1. Statute requires local governmental con-
tributions amounting to at least 20 per-
cent of Federal annual contributions, in
form of cash or tax remissions or tax
exemptions. All local contributions to
date have been in form of tax exemptions.
2. To extent not carried out by local hous-
ing authority itself, local governmental
unit is required to eliminate unsafe or
insanitary dwellings in locality approxi-
mately equal in number to number of
new dwellings provided by project as-
sisted ("equivalent elimination").
(b) By local agencies or
institutions participa-
ting or assisted.
To FHLBanks: Each bank member must subscribe
to bank stock to extent of at least 1 percent of aggre-
gate unpaid principal of its home mortgage holdings,
but in no event less than $500. Also, each member's
stock holdings must at least equal 12 of aggregate
amount of its outstanding advances from the bank.
Members' deposits also help provide banks with
funds.
(c) By private capital... 1. To FHLBanks: Operating funds are in part ob
tained by FHLBA's issuance to general financing
community (primarily banks and dealers) or con-
solidated debentures constituting joint and several
obligations of all 12 banks. It has been the policy
thus far to issue these consolidated debentures in
preference to debentures issued by the individual
banks, as being more economical and better suited
to the bank's needs.)
2. To savings and loan associations: Savings of indi-
viduals and organizations have contributed all but a
very small fraction of outstanding share capital of
both Federal- and State-chartered associations.
Participating lending institutions obtain their
funds through issuance of capital stock or
shares, acceptance of deposits, borrowings, col-
lections, and such other methods as are used
by institutions of the types involved to obtain
funds for operations.
1. "Temporary financing:
loans, made primarily by commercial
banks and investment houses at very
low interest rates, finance bulk of con-
struction cost of projects until definitive
long-term financing, which takes place
toward end of construction period. Re-
sulting savings in interest costs are re-
flected in a reduced development cost
and in smaller definitive loans and an-
nual contributions.
2. "Permanent financing": Statute requires
that at least 10 percent of project cost be
secured from sources other than FPHA.
General financing community (primarily
banks, investment houses, and insurance
companies) furnishes this portion of cap-
ital cost through purchase of definitive
long-term series A bonds issued by the
local authority. On many projects, pri-
vate capital has financed 25 to 85 percent
of project cost. Average for all projects
is over 33 percent.
The National Housing Agency-A descriptive analysis of the basic permanent housing functions being administered by its 3 constituent units under the general direction and supervision of its Administrator-Continued
![[graphic]](https://books.google.co.ke/books/content?id=xK13-x4h_REC&output=html_text&pg=PA533&img=1&zoom=3&hl=en&q=%22obligations+acquired+by+him+under+this+subsection.+All+redemptions,+purchases,+and+sales+by+the+Secretary+of+the+Treasury+of+such%22&cds=1&sig=ACfU3U1C7lu0QlN21JTD2n2tDhNwaYRllg&edge=0&edge=stretch&ci=493,126,404,1429)
term of loan may be 25 years. Maximum interest rate permitted by regulation is 41⁄2 percent per annum (statutory maximum is 5 percent on outstanding principal (exclusive of FHA'S 1⁄2 of 1 percent insurance premium). Mortgage loan is amortized by monthly installment payment plan calling for equal monthly payments of amount necessary to provide for payment of taxes, special assessments, ground rents, and hazard insurance premiums, as well as debt service. Rental project loans may not exceed $5,000,000, or 80 percent of total value, or $1,350 per room attributable to dwelling use. Maximum interest rate (exclusive of FHA's 1⁄2 of 1 percent insurance premium) is 41⁄2 percent per annum on outstanding balance on loans of $100,000 or less and 4 percent for loans in excess of $100,000. Loans are amortized by periodic payments within such term as approved by FHA for each individual case. (Most mortgages are amortized over a 26-28 year period). FHA is given various controls over rents, charges, rate of return, and methods of operation in general.
The National Housing Agency-A descriptive analysis of the basic permanent housing functions being administered by its 3 constituent units under the general direction and supervision of is Administrator-Continued
Type of housing or structure provided under programContinued
(b) Cost limitations.
(a) Communities and Practically all nonfarm areas of country.
Federal Housing Administration
Title I: None as such. Indirectly, costs may be
affected by $2,500 and $3,000 limitations on size
of loans.
Title II: None as such. Indirectly, costs may
be affected by $16,000 limitation on home
loans, and $1,350 limitation per room attribu-
table to dwelling use on amount of rental proj-
ect loans. (50 percent of homes insured are in
$4,000 to $6,000 range, median valuation being
between $5,000 and $6,000.)
Federal Public Housing Authority (admin-
isters functions formerly in United States
Housing Authority)
Statutory maximum is $4,000 per family dwelling unit and $1,000 per room (excluding land, demolition, and nondwelling facilities)-$5,000 and $1,250, respectively, in cities of more than 500,000 population. Actually, average dwelling facilities cost has been $3,191 for cities of less than 500,000 and $3,695 for larger cities. Economy must be promoted in construction and average construction cost (excluding land, demolition, and nondwelling facilities) may not exceed average construction cost of dwellings produced by private enterprise in the locality under applicable legal building requirements and same labor standards.
Communities of all sizes in both urban and rural areas of 36 States, District of Columbia, Hawaii, and Puerto Rico. (2 additional States and Virgin Islands have former PWA housing projects transferred to FPHA.) Not more than 10 percent of Federal funds authorized may be expended within any 1 State. Families who are in the lowest income group and who cannot afford to pay enough to cause private enterprise in their locality or metropolitan area to build an adequate supply of decent, safe, and sanitary dwellings for their use. Family net income at time of admission may not exceed 5 times the rental, including utilities (6 times in case of families with 3 or more minor dependents).
The average interest rate on outstanding mortgage
loans of participating member associations was 5.72
percent in 1942.
Title I: Improvement and new nonresidential
construction loans carry maximum financing
charge to borrower equivalent to about 9.6
percent per annum on outstanding balance
(inclusive of FHA insurance charges). New
residential construction loans carry maximum
financing charge equivalent to about 6.7 per-
cent per annum; average monthly debt serv-
ice payment per $1,000 borrowed is $8.36, on
basis of 15-year maximum term discount loan.
Title II: Maximum financing charge on home
loans is 41⁄2 percent per annum on outstanding
principal, plus insurance premium of 4 of 1
percent on annual reducing balances. Aver-
age monthly debt service payment, including
insurance premium, per $1,000 borrowed is
$5.81 on 25-year new home loan, which is most
common type. Total estimated monthly
housing expense, including taxes, heating,
lighting, maintenance, and repair, ranges from
about $36 on homes costing $3,500 to $96 on
homes costing $10,000. For homes costing
about $5,000 (average valuation of homes in-
sured) total estimated monthly housing ex-
pense is about $54.
Monthly rentals in projects are concentrated
in $35 to $75 range. Average is $55.
SCOPE AND STATUS OF PROGRAM
Prewar range with respect to most
families was $500 to $1,200, with almost
half of families served in $600-$900 in-
come group. In South average income
was $710, and in North $936.
Average prewar shelter rentals ranged from
$5 to $20 per dwelling unit, with an aver-
age of $12.80 a month. In South, average
shelter rental payment was $10.48, and
in North $14.73.
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