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If section 8 becomes a part of 203 and is administered by its personnel, it will aost probably be treated as an undesirable stepchild, and I believe we can expect ts death through regulations which will make the program impractical within

short time. This is not said in criticism of the personnel of the FHA. It seems o me only logical that those concerned principally with housing under section 03 will approach the problems of section 8 on the same basis. Mass production equires standardizations. In the same department exceptions are a nuisance, nd the tendency will be to do away with them.

In the event the section 8 program receives serious legislative consideration, ne of the important recommendations should be that the sole method of evaluaon should be reproduction cost. Another is the insurance of construction dvances for rental housing similar to section 608.

SIDNEY C. BARNES. DETROIT, Mich., January 26, 1954.

SPOKANE, Wash., April 1, 1954. on. WARREN G. MAGNUSON,

Senate Office Building, Washington, D. C.: 1. I urge that you vote against current public-housing legislation and vote for

panding section 221 to include minorities and other low-income families on

introlled programed basis. Also vote for lower downpayments of 95 percent but I first $10,000 and for elimination of proposed Presidential credit control. whese matters urgently need your attention for the benefit of the people of the ate of Washington.

ANTONE EBERLE.

NEW YORK, N. Y., March 30, 1954. on. HOMER E. CAPEH ART, Chairman, Banking and Currency Committee,

Senate Office Building, Washington, D. C.: This association desires to register strong support to the testimony presented the Banking and Currency Committee, March 19, urging the amendment S. 2938 to extend the provisions of title IX of the National Housing Act d title III of the Defense Community Facilities and Services Act of 1951. ir 260-member agencies serving needy families throughout the United States e acutely aware of the desperate need for decent, low-cost housing, especially the defense-impact communities. The worst of these situations result from deral defense projects and, therefore, seem to us to place a particular sponsibility on the Federal Government for alleviating the woefully inadequate using available.

Earl N. PARKER, Assistant General Director, Family Serrice Association of America.

GUAM, April 7, 195.4. Financing and Housing Needs of Guam. nator HOMER E. CAPEHART, Chairman, Senate Banking and Currency Committee,

Senate Office Building, Washington, D. C. DEAR SENATOR CAPEHART: As one of the sponsors of a major rental housing ject in Guam, I take this opportunity to outline the problems encountered rein and to appeal to you and your committee for legislative assistance. You

no doubt aware of many of the facts and problems herein set forth. My owledge and analysis of the problem is firsthand, however, and I respectfully smit the following for your consideration. Juam lies westerly 5,600 miles from the California coast. It is a naval ie of great magnitude and the far western outpost of United States territory. en Guam was retaken from the Japanese occupation forces it was shelled by : fleet for 4 days prior to the invasion. Practically every building on the ind was blown to bits. The invading forces moved into the island bringing th them their temporary quarters: Wood frame, Army prefabricated builds, sheet metal quonset huts, and sheet metal Butler buildings were the priry housing facilities installed after the inyasion. All of these units had an estimated life of approximately 5 years. This was 10 years ago. Today, those same buildings are being used in their rusty dilapidated condition as housing for the people of Guam.

The Organic Act of Guam as passed by our Congress in 1951 granted to the native population of Guam their citizenship, established an elective legislaturr. and appointive civil governor and bestowed upon Guam the status of a territory very siinilar to that of Alaska and Hawaii. At approximately this same tin the critical need for new permanent modern housing was being discussed amoni the Guam Government officials, the Housing and Home Finance Agency and the Federal Housing Administration. It was determined at that time that FHA insured mortgages should be made available to the people of Guam. Defense housing and military housing were discussed but it was thought better to prora title II housing for Guam since it was and is a better and more permanent sans tion to the housing problem. An FHA field office was established on the islas: and applications were taken for insured home mortgages. At this point ttentire program failed. No lending institution in the United States, either inst" ance company or banking organization, was willing to make long-term loans ! Guam even with FHA's mortgage insurance. Due to this lack of financing the FHA's field office has processed less than 40 residential units since its establishment, almost 2 years ago.

