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Pfiilip N. Broumsfein,
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FOR THE YEAR ENDING DECEMBER 31,1962
The body of this report is reprinted from Port 111 of the
Sixteenth Annual Report of the Housing and Home Financing Agency
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CONTENTS
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FEDERAL HOUSING ADMINISTRATION______________________________________________________
Section 1. FIIA IN 19C2______________________________________________________________________
Section 2. VOLUME OF MORTGAGE AND LOAN INSURANCE OPERATIONS___________________
Summary of Operations____________________________________________________________________
Combined Insurance Activity____________________________________________________________
FIIA Influence on Residential Financing During 1962____________________________________
Home Mortgages_______ .___________________________________ _______________________
Multifamily Project Mortgages--------------------------------------------------------------------------------Title I Property Improvement Loans---------------------------------------------------------------------------Construction Starts________________________________________________________________
5'HA Workload_______________________________________________________________________
Volume of Insurance Written______________________________________________________________
Home Mortgages_______________________________________________ _______________________
Project Mortgages_____________________________________________________________________
Title I Property Improvement Loans--------------------------------------------------------------------------------State Distribution of Insurance Written----------------------------------------------------------------------------------Insurance Written in 1962----------------------------------------------------------------------------------------------All Programs_____________________________________________________________________
Home Mortgage Programs-----------------------------------------------------------------------------------------Project Mortgage Programs____ L-------------------------------------------------------------------------------Title I Property Improvement Program------------------------------------------------------------------------Cumulative Insurance Written, 1934-1962------------------------------------------------------------------------Ail. Programs---------------------------------------------------------------------------------------------------------Home Mortgage Programs----------------------------------------------------------------------------------------Project Mortgage Programs---------------------------------------------------- ----------------------------------Title I Property Improvement Loans_________________________________________________
Lending Institution Activity-------------------------------------------------------------------------------------------------Mortgage and Loan Financing During 1962_______________________________________________
Rome Mortgage Financing__________________________________________________________
Multifamily Housing Mortgage Financing-------------------------------------------------------------------Title I Property Improvement Loan Financing--------------------------------------------------------------Mortgages and Loans Held in Portfolio--------------------------------------------------------------------------Home Mortgage Holdings__________________________________________________________
Project Mortgage Holdings-------------------- ------------------------------------------------------------------Title I Property Improvement Loan Holdings_________________________________________
Mortgages and Loans Purchased and Sold in 1962__________________________________________
Home Mortgages-----------------------------------------------------------------------------------------------------Project Mortgages--------------------------------------------------------------------------------------------------Title I Property Improvement Loans--------------------------------------------------------------------------Terminations, Defaults, and Claims Paid—---------------------------------------------------------------------------Terminations of Home and Project Mortgages by Type of Termination--------------------------------Home Mortgages---------------- ---------------------------------------- -------------------------------------------Project Mortgages--------------------------------------------------------------------------------------------------Terminations of Home and Project Mortgages by Years-----------------------------------------------------Home Mortgages________ ’--------------------------------------------------------------------------------------Project Mortgages---------------------------------------------------------------------------------------------------Defaults of Home and Project Mortgages by Years------------------------ --------------------------------Home Mortgages----------------------------------------------------------------------------------------------------Project Mortgages---------------------------------------.------------------------------------------------------------Terminations and Defaults by States------------------------------------------------------------------------------Home Mortgages—------------------------------------------------------------------------------------------------Project Mortgages---------------------------------------------------------------------------------------------------Claims Paid on Title I Property Improvement Loans----------------------------------------------------------Trend____________________________________________________________________________
State Distribution--------------------------- ----------------------------------------------------------------------Financing Institutions---------------------------------------------------------------------------------------------Payments Received Prior to Default-------------------------------------------------------------------------Section 3. CHARACTERISTICS OF MORTGAGE AND LOAN TRANSACTIONS INSURED IN 1962.
Section 203 Home Mortgage Transactions----------------------------------------------------------------------------Trends of Typical Transactions--------------------------------------------------------------------------------------Technical Notes------------------------------------------------------------------------------------ -----------------------Mortgage Characteristics----------------------------------------------------------------------------------------------Amount of Mortgage----------------------------------------------------------------------------------------------Term of Mortgage-------------------------------------------------------------------------------------------------Total Monthly Mortgage Payment-----------------------------------------------------------------------------Ratio of Loan to Value-------------------------------------------------------------------------------------------
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Federal Housing Administration
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Under authority of the National Housing Act of June
27,1934, as amended, the Federal Housing Administration
operates housing loan insurance programs designed to
encourage improvement in housing standards and con
ditions, to facilitate sound home financing on reasonable
terms, and to exert a stabilizing influence in the mortgage
market. The FHA makes no loans and does not plan or
build housing.
