lanham Act as is given to veterans of World War II and to Korean war veterans whose services commenced before that time. This amendment was necessitated by the expiration on July 1, 1953, of certain powers under the Emergency Powers Continuation Act (Public Law 45, 82d Cong.) as amended by Public Law 12, Eighty-third Congress. Public Law 98 also amended the Bankhead-Jones Farm Tenant Act and Section 507 of the Housing Act of 1949 to include Korean veterans among the veterans entitled to certain preferences in connection with Federal aid to farm housing.
The Housing and Rent Act of 1953, Public Law 23, Eighty-third Congress, approved April 30, 1953, continued until April 30, 1954, the provision in the Housing and Rent Act of 1947, as amended, requiring preference to veterans in the sale or rental of new houses.
10. Veterans’ Home Loans
Public Law 101, Eighty-third Congress, approved July 1, 1953, extended for 1 year—until June 30, 1954—the direct home loan program for veterans and provided an additional $100 million authorization for such loans to be made available at the maximum rate of $25 million per calendar quarter.
The Servicemen’s Readjustment Act of 1944, as amended, was also amended to change the maximum interest rate permitted by statute for direct home loans to veterans from 4 per centum per annum to the same maximum rate prescribed by the Veterans’ Administrator for guaranteed home loans. The provisions of that Act governing the maximum rate which can be prescribed by the Veterans’ Administrator for guaranteed home loans permit it to be as high as 4% per centum per annum. Public Law 101 amended this provision to make it clear that the Veterans’ Administrator can adjust this maximum below as well as up to 4% per centum.
The Second Independent Offices Appropriation Act, 1954, Public Law 149, Eighty-third Congress, approved July 27, 1953, provided that from September 1, 1953, to June 30, 1954, no part of any appropriation to the Veterans’ Administration should be available in connection with any veteran’s home loan made, insured, or guaranteed under Title III of the Servicemen’s Readjustment Act of 1944, as amended, for the payment of the gratuity authorized by that act equivalent to 4 per centum of the amount originally loaned, guaranteed, or insured by the Veterans’ Administration. The provision did not apply with respect to payments based on guarantees made, or certificates of commitments issued prior to September 1, or commitments for loans made by the Veterans’ Administration.
11. Real Estate Credit Controls—Priorities and Allocations
The Defense Production Act Amendments of 1953, Public Law 95, Eighty-third Congress, approved June 30, 1953, amended and extended for 2 years the priorities and allocations powers of the President under Title I of the Defense Production Act of 1950 (until June 30, 1955). The definition of the term “national defense” in the Defense Production Act was amended to mean “programs for
121
HOUSING AND HOME FINANCE AGENCY
military and atomic energy production or construction, military assistance to any foreign nation, stockpiling, and directly related activity.”
The authority in Title VI of the Defense Production Act for real estate credit controls was allowed to expire as of June 30, 1953.
12. Rent Control
The Housing and Rent Act of 1953, Public Law 23, Eighty-third Congress, approved April 30, 1953, allowed Federal rent controls to expire July 31, 1953, except that the expiration date was extended to April 30, 1954, in critical defense housing areas. The criteria for certification of critical defense housing areas were amended. Provision was made that an area must be determined to fall within the modified criteria if rent control were to continue within the area after July 31, 1953. The Office of Rent Stabilization was ordered to be terminated not later than July 31, 1953. Authorization was given to the President to designate any officer or agency of the Government to administer rent controls.
Public Law 24, approved April 30, 1953, extended rent control in the District of Columbia to July 31, 1953.
13. Federal Loans to State or Local Public Agencies
Public Law 163, Eighty-third Congress, approved July 30, 1953, authorized the President, through such agency as he might designate, to make loans to State and local agencies, and public corporations, boards and commissions to aid in financing public projects. Appropriations of $25 million were authorized for these loans. The authority terminates at the close of June 30, 1955.
14. Disaster Loans
Title II of Public Law 163, Eighty-third Congress, approved July 30, 1953, authorized the Small Business Administration to make loans (among others) necessary because of floods or other catastrophes, including loans for the acquisition or construction of housing for the personal occupancy of the borrower. The loan authority of the Administration terminates June 30, 1955.
15. Federal Aid to Schools
Public Laws 246 and 248, approved August 8,1953, amended and extended Public Laws 815 and 874 (81st Cong.). Public Law 815 provides Federal assistance to school construction and Public Law 874 provides assistance to the maintenance and operation of schools. The assistance is available to schools in federally affected areas.
16. Relief of Ruth D. Crunk
Public Law 41, Eighty-third Congress, approved May 27, 1953, directed the Secretary of the Treasury to pay to Ruth D. Crunk, widow of Tim D. Crunk, $5,000 in full settlement of all claims against the United States for the death of her husband as the result of burns sustained in a fire in a war housing project in Evansville, Indiana.
17. Emergency Powers Continuation
Public Law 12, approved March 31, 1953, continued to July 1, 1953, certain emergency powers which would have been rendered inoperative upon the termi-nation of the war or of the emergencies proclaimed in 1939 and 1941. Included among powers continued was the authority to continue operation or reactivation of existing Lanham Act housing and the use of leased property. Veterans hous
122
OFFICE OF THE ADMINISTRATOR
ing benefits under Title V of the Lanham Act were also extended to persons serving in the Armed Forces prior to July 1, 1953. (See also Public Law 98, supra, under “Veterans’ Preferences”.)
18. Investigations
In addition to the full-scale general investigation of the Government’s housing programs and operations carried on by the Housing Administrator and the President’s Advisory Committee on Government Housing Policies and Programs, other investigations relating to housing were authorized by Congress or carried on by Congressional Committees.
In January 1953 the Senate Banking and Currency Committee met with representatives of the Government agencies directly concerned with mortgage financing to discuss the mortgage interest rate problem.
The Subcommittee on Housing of the House Committee on Veterans’ Affairs held hearings in Oklahoma City and San Antonio in December 1953, to ascertain information concerning the availability of guaranteed housing loans in the Southwest.
Public Law 108, approved July 10, 1953, established the Commission on Organization of the Executive Branch of the Government to study and investigate the organization and methods of operation of all Federal agencies.
Public Law 109 established the Commission on Intergovernmental Relations to: (1) Study and investigate all of the present activities in which Federal aid is extended to States and local governments, the interrelationships of the financing of this aid, and the sources of the financing of governmental programs; (2) determine and report whether there is justification for such Federal aid in the various fields in which it is extended, whether it should be cut off, limited, or increased; (3) determine whether such aid should be extended in other fields not now covered; and (4) determine the ability of the Federal Government and the States to finance such activities.
A special subcommittee of the House Committee on Government Operations held hearings in Los Angeles in May 1953, on public housing activities in Los Angeles and issued a preliminary report on June 5, 1953.
The third annual report of the activities of the Joint Committee on Defense Production together with materials on national defense production and controls was issued as a “Committee Print” on October 20, 1953. The report of the Housing and Home Finance Agency on its activities under the Defense Production Act appears in this report, along with the reports of other Federal agencies performing functions under the Act.
19. Appropriations
Public Law 91, approved June 30, 1953, provided temporary appropriations for the Housing and Home Finance Agency pending enactment of the First Independent Offices Appropriation Act, 1954. The latter* law, Public Law 176, approved July 31, contained the fiscal year 1954 appropriations for the Agency. The Supplemental Appropriation Act, 1954, Public Law 207, approved August 7, 1953, provided that in addition to amounts appropriated for salaries and expenses of the Office of the Administrator, the Administrator might transfer to the appropriation for salaries and expenses from any other funds available for administrative expenses not to exceed $50,000 for the Administrator’s study of the housing policies and programs of the Government.
Appropriations for Federal aid to school construction, and the maintenance and operation of schools were provided in the Second Supplemental Appropriation Act, 1953 (Public Law 11, approved Mar. 28), the Departments of
294078----54—10
123
HOUSING AND HOME FINANCE AGENCY
Labor and Health, Education, and Welfare Appropriation Act, 1954 (Public Law 170, approved July 31), and the Supplemental Appropriation Act, 1954 (Public Law 207, approved Aug. 7).
20. Recissions of Appropriations
The First Independent Offices Appropriation Act, 1954, reduced by $17^ million funds previously appropriated for defense housing, by $5 million appropriations for Alaska housing, and by $4.6 million appropriations for advance planning of non-Federal public works. Public Law 170, the Departments of Labor and Health, Education, and Welfare Appropriation Act, provided that the balance of the amount appropriated under section 101 of Public Law 815, Eighty-first Congress (the “School Construction Act”) in the Supplemental Appropriation Act of 1951 which was unexpended on December 31, 1953, should be rescinded.
124
Appendix C
PUBLICATIONS OF THE HHFA
A. Office of the Administrator
Unless otherwise indicated, the following publications are available without charge from the Housing and Home Finance Agency, Washington 25, D. C.
Annual Report.—Sixth Annual Report of the HHFA covering calendar year 1952. Available from Government Printing Office, Washington 25, D. C., $1.
Housing and Home Finance Agency; Its Organisation and Functions.—The organization of housing agencies in the HHFA and their respective functions.
List of Selected Publications.—A short list of representative HHFA publications.
Psychological Objectives in Hot Weather Housing—Principles of housing for typical hot climates. Available from Government Printing Office, Washington 25, D. C. 45$.
Recommendations on Government Housing Policies and Programs—A Report of the President’s Advisory Committee on Housing Policies and Programs.—Background information and recommendations on Government housing activities. Available from Government Printing Office, Washington 25, D. C., $1.
Slum Prevention Through Conservation and Rehabilitation.—Exhibit 2 of the Report of the President’s Advisory Committee on Housing Policies and Programs.
Publications of the Housing and Home Finance Agency.—List of publications prepared by Office of the Administrator, Federal Housing Administration, Home Loan Bank Board, and Public Housing Administration.
Reading List of Housing in the United States.—List of Government and nonGovernment publications, by agency and subject matter. Available from Government Printing Office, Washington 25, D. C., 15$.
Readings for the Prospective Home Owner.—List of Government and nonGovernment publications on buying, building, and planning homes.
Semi-Annual Report of the Federal National Mortgage Association.—Summary of activities of the FNMA issued semiannually.
Government Guaranteed Real Estate Mortgage Loans Covering Individually Owned Homes and Rental Housing Developments.—Mortgages insured by the FHA or guaranteed by the VA and owned by the Federal National Mortgage Association, available for sale, on a state basis by sections of acts.
Application of Climatic Data to House Design.—A series of six reports designed to help architects, engineers, and housing consultants to use available weather data in the planning of more comfortable, convenient, and economical structures. Available from Government Printing Office, Washington 25, D. C., 75$.
Basic Principles of Modular Coordination.—A textbook for students, as well as a guide for architectural and engineering draftsmen in applying the principles of modular coordination to working drawings. Government Printing Office, Washington 25, D. C. 25$.
Construction Aid Series.—Publications directed toward more economical building. (Available from Government Printing Office, Washington 25, D. C., at prices indicated.)
No. 4. Plank-and-Beam System For Residential Construction. 45$.
125
HOUSING AND HOME FINANCE AGENCY
Construction Financing For Home Builders.—A simple, comprehensive guide for homebuilders to the practical aspects and procedures of financing new single-family houses. Government Printing Office, Washington 25, D. C. 700
Housing Market Analysis—A Study of Theory and Methods.—Factors influencing the size and characteristics of local housing markets are examined in this monograph. Government Printing Office, Washington 25, D. C. 500.
Housing Research.—A quarterly publication of HHFA in which results of research activities are reported. (Single copies available from Government Printing Office, Washington 25 D. C., at prices indicated.)
No. 5. March—1953 : 400.
Is Your Roof Construction Leaking Dollars?
Selection of Durable Exterior White House Paints.
New Home Price Shifts, 1951-52 Under Credit Controls as Amended in 1951.
The Fully Insulated House.
Better Building Codes Through ^Better Administration.
A Practical Money and Materials Saver for the House Builder: Chimney Location.
Saving Copper on House Wiring: Part II—Fixed Appliance Circuits.
Housing Research Publications.
No. 6. October—1953: 350.
Mobility and Migration as Factors in Housing Demand.
Humidity Conditions in Modern Houses.
Clear-Span Roof Trusses for One-and-One-Half Story Houses.
A Program for Local Training of Building Officials.
Highlights of Outstanding Residential Mortgage Debt Analysis. Housing Research Publications.
Housing Research Papers.— (Available from Government Printing Office, Washington 25, D. C., at prices indicated).
No. 21. Structural Properties of Light-Gage Tubular Columns. Factual data on the behavior and safe load-carrying capacity of light-gage tubular columns (both hollow and concrete-filled) suitable for the light loads used in dwelling construction. 250.
No. 25. Relation of Shrinkage to Moisture Content in Concrete Masonry Units. The first of a series of investigations relative to the reduction of shrinkage cracking of concrete masonry-unit construction. 200.
No. 26. Design Data for Some Reinforced Lightweight Aggregate Concretes. One of a series of investigations concerning improvement of the quality and economy of construction with lightweight aggregate concretes. 150.
No. 27. Financing the Construction of Prefabricated Houses. Case studies and summary analyses showing how Midwest manufacturers and dealers have financed the erection of prefabricated houses. 400.
Housing Research Reprint Series.—Articles previously published in Housing ’ Research. (Available from Government Printing Office, Washington 25, D. C., at prices indicated.)
No. 15. Durability of Moisture-Resistant Membrane Material in Contact With the Ground. A summary of recent research on the durability of roofing felt and roll roofing when used as waterproofing membranes. 50.
126
OFFICE OF THE ADMINISTRATOR
Housing Statistics.—A monthly publication of statistics relevant to housing.
Local Development and Enforcement of Housing Codes.—An aid for cities interested in developing and enforcing minimum housing standards. Government Printing Office, Washington 25, D. C. 40(5.
The Materials Use Survey.—A study of the national and regional characteristics of one-family dwellings built in the first half of 1950. Government Printing Office, Washington 25, D. C. 20^.
Population Growth in Standard Metropolitan Areas, 1900-1950, With an Explanatory Analysis of Urbanized Areas.—First of a series of reports analyzing patterns of a half-century of metropolitan growth. Government Printing Office, Washington 25, D. C. 55(5.
A Short-Term Forecast of the Housing Market, Jacksonville, Florida.—A simple low-cost technique for a quantitative short-term forecast of housing demand, without regard to price or location, based on an experimental analysis in a moderate-sized industrial community. Government Printing Office, Washington 25, D. C. 25(5.
B. Home Loan Bank Board
The following publications of the Home Loan Bank Board, issued in 1953, may be obtained without charge from the Home Loan Bank Board, Washington 25, D. C.
Savings and Home Financing Source Book, 1952.—Tabular data on savings and home financing.
Summary of Operations for 1952.—.Includes Federal Home Loan Bank System, Federal Savings and Loan System, and Federal Savings and Loan Insurance Corporation.
Combined Financial Statement of Members of the Federal Home Loan Bank System, 1952.
Financial Report (Annual) Federal Savings and Loan Insurance Corporation, as of June 30,1953.
Trends in the Savings and Loan Field.—Covers all savings and loan associations.
C. Federal Housing Administraton
The following are the principal new or revised FHA publications issued in 1953. Unless otherwise indicated, they can be obtained, without charge, from the Federal Housing Administration, Washington 25, D. C.
Administrative Rules and Regulations under Section 8 of the National Housing Act.—FHA Form No. 2000, reprinted May 1953, to include all amendments through May 4, 1953.
Amortization and Mortgage Insurance Premium Tables for Mortgages to be Insured under Section 203 of the National Housing Act.—FHA Form No. 2042B, revised 1953.
Annual Report.—Nineteenth annual report of the Federal Housing Administration ; year ending December 31, 1952. Government Printing Office, Washington 25, D. C. 5O<5.
127
HOUSING AND HOME FINANCE AGENCY
Cooperative Housing Insurance.—Amortization and mortgage insurance premium tables for individual mortgages to be insured under Section 213 of the National Housing Act; FHA Form No. 3200, revised July 3, 1953.
Dealer Guide for FHA Title I Loans.—FH-30A, reprinted August 21, 1953. Government Printing Office, Washington 25, D. C. 10$.
Federal Housing Administration Digest of Insurable Loans.—Revised September 1953.
Insured Mortgage Portfolio (issued quarterly).—Vol. 17, Nos. 3 and 4; Vol. 18, Nos. .1 and 2. Government Printing Office, Washington 25, D. C. Single copy 15$, annual subscription, 50$.
Planning Rental Housing Projects.—FHA Form No. 2460, reprinted 1953. Government Printing Office, Washington 25, D. C. 20$.
Property Improvement Loans under Title I of the National Housing Act, Regulations Governing Class 1 and 2 Loans.—FH-20, reprinted September 17, 1953.
What Is the FHA?—Revised July 1953.
D. Public Housing Administration
Annual Report.—Sixth annual report of the Public Housing Administration, covering calendar year 1952. Available from the Public Housing Administration, Washington 25, D. C.
128
PART II
OF THE
Seventh Annual Report
HOUSING AND HOME FINANCE AGENCY
Covering the Activities of the
HOME LOAN BANK BOARD
April 5, 1954..
LETTER OF TRANSMITTAL
The Speaker of the House of Representatives, Washington, D. C.
Sib:
Pursuant to Section 20 of the Federal Home Loan Bank Act, we are pleased to submit the Annual Report of the Home Loan Bank Board, covering the operations of the Federal Home Loan Bank System, the Federal Savings and Loan Insurance Corporation, and the Federal Savings and Loan System for the calendar year 1953.
Respectfully,
Walter W. McAllister,
Chairman,
'William K. Divers,
Member, Home Loan Bank Board.
130
Section 1
HOME LOAN BANK BOARD
1953 A Record Year
The Home Loan Bank Board under statutory authority supervises the Federal Home Loan Banks, charters and supervises Federal savings and loan associations, and operates the Federal Savings and Loan Insurance Corporation which insures the accounts of savings and loan associations and similar institutions.
As indicated in subsequent sections of this report, 1953 was a banner year for the Federal Home Loan Banks, the Federal Savings and Loan Insurance Corporation, and the Federal Savings and Loan System.
Since the growth of the Banks and the Insurance Corporation is primarily dependent upon the activity and development of savings and loan associations and similar institutions, it is significant that growth of these associations during 1953 surpassed that for any prior year. At the close of 1953, savings and loan associations held mortgages with an aggregate unpaid balance of $22 billion, representing an increase during the year of $3.6 billion, or 20 percent. The increase in savings held by such associations amounted to $3.7 billion, or 19 percent, to give a year-end total of $22.8 billion. Assets of all savings and loan associations at the close of 1953 totaled $26.7 billion, of which $23.6 billion were held by associations insured by the Federal Savings and Loan Insurance Corporation, while noninsured associations held $3.1 billion.
Federal Savings and Loan Advisory Council
The activities and responsibilities of the Board consist principally of establishing policies, issuing regulations, and, as indicated above, supervising the operations and activities of the units under its authority. In the determination of these policies, the Board is assisted by an advisory board known as the Federal Savings and Loan Advisory Council, in which each of the Bank Districts is represented and through which the Board is kept up to date on current trends and conditions in the field.
Created by the Federal Home Loan Bank Act, the Council is composed of 17 members—1 member elected by each of the 11 Federal Home Loan Banks and 6 members appointed by the Home Loan Bank Board. Among the latter are included representatives of the national trade organizations and the State Savings, Building and Loan Supervisors.
The Council is authorized to confer with the Board on general business conditions and on special conditions affecting the agencies
131
HOUSING AND HOME FINANCE AGENCY
under the Board’s supervision. In addition it may request information and make recommendations concerning matters within the jurisdiction of the Board.
During the calendar year 1953 the Council held 2 meetings in Washington—on May 26-27 and October 22-23. On the agenda for discussion and recommendation were such diversified subjects as hazard insurance, reserve requirements, frequency of examinations, expansion of bank credit, branch office advertising, legislation, dividends, liquidity requirements, and give-away programs.
The following members of the Council served during 1953:
Advisory Council Members Appointed by Home Loan Bank Board
1 Charles L. Clements, president, United States Savings and Loan League, Miami Beach, Fla.
W. J. P. Farrell, president, National Association of State Savings, Building and Loan Supervisors, Salem, Oreg.
* Raleigh W. Greene, president, National Savings and Loan. League, St. Petersburg, Fla.
Boston :
Judge Frederick J. Dillon, Probate Court for Suffolk County, Boston, Mass.
Pittsburgh :
Ernest T. Trigg, Malvern, Pa.
Cincinnati ;
W. D. Gradison, W. D. Gradison Co., Cincinnati, Ohio.
Advisory Council Members Elected by Federal Home Loan Banks
Boston :
Frederick T. Backstrom, executive vice president, First Federal Savings and. Loan Association of New Haven, New Haven, Conn.
New York:
3 Arthur F. Smethurst, president, Bradford Savings and Loan Association, Newark, N. J.
Pittsburgh :
Francis E. McGill, president, Rox-borough-Manayunk Federal Savings and Loan Association, Phil a -delphia, Pa.
Gbeensbobo:
4 Frank Muller, Jr., president, Liberty Federal Savings and Loan Association, Baltimore, Md.
Cincinnati ;
R. A. Stevens, president, Dyer County Federal Savings and Loan Association of Dyersburg, Dyersburg, Tenn.
Indianapolis :
Walter Gehrke, president, First Federal Savings and Loan Association of Detroit, Detroit, Mich.
Chicago :
Charles R. Jones, secretary, Security Federal Savings and Loan Association, Springfield, Ill.
Des Moines:
C. R. Mitchell, executive vice president, First Federal Savings and Loan Association of Kansas City, Kansas City, Mo.
Little Rock:
R. T. Love, secretary-treasurer, Delta Federal Savings and Loan Association, Greenville, Miss.
Topeka :
0 Louis W. Grant, president, Home Federal Savings and Loan Association of Tulsa, Tulsa, Okla.
San Fbancisco:
Joe Crail, president, Coast Federal Savings and Loan Association, Los Angeles, Calif.
1 Alternate at October meeting for Mr. Clements: Ralph R. Crosby, president, Old Colony Co-operative Bank, Providence, R. I.
’Alternate at October meeting for Mr. Greene: Clifford P. Allen, III, president, Home Building and Loan Association, Philadelphia, Pa.
3 Alternate at May meeting for Mr. Smethurst: Arthur E. Knapp, president, Nassau Savings and Loan Association, Brooklyn, N. Y.
4 Vice chairman.
’ Chairman.
132
HOME LOAN BANK BOARD
Legislation
Public Law 286, 83d Congress, provided that after August 15,1953, all Government agencies are required to pay postage on all mailings. Prior to that time the Home Loan Bank Board and the units under its supervision were permitted free mail privileges.
Public Law 9Ji, 83d Congress, provided for the dissolution and abolishment of the Home Owners’ Loan Corporation. Pursuant to the provisions of the law, the corporate existence of the HOLC will expire effective February 3, 1954. The Corporation, which was created as a temporary emergency relief agency in 1933, went out of business as a mortgage holding agency of the Government during the calendar year 1951. A final report of the operations and liquidation of the Corporation was submitted by the Board to the Congress on March 1, 1952.
Administrative Expenses
The funds which the Home Loan Bank Board uses to pay its operating expenses come from private sources and not from the United States Treasury. They are obtained by assessments against the 11 Federal Home Loan Banks and the Federal Savings and Loan Insurance Corporation and by charges against insured associations for examining and audit services.
In 1953 the administrative expenses of the Board, with its 121 employees, totaled $725,000, compared with $759,000 and 124 employees the year before. When expressed in relation to the assets of member associations, the cost was about $32 per million dollars of such assets in 1953 as against $38 in 1952. It has long been the objective of the Board to operate as economically but as efficiently as is consistent with sound management. The following figures show the extent to which the Board has succeeded in reducing operating expenses through simplification of procedures and other refinements:
Fiscal year Number of employees Administrative expenses Cost per $1 million of members’ assets
1945 176 $822 859 $103
1947 167 926 700 87
1949 . . 148 81L800 61
1950 . 142 795 772 52
1951 133 731 513 42
1952 124 758 758 38
1953 121 725’ 000 32
133
HOUSING AND HOME FINANCE AGENCY
FEDERAL HOME LOAN BANK DISTRICTS
J /^\
X M T--- , A j—x X
/ / \ IN 0AK- ] MINN.' A / 1 7
/ y \ I_____________________________i y^xw
V_ / '' ---Js'dak. ■ 7 1 /’j'A T" n V^0 l0WA XCH/M60l-^--ZX^/ZV^«eU»’GH
( / / X- I Ys,.“1ll VX’ k' KL2)
\_ \ / pULO. J---} I J I I ;-mV-
FRANCISCO / /_________________VX----\l^lANAPn
) \ / / kans. t X I r W
I \ I_____ I TOPEKA 1
\ \ -A i-f _ —'XTnsb°s0
L \/ P Mtx. 1 -----------yS-----------5-—L®QREEf' ,
A. . \ / Itfxac: n 0KLA- Trk "IJtenn. , X
X-OS ANGELEs\ I TEXAS I ARK- y —Z__<7T^-X/
) / f L * Aiiss. I AL A. yG*- \
I___| / LITTLE f \ A /
---X I ' roc* I \ X.
I JT I ) I 7
9 \
® federal home loan bank \ ~T-L 'N \
• BRANCH X_/ j
DISTRICT 2 INCLUDES PUERTO RICO AND VIRGIN ISLANDS \ I V J
DISTRICT II INCLUDES ALASKA, HAWAII AND GUAM ’ 'X-J
Chabt 1.
134
Section 2
FEDERAL HOME LOAN BANK SYSTEM
Origin and Purpose
The Federal Home Loan Banks which were created by an act of the Congress, approved July 22,1932, to serve as reserve banks for eligible home-financing institutions, opened for business on October 15, 1932. As indicated in previous annual reports, building and loan associations, savings and loan associations, homestead associations, cooperative banks, savings banks, and insurance companies are eligible for membership in the Bank System, provided the character of their management and their home-financing policies are consistent with sound and economical home financing.
General Comments
Due to the continued high rate of home construction during the calendar year 1953 and the corresponding increase in home financing by member institutions, as well as the increase in savings accounts held by the member institutions, the Federal Home Loan Banks continued their steady growth so that at the close of 1953 their cash and investment holdings, their advances outstanding, deposits held for their members, and their capital stock reached all-time peaks. As a result, the consolidated assets of the Banks amounted to a record high of $1,387,518,000, which represented an increase of $165,816,000, or 13.6 percent over the previous year-end total.
Cash and Investment Securities
While cash holdings of the Banks increased but slightly, the par value of investments in United States Treasury securities increased $77,032,500 to a total of $387,640,000, which amount includes investments of reserves required by the Federal Home Loan Bank Act and by regulations. During the year, investment securities were purchased at an approximate cost of $1,082,733,000 while the proceeds of sales and maturities approximated $1,011,932,000. The United States Treasury obligations owned on December 31,1953, were distributed as follows:
Par value Book value
Treasury bills $72,400,000 59, 200,000 5, 699,000 52, 700,000 155,791,000 31, 650, 000 10, 200, 000 $72,166, 383 59,243,230 5, 699,000 52,700,000 155, 441,544 31,886, 860 10, 200,000
Certificates of indebtedness
Notes—Marketable ...
Notes—Special series
Bonds—Bank eligible
Bonds—Bank restricted
Bonds—Savings
Totals
387,640,000 387,337,017
135
HOUSING AND HOME FINANCE AGENCY
Lending Operations of the Federal Home Loan Banks
The trend of advances outstanding during 1953 followed the usual seasonal pattern by reflecting decreases during each month of the first calendar quarter, increases during each month of the second quarter, and then the usual decrease during July followed by a steady increase each month thereafter, so that at the year’s end, advances outstanding totaled $951,555,018. This total represented an increase of $87,366,487, or 10.1 percent over the $864,188,531 balance outstanding at the close of 1952. The increase was the result of advances of $727,516,618 during the year less repayments of $640,150,131. It will be noted by reference to table 2 of this report, that the lending activity of the Banks during 1953 set new records in both advances made and repayments received. The following tabulation reflects the number of borrowers by types and the amount of advances outstanding to each group on December 31, 1953:
Type of institution Borrowers Advances outstanding
Number Percent Amount Percent
Savings and loan associations and similar institutions: Insured by Federal Savings and Loan Insurance Corporation: Federally chartered 871 40.57 $593, 467, 428 62.37
State-chartered _ 875 40. 75 310, 789,897 32.66
Other State-chartered 1 400 18.63 42,949,818 4.51
Subtotals 2,146 99.95 947,207,143 99.54
Insurance company 1 .05 4,347,875 .46
Totals 2,147 100.00 951, 555,018 100.00
1 Includes 1 nonmember borrower whose indebtedness was $32,500.
Advances secured by the pledge of collateral were outstanding to 1,329 borrowing institutions in the aggregate amount of $637,407,110 and represented 67 percent of the total advances outstanding. Of such total, advances of $319,967,937 or 50.2 percent had maturities of 1 year or less while $317,439,173 or 49.8 percent represented amortized loans for terms of more than 1 year on which installments of $50,364,-351 were payable within 1 year. The Federal Home Loan Banks held as collateral security to such advances 218,433 home mortgages with unpaid balances aggregating $1,255,303,083, United States Government obligations having a par value of $119,002,500 and other eligible collateral having a face value of $4,130,000. The face value of all such collateral amounted to $1,378,435,583 or 216.26 percent of the $637,407,110 of advances secured thereby. To this collateral, the Banks had assigned, within the statutory limitations, a value of $988,-733,426. In addition, each Bank held a statutory lien on its capital stock owned by each member-borrower as further collateral security for all indebtedness of the member to its Bank. Such stock, on Decem
136
HOME LOAN BANK BOARD
ber 31, 1953, amounted to $222,175,850 and with respect to each member-borrower was not less than one-twelfth of such member’s principal indebtedness to its Federal Home Loan Bank.
Unsecured advances, which require no collateral other than Federal Home Loan Bank stock, amounted to $314,147,908 on December 31, 1953, and represented 33 percent of the total advances outstanding on that date.
It will be observed from the following chart that the high dollar amount of advances outstanding on December 31, 1953, was but 3.7 percent of the total assets of members on that date and that at no time has the total advances outstanding exceeded 5 percent of the combined assets of all members.
FEDERAL HOME LOAN BANK ADVANCES OUTSTANDING AS A PERCENT
OF ASSETS OF MEMBER INSTITUTIONS 6i-----------------------------------------------------
5 ~ ----------------------------------------------------5
4 — .x-------------------xx—r — 4
z \ / z
o 3---------------\--------------/-________yl_____________, w
a: 1 Jr --- £
LU > 0-
a. \ J 1x1
2-----------------~XT-----------------------------------2
I----------------------------------------------------------
°. —____________________________ __ ____________ 0
1937 1939 1941 1943 1945 1947 1949 1951 1953
Chart 2.
Delinquent Advances
With the exception of advances totaling $6,300,000 and interest thereon of $721,017 represented by notes from the Long Beach Federal Savings and Loan Association, Long Beach, Calif., none of the $951,555,018 of advances outstanding on December 31, 1953, was more than 30 days past due. An action has been instituted by the Federal Home Loan Bank of San Francisco to recover the amount due from the Long Beach Federal Savings and Loan Association, which association is withholding payment because of claims made by it in two suits, now joined, one arising out of the merger of the Federal Home Loan Bank of Los Angeles with the Federal Home Loan Bank of Portland under the name of the Federal Home Loan Bank of San
137
HOUSING AND HOME FINANCE AGENCY
Francisco, and the other out of the appointment of a conservator for the Long Beach Federal Savings and Loan Association. Both of said suits have been decided adversely to the Long Beach Federal Savings and Loan Association by the United States Court of Appeals for the Ninth Circuit. Petitions for certiorari filed by the Association and others were denied by the Supreme Court of the United States on May 4, 1953, and mandate issued by the Court of Appeals on May 21, 1953, directing the District Court to deliver to the San Francisco Bank the $6,300,000 in notes and the collateral securing the same, all of which had been impounded by the District Court. The District Court has not yet carried out the mandate. In view of these court decisions, it is the opinion of the Bank’s Counsel, the General Counsel for the Home Loan Bank Board, and the Department of Justice attorneys assigned to the case that the attempted defenses raised by the Long Beach Association, which are identical with the matters raised in the two suits decided adversely to it, have no validity and that the Bank will recover judgment for the amount due.
Interest Rates on Advances
Each Federal Home Loan Bank is authorized to establish interest rates on its advances within a maximum limit prescribed by the Home Loan Bank Board. At the present time such rate cannot exceed 6 percent per annum. During the calendar year 1953, all 11 Banks increased the rate of interest charged on advances. Six of the Banks increased the rate by one-half of 1 percent while the increase in 5 Banks was one-fourth of 1 percent per annum. Table 4 of this report reflects the interest rates charged by each Bank on January 1, 1954, on new advances to their respective members.
Interest rates on advances made to nonmember mortgagees under the provisions of section 10b of the Federal Home Loan Bank Act, as amended, must be at least one-half of 1 percent but not more than 1 percent higher than the rates of interest charged members on advances of like character.
Deposits of Members
Deposits of member institutions in the Federal Home Loan Banks increased steadily during 1953 to a year-end figure of $558,445,776, representing an increase of $138,784,660 over the December 31, 1952, total. As of December 31,1953, demand deposits on which no interest is paid amounted to $87,891,513. Time deposits totaled $470,554,263 and bore interest at annual rates ranging from 1 percent to 2.5 percent. Table 4 of this report reflects the rates of interest paid by each Bank as of January 1, 1954, on the time deposits of their respective members.
138
HOME LOAN BANK BOARD
As in the case of interest on advances, the Boards of Directors of the Federal Home Loan Banks may establish the rates of interest paid by the Banks on their members’ time deposits within a maximum specified by the Home Loan Bank Board. The maximum rate was raised on March 2, 1953, from 2 percent to 2.5 percent per annum.
Interbank Deposits
Transfer of funds from a Federal Home Loan Bank to another Federal Home Loan Bank which has a temporary need thereof is accomplished by means of a deposit with the Bank desiring funds. These interbank deposits bear interest at rates designated by the Home Loan Bank Board. Such rates usually change the day following the issuance or the maturity of a series of consolidated Federal Home Loan Bank obligations, the average annual cost of such obligations then outstanding usually being considered in determining the interbank interest rate to be charged.
During the 1953 calendar year $90,400,000 of such deposits were made and $81,400,000 were returned leaving a balance of $9,000,000 outstanding at the end of the year.
Consolidated Federal Home Loan Bank Obligations
Since 1946 the issuance of consolidated Federal Home Loan Bank obligations has been confined to short-term notes. During 1953, 5 series of such notes were issued in the total amount of $453,500,000 and 6 issues totaling $488,550,000 were retired. The latter figure included $3,500,000 of such obligations owned by some Federal Home Loan Banks at the close of 1952.
From May 10, 1937, through December 31, 1953, consolidated obligations, including debentures, bonds, and notes, were issued in the total amount of $4,449,250,000 of which $4,035,750,000 were retired, leaving a balance outstanding on the latter date of $413,500,000 which comprised the following issues:
Series Dated Rate Maturity Amount
A-1954 May 15,1953 Sept. 15,1953 Aug. 17,1953 Nov. 16,1953 2% 2% 2'+ 2.10 Feb. 15,1954 Mar. 15,1954 Apr. 15,1954 May 17,1954 $111,000,000 98, 500,000 100,000,000 104,000,000 413, 500,000
C-1954
B-1954
D-1954
Total
The Secretary of the Treasury is authorized by law to purchase obligations of the Banks up to a total not exceeding $1 billion outstanding at any one time. To date it has not been necessary to request such a purchase.
294078—54---11
139
HOUSING AND HOME FINANCE AGENCY
Capital Structure of the Federal Home Loan Banks
The capital of the Federal Home Loan Banks is composed of paid-in capital—represented by capital stock owned exclusively by member institutions—and of earned surplus. The latter is divided into a reserve required by section 16 of the Federal Home Loan Bank Act, as amended, a reserve for contingencies established voluntarily by some of the Banks, and undivided profits. It will be observed from the following comparative tabulation that the Banks’ total capital increased $56,138,369 during the calendar year 1953.
Decen 1953 iber 31 1952 Increase for 1953
Capital stock: Subscribed by members Less—Unpaid subscriptions Total paid-in capital . Surplus: Legal reserve $368,609,800 86,150 $315,686, 500 198, 625 $52,923,300 > 112,475
368, 523, 650 315,487,875 53,035, 775
19,602,070 3,158, 763 14, 754, 643 17,460,692 4,831, 260 12,120,930 2,141,378 > 1,672,497 2,633, 713
Reserve for contingencies Undivided profits...
Total surplus
37, 515,476 34,412,882 3,102, 594
Total capital _ __
406.039,126 349,900, 757 56,138,369
1 Indicates negative item.
Capital Stock of the Federal Home Loan Banks
Each member of a Federal Home Loan Bank is required by the Federal Home Loan Bank Act, as amended, to own stock in such Bank in a minimum amount equal to 2 percent of the aggregate of the unpaid principal amount of such member’s home mortgage loans and similar obligations, but not less than $500. A borrowing member must at all times own stock in its Federal Home Loan Bank in an amount equal to at least one-twelfth of the principal amount of advances it owes such Bank, but not less than the minimum requirements set forth above. As indicated in the preceding tabulation, the amount paid in on capital stock increased $53,035,775 during 1953 to a year-end total of $368,523,650.
Legal Reserve
Section 16 of the Federal Home Loan Bank Act, as amended, requires each Federal Home Loan Bank to transfer semiannually to a reserve account 20 percent of its net earnings for each semiannual period until such reserve is equal to the Bank’s paid-in capital, after which 5 percent of the net earnings must be so transferred. During the calendar year 1953 the Federal Home Loan Banks transferred a total of $2,141,378 to this reserve, resulting in a year-end balance of $19,602,070 which amount equaled 5.32 percent of the total paid-in capital as of December 31, 1953. The Act requires that the reserves
140
HOME LOAN BANK BOARD
of each Federal Home Loan Bank shall be invested, subject to such regulations, restrictions, and limitations as may be prescribed by the Board, in direct obligations of the United States and in such securities as fiduciary and trust funds may be invested in under the laws of the State in which the Bank is located. On December 31, 1953, all of such reserves were invested in direct obligations of the United States.
Comparative Balance Sheets
A comparative consolidated statement of condition of the 11 Federal Home Loan Banks as of December 31, 1953, and December 31, 1952, designated as table 1, provides additional information with respect to changes in the Banks’ assets and liabilities during 1953.
Income and Expense
A comparative consolidated statement of income and expense for the calendar years 1953 and 1952 is presented in table 3. The 1953 operating income of $29,278,645 represented a 21.7 percent increase over the 1952 figure, while 1953 operating expense of $18,739,942 was but 20.4 percent greater than the 1952 expenses. This resulted in a net operating income of $10,538,702 for 1953 representing an increase of $2,035,748, or 23.9 percent, over the 1952 amount.
Interest on members’ deposits during 1953 amounted to $8,264,922 and reflected an increase of $2,794,782, or 51.1 percent, over the 1952 total. The average monthly balance of such deposits during 1953 was $476,066,724 at an average cost of 1.74 percent per annum as compared with $360,939,571 and 1.52 percent for 1952.
Net income of the Banks during 1953 increased 24.1 percent over 1952 to a total of $10,706,892 and represented an average annual rate of earnings of 2.46 percent on capital stock, after meeting statutory reserve requirements, as compared with a net income of $8,625,076 and a rate of earnings of 2.32 percent for 1952. The following tabulation reflects the disposition of the Banks’ net income for 1953 and from the beginning of operations through December 31, 1953:
Calendar year 1953 Oct. 15, 1932, to Dec. 31, 1953
Amount Percent Amount Percent
Dividends paid: U. S. Government .... $26,176,170 32,474,013 26.9 33.3
Member institutions Total dividends Retirement fund: Payments for prior service Special payments Undivided profits and contingent reserve Legal reserve—Section 16 of act Total net income $7,436,419 69.4
7,436, 419 96 167,784 961,215 2,141,378 69.4 1.6 9.0 20.0 58, 650,183 655,122 558,013 17, 913,405 10, 602,070 60.2 .7 .6 18.4 20.1
10, 706,892 100.0 97, 378,793 100.0
141
HOUSING AND HOME FINANCE AGENCY
Dividends of Banks
The average annual dividend rate for 1953 was 2.14 percent as compared with 1.91 percent for 1952. Dividend declarations by the individual Banks for 1953 ranged from 1.5 percent to 2.5 percent. During 1952 the minimum rate was 1.25 percent and the maximum 2.25 percent.
During 1952, dividends represented 65.6 percent of that year’s net income. It will be noted from the foregoing tabulation that 69.4 percent of the Banks’ net income for 1953 was distributed to stockholders in the form of dividends, and that dividends from the beginning of operations equaled 60.2 percent of the cumulative net income.
Required Liquidity of Banks
Section 11(g) of the Federal Home Loan Bank Act, as amended, requires that each Federal Home Loan Bank shall at all times have at least an amount equal to the current deposits received from its members invested in obligations of the United States, deposits in banks or trust companies, and in advances with a maturity of 1 year or less. In order to insure greater liquidity for the purpose of meeting the cash requirements of their members, each Federal Home Loan Bank during 1953 was required to participate in an overall liquidity reserve of $100,000,000 in the proportion its paid-in capital bore to the total paid-in capital of all the Banks, and, in addition thereto, was required to maintain a reserve equal to 25 percent of its deposits from members. These reserves consisted of cash and specified United States Treasury obligations, but not more than 25 percent of such reserves could be invested in marketable obligations with maturities of more than 13 months.
On November 23, 1953, the Board adopted a revised liquidity formula, effective February 15,1954, which requires each Bank to provide for a liquidity reserve at least equal to 20 percent of the total of its paid-in capital and its liability on members’ deposits. The reserve consists of cash on deposit and obligations with maturities not in excess of or which can be redeemed within 13 months and securities acquired under an agreement whereby each of the dealers involved will repurchase such securities on or before a specified date at a price to give the Bank a stipulated yield.
