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Jesse H Jones
Chairman of the Board

July 24, 1935

Dear Stewart:
In reply to your inquiry as to whether the
RFC Mortgage Company would btiy mortgages insured " y the
Federal Housing Administration, without recourse, beg
to advise that to the extent that The SFC Mortgage Company has available funds for investment in such mortgages,
it will bioy and sell insured mortgages given for construction of n^w homes.
It will only "buy these mortgages from "banks and
insurance companies qualified under Title II of the National
Housing Act, and then only when the "bank or insurance company can show need for converting such bonds into cash.
We regard the mortgages well, and as safe investments for banks and insurance companies within proper limitations to the total lending funds of such institutions, but
naturally we cannot give a continuing government guarantee to
purchase these mortgages in unlimited amounts.

Very truly yours,

Jesse H. Jones

Mr, Stewart McDonald
Acting Administrator
Federal Housing Administration
Washington, D# 0.