The situation existing today in Guam is very similar to the situation what existed in Alaska prior to the enactment of the Alaska Housing Act. Alahad the same problems we now have in Guam, namely, inadequate housing far". ties and inadequate long-term financing to enable those facilities to be replace! with modern permanent structures. In 1953 the Senate Banking and Current Conmittee in proposing legislation for the Housing Act of 19.73 was well away of this situation. In the Senate bill provision was made to make certain portiu of the Alaska Housing Act applicable to Guam. Had this passed as the Senait bill had been written, housing projects in Guam would now be well under mi struction. Unfortunately, this was not the case. In joint conference it was decided that possibly the Federal National Mortgage Association's 1-for-1 pla" would provide the necessary financing without further assistance. As has beef proved this last year, the 1-for-1 plan is not the solution to Guam's probe The reasons are as follows:

1. There is an inherent discount in the 1-for-1 program which must be absorbed by the builder. Since the earned income derived from a rental house project is predicated on the sponsor's equity, and since said equity does I reflect the discount, the earned income on the actual equity, including the di count absorbed by the builder represents a return so reduced that it is di sound investment on the part of the operative builder or rental project spoesi

2. The 1-for-1 plan does offer a method of financing for units to be huilt in sale. However, in Guam the market for sales units is negligible. This in because Navy personnel seldom stay on the island of Guam beyond their lo months normal tour of duty. The civil service employees of both the Federa Government and the Guam Civil Government are largely on 1- to 2-year coe tracts, thereafter returning to the States. The people in private enterprise per Guam are, to a large extent, assigned for relatively short periods to Goss branch offices of firms with headquarters elsewhere. It is the studied opinie of the writer that the construction of 40 or 50 sales units would flood tha: market. The demand for rental units, however, is quite a different stors Native inhabitants, now citizens, Navy personnel and civil service personnel ? people in private enterprise all desperately need modern housing with adequa" sanitation, parking areas, parks, playgrounds, in short, the type of housing * expect our people to have.

Since the 1-for-1 plan is not a satisfactory solution to rental housing projects and since there is virtually no other market in Guam, it follows that the 1-for-1 program is of no assistance to Guam. The Navy made a survey of the housing requirements on the island. The figures established are classified lite are available to the Senate. The Housing and Home Finance Agency made 3 survey of the housing requirements in Guam. This survey was transmitted t the Federal Housing Administration. It indicated an immediate need for : minimum of 1,600 units. The Pacific Iron & Steel Corp., joint venturing ! M. W. Finley and D. E. Turner have completed the plans and secured fra commitments from the Federal Housing Administration for a project total.es only 600 residential units, plus accessory buildings. The mortgage amount ** committed by FHA is $6,571,200. These sponsors have invested heavily in atto

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neys' fees, FHA examination fees, architects' fees, engineers' fees and travel *** (penses. The sponsors have made every effort to secure financing for the Guam

roject and have come to the conclusion that only through legislation can such a program of housing and financing be brought to a successful conclusion.

The new bill, H. R. 7839, restricts the activities of the Federal National MortAge Association in such a manner that only through Presidential directive can ay assistance whatever be made available to Guam. Further, it specifies that ay mortgages purchased by the Association shall be such that they meet the irrent market requirements of private investment concerns, and further, that ich mortgages be purchased at a realistic market price. It is the contention the writer that these two restrictions would (1) either preclude the purchase ! mortgages in Guam since it is easily proved that such mortgages are not 'ceptable to private lending institutions, or (2) that the realistic market values ould necessarily be established so far below par that the resulting purchase immitment would be unusable. The writer has taken this problem up with the Housing and Home Finance gency, Federal Housing Administration, the Department of the Interior, Office Territories, and has recommended an amendment for the present housing bill i reported (H. R. 7839). The amendment was prepared by the General Counsel the Housing and Home Finance Agency at the writer's request, as follows: Page 169, line 9, insert the following before the period : : Provided. That, notwithstanding any other provision of this title, the Asciation is hereby authorized to make commitments to purchase and to purlase, service, or sell any mortgages, not exceeding in the aggregate $10 million original principal amounts, in connection with projects or properties located Guam, if such mortgages would have been eligible for purchase by the Asciation had they been offered to the Association prior to the enactment of e Housing Act of 1954.” This amendment, if adopted, would definitely provide a solution to the housg shortage in Guam. It would make it possible for Federal National Mortge Association to purchase at par mortgages in Guam using funds already ailable to the Association. We are not asking that the Federal National ortgage Association be granted the power to make advances on construction, ace this phase of the financing is already available through private banks .th the proviso that the mortgages definitely will be purchased on completion

construction. We are asking only a limited amount of such financing since we requirements of Guam are small as compared to other areas.