The obligations apportioned to the liquidity reserve must be securities other than those needed for compliance with the requirements of section 16 of the Act.
Growth in Membership
The membership of the Federal Home Loan Banks continued its steady growth during 1953 with net additions of 78 members resulting
142
HOME LOAN BANK BOARD
in a year-end total of 4,134 with estimated assets of $25,836,000,000, which are distributed by types as follows:
Type of member
Savings and loan associations and similar institutions:
Insured by Federal Savings and Loan Insurance Corporation:
Federally chartered____________________________________
State-chartered_________________________________ZZZZZZZZZZZZ
Other State-chartered______________________________________'Z
Subtotal_____________________________________
Savings banks____________________________________________
Insurance companies_________________________________Z-ZZZZZZZZZZZZZ
Totals___________________________________
Number Assets
1,604 1,700 804 $14,045,000,000 9,548,000,000 1, 724,000,000
4 108 23 3 25,317,000,000 483,000,000 36,000,000
4,134 25,836,000,000
FEDERAL HOME LOAN BANK SYSTEM
NUMBER AND ASSETS OF MEMBER INSTITUTIONS
14 r~---------j-------------:---------------128
1 2 ---- LEGEND ---------------—-— 2 4
® i
IO____ ASSETS
Q NUMBER (billions of dollars) 20 . ,$««?■}««».7/
Insurance premiums and interest earned on United States Government securities comprise the major sources of income of the Corporation. During the past 19 years funds derived from these sources amounted to 58.2% and 39.3%, respectively, of the Corporation's total cumulative income of $189,354, 356.
DISTRIBUTION
Cumulative expenses have amounted to but 4.3% of the Corporation's income to date. Insurance losses have absorbed 2.7% and return on capital stock 20.2%. Thus, of the income received since the inception of the Corporation, 72.8% has been credited to reserves.
» INSURANCE LOSSES
GROSS 2.7%
EXPENSES
f/Z return
[%& CAPITAL WgW'6y7%ZZZZZZZZ^Z/ZZ/zX stock c^z^zz^^zzz^
■ 20.2
additions tozz/zI
reserve 'zm664
XZZZ^ZZZZZ^WZZ/ZZZZzZ' 7 2 8 0/0 ZZZ/ZZZ
Cxlast 5.
During 1953, gross income of the Corporation amounted to $19,620,-689 as compared with $16,983,666 during the previous year. Of this total, 74 percent represented insurance premiums and admission fees, and 26 percent, interest on investments and miscellaneous income. Operating expenses of $725,218 reflected a decrease of 3.9 percent .from the previous year and were equivalent to 3.7 percent of gross income. A statement of income and expenses for 1953 and 1952 appears in table 7.
Assets and Liabilities of Insured Associations
Assets of the insured membership totaled $23,593,000,000 at year end, an increase of $4,011,000,000 or 20 percent during the year. About $190,000,000 of the growth was due to the admission of new members and the balance was attributable to the growth of the institutions already insured.
152
HOME LOAN BANK BOARD
Trends in asset items of all insured associations
[Dollar amounts in millions]
End of year Total assets Mortgage loans outstanding Cash and U.S. Governments Percent to assets
Amount Percent of all savings and loan associations Mortgage loans outstanding Cash and U. S. Governments
1940 $2,926 51.0 $2, 370 $195 81.0 6.7
1944 4,995 67.0 3, 272 1,493 65.5 29.9
1948 9,715 74.6 7, 777 1,616 80.1 16.6
1949 11, 278 77.1 9,022 1,869 80.0 16.6
1950 13, 644 81.0 11,153 2,002 81.7 14.7
1951 16,146 84.3 13,191 2,295 81.7 14.2
1952 19' 582 86. 7 16,031 2,718 81.9 13.9
1953 1 23, 593 88.3 19, 524 3,014 82.8 12.8
1 Preliminary.
The mortgage portfolios of insured associations, accounting for 83 percent of their assets, aggregated $19,524,000,000 as of December 31, 1953. Of these mortgages, $23.50 out of every $100 were guaranteed or insured by the Veterans’ Administration or the Federal Housing Administration. The balance represented conventional mortgage loans. Cash and United States Government obligations, representing 13 percent of assets and 15 percent of savings capital, totaled $3,014,-000,000 at year end.
Mortgage loans held by insured savings and loan associations Dec. 31, 1953
Type
Amount
Percentage distribution
FHA-insured_______________________________________________________
VA-insured or guaranteed__________________________________________
Subtotal____________________________________________________
Uninsured mortgage loans__________________________________________
Total_______________________________________________________
$970, 266,000 3,605,853,000 5.0 18.5
4, 576,119,000 14, 947,881,000 23.5 76.5
$19, 524, 000,000 100.0
After a record growth of nearly $3,400,000,000 during 1953, savings capital of insured associations amounted to $20,252,000,000 on December 31. Withdrawals for the entire year were equivalent to 61 percent of new savings received compared with 60 percent in 1952 and 67 percent in 1951.
Flow of savings—all insured institutions
[Dollar amounts in millions]
Year New investments Withdrawals Net inflow Withdrawal ratio
1949 $3 688 $2 425 $1 263 65 8
1950 4 543 3 211 1 ’ 332 70 7
1951 5 667 3’ 770 1' 897 66 5
1952 7,103 4, 267 2 836 60 1
1953 8,662 5,278 3,384 60.9
153
HOUSING AND HOME FINANCE AGENCY
The combined reserves and undivided profits of insured institutions, which would be available for business losses in case of need, continued to increase in 1953. At the close of the year, such reserve accounts totaled $1,598,000,000 and were equivalent to 6.8 percent of total assets or 7.9 percent of savings capital.
BILLIONS OF DOLLARS
ASSETS OF INSURED AND UNINSURED SAVINGS AND LOAN ASSOCIATIONS
T
1'
2 0----- LEGEND ---------------------'$—20
H HI
INSURED | । »
'6 VN.NSUREO^ -——®— | — g-'6S
— - O
s B °
I 2 ------------U_______________&_______1+_____sfe_ । 9 u.
C S3, --S® 1 O
s i t I i i 5
’’ ’ I | | । I । I”8 8
4 Jg-------i------g---1.----|------1_|_।___।_ 4
rat
-I Hi 1$ ip Is & it ii it -
JJfa M 11.11 M m mJ m W.Wlo.
1935 1940 1945 1947 1948 1949 1950 1951 1952 1953
Chart 6.
154
Section 4
FEDERAL SAVINGS AND LOAN SYSTEM
Introduction
The chartering of Federal savings and loan associations was authorized by section 5 of the Home Owners’ Loan Act of 1933. In many areas at that time, local sources of home mortgage credit and facilities for the investment of savings were inadequate. To meet this need, provision was made for the establishment of Federal associations either by the granting of new charters to local organizing groups or by the conversion of existing institutions of the savings and loan type from State to Federal charter.
Responsibility for the organization, chartering, and regulation of Federal associations was vested in the Home Loan Bank Board. Although subject to Board supervision and examination, Federal associations are privately owned and operated mutual institutions, the capital of which is represented entirely by the savings accounts of members. All savings accounts, which are nonassessable, participate equally in the earnings of the assocation, on a pro rata basis, earnings being paid semiannually at a rate determined by the directors on the basis of net profits. Directors are elected by the members at annual meetings.
Federal associations are not permitted to accept deposits, or to issue certificates of indebtedness except for such borrowed money as is authorized by regulations made by the Home Loan Bank Board. Funds received by Federal associations are generally of a savings or investment type. Such funds are loaned principally on a monthly amortization, long-term basis on the security of first liens on local home properties.
The Board has endeavored to incorporate into the charter for Federal associations the soundest and most advanced operating principles and practices known for savings institutions specializing in the financing of homes. Likewise, the savings plans offered to the public by Federal associations are designed both to afford the fullest possible measure of protection and to stimulate regular systematic saving.
All Federal associations must be members of the Federal Home Loan Bank System. An association’s membership in this System
294078—54----12
155
HOUSING AND HOME FINANCE AGENCY
offers it a more ample supply of funds for home-financing purposes and makes the credit facilities of the System available for such other needs as may arise.
In addition, all Federal associations must qualify for insurance of their accounts by the Federal Savings and Loan Insurance Corporation. As a consequence, the funds of each investor in a Federal association are insured against loss up to $10,000 by that Corporation.
Granting of Charters and Branches
Applications for permission to organize new Federal associations are considered by the Board on the basis of all available information relative to the character and responsibility of the applicant group, the need for such an institution in the community to be served, the prospect for its usefulness and success, and whether or not it could be established without undue injury to properly conducted existing local thrift and home-financing institutions. No application is approved until provision has been made for a public hearing, which usuany is dispensed with if no notice of intention to appear is received in response to locally published notice of such hearing.
Applications for branch offices by Federal associations are considered by the Board on the basis of the same tests as applications for new Federal charters. Approvals are granted only when there is satisfactory evidence that a necessity exists for such an office in the community and that it can be operated successfully, without undue injury to existing local thrift and home-financing institutions. In all cases provision is made for a public hearing before approval of the establishment of a new branch office, with notice of such hearing published locally and also mailed to the State supervisory authority and to the appropriate regional savings and loan trade organization. Those who wish to protest the establishment of a branch may appear in person or submit their objections in writing.
In the case of conversion of an uninsured State association to Federal charter, the Board applies the same tests as if such association were seeking insurance of accounts under State charter. It is the Board’s policy also to permit insured associations to convert either from State to Federal charter or from Federal to State charter, in accordance with the expressed vote of the association’s mutual shareholders.
Number and Assets
On December 31, 1953, a total of 1,604 associations were operating under Federal charter, of which 699 were newly organized and 905 had converted from State to Federal charter. Federal associations
156
HOME LOAN BANK BOARD
are located in each of the 48 States and in the District of Columbia, Puerto Rico, Alaska, and Hawaii. The combined assets of all Federal associations, which represent about 52.6 percent of the total assets of all savings and loan associations in the country, increased by 19.4 percent during the year to $14,045,000,000 on December 31, 1953.
NUMBER AND ASSETS OF FEDERAL SAVINGS AND LOAN ASSOCIATIONS
e---------------1t--------------------------*——
LEGEND ----------------------------=—l-a
ASSETS B «
(BACONS OF DOLLARS) g | K
PS S | O
s ® b °
•- Home mortgage programs 2 Project mortgage programs 3 Property improvement loans 4 Manufactured-housing loans 8
Amount Number Amount Units Amount Number Net proceeds Units Amount
1934 $27, 406 297, 495 532, 581 489, 200 671, 593 925, 262 991, 174 1,152,342 1,120, 839 933, 986 877,472 664, 985 755, 778 1, 788, 264 3, 340, 865 3, 826, 283 4, 343,378 3, 219,836 3,112, 782 3, 882,328 72, 658 635, 747 617, 697 124, 758 376, 480 502, 308 653,841 680,104 427, 534 307, 826 389, 615 501, 441 799,304 1, 247, 613 1,357,386 1, 246, 254 1, 447,101 1, 437, 764 1,495,741 2, 244, 227 $27,406 201, 258 221, 535 54,344 138,143 178, 647 216,142 228, 007 126, 354 86, 267 114,013 170, 923 320, 654 533,645 614,239 593, 744 693, 761 707, 070 848,327 1,334, 287
1935 23,397 77, 231 102,076 115, 124 164, 530 177, 400 210,310 223, 562 166,402 146, 974 96, 776 80, 872 141, 364 300, 034 305, 705 342, 582 252, 642 234,426 261, 541 $93,882 308, 945 424,373 485, 812 694, 764 762, 084 910, 770 973, 271 763, 097 707,363 474, 245 421, 949 894, 675 2,116, 043 2, 209,842 2,492, 367 1, 928, 433 1, 942,307 2, 288,626 738 624 3, 023 11,930 13, 462 3, 559 3, 741 5, 842 20,179 12, 430 4, 058 2, 232 46, 604 79,184 133,135 154, 597 74, 207 39, 839 30, 701 $2,355 2,101 10,483 47, 638 51,851 12, 949 13, 565 21,215 84, 622 56, 096 19,817 13,175 359, 944 608,711 1, 021, 231 1,156, 681 583, 774 321,911 259,194
1936
1937 1938 1939 1940 1941
1942
1943
1944 1945
1946
1947
1948 524 626 324 195 85 83 $1, 872 1,466 569 560 237 221
1949 1950
1951
1952
1953
Total. _
32, 953,851 3, 422, 948 20,892, 848 640, 085 4,647, 313 16, 565,399 7,408, 765 1,837 4, 924
1 Throughout this report, component parts may not add to the indicated totals because of negative adjust -ments or rounding of numbers.
2 Includes the following sections listed in order of enactment date: Sec. 203, June 27,1934; Sec. 2 (Class 3), Feb. 3, 1938; Sec. 603, Mar. 28, 1941; Sec. 603-610, Aug. 5, 1947; Sec. 8, Apr. 20, 1950; Sec. 213 (individual home mortgage provisions), Apr. 20, 1950; Sec. 611 (individual home mortgage provisions), Apr. 20, 1950; Sec. 903, Sept. 1, 1951.
3 Includes the following sections listed in order of enactment date: Sec. 207, June 27,1934; Sec. 210, Feb. 3, 1938 (repealed June 3, 1939); Sec. 608, May 26, 1942; Sec. 608-610, Aug. 5, 1947; Sec. 611 (project mortgage provisions), Aug. 10, 1948; Sec. 803, Aug. 8, 1949; Sec. 213 (project mortgage provisions), Apr. 20, 1950; Sec. 908, Sept. 1, 1951.
4 Sec. 2 (Classes 1 and 2), enacted June 27, 1934.
8 Sec. 609, enacted June 30, 1947.
VOLUME OF FHA INSURANCE WRITTEN
_____________________________1934 - 1953___________________________
BILLIONS OF DOLLARS BILLIONS OF DOLLARS
__ ■■ 4- TOTAL --
PROJECT* RM
MORTGAGES +/■
‘ 4 - HOME * K+g® +> PROPERTY ElS 4 ’
MORTGAGES IMPROVEMENT LOANS JH
3 -------------------------------- % ----- I----B----------H-B----3-
o Illi I LB
J III
:. 111 U a 8 a a
1934-36 1937-39 1940-42 1943-45 1946-48 1949 I960 1951 1952 1953
(YEARLY AVERAGE)
Chart 1.
179
HOUSING AND HOME FINANCE AGENCY
factured-housing loans insured since the establishment of the agency in 1934. Chart 1 shows the dollar amount of insurance in selected years.
The largest total volume of insurance in any one year, $4.3 billion, was written in 1950. That year accounted also for the largest volume of mortgage insurance in any one year on homes and on rental and cooperative projects. The number and amount of mortgages insured decreased in 1951 and again in 1952, but rose in 1953 to points considerably higher than in either of the two preceding years.
Beginning in 1947, property improvement loan insurance increased rather steadily each year, reaching its highest point in 1953, when the loans reported for insurance numbered 1.8 million with net proceeds of $1.1 billion. (The larger volume recorded in Tables 1 and 2 as insurance written under Setion 2 in 1953 reflects the carryover into 1953 of loan reports received in 1952 but not recorded as insured until insurance authorization became available as a result of payoffs on other loans or the increase in aggregate insurance authorization provided by Public Law 5 in March 1953.)
Table 2 shows the volume of insurance under the various FHA programs in 1953,1952, and for the entire period of operations. Home mortgage insurance under Section 203 is by far the largest of the programs, aggregating $16.7 billion and accounting for over half of the total amount of insurance for each of the periods shown. The 1953 increase over 1952 in overall volume was mostly in Section 203 and Title I operations.
Title I property improvement loan insurance of $7.4 billion is the next largest program. War and veterans’ housing under Sections 603 and 608 of Title VI total $7 billion; rental housing under Section 207, $315 million; and cooperative project housing under Section 213, $242 million.
Detailed statistics of FHA home mortgage, project mortgage, and property improvement loan insurance operations appear in Section 2 of this report.
Table 3 shows the status of FHA insurance operations as of December 31, 1953, under the various programs. Of the total $33 billion written, $20 billion was in force at that date, of which an estimated $3 billion had been amortized, leaving $17 billion outstanding.
Table 4 and Chart 2 show by years, from 1935 on, the total number of privately financed nonfarm units started as reported by the Bureau of Labor Statistics, and the number started under FHA programs. For the entire 19-year period, FHA starts have represented 30 percent of the total number. The 1953 proportion was 23.6 percent.
180
FEDERAL HOUSING ADMINISTRATION
Table 2.—FHA insurance written by title and section, 1952, 1953, and 1934-53 [Dollar amounts in thousands]
1934-53 Units NA NA 46,115 16, 582 2,896,859 2,800,979 64,010 31,870 (25, 633) (6, 237) 1,168, 653 690,006 465,680 1,837 9,071 (5,156) (3,915) 2, 059 (1,984) (75) 71, 766 71,766 47, 568 40, 471 7,097 4, 217, 543
Amount $7,617,230 7,408, 765 126,611 81, 854 17,269,270 16, 651, 963 315, 233 302, 073 (212,192) (59, 881) 7,126, 872 3, 645, 260 3, 439, 679 4,924 24, 462 (16,103) (8,360) 12, 546 (11,991) (556) 577,175 577,175 363, 304 310, 621 52,683 32,953,851
Number 16, 628,096 16, 565,399 46,115 16, 582 2,697,459 2, 690, 459 618 6,382 (145) (6, 237) 635, 813 624,652 7,046 630 3,385 (3,362) (23) 100 (25) (75) 230 230 35, 546 35,466 80 19, 997,144
1952 Units NA NA 5,815 241,420 222,368 6,043 13,009 (9, 774) (3, 235) 3,792 16 3,457 85 40 (40) (-) 194 (125) (69) 17, 233 17, 233 17, 769 14, 562 3, 207 NA
Amount $878,435 b- । co 04 i O CO 1 T-4 cd ! o oo ! 1,936,370 1, 772,472 41,813 122, 055 (91, 701) (30,355) 31,383 109 29,634 237 182 (182) (-) 1,222 (706) (516) 135,812 135,842 130, 721 108,535 22,186 3,112,750
Number 1,501,556 1,495, 741 5,815 216,109 212, 748 67 3, 294 (59) (3, 235) 219 16 19 85 29 (29) (-) 70 (1) (69) 00 89 12, 546 12, 510 36 1,730,488
1953 Units VN NA 4,379 256,693 239, 250 7,175 10, 268 (7,579) (2,689) 300 65 83 7 (7) (-) 145 (145) (-) 12,181 12,181 29, 799 25,909 3,890 303,083
Amount $1,356,233 1,334, 287 21,916 2,192,992 2, 037, 210 53, 839 101, 943 (74,880) (27,062) 1,468 278 221 44 (44) (-) 926 (926) (-) 100, 558 100,558 232,584 202, 086 30,497 3,882,328
Number 2, 218,606 2, 244, 227 4, 379 234,261 | 231,445 82 2,734 (45) (2, 689) 1 65 40 7 3 (3) (-) 5 23,000 22,956 44 2, 506, 023
1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 I II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 I It 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 t 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 I 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 I 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 t 1 1 1 1 1 1 1 1 1 1 I It 1 1 III 1 1 1 1 1 1 1 i 1 1 1 1 1 1 1 1 1 I I II 1 1 III 1 1 1 1 1 1 1 1 1 1 1 I 1 1 1 1 1 1 1 II 1 1 III 1 1 1 1 1 1 1 1 1 I 1 1 1 1 1 1 1 1 1 II 1 1 Wit i I 1 i 1 I I 1 I £ ' ’ 1 I I I i 1 1 II I । rj i i t । । i । । i । i 03 । ; w । । । । । । ii । i aS'1 1 iiiii i 1 ’5 1 » s, 1 1 ' • • । ii i 1 © 1 • 1 1 1 1 1 1 1 • 1 r—' 1 Q) b£ | 1 1 1 | | |l | 1 r—1 1 1 • IIIII 1 ' 1 bjQ ' bL CS bD 1 1 1 1 1 II 1 1, 1 1 1 IIIII I 1 1 Z7 1 Lo bn 1 1 1 I I II i 1 jZ 1 1 ’ ’ 1 1 ' ' * '.H ' ST 4-3.S II 1 1 1 II | । Pit i iiODii । ' । tn w i i । । । ) । । i ® i i i i id > । । 1 ii । । i । । • § : ; : dp i : : ; : ; ; ; : : ; ga-^a : gatte^-g^a : : ; gg : : >>gg : S-ggo'S •: St ; : : a« [ : -eSS ; §8g,a2 : g§ ; ; i gS ; ■ &sa ! : ^aaas^sg i • ■ si J ; x ; S3 £; S2 2 § 1 J S3 I S3 S3 72 [ 04 CN GO 1 04 04 04 , ] C O Q O C £3 00 । §8 -g । 6 6 d h d d d ►> d d d d d 5 d d d A 'OOO^OOO OOOO O o *■“* o o O W ffi O 71W K O 71M 7J 71 CO O ffi -----------/—\----------------------60 —....................... 1,860,000
I total units 30----•------~— -----------------—— 50
f STARTED «o--------T I—J-/.------\--------- —«o
units started / so |---—। 1— --------\—j- 30
UNDER FHA I i?WQ$ > go - _/<-----------— ------ | ■ p- «o
’mW+rm I I I I I I'd B
1935'36 37'38 39 '40'41 42'43 '44'45'46'47 '48'49'50'51 '52'53 w.w.».
i.ooo.ooo--------------------------------- —7^ $:•:$:% ~ — * •000>000
750,000--------------------------------------------------------:— 750,000
500,000---------------------------— 500,000
■ • •
250,000 ----- ~ $$85 — 250,000
. m__2
• ww 1935 ‘36 '37 *38 *39 *40 *41 *42 '43 *44 *45 '46 *47 ’48 *49 '50 *51 *52 1953
Chart 2.
As' of December 31, 1953, the FHA had acquired through foreclosure or the assignment of mortgage notes 40,659 units of housing, representing about 1 percent of the 4,201,428 units (exclusive of Title I, Class 3 properties) covered by mortgage insurance since the beginning of operations. Of the acquired units, 23,174 had been sold and 17,485 remained on hand at the end of 1953.
Losses realized on the total amount of mortgage insurance written from 1934 through 1953 amounted to two one-hundredths of 1 percent.
Mortgage Insurance
The FHA-insured home and project mortgages in 1953 totaled $2.5 billion on 303,000 dwelling units. These figures represented an increase of $0.3 billion and 17,000 units over the 1952 totals of $2.2 billion and 286,000 units. The number of units covered by mortgage insurance was 6 percent greater in 1953 than in 1952. Removal of FHA credit controls in the fall of 1952 accounts for the increase in FHA operations which resulted in the greater volume of insurance written in 1953.
A comparison of home mortgage insurance activity in 1953 and in 1952 is shown in the following table:
184
FEDERAL HOUSING ADMINISTRATION
Title and section 1953 1952
Number of mortgages Amount (thousands) Number of units Number of mortgages Amount (thousands) Number of units
Total 261,541 $2,288,626 272, 299 234,426 $1, 942, 307 246,109
Title I: Sec. 8.
4,379 231, 445 2,689 65 7 21, 946 2,037, 210 27,062 278 44 4,379 239, 250 2,689 65 7 5, 815 212, 748 3,235 16 29 69 12, 510 30,108 1,772,472 30.355 109 182 516 108, 535 5, 815 222, 368 3,235 16 40 69 14, 562
Title II: Sec. 203. -
Sec. 213
Title VI: Sec. 603
Sec. 610
Sec. 611
Title IX: Sec. 903 22, 956 202,086 25, 909
The increased volume of insurance in 1953 resulted chiefly from operations under Section 203 and Section 903. The number of units financed under Section 203 was 7.6 percent greater than in 1952, and the number financed under Section 903 was 78 percent greater than in 1952. The other home mortgage insurance programs were less active in 1953, except for a slight increase in refinancing operations under Section 603.
About 51 percent of the mortgages insured under Section 203 financed new homes and about 49 percent financed existing homes.
The amount of the average mortgage insured under Section 203 in 1953 was about $8,500 per unit, compared with $8,000 per unit in the preceding year.
The volume of project mortgage insurance in 1953 and in 1952 was as follows:
Title and section 1953 1952
Number of mortgages Amount (thousands) Number of units Number of mortgages Amount (thousands) Number of units
Total 215 $259,194 30, 701 240 $321, 911 39, 839
Title II:
Sec. 207 82 53, 839 7.175 67 41, 843 6, 043
Sec. 213 45 74, 880 7, 579 59 91, 701 9,774
Title VI:
Sec. 608 19 29,634 3,457
Sec. 611 __ 3 926 145 1 706 125
Title VIII:
Sec. 803 -- .. 44 100, 558 12,181 58 135, 842 17, 233
Title IX:
Sec. 908 44 30,497 3,890 36 22,186 3,207
In 1953 as in 1952, military housing under Title VIII accounted for the greatest amount of project mortgage insurance, although there was a decline in activity under this title in 1953. FHA authority to issue new-construction commitments under Title VIII expires on June 30, 1955.
Mortgages on rental projects insured under Section 207 increased nearly 29 percent in amount and 18.7 percent in number of units
185
HOUSING AND HOME FINANCE AGENCY
financed in 1953, and there was an increase under Section 908 of 37 percent in amount and 21 percent in number of units.
Interest in Section 213 was stimulated by the authority given to the Federal National Mortgage Association to make advance purchase commitments, not to exceed $30 million outstanding at any one time, on cooperative housing projects on which the FHA had issued insurance commitments or statement of eligibility before September 1, 1953 (Public Law 94, 83d Cong.). Between June 30, 1953, and September 30, 1953, the FHA processed applications for statements of eligibility totaling over $90 million, and applications presented to the Federal National Mortgage Association pursuant to these statements of eligibility totaled nearly twice the amount of available FNMA authorization.
While the volume of mortgage insurance increased in 1953, a decline in the number of applications began in April and continued through the rest of the year, so that applications for the year as a whole were 4 percent under the number for 1952.
The number of units started in 1953 under FHA inspection was 10 percent less than in 1952, and the proportion of FHA starts to the total number of privately financed nonfarm dwelling units started, as reported by the Bureau of Labor Statistics, was smaller in 1953 than in 1952—24 percent as compared with 26 percent.
The decline in FHA applications and starts resulted chiefly from conditions in the money market. The tightness that had prevailed in 1952 was increased by tremendous business and Government borrowings in the first half of 1953, by unprecedented demands for funds for conventional mortgage financing and consumer credit at rates more attractive to lenders than the rates on insured mortgages, and by uncertainty on the part of lenders and builders about discount rates on sales of insured mortgages. Part of the decline in the second half of the year was caused by an abnormally high volume of Section 903 applications received before June 30, which was the scheduled expiration date for Title IX. This title was extended for another year, however, by Public Law 94.
Prefabricated Housing
Only one loan was insured in 1953 under the provisions of Section 609 of the National Housing Act. That loan, in the amount of $100 000, was to finance the manufacture of 44 houses.
Although the, Section 609 insurance contract specifies a maximum dollar amount for the manufacture of the number of houses included in the eligible purchase contracts submitted with the application, the terms of the loan may provide that new purchase contracts for addi-
186
FEDERAL HOUSING ADMINISTRATION
tional houses may be substituted during the term of the loan as deliveries and payments are made under the original purchase contracts. In this way the one loan insured in 1953 was used by the manufacturer to produce 137 houses.
From the enactment of Section 609 in 1947 to the end of 1953, 11 loans to manufacturers, involving 1,218 units, were insured in the total amount of $3,196,482. As of December 31, 1953, 8 loans had been repaid, 1 was outstanding, and debentures had been issued on the remaining 2 under the terms of the insurance contracts. Purchasers’ notes insured in 1953 totaled 39 and amounted to $120,945, bringing the total number of notes insured since 1947 to 619 and the aggregate amount to $1,727,862.
Property Improvement Loan Insurance
Title I, Section 2 of the National Housing Act authorizes the Federal Housing Administration to insure lending institutions against loss on the following classes of 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 2 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.
In 1953 there were 1,832,000 property improvement loans with net proceeds totaling $1,092,000,000 reported for insurance, representing increases of 1 percent in number of loans and 4 percent in dollar amount over the volume for 1952, the previous highest year.
The volume of insurance recorded in 1953, as shown in Tables 1 and 2, exceeded substantially the volume of loans reported for insurance during the year because of a carryover of loans reported to FHA in 1952 but not insured until 1953. When 1953 began, the maximum statutory authorization of $1.25 billion had been exhausted for several months, and loans were being recorded for insurance at the rate of about $65 million a month, which was the estimated rate of liquidation of outstanding loans. Because the volume of loan reports being received was far greater than this, a backlog developed that by March
294078—54——14
187
HOUSING AND HOME FINANCE AGENCY
1953 totaled 480,000 loans with net proceeds totaling $283 million. In March Congress increased the maximum insurance authorization to $1.75 billion. Loans thus reported by lending institutions in 1952 but not insured until 1953 accounted for about one-fifth of the 1953 volume of insurance.
From 1934 through 1953, 16.6 million loans with net proceeds totaling $7.4 billion were insured.
At the end of 1953, there were about 10,152 financial institutions making Title I loans, including 7,113 main offices and 3,039 branches. Of the 7,113 lending institutions insured, 5,138 (excluding 2,487 operating branches) were active at the end of 1953—an increase of 238 over the comparable number at the end of 1952.
Income for 1953 exceeded losses and expenses for the year by $8.4 million, or an average monthly excess of $700,000.
As of December 31, 1953, the total earned surplus of the Title I Insurance F und was $27,104,490.
On July 1, the Commissioner repaid to the Secretary of the Treasury $8,333,314, constituting the Government investment in the capital account of the Title I Insurance Fund.
On October 28,1953, the FHA regulations were amended to tighten dealer controls and place more responsibility on the lending institutions buying dealer-originated paper. It is estimated that at least 75 percent of the total Title I volume is dealer-originated, and the new regulations were designed to assure lender controls over possibilities of abuse of the program by high-pressure tactics of dealers and salesmen. The October amendments to the regulations are one of a series of steps taken by the FHA toward minimizing these possibilities of abuse.
On December 18 the regulations were amended to remove an operating inequity on small lenders by providing that no adjustment of the insurance reserve of a lending institution should be made that would reduce the reserve to less than $5,000.
The March 31 call report showed $1.4 billion in outstanding loans, including 49,850 loans more than 90 days delinquent, with unpaid balances totaling $18.1 million or 1.30 percent of the total outstanding amount. The ratio for the previous year was 1.43 percent.
In 1953 the FHA paid 37,470 claims amounting to $14,995,408, bringing the year-end cumulative volume of claims paid to $147.7 million, or 1.99 percent of the total net proceeds of all insured loans, as compared with 2.18 percent at the end of 1952. FHA recoveries, actual and anticipated, from both notes and security assigned as a result of these claims, amount to $75.5 million, leaving unrecoverable paid claims of $73.6 million. The estimated unrecoverable amount is 0.98
188
FEDERAL HOUSING ADMINISTRATION
percent of the net proceeds of all insured loans. Cash recoveries in 1953 amounted to $7.6 million, representing an increase of 1.5 percent over recoveries in 1952. Recoveries in 1953 were the largest of any year to date.
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 staff of the FHA field office, and by reference of the case 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.
Property Management
All properties acquired by the Federal Housing Commissioner under the terms of mortgage insurance contracts are managed and sold under the supervision of the Property Management Division of the FHA in compliance with general policies established by the Commissioner. No sale of a rental project or a group of houses may be concluded without the specific concurrence of the Commissioner.
The policy of the FHA is not to sell acquired home properties in bulk, but to place them in good condition and then return them at fair prices in the going market, without speculative markup, to the homeownership use for which they were originally produced. The agency uses the facilities of qualified local real estate brokers to manage and sell 1- to 4-family properties through established retail channels.
The FHA rehabilitates acquired rental project properties to the extent necessary to enable them to compete in the rental market, and then operates them until the income is stabilized. Although a local real estate broker is engaged to act as managing agent for such a property, the marketing of the property is handled independently of a broker as a direct transaction between the Government and the purchaser. The sale is publicized in advance through advertisements stating minimum prices and terms, and the property is sold to the qualified operator whose offer meets the minimums and is most advantageous.
The FHA began 1953 with an on-hand inventory of 1,347 1- to 4-family homes and 64 rental developments having a total of 6,774 units. During the year, 742 1- to 4-family properties were acquired and 565 were sold, leaving the inventory at the end of the year at 1,524 properties. Acquisition of 29 rental developments consisting of 1,736 units and the sale of 7 developments totaling 895 units resulted in an inventory of 86 developments totaling 7,615 units at the end of 1953.
189
HOUSING AND HOME FINANCE AGENCY
FEDERAL HOUSING ADMINISTRATION
ORGANIZATIONAL CHART
ASSISTANT TO THE ___________________ __________________ EXECUTIVE
COMMISSIONER COMMISSIONER ____________ B0ARD
_____________ DEPUTY COMMISSIONER I___________________________
_ MINORITY GROUP —r—' HOUSING ADVISOR
_____r r.....i”—i—"'i-----------------------1— -r----1— । । ।
ASSISTANT................ASSISTANT---------------------ASSISTANT ASSISTANT
GENERAL COMMISSIONER COMMISSIONER COMMISSIONER COMMISSIONER
mi.ucn AUDITOR
orefx., ——
DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR
COMPTROLLER ADMINISTRATIVE PROPERTY »..nrrT RESEARCH AND
SERVICES MANAGEMENT "LKbONNEL BUDGET STATISTICS
DIVISION DIVISION DIVISION DIVISION DIVISION
r~------------—r~—'ill
REGIONAL REGIONAL REGIONAL REGIONAL REGIONAL
DIRECTOR DIRECTOR DIRECTOR DIRECTOR DIRECTOR
REGION 1 REGION II REGION HI REGION IV REGION V
“~t___________________~.r___________________r~ i
I- j
I FIELD
Chart 3.
FEDERAL HOUSING ADMINISTRATION
INJURING OFFICE BASIC ORGANIZATION CHART
DIRECTOR ASSISTANT DIRECTOR
_________EZ. ■ ■ ....- I - ~ 1 ~ I
MARKET ANALYST ATTORNEY ADV! SER ^'*5 MORTGAGEE CONTACT
OFFICER REPRESENTATIVE
__________I I________________. I . , I MORTGAGE SERVICING AND__________________________________________________________OFFICE MANAGEMENT UNDERWRITING TITLE I
PROPERTY MANAGEMENT DIVISION DIVISION DIVISION
DIVISION
RECEIVING RECORDING MORTGAGE CREDIT VALUATION
SECTION SECTION SECTION SECTION
COMMITMENT CLOSING ARCHITECTURAL LAND PLANNING
SECTION SECTION SECTION SECTION
FILESa SUPPLY PROCESSING “y INSPECTION
SECTTON SUB-SECTION SUB-SECTION
Chart 4.
190
FEDERAL HOUSING ADMINISTRATION
Statements of profit and loss on sales of properties acquired under the various FHA home mortgage insurance programs are included in Section 3 of this report (Accounts and Finance), together with similar statements on properties acquired and mortgage notes assigned to the FHA under the rental housing programs.
Organization and Personnel
There were 5,443 FHA employees at the beginning of 1953 and 5,231 at the end of the year. The average employment during the year was approximately 5,420, with about 74 percent of the employees serving in field offices. The remaining 26 percent were divided among the insuring, realty, fiscal, and liquidation operations carried on centrally in Washington, and the administrative services and other management staff functions necessary in the Washington headquarters office to support, direct, and control the operating program.
In 1953 there were 760 appointments of per-annum employees, and 972 separations were effected. Of the total number of employees separated, 182 were separated by reduction-in-force action and 58 were displaced under the separated-career-employee program. The separation rate averaged 18.2 percent, while the annual turnover rate was approximately 14 percent. During the year, 719 employees were promoted, 1,159 reassigned, and 103 demoted.
FEDERAL HOUSING ADMINISTRATION PER ANNUM EMPLOYEES
number BY MONTHS, 1934 -1953 number
10,000 ---1-------------------------------------1-------------------------------10,000
9,000 -------------------------------------------------------------------------- 9,000
8,000 ---------------------------------------*---------------------------------- 8,000
7.000 -------------------------------------------------------------------------- 7,000
total /^\
6,000 --------------------------------------------------------yJ---X------------6,000
$,000 --------------------------------------------------------------------------- itXO
/ \ / field / \
4.000 ---------j----s'-----------------------\ -(A--------r >/------------------ «°o
/vs. ( ,1^ vkj T/ _ |zJ--'
rXvFrr u a tup
, \ L-i—L+ - L ... js
Vr---k.!/~T+ I W—
1 TT hi-1 U
... lull,I lulu! h.l..I..!,.!,।I..I।,1 1 L,l..l,,l.ll 1 I [a
1934 1935 1936 1937 1938 1939 1940 1941 1942 1943 1944 1945 1946 1947 1948 1949 1950 1951 1952 1953- 1954
Chart 5.
191
HOUSING AND HOME FINANCE AGENCY
Charts 3 and 4 show the organization of the Washington headquarters and field offices, and Chart 5 reflects per-annum employment by months from the establishment of the agency in 1934 through December 1953.
At the end of 1953, the field organization included 138 offices—75 insuring offices, which receive and completely process applications for mortgage insurance; 14 service offices, which receive applications for mortgage insurance and process them for submission to insuring offices for review, issuance of commitments, and endorsement for insurance; and 49 valuation stations, where technical personnel prepare architectural and valuation reports for the insuring offices in their respective areas. Two new insuring offices were established during the year, six valuation stations were added, and the number of service offices decreased by seven.
Forty new directors of FHA insuring offices were appointed in 1953..
Publications
The following are the principal new or revised FHA publications issued in 1953. Unless otherwise indicated, they can be obtained, without charge, from the Federal Housing Administration, Washington 25, D. C.
Administrative Rules and Regulations under Section 8 of the National Housing Act.—FHA Form No. 2000, reprinted May 1953, to include all amendments through May 4,1953.
Amortization and Mortgage Insurance Premium Tables for Mortgages to be Insured under Section 203 of the National Housing Act.—FHA Form 2042B, revised 1953.
Annual Report.—Nineteenth annual report of the Federal Housing Administration ; year ending December 31, 1952. Government Printing Office, Washington 25, D. C. 50 cents.
Cooperative Housing Insurance.—Amortization and mortgage insurance premium tables for individual mortgages to be insured under Section 213 of the National Housing Act; FHA Form No. 3200, revised July 3, 1953.
Dealer Guide for FHA Title I Loans.—FH 30A, reprinted August 21, 1953. Government Printing Office, Washington 25, D. C. 10 cents.
Federal Housing Administration Digest of Insurable Loans.—Revised September 1953.
Insured Mortgage Portfolio (issued quarterly).—Vol. 17, Nos. 3 and 4; Vol. 18, Nos. 1 and 2. Government Printing Office, Washington 25, D. C. Single copy 15 cents, annual subscription 50 cents.
Planning Rental Housing Projects.—FHA Form No. 2460, reprinted 1953. Government Printing Office, Washington 25, D. C. 20 cents.
Property Improvement Loans under Title I of the National Housing Act, Regulations Governing Class 1 and 2 Loans.—FH-20, reprinted September 17, 1953.
What Is the FHA?—Revised July 1953.
192
Section 2
STATISTICS OF INSURING OPERATIONS
More detailed information on the volume and character of the various phases of FHA operations during 1953 is provided in this section of the report, including such subjects as the geographical distribution of FHA business, types of financial institutions participating in the various programs, termination and foreclosure experience, and selected characteristics of the insured mortgage and loan transactions.
In the last several years, FHA has operated pursuant to a multiplicity of titles and sections of the National Housing Act, which functionally may be classified in three principal groups:
(1) Home mortgage insurance.—Title I, Section 8; Title II, Sections 203 and 213; Title VI, Sections 603, 603-610, and 611; Title IX, Section 903.
(2) Project mortgage insurance.—Title II, Sections 207 and 213;. Title VI, Section 608, 608-610, and 611; Title VIII, Section 803; and Title IX, Section 908.
(3) Property improvement loan insurance.—Title I, Section 2.
In addition, a limited amount of activity occurred under the Title VI, Section 609, program for insurance of loans financing the production and marketing of prefabricated housing. Through the end of 1953, no contracts had been closed under the Title VII program of yield insurance on rental housing investments.
The following table indicates the relative importance of the three major types of FHA programs on the basis of dollar volume of insurance written during 1953 and cumulatively from 1934 through 1953:
Type of program Year 1953 1934-53
Billions of dollars Percent Billions of dollars Percent
Home mortgages 2.3 59 20.9 63
Project mortgages _ .3 7 4.6 14
Property improvement loans 1.3 34 7.4 23
Total. - 3.9 100 32.9 100
The home mortgage insurance program continued its predominance in 1953, although its relative share of FHA business was down from
193
HOUSING AND HOME FINANCE AGENCY
61 percent in 1952. Also behind the preceding year were project mortgages, declining from 10 to 7 percent of total. The impressive gain recorded by property improvement loans, from 29 to 34 percent in the last 2 years, is inflated somewhat by being based on loans tabulated.1
The percentage distribution of cumulative insurance written through the end of 1953 showed little change from the previous year, property improvement loans rising from 21 to 23 percent of the total, project mortgages declining from 15 to 14 percent, and home mortgages declining from 64 to 63 percent.
In the preceding section of this report, data on the annual and cumulative volumes of FHA insurance were summarized on a national basis. State distributions of the annual and cumulative volume of this insurance, based on the location of the properties involved, are presented in Tables 5 and 6.
Home Mortgage Insurance
FHA home mortgage insurance was available in 1953 under seven different sections of the National Housing Act:
Section 8.—Single-family properties only.
