Schedule of FHA personal services, fiscal year 1962—Continued

Mr. THOMAS. The language is for

an additional amount not to exceed $350,000 shall be available for administrative expenses of the Federal Housing Administration, for the District, and an additional amount not to exceed $5 million shall be available for certain nonadministrative expenses of said agency.

In the regular bill you had $9,600,000. Was that the combined figure for administrative and nonadministrative expense?

Mr. HARDY. That is the administrative expense.

Mr. THOMAS. And you have a request for $350,000, making a total of $9,950,000.

This is to carry out its added responsibilities under the Housing Act of 1961. FHA will need to have its total operating expense authoriza

tion for fiscal 1962 increased by $5.35 million over the $69.25 million that would be provided by H.R. 7445 as reported by the conferees. Of this increase, $350,000 is for administrative and $5 million for nonadministrative.

The administrative supplement is required for staff and facilities to develop, establish, and supervise the new and vastly expanded program.

I thought we took care of Mr. Thompson pretty well in the regular bill.

This is for the mortgage and loan insurance programs provided by the new legislation. Of the nonadministrative supplement, the major portion, $4.3 million, is required for the operation of these new and expanded programs, and the remainder, $700,000, is needed to reduce the existing critical backlogs of old work carried forward.

I hate to read the last language "defaults, foreclosures, and insurance claims."

You refer to the nature and extent of the additional technical, legal, and administrative work, et cetera.

What are the new programs you mention? Enumerate them quickly, and tell us about the new loan program.

NEW PROGRAMS

Mr. HARDY. Perhaps the most important new program so far as FHA is concerned in the 1961 Housing Act is the proviso for supplementary credits for the purpose of rehabilitation and modernization of existing structures. This is done in two amendments to the act, one applicable in urban renewal areas and the other in normal but older subdivisions.

In addition we are given the responsibility under this act for entirely new rental programs, what is called a submarket interest rate to take care of providing housing for families of low and moderate income. We have an additional program, which also is new to the FHA.

Mr. THOMAS. That is the 35-year loan program. What is the ceiling on it-$10,000?

Mr. HARDY. In terms of the rehabilitation program?

Mr. THOMAS. No.

Mr. HARDY. Which program, sir?

Mr. THOMAS. You have two new programs virtually. You have your rehabilitation and the new long-range, low-cost housing. What is the limitation on the low-cost housing?

Mr. HARDY. It is based on a per room limitation. It is $2,250

per room.

Mr. WEAVER. The chairman refers to the 35- to 40-year, lowdownpayment program.

Mr. HARDY. 221, which heretofore had been available only on a program basis for displaced persons from urban renewal areas, now has been opened up and made available generally. The terms are 35 years. The maximum mortgage amount is $11,000. It can be raised to as high as $15,000 in high cost areas, depending on the relative cost of construction.

Displaced families, however, may continue to have 40-year terms as they have in the past.

Mr. THOMAS. That new amendment opens up virtually the untapped market. That is the biggest untapped market in the field of housing in the entire country, is it not?

Mr. HARDY. There is no question about it.

Mr. THOMAS. How much business do you anticipate doing?

Mr. HARDY. 50,000 units, one- to four-family units, and in the multifamily field

Mr. THOMAS. Stay with that one program. We shall take them up by program. The nearest approach to it is page I-5. You might let this discussion follow this page but it is not quite as clear as we want it.

DEPARTMENTAL AND FIELD EMPLOYMENT

How many jobs are you looking for in the District of Columbia in your administrative expense item? Also show how many you are showing in the nonadministrative expense item of $5 million.

Mr. HARDY. In the Washington office provision would be made for 119 positions. In the field it will be 400.

Mr. THOMAS. That is under administrative expense?

Mr. HARDY. Pardon me. That is total.

be 70 people in the Washington office.

Mr. THOMAS. Any in the field?

Mr. HARDY. No, sir.

Administrative would

Mr. THOMAS. You have some nonadministrative in the District? Mr. HARDY. That is right.

Mr. THOMAS. How many jobs for the administrative?

Mr. HARDY. Seventy.

Mr. THOMAS. How many do you have now?

Mr. HARDY. 997.

Mr. JONAS. That doesn't jibe with the chart.

Mr. THOMAS. You have 997 in the District?

Mr. HARDY. Actual employment is 997 at the present time. The figure of 1,105 is the total amount which could be employed in terms of the legislation now in effect.

Mr. THOMAS. How many new jobs did we give you in the regular appropriation bill for the District of Columbia under administrative expense? How many were there over 1961? Was it not a sizable increase?

Mr. HARDY. 108.

Mr. THOMAS. Now you want 70 more?

Mr. HARDY. That is correct, sir.

Mr. THOMAS. What is Mr. Thompson going to do with these jobs? Mr. HARDY. Mr. Thompson gets very few of these. Most of these are additional positions to be filled in the new Multifamily Housing Division to take care of increased workload in urban renewal and rehabilitation and modernization. Also in the technical standards divisions, where we are short in staff for the new experimental housing program and for the development of standards for housing under the other new programs.

