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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 ff tt per cent - law) • • i" ft tt Total &} Section 207 - covering obligations up to $5,000,000 of w new large-scale projects... 4g-M Insurance premium (no statulf tory amount) • • _J|tf ff lf Total 5 Section 210 - covering mortgages of |16,000 to $200,000 on new construction.••• (Repealed) Insurance premium (no statutt it tory amount)•.•••*..••••••• tt it Total.• * January 1938 to July 1939 - Premium fixed at 1/4 per cent of declining balance on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limit) in practice generally 20-30 years ..«•«••.•••...••.••• years average Section 210 - f16,000 to $200,000 •• (Repealed) 25 years 20 years years average 21 years - 2 - FEDERAL HATIOMAL MORTGAGE ASSOCIATION In practice they only buy Federal Housing Administration mortgages on new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 tf n " 5 per cent plus l/2 per cent service charge..••••••••••••••••••••....*•.•••. 4 l/2 11 ft ff ft less than 5 per cent but not less than 4 3/4 per cent - no service charge..... 4 l/4 11 lf ff ff 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^