Section 203.—One- to four-family properties.
Section 213.—Single-family properties released from blanket cooperative project mortgage insured under Section 213.
Section 603.—One- to four-family properties involved in refinancing of existing Section 603 mortgage.
Section 603-610.—One- to seven-family properties originally built as part of public housing projects, now being sold to individual borne owners or investors.
Section 611.—Single-family properties released from blanket project mortgage insured under Section 611.
Section 903.—One- and two-family properties programed as defense housing pursuant to the terms of the Defense Housing and Community Facilities Act of 1951.
1 Due to the near exhaustion of the Title I, Section 2, authorization during the last third of 1952, the volume of property improvement loans tabulated as insured by FHA in 1952 was considerably below the volume of loans originated, while loans tabulated as insured in 1953, when increased authorization became available, included a backlog of loans actually originated in 1952.
194
FEDERAL HOUSING ADMINISTRATION
Table 5.—Volume of FHA-insured mortgages and loans, by State location of property, 1953
[Dollar amounts in thousands]
State Total amount Home mortgages Project mortgages Property improvement loans
Number Amount Units Amount Number Net proceeds
Alabama $43, 756 2,951 $25,673 33,761 $18, 085
Arizona 60,130 5' 924 47,387 164 $1,187 19i 334 11,556
Arkansas _ 30,659 2,806 23,205 12, 299 7,455
California 567,171 43, 538 39L 710 3,989 35,814 275; 429 139,326
Colorado 36,806 2,409 22,305 ' 146 1,001 23,391 13,522
Connecticut 48,625 3411 32,894 966 7' 971 11,484 7, 760
Delaware 5,389 450 4; 107 107 '849 ' 599 ' 436
District of Columbia 8,436 182 2,146 10,857 6, 290
Florida . 118,820 10,925 84, 748 52, 566 34,103
Georgia 6.3, 800 4,809 40,805 774 5,346 30,875 17,610
Idaho 25, 729 1, 946 16, 562 55 ' 398 12, 632 8, 770
Illinois 159, 748 7,876 77', 646 16 256 128,125 83,393
Indiana 128,698 8,511 74,147 1,475 11,181 74,524 43, 382
Iowa 42, 587 2 976 25i 353 29,299 17, 234
Kansas 71, 957 6 666 56, 224 216 1,780 25, 946 13, 953
Kentucky - .. 44,937 2, 734 24,365 764 5; 914 26, 769 14, 658
Louisiana 49,419 3'727 33,763 25,110 15, 656
Maine . 27, 522 1'056 8,013 1,500 14, 552 10,030 4, 957
Maryland. - 73, 785 3' 285 28', 789 2' 057 15; 105 59,441 29,891
Massachusetts 46,931 1 447 13,454 '804 6', 725 45, 374 26, 753
Michigan 275, 962 18,738 165,125 608 4, 740 189, 049 106,107
Minnesota _ - 52, 969 2, 226 21, 654 66 513 53,635 30, 777
Mississippi-, __ __ 20,458 1,804 13 '. 613 11,810 6,845
Missouri 9i; 763 6’ 744 61,938 82 520 56,744 29, 519
Montana.-- _ 16, 618 1'232 11,174 82 860 6,425 4, 584
Nebraska 3L 304 2 898 24, 046 12,164 7,258
Nevada - . 19,106 1 780 15,875 3,862 3,232
New Hampshire 4, 554 251 1', 838 5,330 2,716
New Jersey 108', 571 6,094 51,223 1,238 10,141 60,495 47, 632
New Mexico. 26, 552 2, 684 21,691 18 6,976 4,843
New York _ . 310,423 9' 261 80, 085 6,472 59,497 235,124 170,465
North Carolina 44,553 3, 989 32; 295 52 698 19, 222 11,563
North Dakota . 8,647 ' 568 5,308 95 754 3,996 2,585
Ohio .. -. 234', 269 15,308 148,154 1,053 8, 585 133,759 77, 530
Oklahoma 53, 353 4 190 34,323 32,421 19,030
Oregon _ 52, 318 4', 738 39, 241 50 371 19,053 12,681
Pennsvlvania 149' 404 9, 550 81,008 1,088 8, 977 101,962 59,428
Rhode Island _. 15,128 '703 6,386 ' 654 5,919 4,942 2,823
South Carolina.- - - 23,875 2,102 17, 255 25 ' 151 11,189 6,468
South Dakota 12, 593 1,128 9,251 5,407 3, 341
Tennessee 59^ 009 4,285 34,438 190 1,361 45,052 23,211
Texas. 254,905 18^ 298 145,169 2,195 16,430 166,771 93,305
Utah 43, 055 2,613 24, 245 ' 104 922 28, 952 17,887
Vermont 2,290 ' 141 1,131 1', 759 1.158
Virginia... 91i316 6,017 53, 709 2,385 18, 231 35; 160 19,376
Washington 114, 609 9', 274 82,816 '200 1,863 48,592 30,014
West Virginia . 16, 726 1', 158 10^ 132 14 ' 111 11,169 6,483
Wisconsin _ .... 32, 697 1'950 19,167 17 115 20, 280 13,462
Wyoming ._ 8', 609 ' 765 6,841 2; 092 1,768
Alaska.. __ _ _. 17j 917 855 13; 553 270 3,687 ' 508 568
Guam ' 669 31 '385 238 284
Hawaii.. 19,802 1,232 12, 935 760 6,146 808 722
Puerto Rico _ 13; 952 1' 354 9; 943 237 2; 016 1,603 1,994
Virgin Islands 5 3 5
Total1 2 2 3,882,942 261,590 2,289, 240 30,701 259,194 2, 244,227 1,334,287
1 Based on cases tabulated in 1953, including adjustments not distributed by States.
2 Includes $220,945 in loans insured under Sec. 609 not distributed by States.
195
HOUSING AND HOME FINANCE AGENCY
Table 6.—Volume of FHA-insured mortgages and loans, by State location of property, 1934-53
[Dollar amounts in thousands]
State Total amount Home mortgages Project mortgages Property improvement loans
Number Amount Units Amount Number Net proceeds
Alabama 1. 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 Guam. _ $397,795 336,155 250, 931 4, 565,941 321, 301 360, 771 78,031 235,282 903,829 581,034 164, 578 1, 632,163 940,311 293,339 480,059 324, 702 501,168 100,945 756, 569 345,893 2,072, 781 403, 759 192, 989 787,828 96,006 249,145 86,173 43,837 1, 519,035 172,008 3,089, 688 419,277 37,946 1,622,600 607,034 439,279 1,587,447 77,145 249,963 82, 588 545,138 1,842,324 288,148 29, 723 851,779 1,067,791 169,299 328, 572 74,046 70,313 682 105, 703 150,472 83 39,650 42,883 34, 639 569, 676 38,834 35,971 6,788 6,830 103,444 56,159 18,786 151,259 111,651 30,711 62,841 33, 269 56,668 10,365 52,404 19,500 229, 718 32, 541 24, 994 86, 729 11,494 32,001 9,476 4,564 131,191 20, 626 167,303 41,548 3,418 163,589 81,849 49,118 175,690 7,075 31,765 10, 921 63,329 218,003 32,888 4,007 77, 652 136, 766 22, 534 29, 439 11,221 1,957 33 9,546 14,737 9 $233, 402 263,882 193,630 3,470,397 240, 648 244, 894 40, 997 50,416 644, 214 333,214 114,845 978,187 646, 441 182,360 391,162 206,919 372,300 53,743 318, 368 118,731 1,419, 637 202, 220 131,538 545, 927 67,819 189,897 68,005 23,383 775,734 135, 226 1,078,380 252,169 22, 684 1,066,997 480,758 308,747 1,007,028 42,087 172, 285 62,590 367,412 1,256,510 203, 662 19,370 473,172 821, 698 128, 572 191, 222 60,072 23,713 398 82,475 93,308 77 11,820 2, 516 1,634 43,032 3,141 5,169 4,155 21,102 14,837 23,081 626 22,220 8,816 1,763 4,634 6,333 8, 651 2,188 43, 690 5,094 10,072 6,298 2,722 11,215 809 2,468 641 244 57, 215 2,072 117, 948 17,357 138 20,132 4,414 5,371 24,390 952 7,229 729 9,546 30,065 1,603 193 43, 767 9,982 797 4, 104 571 3,853 $71,413 16, 660 11,258 312, 659 22,417 38,054 30,277 142, 787 103,142 158,585 4,970 174, 558 65, 298 13, 6S9 29, 926 45,946 64,021 17,464 297, 386 39, 559 71,828 46,234 16,962 80, 929 6,076 18,368 4, 966 1,672 417,000 17, 748 960,465 106, 409 1,021 148, 734 32,077 39, 264 183,771 7, 973 44, 964 5, 573 56,127 205, 987 12, 687 1,512 279,112 77, 220 3,601 32, 589 4,451 45,349 247,909 113,004 111,605 1,967,446 136, 277 170, 763 14,846 86,733 308, 984 216,163 91,263 1,016,807 570, 994 227,972 152,810 178,304 153,291 69,489 336, 269 426,986 1,384, 376 369,022 108,090 424,127 42,917 94,259 22, 295 43,112 592,182 33, 976 1,804,891 143,019 30,767 991, 048 231,083 207,376 920,662 62,273 78,919 29,387 322, 777 881,073 160, 728 19,252 216,747 392,009 77, 907 234,449 16,162 1,263 238 2,445 27, 797 3 $92, 980 55,613 46,043 782,885 58, 235 77,822 6, 757 42,078 156,474 89, 235 44, 762 479,418 228,572 97, 290 ' 58,971 71,837 64,847 29,738 140,814 187,603 581,316 155,305 44,489 160,973 22,111 40,880 13. 202 18, 782 326,301 19, 034 1,050,844 60, 699 14, 241 406,868 94,199 91,267 396,648 27,085 32, 714 14,424 121, 599 379,827 71, 799 8,841 99,496 168.872 3L 126 104, 761 9, 523 1, 252 284 1,671 22,148 5
Hawaii Puerto Rico ... Virgin Islands Total1 2,927 5,759 21,557 35,015
2 32,934,059 3,419, 928 20,873,057 640,085 4,647,313 16, 565, 399 7,408,765
1 Based on cases tabulated through 1953, including adjustments not distributed by States.
2 Includes $4,924,344 in loans insured under Sec. 609 not distributed by States.
196
FEDERAL HOUSING ADMINISTRATION
As indicated in Table 7, insurance was written in 1953 under all of these sections but Section 611.
Volume of Business
FHA home mortgage insuring activity experienced an upturn in 1953, with the total number of dwelling units increasing 11 percent over 1952 to 272,300 and new construction up 24 percent to 151,800 units. Existing-construction volume declined a slight 2 percent to 120,500 units. As shown in Chart 6, the volume of total dwelling units in mortgage insurance written in 1953 was exceeded only in the years 1948-50, new construction in the years 1941-42 and 1948-51, and existing construction in the years 1949,1950, and 1952.
HOME MORTGAGES INSURED BY FHA, 1935-53
NUMBER OF UNITS ~ NUMBER OF UNITS
300,000-----------------------------------TOTAL HOMES —------\-------------300,000
250,000 ----------------------------------------------------/------------------~------- 250,000
I A
/ \ / / \
200,000 ----------------------/----------- \----------------/ —Z-----\------------- 200,000
/] \ // \
150,000 ■ ■ -----/---------/--------\-----\-----------/—,----------------\-------/— 150,000
/ / \ \ fl \ /
.J ' NEW HOMES |\ / / ...•..
100,000----------------/ -----------------------j— j-/-------------------——V----------- 100,000
/ / \ /
/ __________ / EXISTING HOMES |\
50,000 ./■’’-----X —----............................... /------------------------------ 50,000
// '''
0 I I I I I I I I I I I I_______________________________________I_I__________I_1_____I_I_____2_
'35 ' 36 ' 37 ' 38 ' 39 '40 '41 '42 '43 '44 '45 '46 ‘47 '48 '49 '50 '51 '52 '53
Chart 6.
Reflecting a record-high average mortgage amount per unit ($8,400), the amount of home mortgages insured by FEE A rose 18 percent in 1953 to $2.3 billion—the second largest volume in history. New construction, with an average of $8,300, increased 30 percent over the previous year to more than $114 billion, while the existing-construction volume, averaging over $8,500 per unit, was up 6 percent to a new high of over $1.0 billion.
Most of this insuring activity occurred under Section 203. With the exception of the period from 1943 through 1948, when the bulk of home mortgages were insured under the war and veterans’ housing provisions of Section 603, Section 203 has been FHA’s major home mort-
197
HOUSING AND HOME FINANCE AGENCY
198
Table 7.—Home mortgages insured by FHA, 1935-53
[Dollar amounts in thousands] New construction
Grand total1 Total new construction T°ta’:----------------------------------------------------------------
Year Secs. 2 and 82 Sec. 203 Sec. 603 Sec. 903
Units Amount Units Amount Units Amount Units Amount Units Amount Units Amount Units Amount 1935-39_________ 513,615 $2,007,777 235,391 $1,012,590 278,224 $995,187 16,628 $37,914 218,763 $974,676 ______________________
1940-44________ 981,388 4,116,585 738,051 3,117,345 243,337 999,240 22,373 61,888 399,467 1,792,224 316,211 $1,263,233 -----
1945-49________ 979,451 6,116,754 540,396 3,603,452 439,055 2,513,302 5,591 20,452 187,002 1,324,183 347,803 2,258,816 -----
1950 __________ 351,528 2,492,367 225,269 1,636,678 126,259 855,690 1.759 7,428 221,381 1,613,725 2,129 15,525 -----
1951___________ 261,231 1,928,433 161,673 1,215,535 99,558 712,898 6,106 28,514 155,416 1,187,402 23 184 ----
1952___________ 246,109 1,942,307 122,764 968,613 123,345 973,694 5,615 29,112 102,695 831,748 14,449 $107,716
1953___________ 272,299 2,288,626 151,777 1,258,558 120,522 1,030,068 4,276 21,393 121,981 1,038,234 25,520 198,933
Total____ 3,605,621 20,892,848 2,175,321 12,812,770 1,430,300 8,080,078 62,348 206,701 1,406,705 8,762,191 666,299 3,537,229 39,969 306,649
Existing or refinanced construction
Year Sec. 8 Sec. 203 Sec. 213 Sec. 603 Sec. 603-610 Sec. 611 Sec. 903
Units Amount Units Amount Units Amount Units Amount Units Amount Units Amount Units Amount 1935-39_________________________ 278,224 $995,187 _________________________________________________________________________
1940-44_________________________ 236,737 973,301 _____________ 6,600 $25,939 ____________________________________________
1945-49_________________________ 419,194 2,423,058 _____________ 16,874 81,155 2,987 $9,089 ____________________________
1950____________________________ 125,186 852,330 _____________ 136 481 937 2,880 ____________________________
1951.............. 46 $215 97,991 706,196 313 $2,464 17 74 1,185 3,909 6 $40 ------------
1952____________ 200 996 119,673 940,724 3,235 30,355 16 109 40 182 69 516 113 $819
1953____________ 103 553 117,269 998,977 2,689 27,062 65 279 7 44 --------------- 389 3,154
Total_______ 349 1,764 1,394,274 7,889,772 6,237 59,881 23,707 108,031 5,156 16,103 75 556 502 3,973
1 For total number and amount of mortgages insured under each section in 1952, 1953. and cumulatively through the end of 1953, see Table 2.
2 Sec, 2 activity, 1938-50; Sec. 8 activity, 1950-53,
FEDERAL HOUSING ADMINISTRATION
gage program since the establishment of the agency in 1934. The following data emphasize the predominance of Section 203 in FHA’s home mortgage operations in 1953:
Total New Existing
Section Percentage distribution of—
Units Amount Units Amount Units Amount
203 88 89 80 82 98 97
903 9 9 17 16 (!) (i)
8 2 1 3 2 (!) (i)
213 1 1 2 3
Others ... _ (1) (1) (!) (!)
Total 100 100 100 100 100 100
1 Less than 0.05 percent.
As denoted in Table 7, FHA financing assistance with respect to proposed or new construction was limited in 1953 to Sections 8, 203, and 903. Almost all insurance written under Sections 8 and 903 involved new construction. Under Section 203, however, new construction had only a slight edge in the proportion of dwelling units and amount of mortgages insured in the last year. Among the factors that may have contributed to the high level of existing construction business are the following:
(1) In the price ranges above $11,000, FHA financing terms for ••
/ 0Mm / —.......’Y\ILI
/ / 18S58
Bffik --------X^^7>777//7>>}
sXXXg^z/Z okla zz4 L4ZZ22ZZZ^^^
.;;.?Y ■ J nm« ARK [
iO§iiiOiiihiwiM'ss ala v///^/a
KEY:-
r I LESS THAN 1,000
•--- v8$88ooo8o§^ rflaa
[Z.'p I 1,000 - 2,999
3,000 - 4,999 '^&x| ____ ^^8
M 5,000 - 9,999 ALASKA □ PUERTO RICO
gggga 10,000 -19,999 GUA“ □ V,R6,N ,SLAN0S □
■d SO,000 OR MORE HAWAII (;++)
Chart 7.
Among the larger-volume States in which the existing-construction volume surpassed the new-construction volume were Illinois, Missouri, New Jersey, New York, Ohio, Virginia, and Washington.
As indicated in Table 10, the Section 203 program predominated during 1953, both in new and existing construction, in all States but Georgia and Massachusetts, where Section 903 had a slight edge in the number of new dwelling units. Although only in limited numbers, Section 8 mortgages were insured during the year on low-cost properties in 36 States and Hawaii. Over one-fourth of these units were located in Michigan, while other States with comparatively large volumes of Section 8 activity were New York, Florida, and Kansas. Reflecting the far-flung distribution of the Nation’s defense plants and military establishments, some 43 States and Hawaii were sites of defense housing properties securing mortgages insured under Section 903 in 1953. More than half of these, however, were concentrated in six States—California (with about a fifth of the total), Georgia, Indiana, Kansas, Ohio, and Texas.
Cumulative totals.—Table 11 shows the cumulative number and amount of home mortgages in each State, Territory, and possession insured by FHA through the end of 1953 under all programs combined, and under Sections 203 and 603 separately. Nearly one-half of the mortgages were on properties located in 7 States—California, far in the lead with almost 570,000 (or one-sixth of the total), Michi
204
FEDERAL HOUSING ADMINISTRATION
gan with nearly 230,000, Texas with 218,000, Pennsylvania with about 176,000, New York with 167,000, Ohio with about 164,000, and Illinois with over 151,000.
Table 11.—Volume of FHA-insured home mortgages, by State location, 1935-53
[Dollar amounts in thousands]
State Total Sec. 203 Sec. 603 Other sections 1
Number Amount Number Amount Number Amount Number Amount
Alabama 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 Guam 39, 650 42,883 34. 639 569, 676 38,834 35, 971 6,788 6,830 103, 444 56,159 18, 786 151, 259 111,651 30. 711 62, 841 33,269 56,668 10,365 52, 404 19, 500 229, 718 32, 541 24, 994 86, 729 11, 494 32, 001 9, 476 4,564 131,191 20, 626 167,303 41, 548 3. 418 163, 589 81,849 49,118 175, 690 7,075 31, 765 10. 921 63, 329 218,003 32,888 4,007 77,652 136, 766 22, 534 29, 439 11, 221 1, 957 33 9, 546 14, 737 9 $233, 402 263,882 193. 630 3, 470,397 240,648 244,894 40, 997 50, 416 644, 214 333, 214 114,845 978,187 646, 441 182,360 391,162 206,919 372,300 53,743 318, 368 118, 731 1, 419,637 202,220 131, 538 545, 927 67,819 189,897 68, 005 23. 383 775, 734 135,226 1,078,380 252,169 22,684 1,066,997 480, 758 308, 747 1,007.028 42,087 172,285 62, 590 367, 412 1,256, 510 203, 662 19,370 473,172 821,698 128,572 191, 222 60,072 23, 713 398 82,475 93,308 77 28, 759 32,396 28, 363 418,559 32,788 28,138 4,117 4,049 72,974 39, 287 17, 869 127,012 93, 771 27, 722 47,400 27,942 42, 920 8,952 35,899 15,821 183,179 27,301 19, 792 79,149 11,067 25, 716 7,100 4,108 111,556 17,121 136,097 30, 902 3,165 136, 490 62,403 41,397 142,936 5. 772 22, 545 10,113 45, 351 155, 674 24, 761 3, 711 54, 076 114, 355 21,171 24,436 9, 997 1,935 33 8, 819 10,575 7 $175, 209 204.044 160, 743 2,587,379 208,173 206, 281 26,276 29, 723 459,939 235, 725 109,155 839,826 535, 729 166,334 293,881 175,472 288,769 46, 203 219,695 97, 736 1,148, 474 168,844 102,249 504, 772 64,303 155,870 54,582 20, 656 658, 743 112,128 892,814 186, 321 20, 757 904, 071 364,655 265, 341 808,072 35, 258 117,558 56,065 259,397 921.385 159, 835 17, 974 350,044 703, 635 122,227 161, 638 53, 230 23, 643 398 77,192 74,162 65 9,649 7,132 4,869 126, 012 5,069 7, 527 2,631 2, 780 26,895 13,307 527 21,975 15, 801 2,551 10,329 4, 737 12,381 1,240 14, 409 3,076 41,334 4,810 4,168 7,080 334 5,868 1, 925 337 16. 615 2.624 23,069 8,829 162 24,771 17,706 6,845 31,443 1,263 6,378 520 15, 977 52,028 7,920 283 18, 806 19,076 1,325 4,425 1,125 1 $50, 612 43, 215 24, 493 742,836 29,429 37,340 14, 622 20, 691 165,132 70. 525 3,104 128, 698 93,631 13, 568 57, 646 27,874 75, 633 6,470 88, 416 17,275 248,254 31,968 22, 926 38, 418 2, 849 31,520 10,177 2,173 106, 257 16,587 151,850 53, 933 1,135 146, 767 101, 697 40, 369 193,118 6,730 34,137 3,439 96,140 281,987 42,924 1,372 102, 931 103, 235 6,224 25, 510 6,582 7 1,242 3, 355 1,407 25,105 977 306 40 1 3, 575 3, 565 390 2,272 2,079 438 5,112 590 1,367 173 2,096 603 5,205 430 1,034 500 93 417 451 119 3,020 881 8,137 1,817 91 2,328 1,740 876 1,311 40 2,842 288 2,001 10,301 207 13 4, 770 3,335 38 578 99 21 $7, 581 16, 623 8, 395 140,181 3,047 1,273 100 3 19,143 26, 964 2, 587 9,663 17,081 2, 458 39, 634 3,574 7, 898 1,070 10, 256 3, 720 22,909 1,408 6,364 2,736 667 2,506 3, 246 554 10, 734 6,510 33, 716 11,914 792 16,159 14, 406 3,037 5,838 99 20, 590 3,086 11,876 53,139 903 25 20,197 14,828 121 4,075 259 63
Hawaii Puerto Rico Virgin Islands Total2 544 4,162 2 3,677 19,146 13 183 1,605
3, 419,928 20,873,057 2, 687,548 16,632,647 624,652 | 3,645,260 107, 728 595,150
i Includes Secs. 2, 8, 213, 603-610, 611, and 903.
2 Cases tabulated through Dec. 31, 1953.
Terminations and Foreclosures
About 1,450,000 FHA insurance contracts on home mortgages aggregating over $7 billion in original principal amount had been termi-
205
HOUSING AND HOME FINANCE AGENCY
mated through the end of 1953. Remaining in force at that date were about 1,925,000 mortgages with combined total face amounts of $13.7 billion—or approximately the amount of home mortgage insurance written during the 7 years from 1947 through 1953. The outstanding balance on the home mortgages still in force at December 31, 1953, after allowance for amortization, was about $12.0 billion, or 57 percent of the total amount of home mortgages insured by FHA since its establishment. (See Table 3, Section 1 of this report.)
FHA insurance contracts are terminated when:
(1) The loan is paid in full at maturity.
(2) The loan is prepaid prior to maturity. If prepaid without refinancing or with the proceeds of a non-FHA mortgage involving the same or a new mortgagor, it is classified as a prepayment in full. If prepayment involves refinancing with a new FHA-insured mortgage, it is classified as prepayment by supersession.
(3) The mortgage is foreclosed and title to the property is acquired by the mortgagee. The mortgagee may either transfer the title to FHA in exchange for debentures and a certificate of claim for those foreclosure expenses not covered by the debentures, or retain the property, in which case the mortgagee “withdraws” from the FHA contract and foregoes its insurance privileges.
The disposition of FHA-insured home mortgages terminated through the end of 1953 is shown in Table 12. Nearly all home mortgage terminations have resulted from prepayments—16 percent prepaid with new FHA-insured home mortgages and 82 percent prepaid in full with funds from other sources. Only 1.4 percent of the terminations resulted from foreclosure. Nearly three-fifths of the foreclosures occurred under Section 603, which had the highest foreclosure rate (3.9 percent of terminations) of all home mortgage programs.
Of the properties involved in foreclosed cases, mortgagees transferred to FHA 15,475 (65 percent insured under Section 603) in exchange for debentures and retained 4,660 (nearly two-thirds insured under Section 203) for disposition by sale or rent. Detailed information on the financial experience of FHA with acquired home properties is presented in Section 3 of this report.
Included in the terminations shown in Table 12 were nearly 124,000 that occurred in 1953. Of these, about 92,000 were prepayments in full, 29,000 were supersessions, 1,900 were matured loans, and 1,300 were foreclosures.
206
FEDERAL HOUSING ADMINISTRATION
Table 12.—Disposition of FHA-insured home mortgages, 1935-53
[Dollar amounts in thousands]
Total i Sec. 8 Sec. 203 Sec. 213
Number Amount Number Amount Number Amount Number Amount
Mortgages insured 3,376,833 $20,766,238 16, 582 $81,854 2.690, 459 M6,651,963 6, 237 $59,881
Mortgages terminated: Prepaid in full.., .
1,183, 348 236,051 11, 217 15,475 4,660 597 5, 729,392 1,183,422 31,986 86,969 26,356 2,638 168 55 763 251 959, 777 169,732 11, 217 5,285 3,014 459 4,618,084 862,142 31,986 27, 224 16,838 2,075 11 101
Prepaid by supersession... Matured loans
Properties acquired by mortgagee: Transferred to FHA... Retained by mortgagee ... 57 4 244 19
Other terminations
Total terminations
1,451, 348 7,060, 763 284 1,276 1.149,484 5, 558, 349 11 101
Mortgages in force.
1,925, 485 13, 705, 474 16, 298 80, 577 1, 540,975 11,093,614 6,226 59, 780
Sec. 603 Sec. 603-610 Sec. 611 Sec. 903
Number Amount Number Amount Number Amount Number Amount
Mortgages insured 624,652 $3,645,260 3, 362 $16,103 75 $556 35, 466 $310,621
Mortgages terminated: Prepaid in full... ... .
223,033 66,092 1,108, 716 319,795 279 91 1,106 365 3 22 77 81 599 870
Prepaid by supersession. _. Matured loans
Properties acquired by mortgagee: Transferred to FHA... Retained by mortgagee 10,118 1,641 138 59,426 9,496 563 12 1 39 3 3 36
Other terminations
Total terminations
301,022 1,497,996 383 1,513 3 22 161 1,505
Mortgages in force...
323, 630 2,147, 264 2,979 14, 590 72 534 35, 305 309,116
i Excludes Sec. 2 home mortgages.
Yearly trend.—Chart 8 shows the trends in yearly rates, of FHA home mortgage terminations for total types, for prepayments (in full and by supersession), for total foreclosures, and for those foreclosures that result in transfer of properties to FHA. The rates represent the percentage relationship between the yearly volume of terminations and the average number of mortgages in force during the year.
The curves in the chart illustrate graphically that the trend of FHA home mortgage termination rates has been determined almost exclusively by prepayments; that the peak of prepayments (and hence terminations) occurred in the early postwar years when mortgage obligations were retired on homes retained by owners or on those sold to new owners; that foreclosures even in peak years represented only a small part of total terminations; that FHA property acquisitions, as expected, tend to parallel foreclosures with the rate consistently some-
207
HOUSING AND HOME FINANCE AGENCY
YEARLY TERMINATION RATES OF FHA HOME MORTGAGES. 1935 -1953*
MOWGAGE^iN FORCE -Zt MORTcSJ^ IN FORCE
t5t--------/—A /—A “*
TOTAL TERMINATIONS / \ PREPAYMENTS / \
f 10X d—\ ------------------------——v4- >o*
5X j-—/-------------------------—/ «
O I I I 1 I I Illi I I I Illi_1—1—J—I-1, ..I J_J-1 I I .J-2.
FORECLOSURES FHA ACQUISITIONS
(Ma XM
1939 1944 1949 ^3 1935 1939 1944 1949 53
** YEARLY VOLUMES OF TOTAL TERMINATIONS, PREPAYMENTS. FORECLOSURES.
AND FHA PROPERTY ACQUISITIONS AS PERCENT OF AVERAGE NUMBER OF
INSURED MORTGAGES IN FORCE DURING EACH YEAR.
Chart 8.
what lower than foreclosures; and that foreclosure rates react not only to economic conditions (as evidenced by the peaks following the 1937-38 recession and the 1948-49 inventory adjustment) but may also rise after a period of heavy new loan activity, as in 1944 when foreclosures of Section 603 war housing increased following the peak years of activity under that program. In 1953, the prepayment (and hence total termination) rate was on the upgrade, while foreclosures (and FHA acquisitions) continued to decline, reflecting the general wellbeing of the economy.
Table 13 shows the number of terminated cases, titles acquired by mortgagees, and foreclosures in process at the year end, for each of the last 4 years and by 5-year periods from 1935 through 1949. Terminations in 1953 (124,000) were over one-fifth higher than in 1952, principally because of a 24-percent increase in prepayments. Practically all the terminations occurred under Section 203 (82 percent) and Section 603 (17 percent).
Of the 20,434 properties shown as acquired by mortgagees through the end of 1953 as a result of foreclosure, 299 were being held subject to redemption or pending final disposition (i. e. transfer to FHA or retention by mortgagee), compared with 513 such cases at the close of 1952. Causing this decline in the number of these “pending” cases and also in the number of insurance contracts finally terminated be-
208
FEDERAL HOUSING ADMINISTRATION
Table 13.—Terminations of FHA-insured home mortgages, 1935-53
Year Total terminations Titles acquired by mortgagees1 Foreclosures in process at year end
Number for the period Cumulative through end of year Number for the period Cumulative through end of year
Number Percent of insured mort- . gages in force
Number Percent of total insured Number Percent bf total insured
Total
1935-39 28,258 281,675 675,029 131,833 109, 795 101,134 123,624 28,258 309,933 984, 962 1,116, 795 1,226, 590 1,327,724. 2 1,451,348 6. 07 22. 66 43.06 42. 50 42. 58 42.62 42.98 2,095 6,912 4,684 2,610 1,523 1,478 1,132 2,095 9,007 13. 691 16,301 17,824 19,302 20,434 0.45 .66 .60 .62 .62 .62 .61 808 820 1,281 1,167 899 646 822 0.18 .08 .10 .08 .05 .04 .04
1940-44
1945-49
1950 .
1951
1952
1953
Sec. 8
1951 2 2 0.03 1 0 02
1952 89 91 .75 5 5 0 .04 5 :o<
1953 193 2 284 1. 71 64 69 .42 12 .07
Sec. 203
1935-39 28,258 28, 258 6 07 2 095 2 095 0 45 808 O 1ft
1940-44 269; 406 297, 664 27 52 2 308 d 403 HQ 99 u. io
1945-49 486; 037 783 701 47 13 ’ 244 5’ 647 34 302 . vl no
1950 97,144 880,845 44.02 677 6; 324 .32 502 . VO .04
1951 85, 506 966,351' 43 02 760 7 084 82 515 04
1952 8i; 301 1, 047,652 42 60 684 7’ 768 32 438 no
1953 10i; 832 2 1,149,484 42.72 741 509 .32 511 • Vo .03
Sec. 213
1952 1 10 1 11 0.03 .18 .. --
1953 3 0.05
Sec. 6033
1940-44 12,269 188,992 34,689 24, 287 19,743 21,425 12,269 201,261 235, 950 260, 237 279,980 2 301,405 4. 28 32.23 37.62 41.45 44. 59 47.99 3,604 4,440 1, 933 763 789 305 3,604 8,044 9, 977 10, 740 11,529 11,834 1.26 1.29 1.59 1.71 1.84 1.88 721 979 665 383 203 178 0.26 .23 .17 .10 .06 .05
1945-49
1950
1951
1952
1953
Sec.611
1953 3 3 4. 00
Sec. 903
1953 161 2 161 0. 45 22 22 0.06 118 0.33
1 Includes titles transferred to FHA. titles retained by mortgagees with termination of mortgage insurance and titles to foreclosed properties subject to redemption or held by mortgagees pending final disposition—8 tinder Sec. 8, 210 under Sec. 203, 62 under Sec. 603, and 19 under Sec. 903.
2 Of the cumulative number of terminated mortgages, FHA reinsured 55 Sec. 8 cases, 169,732 Sec. 203 cases, 66,183 See. 603 cases, and 81 Sec. 903 cases. A reinsured mortgage involves the same property as covered by the original FHA insurance contract.
3 Includes Sec. 603-610 cases.
209
HOUSING AND HOME FINANCE AGENCY
cause of foreclosure (from 1,572 in 1952 to 1,346 in 1953) was the reduction in the number of property titles acquired by mortgagees during the year (1,132) by roughly one-fourth from the year before. Acquisitions of Section 203 properties, accounting for nearly two-thirds of the total, were 8 percent higher than in the previous year, while Section 603 acquisitions, representing one-fourth of the total, declined 61 percent.
Foreclosures in process on December 31 increased 27 percent from 1952 to 1953, although the percentage relationship to insurance in force remained the same at four one-hundredths of 1 percent. The comparable percentage for Section 203 registered no change and for Section 603 declined slightly. Reflecting difficulty in the sales and rental of defense housing, Section 903 foreclosures in process at the year end numbered 118, or one-third of 1 percent of insured cases in force.
State distribution —Table 14 provides an indication of FHA home mortgage experience in each State and Territory through the end of 1953 under the two major home mortgage programs—Sections 203 and 603. The total number of mortgages insured, the percent of these terminated, the percent terminated because of foreclosures (i. e., titles acquired by mortgagees), and the number remaining in force at the year end are shown for each State.
The proportion of Section 203 contracts terminated ranged from none in Guam and the Virgin Islands (where FHA insurance contracts have been in force a comparatively short time) to 62 percent in Vermont, with a national average of about 43 percent. In the greater number of States, the termination ratios were between 35 and 50 percent, only 13 States having ratios below 35 percent and 9 States having ratios in excess of 50 percent. Section 203 terminations because of foreclosure, averaging less than one-third of 1 percent of insured cases for the entire nation, exceeded one-half of 1 percent in only 11 States and 1 percent in only 3 States.
The combination of a negligible volume of reinsurance under Section 603 and over 21,000 terminations of insurance contracts during 1953 increased the cumulative to-date termination ratio under this section to about 48 percent. In 25 States, more than half of the Section 603 cases had terminated, and in only 8 States was the proportion under 35 percent. The foreclosure rate under Section 603, mirroring the emergency nature of the program, was notably higher than for Section 203, averaging 1.9 percent of all mortgages insured. In 10 States foreclosures exceeded 5 percent of the insured cases, while in 28 States and Territories it was less than 1 percent.
210
FEDERAL HOUSING ADMINISTRATION
Table 14.—Termination of FHA-insured home mortgages, by State location, Secs. 203 and 603, 1935-53
State Sec. 203 Sec. 603
Total mortgages insured Terminations Titles acquired 1 Insured mortgages in force December 31, 1953 Total mortgages insured Terminations Titles acquired 1 Insured mortgages in force December 1, 1953
As percent of insured As percent of insured
Alabama 28,759 32,396 28,363 418, 559 32,788 28,138 4,117 4,049 72, 974 39, 287 17, 869 127,012 93, 771 27, 722 47, 400 27, 942 42, 920 8, 952 35,899 15,821 183,179 27,301 19, 792 79,149 11,067 25, 716 7,100 4,108 111, 556 17,121 136,097 30, 902 3,165 136, 490 62,403 41,397 142,936 5, 772 22, 545 10,113 45, 351 155, 674 24, 761 3,711 54,076 114,355 21,171 24,436 9,997 1,935 33 8,819 10, 575 7 36.40 24.20 31.60 48.43 40.54 36. 69 40.00 57.92 30.14 38. 63 38. 25 57. 72 44.32 47.41 38. 50 38. 18 30. 99 44.25 48.70 52. 92 43.43 53.39 35.83 43. 14 46.17 42.98 26.99 59.91 50.16 21.67 37. 27 36.37 42.40 48. 79 36.86 33.05 48.92 51.75 30.09 45.07 39.66 31.67 41.67 62.44 34.92 43.37 46. 54 53. 95 51.58 25.12 0.60 .19 .94 .15 .15 . 16 .90 .07 .36 .48 .21 .19 .20 . 12 .88 .35 .51 .87 .35 2.14 .39 .36 .50 .29 .10 .22 .01 3.02 .63 .04 .66 .29 .25 .14 .35 .20 .19 .47 .39 .21 .33 .17 .17 1.24 .27 .16 .25 .17 .16 18, 291 24,557 19,400 215.843 19.497 17,815 2,470 1,704 50,982 24, 111 11,035 53, 700 52, 209 14, 580 29,152 17, 273 29,621 4,991 18,417 7,448 103, 617 12, 726 12. 701 45,001 5,957 14,662 5, 184 1,647 55, 596 13,411 85,376 19,663 1,823 69,892 39,399 27,717 73.016 2,785 15,762 5, 555 27,366 106,365 14,442 1,394 35,194 64,758 11,318 11, 252 4,841 1,449 33 6,251 8,808 7 9,649 7,132 4,869 126,012 5,069 7. 527 2,631 2,780 26,895 13,307 527 21,975 15,801 2, 551 10, 329 4,737 12,381 1,240 14,409 3,076 41,334 4,810 4,168 7,080 334 5,868 1, 925 337 16,615 2,624 23,069 8,829 162 24, 771 17, 706 6,845 31,443 1, 263 6,378 520 15,977 52,028 7,920 283 18,806 19,076 1,325 4,425 1,125 1 53.60 22. 34 48.94 49.52 44. 19 70. 32 76.85 45. 22 24.22 49.00 52.18 64. 65 48. 18 60. 92 55.42 47. 48 51.17 67. 02 57.82 61.87 47. 29 48.90 28. 26 58.46 56. 59 65.24 55. 22 48.96 49. 46 31,29 33. 92 31. 22 46.91 61.45 42.56 49.42 53.14 61.60 45. 16 50.00 29.64 40. 15 71.87 72.44 50.16 68.00 61.51 61.47 42.67 100.00 6.50 6.74 1.09 .21 . 12 21.27 .11 .18 1.26 4.93 . 19 .07 .51 5.80 1.07 .06 4. 57 2. 66 6.72 1. 66 2i23 .52 .34 2.70 .30 2. 25 .05 9.20 1.70 .04 2.18 2.15 4,477 5,539 2,486 63, 615 2,829 2, 234 609 1,523 20,381 6, 786 252 7, 768 8,188 997 4, 605 2, 488 6,046 409 6,078 1,173 21, 787 2,458 2, 990 2,941 145 2,040 862 172 8,398 1,803 15, 245 6,073 86 9, 548 10,171 3, 462 14, 733 485 3, 498 260 11, 241 31,141 3, 020 78 9,372 6,104 510 1,705 645
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 .. .49 1.94 .28 . 18 . 16 6.07 .19 1.04 .97 5.04 4. 95 5. 52 .82 21.28 .29
Oklahoma
Oregon..
Pennsylvania
Rhode Island .
South Carolina
South Dakota
Tennessee. _
Texas _ _
Utah
Vermont
Virginia
Washington
West Virginia .
Wisconsin... ...
Wyoming
Alaska.
Guam
Hawaii. _ 29.12 16.71 .02 .14 544 4,162 2 41.18 7.42 50.00 320 3,853 1
Puerto Rico. _ .43
Virgin Islands
Total ’
2,690,459 42.72 .32 1, 540, 975 624,652 48.19 1.89 323,630
1 Includes titles transferred to FHA, titles retained by the mortgagees with terminations of mortgage insurance, and titles to 210 Sec. 203 and 62 Sec. 603 foreclosed mortgages that are subject to redemption or held by mortgagees pending final disposition.
1 Cases tabulated in Washington through Dec. 31, 1953.
211
HOUSING AND HOME FINANCE AGENCY
Termination Experience
Analysis of terminating FHA mortgages on 1- to 4-family homes insured under Section 203 discloses their life expectancy to be an estimated 7.88 years. The life expectancy of a mortgage is the period of time for which the mortgage can, on the average, be expected to remain in force. The figure for this average period is based on (1) cumulative termination experience of the home mortgages insured prior to 1952 observed over the 17-year period from the inauguration of the first of FHA’s home mortgage insurance programs, operating under the Mutual Mortgage Insurance Fund, to the end of policy years ending in 1952, and (2) a projection of this experience through 3 additional years to reflect the life expectancy of mortgages with maturities of 20 years. The termination experience includes all home mortgage insurance contracts written under Section 203 from 1935 through 1951 and exposed to their policy anniversaries in 1952 or prior termination dates.
