President Roosevelt Proposes Amendments to Housing Act to Speed Up Buifding

Washington, Nov. 29-President Roosevelt today submitted a special message to Congress calling for revision of present housing legislation to stimulate a 12,000 million dollar to 16,000 million dollar construction boom to be financed by private capital over a five-year period.

The message was accompanied by specific recommendations for changes in the National Housing Act. Senator Robert F. Wagner, of New York, immediately introduced a bill embodying presidential recommendations.

The President, in his message, said:

"Housing construction has not kept pace with either the needs or growth of our population. From 1930 to 1937, inclusive, the average annual number of new dwelling units constructed in the United States was 180,000 as contrasted with an annual average of 800,000 in the seven'years prior to 1930.

"In addition, much of our existing housing has seriously deteriorated, or has been demolished.

"ft is estimated that an average of 600,000 to 800,000 dwelling units ought to be built annually over the next five years to overcome the accumulated shortage and to meet the normal growth.in number of families."

'Ihe President proposed these amendments to the housing act:

1. Expiration date for Federal Housing Adniinistration activities would be extended indefinitely from July l, L939when present insurance features end-and the limitations of 2000 million dollars on the amount of mortgages insurable would be modified.

2. Encouragement of national mortgage associations by allowing sale of debentures up to a 20-to-l ratio to their capita'L. Financing of a 5O million dollar association by the Reconstruction Finance Corporation to "provide the basis for 1000 million dollars of private funds obtainable through the sale of national mortgage association debentures."

3. Extension of FHA features to allow increase of small property loans from 80 to 90 per cent arnd reduction of interest rates from 6r/a to 512 or 57/a per cent, depending on the property evaluation.

4. Expansion of Federal Housing Administration to cover loans up to $200,000 on large-scale building projects instead of the present $16,000 limitation. This extension would be contingent upon the requirement that the mortgage does not exceed $1000 a room on the structure or structures.

5. Liberalization of existing limited dividend requirements of the act, releasing dwellings in this category from blanket mortgages where the mortgage does not exceed $1200 a room and the value of the dwelling is not in excess of $5000.

6. Revival of insurance provisions for repair and modernization loans similar to those provided by Federal Housing Administration up to last April 1.

To facilitate this co-operation, the President said:

"It is my intention to initiate a series of conferences with representatives of industry, labor and finance, with a view to giving housing construction a fresh start in the coming building year."

How New Housing Act Would Aid Builders

Washington, Nov. 29.-This is how President Roosevelt's proposed amendment of the National Housing Act would help the man of moderate income build a home:

The necessary down payment for Federal Housing Administration mortgage insurance would be cut in half. On a $5000 house the down payment would be g500 instead of $1000, as at present.

Carrying charges on the mortgage would be cut. payments on a $5000, 2o-year mortgage would begin, for instance, at $34 a month instead of. $37.14, as under the present Federal Housing Administration schedule. Ih addition, the total monthly payment would be reduced more rapidly because the insurance fee, now a flat $2.08 a month on a $5000 mortgage, would decline as the principal of the mortgage outstanding was reduced.