FNMA nonfarm home-financing activity (by FHA and VA)

2 Amount available for commitment as of Nov. 30, 1949, allowing for $211,000 mortgage balance outstanding and $210,000 commitments undisbursed under VA section 502 farm mortgages.

Source: Reconstruction Finance Corporation; Federal National Mortgage Association.

Type of institution originating and holding all home mortgages: Number and face amount of secs. 203 and 603 mortgages originated for the year 1948 and held in portfolio as of Dec. 31, 1948

1 Total originations for the year do not agree with insurance written for the year shown elsewhere, due to lag in tabulation.

Less than face amount in force, due to lag in tabulation.

Based on amount of mortgage.

• Includes industrial banks, finance companies, endowed institutions, private and State benefit funds, etc. Excludes mortgages insured under sec. 603 pursuant to sec. 610 and those insured under sec. 609.

Type of institution purchasing and selling all home mortgages: Number and face amount of home mortgages transferred (including resales) under secs. 203 and 603, for the year 1948

1 Based on amount of mortgage.

? Includes industrial banks, finance companies, endowed institutions, private and State benefit funds, etc.

3 Excludes mortgages insured under sec. 603 pursuant to sec. 610 and under sec. 609.

Type of institution originating and holding all rental-project mortgages: Number and face amount of secs. 207 and 608 mortgages financed through 1948 and held in portfolios as of Dec. 31, 1948

1 Based on amount of mortgages.

Type of institution holding mortgages at date of termination or as of Dec. 31, 1948.
Excludes mortgages financed and held under sec. 608 pursuant to sec. 610.

Senator SPARKMAN. Senator Douglas.

Senator DOUGLAS. Mr. Foley, you submitted this morning a very interesting table on comparative cost figures for cooperatives as compared with section 608. Will you return to that mimeographed sheet? I think it is a very crucial set of figures.

Mr. FOLEY. Yes, sir.

Senator DOUGLAS. I would like to ask some questions, if I may, about the estimates, how they were arrived at.

As I understand it, this is made up of about five estimated lower forms of cost under the cooperative form; a lower vacancy rate, lower operating costs, a lower interest rate, a longer amortization rate, and then a smaller balance left after costs were met.

I won't ask questions about differences in the interest rate, because I think we at least touched on that this morning, but I would like to take up the other items. I first come to the vacancy allowance which I understand you fix at 3 percent for the cooperative units and at 7 percent under section 608; so that the saving is around $4 a month. The question I would like to ask is this: In practice, at the present time, do you have a 7 percent vacancy rate in units constructed under section 608? Are you not using a ratio in normal times, whatever those may be, or the 1930 vacancy ratio, but not the 1949 vacancy ratio? It is my observation that in the largest cities of the country, at least, vacancies are almost nonexistent. I don't want to give any ammunition to the opposition, but it will be hard to argue that there are no vacancies, and therefore rent control should be continued, and then in the next breath to argue that there are 7 percent vacancies. I think we have to base these policies on facts.

I want to know where you get this 7 percent vacancy figure.
Mr. FOLEY. Of course, Senator-

Senator MAYBANK. We have no rent control.

Senator DOUGLAS. I don't want to get rent control mixed up in this. I can say, as far as Chicago is concerned, I know there is not a 7-percent vacancy rate. I doubt if it is 2 precent. Perhaps not 1 percent.

I am interested in having the same set of facts apply across the board. I would like to find out where the 7-percent vacancy rate comes in.

Mr. FOLEY. Of course, Senator, we would not contend that there is a 7-percent vacancy ratio at this time on an average in rental housing projects, either FHA insured or otherwise. You will recall that we are discussing a long-range set-up which has to be set up at the beginning with an evaluation of the risk as far as we can over a long term and an attempt to appraise what allowances have to be made so that the project will not fail.

Senator DOUGLAS. Then this is an estimate of the future?

Mr. FOLEY. That is an estimate of the future, based upon experience of the past.

Senator DOUGLAS. What experience have you used on this, please? Mr. FOLEY. In many quarters, in the past, a vacancy ratio of 10 is calculated, before we ran into critical housing situations. In this situation we have attempted to get a figure that would probably be realistic, as against a development of a more normal housing supply, and a greater freedom of choice.