The estimated expectancy of Section 203 home mortgages based on the 1935-52 termination experience shows an increase of 0.18 years over the comparable figure reported in the 1952 annual report, where the life expectancy of these mortgages, based on the 1935-51 termination experience, was shown to be an estimated 7.70 years. The annual report for the year ending December 31, 1951 showed an estimated life expectancy for these home mortgages of 7.55 years, based on the 1935-50 termination experience. This trend toward longer life expectancies for Section 203 mortgages can be expected to continue as the rates of prepayments, which bulk so large in total terminations of insurance contracts, continue at levels below the rates in the late war and early postwar years (see Chart 8). Total terminations of Section 203 mortgages relative to insurance contracts in force reached a peak rate in 1946. Termination rates in the late war and early postwar period, 1944-48, were substantially higher than in either prior or later years. These record rates of terminations, predominant!^ prepayments, resulted from the paying off of mortgages and the turnover of residential properties, both attributable to the high personal savings and incomes and the shortages of consumer goods and housing in that war and postwar period.
The 1935-52 termination experience of Section 203 mortgages provides the basis for the survivorship table presented in Actuarial Schedule 1. The table shows total annual termination rates by policy year and their application to an initial hypothetical group of 100,000 mortgages on 1- to 4-family homes. When the termination rates are applied to this initial group, the number of mortgage terminations during each policy year and the number of mortgages surviving at the beginning of each policy year are derived.
212
FEDERAL HOUSING ADMINISTRATION
Actuarial Schedule 1.—Survivorship table of a group of 1- to J- family home mortgages based on aggregate termination experience by policy years for Sec. 203 mortgages insured from 1935 through 1951 and exposed to policy anniversaries in 1952 or prior termination dates
Policy year Mortgage survivors at the beginning of policy year Annual termination rates 1 Mortgage terminations during the policy year Policy year Mortgage survivors at the beginning of policy year Annual termination rates 1 Mortgage terminations during the policy year
1st.. 100,000 0.0262079 2,621 10 th 33, 773 0.1523362 5,145
2d 97,379 .0492760 4, 798 11th 28, 628 . 1421310 4, 069
3d 92, 581 . 0749205 6, 936 12th 24,559 . 1431409 3, 515
4th 85, 645 . 1039655 8 904 13th 21,044 . 1432536 3,015
5th 76, 741 . 1315634 io’ 096 - 14th 18 029 . 1532564 2, 763
6th 66', 645 . 1502859 10 016 15th 15,266 . 2570375 3,924
7th 56, 629 . 1595251 9,034 16th 11,342 . 2627400 2, £80
8th 47, 595 . 1605922 1, 643 17th 8,362 . 3511450 2,936
9 th 39,952 . 1546551 6,179
1 The method of determining these rates is identical with the standard method of computing probabilities.
A policy year covers the annual period beginning with the date on which a mortgage contract is endorsed for insurance. Thus a mortgage insurance contract which has not passed its first anniversary is in force or exposed to the risk of termination during its first policy year. If the contract is terminated before this anniversary, it is terminated during its first policy year. Determined by the standard method of computing probabilities, the rate of termination for the first policy year is the number of mortgage insurance contracts terminated during this policy year divided by the number of mortgage insurance contracts in force (i. e., exposed to the risk of termination) at the beginning of the first policy year. Likewise, the rate of termination for the second policy year is the number of mortgages terminated during the second policy year divided by the number of mortgages in force at the beginning of the second policy year.
The mortgage survivors and mortgage terminations presented in Actuarial Schedule 1 are interpreted in the following manner: Based on the 1935-52 termination experience of Section 203 mortgages, from an initial group of 100,000 home mortgages 2,621 can be expected to terminate within the first policy year after the date of their insurance. This number of terminated mortgages represents the product of the annual rate of termination in the first policy year of 0.0262079 and the initial number of mortgages. When these terminated mortgages are subtracted from the initial number of 100,000, it leaves 97,379 mortgage survivors at the beginning of the second policy year. During the second policy year, 4,798 mortgages can be expected to terminate* The annual termination rate in the second policy year is 0.0492760, and when this rate is applied against the survivors at the beginning of the second policy year the product is 4,798 mortgages. Subtracting these from the 97,379 mortgages in force at the beginning of the second policy year leaves 92,581 mortgage survivors at the beginning of the third policy year*
213
HOUSING AND HOME FINANCE AGENCY
The total annual termination rates by policy year shown in the survivorship table are a composite of rates for the two types of prepayment—prepayments in full and prepayments by supersession; the two types of titles acquired—titles retained by mortgagees and titles transferred to FHA; and other types of termination, which are predominantly maturities. These individual rates are shown in Actuarial Schedule 2. The component annual rates of termination are additive. The rate of prepayment in full for a given policy year can be added to the rate of prepayment by supersession for the same policy year to give the total rate of prepayment for the given policy year. The rate for each policy year for titles acquired by mortgagees and retained by mortgagees can be combined with the rate for the same policy year for titles acquired by mortgagees and transferred to FHA, to give a total foreclosure rate by policy year.
Actuarial Schedule 2.—Annual termination rates1 for 1- to 4-family home mortgages by type of termination based on aggregate termination experience by policy year for Sec. 203 mortgages insured from 1935 through 1952 and exposed to policy anniversaries in 1952 or prior termination dates
Policy year Type of termination
Prepayments in full Prepayments by super-session Titles acquired by mortgagees Others Total
Retained by mortgagee Transferred to FHA
1st - 0. 0191540 0. 0068589 0.0000748 0.0000828 0.0000374 0.0262079
2d... .0374305 .0106983 .0003559 . 0007595 .0000318 . 0492760
3d .0588369 .0145636 .0004099 . 0010402 .0000699 . 0749205
4th . 0857987 .0168657 . 0003958 . 0007722 .0001331 . 1039655
5th.... . 1141762 . 0161572 . 0002144 .0004526 .0005630 . 1315634
6th .1345012 .0151243 . 0001540 .0002430 .0002634 .1502859
7th . 1454432 .0136765 . 0000974 .0000943 .0002137 . 1595251
8th . 1472820 .0127099 . 0000832 .0000271 . 0004900 . 1605922
9th . 1412994 .0127573 . 0000742 .0000120 . 0005122 . 1546551
10th . 1368874 .0113546 .0000473 .0000029 . 0040440 . 1523362
11th . 1259430 .0099934 . 0000492 .0061454 . 1421310
12th 1301721 . 0087641 . 0000516 .0041531 . 1431409
13th . 1292362 . 0065805 . 0000217 . 0000108 .0074044 . 1432536
14th . 1464951 . 0054132 . 0000632 . 0012849 . 1532564
15th 1943044 . 0027044 .0600287 . 2570375
16th . 1368808 . 0018962 .0001185 . 1238445 . 2627400
17th . 3389313 . 0045801 . 0076336 . 3511450
i The method of determining these rates is identical with the standard method of computing probabilities.
Interpretation of the component rates by policy year for the different types of termination is the same as for total annual termination rates in measuring the distribution of terminations during a policy year. Based on the 1935-52 termination experience for Section 203 mortgages, if, for example, 100,000 mortgages are in force at the beginning of the sixth year, 15,028 can be expected to terminate during the sixth policy year. This figure is the product of the total termination rate in the sixth policy year and the 100,000 mortgages. Of this total number of terminations, 14,963 can be expected to be prepayments : 13,450 prepayments in full and 1,513 prepayments by super
214
FEDERAL HOUSING ADMINISTRATION
session. The remainder of the terminations can be expected to consist of 39 foreclosures, with 15 of the properties retained by mortgagees and 24 transferred to FHA, and 26 other terminations, principally maturities.
A comparison of the annual rates of prepayment in full with total annual termination rates discloses the extent to which the rates of prepayment in full dominate total rates. The emerging pattern of the rates of prepayment in full by policy year shows a steady increase in the rates by duration of the insurance contract, i. e., the number of policy years during which a contract is exposed to the risk of prepayment in full, until about the seventh policy year, when the rates tend to level out for about the next seven policy years. After the fourteenth policy year the sharp fluctuation in the rates reflects both the thinness of the termination experience and the approach of the insurance contracts to their maturities (cumulative effects of partial prepayments during the life of the mortgage result in accelerated termination before maturity).
For prepayments by supersession, which are second in importance among terminations of home mortgages insured under Section 203, the emerging pattern of their rates by policy year is substantially different. Here the rates rise with duration, reaching a peak in the fourth policy year, and then fall off gradually in the succeeding policy years.
The annual rates of termination are “crude” or actual rates as distinguished from “graduated” or smoothed rates. They are based on number of mortgages only, and include mortgages with the various terms of financing eligible for insurance under the administrative rules and regulations for Title II, Section 203. Because this insurance program has not been in operation long enough for many of its longer-term mortgages to mature, the rates of termination for the later policy years are based on a smaller aggregate amount of experience than those for earlier policy years. The rates of termination for the first policy year are based on the contracts endorsed for insurance in each calendar year from 1935 through 1951. For the second policy year, they are based on the endorsements in each calendar year from 1935 through 1950. Thus, for the seventeenth policy year they are based on endorsements of the calendar year 1935 only. With time, the accumulation of termination data will provide the merged experience of home mortgage insurance contracts through that policy year which will represent the longest maturity eligible for insurance under this program.
It should be noted, therefore, that the pattern of termination rates shown in the actuarial schedules is only an emerging one and cannot be said to be definitive for the different types of terminations. Not
215
HOUSING AND HOME FINANCE AGENCY
only can additional termination experience influence their rates by duration, particularly in the later durations where the aggregate experience is smaller, but changing economic conditions can also influence the rates of termination.
Home Mortgages in Default
At the end of 1953, about 10,500 FHA-insured home mortgages, or only slightly more than one-half of 1 percent of total insured mortgages in force, were reported by mortgagees to be in default. As compared with the preceding year, the number and the percentage are almost the same. In view of the previously discussed decline in title acquisitions during the year (down over one-fourth to 1,132), it appears that a great majority of the cases in default at the previous year end had been returned to good standing or prepaid, and that a new group of mortgagors, of almost the same magnitude, had defaulted in their payments. A default ratio below one-half of 1 percent at the year end has been recorded only in 1947 and 1948.
Most of the defaults—over 6,500—occurred under Section 203, although this number was 6 percent less than at the end of 1952. Section 603 defaults declined about one-fourth to 2,200, while Section 903 defaults, in line with marketing problems encountered during the year, increased nearly one hundredfold to about 1,600. Compared with insurance in force, Section 203 defaults represented less than one-half of 1 percent (slightly lower than last year), and Section 603 defaults were down to seven-tenths of 1 percent from nine-tenths of 1 percent the year before. Under Section 903, however, nearly 4i/2 percent of the insured mortgages in force were in default at the close of 1953, contrasted with only one-seventh of 1 percent at the end of the previous year.
Financial Institution Activity
Only FHA-approved financial institutions may originate or hold FHA-insured mortgages. This approval is automatically extended to certain Federal, State, and municipal government agencies. Members of the Federal Reserve System and institutions participating in the Federal Savings and Loan Insurance and Federal Deposit Insurance systems may be approved upon application. Other applicant institutions obtain approval if they meet certain prescribed qualifications and comply with regulations established for such approval.
Mortgages originated.—About 4,200 financial institutions originated the $2.3 billion of home mortgages insured by FHA during 1943. Nearly all these institutions participated in the Section 203 program, but only slightly over 200 lenders were active under either Section 8 or Section 903.
216
FEDERAL HOUSING ADMINISTRATION
As in the last several years, mortgage companies continued during 1953 to lead in volume of mortgages originated, with $780 million or nearly 35 percent of the total. Virtually all mortgages financed by mortgage companies are sold to insurance companies, savings banks, or the Federal National Mortgage Association, with the mortgage companies frequently retained as servicing agents. Ranking next in originations were national banks ($504 million, or 22 percent), State banks ($318 million, or 14 percent), insurance companies ($277 million, or 12 percent), and savings and loan associations ($233 million, or 10 percent).
As shown in Table 15, the relative activity of the different types of lenders varied under each of the home mortgage programs in 1953. Under the predominant Section 203 program, mortgage companies and commercial (national and State) banks together accounted for nearly 70 percent of the total amount of originations, and about that same proportion of Section 903 defense housing mortgages were made by mortgage companies alone. In the low-cost housing program under Section 8, however, savings and loan associations ranked first with nearly three-eighths of the total amount, followed by mortgage companies with over one-fourth of the total.
As indicated by Chart 9, virtually all types of lending institutions originated greater volumes of FHA home mortgages in 1953 than in
ORIGINATIONS OF FHA HOME MORTGAGES BY TYPE OF INSTITUTION 1952 AND 1953
MILLIONS OF DOLLARS O 100 200 300 400 500 600 700 BOO
I I I I I I I ~"
MORTGAGE COS. .......U
I I I I I
NATIONAL BANKS .....
STATE BANKS -I
INSURANCE COS.
SAVINGS a LOAN | |
ASSOCIATIONS I SAVINGS BANKS .....
LA ।1953 ^^^^1952
OTHER TYPES
_________________o______100______200_______300_____400_______500_____600______TOO____800
Chart 9.
217
HOUSING AND HOME FINANCE AGENCY
Table 15.—Originations and holdings of FHA-insured home mortgages by type of institution, 1953
[Dollar amounts in thousands]
Type of institution» Number of institutions Mortgages originated in 1953 Mortgages held 1 Dec. 31,1953
Originating Holding Number Amount Percent of amount Number Amount Percent of amount
Total
National bank .... 57,314 $504,350 22.3 343, 918 $2,394, 719 18.0
State bank .. . 35, 303 318,068 14.1 211,172 1,432, 561 315,195 10.7
Mortgage company 91.311 780, 221 34.5 40,559 2.3
Insurance company 30, 225 277,070 12.2 761, 983 5,404, 570 40.6
Savings and loan assn... (Not 27. 838 233, 382 10.3 153,273 1,063,171 8.0
Savings bank .. available) 11,996 106, 552 4.7 276, 477 2,024,316 15.2
Federal agency 65, 795 489,166 195, 389 3.7
All other 3 4,932 42,413 1.9 29,919 1.5
Total 258, 919 2,262,056 100.0 1,883,096 13,319,087 100.0
Sec. 8
National bank 33 75 316 $1,776 8.1 1,163 $5,460 7.1
State bank 42 105 615 3,295 15.1 1,261 5,949 7.8
Mortgage company 46 63 1,115 5,687 269 26.1 531 2,600 3.4
Insurance company 9 56 58 1.2 1, 740 8,208 10.7
Savings and loan assn... 66 102 1, 689 8,150 37.4 2, 778 13,215 17.3
Savings bank 10 35 498 2,376 10.9 2,398 11,252 14.7
Federal agency 1 5,267 340 28,224 1,566 36.9
All other?...?. 4 12 57 264 1.2 2.1
Total 210 449 4,348 21,817 100.0 15,478 76,473 100.0
Sec. 203
National bank 1,081 2,666 54,363 $478,515 23.5 294, 786 $2,075,834 19.2
State bank .. 1,177 599 3,408 659 32,629 295, 755 14.5 179, 431 1,237 492 11.4
Mortgage company 74,240 636,345 31.2 31,281 247,061 2.3
Insurance company 308 567 30,071 275, 946 13.6 606,424 4,373,207 40.4
Savings and loan assn 787 1,607 24,962 214,375 10.5 129,276 914,630 8.5
Savings bank 181 334 11,276 102,251 5.0 223.459 1,650, 456 151,306 15.3
Federal agency 4 21,283 24,106 1.4
All other?....' 33 163 4,003 34. 731 1.7 159.645 1.5
Total 4,166 9,408 231,544 2,037, 916 100.0 1,510,046 10,809,630 100.0
Sec. 603 4
National bank... 2 861 4 $18 5.6 47,050 $304, 797 14.1
State bank 1 1,128 158 1 7 2.0 29, 857 183,546 8.5
Mortgage company 1 7 34 10.7 5,201 34,919 1.6
Insurance company 1 250 6 41 12.8 153, 549 1,020,806 47.2
Savings and loan assn 643 20, 778 49, 836 131,583 6.1
Savings bank.. 4 175 54 222 68.9 355,628 16.5
Federal agency 2 15, 064 97, 906 4.5
All other .’ 46 5,274 32.672 1.5
Total 9 3.263 72 323 100.0 326,609 2,161,856 100.0
Sec. 903
National bank 22 29 2,631 $24,041 11.9 919 $8,629 3.2
State bank .. . 43 37 2,058 19,012 9.4 623 5, 574 2.0
Mortgage company 127 83 15, 949 138,155 68.4 3, 546 30,615 11.3
Insurance company 6 11 90 813 .4 270 2.349 .9
Savings and loan assn... 24 22 1,187 10,856 5.4 441 3,743 1.4
Savings bank . 6 17 168 1,703 .8 784 6,981 2.6
Federal agency 1 24,181 211,731 78.1
All other? 10 7 872 7,419 3.7 199 1,507 .5
Total 238 207 22, 955 202,000 100.0 30, 963 271.128 100.0
* On this and the following table, data include only cases tabulated through year end and exclude Sec. 213
and Sec. 611 cases.
2 Differs from number and amount in force due to lag in tabulation.
» On this and the following table, includes industrial banks, finance companies, endowed institutions,
private and State benefit funds, etc.
4 Includes mortages insured under Section 603-610:7 for $43,600 originated in 1953 and 2,979 for $14,592,750
held in portfolio.
218
FEDERAL HOUSING ADMINISTRATION
1952—on the average, 18 percent more. Higher than average gains were made by savings and loan associations (up 37 percent), savings banks (up 25 percent) and national banks and mortgage companies (up 20 percent). The proportions of total amount of mortgages originated by each of these types of institutions also increased in 1953. On the other hand, State banks, insurance companies, and miscellaneous types of lenders, with lower-than-average gains over 1952, accounted for smaller relative shares than in the preceding year.
Mortgages held in portfolio.—At December 31, 1953, over 9,400 financial institutions were holding in their portfolios nearly 1.9 million FHA-insured home mortgages totaling $13.3 billion in original face amount.3 As indicated in Chart 10, insurance companies were
HOLDINGS OF FHA HOME MORTGAGES BY TYPE OF INSTITUTION
AS OF DECEMBER 31, 1953
BILLIONS OF DOLLARS
0IZ345 i i i i i i i i i • i i r । । i i i
INSURANCE COS.
I
STATE BANKS A
I SAVINGS a LOAN
ASSOCIATIONS
FEDERAL AGENCIES |||||||
MORTGAGE COS. ||||
OTHER TYPES
O | f t t t t t 2 । । t 3 |। । 4 | । । 5 |
Chart 10.
by far the leading investors in FHA home mortgages, holding $5.4 billion, or 41 percent of the total. Next in rank were national banks with $2.4 billion (18 percent of total) and savings banks with $2.0 billion (15 percent), followed by State banks with $1.4 billion (11 percent) and savings and loan associations with $1.1 billion (8 percent). Although holding less than 4 percent of the total amount of FHA home mortgages under all programs combined, Federal agencies (al-
3 Due to time required for auditing newly insured cases, transfers of mortgages, and terminations of insurance contracts, data on mortgages held in portfolio do not reflect some of the actions occurring in the latter part of the year. For example, about $38 million of Sec. 903 insured cases, in process of audit at the end of 1953, are not included in the mortgages held in portfolio as shown in Table 15.
294078—54----16
219
HOUSING AND HOME FINANCE AGENCY
most exclusively FNMA) had the largest portfolios of Section 8 and Section 903 mortgages—37 and 78 percent, respectively, of the total amounts.
All types of financial institutions except mortgage companies expanded their holdings of FHA home mortgages in 1953. Reflecting the FNMA support given to financing defense programs, Federal agency portfolios were nearly doubled. Savings banks increased their holdings by 18 percent, savings and loan associations by 15 percent, national banks by nearly 14 percent, insurance companies by about 10 percent, State banks by 7 percent, and miscellaneous types by about 6 percent,—most of the acquisitions being Section 203 mortgages. Because of terminations, the Section 603 portfolios of the various types of institutions declined during the year. For all home mortgage programs combined, the proportions held by most of the different types of institutions at the end of 1953 did not vary materially from the distribution at the previous year end, although the insurance-company proportion declined (from 41.9 to 40.6 percent) and the Federal-agency share increased from 2.1 to 3.7 percent.
Chart 11 graphically illustrates the primary function of the different types of mortgagees in financing FHA home mortgages, by comparing the proportions of mortgages originated during 1953 by each type of institution with proportions of mortgages held at the year end.
ORIGINATIONS AND HOLDINGS OF FHA HOME MORTGAGES BY TYPE OF INSTITUTION. 1953
PERCENT DISTRIBUTIONS OF FACE AMOUNT 30%20%10%O O 10% 20%30%40%
MORTGAGE COMPANIES Zgl
0RI_ | JNGS
“ j|j = j— Asoeoec.3,.^
I ™I
(0) FEDERAL AGENCIES
30%20%10% 10%20%30%40%
Chart 11.
220
FEDERAL HOUSING ADMINISTRATION
For mortgage companies, the substantial excess of originations over holdings emphasizes the fact that these institutions are in effect the retail outlets of mortgage funds, obtaining these funds in turn by sales of the originated mortgages to other types of institutions. Insurance companies and savings banks, with holdings that far outrun originations, depend for the most part on purchases to build up their portfolios. More nearly in balance are the originations and holdings of national and State banks and savings and loan associations, although the proportions of originations for these types of institutions outweigh the holdings. Many of the larger national and State banks in urban financial centers of the nation often purchase home mortgages for investment purposes, thus tending to offset sales by the smaller banks. Savings and loan associations generally retain most of the mortgages they originate for their own portfolios.
Purchases and sales.—In 1953, nearly 165,000 FHA home mortgages with aggregate face amounts of about $1.4 billion were transferred between institutions. This represented increases of 25 percent in number and 39 percent in amount as compared with 1952. Section 203 mortgages account for 83 percent and Section 903 for nearly 14 percent of the total number of transfers, the remainder being divided almost equally between Sections 8 and 603. Reflecting the accelerated completions of defense housing in 1953, Section 903 transfers during the year were 8 times as great as in the previous year. (See Table 16.)
Chart 12 indicates that the most active institutions in the secondary
PURCHASES AND SALES OF FHA HOME MORTGAGES
BY TYPE OF INSTITUTION, 1953
MILLIONS OF DOLLARS 600 400 200 O O 200 400 600 800
= |
MH—\
PURCHASES
® STATE
ggg BANKS 'Z%ZZZ7////A
I 1
H SAVINGS a
gtOANASSNS.^
“ I I I I
600 ___400_____eoo___ 0_____0______200 ____400____600 BOO
Chart 12.
221
HOUSING AND HOME FINANCE AGENCY
Table 16.—Purchase and sale of FHA-insured home mortgages by type of institution, 1953
[Dollar amounts in thousands]
Type of institution Number of institutions— Mortgages purchased Mortgages sold
Purchasing Selling Number Amount Percent of amount Number Amount Percent of amount
Total
National bank 9,257 $74,624 5.4 15,997 $136, 026 9. 9
State bank 7, 242 56, 598 4.1 22,123 188,134 13. 7
Mortgage company 3,608 28,175 2.1 100,387 841,655 61.2
Insurance company 66,015 566,392 41.2 8,292 68' 734 5 0
Savings and loan association. (Not 4,032 30,302 2.2 6^ 389 51’095 3 7
Savings bank available) 37,489 309,698 22.5 i; u4 ' 7,613 6
Federal agency 32,040 272,442 19.8 2,677 20, 757 1. 5
All other 5,120 36,533 2.7 7,824 60; 749 4.4
Total 164,803 1,374, 763 100.0 164,803 1,374, 763 100.0
Sec. 8
National bank 10 14 137 $639 3.8 319 $1,865 11 0
State bank 18 19 171 815 4.8 712 4, 673 27 6
Mortgage company 10 71 90 8,466 49.9
Insurance company 17 4 328
Savings and loan association. 10 9 97 499 2.9 141 872 . 3 5 1
Savings bank 14 1 385 1,827 10.8 102 485 2 9
Federal agency 1 1 1,742 10,788 63.7 48 270 1 6
All other 6 6 84 355 2.1 58 272 1.6
Total 86 125 3,034 16, 947 100.0 3,034 16,947 100.0
Sec. 203
National bank 397 336 8,514 $69, 010 6.1 12,951 $110, 562 9. 7
State bank 428 393 6,886 54,599 4.8 18,133 154,179 13.6
Mortgage company 128 571 3,179 24, 940 2.2 82, 740 694; 353 61.1
Insurance company 211 211 64 756 66; 315 38, 496 5.8 3 4
Savings and loan association. 185 136 3, 549 27^ 232 2.4 4, 838
Savings bank 151 36 36,083 299,496 26.3 608 4,063 . 4
Federal agency 3 2 8 427
All other 39 33 4,643 34^ 178 3.0 6,357 49,197 4.3
Total 1,542 1,718 136,037 1,136,397 100.0 136,037 1,136,397 100.0
Sec. 603 i
National bank . 39 35 525 $3 osn 19 8 OA 7 j 8.0
State bank ... 32 33 162 ’ 951 4 7 KQS 010
Mortgage company 15 20 136 963 4 8 9QH 4,306 ; 21.4
Insurance company. ... ... 25 18 775 5 720 2R 4 298 2, 259 11. 2
Savings and loan association. 16 18 338 2,166 10.8 578 4,172 10. 6 20 7
Savings bank... 25 12 566 4 357 21 6 APIA 3; 065 ; 15.2
Federal agency 2 2 7 ’ 45 2 TIM 110
AH other 4 2 389 1,949 9. 7 371 Zoo 1,855 3.7 « 9.2
[ Total 158 140 2,898 20,131 100.0; 2,898 ' 20,131 1 100.0
\ । Sec. 903 1
National bank 5 21 81 $995 0.5; 2,480 $21,983 —[ ! 10.9
State bank 4 31 23 234 .li 2,683 24,977 1 12.4
Mortgage company 3 115 203 1,825 .9 15, 708 136,577 - 67.8
Insurance company __ __ ._ 7 4 156 1 516
Savings and loan association. 2 15 48 ’405 .2f 832 7,555 3?8
Savings bank 8 455 4 018 2 0
Federal agency 1 1 21 864 192* 243
All other 1 8 4 51 (2) 1 1,038 OAA) 9,426 .3 i 4.7
i Total 31 195 22,834 201,287 100. Oi 22,834 ■■ 201, 287 100.0
1 Includes 38 mortgages for $167,700 insured under Sec. 603-610.
2 Less than 0.05 percent.
222
FEDERAL HOUSING ADMINISTRATION
market were the insurance companies, which accounted for $566 million or two-fifths of the purchases, and mortgage companies, which sold $842 million or more than three-fifths of the total. Next in volume of purchases, with nearly $310 million or about 23 percent of the total, were savings banks, closely followed by Federal agencies with $272 million or nearly one-fifth of total purchases. Ranking next to mortgage companies in sales of FHA home mortgages during 1953, but with substantially lower volumes, were State banks, which sold $188 million or 14 percent of the total, and national banks, selling $136 million or about 10 percent of the total.
Under the individual programs, as shown in Table 16, Federal agencies purchased a majority of the Section 8 and nearly all of the Section 903 mortgages but considerably smaller proportions of those insured under the other sections, while insurance companies and savings banks accounted for the majority of Section 203 purchases. With the exception of the Section 603 program, mortgage companies predominated during 1953 in the sale of FHA home mortgages insured under the various sections.
The following table indicates that, with the exception of national and State banks, all types of financial institutions purchased larger volumes of FHA home mortgages (all sections combined) in 1953 than in the previous year, but that the most substantial percentage gains were those of Federal agencies, miscellaneous types of institutions, and savings and loan associations. With respect to sales, all types of institutions except savings banks and Federal agencies registered gains over 1952, the largest gain being made by mortgage companies.
Type Percent change in amount, 1953 over 1952
Purchases Sales
National bank ... -31 +28
State bank -32 +13
Mortgage company +8 4-65
Insurance company +43 +26
Savings and loan association +79 4-27
Savings bank +30 -74
Federal agency +174 -22
Other....”- +82 +10
All types +39 +39
Reflecting these changes, the proportion of FHA home mortgage purchases made by national banks declined from 11 to 5 percent in 1953 and that of State banks from 8 to 4 percent, while the Federal agencies’ purchases increased from 10 to 20 percent of the total. For other types of institutions, there was little change from 1952 to 1953 in the proportions of purchases. In the case of sales, the mortgage
22S
HOUSING AND HOME FINANCE AGENCY
companies’ share rose from 52 to 61 percent, with offsetting declines in the proportions sold by other types of institutions.
Characteristics of Home Mortgage Transactions
About 1,070,000 new privately financed dwelling units were placed under construction during 1953 in the nonfarm areas of the country. The construction and sale of most of these units involved the advance of short-term construction money and long-term mortgage funds by privately owned financial institutions. Nearly 252,000, or 24 percent, of these privately financed units were started with FHA approval and were subject to FHA compliance inspections during the course of construction.
Of the units started with FHA inspection, 216,500 were approved under the home mortgage programs and the remaining 35,500 under the multifamily project programs.
In 1953, some 217,000 units in FHA-inspected 1- to 4-family homes were reported as completed and ready for occupancy. Mortgages secured by 151,800 of these units and by an additional 120,500 existing units were insured by FHA during the year. The characteristics of these insured home mortgages, the properties securing them, and the mortgagors buying homes for their own occupancy are analyzed in detail in this part of the report. This discussion is followed by comparable analyses of the multifamily rental and cooperative projects covered by commitments issued during the year. Completing this section of the report is a detailed discussion of the characteristics of the property improvement loans insured during 1953 under Title I, Section 2.
The analysis of the characteristics of home mortgage transactions is devoted almost exclusively to cases insured under Section 203— FHA’s major long-term home mortgage program. During 1953, about 4 of every 5 of the new-home mortgages and all but 3 percent of the existing-home mortgages which FHA insured were insured pursuant to the provisions of this section. Brief statistical summaries on the characteristics of the defense housing mortgage transactions insured under Section 903 are also presented.4
In 1953 as in previous years, almost all Section 203 transactions involved single-family structures, the new-home proportion being slightly higher than the existing-home. As shown in Table 17, the proportion of new properties involving single-family structures (98 percent) was slightly higher in 1953 than in 1952, the offsetting decrease occurring principally in the proportion of 2-family houses.
4 The data used in these analyses were based on the following samples :
1. Section 203—41,500 new-home and 39,900 existing-hoine cases selected from mortgages insured during the first 11 months of 1953.
2. Section 903 18,800 new single-family and 2,900 new 2-family home cases selected from mortgages insured in 1953.
224
FEDERAL HOUSING ADMINISTRATION
Inasmuch as the unusually large proportion of 2-family property transactions insured under Section 203 in 1952 resulted from the construction of rental housing in defense areas, the decline from 1952 to 1953 appears to be in line with the increase in the utilization of Section 903 insurance assistance in the construction of defense housing.
Table 17.—Structures and dwelling units in 1- to 4-family homes, Sec. 203. selected years
Units per structure New homes Existing homes
1953 1952 | 1951 1946 1940 1953 1952 1951 1946 1940
Structures—Percentage distributions
One 97.8 96.1 98.5 98.7 99.0 96.4 96.3 95.6 93.6 92. 7
Two 1.8 3.1 1.2 1.0 .7 3.2 3.3 3.8 5.8 6.1
Three . (!) .2 . 1 . 1 . 1 .2 .2 .3 .3 . 7
Four .4 .6 .2 .2 .2 .2 .2 .3 .3 .5-
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Dwelling units—Percentage distributions
One 95.1 91.3 96.5 96.9 97. 7 92.4 92.3 90.8 87.4 85.0>
Two _ 3.4 5.8 2.3 2.1 1.5 6.0 6.3 7.3 10.9 11.3
Three .1 .5 .3 .2 .2 .7 .6 .8 .7 1.8
Four 1.4 2.4 .9 .8 .6 .9 .8 1.1 1.0 1.9
Total 100.0 100.0 100.0 100.0 100 0 100.0 100.0 100.0 100.0 100.0'
Average 1.03 1.05 1.02 1.02 1.01 1.04 1.04 1.05 1.07 1.09
1 Less than 0.05 percent.
There was practically no change in the distribution by size of structure for existing homes from 1952 to 1953.
Mortgagors in more than 96 percent of the new single-family home transactions and virtually all of the existing single-family cases were owner occupants. For new homes, this marked a gain over the 93 percent reported in 1952 as owner-occupant mortgagors. Of the remaining new-home mortgagors, 21/Z> percent were builders and slightly over 1 percent were landlords.
Over nine-tenths of the 3- and 4-family properties (new and existing) involved in the Section 203 transactions insured in 1953 were built or purchased for rental income purposes. Of the 2-family houses, nearly 46 percent of the new but only 5 percent of the existing were acquired primarily for rental income.
Trends in Characteristics in FHA Home Mortgage Transactions
Property values, mortgage amounts, mortgagors’ incomes, and land prices reported for FHA home mortgage transactions insured under Section 203 continued to rise in 1953. As indicated in Chart 13, however, the new-home curves depicting these items exhibited a marked
22?
HOUSING AND HOME FINANCE AGENCY
CHARACTERISTICS OF FHA MORTGAGES. HOMES. AND MORTGAGORS
SINGLE-FAMILY HOME MORTGAGES INSURED UNDER SECTION 203 SELECTED YEARS 1940 - 1953
DOLLARS NEW HOMES EXISTING HOMES DOLLARS
11,000-- -------------------------------—^-11,000
10,000-- ~ ■ f-------—— ------------------------------------10,000
PROPERTY VALUE PROPERTY VALUE
9,000-------------1----1---HZ|------------------- --------------4—------------------[—9,000
8,000------------------1— ----------------- ------------------------------__8 000
7,000 - - - i.. I--------------------------Z' j--------------------------7,000
1Z^ MORTGAGE AMOUNT S' 1 '
cnnn / S ______________ S Iv— MORTGAGE AMOUNT
6,000 - - ' - ----------------------------------- -------------------------6,000
5,000 *Jz — ___ I-,------------------------------ — 5.000
/ MORTGAGOR’S INCOME '~^S^ f t'l MORTGAGORS INCOME
4,000 - - ---------' -----------1 ■ I-------------------------4,000
3,000--)/-----—-----------------—--------~LA---------------—------------------------3,000
2,000-- -————J---------------------------_ _— --------------------------------------2,000
MARKET PRICE OF SITE MARKET PRICE OF SITE
i.ooo-H L | ” * 1----"I* I I "I 1.000
I. ilirT I I I I I I Illi I I I I I I LI
PERCENT PERCENT
;—ui j nn———।—।—urn——
__|_| I I LL LOAN-VALUE RATIO
80 ''—LOAN-VALUE RATIO - 1 1---- .—----------80
• ■■ I I I I 1 I I I I I I I
INCOME -VALUE RATIO INCOME-VALUE RATIO
S' 1 I I ।
40----------------------------------------------------------------------------------40
PAYMENT - INCOME RATIO
20---Jj H---------1----1---1----|-------- H-----------PAYMENT-INCOME RATIO ---------20
. Iff! I I I I I I I 1 I I i I I I I .
1940 ‘46 ‘47 ’48 ‘49 ‘50 ’51 '52 ‘53 1940 ‘46 '47 '48 '49 '50 '51 '52 '53
Chart 13.
tendency to level off during the year, while those for existing-home cases, in contrast, maintained or exceeded the rate of increase of the previous years.
The FHA new-home trend in property value was generally in line with that of overall construction costs, but the typical mortgage amount increase of 3 percent was somewhat lower than the 5 percent average gain reported for total mortgage recordings of $20,000 or less during 1953. Similarly, the rise in typical incomes of FHA new-home buyers from 1952 to 1953 appears to have been less than the esti-. mated average increase in nonfarm family income.
226
FEDERAL HOUSING ADMINISTRATION
Under the provisions of Section 203 effective in 1953, the most favorable terms for proposed- or new-construction transactions were available where the required mortgage financing was under $9,500. Consequently, builders were inclined to construct properties in price ranges that would yield the maximum mortgages and lowest down payments as well as conform to the buying capacity of prospective home owners. These properties were purchased by buyers whose incomes were sufficient to permit accumulation of savings for down payments and to undertake the monthly mortgage payment and other housing expense items. In effect, the characteristics of Section 20*3 new-home transactions insured in 1953 reflected the influence of a “ceiling” created by the statute, as well as the economic climate.
In existing-home transactions, the sustained upward trend of the curves in the upper portion of Chart 13 reflects several developments:
(1) The increased proportion of recently built properties included in the FHA existing-home transactions. About 30 percent of the existing-home cases insured under Section 203 in 1953 involved structures built in 1952 or 1953.5 In 1951, the comparable proportion (properties completed less than 16 months) was 24 percent and in 1952 it was 28 percent. Of the existing-home transactions with mortgages of $10,000 or more in 1953, about 40 percent were secured by “new” properties completed in 1953 and 1952. As a result, the proportion of existing-home cases in the higher mortgage and value groups in 1953 was larger than in the preceding year.
(2) The increased proportion of existing-home transactions involving properties previously covered by FHA insurance. About one-fourth of the existing-home mortgages insured under Section 203 in 1953 were secured by properties that had previously been involved in FHA-insured home mortgage transactions. This represented a gain of about 45 percent over the 1952 proportion. Many of these homes had been constructed under FHA inspection and consequently were eligible for higher mortgage amounts than were other existing dwellings.
(3) The continuing demand for larger houses as a result of the high postwar birth rate and the increasing number of larger families. Since the prices of more spacious new homes are higher than many of these families can afford, they presumably have been meeting their space requirements by purchasing older existing properties. The calculated area and number of rooms of the typical FHA existing home were slightly higher in 1953 than in 1952.
(4) Conditions in the money market may have contributed to the upward trends for existing homes as shown in Chart 13. The volume
8 The classification new construction by FHA definition applies only to properties on which construction has not been started at the time of application for FHA insurance. All other types of construction are classified as existing, including newly built homes and properties under construction on the application date.
227
HOUSING AND HOME FINANCE AGENCY
of business and Government borrowing in the first half of 1953 produced marked increases in bond and mortgage yields. Although interest rates of FHA mortgages were raised in May, rates on conventional mortgages also rose, thus continuing their competitive attractiveness to lenders over FHA mortgages. It therefore appears that, with respect to existing homes, mortgage lenders tended to utilize FHA mortgage insurance in transactions assuring attractive yields, i. e. interest returns exceeding servicing costs by comfortable margins. Such transactions would include a disproportionate share of properties in the higher value categories, warranting larger mortgages and interest returns. The buyers of these properties had typically higher incomes, enabling them to accumulate the savings for the down payments and to meet the prospective housing expense. In 1952, Table 18.—Characteristics of mortgages, homes, and mortgagors for singlefamily home transactions, Sec. 203, selected years
Year New homes Existing homes New homes Existing homes New homes Existing homes New homes Existing homes
Amount of mortgage i Duration in years 1 2 3 4 * 6 Loan as a percent of FHA value 1 1-family as a percent of 1- to 4 family
1953 $8, 555 8,273 7, 586 7,101 7,143 5, 504 (3) 4 4,358 $8.623 8,047 7, 448 6,801 6, 778 4,697 4,312 4 3,687 22.2 21.7 23.4 24.1 22.8 21.0 (3) 8 23.0 19.9 19.7 21.1 20.2 19.8 18.9 18.3 517.5 86.5 83.7 86.5 88.0 87.3 87.0 (’I' 4 87.0 78.3 77.9 76.6 77.8 78.0 78.4 (3) 4 76.8 97.8 96.1 98.5 99.0 98.9 98.7 (3) 99.0 96.4 96.3 95.6 95.5 96.1 93.6 94.6 92.7
1952
1951
1950
1949
1946
1943
1940
1953 .
Property value 1 Market price of site 2 Number of rooms16 Percent with garages
$10,140 10,022 9,007 8,286 8, 502 6,558 (3) 5,028 $11,061 10, 289 9,843 8,865 8,700 5,934 5, 535 4,600 $1,291 1,227 1,092 1,035 1,018 761 (3) 662 $1,461 1,296 1,222 1,150 1,098 833 956 948 5.3 5.3 5.2 4.9 4.9 5.5 (3) 5.6 5.6 5.5 5.6 5.6 5.6 5.9 ’6.3 6.3 59.7 53.4 49.6 48.7 49.6 58.1 (3) 75.6 74.1 70.7 69.5 70.6 70.4 83.4 85.8 87.2
1952
1951 ...
1950
1949
1946 . .
1943
1940
1953
Mortgagor’s effective annual income 17 Total monthly payment17 Payment as a percent of income 7 8 Ratio of property value to annual income 7 8
$4,880 4,811 4,225 3,861 3,880 3, 313 (3) 2,416 $5,396 4,938 4,726 4.274 4, 219 3,101 3,062 2,490 $65.95 64.16 58.84 54.31 55. 59 46.18 (3) • 6 35. 15 $70.84 65.08 61.57 56.65 56.12 40.83 ’39.80 ’ 34.56 15.2 15.1 15.1 15.8 16.0 15.3 (3) 17.2 14.7 14.5 14.4 14.6 14.8 14.3 14.6 15.1 1.96 1.99 2.00 2.04 2.05 1.81 (3) 1.97 1.92 1.95 1.96 1.92 1.92 1.71 1.67 1.70
1952
1951
1950
1949
1946
1943
1940
1 Data shown are medians.
2 Data shown are averages (arithmetic means).
2 Data not available.
4 Based on 1- to 4-family home mortgages.
6 Estimated.
6 Throughout this report medians are computed on the assumption that all characteristics distributions arc represented by continuous data within groups.
, 1 Throughout this report distributions of mortgage payment, housing expense, and mortgagor’s income, as well as characteristics relating to income, are based on owner-occupant cases only.
8 Based on arithmetic means.
228
FEDERAL HOUSING ADMINISTRATION
the average amount of Section 203 insured mortgages on existing single-family homes was 35 percent higher than the average amount of total mortgages recorded during the year. This differential increased in 1953 to 42 percent.