Mr. THOMAS. What are the duties of the field in the new program of modernization? What is the top limit on that?

Mr. HARDY. $10,000.

Mr. THOMAS. For how many years?

Mr. HARDY. Twenty years.

Mr. WEAVER. Up to 20 years.

Mr. THOMAS. And the low-cost, 35-year program is the other big increase in the workload?

Mr. HARDY. That is right.

Mr. THOMAS. How will the 70 be divided in the District of Columbia as between these two activities?

Mr. HARDY. I can do it by divisions. It is not strictly by programs. We have 4 people in the Legal Division, 4 in the Rental Housing Division, 19 in the Urban Renewal Division which is a new division and which will have a good deal to do with the expanded 221 program, 3 people in the cooperative housing, 16 in technical standards, 3 in personnel, 1 in management, and 5 in general services, 15 in the Comptroller's Division.

EXPECTED VOLUME OF BUSINESS

Mr. THOMAS. I notice you use this language which is quite encouraging

As for the assumed volume of business this would seem well within the range of probability. The estimated level of total unit applications, 1,129,500, is 169,500 above the level of the adjusted 1961 estimate.

That is the figure you presented in the regular 1962 bill.

You say:

It is 224,000 above the currently seasonally adjusted annual rate.

NEW HOUSING STARTS

How many new starts are you going to make this year as compared with last year?

Mr. HARDY. Total private housing this year?

Mr. THOMAS. New starts.

Mr. HARDY. Somewhere between 3 and 5 percent above last year. Mr. THOMAS. Last year you did about 35 percent of the total of new starts.

Mr. HARDY. About 22 percent.

Mr. THOMAS. What did VA do?

Mr. HARDY. They had a lesser proportion of the total than we did but I would have to check the figure.

Mr. THOMAS. The Home Loan Bank Board did about 40 percent. Mr. HARDY. That is right.

Mr. THOMAS. And you will pick up anywhere from 22 to 28 percent this year?

Mr. HARDY. I think we are estimating that our participation will run 23 percent. I speak in terms of new starts. Much of the increase estimated here is in connection with rehabilitation and other existing housing, however.

Mr. THOMAS. The new starts is perhaps no more than half of the program, if that much.

Mr. HARDY. About a third.

Mr. THOMAS. But the new starts will pick up only 3 to 5 percent and then give you a total on an overall basis of about 23 percent of the total new starts in the United States?

Mr. HARDY. That is correct.

Mr. THOMAS. The record should be clear that the new starts are less than 50 percent of your business. Modernization and renewal programs, plus the current rate of foreclosures, make up more than 60 percent of the total workload.

Mr. JONAS. Did you mean that you are estimating that the total new starts for the country will be 3 to 5 percent higher than they were last year?

Mr. HARDY. On a calendar year basis, yes.

Mr. JONAS. Is that not a substantial reduction from previous estimates? Were we not anticipating a more substantial increase earlier? Mr. HARDY. I have not, sir.

Mr. WEAVER. Our agency has not so testified.

Mr. JONAS. I have seen figures of an increase of 7 percent, 7 to 10. Mr. HARDY. In terms of the starts so far this year it would be virtually impossible to increase that much.

Mr. JONAS. Do you have in mind the unit figure?

Mr. HARDY. For this current calendar year it will be approximately 1.3 million.

Mr. JONAS. What was it last year?

Mr. WEAVER. 1,255,000 if I recall correctly.

Mr. JONAS. I may be wrong.

Mr. WEAVER. There may have been other estimates but they were not our estimates, sir. Others were estimating.

Mr. THOMAS. Do you actually need 70 people more than you have in the regular bill? You had an increase of around 110.

Mr. HARDY. 108.

Mr. THOMAS. Is that a firm figure? What is this based on, Mr. Hardy?

Mr. HARDY. The 70 is based on a careful analysis of the staff we need to devote its attention to multifamily activity in the urban renewal field by and large.

WORKLOAD FOR URBAN RENEWAL PROGRAM

Mr. THOMAS. What part of the total workload will be directed toward the urban renewal program?

Mr. HARDY. In terms of workload, sir, I look to this next fiscal year and several fiscal years to come as years of substantial increase in volume. As for the urban renewal program itself, virtually all of the building is done with FHA financing.

Mr. THOMAS. How much will that activity increase the total workload on new starts? It is part of the new starts program, is it not? Mr. HARDY. Yes, it is.

Mr. THOMAS. How many units do you anticipate you will start compared with the total estimated new starts?

Mr. HARDY. We are estimating 15.000 additional over the figure in the 1962 regular bill.

Mr. THOMAS. What was that figure?

Mr. HARDY. 25,000.

Mr. THOMAS. What was the total estimated new starts for fiscal 1962? I refer to all programs.

Mr. HARDY. 960,000 applications, of which 549,000 would be insured. We are now estimating 1,129,500, of which the bulk of the increase