Mr. VANIK. How big is that fund? Would it be adequate to take care of the great need? Mr. HARDY. I think there is no question as to its adequacy. I can supply for the record the exact status of the fund. We are also proposing in this particular legislation that the authority now contained in section 219 of the act Mr. VANIK. You are talking about 221. I am not talking about that. I am talking about an insurance program that would be available to anybody wanting to buy a single home or a double home, probably in the older neighborhoods where there is a higher risk factor, that is not only based on the low income of the prospective borrower, but perhaps on the value of the property to be acquired. This property is today acquired under a land contract, and I want to make it possible for him to acquire it at a decent rate of interest. Mr. WEAVER. I think before one would go into that, one would have to look at the whole impact of the program on the mortgage and credit structure of the country. You would have, I think, a very, very difficult and complicated problem here of how you would adjust the new loans to the old, whether you would include the old, where you would go, how much money would be involved, and what would happen to the commitments which existed, would you be refinancing loans and so forth. So I think that, while this is an area which is very significant, as I said to Mrs. Griffiths, on the other hand I am cautious enough to think that this is not something one could go into without knowing what the impact would be on the money market and the mortgage market. Mr. VANIK. Well, under the GI loan program many loans were GI-FHA loans, combinations where the Government would insure the first $4,000 under the GI bill and FHA would step in after that. If we had a soft or a high-risk soft loan insurance fund created here for the benefit of these low-income buyers, I think that it would probably create more movement of these people into decent housing than some of these other proposals we have discussed. Mr. WEAVER. It well might, but it might have other repercussions. Mr. RAINS. What you are talking about, Mr. Vanik, is Mr. Reuss' bill of last year. Mr. VANIK. Yes; that is precisely it. Mr. RAINS. Do you know the number? Mr. VANIK. No. Mr. RAINS. I would like to have a report written on that for the subcommittee's information. Mr. WEAVER. I would be glad to do that. Mr. RAINS. Mr. Widnall has one other question. Mr. WIDNALL. Dr. Weaver, earlier today I spoke about the method of mortgage financing of the $4,000 to $6,000 group, but I believe I didn't phrase the question correctly so as to get the information that I want. I would like to repeat the request. Will you furnish information on the mortgage status of the homes owned and occupied by the $4,000 to $6,000 income group at the time of the 1956 census? I believe that that is available. Mr. HARDY. Yes. Mr. WIDNALL. Would you furnish that for the record? Mr. WEAVER. It will be furnished. Mr. WIDNALL. I want to express my thanks also for your testimony, Doctor. It has been very lucid and clear as well as that of the rest of the panel, and we are all extremely happy that Stanley Baughman is still a part of your organization. Mr. RAINS. Before we close with these witnesses, I want to ask Mrs. McGuire to include the exact status of the public housing program for the record, including the number of starts, the number that are under contract, the number that are not committed, and I would like to have them by regions, broken down so that we can include them as a part of the record. Mrs. MCGUIRE. I would be very happy to furnish those for the record. (The information referred to above is as follows:) Status of the low-rent program, by region (number of dwelling units), as of Mar. 31, 1961 NOTE.-As of Mar 31, 1961, 19,897 units of the 37,000 which the PHA is presently authorized to place under annual contributions contracts have not yet been so committed. It is expected, however, that this remainder will be fully committed by June 30, 1961. Mr. RAINS. I think we should congratulate Miss Marie because we just understand the Senate confirmed her this afternoon. Mrs. MCGUIRE. Thank you. Mr. RAINS. Gentlemen, you have done a good job in presenting your testimony and we are grateful to you. Mr. WEAVER. Thank you, very much. (The data referred to in the text has been submitted and is as follows:) ADD IT TONAL STATEMENT OF HOUSING AND HOME FINANCE ADMINISTRATOR H.R. 6028, 87th CONGRESS, HOUSING BILL OF 1961, and H.R. 5300, 87th CONGRESS, CONCERNING COLLEGE HOUSING APRIL 24, 1961 H. R. 6028 - HOUSING BILL OF 1961 TITLE I HOUSING FOR MODERATE INCOME FAMILIES The largest unfilled demand in the housing market is that of moderate income families. There are 11 million families with incomes between $4,000 and $6,000. Some 15.7 million dwelling units, or 27 percent of the housing supply, are substandard (3 million dilapidated; 8.4 million deteriorating; and 4.3 million sound but lacking some or all plumbing facilities). Title I of the bill would authorize on a temporary, experimental basis a new FHA mortgage insurance program which would assist private enterprise to provide home ownership for families of moderate income. For families with incomes that do not permit home ownership at current construction costs and at market interest rates, but who have incomes too high for public low-rent housing, this title of the bill would also establish a new program of FHAinsured long-term low-interest rate loans for moderate rental housing. The present relocation housing program of the Federal Housing Administration would be liberalized by Title I of the bill to make it more helpful in the provision of housing for families displaced by urban renewal and other governmental action. This title would serve another major purpose. It would accelerate and stimulate housing construction as a means of alleviating the present depression in the homebuilding and related industries. The housing constructed, however, would be designed to meet the greatest need - that of moderate income families. To accomplish these purposes, the present Federal Housing Administration mortgage insurance program for persons displaced by urban renewal and other governmental activities would be broadened and modified so that it would also serve a broad range of moderate income families. The program would continue to be available in its modified form for relocation housing, and procedures would be prescribed by the Federal Housing Commissioner to assure availability of dwellings provided under the program to displaced families. The Federal Government would continue to favor housing which serves displaced families by earmarking Federal National Mortgage Association special assistance funds for relocation housing. FHA-Insured Housing for Displaced Families and other Moderate Income Families Section 221 of the National Housing Act now provides for FHA mortgage insurance for both homes and rental housing, new or rehabilitated, for persons displaced from their homes by urban renewal and other govermental action. The units which may be provided in any one locality are limited to the number which the Housing and Home Finance Administrator certifies to the Federal Housing Commissioner as being needed for the relocation of displaced families. Also, the availability of section 221 mortgage insurance is restricted generally to communities which have a "workable program", approved by the Housing Administrator, for dealing with their overall problems of slums and blight. Broadened scope of program. Title I of the bill would broaden the program so that it would serve moderate income families as well as displaced families whose needs would continue to be met under the program. The following changes would be made in view of its broadened purpose: (1) the maximum number of section 221 units in any given community would no longer be predetermined by the Housing Administrator; (2) it would not be necessary in all cases for the community to obtain approval of a "workable program" as a prerequisite for section 221 mortgage insurance; and (3) it would not be necessary for the community to formally request that the program be made available. The "workable program" requirement would apply to the low interest rate rental housing mortgage insurance program under section 221 described later. Changes in terms -one- to four-family home mortgages. In addition to the broadened scope of the program, several other changes would be made in order to make it more workable. With respect to one- to four-family residences, 40-year, no downpayment mortgages are now permitted, with the mortgagor being required to make only an initial payment of at least $200 (including closing costs) for each dwelling unit. The maturity of the mortgage could not, in any event, be more than 3/4 the economic life of the property. These provisions would not be changed, but statutory limits on the amounts of the mortgages would be increased as follows: The authority to insure one-/four-family home mortgages would expire on July 1, 1963, unless further extended by law, except for mortgage insurance commitments issued before that date and except for insurance of mortgages covering property intended to provide housing for displaced families. Changes in mortgage terms rental housing. The present statutory limit on a section 221 rental housing mortgage of $9,000 per family dwelling unit, or $12,000 in high cost areas, would be changed to a per room limit, except in the case of a project having less than 4 rooms per unit. The maximum mortgage amount per family unit would, under the bill, be $8,500 if the number of rooms in the project averages less than 4 per family unit, or $9,000 for elevator type structures. In high cost areas the mortgage could include up to an additional $1,000 per room. Where the number of rooms in the property averages 4 or more per family unit the maximum mortgage amount would be as follows: In the case of rental housing being rehabilitated, the present law for profit-making mortgagors limits the mortgage to 90 percent of the value of the project when the proposed rehabilitation is completed and for nonprofit mortgagors to 100% of value. Under the bill the percentage ratios would apply to the sum of the estimated cost of repair and rehabilitation and the Commissioner's estimate of the value of the property before repair and rehabilitation. Under many circumstances, mortgage amounts more adequate to finance the rehabilitation would be permitted under this amendment than under the present law. This title would also permit the maximum maturity of these rental housing mortgages to be determined at the discretion of the Federal Housing Commissioner. The maximum maturity is now established at 40 years by law, but not more than 3/4 of the remaining economic life of the property. Also, the minimum number of units in a rental project eligible under this program would be changed by this section from 10 units to 5 units. The authority to insure mortgages on rental housing for profit would also expire on July 1, 1963, unless further extended, except for commitments issued prior to that date and except for housing for displaced families. Payment of mortgage insurance claims. With respect to section 221 mortgages committed to be insured after March 29, 1961, the Commissioner could, in his discretion, agree that the mortgage insurance claim payable in the event of a mortgage default would be paid in cash. Under present law the insurance claim is payable in FHA debentures and a certificate of claim. Regulations would be issued prescribing whether mortgages insured under the regulations would be payable in cash or in debentures. The regulations permitting cash payments could also provide that the lender, at the time of payment of insurance benefits, could elect to take the insurance payment in debentures. Cash payments would be permitted as an inducement to mortgagees to make the loans. As the program progresses, or if the need for stimulation of housing for moderate income families decreases, the |