The trends in the relationships between amount of loan and property values, mortgagors’ incomes and property values, and total mortgage payments and mortgagors’ incomes are shown in the lower portion of Chart 13. With one exception—the loan-value ratio for new homes— these ratios showed little change in 1953. Reflecting the September 1952 relaxation and the April 1953 suspension of credit control limitations imposed by FHA during the Korean crisis in line with Regulation X of the Federal Reserve Board, the median ratio of loan to value for new single-family homes insured in 1953 under Section 203 increased to 86.5 percent from 83.7 in 1952. Existing-home transactions, which ordinarily are characterized by lower ratios of loan to value, display a more limited influence of the initial imposition and subsequent relaxation of credit controls on ratio of loan to value.
Table 18 compares the medians and averages (arithmetic means) of certain key characteristics of Section 203 new- and existing-home transactions insured in 1953 with comparable data for selected earlier years.6
8 Throughout this report the use of technical terms is in keeping with the following definitions, which have been established by the FHA Underwriting Division in connection with their procedures for the appraisal of properties and the evaluation of mortgage risk: Estimate of property value is the price that typical buyers would be warranted in paying for the property (including the house, all other physical improvements, and land) for long-term use or investment, assuming the buyers to be well informed and acting intelli-gently, voluntarily, and without necessity.
Market price of site is an estimate by FHA for an equivalent site including street improvements or utilities, rough grading, terracing, and retaining walls, if any.
Number of rooms excludes bathrooms, toilet compartments, closets, halls, storage, and similar spaces.
Mortgagor’s effective income is the estimated amount of the mortgagor’s earning capacity (before deductions for taxes) that is likely to prevail during approximately the first third of the mortgage term.
Total monthly mortgage payment includes monthly payment for the first year to principal, interest, FHA insurance premium, hazard insurance, taxes and special assessments, and miscellaneous items including ground rent, if any.
Replacement cost includes estimated cost of building and other physical improvements, land, and miscellaneous allowable costs for the typical owner.
Total requirements include the total amount, including mortgage funds, necessary to close the transaction less any prepayable expenses such as unaccrued taxes, insurance premiums, and similar items.
Sale price is the price stated in the sale agreement.
Taxes and assessments include real estate taxes and any continuing nonprepayable special assessments.
Prospective monthly housing expense includes total monthly mortgage payment for first year, estimated monthly cost of maintenance, and regular operating expense items (water, gas, electricity, fuel).
Rental value is estimated on the basis of typical year-round tenant occupancy, excluding any premium obtainable because of local housing shortages or newness of the Individual property.
Calculated area is the 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.
229
HOUSING AND HOME FINANCE AGENCY
Typical new-home transaction.—The median amount for new single-family home mortgages insured under Section 203 in 1953 was $8,555, or 3 percent more than in 1952. Despite the removal in April 1953 of credit control limitations on the maximum mortgage term, the average duration for the year 1953—22.2 years—was only slightly higher than the 21.7-year average reported for 1952.7 More sensitive to the influence of credit controls was the ratio of loan to value, as indicated by the rise in the median ratio from 83.7 to 86.5 percent from 1952 to 1953.
The typical mortgage payment, including taxes and hazard and FHA insurance premiums, was $65.95, an increase of 3 percent over 1952, resulting principally from the higher mortgage amount.
The property securing the mortgage had an FFIA-estimated valuation of $10,140, including land with a market price of $1,291. The single-family house on this property contained 924 square feet and provided 5.3 rooms, including 3 bedrooms. In all probability, some type of garage facility was also provided. Since there was virtually no change in the size of the house (either in rooms or area) as compared with 1952, the 1-percent rise in median property value may have been largely due to the 5-percent increase in land price reflecting a limited supply of land suitable for residential development.
The annual effective income (before taxes) of the typical new-home buyer under Section 203 in 1953 was $4,880, about 1 percent more than in 1952. Of that income, 15.2 percent was required for total monthly payment, about the same proportion as in the two preceding years but a somewhat smaller proportion than was required in the typical prewar transaction. The property value was the equivalent of about two years of the mortgagor’s income, about the same relationship that typified transactions insured in 1952.
Typical existing-home transaction.—Generally speaking, existing-home buyers under the Section 203 program in 1953, as compared with new-home buyers, earned larger incomes, bought higher-priced, roomier homes, and undertook mortgage obligations that were larger both in total principal amount and in total monthly payment (although the portion of income required for payment and the valueincome ratio were lower).
’ Under credit controls Imposed by FHA, at the direction of the HHFA Administrator, in keeping with Regulation X of the Federal Reserve Board, the maximum term during 1952 for mortgages approved before start of construction was 25 years for 1- and 2-family properties with acquisition costs per family unit of $12,000 or less, and 3- and 4-family properties; for all other home mortgages, 20 years. The Section 203 statutory maximum, restored in April 1953, is 25 years for mortgages approved before start of construction, or 30 years if such mortgages do not exceed $6,650 on 2-bedroom houses, $7,600 on 3-bedroom houses, and $8,550 on 4-bedroom houses (or such higher amounts, up to an additional $950, as may be authorized by the FHA Commissioner in areas where costs so require). For all other types of mortgages, the maximum is 20 years.
230
FEDERAL HOUSING ADMINISTRATION
The median existing-home mortgage amounted to $8,623, or roughly $600 more than in 1952. The average mortgage duration (19.9 years) and the typical loan-value ratio (78.3 percent) were only slightly higher than in that year. Repayment of the mortgage was at a monthly rate of $70.84 (including additional charges for real estate taxes and hazard and FHA insurance premiums), which was over $5 above the median existing-home payment for 1952.
The typical property value for existing homes ($11,061) not only exceeded the 1952 figure by 7% percent but was $900 above the new-home median—the largest plus differential in FHA's history. The land included in the existing-home property had an average market price of $1,461, nearly 13 percent more than in 1952, and apparently contributed substantially to the higher property value. The house— a single-family structure—had 5.6 rooms and a calculated area of 1,008 square feet, no appreciable change from the 5.5 rooms and 992 square feet of the year before. The proportion of existing properties with garages, however, was up to 74.1 percent from 70.7 percent, although the gain was not as large as that recorded for new homes.
The annual effective income of the typical 1953 existing-home buyer was up 9 percent to $5,396—$500 more than the median income of new-home buyers. Total monthly payment in existing-home transactions in 1953 averaged 14.7 percent of income compared with 14.5 percent in 1952, while the average ratio of property value to income was down slightly from 1.95 to 1.92 percent.
Amount of mortgage.-—New-home mortgages insured under Section 203 in 1953 were principally for amounts of $6,000 to $9,999, less than 1% percent involving amounts of less than $6,000 and only 14 percent amounts of $10,000 or more. Mortgages on existing properties were more widely distributed, with significant proportions occurring at all levels in the $6,000 to $12,999 range (Chart 14 and Table 19). These data serve to emphasize the relatively more favorable financing available with FHA insurance for new-construction transactions involving mortgages of less than $10,000.
The typical new-home mortgage insured in 1953 had a principal amount of $8,555, compared with $8,623 for the median existing-home mortgage. This was the first year in FHA history when existing-home mortgages were typically higher than those on new homes. It is probably indicative of increased use of FHA insurance in the purchase of higher-priced existing properties, an increasing proportion of which are postwar structures.
On the average, new-home mortgages were 4 percent higher in 1953 than in 1952, while existing-home mortgages were 10 percent higher. Table 19 indicates that the proportions of new-home mortgages of less than $9,000 declined from 1952 to 1953, with increases
231
HOUSING AND HOME FINANCE AGENCY
AMOUNT OF MORTGAGE
FHA-INSURED MORTGAGES ON SINGLE-FAMILY HOMES
SECTION 203, 1953
PERCENT — PERCENT
29 -----------------------—------- pq------------- -25
S® ] NEW HOMES
$388 EXISTING HOMES
20"* 5888 — —-----------------20
alltai
tEam $6,000 $7,000 $ 8,000 $ 9,000 $10,000 $11,000 $13,000 $15,000
THAN TO TO TO TO TO TO TO OR
$6,000 6,999 7,999 8,999 9,999 10,999 12,999 14,999 MORE
AMOUNT OF MORTGAGE
Chart 14
Table 19.—Amount of mortgage for single-family homes, Sec. 203, selected yea/rs
Amount of mortgage New homes Existing homes
1953 1952 1951 1946 19401 1953 1952 1951 1946 1940 *
Percentage distributions
Less than $2,000 0.1 0. 5 (2) (2) 1 0 7 8
$2,000 to $2,999 (2) 0.1 0.1 1.1 10.4 (2) 0.2 0.7 7.6 24.5
$3,000 to $3,999 0.1 .2 .3 7.1 28.6 0.2 .8 1.8 19.2 26.6
$4,000 to $4,999 .2 .8 1.2 22.6 29.1 1.2 2.7 5.7 29.0 19.1
$5,000 to $5,999 1.1 3.3 6.4 31.4 20.7 4.6 7.0 11.9 21.3 9.7
$6,000 to $6,999 14.4 14.5 23.6 25.0 6.1 11.2 15.6 19.7 11.0 5.6
$7,000 to $7,999 20.6 22.5 30.6 9.5 2.4 18.0 20.4 20.5 4.7 2.5
$8,000 to $8,999... 24.4 27.4 21.0 2.4 1.1 20.4 21.7 17.5 2.7 1.8
$9,000 to $9.999 25.0 20.0 11.0 .4 .4 16.7 15.5 10.6 1.2 .9
$16,000 to $10,999. _. 7.5 7.6 3.0 .2 1 4 f 11.8 10.5 7.3 1.1
$11,000 to $11,999... 3.2 2.5 1.4 .2 / -4 I 6.1 4.1 3.1 .2 J 11
$12,000 to $12.999... 1.7 .5 .6 (2) f 4.6 .8 .6 .4
$13,000 to $13,999... .7 .2 .3 I 2.2 3 2 1
$14,000 to $14,999... .8 .2 .3 । 3 1 1.8 .3 .3 .2 । 9
$15,0+ or more .3 .2 .2 — I 1.2 .1 .1 .3
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Average $8, 585 $8,238 $7,675 $5, 548 $4 424 $8 847 $8 044 $7 469 $4 929 $3 977
Median '8? 555 8? 273 1,586 5, 504 4,358 8,623 8^ 047 7^448 4,697 3? 687
11- to 4-family distribution.
2 Less than 0.05 percent.
occurring in virtually all the higher-amount brackets. The most significant increase, from 20 percent of the 1952 cases to 25 percent of those insured in 1953, occurred in the $9,000 to $9,999 range. These
232
FEDERAL HOUSING ADMINISTRATION
shifts probably reflect the restoration of the maximum permissible loan amount ($9,450) and ratio of loan to value for mortgages on single-family owner-occupied dwellings insured under Section 203(b) (2) (C) of the National Housing Act, which followed the relaxation in September 1952 and the complete removal in April 1953 of credit control limitations. A comparable shift is evident in the distributions of the existing-home mortgage amounts from 1952 to 1953, but with the increases being appreciably greater in the higher brackets ($11,000 and up).
Mortgage amount as a percent of property value.—Mortgages insured under Section 203 during 1953 were in the majority of the cases at or near the maximum amounts permitted under the prevailing administrative rules. This is evident from the data presented in Table 20, which shows by property value groups the percentage distributions of the single-family home mortgages insured during the year by ratio of loan to value.
Table 20.—Ratio of loan to value by property value of single-family homes, Sec. 203, 1953
Per- Median Ratio of loan to value—Percentage distributions
FHA estimate of centage loan-
property value distri- value 50 per- 51 to 61 to 71 to 76 to 81 to 86 to 91 to
bution ratio cent 60 per- 70 per- 75 per- 80 per- 85 per- 90 per- 95 per- Total
or less cent cent cent cent cent cent cent
New homes
Less than $7,000 2.2 93.2 0.2 0.1 0.3 0.8 1.6 3.5 3.2 90.3 100.0
$7,000 to $7,999 14.9 93.0 .2 .1 .3 .6 2.0 2.3 11.0 83.5 100.0
$8^000 to $8^999 14.4 90.9 .2 .2 .7 1.2 3.7 4.2 40.5 49.3 100.0
$9,000 to $9,999 14.8 88.2 .3 .6 1.5 3.1 4.4 6.8 75.6 7.7 100.0
$10,000 to $10,999.... 15.7 87.1 .6 .7 2.3 3.9 7.2 20.8 64.4 .1 100.0
$11,000 to $11,999.... 14.5 82.6 .8 1.4 4.0 6.4 18.6 58.1 10.6 .1 100.0
$12,000 to $12,999.... 10.1 77.8 1.6 2.2 8.5 11.1 75.8 .7 .1 (>) 100.0
$13,000 to $13,999 ... 5.2 77.5 1.7 2.8 11.4 13.6 70.1 .2 .1 .1 100.0
$14,000 to $14,999.... 3.2 77.2 1.7 2.8 15.3 14.5 65.0 .2 .5 100.0
$15,000 to $15,999.... $16,000 to $17,999.... $18,000 to $19,999.... $20,000 or more 2. 0 77.3 2. 2 3.1 15.1 12.4 66.8 . 1 .3 100.0
1. 9 77.5 2.5 5.2 15.6 11.1 52.0 2.2 11.4 100. 0
.7 . 4 77.1 2.7 7.0 13.4 13.4 63.5 100.0
72.2 4.4 18.2 22.6 14.5 40.3 .-100.0
Total 100.0 86.5 .7 1.2 4.0 5.2 21.7 13.8 30.7 22.7 100.0
Existing homes
Less than $7,000 2.8 80.5 1.2 1.1 6.1 5.5 40.5 1.0 3.7 40.9 100.0
$7,000 to $7,999 $8,000 to $8,999 6.8 80.2 .6 1.3 6.6 5.1 43.5 2.5 7.1 33.3 100.0
11.2 80.1 .7 1.4 5.8 5.8 44.6 4.0 21.3 16.4 100.0
$9,000 to $9,999 12.5 79.3 .7 1.6 6.4 6.2 52.8 5.8 26.4 .1 100.0
$10,000 to $10,999.__. 14.0 78.7 .8 1.8 7.9 8.0 58.7 7.5 15.3 100.0
$11,000 to $11,999— 12.9 78.2 1.0 2.0 9.0 9.7 63.0 12.1 3.2 100.0
$12,000 to $12,999.... $13,000 to $13,999.... $14,000 to $14,999.... $15,000 to $15,999.... $16,000 to $17,999.... $18,000 to $19,999. 12.1 77. 6 1. 2 2.3 10.8 12.1 73.4 .2 100.0
8 7 77.4 1. 6 3. 2 12.3 13.4 69.5 (1) 100.0
6. 0 77.1 1. 7 3.2 15.2 15.8 64.0 . 1 100.0
4. 6 77. 2 2.1 3.6 14.7 13.7 65.9 (1) 100. 0
5. 2 77. 2 2.7 3.3 14.4 14.4 65.1 . 1 100.0
1. 9 76.8 2.3 5.0 16.3 17.5 58.9 100.0
1.3 71.9 7.4 9.5 30.4 14.7 38.0 .-100.0
Total 100.0 78.3 1.3 2.3 9.7 9.8 58.9 4.0 8.8 5.2 100.0
1 Less than 0.05 percent.
233
HOUSING AND HOME FINANCE AGENCY
As indicated by the median loan-to-value ratios (second column of table) and the percentage distributions for the various value groups, home mortgages on properties valued by FHA at less than $9,000 were predominantly for amounts representing 90 to 95 percent of value; those on properties in the $9,000 to $10,999 value group, 86 to 90 percent of value; and most of those on properties valued at $12,000 or more, 76 to 80 percent of value. The scattering of cases in the value groups of $12,000 or more with the ratios of loan to value exceeding 80 percent represent for the most part transactions involving Alaska properties and to some extent properties in Hawaii and Guam, where the specified maximum mortgage amounts may be as much as one-half greater.
Existing-home mortgages tended to cluster near the 80 percent ratio of loan to value in nearly all value groups. Although this is the specified maximum for existing-construction cases, i. e., dwellings completed or under construction at time of application for mortgage insurance, the table indicates ratios in excess of 80 percent for about one-sixth of existing-home transactions. These for the most part involved properties that were approved for FHA insurance and constructed under FHA compliance inspection in a transaction previously insured by FHA and thus eligible for higher ratios of loan to value. By value groups, the proportion of cases having ratios higher than 80 percent ranged from 15 percent of those with properties valued at $11,000 to $11,999, to 45 percent of those valued at less than $7,000. As with new construction, the scattering of cases valued at $12,000 or more with ratios in excess of 80 percent represent transactions on properties in Alaska, Hawaii, or Guam, where higher maximum mortgage amounts and ratios of loan to value are permissible.
The loan-value distributions of new-home mortgages insured under Section 203 in 1953 moved decidedly upward from the 1952 level, while existing-home ratios registered only a very slight rise. This is shown by the data presented in Table 21, which compare the loan-value distributions of 1953 with those of the two preceding years, the initial postwar year 1946, and prewar 1940. Two events which influenced the trend of these distributions during 1953 involved the credit control limitations imposed by FHA in conformance with Regulation X of the Federal Reserve Board. These were the almost complete relaxation in September 1952 of limitations on maximum mortgage amounts and loan-value ratios, and the April 1953 elimination of the requirement that mortgagors’ downpayments come only from savings •or life insurance loans.
Compared with 1952, the ratio of loan to value for the typical new-home transaction in 1953 (86.5 percent) was about 3 percentage points higher, but the corresponding existing-home ratio (78.3 percent) rep-234
FEDERAL HOUSING ADMINISTRATION
Table 21.—Ratio of loan to value of single-family homes, Sec. 203, selected years
Ratio of loan to value (percent) New homes Existing homes
1953 1952 1951 1946 1940 1953 1952 1951 1946 1940
Percentage distributions
50 or less 0.7 1. 3 1.1 0. 6 0.4 1. 3 1. 8 2. 9 1. 3 2.3
51 to 55 . 4 . 9 . 6 . 8 . 2 . 8 1. 2 1. 9 .9 1.7
56 to 60 .8 1. 3 1. 0 . 8 . 5 1. 5 2.1 3. 0 1. 2 3. 2
61 to 65 1.3 2. 0 1. 7 1.3 . 8 2.6 3. 6 5. 3 2.8 4. 7
66 to 70. 2.7 4. 3 3. 0 3.3 2. 7 7. 2 9. 0 12.1 5. 8 8. 6
71 to 75 5. 2 8. 4 6.7 4.8 3. 6 9. 8 11. 5 19. 6 8.8 16. 2
76 to 80.. 21. 7 21. 5 15. 0 11.8 11.8 58. 8 55. 6 45. 6 60. 7 63.3
81 to 85 13.8 18.9 17.1 14. 1 13.2 4.0 4.8 4.1 3. 6
86 to 90 30.7 31.2 35. 6 62. 5 66.8 8.8 7.4 4. 0 14. 9
91 to 95 22. 7 10.2 18.2 5.2 3.0 1. 5
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Average 82. 9 80.4 82. 5 84.1 84. 8 77.5 76.1 73. 6 78. 6 75.3
Median 86.5 83.7 86.5 87.0 87.0 78.3 77.9 76.6 78.4 76.8
resented a minuscule gain over the preceding year. The principal changes in the new-home distributions were declines in the proportions of cases with loan-value ratios of 75 percent or less and 81 to 85 percent, counterbalanced largely by a substantial increase in those with ratios of 91 to 95 percent—the proportion in 1953 being about double that of 1952. In the existing-home transactions, the proportion of cases with ratios of 75 percent or less was lower than in 1952, with gains occurring in the 86- to 95-percent ratio range and the 76- to 80-percent group, which in both years accounted for the majority of the cases.
Relationship of amount of mortgage to total requirements.—The assets required of home buyers in FHA transactions are significantly greater than is indicated by comparison of mortgage amounts and property values. This is because the total requirements of a transaction (sale price plus costs incidental to making the purchase) generally exceed the FHA estimate of property value. In fact, as is evident in Tables 23 and 25, sale prices alone usually exceed estimated property values.
In Table 22, the mortgages insured under Section 203 on new and existing single-family homes during 1953 are grouped according to the amounts of total requirements reported and the cases in each of these groups distributed by amount of mortgage. The data indicate that in each total requirements group up to $12,999 the mortgages cluster within $1,000 ranges near the maximum amounts permitted under the law on the basis of estimated property value. Somewhat greater dispersion of mortgage amounts is evident in the new-home transactions having total requirements of $13,000 or more, and in all existing-home groups. This probably reflects a greater range of differences between
294078—54---17 235
w Table 22.—Amount of mortgage by total requirements for single-family home purchase transactions, Sec. 203,1953
Amount of mortgage—Percentage distributions
Percent- Median________________________________-_________________________
Total requirements tribution ^o™ Less $4,000 $5,000 $6,000 $7,000 $8,000 $9,000 $10,000 $11,000 $12,000 $14,000
mortgage than to to to to to to to to to or Total
$4,000 $4,999 $5,999 $6,999 $7,999 $8,999 $9,999 $10,999 $11,999 $13,999 more
New homes
Less than $7,000---------------- 1.3 $6,294 0.5 ___ 15.5 84.0 _________________ ____ _ _ 100 0
$7,000 to $7,999________________ 14.9 6,780 .1 .1 .3 81.9 17.6 ___ ____ . _ Wo'0
$8,000 to $8,999________________ 13.4 7,169 .1 .1 .6 5.7 92.5 1.0 _______ ____ ’ loo'0
$9,000 to $9,999 --------------- 12.2 8,166 .1 .2 .4 1.8 31.8 65.6 0.1 ____________ 100 0
$10,000 to $10,999-------------- 14.1 8,688 .2 .1 .7 1.8 7.4 71.7 18.0 .1 ___ ___ 100 0
$11,000 to $11,999-------------- 15.7 9,145 .1 .3 .6 1.4 3.7 25.0 68.6 .2 0.1 ___ __ 1000
$12,000 to $12,999 ------------- 11.7 9,346 .2 .2 .5 1.5 3.2 11.0 73.0 10.4 (1) ____ . 100 0
$lo,000 to $13,999 ------------- 6.4 9,924 .4 .4 1.0 1.2 3.1 7.5 39.3 44.9 2.1 0.1 ... 100 0
$14,000 to $14,999 ------------- 4.0 10,364 .1 .3 .7 1.1 2.6 5.3 21.9 44.5 22.3 1.2 100 0
$15,000 to $15,999-------------- 2.5 11,130 -- .3 .6 .9 1.9 3.7 9.9 27.4 39.1 14.1 2.1 100 0
$16,000 to $17,999-------------- 2.5 11,845 .1 .1 .2 .7 1.5 2.8 5.2 14.1 30.1 40.4 4.8 100.0
$18,000 to $19,999-------------- .9 13,147 -- .3 .9 ---- .3 1.6 3.7 7.5 12.2 46.1 27.4 100.0
$20,000 or more----------------- .4 14,262 ------------ .6 ----------- 3.2 5.8 8.3 25.0 57.1 100.0 q
Total------------------------ 100.0 8,563 .1 .2 . 8 15.1 21.3 24.3 25.6 7.1 2.9 1.9 . 7 100.0 S
------------------------------------------------------------------------- §
Existing homes _____ > Less th an $7,000--------------- 2.2 $5,606 0.8 16.2 64.1 18.9 ________ inn o H
$7,000 to $7,999_.-------------- 5.1 6,339 .2 2.4 27.1 60.3 10.0 ___ _ lOo’o
$8,000 to $8,999________________ 9.4 6,926 .2 .4 6.8 45.9 45.9 0.8 „ _____ 100 0 ®
$9,000 to $9,999________________ 10.7 7,508 .2 .3 1.8 17.0 60.8 19.4 0.5 ' 100 0 O
$10,000 to $10,999-------------- 13.1 8,145 .1 .2 .8 4.8 32.3 56.7 4.6 0.5 ___’ 100 0
$11,000 to $11,999-------------- 11.8 8,699 (1) .1 .5 2.2 12.0 52.9 31.8 .5 ____100 0 W
$12,000 to $12,999-------------- 11.6 9,255 .1 .1 .4 1.0 5.5 26.1 56.0 10.7 0.1 100 0 Ti
$13,000 to $14,999 ------------- 9.9 9,906 --- .1 .2 .6 2.3 11.5 39.1 44.5 1.6 0- i 100 0
$14,000 to $14,999 ------------- 7.3 10,360 -- (>) .4 . 6 1.4 5.9 21.9 43.5 25.3 1.0 100 0 £
$15,000 to $15,999 ------------- 5.5 10,983 .1 .1 .3 . 3 . 9 3.7 10.6 34.5 34.0 15.4 6 1 100 0 £
$16,000 to $17,999 ------------- 7.0 11,929 -- (1) .1 .4 . 9 1.5 5.1 15.8 28.1 45.8 2.3 100.0 n
$18,000 to $19,999-------------- 3.7 13,134 -- .1 ------ .3 . 8 1.2 2.0 5.6 9.3 56.8 23.9 100.0 M
$20,000 or more----------------- 2.7 14,458 ------------ .6 . 6 . 6 . 8 3.5 4.4 25.6 63.9 1C0.O
------------------------------------------- -- ------------ > Total------------------------ 100.0 8,753 .1 .6 3.9 10.8 18.1 20.8 17.4 12.3 6.3 6.9 2.8 100.0 §
---------------------------------------—------------------------------------------------------------------ % 1 Less than 0,05 percent,---------------Q
FEDERAL HOUSING ADMINISTRATION
237
Table 23.—Transaction characteristics by total requirements for single-family homes, Sec. 203,1953
Current investment
Average as a percent of —
, Percentage________________________________________________________
Total requirements distri-
bution Total . Mortgage Property Area in Annual Current in- T°4^Lre’ Annual
mentT amount value square feet income vestment* income
New homes
-------------------------------------- 1,3 $6’752 $6’675 $6-257 $6,763 737 $4-098 $495 7-3 12-4 87’999 4 °|7’999----------------- 14.9 7>327 7,223 6,740 7,235 792 4,352 587 8.0 13.5
io ’ZS to oqi--------------------- 1X4 8’389 8’250 7>454 8,189 868 4,667 935 1L1 20-°
tinmHAtfio----------------------- 12'2 9’473 9’306 8-048 9,117 912 4,976 4’425 15.0 28-6
!4?’999 40 f4?’999-------------- 14-1 10,467 10,295 8,543 10,038 937 5,146 1,924 18.4 37.4
t44’99 J ilJ’nno---------------- 45‘7 H>503 11,307 9,001 10,865 974 5,314 2,502 21.8 47.1
S------------------------- 11>7 12’408 12’211 9,283 11,687 1,000 5,641 3,125 25.2 55.4
f43’999 40 f43’999---------------- 6-4 13,425 13,211 9,644 12,498 1,028 6,059 3,781 28.2 62.4
t - non 1 ---------------------- 4-0 14,462 14>245 10,124 13,299 1,080 6,487 4,338 30.0 66.9
ttft’XXn! *}?’nnn--------------- 2-5 15,420 15,152 10,841 14,255 1,105 7,130 4,579 29.7 64.2
tJe’nnn J° Hanoi---------------- 2-5 16,786 16,408 11,548 15,210 1,150 7,796 5,238 31.2 67.2
ton’nnot0 $19’"3------------------------- -9 18>880 18’372 42-667 17,045 1,244 8,486 6,213 32.9 73.2
$20,000 or more-------------------- .4 21,834 21,484 13,687 18, 658 1,396 9, 592 8,147 37.3 84.9
Total------------------------ 100.0 10,700 10,515 8,524 10,166 940 5,288 2,176 20.3 41.1
Existing homes
-------------------------------------- 2-2 $6,526 $6,464 $5,556 $6,584 849 $4,240 $970 14.9 22.9 $7’999 to $7,999------------------ 5.1-7,498 7,331 6,198 7,338 854 4,496 1,300 17.3 28.9
$8’999 . Sn’nna----------------- 9-4 8,522 8,341 6,814 8,192 901 4,794 1,708 20.0 35.6
8?’099 t°$9’999------------------------ 10.7 9,472 9,276 7,383 9,064 951 4,999 2,089 22.1 41.8
f4?’999 40 f4?’999--------------- 13-1 10,478 I9.299 7,970 9,947 992 5,199 2,508 23.9 48.2
!41’2?? 4o ?44’999---------------- 1L8 11-476 11,280 8,540 10,795 1,015 5,439 2,936 25.6 54.0
I12’999 4o ---------------------- 11,6 12’473 12’279 9-973 H>665 1,056 5,791 3,400 27.3 58.7
$43’999 40 $}3’999---------------------- 9.9 13,464 13,229 9,654 12,481 1,101 6,154 3,810 28.3 61.9
844’999 40 144’999-------------- 7-3 14,447 14,211 10,183 13,294 1,143 6,501 4,264 29.5 65.6
f}5>999 40 143-999---------------------- 5.5 15,428 15,170 10,715 14,065 1,205 6,909 4,713 30.5 68.2
?4?,992 40 JJ7’999---------------- 7'° 46’865 46,576 11,597 15,196 1,270 7,769 5,268 31.2 67.8
848’999 40 $49’999---------------- 3.7 18,792 18,349 12,729 16,659 1,365 8,848 6,063 32.3 , 68.5
$20,000 or more----------------- 2.7 22,391 22,144 13,941 18,773 1,582 10,428 8,450 37.7 81.0
Total----------------------- 100.0 12,217 12,018 8,917 11,352 1,032 5,911 3,300 27.0 55.8
I Total requirements less mortgage amount.
HOUSING AND HOME FINANCE AGENCY
sale prices and FHA valuations for these properties than for lower-value new homes.
Median mortgage amounts for new homes ranged from $6,294 for transactions requiring less than $7,000, to $14,262 for cases with total requirements of $20,000 or more—a difference of $8,000 in mortgage amount compared with a substantially wider spread in total requirements. In existing homes, the range between the median mortgage amounts for the lowest requirements group ($5,606) and the highest ($14,458) was somewhat greater than for new homes, although still substantially below the corresponding range in total requirements.
Table 23 presents averages of selected characteristics for the various total requirements groups of single-family home mortgage transactions insured under Section 203 in 1953. These data provide an indication of the extent to which FHA-insured mortgage financing assisted buyers of homes in the different price ranges, the incomes of these buyers, and the size of their initial current investments, i. e., cash required over and above the mortgage amount. In new-home transactions, initial current investments ranged from $495 or 7 percent of total requirements in the lowest price group, to $8,147 or nearly 37 percent of total requirements in the highest price class, with the average for all groups being $2,176 or 20 percent of total requirements. Reflecting the comparatively lower maximum mortgage amounts permitted on existing homes, buyers of these properties were required to make considerably larger initial investments. For all groups, these averaged $3,300, or 27 percent of total requirements, and ranged from $970, or 15 percent in the lowest price class, to $8,450, or 38 percent in the highest.
In both new- and existing-home transactions, initial current investments required of mortgagors purchasing homes costing $11,000 or more represented substantially larger proportions of buyers’ incomes compared with transactions in the lower-price levels. For example, the ratio of current investment to annual effective income for new-home transactions in the total requirements groups of $14,000 to $14,999 averaged nearly 67 percent, or about five times the investmentincome ratio indicated in transactions with total requirements of $7,000-$7,999 (i. e., involving properties costing half as much).
Property Characteristics
A basic procedure in the FHA underwriting system is the determination of the value of the property, including the house, land, and other physical improvements. Involved in this determination is a consideration of such items as the estimated replacement cost of the property, its rental value, sale prices of comparable houses, the type and location of the neighborhood, the character and market price of the site, materials and quality of construction, the size of the house,
238
FEDERAL HOUSING ADMINISTRATION
and garage facilities. The following portion of the report is devoted to an analysis of certain characteristics of the properties involved in the Section 203 transactions insured during 1953.
Property value distributions.—The majority of the single-family properties in Section 203 transactions insured in 1953 had FHA estimated values of $8,000 to $11,999. In this range were three-fifths of the new homes and over half of the existing homes. Of the remaining properties, greater proportions of the existing homes were in the higher value groups, nearly two-fifths having values of $12,000 or more, compared with less than one-fourth of the new homes. In the $6,000 to $7,999 group were over one-sixth of the new homes, but only one-tenth of the existing. None of the properties covered by the sample had values of less than $6,000. (Chart 15 and Table 24.)
On the average, the values of new-home properties registered little change from 1952 to 1953, increasing but 1 percent. There were, however, increases in the proportions of properties in both the lower and higher value brackets.
As indicated in Table 24, the proportions of new-construction properties valued at less than $7,000 and from $8,000 to $10,999 decreased during 1953. Offsetting increases occurred in the proportions of properties in the $7,000 to $7,999 bracket and in properties valued at $11,000 or more.
PROPERTY VALUE
FHA-INSURED MORTGAGES ON SINGLE-FAMILY HOMES
SECTION 203, 1953
PERCENT ' PERCENT
30------------—----- ----------------------zzz-------------30
| ~| NEW HOMES
EXISTING HOMES
---------------------------------25
I “7■
— —------------------------------5
— ----------§§§------------------10
-1 rhuay
$6,000 $8,000 $10,000 $12,000 $14,000 $16,000 $18,000
TO TO TO TO TO TO OR
$7,999 9,999 11,999 13,999 15,999 17,999 MORE
FHA ESTIMATE OF PROPERTY VALUE
Chart 15.
239
HOUSING AND HOME FINANCE AGENCY
Table 24.—Property value of single-family homes, Sec. 203, selected years
FHA estimate of property value New homes Existing homes
1953 1952 1951 1946 1940 1953 1952 1951 1946 1940
Percentage distributions
Less than $3,000 3.2 (’) 1.7 10.9
$3,000 to $3,999 (1) 2.3 18.6 0.1 0.3 7.3 21.8
$4,000 to $4,999 (*) 0.2 10.0 26.8 .3 .8 16.8 22.5
$5,000 to $5^999 0.4 .8 20.3 23.6 1.0 2.0 24. 6 17.3
$6,000 to $6,999 2.2 3.8 8.7 27.8 16.5 2.8 3.8 5.8 20.3 10.8
$7,000 to $7,999 14.9 10.4 18.2 22.4 5.7 6.8 8.4 11.0 12. 1 6.1
$8,000 to $8,999 14.4 15.9 21.9 11. 1 2.6 11.2 13.6 15.3 7.0 3.6
$9,000 to $9,999 14.8 18.7 18.8 3.4 1.2 12.5 15.3 15.2 3.4 1.9
$10,000 to $10,999... 15.7 16.9 12.5 1.5 .7 14.0 15.6 14.4 2.5 1.5
$11,000 to $11,999... 14.5 12.8 8.0 .5 .3 12.9 13.3 11.0 1.1 .9
$12,000 to $12,999... 10.1 9.0 4.4 .3 .3 12.1 11.1 8.9 1.2 .8
$13,000 to $13,999... 5.2 5.4 2.5 .2 . 1 8.7 7.1 5.9 .5 .4
$14,000 to $14,999... 3.2 2.6 1.5 .1 I 2 f 6.0 4.3 3.5 .3
$15,000 to $15,999... 2.0 1.8 1.0 . 1 J -2 t 4.6 2.7 2.5 .4 J -7
$16,000 to $17,999... 1.9 1.4 .9 (*) I ! / 5.2 2.3 2.1 .3
$18,000 to $19,999.. .7 . 5 .3 1 1.9 .5 .6 .2 J
$20,000 or more .4 .4 .3 — .1 1.3 .6 .7 .3 .2
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Average value $10, 357 $10, 245 $9, 307 $6, 597 $5,199 $11, 419 $10, 567 $10,147 $6,269 $5,179
Median value io; 140 10,022 9i 007 6,558 5i 028 IL 061 10,289 9,843 5,934 4,600
1 Less than 0.05 percent.
Existing-home properties financed with insured mortgages, on the other hand, exhibited a pronounced increase in value, averaging, 8 percent higher than in 1952. Table 24 shows that there were relatively fewer properties in all values below $12,000 in 1953, while existing homes in the higher value brackets showed marked gains, especially those valued at $16,000 or more.
Averages by 'property value groups.—Comprehensive summaries of selected characteristics of Section 203 cases insured in 1953 are presented by value groups in Table 25 (transaction characteristics), Table 26 (property characteristics), and Table 27 (financial characteristics). The data indicate, for example, that in transactions involving new single-family homes valued by FHA at $11,000 to $11,999, the average mortgage ($9,149) represented 81 percent of the property value but covered a somewhat smaller share (77 percent) of the mortgagor’s total requirements of $11,980, i. e., the sale price of $11,857 and closing costs of $123. Mortgagor’s annual effective income in this group averaged $5,559, or about half as much as the property value and sale price. The properties had an average FHA estimated replacement cost of $11,719, of which $1,428 represented the market price of the land site. This amounted to about one-eighth of the property value. The structure had an average calculated area of 985 square feet and contained an average of 5.4 rooms, including 3.2 bedrooms. More than half of the properties had garage facilities.
240
FEDERAL HOUSING ADMINISTRATION
The total monthly mortgage payment required in these transactions averaged $71.96, including $11.33 in estimated real estate taxes and assessments. Additional amounts required for heating and cooking fuel, electricity, water, garbage and trash disposal and the estimated pro rata amount required for maintenance and repair expense, added to total monthly mortgage payments, resulted in an average prospective housing expense of $92.77. Mortgagors in this group, therefore, would have to devote an average of 20 percent of their effective incomes to housing expense, including 16 percent for monthly mortgage payment. Had the same properties been rented, the estimated monthly rentals would have averaged $90.95 or 26 percent more than the monthly payment. Compared with housing expense, the monthly rental value was about $2 lower.
New- and existing-home transactions in other value groups may be analyzed in the same fashion by reference to the data in these three tables.
Table 25.—Transaction characteristics by property value of single-family homes, Sec. 203, 1953
FHA estimate of property value Percentage distribution Average Ratio of—
Property value Total requirements 1 Sale price 1 Amount of mortgage Mortgagor’s annual income Loan to total value Loan to total requirements 1 Property value to income
New homes
Percent Percent
Less than $7,000 2.2 $6, 706 $7,062 $7,008 $6, 275 $4,165 93.6 89.7 1.61
$7,000 to $7,999 14.9 7,308 8,341 9,409 10, 407 7,569 8,816 10,006 11,041 7,419 8, 627 9,823 10,884 6, 771 7,519 8,156 8, 751 4, 397 4,706 5,097 5,217 92.7 89. 7 1.66 1 77
$8/100 to $8,999 14.4 90.1 85.8 82.0
$91000 to $91999 14.8 86.7 1.85 1.99
$10,000 to $10,999--.. 15.7 84.1 79.8
$11,000 to $11,999 14.5 11,332 11,980 11,857 9, 149 5, 559 80.7 76.7 2. 04
$12,000 to $12,999.... 10.1 12, 361 12, 939 12, 769 9, 455 5, 905 76.5 73.5 2. 09
$13,000 to $13,999.... 5.2 13,356 14,154 13, 944 10,095 6,311 75.6 71. 7 2.12
$14,000 to $14,999—. 3.2 14, 339 15, 309 15,073 10, 775 6,876 75.1 70.8 2.09
$15,000 to $15,999 2.0 15,313 16, 257 16,064 11,479 7,391 75.0 71. 1 2. 07
$16,000 to $17,999.— 1.9 16, 679 17, 765 17,423 12, 513 8, 494 75.0 71.0 1.96
$18,000 to $19,999.... .7 18,701 19,619 19, 460 13,493 8,834 72.2 70.2 2.12
$20,000 or more .4 22, 318 23,196 22, 465 14, 612 9,816 65.5 64. 1 2.27
Total 100.0 10, 357 10, 724 10, 550 8,585 5, 346 82.9 79.5 1.94
Existing homes
Percent Percent
Less than $7,000 2.8 $6,426 $6, 961 $6, 762 $5, 428 $4,288 84.5 79.8 1.50
$7,000 to $7,999 6.8 7, 397 8,392 9, 361 10,333 7,913 8, 978 10,076 11, 067 7, 728 8,789 9,864 10,867 6,173 6,894 7, 507 8,138 4, 615 4.896 5,148 5, 382 83. 5 79 3 1.60 1 71
$8',000 to $8',999 11.2 82.1 77 9
$9,000 to $9,999 12. 5 80. 2 75.4 74.4 1 82
$10,000 to $10,999— 14.0 78.8 1.92
$11,000 to $11,999.... 12.9 11,329 12, 196 11,984 8, 774 5,718 77.4 72.7 1.98
$12,000 to $12,999.-.- 12. 1 12, 327 13, 249 13, 028 9. 408 6,079 76.3 71.8 2. 03
$13,000 to $13,999..-- 8.7 13, 333 14, 355 14,156 10,079 6, 583 75.6 71.0 2. 03
$14,000 to $14,919...- 6.0 14, 298 15,370 15,179 10, 732 7,010 75.1 70.5 2.04
$15,000 to $15,999 4.6 15, 243 16, 547 16, 336 11, 455 7, 692 75.1 70.1 1.98
$16,000 to $17,999.... 5.2 16, 724 18, 288 18,032 12,519 8, 693 74.9 69.5 1.92
$18,000 to $19,999 1.9 18, 543 20,412 20, 218 13, 666 9, 615 73.7 68.0 1.93
$20,000 or more 1.3 21,713 23, 569 23, 469 14, 922 11, 520 68.7 63.7 1.88
Total 100.0 11,419 12, 226 12, 016 8, 847 5, 977 77.5 72.9 1.91
1 Data reflect purchase transactions only.
241
HOUSING AND HOME FINANCE AGENCY
Table 26.—Property characteristics by property value of single-family homes, Sec. 203, 1953
FHA estimate of property value Percentage distribution Average Price of site as percent of value Median Percentage of Structures with garage
Property value Property replacement cost Market price of site Calculated area (square feet) Number of rooms Number of bedrooms
New homes
Less than $7,000 2.2 $6,706 $6, 927 $815 12.2 736 4.5 2.5 52.2
$7,000 to $7,999 14.9 7, 308 7, 685 877 12.0 777 4. 6 2. 6 54. 0
$8,000 to $8^999 14.4 8, 341 8, 664 972 11.7 881 5.2 3.1 57.3
$9,000 to $9,999 14.8 9, 409 9; 783 1,124 11.9 924 5.3 3.2 61.4
$10,000 to $10,999.... 15.7 10, 407 10, 743 1,296 12.5 948 5.3 3.2 60.0
$11,000 to $11,999.... 14.5 11, 332 11,719 1, 428 12.2 985 5.4 3.2 56.9
$12,000 to $12,999 10.1 12,361 12, 780 1, 606 13.0 1,014 5.5 3.3 55.9
$13,000 to $13,999.... 5.2 13, 356 13, 715 1, 677 12.6 1,055 5.6 3.3 59.5
$14,000 to $14,999 3.2 14, 339 14, 746 1,824 12.7 1,126 5.7 3.3 66.6
$15,000 to $15,999 2.0 15, 313 15, 724 2, 059 13.4 1,180 5.8 3.4 78.7
$16,000 to $17,999.._. 1.9 16, 679 17,105 2,150 12.9 1,186 5.8 3.3 82.6
$18,000 to $19,999 .7 18, 701 19,128 2,848 15.2 1, 298 5.8 3.4 82.9
$20,000 or more .4 22, 318 23,285 3,912 17.5 1,489 6.1 3.5 92.3
Total 100.0 10,357 10, 726 1,291 12.5 924 5.3 3.1 59.7
Existing homes
Less than $7,000 2.8 $6,426 $8,441 $891 13.9 813 5.1 2.7 54.2
$7,000 to $7,999 6.8 7,397 9,159 919 12.4 820 4.9 2.6 64.2
$8,000 to $8,999 11.2 8, 392 9; 990 1,055 12.6 864 5.1 2.7 69.6
$9,000 to $9,999 12. 5 9^ 361 10, 936 1,167 12.5 932 5.3 2.8 72.8
$10,000 to $10,999— 14.0 10; 333 11, 906 L 289 12.5 988 5.5 2.9 74.1
$11,000 to $11,999.... 12.9 11,329 12, 724 1,406 12.4 1,012 5.5 3.0 73.4
$12,000 to $12,999.... 12. 1 12, 327 13, 703 1,517 12.3 1,067 5.7 3.2 73.8
$13,000 to $13,999.... 8.7 13,333 14, 685 1,681 12.6 1,112 5.8 3.2 76.0
$14,000 to $14,999-.. 6.0 14, 298 15, 671 1,849 12.9 1,169 5.9 3.3 79.9
$15,000 to $15,999 4.6 15, 243 16,828 2,021 13.3 1,247 6.2 3.4 80.8
$16,000 to $17,999.... 5.2 16, 724 18,301 2, 330 13.9 1,318 6.3 3.4 83.5
$18,000 to $19,999.... 1.9 18, 543 20,343 2,748 14.8 1, 421 6.4 3.5 89.2
$20,000 or more 1.3 21,713 24, 531 3,190 14.7 1,664 6.7 3.6 89.5
Total 100.0 11, 419 12, 963 1,461 12.8 1,008 5.6 3.0 74.1
Observation and analysis of the data presented in Tables 25, 26, and 27 reveal certain significant features of the Section 203 transactions insured in 1953.