The sponsors of the housing project above referred to sincerely request that ur honorable body give full consideration to this proposed amendment. The terests of the sponsor and the Island of Guam are identical. Respectfully submitted.

M. W. FINLEY. (On behalf of Pacific Iron & Steel Corp.)

Gross Bros..

New York, V. Y., March 10, 195.. on. IRVING M. IVES,

United States Senate, Washington, D. C. Sir: A problem of vital concern to the New York City builders has arisen in e housing bill, S. 2938, page 13, line 10. This refers to title 213, Cooperative ousing, and changes the criteria from estimated cost to estimated value. As you know, New York City has not kept pace with our national-housing onomy and, in fact, the private builders have been unable to reach 30 percent the volume established by them in the 1920's. While the attitude of our city officials is quite friendly toward builders, vertheless, when he finishes his building, he becomes a landlord, and in any nt-controlled economy, the position of a landlord is difficult. The solution 's in a builder performing his function as a builder, and then selling his oduct on a cooperative basis. This movement is making rapid progress, it only with respect to new buildings but also has spread to existing structures. The change from cost to value in the housing bill came about because of s operation in what is known as a "sales-type” of cooperative, which refers I groups of individual one-family houses, and the change, if required, should

confined to that portion of the act. In the management type of 213, which concerns itself with multifamily ructures, this change will require the FHA to capitalize the net return from the rental amount, as stated in the application, in order to arrive at a value

Since the very purpose of a cooperative is to arrive at the lowest possive rent, caapitalizing this figure will automatically materially reduce the mortgage amount and increase the downpayment.

While the bill provides a 90-percent mortgage and, in the event of 65-percat veterans' occupancy, a 95-percent mortgage, the application of the most favorable rate in use would result in an 84-percent mortgage and a 16-percent downpayment. On a national basis, the average downpayment would be betweel. 25 and 30 percent.

If a further penalty factor is imposed for location, these mortgage amounts will be reduced still more, and the downpayment increased accordingly.

It will be quite impossible to use title 213, in connection with title 1 urban redevelopment operation.

I would appreciate your good offices in bringing this matter before the Banking and Currency Committee, with your recommendation for its change Respectfully submitted.

ALFRED Gross

Capitalization effect on title 219, typical New York City apartment under

present laws

$10.00

Sales price (FHA replacement cost per apartment)
Rent
Operating cost (taxes, fuel, labor, etc.)
Net amount for debt service available for capitalization, per annum

Applying various capitalization rates to net return 1. 6 percent, 50 years, rate 14.74 equals $8,814, at 95 percent (maximum veteran

mortgage, $8,400), 16 percent down payment. 2. 612 percent, 40 years, rate 12.76 equals $7,656, at 95 percent (maximus

veteran mortgage, $7,250), 2212 percent downpayment. 3. 7 percent, 40 years, rate 12.11 equals $7,260, at 95 percent (maximum veteran

mortgage, $6,900), 31 percent downpayment. 4. 674 percent, 50 years, rate 13.45 equals $8,070, at 95 percent (maximum

veteran mortgage, $7,650), 2312 percent downpayment.
Rate 1 is used in the New York insuring office of the FHA.
Rates 2 and 3 are in general use throughout the country.
Rate 4 is contemplated for title 1 redevelopment use in New York.

