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Form F.R. 151

BOARD OF GOVERNORS
OF THE

FEDERAL RESERVE SYSTEM

Office Correspondence
Mr. Currie

Date

jnly 12.9 1939

Subject:

Henry Ednii s t on
The information you wanted on the Federal Housing Administration and
the Federal National Mortgage Association is shown below:
FEDERAL HOUSING ADMEUISTRATI OH
1938 law
1939 law
(Per cent per annum)
(Per cent per annum)
Maximum interest rates and insurance premiums:
Section 203 - covering mortgages up to #16,000 on new
5 on declining balance 5 on declining balance
or old property<
Insurance premium (l/2 to 1
f
f
tt
per cent - law) •
•
i"
f
t
tt
Total
&}
Section 207 - covering obligations up to $5,000,000 of
w
new large-scale projects... 4g-M
Insurance premium (no statul
f
tory amount) •
• _J|tf
f
f
l
f
Total
5
Section 210 - covering mortgages of |16,000 to $200,000 on new construction.••• (Repealed)
Insurance premium (no statutt
it
tory amount)•.•••*..•••••••
tt
it
Total.•
* January 1938 to July 1939 - Premium fixed at 1/4 per cent of declining balance on new small homes up to $5,400.
Maximum maturity
Section 203
New small homes up to
|5,400 mortgage••••••••• 25 years
Other new homes and existing properties up to
20 years
#16,000
Section 207 - large-scale
(no statutory limit) in
practice generally 20-30
years ..«•«••.•••...••.•••
years average
Section 210 - f16,000 to
$200,000
•• (Repealed)




25 years
20 years

years average
21 years

- 2 -

FEDERAL HATIOMAL MORTGAGE ASSOCIATION
In practice they only buy Federal Housing Administration mortgages on new
homes (built after January 1, 1936) • No statutory minimum on rate but in practice mortgages are purchased to yield 4 l/i per cent.
Types
Section 203 - regular
Bought to yield
If interest rate is 5 per cent - no service charge.. ....••...
4 l/4 %
M
t
f
n
"
5 per cent plus l/2 per cent service
charge..••••••••••••••••••••....*•.•••.
4 l/2
1
1
f
t
f
f
f
t
less than 5 per cent but not less than
4 3/4 per cent - no service charge.....
4 l/4
1
1
l
f
f
f
f
f
less than 4 3/4 per cent Federal National
Mortgage Association will not purchase
Section 207 - large-scale
(Purchased through May 31, 1939, only 9 totaling |3,789,000..
4 l/j^