(1) Because sale prices invariably exceeded FHA estimates of value, and also because of the additional expense of closing charges, the initial investment of the FHA home buyer was significantly more than is indicated by the ratios of loan to value. On the average, new-home buyers provided about 21 percent and existing-home buyers about 27 percent of total financing requirements. Only in new-home transactions with property values of less than $12,000 and existing homes valued at less than $10,000 did buyers’ initial investments average less than 25 percent of total required funds.
(2) Reflecting a significant degree of stability in home prices, FHA estimated values averaged 98 percent of new-home sale prices and 95 percent of existing-home prices. In new homes, the value-sale
242
FEDERAL HOUSING ADMINISTRATION
price relationship tended to be fairly constant in the several value levels, while in existing homes sale prices tended to rise at a somewhat faster rate than the FHA estimated values.
(3) In comparable valuation classes, new-home values represented slightly larger proportions of mortgagors’ annual effective incomes than did existing-home values, reflecting the more favorable financing terms available to new homes. Ratios of property values to borrower incomes increased with increases in property values for nearly all values of new homes and for existing homes valued up to $15,000, as shown in the last column of Table 25.
(4) In new-home transactions, property values averaged nearly 97 percent of property replacement costs (as estimated by FHA). This probably indicates a composite judgment of FHA valuators throughout the nation that construction and land costs are reasonably stabilized. In existing-home transactions, the differential be-
Table 27.—Financial characteristics by property value of single-family homes, Sec. 203, 1953
FHA estimate of property value Percentage distribution Average property value Monthly average Ratio of
Total payment Estimated taxes Prospective housing expense Estimated rental value Mortgagor’s income Mortgage payment to income Housing expense to income Mortgage payment to rental value
New homes
Less than $7,000 2.2 $6, 706 $48. 66 $6. 03 $63. 56 $56. 47 $347. 07 14.0 18.3 86.2
$7,000 to $7,999 14.9 7,308 50. 95 6. 53 67. 67 61.56 366. 44 13.9 18.5 82.8
$8,000 to $8,999 14.4 8, 341 57.15 7.35 75. 39 69.40 392.19 14.6 19. 2 82.3
$9,000 to $9,999 14.8 9,409 62. 76 8. 93 82. 06 76. 54 424. 71 14.8 19.3 82.0
$10,000 to $10,999... 15.7 10, 407 67. 45 10. 33 87. 26 84.31 434. 75 15.5 20.1 80.0
$•'1,000 to $11,999... 14. 5 11,332 71. 96 11.33 92. 77 90. 95 463. 28 15.5 20.0 79. 1
$12,000 to $12,999... 10.1 12, 361 76. 52 12. 55 98. 22 98. 23 492. 07 15.6 20.0 77.9
$13,000 to $13,999.__ 5.2 13. 356 82. 36 13. 53 105. 02 104. 68 525. 92 15.7 20.0 78.7
$14,000 to $14,999... 3.2 14, 339 88.19 14. 31 111.32 112.11 572. 98 15.4 19.4 78. 7
$15,000 to $15,999... 2.0 15. 313 93.16 14. 25 119. 73 118.16 615. 92 15.1 19.4 78.8
$16,000 to $17,999... 1.9 16, 679 98. 83 14. 29 130. 75 127. 04 707. 85 14.0 18.5 77.8
$18,000 to $19,999... .7 18. 701 105. 33 15.21 139. 51 139. 90 736.19 14.3 19.0 75.3
$20,000 or more .4 22,318 127. 51 20. 65 153. 36 163. 52 818. 04 15.6 18.7 78.0
Total , 100.0 10, 357 67. 05 9.93 87. 01 83. 56 445. 54 15.0 19.5 80.2
Existing homes
Less than $7,000 2.8 $6,426 $45. 54 $6. 33 $63.04 $55. 97 $357.34 12.7 17.6 81.4
$7,000 to $7,999 6.8 7,397 51. 12 6.90 69.81 62.73 384. 61 13.3 18. 2 81.5
$8,000 to $8,999 11. 2 8, 392 56. 83 8. 34 76. 78 70. 01 408.04 13.9 18.8 81.2
$9,000 to $9,999 12.5 9, 361 61.49 9. 00 82. 58 76. 70 428. 96 14.3 19.3 80.2
$10,000 to $10,999... 14.0 10, 333 66. 59 9. 89 88. 33 83. 87 448. 52 14.8 19.7 79.4
$11,000 to $11,999... 12.9 11, 329 72. 01 10. 73 94. 78 90. 77 476.49 15. 1 19.9 79.3
$12,000 to $12,999... 12.1 12,327 77.62 11. 76 101.35 97. 97 506. 61 15.3 20.0 79.2
$13,000 to $13,999... 8.7 13,333 82. 84 12.67 108. 08 104. 76 548. 58 15.1 19.7 79.1
$14,000 to $14,999... 6.0 14, 298 88. 48 13. 47 113. 47 111.62 584.13 15.1 19.4 79.3
$15,000 to $15,999... 4.6 15, 243 93.93 14. 33 121.37 118. 41 641. 00 14.7 18.9 79.3
$16, 000 to $17, 999... 5.2 16, 724 102.62 15. 67 131. 58 128. 71 724. 40 14.2 18.2 79.7
$18, 000 to $19, 999... 1.9 18, 543 113. 54 17. 69 143. 57 139. 99 801. 21 14.2 17.9 81.1
$20,000 or more 1.3 21, 713 125. 38 20.58 164.15 164. 06 960. 00 13.1 17. 1 76.4
Total 100.0 11,419 72. 79 10. 89 95.81 91.33 498.12 14.6 19.2 79.7
243
HOUSING AND HOME FINANCE AGENCY
tween value and replacement cost is substantially greater, with value averaging 88 percent of cost and reflecting allowance in the valuation process for depreciation of the older properties and decreased marketability of certain types of property because of less favorable location or structural arrangement.
(5) Land market prices for existing-home properties averaged $1,461, or about 13 percent higher than for new-home properties ($1,291). In corresponding value groups, land prices generally represented slightly larger proportions of the total property value of existing properties than the proportions for new properties, although the overall existing-home ratio (12.8 percent) was only slightly higher than the new-home ratio (12.5 percent). The higher market price for land in existing properties reflects not only the depreciation of the structure, without land value depreciation, but also the location of existing homes nearer the center of cities in more fully developed neighborhoods providing more convenient access to shopping, schools,, churches, and entertainment.
Real estate taxes averaged about $1 more per month on existing properties than on new. Also, within corresponding value groups, taxes on new-home properties generally averaged somewhat less. This probably reflects higher tax rates in the older, more completely developed communities because of the larger number of services provided.
(6) Total monthly mortgage payments for corresponding value groups of new and existing properties did not vary significantly. Although the mortgage principal averaged less for existing transactions, the shorter term tended to raise monthly interest and principal payments. This situation plus the higher taxes tended to increase total monthly payments on existing properties up to the level of those on new properties in comparable value ranges. With monthly payments about equal for new- and existing-home transactions, and with monthly incomes of new-home mortgagors averaging slightly less than for existing-home mortgagors in the same value ranges, new-home monthly payments represented slightly larger proportions of mortgagors’ incomes than did the monthly payments in existing-home transactions.
(7) With only slight variation in the average monthly mortgage payments of new- and existing-home transactions in the same valuation groups, the higher average prospective housing expense indicated for existing properties stems from the larger operating costs (principally for heating) and higher estimated maintenance and repair expense. Nevertheless, because of the lower average incomes of new-
244
FEDERAL HOUSING ADMINISTRATION
home mortgagors, the ratios of housing expense to income for new-home transactions were generally slightly higher than for existing-home transactions in the same value ranges.
(8) Rental values were approximately equal for new- and existing-home properties in the same value ranges. Because of the larger proportion of existing properties in the higher value groups, however, rental value for all existing homes was about 9 percent above the rental value of all existing homes combined.
Size of house.—The typical new single-family house under Section 203 in 1953 had a calculated area of 924 square feet; the typical existing structure was 9 percent larger, with an area of 1,008 square feet. Most of the houses—seven-eighths of the new and seven-tenths of the existing—were in an area bracket of 700 to 1,199 square feet. (See Table 28.) About 8 percent of the new and 18 percent of the existing structures had 1,200 to 1,499 square feet, while areas of 1,500 square feet or more were reported in 1 percent of the new homes and 9 percent of the existing homes. Only 3 percent of the new and existing houses measured less than 700 square feet.
Table 28.—Calculated area of single-family homes, Sec. 203, selected years
Calculated area (square feet) New homes Existing homes
1953 1952 1951 1949 1948 1953 1952 1951 1949 1948
Percentage distributions
Less than 600 0.1 0.1 0.2 1.8 0.9 0.2 0.3 0.4 0.7 0.9
600 to 699 2.7 2.9 4.3 7.0 4.6 3.0 3.3 3.1 3.5 4.7
700 to 799 19.5 18.7 23.7 28.8 20.6 13.7 14.6 13.1 14.2 16.3
800 to 899 22.1 23.7 25.8 24.2 22.0 17.5 18.0 16.8 17.5 18.5
900 to 999 20.6 16.4 13.6 12.5 16.2 13.9 14.8 14.3 13.8 13.3
1,000 to 1,099 15.4 15.5 13.4 9.5 11.2 13.5 13.2 12.9 12.1 10.9
1,100 to 1,199 10.2 10.8 8.5 6.1 8.7 10.8 10.3 9.9 9.3 8.0
1,200 to 1,299 1,300 to 1,399 4.5 4.9 4.1 4.2 6.4 8.4 7.7 8.1 7.3 6.8
2.3 3.5 2.8 2.1 3.4 5.9 5.6 5.9 5.5 5.1
1,400 to 1,499 1.4 1.7 1.3 1.3 2.2 3.9 3.6 4.4 4.2 3.7
1,500 to 1,599 .5 .9 .9 .8 1.5 2.6 2.5 3.1 3.2 2.9
1,600 to 1,799 .4 .6 .8 .9 1.4 3.3 3.1 3.8 4.0 3.7
1,800 to 1,999 .2 .2 .3 .4 .4 1.6 1.5 1.9 2.0 2.2
2,000 or more .1 .1 .3 .4 .5 1.7 1.5 2.3 2.7 3.0
Total 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Average 953 968 942 909 972 1,075 1,060 1,093 1,091 1,075
Median 924 923 879 841 912 1,008 992 1,011 1,001 972
Compared with the structures underlying the transactions insured in 1952, the new homes of 1953 showed virtually no change in size, while existing houses were moderately larger. Principal changes in the area distribution of new homes occurred in the proportions of houses with 900 to 999 square feet, which rose from 16 percent in 1952 to 21 percent in 1953 and of those in the 1,300 to 1,799 square foot range, which dropped from 7 percent to 5 percent. For existing properties, declines in the proportion of houses with areas of
245
HOUSING AND HOME FINANCE AGENCY
less than 1,000 feet (from 51 to 48 percent) were offset by increases in the proportion of those with larger areas (from 49 to 52 percent).
The marked correlation between calculated area and number of rooms in the homes covered by Section 203 transactions in 1953 is evident in Table 29, which shows distributions by room count in the several area ranges. Typical room counts ranged upward from 4.5 in new houses with less than 800 square feet, to 7.0 rooms for those with 2,000 or more square feet. Comparable gains in room count in line with increase in area also characterized existing properties.
Table 29.—Number of rooms by calculated area of single-family homes, Sec. 203, 1953
Calculated area (square feet) Percentage distribution Average number of rooms Median number of rooms Number of rooms—Percentage distributions
3 4 5 6 7 or more Total
New homes
Less than 700 2.9 4.1 4.5 2.0 91.9 3.2 2.9 100.0
700 to 799 19.5 4.1 4.5 .3 92.3 6.2 1.2 (i) 100.0
800 to 899 22.1 4.5 4.9 .2 50.2 48.4 1.1 0.1 100.0
900 to 999 20.6 4.9 5.4 .5 17.7 75.0 6.8 (*) 100.0
1,000 to 1,099 15.4 5.1 5.6 .1 6.8 72.9 20.0 .2 100.0
1,100 to 1,199 10.2 5.4 5.8 .2 3.8 54.8 40.0 1.2 100.0
1,200 to 1,399 6.7 5.5 6.0 .3 3.8 45.9 46.8 3.2 100.0
1,400 to 1,599 1.9 5.7 6.2 . 1 1.9 37.2 53.1 7. 7 100.0
1,600 to 1,999 .6 6.0 6. 5 2.4 18.0 54.0 25.6 100.0
2,000 or more .1 6.3 7.0 2.3 18.6 30.2 48.9 100.0
Total 100.0 4.8 5.3 .3 37.1 48.2 13.6 .8 100.0
Existing homes
Less than 700 3.2 4.2 4.6 5.0 78.0 13.7 2.9 0.4 100.0
700 to 799 13.7 4.3 4.7 .6 75.3 20.0 3. 7 .4 100.0
800 to 899 17.5 4.6 5.0 .2 48.4 45.1 5.5 .8 100. 0
900 to 999 _ 13.9 4.9 5.4 .2 26.9 58.9 12.6 1.4 100.0
1,000 to 1,099 13.5 5.1 5. 6 .2 13.0 61.1 23.6 2.1 100.0
1,100 to 1', 199 10.8 5.4 5.9 .1 5.2 49.9 41.7 3.1 100.0
1,200 to 1,399 14.3 5.7 6.3 .2 2.1 32.9 56.5 8.3 100.0
1,400 to 1,599 6.5 6.1 6.6 .2 .7 15.8 57.1 26.2 100.0
1,600 to 1,999 4.9 6.6 7.2 .2 .9 7.0 38.9 53.0 100.0
2,000 or more 1.7 7.5 6.2 .7 .3 1.4 12.8 84.8 100.0
Total 100.0 5.1 5.6 .4 27.8 39.0 24.9 7.9 100.0
1 Less than 0.05 percent.
Almost one-half of the new homes had 5 rooms, three-eighths had 4 rooms, and slightly over one-eighth had 6 rooms. In existing properties there were comparatively fewer 4- and 5-room houses (28 and 39 percent respectively) but more with 6 rooms (25 percent). Nearly 8 percent of the existing houses contained 7 or more rooms, as contrasted with less than 1 percent of the new structures.
Generally, the higher the room count the greater was the number of bedrooms. In the new-home transactions insured in 1953, more than half of the properties had 3 bedrooms, 44 percent had 2 bedrooms, and 2 percent had 4 or more. Relatively more (about one-half) of the existing homes provided 2 bedrooms, 44 percent 3 bedrooms (sig-
246
FEDERAL HOUSING ADMINISTRATION
nificantly fewer than the new homes), and 6 percent contained 4 or more bedrooms.
In terms of room count, there was little change from 1952 to 1953. The typical new house in 1953 (5.3 rooms) was the same size as in 1952, and the typical existing house was slightly larger than in 1952 (5.6 rooms compared with 5.5 rooms). The proportion of new structures with 5 rooms increased from 43 to 48 percent, while 6-room properties declined from 18 to 14 percent of the total. The room-count distribution of existing homes was practically the same in both years, with a slight decrease in 4-room structures (29 to 28 percent) and a compensating increase in 5-room structures (38 to 39 percent).
Bedroom accommodations in both new and existing houses were about the same in 1953 as the year before. The new-home median bedroom count was the same (3.1) in both years, while the comparable existing-home median declined slightly from 3.1 to 3.0 bedrooms. In new homes the changes in the distributions from 1952 to 1953 were as follows: the 3-bedroom proportion declined from 58 to 54 percent, 2-bedroom houses increased from 41 to 44 percent of the total, and houses with 4 or more bedrooms rose from 1 to 2 percent. Existing properties also registered increases in the proportion of 2-bedroom houses from 46 to 49 percent, counterbalanced by minor decreases in the proportion with 3 or more bedrooms.
Relationship of size of house and property valuation.—Of major consideration in the FHA valuation of a property is the size of the house, i. e., the calculated area of the structure and the number and type of rooms available. FHA estimated property values generally tend to rise with increases in calculated area and number of rooms in the structure.
Table 30 shows for the several value groups the distributions by calculated area of the structures securing Section 203 transactions insured in 1953. Considerable variation in area is evident within each value group, reflecting differences in construction costs and home prices caused by such factors as geographical location; types, materials, and quality of construction; neighborhood characteristics; number of bedrooms ; and, for existing properties, condition and age of structure. In given value intervals, the areas of existing homes were typically larger than those of new homes, as indicated by the respective median calculated areas.
Chart 16 graphically delineates the ranges of calculated areas of the Section 203 homes in 1953. The bar for new homes valued at $8,000 to $9,999, for example, shows that nearly all (90 percent) of the houses had areas between 714 and 1,170 square feet and 50 percent ranged from 813 to 985 square feet in size. Of the 90 percent shown, the lowest 20 percent ranged from 714 to 813 square feet; the next higher 25 percent contained 813 to 901 square feet; the next 25 percent
247
HOUSING AND HOME FINANCE AGENCY
Table 30.—Calculated area by property value of single-family homes, Sec. 203,1953
Median Calculated area (square feet)—Percentage distributions
Percent- calculated_____________
FHA estimate of property value age dis- area tribution (square Less than 700 to 800 to 900 to 1,000 to 1,100 to 1,200 to 1 400 to 1,600 to 2,000 or rPntol feet) 700 799 899 999 1,099 1,199 1,399 1,599 1,999 more 10lal
New homes
Less than $7,000--------- ,2.2 736 18.1 69.3 10.9 1.6 ____ 0.1 ___________________________ 100.0
$7,000 to $7,999--------- 14.9 777 8.6 52.6 25.7 10.1 1.8 1.1 0.1 __________________ 100.0
$8,000 to $8,999--------- 14.4 881 3.7 20.8 31.5 33.2 7.0 3.7 .1 __________________ 100 0
$9,000 to $9,999--------- 14.9 924 1.9 16.8 24.7 25.8 14.1 12.7 3.5 0.5 ___________ 100 0
$10,000 to $10,999-------- 15.7 948 1.0 14.8 24.8 19.2 24.5 11.4 4.0 .1 0.2 100.0
$11,000 to $11,999-------- 14.4 985 .8 9.1 21.4 22.4 22.0 14.8 8.6 .7 .2 100.0
$12,000 to $12,999-------- 10.1 1,014 .9 4.8 15.8 24.1 23.2 16.4 11.4 3.1 .3 100.0
$13,000 to $13,999------- 5.2 1,055 .1 4.0 13.5 17.3 25.5 15.8 18.0 5.1 .6 0.1 100.0
$14,000 to $14,999------- 3.2 1,126 .1 1.9 8.9 12.9 20.9 18.5 26.3 9.0 1.4 .1 100.0
$15,000 to $15,999--------- 2.0 1,180 .8 5.2 13.7 18.2 15.6 29.1 13.3 3.5 .6 100.0
$16,000 to $17,999------- 1.9 1,186 ______ 12.5 5.2 9.4 12.0 12.5 23.0 16.3 8.2 .9 100.0
$18,000 to $19,999---------- .7 1,298 .3 10.6 3.3 8.0 7.0 29.9 24.3 15.3 1.3 100.0
$20,000 or more---------- .4 1,489 __________ 1.2 3.7 2.4 3.1 27.4 26.8 23.2 12.2 100.0
Total----------------- 100.0 924 2.9 19.5 22.1 20.6 15.4 10.2 6.7 1.9 .6 .1 100.0
Median property value----------- $10,234 $7,808 $8,136 $9,669 $10,053 $11,150 $11,334 $12,799 $14,665 $17,000 $20,000 100.0
Existing homes
Less than $7,000 ---------- 2.8 813 18.4 24.6 32.0 8.3 5.4 3.0 4.1 2.0 1.4 0.8 100 0
$7,000 to $7,999--------- 6.7 820 12.3 30.9 28.2 10.5 6.6 3.5 4.5 1.8 1.3 .4 100 0
$8,000 to $8,999_________ 11.2 864 6.0 25.4 26.8 16.1 10.7 5.2 5.3 2.5 1.5 .5 100 0
$9,000 to $9,999_________ 12.5 932 4.6 18.6 20.3 18.3 16.2 8.9 7.8 2.8 2.0 .5 100 0
$10,000 to $10,999_______ 14.0 988 2.4 16.2 17.5 15.8 18.0 12.0 10.7 3.9 2.7 .8 100 0
$11,000 to $11,999________ 13.0 1,012 1.1 13.8 18.8 14.1 16.5 13.4 14.2 4.7 2.8 .6 100 0
$12,000 to $12,999-------- 12.1 1,067 .6 8.4 17.1 15.3 12.6 14.8 19.2 6.9 3.9 1.2 100 0
$13,000 to $13,999_______ 8.7 1,112 .4 4.9 12.7 15.7 14.4 14.5 22.5 7.8 5.7 1 4 100 0
$14,000 to $14,999--------- 6.0 1,169 .3 2.8 9.1 13.5 15.6 12.9 24.4 12.6 6.7 2.1 100 0
$15,000 to $15,999--------- 4.6 1,247 .3 1.3 6.0 9.6 12.3 13.2 26.1 15.9 11.2 4.1 100.0
$16,000 to $17,999------- 5.2 1,318 .2 .5 3.0 5.1 11.6 13.3 25.5 19.1 16.1 5 6 100 0
$18,000 to $19,999--------- 1.9 1,421 .3 .4 1.8 3.2 7.0 9.4 25.8 19.9 24.7 7.5 100 0
$20,000 or more__________ 1.3 1,664 ___ 1.0 4.7 2.0 3.0 4.9 13.7 16.5 29.8 24.4 100.0
Total----------------- 100.0 1,008 3.2 13.7 17.5 13.9 13.5 10.8 14.3 6.5 4.9 1.7 100.0
Median property value----------- $11,213 $8,406 $9,535 $10,164 $10,871 $11,200 $11,980 $12,780 $13,712 $14,450 $15,493
248
FEDERAL HOUSING ADMINISTRATION
RANGE OF CALCULATED AREAS BY PROPERTY VALUES
FHA-INSURED MORTGAGES ON SINGLE-FAMILY HOMES, SECTION 203, 1953
SQUARE FEET ~ ~ ~ SQUARE FEET
NEW HOMES LEGEND
5 % OF HOMES I LARGER I
2,000--- % 0F ------------------------------------- „ -------2,000
"■■'■■■I homes
«- s OOOOO I 50 % OF
MEDIAN-* KgriM S H0MES
20 % OF ???Xv??Xa‘a- ;, - ■ -
m □ ■ B ®
□- ffi -L X' 000
H E-3 t—1 ___
500-------------Z--------T------3-------3--------3-------~JT~ 500
---M-----v4------X---------—————d---------------------------'Tfr*--
।—------4- .—-4- -7- -----i- .....+ ~£~- ' -9----Qj
SQUARE FEET
EXISTING HOMES
SQUARE FEET
2,000----------------------- 1'.' """"'71— BS® 2,000
°°-------------- B——1,500
000 ~is_si_(-B--—-—-'•oo°
500-----------------------------------------500
- —./i- .. Z. . —X
$ 6,000 $ 8,000 $ 10,000 $ 12,000 $ 14,000 $ 16,000 $18,000 TO TO TO TO TO TO OR
$7,999 9,999 11,999 13,999 15,999 17,999 MORE
PROPERTY VALUE
Chart 16.
provided 901 to 985 square feet; and the remaining 20 percent had between 985 and 1,170 square feet. Another 5 percent of the properties in each value class were above and 5 percent were below the range of the bars in the chart. The chart also demonstrates how the range of area expanded with increases in property value, and shows that the spread in new-home area ranges was somewhat narrower than for existing homes in comparable value brackets.
An unusual clustering of new-construction cases in the $16,000 to $17,999 value group with areas of 700 to 799 square feet, and in the
249
HOUSING AND HOME FINANCE AGENCY
$18,000 to $19,999 value group with 800 to 899 square feet, which also produce the elongation of the bars in Chart 16 in these value groups, represents properties constructed in Alaska where exceptionally high costs of construction are experienced.8
Table 31.—Number of rooms by property value of single-family homes, Sec. 203, 1953
FHA estimate of property value Percentage dis -tribution Average number of rooms Median number of rooms Number of rooms—Percentage distributions
3 4 5 6 7 or more Total
New homes
Less than $7,000 2.2 4.1 4.5 0.6 90.2 4.2 5.0 100.0
$7,000 to $7,999 14.9 4.2 4.6 .6 79.6 18.8 1.0 (') 100. 0
$8,000 to $8,999 14.4 4.6 5.2 .2 39.8 54.7 5. 3 100.0
$9,000 to $9,999 14.8 4.8 5.3 .4 35.2 45.4 17.6 1.4 100.0
$10,000 to $10,999... 15.7 4.8 5.3 .4 32.8 53.9 12.8 .1 100. 0
$11,000 to $11,999... 14.5 4.9 5.4 .1 24.4 60.6 14.7 .2 100.0
$12,000 to $12,999... 10.1 5.0 5. 5 .3 17.8 63.7 17.5 .7 100.0
$13,000 to $13,999... 5.2 5.1 5.6 .1 16.1 59.1 23.9 .8 100.0
$14,000 to $14,999... 3.2 5.2 5.7 .2 12.5 52.6 32.7 2.0 100.0
$15,000 to $15,999... 2.0 5.4 5.8 8. 7 51.5 35.7 4.1 100. 0
$16,000 to $17,999... 1.9 5.2 5.8 .5 20.9 37.6 35.8 5.2 100.0
$18,000 to $19,999... .7 5.4 5.8 1.0 9.9 48.0 31.5 9.6 100.0
$20,000 or more .4 5.7 6.1 — 6.9 39.1 36.0 18.0 100.0
Total 100.0 4.8 5.3 .3 37.1 48.2 13.6 .8 100.0-
Existing homes
Less than $7,000 2.8 4.7 5.1 2.7 43.9 40.2 9.9 3.3 100.0'
$7,000 to $7,999 6.8 4.6 4.9 1.5 53.9 30.0 11.2 3.4 100.0
$8,000 to $8,999 11.2 4.8 5.1 .3 46.1 35.4 14.2 4.0 100.0
$9,000 to $9,999 12.5 4.9 5.3 .3 36.2 39.9 18.8 4.8 100.0
$10,000 to 10,999 14.0 5.0 5.5 .3 31.0 41.2 21.5 6.0 100.0
$11,000 to $11,999... 12.9 5.1 5.5 .3 27.7 43.0 22.9 6.1 100.0
$12,000 to $12,999... 12.1 5.2 5.7 .3 20.6 44.0 27.5 7.6 100.0
$13,000 to $13,999... 8.7 5.4 5.8 .3 15.7 43.6 31.4 9.0 100.0
$14,000 to $14,999... 6.0 5.5 5.9 .2 12.4 39.6 36.7 11.1 100.0
$15,000 to $15,999... 4.6 5.7 6.2 .3 7.3 35.0 42.9 14.5 100.0
$16,000 to $17,999... 5.2 5.8 6.3 .1 4.0 31.9 45.2 18.8 100.0
$18,000 to $19,999... 1.9 5.9 6.4 .3 3.6 28.2 44.7 23.2 100.0
$20,000 or more 1.3 6.3 6.7 .2 5.2 17.3 39.9 37.4 100.0
Total 100.0 5.1 5.6 .4 27.8 39.0 24.9 7.9 100.0
' 1 Less than 0.05 percent.
Table 31, presenting room-count distributions by value groups of the properties involved in Section 203 transactions insured in 1953, shows significant proportions of 4-, 5-, and 6-room houses at most value levels of both new and existing homes. Although structures with 7 or more rooms are evident in all value ranges of existing properties and new homes valued at $9,000 or more, they occurred principally in the new homes with valuations exceeding $15,000 and in existing homes valued at $14,000 or more. In the new-home value groups there was a tendency for certain room counts to predominate—4-room
8 The typical new-home transaction in Alaska insured under Sec. 203 in 1953 involved a mortgage of $14,163 with a term of 25 years and a monthly payment of $96.45; the property had an FHA-estimated value of $16,485, with the structure providing 4 rooms (including 2 bedrooms) in an area of 732 square feet. At the time of insurance 46 percent of the mortgagors were builders, 40 percent owner-occupants, and 14 percent landlords
250
FEDERAL HOUSING ADMINISTRATION
houses in the less-than-$8,000 bracket, and 5-room structures in the $10,000-$15,000 ranges. The existing properties, however, tended to be more widely distributed by room count within the different value groups.
The number of bedrooms in a structure also affects the value of the property. As indicated in Table 32, new homes valued at less than $8,000 and existing homes under $11,000 were predominantly 2-bed-room structures, while most of the houses in value classes above these amounts contained 3 bedrooms. Dwellings with 4 bedrooms or more represented significant proportions of the new homes valued at $9,000 to $9,999 and $18,000 or more, and of the existing properties valued at $10,000 or more.
Table 32.—Number of bedrooms by property value of single-family homes, Sec.
203, 1953
FHA estimate of property value Percentage distribution Average number of bedrooms Median number of bedrooms Number of bedrooms—Percentage distributions
1 2 • 3 4 or more Total
New homes
Less than $7,000 2.2 1.8 2. 5 92; 2 7.8 100. 0
$7,000 to $7,999 14.9 2.0 2.6 0.4 83.1 16. 5 (1) WO 0
$8,000 to $8,999 14. 4 2.4 3.1 . 2 42. 1 57. 5 0 2 WO 0
$9,000 to $9,999 14.8 2.5 3. 2 . 3 42. 0 48. 5 9 2 WO 0
$10,000 to $10,999 15.7 2.4 3.2 . 1 40.9 58.7 .3 100.0
$11,000 to $11,999 14.5 2.6 3.2 .2 33.7 64.9 1.2 100.0
$12,000 to $12,999 10. 1 2.7 3.3 .2 27.5 70.6 1.7 100.0
$13,000 to $13,999 .... 5.2 2.7 3.3 . 1 26.8 71.4 1.7 100.0
$14,000 to $14,999 3.2 2.7 3.3 .2 25.3 72.5 2.0 100.0
$15,000 to $15,999 2.0 2.7 3.4 .3 23.9 72.0 3.8 100.0
$16,000 to $17,999 1.9 2.6 3.3 1.0 32. 1 63. 1 3.8 100.0
$18,000 to $19,999 .7 2.9 3.4 1.0 16.1 76.2 6.7 100.0
$20,000 or more .4 2.9 3.5 — 16.0 68.0 16.0 100.0
Total 100.0 2.4 3. 1 .2 43.9 53.7 2.2 100.0
Existing homes
Less than $7,000 2.8 2.3 2.7 4.6 61.3 30.9 3.2 100.0
$7,000 to $7,999 6.8 2.1 2.6 2.3 77.6 16.9 3.2 100.0
$8,000 to $8,999 11.2 2.2 2. 7 1. 1 70. 7 24. 9 3. 3 100 0
$9,000 to $9,999 12.5 2.3 2.8 .9 59. 5 35. 3 4. 3 100 0
$10,000 to $10,999 14.0 2.4 2.9 .7 52.2 41.9 5.2 100.0
$11,000 to $11,999 12.9 2.5 3.0 .6 48. 1 46.2 5.1 100.0
$12,000 to $12,999 12. 1 2.6 3.2 .6 41.0 51.7 6.7 100.0
$13,000 to $13,999 8.7 2.6 3.2 .6 37.3 54.6 7.5 100.0
$14,000 to $14,999 6.0 2.7 3.3 .5 31. 7 59.8 8.0 100.0
$15,000 to $15,999 4.6 2.8 3. 4 .3 27.2 62.3 10.2 100.0
$16,000 to $17,999 5.2 2.9 3.4 .3 20.5 66.4 12.8 100.0
$18,000 to $19,999 1.9 3.0 3.5 .3 18. 1 65.5 16.1 100.0
$20,000 or more 1.3 3.2 3.6 .2 17.4 55.5 26.9 100.0
Total 100.0 2.5 3.0 .9 48.7 44.0 6.4 100.0
i Less than 0.05 percent.
Data on selected characteristics of the Section 203 transactions in the different calculated-area classes are shown in Table 33. Property values, total requirements, monthly housing expenses, and rental values, number of rooms and bedrooms, and percentage with garages all tended to rise with increases in the areas of both new and existing structures.
294078—54----18
251
HOUSING AND HOME FINANCE AGENCY
Table 33.—Property characteristics by calculated area of single-family homes, Sec. 203, 1953
Calculated area (square feet) Percentage distribution Average
Calculated area (square feet) Property value Total requirements 1 Monthly Number of rooms Number of bedrooms Percentage of structures with garage
Housing expense Rental value
New homes
Less than 700 2.9 669 $8,172 $8, 391 $73.17 $65. 49 4.1 1.7 22.1
700 to 799 19. 5 751 8, 650 8, 906 75. 69 70. 13 4.1 1.8 44.4
800 to 899 22.1 851 9, 759 10, 213 83. 08 78. 72 4.5 2.2 46.2
900 to 999 _ 20.6 946 10, 233 10, 619 85. 79 83. 36 4.9 2.6 59.7
1,000 to 1,099 15. 4 1, 045 11, 255 11, 795 92.63 91.26 5.1 2.8 70.3
IJOO to 1,199 10.2 1,148 11,387 12, 092 94.17 91.52 5.4 2.9 83.2
L200 to L399 6.7 1, 276 13, 067 13, 907 105. 07 103. 05 5.5 2.9 85.3
1,400 to 1,599 1.9 1, 467 14,858 15, 513 116. 22 115.41 5.7 3.0 84.7
1600 to 1999 .6 1,747 16, 516 17, 946 130. 60 127.40 6.0 3.0 83.8
2^000 or more .1 2,220 20, 385 22, 984 154. 60 152. 58 6.3 3.3 91.7
Total 100.0 953 10, 363 10, 722 86.99 83. 57 4.8 2.4 59.8
• Existing homes
Less than 700 3.2 659 $8, 559 $9,163 $77. 22 $70. 07 4.2 1.8 52.5
700 to 799 13.7 753 9, 587 10,152 83.04 77. 23 4.3 1.9 54.8
800 to 899 .. 17.5 847 10, 207 10, 829 86. 22 82. 23 4.6 2.1 65.0
900 to 999 13.9 946 10, 980 11, 773 91.74 87. 61 4.9 2.3 71.6
1,000 to 1,099 13.5 1,045 11, 423 12, 335 94. 63 91. 44 5.1 2.5 79.2
1100 to 1,199 10.8 1,146 12, 068 13, 111 99. 57 96. 40 5.4 2.7 83.2
1,200 to 1,399 14.3 1,285 12,807 13, 904 105.47 101. 62 5.7 2.8 84.4
1,400 to 1^599 6.5 1,484 13, 587 14, 836 112. 66 107. 82 6.1 3.1 87.1
1,600 to 1,999 4.9 1,752 14, 311 15, 569 119. 76 113.14 6.6 3.4 89.2
2,000 or more 1.7 2,358 15,452 16, 766 136.20 124.15 7.5 4.1 88.2
Total 100.0 1, 075 11,424 12, 228 95.81 91.34 5.1 2.5 74.2
i Data reflect purchase transactions only.
Existing homes in the calculated area groups below 1,200 square feet had higher average property values, total requirements, monthly housing expenses, and rental values than new homes in the same ranges. The higher total requirements and property and rental values of the existing properties may be attributable to their location in neighborhoods which are nearer to the center of the city. Moreover, structural and land improvements usually made to existing properties tend to enhance their prices and values. The greater housing expenses of the existing homes probably reflect the higher heating and maintenance and repair costs generally experienced in older properties. It is reasonable to assume that most new homes with less than 1,200 square feet were constructed by operative builders in outlying areas, as projects located in newly developed subdivisions with less commercial and community development than is characteristic of existing homes.
On the other hand, new homes with structural areas of 1,200 or more square feet generally averaged higher than comparable existing properties in total requirements, values, and expenses. Inasmuch as only
252
FEDERAL HOUSING ADMINISTRATION
a relatively small number of larger-size homes were constructed during the war and postwar period, it would appear that many of the larger existing structures involved in Section 203 transactions in 1953 were probably prewar properties. Whatever advantage these properties enjoy with respect to location would be more than offset by the greater age of structure and shorter economic life as compared with newly constructed properties of the same size. Furthermore, a considerable number of the larger new homes were probably built individually on vacant lots in developed close-in neighborhoods, thus approaching the location advantage of existing properties.
Significant differences in room and bedroom count between new and existing homes of comparable areas are apparent only in those dwellings with 1,400 or more square feet, where the average number of rooms and bedrooms in existing properties is larger than in new; and in the medium-size homes (900 to 1,199 square feet), where the bedroom count of the new homes averages somewhat higher than that of the existing homes. Since average total room counts are identical for these size groups, the difference in bedroom counts reflects the recent construction trends toward elimination of dining rooms. The higher bedroom count is no doubt also influenced by statutory mortgage amount advantages for new, low-value homes of 3 and 4 bedrooms. Garages were relatively more numerous in existing properties than in new homes in nearly all the area classes.
Mortgagors’ Incomes and Housing Expense
Essential to the FHA underwriting procedure is determination of the risk involved in the mortgage credit elements of each transaction. Among the elements considered are the mortgagor’s income, the relationship of that income to prospective housing expense and other fixed obligations, and the mortgagor’s reasons for applying for the mortgage loan.
Inasmuch as the period during the first third of the mortgage term is likely to be the most crucial in the life of the mortgage, an estimate is made of the mortgagor’s probable earning capacity during that time. It is this estimated earning capacity which is recorded as the mortgagor’s effective income. Depending on the circumstances, this estimate may include all, part, or none of the incomes of co-mortgagors or endorsers. Other items analyzed in the mortgage credit processing are the mortgagor’s credit record and reputation, his financial ability to close the loan transaction, and the relationship of his effective income to fixed obligations and living expenses, including the estimated prospective monthly housing expense. The following paragraphs present an analysis of some of the mortgage credit aspects of Section 203 single-family home transactions insured in 1953—specifically those in which the mortgagors were owner occupants. As indicated
253
HOUSING AND HOME FINANCE AGENCY
previously, 96 percent of the new single-family home mortgagors and 99 percent of the existing property mortgagors were owner occupants.
Annual income distribution.—Of the new-home buyers assisted by Section 203-insured financing in 1953, more than half had annual effective incomes of $3,000 to $4,999 and 3 of every 10 were in the $5,000 to $6,999 income bracket. One-seventh earned $7,000 or more, and less than 2 percent earned less than $3,000 annually. The median income was nearly $4,900, while all incomes averaged about $5,300.
Incomes of existing-home buyers were generally higher, as evidenced by the median of nearly $5,400 and an overall average of $5,900. About 40 percent of the existing-home mortgagors had incomes of $3,000 to $4,999, and 35 percent were in the $5,000 to $6,999 range. Nearly 25 percent (contrasted with less than 15 percent of the new-home buyers) earned $7,000 or more yearly, while only 1 percent reported incomes of less than $3,000. (See Chart 17 and Table 34.)