Housing AUTHORITY, CITY OF HACKENSACK, Y. J.,

March 26, 1974 Hon. H. ALEXANDER SMITH, Senator, New Jersey,

Washington, D. C. DEAR SENATOR: The proposed Housing Act of 1954, S. 2938, recently introduced in the Senate of the United States, makes no provision for the expansion of ibe public housing program. It is of the utmost importance this bill be amended to contain provisions that:

1. Enable the President of the United States to determine whether the pro gram in any fiscal year should be 135,000 public housing dwelling units, or bort or less, which discretion was delegated to the President in the Housing Act of 1949.

2. Local housing authorities be authorized to prepare programs for publie housing in the planning stage so as to develop a continuity of projects that would be ready for construction within the number of dwelling units provided for in each fiscal year in the Housing Act of 1949 or such greater or lesser amount as determined by the President.

As you no doubt know, Hackensack has only 144 units which are fully of cupied and over 300 eligible applicants on file. There are, according to the 1900 census of housing report, 798 occupied substandard dwelling units in Hacker sack. These have not been condemned because of the housing shortage. We urge you to support the above amendment to the proposed Housing Art Sincerely yours,

JOSEPH C. BARSALONA,

Erecutire Director.

MOUNT LAKE REALTY,

Seattle, Wash. lon. WARREN G. MAGNUSON, Senate Office Building,

Washington, D. C. Urgent to defeat public housing and leave home dwelling construction for rinorities to private industry. Imperative FHA lower downpayments imvediately to maximum 5 percent up to $10,000. Lower income non-GI families reed to pay high rental due to inability to purchase in view of present downayment regulations.

ALBERT L. LA PIERRE.

LINCOLN, NEBR., April 1, 1954. enator Hugh BUTLER,

Washington, D. C.: Re housing bill from our 100 members. We are trying to house personnel of the trategic Air Command here. Airmen with discharge can buy $12,000 house with othing to $600 under VA. Civilians or airmen without discharge must pay at ast $2,400 under FHA. Downpayment on comparable house at first of war was 300, under FHA, being 10 percent of $6,000. We want 95 percent of first $10,000 id 75 percent of balance written into bill. Need is urgent for average home iyer. Too high downpayments could make this a depression. We cannot erate 6 months to a year ahead with the uncertainties of executive action. (Irthermore, President has had this authority and hasn't used it. Public Housg has failed; should be left out of bill. Section 221, if properly expanded, will ke care of low-income groups, especially minorities.

HOME BUILDERS ASSOCIATION OF LINCOLN,
ERVIN PETERSON, President.

Echo MORTGAGE CORP.,

Atlanta, Ga., Fcbruary 22, 1954. nator BURNET R. MAYBANK, United States Senator, South Carolina,

Senate Office Building, Washington, D.C. DEAR SENATOR : It is my understanding that on February 12, 1954, Senator ipehart and Representative Wolcott, chairmen of the Senate and House Bankg and Currency Committees, concurrently introduced the administration housg bill (S. 2938 ; H. R. 7839). My primary interest in this legislation is as follows: Under title I of FHA sured loans, there will be a provision, the summary of which is :

"TITLE I, FHA INSURANCE

"Increase improvement and repair loans from maximum of $2,500 to $3,000 and payment period from 3 years 32 days to 5 years 32 days. Change the existing iximum of $10,000 for multifamily improvement or conversion loans to $1,500 r family unit or $10,000, whichever is greater, and the maximum loan terms »m 7 years 32 days to 10 years 32 days." For your information, I have recently written Mr. Samuel E. Xeel, general unsel of the Mortgage Bankers Association, for his opinion as to whether the regoing legislation will permit air conditioning of multiunit 608 projects. r. Neel's opinion is that same will be permitted under this legislation ; however, lo not believe that air conditioning is specifically set forth as one of the posle improvements under the title of this loan. Therefore, it will be deeply preciated if you will see to it that it is clearly intended and understood that r conditioning of multistory units will be eligible under this title I loan issification. You probably know that my dad and I, as well as J. C. Long, have interest in ultistory apartment buildings, some of which are not presently air condiined. Therefore, if by an FHA-insured loan we could cause these apartment its to be air conditioned, I am sure that it would be of great help and be deeply preciated by all of us--not to mention the fact that I am sure there are many her owners of multistory units throughout the Nation who will definitely be nefited by this legislation.

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