MORTGAGOR’S ANNUAL INCOME
FHA-INSURED MORTGAGES ON l-FAMILY OWNER-OCCUPIED HOMES
SECTION 203. 1953
PERCENT PERCENT
30----------------- . ------------------------ [ " , J NEW HOME BUYERS — 3Q
EXISTING HOME BUYERS
25----------------- ----------------------------------------------- 25
< Il
20---------—-------;*• -------------------------------------------20
15--------- ------- || H----------------------------------------- 15
10--------- B— II— — II—m------------------------10
5---------- I— 0— B— Il— i-f—8—m—5
_o___। m m____________________to______m m m r~to o
LESS $ 3,000 $ 4,000 $ 5,000 $ 6,000 $ 7,000 $ 8,000 $ 10,000
THAN TO TO TO TO TO TO OR
$ 3,000 3,999 4,999 5,999 6,999 7,999 9,999 MORE
MORTGAGOR’S EFFECTIVE ANNUAL INCOME
Chart 17.
Incomes of FHA home mortgagors in 1953 averaged somewhat higher than in 1952—2 percent for new-home mortgagors and 9 percent for existing-home purchasers. The estimated comparable increase in nonfarm family income was about 5 percent. As indicated in Table 34, the proportion of new-home buyers with incomes of less than $5,000 declined from 1952 to 1953, while those in the $5,000 to
254
FEDERAL HOUSING ADMINISTRATION
Table 34.—Income of single-family home mortgagors, Sec. 203, selected years
Mortgagor’s effective annual income New homes Existing homes
1953 1952 1951 1946 1940 1953 1952 1951 1946 1940
Percentage distributions
Less than $1,500 (>) (*) (‘) 0.2 5.0 (1) (1) 0. 3 5. 3
$1,500 to $1,999 (*) 0.1 0.2 2.7 23.4 (>) (*) 0.2 4.2 20.5
$2,000 to $2,499 0.2 . 5 1.6 16.0 28.3 0.2 0.5 1.1 19.4 25.0
$2,500 to $2,999 1.4 2.3 6.1 15.8 15.4 .9 1.8 3.5 14.8 13.9
$3,000 to $3,499 6.5 8.9 15.7 19.7 12.0 3.9 6.9 10.2 19.3 11.6
$3,500 to $3,999 14.1 15.8 19.8 17.6 6.2 10.3 13.7 16.4 14.5 6.9
$4,000 to $4,499 16.8 15.4 14.7 8.8 3.2 13.1 14.8 14. 1 7.1 4.0
$4,500 to $4,999 15.2 14.5 11.8 7.5 2.0 12.3 14. 1 13.0 6.7 3.1
$5,000 to $5,999 18.3 16.9 12.5 4.1 1.9 19.1 17.2 15.2 4.3 3.3
$6,000 to $6,999 12.8 12.3 9.0 4.3 1.2 15.6 13.5 12.0 4.4 2.5
$7,000 to $7,999 7.5 6.6 4. 2 1.7 .5 10.5 8.1 6.5 1.9 1.2
$8,000 to $9,999. 4.9 4.4 2.7 .7 .4 8.7 6.1 4.6 1.6 1.2
$10,000 or more 2.3 2.3 1.7 .9 .5 5.4 3.3 3.2 1.5 1.5
Total 100.0 100.0 100.0 100.0 100.0 100. 0 100.0 100.0 100. 0 100. 0
Average $5, 284 $5,160 $4,662 $3, 619 $2,665 $5,938 $5, 425 $5,176 $3, 640 $3,012
Median 4i 880 4,811 4, 225 3, 313 2,416 5, 396 4, 938 4, 726 3,101 2,490
iLess than 0.05 percent.
$9,999 classes registered slight increases. In the existing-home transactions, the upward shift in income level was marked by declines in the $3,000 to $4,999 classes and significant increases in the proportion of borrowers earning $6,000 or more.
Averages of selected characteristics by income groups.—The data in Table 35 permit analysis of the characteristics of Section 203 transactions insured in 1953 on the basis of the monthly effective income of the occupant mortgagors. In the new-home group of buyers with monthly incomes of $400 to $449, the sale prices of the properties averaged about $10,600 compared with the FHA estimated value of nearly $10,400, which was about twice the average annual income. The average mortgage of $8,640 amounted to 83 percent of property value but provided under 80 percent of the total financial requirements. The houses had an average calculated area of 950 square feet divided into 4.8 rooms.
About one-fifth of the monthly income was required, on the average, to meet estimated total housing expenses of $87.48, including $67.65 for total monthly mortgage payment, plus estimated operating costs and maintenance and repair expense. The monthly rental values of the properties averaged nearly $84, or 24 percent more than the monthly payment.
In both new- and existing-home transactions, total requirements, sale prices, property values, mortgage amounts, structure sizes, and monthly expense and rental items advanced with rises in the income level, but at moderately lower rates. For example, new-home borrowers in the $700 to $799 income class had an average income over
255
HOUSING AND HOME FINANCE AGENCY
256
SSSSSSSSKKfisSS 8 S $50. 50 55.16 60.83 65.53 69. 27 72. 56 75.92 79.29 81.36 84.68 89. 21 97.38 co ci
Monthly average § New homes S S? Existing homes CO 00 1^- CO CO © >Q »—4 C4 CO »Q©04 04I^00©r-a>OOOr-(C] ^M^^^UQiQiQiQiQ OO r^00©O>-lC4CQCQ'^^>Qt^ -Tjir^TtiiQiQiQiQkQiQlQkQiQ r-4
Calculated area (square feet) § 910 919 946 one ,031 ,075 ,116 ,127 ,163 ,182 ,244 ,378 1Q O rH
T—< r—IHHHHrHH
Mortgage amount o t^'r-'od'oo oo cTof oT®~ o' o' ! $6, 228 6,847 7,454 8,030 8,463 8,824 9,244 9,548 9,864 10,296 10, 769 11,594 S 00
Hi fcooaTooo^^cjgco 10,324 ,100 ,696 ,496 ,319 ,954 ,369 ,949 ,335 ,777 ,288 ,965 147 11,413
CCOOQOOr-lHOUNfOCOQ t—< r—( t—<»—( H H H r-1 rd
Sale price 1 10, 530 $8,235 8,967 9,855 10,739 11,446 11,971 12,642 13,050 13,563 14,168 15,008 16,387 12,001
Total requirements 1 10, 708 $8,378 9,165 10,086 10,944 11,674 12,149 12,851 13, 272 13,743 14,385 15,227 16,649 12,215
Percentage distribution OO + CC‘Qb’C^HiQCC'OO rHodoooocooiajiQTtHcioiffo o 8 r—I HOCO'QCOOO’t CUNN
r-HTrCQLQLQairHCQcdT^kQCO
Mortgagor’s effective monthly income i i 1 1 ! 1 1 1 ' i i Sggg ifli §222 1 1 1 1 1 1 1 1 1 III : : i i : : : ; : i : i 1 1 1 1 1 1 1 1 1 III : : : : : : : : } j : : H H i H i Hi i : i i : i i : ; i : ; ; : : : : : i ; i : i : 1 1 1 1 1 1 1 1 1 III ggdsgggj : Sg^g !»M80 J 18Si 2222222o g §222 SSSSSSSS H 5ggg Hi Hi i ; i i ! ’ i i i sssg 2232 SSSS H ii I 1 i J i i !!! 222 SS8 i ; i ; i ; ij ° s S
Table 35.—Transaction characteristics by income of single-family home mortgagors, Sec. 203, 1953
FEDERAL HOUSING ADMINISTRATION
twice that of mortgagors in the $300 to $349 group, but the average sale price and property value was less than 1% times, calculated area only 1% times, and housing expense only 1% times greater than the corresponding averages for the lower-income buyers. While differences in these directions may well be typical of all home purchasing, the extent of the differences shown by FHA experience is very probably exaggerated by two circumstances. First, low- and middle-price new homes make up the bulk of homes built with FHA inspections, and these would have a greater likelihood of sale with insured financing than would higher-price homes, regardless of the income of the borrower. Secondly, higher-income buyers who could finance more expensive homes with larger down payments can more easily find satisfactory financing terms with conventional loans.
The average income for all existing-home mortgagors exceeds that of new-home buyers by 12 percent. Average total requirements, sale prices, and property values were higher for existing homes than for new homes within corresponding income groups, as were also the home sizes and rental values of existing properties. On the other hand, new-home mortgage amounts averaged more than for existing homes in the monthly income classes under $500, because of the preponderance of properties valued at less than $12,000 and the more favorable financing terms available for new-construction transactions involving such properties. In the $500-or-more income brackets, the comparatively higher values of the existing properties resulted in larger average mortgage amounts. Monthly mortgage payments on existing-home mortgages exceeded the new, principally because of the shorter loan durations in all income groups and the relatively larger mortgages undertaken by existing-home mortgagors in the higher income brackets. In line with the higher monthly payments on the existing-home mortgages and the generally larger operating, maintenance, and repair costs for existing properties, monthly housing expenses of existing-home buyers were above those of new-home buyers in all income classes. Within individual income classes, new-home buyers were devoting smaller shares of their incomes to housing expense, although the ratio of expense to income for all existing-home buyers as a group was slightly less than for the new.
A basic consideration in the determination of mortgage risk under the FHA underwriting procedure is the relationship between the mortgagor’s income and his prospective monthly housing expense. Table 36 shows distributions of monthly housing expense by income classes of owner-occupant mortgagors involved in Section 203 transactions insured in 1953.
The monthly housing expense medians shown (in the second column) for each income group indicate that as mortgagors’ incomes increased
257
HOUSING AND HOME FINANCE AGENCY
258
Table 36.—Housing expense by income of single-family home mortgagors, Sec. 203,1953
Monthly housing expense—Percentage distributions
Percent- Median _____________________________________________________________
Mortgagor’s effective monthly income age monthly ..■••• ----
y distribu- housing Less $50.00 $60.00 $70.00 $80.00 $90.00 $100.00 $110.00 $120.00 $140.00
tion expense than to to to to to to to to or Total $50.00 59.99 69.99 79.99 89.99 99.99 109.99 119.99 139.99 more
New homes
Less than $250.00-------- 1.6 $66.09 1.5 17.1 48.2 26.9 5.4 0.9 100 0
$250.00 to $299.99------- 8.0 72.11 .4 6.1 34.7 37.6 17.9 2.9 6.4 '(>) 100 0
$300.00 to $349.99------- 18.4 78.73 .1 2.6 19.3 32.2 31.0 13.0 1.7 0.1 "71) 1000
$350.00 to $399.99------- 18.3 83.84 .1 1.8 12.2 24.1 30.8 23.6 6.4 .9 (1) 6T 100 0
$400.00 to $449.99------- 16.5 87.36 .1 1.5 9.0 19.2 27.5 24.6 13.8 3.5 0.6 .2 100 0
$450.00 to $499.99------- 9.7 89.68 .1 1.0 7.3 16.5 25.9 25.0 15.6 6.7 1.7 2 100 0
------------------------- 92-34 -2--9 5-7 14-7 22-8 24.0 17.0 9-3 5.0 '.4 100 0 $550.00 to $599.99------- 5.1 93.24 .9 5.3 12.8 22.9 25.1 14.8 9.7 7.6 9 100 0
$600.00 to $649.99--------- 4.5 94.74 .3 4.6 13.9 20.7 22.2 15.8 10.3 10.3 1 9 100 0
$650.00 to $699.99--------- 2.8 97.57 .9 3.3 12.4 19.2 18.7 18.6 11.5 11.1 4 3 100 0
$700.00 to $799.99------- 2.9 100.89 --------- .5 3.2 8.0 16.4 20.5 15.8 13.9 14.2 7 5 100' 0
$800.00 or more------------ 3.0 108.77 .1 2.1 6.4 12.1 16.9 14.1 14.0 19.7 IL 6 lOOio
Total---------------- 100.0 85.11 .1 2.1 12.8 22.0 25.5 19.5 9.7 4.4 2.9 1.0 I00.~0
Existing homes
Less than $250.00-------- 1.1 $67.34 ' 0.9 20.6 39.8 28.1 8.7 1.9 100 0
$250.00 to $299.99------- 4.9 75.48 . 4 7.0 23.2 38.0 24.4 6.3 O.’s 6.*2 100 0
$300.00 to $349.99------- 13.6 81.69 .2 3.2 12.9 28.5 30.9 19.7 4.2 .3 6’1 ' 100 0
$350.00 to $399.99------- 15.0 87.79 .3 1.8 7.8 19.1 26.9 26.5 13.8 3.3 .3 6T 100 0
$400.00 to $449.99-------- 15.5 92.52 .2 1.2 6.1 14.0 21.9 26.1 19.8 8.6 1.9 2 100 0
$450.00 to $499.99------- 9.8 95.90 .2 .9 4.4 13.2 18.0 22.6 20.6 13.6 6.3 2 100 0
$500.00 to $549.99-------- 11.0 99.62 .1 .6 3.8 10.0 16.4 19.9 19.7 16.4 12.1 1.0 100 0
$550.00 to $599.99------- 6.6 101.39 (>) .5 2.8 8.3 14.6 21.2 18.1 15.4 15.8 3 3 100 0
------------------------- *?-4 104'74 -1-14 2-4 7-5 12'7 184 18'° 152 19.5 5.8 100.0 $650.00 to $699.99------- 4.2 108.94 .5 2.3 5.4 11.6 14.8 17.2 15.6 23.3 9.3 100 0
$700.00 to $799.99------- 5.2 113.69 ---- .5 1.4 4.7 8.2 14.1 15.6 15.1 25.1 15.3 100 0
$800.00 or more---------- 6.7 123.57 --------.2 . 7 3.1 6.3 9.1 12.3 13.7 26.1 28.5 100.0
Total---------------- 100.0 93.25 .2 1.7 6.8 15.2 19.6 20.0 14.6 9.4 8.6 3?9~ ~ 100.0
i Less than 0.05 percent.
FEDERAL HOUSING ADMINISTRATION
housing expenses also rose, but at a progressively slower rate. For new-home buyers, typical expenses ranged from $66 for those with monthly incomes of less than $250 to nearly $109 for those earning $800 or more, compared with existing-home expenses of $67 in the lowest income group and about $124 in the highest.
The distributions in the table indicate that there was significant variation in the amount of expenses that mortgagors within the same income class were willing to undertake. Expenses tended to be more widely distributed in the higher-income brackets and somewhat more so in existing-home transactions than for new homes. Chart 18 illustrates graphically the spread of housing expense within income groups of buyers of new homes and the expansion in that spread that accompanied the advance in income.
RANGE OF HOUSING EXPENSE BY INCOME FOR NEW HOME BUYERS
FHA-INSURED MORTGAGES ON SINGLE - FAMILY HOMES
PROSPECTIVE MONTHLY SECTION 203; 1953 PROSPECTIVE MONTHLY
HOUSING EXPENSE HOUSING EXPENSE
$160 —i —-------r—-----------—-------------—*———T—---------------------------1$ 160
J 5% OF > MORTGAGORS I AB0VE
140—-----------------------------------------------------------------(40
20% OF
120 --------------•---------------------IlilOO 120
■ '.’.LZ'.'.l'''''''''''.'■I'''''''''.''.'.I''.~- -■■•J U z 25% 0F
XTX-j.-'-. " . V -z • ■ • • ' - - I MORTGAGORS^^
ioo—--------.-----—100
y Jusino j jii j i''ii'i 1 j|g"Lv 1 25 % of"'" W:
-Y- ' 2T • J ■{ Z : I MORTGAGORS'^
„ ■.....—' ~~ ~~
l .x a; a ll l .xa a a a a a: x 77; xx. \ mortgagors*^**
. ____________________________________________-
''L U I I 5 % OF
60 n.r?J ) ' ' 1 1 ' '' 1 _ ______________ ? MORTGAGORS cn
r i i i 111 -------------------------I below •— ou
i !
40 ---------------—------------------------L---------------------------------------40
■niW7 f- : I ®----------------------------------------r—r 1 -I + .
$ 250 $300 $350 $400 $450 $500 $550 $600 $650 $700 $750 $800
MORTGAGOR’S EFFECTIVE MONTHLY INCOME
Chart 18.
About 3 of every 4 dollars of estimated housing expense for both new- and existing-home buyers in 1953 were attributable to the monthly mortgage payments of interest, principal, taxes and assessments, hazard insurance, and FHA mortgage insurance premiums. Chart 19 shows that the monthly mortgage payment portion of housing expense increased with income, reflecting relatively smaller operating and maintenance expenses for higher quality homes. The ratio of mortgage payment to housing expense increased gradually with
259-
HOUSING AND HOME FINANCE AGENCY
increases in income up through the $600 income class and then leveled out. Because of the higher estimated operating, maintenance, and repair costs of existing properties, the payment-housing expense ratio was lower in existing-home cases than in the new.
MORTGAGE PAYMENT AND HOUSING EXPENSE BY MORTGAGOR’S INCOME
FHA-INSURED MORTGAGES ON SINGLE-FAMILY HOMES, SECTION 203,1953
DOLLARS DOLLARS
NEW HOMES
! ,! I AVERAGE MONTHLY ~ 'Z°
AVERAGE MONTHLY / f HOUSING EXPENSE H
MORTGAGE PAYMENT S 188888 -—
100- -100
i- n n-l-l-rl-l-l 11-
—ii ~HI—HI—HH—iH—iii—Bi—40
— Hi—H?——H®—HH——Hi—iO—20
_Mj Bgjj EsUl A® IM 0
DOLLARS DOLLARS
EXISTING HOMES 120-----------—--------------------------------------_____,_____ -uo
100-----------------------------------— ।— : — >? •’• — — ioo
so------------—-—— — — — — SBaB® — 388885 — — xxxxx — 80
so — f Ss: — y .— |||| — — g®« — so
40—i®®—h®—1 — o®—Hi?—h®—n®——mi—®® —bbi—40
20— Hl — HU — — SsH — — Hi — K8 8 — — iH — — 20
o i&iij______________________ggigg__mu____________nn_____mu__iiig_o
LESS $ 250.00 $ 300.00 $ 350.00 $ 400.00 $ 450.00 $ 500.00 $ 550.00 $ 600.00 $ 650.00 $ 700.00 $ 800.00 than to to to to to to to to to to or
$250.00 299.99 349.99 399.99 449.99 499.99 549.99 599.99 649.99 699.99 799.99 MORE
MORTGAGOR’S EFFECTIVE MONTHLY INCOME
CHABT 19.
Chart 20 depicts the percentage distributions of total monthly payments specified in the new- and existing-home mortgage transactions insured under Section 203 during 1953. Most mortgages—3 of every 4 new-home and 5 of 8 existing-home—involved payments of $50 to $79. Reflecting the shorter duration of existing-home mortgages and the larger proportion in the higher amount brackets, 30 percent required payments of $80 or more as against only 16 percent of the new-home mortgages. At the lower end of the payment scale, 9 percent of the new-home and 7 percent of the existing-home mortgagors were undertaking payments of less than $50 monthly.
In line with the higher level of mortgage principal in 1953, the typical new-home payment was nearly 3 percent more than in 1952, while the median existing-home payment increased 9 percent. Underlying the new-home change were significant declines in the
260
FEDERAL HOUSING ADMINISTRATION
TOTAL MONTHLY MORTGAGE PAYMENT
FHA-INSURED MORTGAGES ON SINGLE-FAMILY HOMES
SECTION 203, 1953 PERCENT b-.j, ■ PERCENT
, 25 - ....... , - .....__ ' ------------------------------------------------25
®8 3888 |®®1 NEW HOMES
, ——WTOPJ jjjjgjjjj EXISTING HOMES
20——■ --.......—— ■ #® ------ g® --------------------------------20
15 .......... f® g&SS — ; ' K ■ « — <® ■ --------------------------------15
10----------------------- '' — ,.®: & i I — # —•— ------------------------10
9-------------- HI— ® Has— HI— HH— -----Hi---------I ------5
o r*—J i ________________lais______aSa_______aaa_____i SS______ail_____I__Ja : \ 0
LESS $40 00 $50 00 $60 00 $70 00 $80 00 $9000 $100.00
THAN TO TO TO TO TO TO OR
$40.00 49.S9 59.99 69.99 79.99 89.99 99.99 MORE
MONTHLY MORTGAGE PAYMENT
Chart 20.
Table 37.—Monthly mortgage payment for single-family homes, Sec. 203, selected years
Total monthly mortgage payment New homes Existing homes
1953 1952 1951 1946 1941 1953 1952 1951 1946 1941
Percentage distributions
Less than $25.00 (') (1) 1.3 11.0 (1) 0.1 0.4 5 5 15 8
$25.00 to $29.99 (*) (>) 0.1 4.1 17.1 (0 .1 .6 9.0 15.2
$30.00 to $34.99 0.1 0.2 .5 11.3 21.1 0.1 .6 1.4 16.0 16.3
$35.00 to $39.99 .2 .6 1.6 13.7 18.8 .6 1.6 3.5 18.3 14.4
$40.00 to $44.99 2.5 2.7 7.0 16.6 13.0 1. 7 3.8 6.2 15.3 11.0
$45.00 to $49.99 6.3 6.5 13.8 14.5 6.7 4. 7 6.8 9.3 11.6 7.8
$50.00 to $54.99 10.7 11.7 18.5 17.1 4.1 7.3 10.0 12.3 7.8 5.1
$55.00 to $59.99 13.3 15.5 17.5 10.0 2.9 10.0 13.0 13.5 5.0 3.6
$60.00 to $64.99 14.0 15.4 14.3 5.8 1.9 11.6 13.7 12.9 3.5 2.6
$65.00 to $69.99 15.3 13.7 10.9 3.2 1.2 12.1 12.5 11.3 2.2 1.8
$70.00 to $74.99 12.8 10. 7 6.3 1. 4 .8 11. 4 11 3 8 6 1 6 1 4
$75.00 to $79.99 8.8 9.8 3.9 .4 .4 10.4 9.5 6.8 1.2 1.0
$80.00 to $89.99 9.6 9.6 3.3 .3 .4 14.2 11.2 8.1 1.2 1.4
$90.00 to $99.99 4.0 2. 5 1.3 . 2 . 2 7. 7 4 0 3 1 6 9
$100.00 or more 2.4 1.1 1.0 . 1 .4 8.2 1.8 2.0 1.2 1.7
Total 100.0 100.0 100. 0 100. 0 100.0 100 0 100 0 100 0 100 0 100 0
$67. 05 $64. 63 $58. 63 $46 06 $36 88 $72 79 $65 65 $61 98 $43 25 $39 50
Median 65. 95 64.16 58.84 46.18 35.21 70. 84 65. 08 61.57 40. 83 35.91
1 Less than 0.05 percent.
261
HOUSING AND HOME FINANCE AGENCY
proportion of payments ranging from $50 to $65 and $75 to $79, and gains in the $65-to-$74 and the $90-or-more brackets (Table 37). In existing homes, the shift out of the lower payment classes into the higher groups was even more pronounced—the proportion under $65 dropping from 50 to 36 percent and that for $65 or more increasing from 50 to 64 percent of the total, including over a threefold increase in the $100-or-more class.
Characteristics of Section 903 Home Mortgage Transactions
During 1953, under the Section 903 defense housing program, FHA insured nearly 23,000 mortgages totaling over $200 million on 1- and 2-family properties containing nearly 26,000 dwelling units. All these properties were newly constructed, although a few of the transactions involved refinancing of existing mortgages. An analysis of the transactions (excluding the refinancing) is presented in this portion of the report.
Nearly 7 of every 8 of the Section 903 structures were of the singlefamily type. Reflecting the primary need for rental housing in critical defense areas, landlord-type mortgagors were reported in nearly four-fifths of the single-family and almost all of the 2-family cases. In about one-eighth of the single-family transactions and the remaining 2 percent of the 2-family cases, the builders were the mortgagors ; in other words, the properties had not been sold by the time of insurance to owner occupants or landlords. In the remaining 8 percent of the single-family cases, the mortgagors were owner occupants of the properties.
Typical Section 903 transactions.—The typical single-family case insured under Section 903 in 1953 involved a mortgage of $8,137 payable over a term of 29 years, with a total monthly payment of $54 including real estate taxes of $7.45 and hazard and FHA mortgage insurance premiums. Securing the mortgage was a property valued by FHA at $9,075. The house had a calculated area of 844 square feet and contained about 5 rooms, of which 3 were bedrooms.
The median mortgage amount for the 2-family home cases was $14,158, the average duration 29 years, and the median total monthly mortgage payment $99.91, including an average of $18.82 for real estate taxes. The typical property had an FHA valuation of $15,944, including land and a 2-family structure with a total calculated area of 1,583 square feet. Each of the 2 units contained about 4% rooms; the median bedroom count for each unit was 2.6 rooms.
Exerting a marked influence on the characteristics of Section 903 insured transactions are two factors'—first, the maximum monthly rental and sale price ceilings stipulated by HHFA for housing programed in each critical defense area, and second, the maximum mortgage amounts, durations, and ratios of loan to value. The schedule
262
FEDERAL HOUSING ADMINISTRATION
below denotes the maximum mortgage amounts effective under Section 903:
Bedrooms per unit l-family homes 2-family homes
1 or 2 bedrooms 3 bedrooms 4 or more bedrooms $8,100 9,150 10, 200 $15, 000 17,100 19, 300
Higher maximum amounts, limited to not more than an additional $900 for single-family and $1,000 for 2-family properties, were authorized in areas where high construction costs retarded the defense housing programs. Mortgage durations were limited to not more than 30 years and the mortgage amount to not more than 90 percent of the FHA appraised value of the property.
Average characteristics by mortgage amount.—Table 38 shows percentage distributions of the Section 903 cases by amount of mortgage, and averages of mortgage amount, duration (term), property value, and loan-value ratio for each mortgage amount group.
Table 38.—Average characteristics by mortgage amount for 1- and 2-family homes, Sec. 903, 1953
Mortgage amount Percentage distribution Average
Amount of mortgage Term in years Property value Loan-value ratio (percent)
l-family homes
Less than $6,000 __ _ _ 3.7 $5,052 28. 5 $5,756 87 8
$6,000 to $6,9'99 9.3 6^ 625 28.7 7, 428 89 2
$7,000 to $7,999 26.8 7, 524 28. 5 8,464 88 9
$8,000 to $8, 999 37. 7 8'312 29.0 9, 471 87 8
$9,000 to $10,200 22.5 9; 204 29.5 io; 542 87.3
Total 100.0 8,023 28.9 9, 096 88.2
2-family homes
Less than $12,000. _ - _ _ ___ 11.3 $11, 229 29.4 $12, 570 89 3
$12,000 to $12,999 - 17.7 12', 537 27. 7 14,060 89 2
$13,000 to $13,999 18.2 13' 389 28. 7 14,940 89 6
$14,000 to $14,999 21.3 14' 486 28. 7 16, 243 89 2
$15,000 to $15,999 20.7 15; 047 29.0 17,025 88.4
$16,000 or more 10.8 16,945 30.0 19, 279 87.9
Total 100.0 13, 956 28.8 15,701 88.9
In the single-family transactions, two-thirds of the mortgages were for amounts of $7,000 to $8,999, with nearly 23 percent ranging from $9,000 to $10,200. The nearly 4 percent of the mortgages of less than $6,000 included a significant number of cases initially processed in accordance with the less stringent property and location requirements of Section 8, but subject to maximum mortgage amounts of $4,750 until July 10, 1953, and $5,700 for commitments issued after that date.
263
HOUSING AND HOME FINANCE AGENCY
The distribution of the mortgages on the 2-family properties was somewhat broader, with 42 percent in the $14,000 to $15,000 ranges and nearly 36 percent in the $12,000 to $13,999 groups. Mortgages in the lowest (less than $12,000) and the highest ($16,000 or more) mortgage amount groups accounted for nearly equal proportions of cases— about 11 percent each.
Mortgage durations for both the 1-family and 2-family transactions averaged about 29 years, with the average durations generally slightly longer in the higher mortgage amount groups. Average ratios of loan to value were nearly the same in both types of transactions and tended to decline as mortgage amounts increased.
Average characteristics by property value.—As shown in Table 39, FHA estimated the values of three-fifths of the single-family properties securing Section 903 mortgages insured in 1953 at from $9,000 to $10,999, with roughly equal proportions (about 30 percent) in the $9,000 and $10,000 groups. About 22 percent of the properties were valued at $8,000 to $8,999,10 percent at $11,000 or more, and almost 8 percent at less than $8,000. Two-family properties tended to be more evenly distributed by property values—with 10 to 12 percent of the cases in each of the intervals from $13,000 to $18,000 or more, except the $14,000 to $14,999 range which accounted for a fifth of the properties and the $16,000 to $16,999 properties which represented 27 percent of the total.
Table 39.—Average characteristics by property value of 1- and 2-family homes, Sec. 90S, 1953
FHA estimate of property value Percentage distribution Average Loanvalue ratio (percent) Monthly average
Property value Mortgage amount Total payment Estimated taxes
1-family
Less than $7,000 _ 1. 2 $5, 896 $5,196 88.1 $35 67 $5 06
$7,000 to $7,999 6. 7 7*531 6, 743 89. 5 46 60 6 1R
$8,000 to $8,999 22. 4 8^ 499 7, 596 89 4 50 50 6 44
$9'000 to $9^999 28.6 9, 324 8, 295 89 0 56 26 7 RR
$10,000 to $10,999 30.7 lOj 256 9, 063 88 4 61 30 9 OR
$11,000 or more 10.4 Hi 668 9,316 79.8 65. 46 8.44
Total - 100.0 9,096 8,023 88.2 54.37 ■ 7.45
2-family
Less than $13,000 8.9 $12,362 $11,083 89. 7 $81 05 $16 79
$13,000 to $13,999 10. 6 13* 632 12, 214 89. 6 87 20 17 26
$14,000 to $14,999 20.0 A 491 12 990 89 6 91 19 16 91
$15^000 to $15,999 11.2 A 509 13, 818 89.1 94 50 16 26
$16,000 to $16,999 27.3 A 499 14, 710 89 2 104 01 20 05
$17,000 to $A999— 11.9 17,317 15,114 87. 3 108 42 1R R9
$18,000 or more 10.1 19j 390 17, 002 87.7 120. 46 25. 38
Total 100.0 15, 701 13, 956 88.9 98. 72 18.82
264
FEDERAL HOUSING ADMINISTRATION
Averages of property value, mortgage amount, loan-value ratio, monthly payment, and real estate taxes are also presented in Table 39 by value groups. Mortgage amounts represented smaller proportions of property value in the higher value ranges in both 1- and 2-family transactions, as evidenced by the decline in average loan-value ratios accompanying rises in property value. Average monthly payments, on the other hand, move upward with property value, reflecting the higher principal and interest payments required by the larger mortgages on the higher-value properties. Average monthly taxes for the single-family properties, for the most part, rise with increases in property value, but in the 2-family property transactions the tax data are less consistent. The variations for taxes probably reflect locality variations in government-sponsored facilities and services and their costs.
Size of house.—Tables 40 and 41 present data indicating the sizes of the structures involved in Section 903 transactions insured during 1953. Table 40 shows by property value groups the average (arithmetic mean) and median room counts and percentage distributions by room count per unit of the 1- and 2-family properties. In the 2-family properties, the total number of rooms per structure is about twice that indicated in the table. For example, in the $15,000 to $15,999 range the average total number of rooms was 8.2 and the median about 9.0 rooms.
Table 40.—Number of rooms per unit by property value of 1- and 2-family homes, Sec. 903, 1953
FHA estimate of property-value Percentage distribution Average number of rooms Median number of rooms Number of rooms—Percentage distributions
3 4 5 6
1-family
Less than $7,000 1.2 3.9 4.5 6.0 93.6 0 4
$7,000 to $7,999 6.7 4.1 4.6 3.4 79. 9 16 7
$8,000 to $8,999 22. 4 4.3 4. 7 . 8 70 2 27 0 2 0
$9,000 to $9,999 28.6 4. 6 5. 0 2 47 6 48 9 3 3
$10,000 to $10,999 30.7 5.0 5. 5 . 2 9 4 76 8 13 6
$11,000 or more 10. 4 4.9 5.5 .3 15.4 73+ 11.0
Total 100.0 4.5 4.9 1.0 49.7 44.4 4.9
2-family
Less than $13,000 8.9 3.5 4.1 46.2 53.8
$13,000 to $13,999 10.6 3.9 4. 4 14. 4 81 5 4 1
$14,000 t > $14,999 20.0 3.9 4. 4 16 6 81 6 Q 0 9
$15,000 to $15,999 11.2 4.1 4. 5 3.6 86 0 10 4
$16,000 to $16,999 27.3 4.3 4 8 4 7 60 3 34 9
$17,000 to $17,999 11.9 4. 5 4. 9 4 9 52 1 34 7 8 3
$18,000 or more .... 10.1 4.7 5.2 .3 37.5 5Z4 9.8
Total 100.0 4.1 4.6 11.3 65.8 20.7 2.2
265
HOUSING AND HOME FINANCE AGENCY
Single-family structures tended to be somewhat larger than the individual units of the 2-family structures, as denoted by higher average and median room counts. Nearly half of the single-family structures contained 4 rooms, 44 percent had 5 rooms, and 5 percent had 6 rooms. Of the dwelling units in 2-family structures, nearly two-thirds contained 4 rooms, one-fifth provided 5 rooms, and only 2 percent had 6 rooms. Three-room units accounted for only 1 percent of the single-family structures and 11 percent of the units in 2-family structures.
In comparable value groups, size of single-family structures and dwelling units in 2-family structures did not vary significantly. To illustrate, single-family structures in the $7,000 to $7,999 value group had a median room-count of 4.6 rooms compared with 4.4- and 4.5-room medians for the individual units in the corresponding value groups ($14,000 to $15,999) of 2-family structures.
Table 41 shows percentage distributions of the Section 903 properties by calculated area of the entire structure. Most (nearly 70 percent) of the single-family structures were in the 700 to 899 square foot range, nearly 8 percent had 1,000 or more square feet, and only 5 percent measured less than 700 square feet. The distribution of the 2-family properties was more dispersed—one-fourth had areas of 1,500 to 1,599 square feet and about 15 percent each were in the 1,300,1,400, and 1,600 square foot ranges.
Table 41.—Property characteristics by calculated area of 1- and 2-family homes, Sec. 903, 1953
Calculated area (square feet) Percentage distribution Average Median
Calculated area (square feet) Property value Number of rooms per unit Number of bedrooms per unit Number of rooms per unit Number of bedrooms per unit
1-family
Less than 700-_ .. . . 5.2 630 $6, 965 3. 9 1. 9 4 4 2 5
700 to 799 _ 30. 6 749 8^ 550 4 1 1 7 4 6 2 5
800 to 899 38.3 845 9” 414 4 6 2 3 5 1 3 1
900 to 999 18.3 945 9^ 661 5.1 2. 9 5 6 4 4
1,000 to 1,099 6.6 1,037 9, 793 5. 2 2 9 5 6 4 4
1,100 or more.. 1.0 1, 778 IL 162 5.3 3.0 5.9 4.4
Total 100.0 844 9,110 4.5 2.3 4.9 2.9
2-family
Less than 1,200. 4.3 1.112 $14, 611 3. 2 1 2 3 7 1 6
1,200 to 1,299 7. 6 1, 260 13’ 919 3. 4 1 9 3 8 2 4
1,300 to 1,399.. 15.4 1, 371 15, 008 3 9 1 8 4 4 2 5
1,400 to 1,499... 14. 8 1, 456 16 417 4 0 2 2 4 5 2 6
1,500 to L599 24. 9 1, 569 16 038 4 2 2 2 4 6 2 6
1,600 to 1,699 15. 9 1 654 16 773 4 4 1 9 4 9 2 7
IJOO to L899 9.1 1, 794 16, 799 4. 7 2 2 5 3 2J7
1,900 or more 8.0 2, 013 18,380 5.1 2.5 5.7 3.5
Total 100.0 1, 548 16, 087 4.2 2.0 4.6 2.6
266
FEDERAL HOUSING ADMINISTRATION
The calculated areas of the single-family structures, in line with room count, were somewhat larger than for the individual units in 2-family structures, as evidenced by the respective averages of 844 and 774 square feet. Similarly, the number of bedrooms provided in l-family structures was somewhat greater, averaging 2.3 as compared with 2.0 bedrooms for 2-family properties.
Average values of l-family properties displayed the expected correlation with calculated area, rising as areas expanded. This was not true, however, for the 2-family properties, in which the average values of those in the 1,500 to 1,599-square-foot range were lower than those for properties with 1,400 to 1,499 square feet, and the averages for properties with 1,600 to 1,699 and 1,700 to 1,899 square feet were practically the same. This situation is probably indicative of the fact that many of the larger-size properties were located in lower-cost areas.
Monthly payment.—Table 42 shows the distributions by total monthly mortgage payment of the 1- and 2-family cases insured under Section 903 in 1953. Some 70 percent of the mortgages on single-family properties involved payments of $45 to $59 (including interest, amortization of principal, real estate taxes, and hazard and FHA insurance premiums). Payments of less than $40 were reported for only 3 percent, and payments of $70 or more for less than 1 percent of all l-family cases.
In the 2-family transactions, the majority (5 of 8) involved payments of $90 to $109 monthly, about one-fifth were in the $80 to $89 bracket, and over one-tenth ranged from $110 upward. Less than 4 percent of the mortgages required monthly payments of less than $80.
Table 42.—Total monthly mortgage payment for 1- and 2-family home mortgages, Sec. 903, 1953
Total monthly mortgage payment Percentage distributions Total monthly mortgage payment Percentage distributions
l-family home mortgages 2-family home mortgages l-family home mortgages 2-family home mortgages
Less than $30.00 1.3 1.1 .7 6.6 20.2 23.9 25.2 13.2 6.9 .8 (>) . 1 $85 to $89.99 (*) (*) 13.2 25.5 38.8 3.9 5.3 1.8
$30 to $34.99 $90 to $99.99
$35 to $39.99 . $100 to $109.99
$40 to $44.99 $110 to $119.99
$45 to $49.99 $120 to $129.99
$50 to $54.99 $130 or more
$55 to $59.99 Total Average Median
$60 to $64.99 $65 to $69.99 $70 to $74.99 $75 to $79.99 $80 to $84.99 0.4 .6 1.2 1.3 8.0 100.0 $54.37 54. 21 100.0 $98. 72 99. 91
1 Less than 0.05 percent.
294078—54----19
267
HOUSING AND HOME FINANCE AGENCY
Project Mortgage Insurance
In 1953, authority existed under the provisions of the National Housing Act for the operation of seven project mortgage insurance programs as follows:
Title II:
Section 207—Rental housing
Section 213—Cooperative housing
Title VI:
Section 608—Refinanced war and veterans’ housing Section 608-610—Sale of certain public housing Section 611—Site-fabricated housing
Title VIII:
Section 803—Military housing
Title IX:
Section 908—Defense housing
Authority under the Section 608 program in 1953 was limited to the insurance of refinancing transactions involving Section 608 mortgages initially insured under either the War Housing or the Veterans’ Emergency Housing program. No such insurance was written during the year, nor—for the second consecutive year—was any insurance written under the public housing disposition program authorized under Section 608 pursuant to Section 610. Another inactive program, not listed above, was Title VII, under which no insurance has been written since its inception in 1948. This program provides for the insurance of a minimum annual amortization of 2 percent of the established investment and an annual return of 2% percent on outstanding investments in debt-free rental housing projects for families of moderate income.
Volume of Business
In 1953, FHA insured 215 project mortgages totaling $259.2 million and covering 30,700 dwelling units. Down one-fifth from the preceding year and one-half from 1951, the volume of project mortgages insured in 1953 reached the lowest volume since 1946—some 78 percent below the peak year of 1950 (Chart 21). As in 1952, all the mortgages insured were secured by new (or rehabilitated) projects, no insurance being written on refinanced mortgages or mortgages on existing construction.
As the first 2 columns in the lower part of Table 43 show, the decline since 1950 in the volume of new project mortgages insured followed the termination of new-construction activity under the Section 608 Veterans’ Emergency Housing Program. Total insurance written under the war and postwar programs of Section 608, from the adoption of the program in 1942 through 1952, amounted to $3.4
268
FEDERAL HOUSING ADMINISTRATION
269
Table 43.—Project mortgages insured by FHA, 1935-53
[Dollar amounts in thousands] New construction
Grand total1 Total new construction Total existing or re-v„ _ financed construction sec. 214
a Sec. 207 2 ------------------------------—
___________________________ Sales type Management type ________________ Units Amount Units Amount Units Amount Units Amount Units Amount Units Amount 1935Z??”________ 29’777____$114,429 29,777 $114,429 _____________ 29 777 $114429
--------■—~------- 45,751 188,446 41,890 174,187 3,861 $14,259 7* 946 28’752 : ------------------ 265,213 2,022,878 260,592 2,008,452 4,621 14,426 1’054 8 519 1951---- 74 207 M^’680 1,120 2,002 2,514 18,065 285 $2,691" ZZZZZ
1952 39 839 321’911 3Q839 VH on 874 6,229 4-890 33,201 1,928 17,726 6,067 $55,194
1953 30 701 959 19I tn’fm pMI ----------------- 6,043 41,843 3,681 35,788 6 093 55 913
ivoo 40,701 259,194 30,701 259,194 ------------------7^75 53,839 1,915 20,926 5; 664 53,954
dotal---------- 640,085 4,647,313 629,609 4,610,397 10,476 36,916 59,399 298,648 7,809 77,131 17,824 165,061
New construction (continued) Existing or refinanced construction
1Car Sec~608 2 Sec. 611 Sec. 803 Sec. 908 Sec. 207 Sec. 608 Sec. 608-610
______________ Units Amount Units Amount Units Amount Units Amount Units Amount Units Amount Units Amount 1935-39_____ _
1940-44----------- 33,944 $145,436 ZZZZZZZZ'Z ZZZZZI <9R7'----------sol--to'eU-------------
1945-49----------- 257,723 L 986,212 275 $1,650 1,54o" "llMn" ZZZZZZZZZZ ZZZZ M44 $ 5 142 476 $2 828 ""'Tsoi-
1950-------------- 135,076 1,007,996 473 2,877 15,129 123,052 _____ . ” ’ ’ m 133 1’ ml
1951-------------- 33,799 259,937 966 5,832 25,683 205, 653 ________ 864 6^94 X> J?4 1,868
1952-------------- 3,457 29,634 125 706 17,233 135,842 3,207 $22,186 6,194 10 35
---------------- 145 926 12,181 100,558 3,890 30,497 _____ZZZZZZZZZZ "ZZZZZZZI ZZZZZZ Total----------- 463,730 3,427,708-1,984 11,991 71,766 577,175 7,097 52,683 MU 16,586 M50 11^971 3?915 8~360
> For total number and amount of mortgages insured under each section in 1952, 1953, and cumulatively through 1953, see Table 2. 2 Including rehabilitation projects.
HOUSING AND HOME FINANCE AGENCY
PROJECT MORTGAGES INSURED BY FHA, 1935-53
NUMBER OF UNITS NUMBER OF UNITS
150,000--------------------------------’--------------------------------------------’50'000
125,000------------------------------------------------------------------------/--------\ - 125,000
100,000 ------------------------------------------------------------------I-------------1----------------100,000
75,000--------------------------------------------------------------------/-------------\---------------- 75,000
50,000---------------------------------------------------------------/-----------------------\ ---------- 50,000
25,000------------------------------------------------------------/-------------------------------------- 25,000
qi । Z~i । । i Dr-' ।_____________________________i____i_________i___।____i___l__
‘35 '36 '37 '38 '39 '40 '41 '42 '43 '44 '45 '46 '47 '48 '49 '50 ‘51 '52 '53
Chart 21.
billion—about three-quarters of the total of $4.6 billion in project mortgages insured by FHA under all project programs since 1935.
The project program with the highest volume of insurance written in 1953—although down 25 percent from 1952—was the Section 803 military housing program. The $100 million insured under this program represented about 40 percent of the total amount of all project mortgages insured during the year. These mortgages were secured by about 12,000 dwelling units located at or near Army, Navy, Air Force, or Atomic Energy Commission establishments. During the 4^2 years of operations under Section 803, a total of $577 million of insurance has been written covering 71,766 dwelling units.
The second ranking project program was the Section 213 management-type cooperative program, with a 1953 insurance volume of $54 million (5,700 units). The year’s business brought the cumulative volume under this program to $165 million (17,800 units). Activity under the sales-type cooperative program—down 42 percent from 1952—has characteristically been less than that under the management-type program. Project mortgages insured under the sales-type program in 1953 amounted to $20.9 million—only 28 percent of the total of $74.9 million insured under Section 213. The cumulative amount of insurance under the sales-type project program totaled
270
FEDERAL HOUSING ADMINISTRATION
$77.1 million—one-third of all Section 213 project mortgages. Mortgages under the sales-type program contain release clauses under which members may purchase their individual homes outright and finance them under the home mortgage provisions of Section 213 (or other sections of the National Housing Act). An account of the Section 213 individual home mortgage program is included in the home mortgage insurance section of this report.
Of the project mortgage insurance programs, the third in volume of insurance written in 1953 was the Section 207 rental housing program. Mortgages aggregating $53.8 million—some 30 percent above the 1952 volume and secured by 7,200 rental units were reported insured during the year. The cumulative total for 19 years of operations under this section was $315.2 million (64,000 units) or 7 percent of the amount under all project programs.
Project mortgage insurance under the Section 908 defense housing program during the year totaled $30.5 million and covered 3,900 units, bringing the cumulative total under this program to $52.7 million (7,100 units). Other project mortgage insurance written in 1953 included $900,000 in mortgages on 145 units under the provisions of Section 611.
Along with the decline in volume of insurance written in 1953 under the project programs, the number of dwelling units started in project structures fell about 30 percent to 36,000 units, and reported completions decreased about 45 percent to 50,000 units. Units under construction in housing projects during the year totaled 77,000—down more than two-fifths from the number under construction during 1952.
Although the volume of insurance written declined in 1953, the num-ber of cases in the initial stages of processing increased. Applications received under the project programs during the year totaled 72,000 units about one-third more than the 1952 volume. The number of commitments issued increased slightly in 1953 to a total of 44,000 units (42,000 in 1952). At the year end, project applications involving a total of 36,000 units were under examination in FHA field offices.
State Distribution
One in every three units covered by mortgages insured under the project programs in 1953 was located in New York State or California (Table 44 and Chart 22). More than half of all new insurance is accounted for when, in addition to the 6,500 units in New York and the 4,000 units in California, the next 3 ranking States of Virginia, Texas, and Maryland, each with over 2,000 units, are included. In only 10 States did the insuring volume exceed 1,000 units, while no project mortgage insurance was written during the year in 14 States, the District of Columbia, or Guam.
271
HOUSING AND HOME FINANCE AGENCY
Table 44.—Volume of FHA-insured project mortgages by State location, 1953
[Dollar amounts in thousands]
State All sections Sec. 207 Sec. 213 Sec. 611 Sec. 803 Sec. 908
Number Amount Units Units Units Units Units Units
Alabama
Arizona 2 $1,187 164 95 69
Arkansas
California 29 35, 814 1,001 7, 971 849 3, 989 146 1,127 1, 915 462 485
Colorado 2 50 96
Connecticut 10 966 16 950
Delaware 1 107 107
District of Columbia
Florida
Georgia Idaho _ 5 1 5,346 398 774 55 400 104 70 — 200 55
Illinois 1 256 16 16
Indiana H 11,181 1,475 585 500 390
Iowa._
Kansas 2 1,780 5, 914 216 764 20 196
Kentucky 4 136 500 128
Louisiana
Maine 4 14, 552 15,105 6, 725 4,740 513 1,500 2,057 804 608 1,500 1,557 502 150
Maryland Massachusetts Michigan 9 4 7 321 258 458 111 — 68 44
Minnesota 1 66 66
Mississippi _
Missouri 3 520 860 82 82
Montana _ 2 82 82
Nebraska
Nevada
New Hampshire
New Jersey New Mexico 11 10,141 18 1, 238 313 40 — 468 417
New York 40 59,497 698 6,472 52 1,197 52 4, 992 283
North Carolina 2
North Dakota 5 754 95 95
Ohio 18 8, 585 1,053 421 632
Oklahoma
Oregon 1 371 50 50
Pennsylvania Rhode Island 7 4 8,977 5,919 151 1,088 654 240 417 — 250 654 181
South Carolina 1 25 25
South Dakota
Tennessee 2 1,361 16,430 922 190 190
Texas 9 2,195 324 1,871 104
Utah 3 ' 104
Vermont
Virginia 6 18, 231 1,863 111 2,385 200 466 1,918 1
W ashington 1 200
West Virginia 1 14 14
Wisoon sin 1 115 17 17
Wyoming
Alaska 4 3,687 6,146 2, 016 270 270
Hawaii 3 760 760
Puerto Rico 1 237 237
Total 215 259,194 30, 701 7,175 7,579 145 12,181 3,890
The project mortgage program showing the widest geographical distribution of insuring activity in 1953 was the Section 207 rental housing program, which involved projects in 23 States and Alaska. The next widest distribution was under the Section 803 military housing program with projects in 17 States, Hawaii, and Puerto Rico. Noteworthy also was the high concentration of business under the relatively high-volume Section 213 program. As in previous years, New
272
FEDERAL HOUSING ADMINISTRATION
York ranked first, with 5,000 units securing mortgages insured primarily under the management-type cooperative program, and California ranked second with 1,900 units covered by mortgages insured primarily under the sales-type cooperative program.
VOLUME OF PROJECT MORTGAGES INSURED IN 1953
(NUMBER OF DWELLING UNITS)
/ N OAK \ \
I / j------------) M,NN ( I- -
AHO j ' H s f ws J
WY0 /-----------------\ j
W^RSU / UTAH t ■ 1 V--------------—J
WMk / f C0Lo h • \
WHRSk f*>w*Vr..._* I KANS MO 7 “cov"’**
r> ••■ ... J X
cliMB ar* j ma okul -x r
ffifcgF 1 n-mex. ark. ic/
____-------------------------1 MISS. ALA.
/ vvz/////Z
KEV : NUMBER OF UNITS la. (____ P/7///g5.
| | NONE \
E. I I TO 99 I. nj, y
l$:$SSI 100 TO 499 V \
Y///A 500 TO 999 ^Saa ALASKA GUAM, | UJ
1,000 TO 2,999 HAWAII VIRGIN ISLANDS|
m 3,000 OR MORE PUERTO RICO ^$j|
Chart 22.
Table 45 shows the location of projects insured under all project mortgage programs from 1935 through 1953. The 5 leading States, accounting for almost half of all the units, were New York with 118,000 units, New Jersey with 57,000 units, and Virginia, Maryland, and California with between 43,000 and 44,000 units each. Other States with over 20,000 units were Texas, Pennsylvania, Georgia, Illinois, the District of Columbia, and Ohio. The widest geographical distribution occurred, as might be expected, under the program with the greatest volume—Section 608—with every State and the District of Columbia, Puerto Rico, Alaska, and Hawaii represented. Both the Section 207 rental program and the Section 803 military housing program have also been widely distributed.
273
HOUSING AND HOME FINANCE AGENCY
Table 45.—Volume of FHA-insured project mortgages by State location, 1935-53
[Dollar amounts in thousands]
State All sections Sec. 207 Sec. 213 Sec. 608 Sec. 608-610 Sec. 611 Sec. 803 Sec. 908
Number Amount Units Units Units Units Units Units Units Units
Alabama. _ 230 $71, 413 16, 660 11, 258 312, 659 11, 820 2,516 1, 634 642 10, 275 947 865 38
Arizona _ _ 55 290 160 1,119
Arkansas 53 211 491 932
California 1,013 43, 032 3,141 5 169 4,609 251 6, 458 21, 575 58 973 8, 874 485
Colorado._ 71 22, 417 38. 054 1, 896 3,013 3, 771 19, 037 10, 669 18, 882 571 50 680 264
Connecticut 67 344 60 1, 752
Delaware 20 30, 277 142, 787 103,142 158,585 4,970 174, 558 65, 298 13, 689 29, 926 45, 946 64,021 17, 464 297,386 39, 559 71, 828 364 20
District of Columbia 180 21,102 14,837 23, 081 626 2 065
Florida. 336 324 68 3, 776
Georgia. _ 180 1, 500 104 150 195 2,050 200
Idaho 9 55
Illinois 294 22, 220 8,816 1,763 4,634 6,333 8, 651 2,188 43,690 5. 094 2,105 1,338 35 17,012 6,065 1, 591 3,052 510 16
Indiana 139 903
Iowa 30 ' 172
Kansas 86 206 3, 243 2,247 7,071 688 350 823 12
Kentucky 100 682 3, 200 692 204
Louisiana 93 713 150 25
Maine . 18 1, 500 4,794 1,352
Maryland 327 3,900 512 181 34. 221 486 108
Massachusetts... 48 3,186 44
Michigan 256 10,072 6,298 2, 722 11 215 1,376 1, 261 324 7,211 5, 037 1,852 9,439 135 500 661
Minnesota 156 46, 234 16,962 80, 929 6,076 18,368 4,966 1,672 417,000 17,748 960,465 106, 409 1,021 148. 734
Mississippi 44 12 858
Missouri 161 1,656 120
Montana 7 809 592 82
Nebraska 53 2,468 641 71 1, 786 611
Nevada 14 ' 240 401
New Hampshire 7 244 244
New Jersey 565 57, 215 2,072 117,948 17,357 138 3,667 52 51,451 277 1,583 462
New Mexico 16 1,795
New York 895 12, 765 2,418 16,612 85,807 9,107 43 566 556 1,642 5, 571
North Carolina 126 85 176
North Dakota 8 95
Ohio .. 308 20,132 4,414 5,371 24,390 952 1, 211 48 16, 207 2,974 5,155 19,474 210 10 2,000 500 656
Oklahoma 141 32,077 39, 264 183, 771 ' 132 419 389
Oregon. 142 134 82
Pennsylvania 398 3,322 36 469 450 402 273
Rhode Island 12 L 973 44,964 5,573 56 127 706
South Carolina 92 7, 229 729 290 6,329 258 25 585
South Dakota 12 70 401
Tennessee 138 9, 546 30, 065 1, 603 193 941 200 6,915 19, 432 737 250 1,240 7,385 854
Texas 436 205,987 12,687 1,512 279,112 3,248 12
Utah 24
Vermont 7 56 137
Virginia 370 43, 767 9,982 797 8,843 413 29, 700 6,369 209 440 4,283 501
W ashington 125 77', 220 3, 601 32, 589 4,451 45, 349 21, 557 2,900 300
West Virginia 15 188 400
Wisconsin 166 4,104 571 235 41 3, 828
Wyoming 6 71 500
Alaska 34 3,853 2, 927 1, 496 2,357
Hawaii 57 ' 850 2,077
Puerto Rico 27 35, 015 5,759 4, 947 812
Total 8,167 4, 647, 313 640, 085 64, 010 25, 633 465, 680 3,915 1,984 71, 766 7,097
Terminations
Some 900 project mortgages with, original face amounts of $426 million had been terminated through December 31,1953—only 9.2 percent of the $4.6 billion (8,200 mortgages) insured by FHA in the 19 years from 1935 through 1953. This volume of terminations left 7,200 mortgages amounting to $4.2 billion still in force at-the year end. (Table 46.)
274
FEDERAL HOUSING ADMINISTRATION
Table 46.—Disposition of FHA-insured project mortgages, 1935-53
[Dollar amounts in thousands]
Disposition
Mortgages insured________________
Mortgages terminated:
Prepayments in full__________
Prepayments by supersession..
Matured loans________________
Mortgages assigned to FHA...
Titles acquired by mortgagees:
Projects transferred to FHA_______________________
Projects retained by mortgagees —
Other terminations___________
Total terminations_________
Mortgages in force, Dec. 31, 1953...
Disposition
Mortgages insured_________________
Mortgages terminated:
Prepayments in full___________
Prepayments by supersession...
Matured loans_________________
Mortgages assigned to FHA_____
Titles acquired by mortgagees:
Projects transferred to FHA_______________________
Projects retained by mortgagees----------------....
Other terminations____________
Total terminations__________
Mortgages in force, Dec. 31, 1953_
Total Sec. 207
Number Amount Number Amount
8,167 $4,647,313 618 $315, 233
600 269, 566 302 123,438
29 15, 816 13 8, 032
111 62,425 4 3,909
181 75, 799 18 13,343
9 1, 639 7 1,407
12 1,033 8 578
942 426, 278 352 150, 707
7, 225 $4,221,035 266 164,526
Sec. 608-610 Sec. 611
Number Amount Number Amount
23 $8,360 25 $11,991
5 1,743 19 9, 305
5 1,743 19 9,305
18 6,617 6 2,686
Sec. 213 Sec. 608
Number Amount Number Amount
145 $242,192 7,046 $3,439,679
39 55,984 235 16 79,096 7,784
3 3,284 104 163 2 4 55, 233 62,456 232 455
42 103 59,268 182, 924 524 6,522 205,255 3, 234,424
Sec. 803 Sec. 908
Number Amount Number Amount
230 $577,175 80 $52,683
230 577,175 80 52,683
The largest group of terminations, accounting for 63 percent of the amount of all terminated project mortgages, were prepayments in full, while prepayments with superseding FHA-insured mortgages accounted for an additional 4 percent of the total. Through the end of 1953, no project mortgage had terminated through maturity of the obligation. About one-third of all project mortgage terminations— 301 mortgages with original face amounts of $140 million—were terminated as a result of default by mortgagors. Termination through default may occur in either of two ways: the mortgagee may foreclose, withdraw from the mortgage insurance contract, and retain title to the property; or he may, in exchange for FHA debentures, either assign the mortgage to FHA without foreclosing or foreclose and transfer title to the property to FHA. Through 1953, titles to 190 properties had been acquired by mortgagees. Of these, 181 had been trans
275
HOUSING AND HOME FINANCE AGENCY
ferred to FHA in exchange for debentures and 9 had been retained by the mortgagees. In addition, 111 defaulted mortgages had been assigned to FHA without foreclosure.
Of the 139 terminations reported during 1953, 71 resulted from prepayments in full and 68 occurred as a result of default. As might be expected on the basis of the relative volumes of insurance in force, almost all (105) of these terminations were under the Section 608 War and Veterans’ Emergency Housing Programs. Although 23 Section 213 insured mortgages were terminated in 1953, these were primarily through prepayments in full under the sales-type cooperative housing program, where properties are transfered to individual owners. Only 9 mortgages were terminated under Section 207 in 1953.
The disposition of the 292 FHA-acquired projects and project mortgages is shown in Table 47. Of the 181 projects acquired by FHA through 1953, three-fourths were on hand at the year end and an additional 31 had been sold by FHA with FHA holding the mortgages. Eight had been sold with reinsurance and 6 without reinsurance. The increase from 117 projects on hand at the end of 1952 to 136 at the end of 1953 resulted primarily from acquisitions under Section 608. Only one project was added to the Section 207 inventory during the year, while no projects have been acquired since the beginning of operations under other project mortgage programs. Mortgage notes assigned to FHA as of the end of 1953 totaled 111, compared with 79 as of the end of 1952. An analysis of some of the financial aspects of FHA-acquired projects and project mortgages is presented in Section 3 of this report.
Table 47.—Disposition of FHA -acquired projects and project mortgages, Dec. 31, 1953
Disposition All sections combined Sec. 207 Sec. 608
Number Number of units Number Number of units Number Number of units
Projects acquired by FHA 1 181 12,581 18 3,120 163 9,461
On hand - 136 7,614 1 87 135 7,527
Sold with reinsurance . _ 8 2,085 7 1,491 1 594
Sold without reinsurance _ 6 '728 4 704 2 24
Sold with mortgage held by FHA 31 2,154 6 838 25 1,316
Mortgage notes assigned to FHA 111 9,026 4 1,194 104 7,497
On hand2 - - 109 7,882 3 92 103 7,455
1 1,102 1 1,102
Sold or settled without reinsurance... 1 42 1 42
i Includes projects acquired by FHA after assignment of mortgage notes to FHA. J Total includes 3 Sec. 213 notes assigned to FHA involving 335 units.
276
FEDERAL HOUSING ADMINISTRATION
Defaults of Project Mortgages
There were only 52 project mortgages in default as of the end of 1953—a drop of over one-quarter from the previous year and of over one-half from the number in default at the end of 1950 (Table 48). On the basis of number of dwelling units, the decrease was substantially less—about 8 percent from 1952—because the average size of the projects in default at the end of 1953 was larger than in other
Table 48.—Status of FHA-insured project mortgages in force, Dec. 31, 1953
Status All sections Sec. 608 Sec. 908
Number Number of units Number Number of units Number Number of units
Insured mortgages in force Insured mortgages in good standing Insured mortgages in default, total In default less than 90 days... In default 90 days or more. Projects being acquired by mortgagee1 Mortgage notes being assigned to FHA Trend of insured mortgages in default as of Dec. 31: 1953 * 1952 7,225 556,857 6,522 430, 555 80 7,097
7,173 52 551,703 5,154 6,479 43 426,364 4,191 72 8 6,348 749
18 19 9 6 2,154 1,899 655 446 16 17 4 6 1,726 1,728 291 446 2 2 4 428 171 150
52 70 76 113 5,154 5, 585 6,471 6,495 43 67 76 112 4,191 5,524 6,471 5,695 8 749
1951
1950
1 Includes 1 mortgage under Sec. 207 with 214 units.
recent years. The ratio of units covered by mortgages in default to units covered by insured mortgages in force has declined each year since 1950—from 1.5 percent in 1950 to 0.9 percent in 1953. The 52 project mortgages in default in 1953 consisted of 43 mortgages under Section 608, 8 under Section 908, and 1 under Section 207. Under the Section 608 program, units covered by mortgages in default combined with cumulative acquisitions by FHA amounted to 4.6 percent of the volume of insurance written—compared with 3.7 percent at the end of 1952 and 3.3 percent at the end of 1951.
Financial Institution Activity •
Mortgages financed and held.—Almost 41 percent of the amount of all project mortgages originated in 1953 were originated by State banks, and 17 percent were originated by national banks (Table 49). Savings banks accounted for 15 percent of the total and mortgage companies for almost 13 percent. The relative participation of each type of institution was approximately the same as in 1952, with the exception of insurance companies, whose activity dropped markedly under each program. The decrease for insurance companies for all programs combined was from 13 percent of the total in 1952 to 4 percent, with mortgage companies and savings and loan associations accounting for most of the compensating increase.
277
HOUSING AND HOME FINANCE AGENCY
Table 49.—Originations and holdings of FHA-insured project mortgages by type of institution, 1953
______________________________[Dollar amounts in thousands]_________________________
Type of institution Number of institutions Mortgages financed Mortgages held
Financing Holding Number Amount Percentage distribution Number Amount Percentage distribution
All sections
National bank 37 $44,744 17.3 359 $130,865 3.1
State bank - 77 105,760 40.8 531 421, 259 239,789 10.0
Mortgage company 48 32,446 12.5 319 5.7
Insurance company (Not available) 9 10,402 4.0 3,529 1,501,807 35.6
Savings bank _ . 25 38,325 14.8 2, 014 1,469,331 34.8
Savings and loan association _ 7 10,332 4.0 79 28,940 .7
Federal agency _ _ 3 2,109 .8 75 104,329 2.4
All other 9 15,077 5.8 320 324, 955 7.7
Total12 215 259,194 100.0 7,226 4,221,275 100.0
Sec. 207
National bank- 9 15 15 $13,801 25.6 30 $25, 637 15.6
State bank 13 17 20 16,151 30.0 38 27,481 16.7
Mortgage company 15 6 34 14,047 26.1 12 7,336 4.5
Insurance company .. 2 20 2 384 .7 55 20, 947 12.7
Savings bank 4 22 7 6,028 11.2 96 56,113 34.1
Savings and loan association 1 6 1 1,422 2.7 6 2,406 1.5
Federal agency 1 1 3 2,007 3.7 13 17,660 10.7
All other 7 16 6,945 4.2
Total 45 94 82 53,839 100.0 266 164,526 100.0
Sec. 213
State bank .. 4 5 15 $21,068 28.1 27 $48, 237 26.4
Mortgage company 3 3 3 3,650 4.9 4 3,655 2.0
Insurance company __ 2 2 5 6,842 9.1 3 1,987 1.1
Savings bank 4 11 15 28, 990 38.7 50 102,240 55.9
Federal agency 1 9 6,104 3.3
AU other 1 3 7 14,330 19.2 10 20,702 11.3
Total 14 25 45 74,880 100.0 103 182, 924 100.0
Sec. 608
Rational bank 59 299 $56,661 1.8
State bank- 51 387 217,408 6.7
Mortgage company 33 293 220,568 6.8
Insurance company 114 3,392 1,804 1,292,527 40.0
Savings bank 80 1,191,782 36.8
Savings and loan association 32 66 17,074 .5
Federal agency 1 15 20,141 .6
Allother- _ --- 19 267 218,503 6.8
Total 2 ... 389 6, 523 3, 234,664 100.0
Sec. 803
National bank 8 13 9 $23,789 23.7 17 $42,979 7.4
State bank . ® 10 11 22 51,316 51.0 41 99,680 17.3
Mortgage company 4 3 6 11,989 11.9 5 5,941 1.0
Insurance company 1 6 1 2, 567 2.5 64 182,168 31.6
Savings bank 1 16 1 1,591 1.6 56 112,018 19.4
Savings and loan association.-. 2 2 4 8,709 8.7 4 8,684 1.5
Federal agency 1 17 47, 248 8.2
All other 1 5 1 597 .6 26 78,457 13.6
Total 27 57 44 100, 558 100.0 230 577,175 100.0
Sec. 908
National bank 7 5 14 $7, 533 24.7 12 $5, 290 10.0
State bank _ 2 6 19 16, 521 54.2 30 24,777 47.0
Mortgage company 6 4 6 4,323 14.2 5 2,289 4.4
Insurance company 1 3 1 '314 1.0 5 1,585 3.0
Savings bank 2 3 2 1,588 5.2 5 5,054 9.6
Savings and loan association.-. 1 2 2 219 .7 3 775 1. 5
Federal agency 1 20 12,913 24.5
Total 19 24 44 30,497 100.0 80 52,683 100.0
i Also includes 3 Sec. 611 mortgages ($925,600) originated and 6 Sec. 611 mortgages ($2,685,950) held. Also includes 18 Sec. 608-610 mortgages ($6,616,800) held and miscellaneous small adjustments under Sec. 608 due to amendments not heretofore included.
2 Less than face amount in force due to lag in tabulation of amendments.
278
FEDERAL HOUSING ADMINISTRATION
In 1953, State banks were the leading originators of project mortgages under each program except for the Section 213 cooperative housing program, where, as in 1952, savings banks ranked first. Under most of the other programs, national banks ranked second and mortgage companies third—under Section 207, mortgage companies and national banks originating about the same proportion.
The last 3 columns of Table 49 show by type of institution the volume of project mortgages held. All references in the succeeding discussion to the amount of mortgages either held or transferred in the secondary market (Table 50) pertain to the original face amount of the mortgages and not to their outstanding balances.
Insurance companies and savings banks each held about 35 percent of the $4,200,000,000 of project mortgages in force as of the end of 1953. This represented a slight decrease in the percent accounted for by insurance companies and a slight increase—for the second consecutive year—in the relative holdings of savings banks. State banks held about 10 percent of the total in 1953 compared with 12 percent in 1952. The proportion held by the Federal agency—the Federal National Mortgage Association—rose from 0.8 percent ($31,000,000) in 1952 to 2.4 percent ($104,000,000) in 1953.
With Section 608 projects accounting for 77 percent of the dollar amount of all project mortgages in force, the distribution of holdings by type of institution for all programs reflects primarily the holdings of mortgages under Section 608. Under that section, insurance companies accounted for 40 percent of all holdings, and savings banks 37 percent. State banks and, to a lesser extent, national banks showed a smaller proportion of holdings under Section 608 than under most of the other programs. The table also shows the relatively large portfolio held by FNMA under some of the programs—1 out of every 4 dollars of Section 908 mortgages and 1 out of every 10 dollars of Section 207 mortgages.
Transfers.—The volume (original face amount) of project mortgages purchased and sold in the secondary market decreased during the year from over $660 million in 1952 to $417 million in 1953. The decrease was primarily under the Section 608 program, which accounted for two-thirds of all transfers in 1952. About 43 percent of the 1953 transfers were under this section, 36 percent under Section 803 and the remaining 21 percent primarily under Section 207.
Among the leading purchasers of project mortgages, savings banks, accounting for nearly one-third of the total amount of all purchases, ranked first; and Federal agencies (FNMA) ranked second with 22 percent (Table 50). This represents a marked shift from 1952, when savings banks accounted for 47 percent of all purchases and the second largest purchasers were insurance companies with 30 percent of the
279
HOUSING AND HOME FINANCE AGENCY
Table 50.—Purchase and sale of FHA-insured project mortgages by type of institution, 1953
[Dollar amounts in thousands]
Type of institution Number of institutions Mortgages purchased Mortgages sold
Purchasing Selling Number Amount Percentage distribution Number Amount Percentage distribution
All sections
National bank 10 $7, 707 1.9 82 $120,033 28.8
State bank.. _ 50 27,324 6.5 136 198, 745 47.6
Mortgage company.- 28 18', 966 4.5 102 60, 873 14.6
Insurance company. 69 67, 906 16.3 13 5,362 1.3
Savings bank ... . (Not 144 131,463 31.5 17 11, 649 2.8
Savings and loan association... available) 5 881 .2 10 1,852 .4
Federal agency 52 90, 973 21.8 27 18,812 4.5
All other 30 72, 259 17.3 1 152 (2)
Total i 388 417, 477 100.0 388 417, 477 100.0
Sec. 207
National bank 2 7 3 $2, 999 6.3 13 $15, 602 32.8
State bank 5 9 13 8,730 332 18.4 19 16,192 34.1
Mortgage company . 1 15 1 .7 35 12; 282 3,300 122 25.9
Insurance company 6 1 11 9,684 9,894 15, 569 290 20.4 2 6.9
Savings bank. 8 1 30 20.8 1 .3
Federal agency. ._ 1 9 32.8
All other 1 3 .6
Total 24 33 70 47, 498 100.0 70 47, 498 100.0
Sec. 213
National bank... __ 2 2 $683 3.2
State bank 1 3 1 $149 .7 10 16,639 4,218 77.2
Mortgage company 1 5 1 165 .8 6 19.6
Savings bank 3 6 7,349 4,166 9,711 34.1
Federal agency. 1 6 19.3
All other 2 4 45.1
Total 8 10 18 21, 540 100.0 18 21,540 100.0
Sec. 608
National bank... 4 15 6 $4,484 2.5 37 $32,168 17.8
State bank 4 22 32 15,934 8.8 75 98, 544 54.7
Mortgage company... 6 15 25 16,475 9.1 47 24, 877 13.8
Insurance company .. 16 2 50 33, 993 18.9 11 2,062 1.1
Savings bank 19 7 88 75,447 41.8 16 lb 527 6.4
Savings and loan association... 1 3 5 881 .5 9 1,406 .8
Federal agency. _ . 2 3 2 5,356 3.0 24 9,733 5.4
All other 3 11 27, 748 15.4
Total .. 55 67 219 180,317 100.0 219 180,317 100.0
Sec. 803
National bank. _. _ ... 1 14 1 $224 .2 24 $65, 978 43.6
State bank 11 22 61,219 40.4
Mortgage company 1 6 1 1,995 1.3 8 14, 800 9.8
Insurance company .. . 2 6 23, 427 15.5
Savings bank . 8 16 36; 212 23.9
Savings and loan association 1 1 446 .3
Federal agency 1 1 21 55,016 36.3 2 8,941 5.9
Allother.. ... 3 12 3< 510 22.8
Total 1.... 16 33 57 151,384 100.0 57 151,384 100.0
Sec. 908
National bank 5 6 $5,602 33.8
State bank 2 5 3 $2,359 14.2 10 6,151 37.1
Mortgage company... ... 6 6 4; 696 28.3
Insurance company. 2 2 802 4.8
Savings bank . 3 4 2, 561 15.5
Federal agency 1 1 14 io; 865 65.5 i 138 .8
Total 8 17 23 16, 586 100.0 23 16, 586 100.0
1 Total includes 1 Seo, 611 mortgage for $152,100 purchased by a State bank from a finance company. * Less than 0.05 percent.
280
FEDERAL HOUSING ADMINISTRATION
total. The miscellaneous type of institutions—such as the Comptroller of the State of New York and various retirement and pension fund systems—continued as heavy purchases of FHA project mortgages. In 1953 they ranked third in volume, accounting for 17 percent of all purchases, compared with 11 percent in 1952.
Three-fourths of the total amount of project mortgages sold in 1953 were sold by national and State banks. After the 48 percent sold by State banks and the 29 percent sold by national banks, mortgage companies ranked next, accounting for 15 percent of the total. The remaining 9 percent of the dollar volume was sold by the various other types of institutions shown in the table, Federal agencies accounting for one-half of the balance.
An analysis of activity in the secondary market under each of the individual project programs reveals that Federal agencies ranked first in volume of mortgages purchased under Sections 207, 803, and 908, with miscellaneous types leading under Section 213 and savings banks under Section 608.
Characteristics of Projects
The following is an analysis of the characteristics of 300 new projects (42,000 dwelling units) committed for insurance during 1953 under the 5 principal project mortgage programs—the Section 207 rental housing program, the Section 803 military housing program, the Section 908 defense housing program, and the two cooperative housing programs—sales-type projects and management-type housing—under Section 213. Commitments issued under other project programs during the year were negligible in volume and were excluded from the analysis.
Table 51 presents a summary for 1953 of the principal characteristics of the mortgages and projects approved under the three rental programs and the two cooperative housing programs, while Table 52 and Chart 23 show the trends from 1935 through 1953 of these characteristics for the rental programs only.
Annual summary—As Table 51 shows, the typical FHA project approved for insurance in 1953 consisted of 103 dwelling units. The typical dwelling unit contained 4.7 rooms, rented for $87.43, and secured a mortgage of $8,041 which represented 82.9 percent of estimated replacement cost.
The typical rental project in 1953 contained more units than the typical cooperative project (107 units compared with 94). The me-• dian unit in rental projects was smaller, (4.6 rooms compared with 5.2), more expensive ($87.95 per month against $85.35), and secured a smaller mortgage ($7,801 for the rental unit and $8,949 for the cooperative unit).
281
HOUSING AND HOME FINANCE AGENCY
Table 51.—Characteristics of mortgages and projects in rental and cooperative project transactions, 1953
Item Total rental and cooperative housing Rental housing Cooperative housing, Sec. 213
Total Sec. 207 Sec. 803 Sec. 908 Total Management type Sales type
Projects: Median size (in units) Average size (in units) Units: Median size (in rooms)13 Median monthly rental14-._ Median mortgage amount12_ Median mortgage-cost ratio.. 103.4 145.0 4.7 $87.43 $8,041 82.9 106.8 150.1 4.6 $87. 95 $7,801 82.4 89.0 129.7 4.3 $110. 65 $7, 738 72.2 268.0 262.0 5.0 $74. 95 $7,976 84.3 58.0 82.1 4.5 $88.79 $7, 943 87.3 93.8 126.8 5.2 $85.35 $8, 949 84.6 119.0 161.0 4.8 $92. 44 $8,549 82.0 57.0 90.4 6.1 $76. 51 $10,071 93.4
The following footnotes apply to this and to all subsequent tables in this section of the report.
1 Tables covering size of units, monthly rental, and amount of mortgage do not include data for projects in Alaska covered by commitments issued under the Alaska Housing Act.
2 Amount of mortgage allocable to dwelling use.
3 In determining the number of rooms per unit, baths, closets, halls, and similar spaces were excluded.
4 Data on monthly rental for units in cooperative projects refer to monthly charges. Monthly charges include, in management-type projects, member’s pro rata share of estimated monthly debt service and project operating and maintenance costs; and, in sales-type projects, estimated total monthly mortgage payment (including real estate taxes, FHA mortgage premiums, and hazard insurance premiums) of purchaser-member.
Among the rental programs, the largest projects (268 units), the largest units (5.0 rooms), and the lowest monthly rentals ($74.95) were typically reported under Section 803 where two-thirds of all units were in single-family houses. Under Section 207, where almost two-thirds of the units were in elevator structures, the monthly rental for the median unit was the highest ($110.65) and the median dwelling unit the smallest (4.3 rooms).
Of the two types of cooperative housing operations, the sales-type had the larger median unit, the lower monthly charge, the higher mortgage per unit, and the larger mortgage-cost ratio. The substantial differences in the characteristics of these two types of cooperative housing programs (for example, monthly charges of $92 for the median management-type unit includes many services not included in the $77 for the median sales-type unit) reflect the differences in the purposes of the programs. The sales-type program provides for the construction (and subsequent sale) of single-family homes, while the management-type projects provide housing for permanent occupancy of members. In 1953, as in 1952, about 3 out of every 4 units in management-type projects were in elevator structures.
Yearly trend.—The median monthly rental for rental projects approved for insurance in 1953 increased 17 percent over 1952 to an all-time high of $87.95 (Chart 23 and Table 52). The average mortgage per unit allocable to dwelling use rose 7 percent to a peak of* $7,679. A near-record proportion—30 percent—of the units approved for rental projects in 1953 were in elevator structures. The share of the units in walkup structures remained about the same as in the
282
FEDERAL HOUSING ADMINISTRATION
TREND OF CHARACTERISTICS OF NEW RENTAL PROJECTS 1935 - 1953
NUMBER OF UNITS PER PROJECT NUMBER OF ROOMS PER UNIT
(MEDIAN) (MEDIAN)
,00---------------------IS -----------------------------------g
■\J lffi£
—.2— _______________________________________________________________________o
|'|9934r|'|99:26| '47 ‘48 '49 '50 '51 '52 '53 I ‘47 '48 '49 '50 '51 '52 '53
MONTHLY RENTAL MORTGAGE PER UNIT*
(MEDIAN)
$100--------------------—-----------------------------------—-----------$8,000
$75 ——^2 —--------------------------------------------------------------$6,000
$5'0 —--------------------------------— ~-------------------------------$4,000
$ 25 ——— — — — — -------------------— --------------------------------$2,000
—2__________________________________________________________________________0
1I461147 148 ’49 ’50 '51 '52 '53 lig^'lilUl147 '48 '49 '50 '51' '52 '53
TYPE OF STRUCTURE MORTGAGE PER ROOM*
(PERCENT OF UNITS)
I I
so % - ~—I ' -----------------------“ ----------------------$ 2,000
\ l-FAMILY
STRUCTURES^ STRUCTURES /
60% < /----------------------------------------------------------------$ 1,500
X l/ \
40 7.-----------1—— 4^—Vi— - — -----------------------------------------$ 1,000
ELEVATOR —I \
STRUCTURES । '*'?/'■ | /
207. 1 // X —/—-------------------------------------—------------------$ 5oo
x <7
_2 1\»•.**** I______________________________________________________________0
i^ji^j *47 I ’48 [’49 ‘50 ’51 '52 '53 |'i9^T|'i9461 ’47 '48 '49 '50 '51 '52 '53
* AMOUNT ALLOCABLE TO DWELLING USE (AVERAGE)
Chart 23.
294078—54----20
283
HOUSING AND HOME FINANCE AGENCY
Table 52.—Characteristics of mortgages and projects in rental project transactions 1935-53
Year1
Item 1953 1952 1951 1950 1949 1948 1947 1942-46 1935-41
Projects: Median size (in units) _ _ 106.8 87.5 112.5 48.6 41.6 22.5 20.3 41.0 72.2
Average size (in units).. 150.1 154.8 182.4 97. 6 78.4 51.1 39.8 75.9 121.1
Percent with: Walkup structures.. 55.8 53.5 49.4 59.0 68.8 84.4 85.9 81.6 82.6
Elevator structures. 22.1 5.6 10.1 18.0 14.0 3.1 1.1 9.9
One-family structures 22.1 40.9 40.5 23.0 17.2 12.5 13.0 18.4 7.5
Units: Median size (in rooms). 4.6 4.8 4.6 4.2 4.0 4.7 4.7 4.0 3.9
Average size (in rooms) _ 4.3 4.5 4.4 3.9 3.7 4.3 4.4 3.7 3.7
Median monthly rental. $87.95 $75.38 $71.10 $78.87 $82. 49 $87. 56 $84.13 $56.45 $53. 09
Average mortgage amount... ... $7,679 $7,179 $7,133 $7,140 $7,190 $7,645 $7, 505 $4, 427 $3, 725
Percent in: Walkup structures.. 39.4 39.4 35.0 40.0 58.2 76.7 83.6 79.4 79.0
Elevator structures. 30.0 4.4 12.8 30.8 26.7 13.1 2.7 14.0
One-family structures 30.6 56.2 52.2 29.2 15.1 10.2 13.7 20.6 7.0
Rooms: Average monthly rental. $21. 34 $16. 77 $16.91 $20.06 $22. 22 $20.13 2 $19.00 $15.10 $14. 54
Average mortgage amount $1,778 $1, 579 $1,619 $1,835 $1,940 $1,769 $1, 724 $1,187 $1,009
1 Based on insurance written in 1935-41 under Sec. 207, in 1942-46 under Sec. 608, and on commitments •issued in 1947-49 under Sec. 608, in 1950-51 under Secs. 207, 608, 803 and in 1952-53 under Secs. 207, 803, 908.
2 Estimated.
previous year, but the proportion in single-family structures decreased sharply. The median size of units in 1953 was 4.6 rooms—a decrease from the record 4.8 rooms reported for 1952 but about the same as in 1951.
Under the cooperative programs (not shown in the table or chart), a slight increase in the size of the typical unit for 1953 was accompanied by an increase of 5 percent in the amount of mortgage allocable to dwelling use and by an increase of about 10 percent in the typical monthly charges.
The characteristics of rental and cooperative housing projects are discussed in greater detail under appropriate subject headings in the pages that follow.
Type of structure.—Table 53 shows the percentage distributions of both projects and dwelling units by type of structure for each FHA housing program. FHA classifies structures into three types: walkup, elevator, and 1-family (row, semidetached, and detached houses). In those instances in which a project contains more than one type of structure, the whole project is classified according to the predominant type.
As in previous years, the most common structural type in 1953 was the walkup, accounting for over 45 percent of all projects approved. One-family houses accounted for 30 percent of the total, and elevator structures for the remaining 25 percent. As Chart 24 shows, the percentage distributions of dwelling units by type of structure, 284
TEDERAL HOUSING ADMINISTRATION
Table 53.—Type of structure for rental and cooperative housing, 1953
Type of structure Total rental and cooperative housing Rental housing Cooperative housing, Sec. 213
Total Sec. 207 Sec. 803 Sec. 908 Total Management type Sales type
Projects —Percentage distribution
Walkup 55.8 51.3 38.9 83.0 9.4 18.2
Elevator . 24. 5 22.1 40.3 1. 8 1. 9 32.8 63 6
1-family 30.0 22.1 8.4 59.3 15.1 57.8 18.2 100.0
All projects 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Dwelling units—Percentage distribution
Walkup ... . _ _ _ 34.0 39.4 32.0 36.3 75.4 11. 7 17. 8
Elevator 33. 9 30.0 62. 7 1.4 6. 9 50. 5 77.1
1-family 32.1 30.6 5.3 62.3 17.7 37.8 5.1 100.0
AH units 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
PROJECTS AND DWELLING UNITS BY TYPE OF PROJECT
COMMITMENTS ISSUED IN 1953 TO INSURE NEW PROJECT MORTGAGES
TYPE OF PROJECT PERCENTAGE DISTRIBUTION
[o 5 IO 15 20 25 30 35 40 45 50%
I I I I I I I I I
PROJECTS 45 5 %