As provided by the President’s Reorganization Plan No.
3 of 1947, the FHA is a constituent agency of the Housing
and Home Finance Agency.
The various FHA insurance programs in effect in 1962
are summarized below.
TITLE I
Section 2 of Title I of the National Housing Act author
izes the FHA to insure qualified lending institutions
against loss ob loans made to finance the alteration,
repair, improvement, or conversion of existing structures
and the building of small new nonresidential structures.
FHA liability is limited to 90 percent of loss on individual
loans and to 10 percent of all Section 2 loans made by an
institution.
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TITLE II
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Section 203(b) of Title II authorizes the insurance of
mortgages on new and existing one- to four-family dwell
ings. Maximum mortgage amounts are $25,000 on a onefamily dwelling, $27,500 on a two- or three-family dwell
ing, and $35,000 on a four-family dwelling.
Section 203(h), added to the Act in 1954, authorizes
the insurance of mortgages in amounts up to $12,000 and
up to 100 percent of value on single-family homes to
replace homes damaged or destroyed in major disasters.
Section 203(i), added in 1954, authorizes the insurance
of mortgages in amounts up to $9,000 on single-family
dwellings for families of low and moderate income, par
ticularly in suburban and outlying areas. From 1950 to
1954, similar authority was provided in Section 8 of
Title I. FHA insurance of mortgages in amounts up to
$9,000 on farm homes is also authorized under Section
203 (i).
Section 203(k), added in 1961, authorizes the insurance
of loans in amounts up to $10,000 for a one-family dwell
ing, $20,000 for a two-family dwelling, $27,500 for a threefamily dwelling, and $35,000 for a four-family dwelling,
with maturities up to 20 years, to finance major home
improvements.
Section 207 authorizes the insurance of mortgages, in
cluding construction advances, on rental housing projects
of eight or more family units, and on mobile borne courts.
Section 213, added to Title II in 1950, authorizes FHA
to insure mortgages on cooperative housing projects of
five or more family units. The mortgagor must be a non
profit ownership housing corporation or trust, with perma
nent occupancy of the dwellings restricted to members
(management-type project), or a nonprofit corporation
or trust organized for the purpose of building homes for
members (sales-type project), or a corporate investor
which undertakes the construction of a management-type
project and certifies its intention of selling the project to
a cooperative group within 2 years after completion. In
a sales-type project, the individual homes may be released
from the blanket mortgage on the project and mortgages
on the individual homes may be insured under Section
213. This section also authorizes FHA to furnish techni
cal advice and assistance in the organization of the
cooperatives and in the planning, development, construc-
tion, and operation of the housing projects. Before the
enactment of Section 213, mortgages on cooperative hous
ing were eligible for insurance under Section 207. Sec
tion 213, as amended by the Housing Act of 1961, also
authorizes the insurance of supplementary cooperative
loans for improvements or repairs to cooperative projects
financed under Section 213 or Section 207 or for commu
nity facilities to serve the occupants.
Section 220, added in 1954, provides FHA mortgage
insurance to assist in financing the rehabilitation of exist
ing salvable housing and the replacement of slums with
new housing, in areas that have been certified to the
FHA by the Housing and Home Finance Administrator
as eligible for this insurance.
Section 220(h), added in 1961, authorizes the insurance
of loans to finance the improvement and rehabilitation of
homes and multifamily structures in urban renewal areas,
in amounts up to $10,000 per family unit (with some
additional limitations), and having maturities up to 20
years.
Section 221, as amended in 1961, authorizes the insur
ance of mortgages on new and rehabilitated one- to fourfamily homes for families displaced by urban renewal or
governmental action, and one-family homes for other lowand moderate-income families. This section also author
izes mortgage insurance for multifamily rental and coop
erative housing. For multifamily housing sponsored by a
limited-dividend, nonprofit, public, cooperative, or investor
sponsor and located in a community that has a workable
program approved by the Housing Administrator for the
elimination of slums and blight, the mortgage may carry
a below-market interest rate. FHA can reduce or waive
its mortgage insurance premium on mortgages with the
below-market interest rate, and the Federal National
.Mortgage Association can buy the mortgages from, its
special assistance funds.
Section 222, added in 1954, authorizes the insurance of
mortgages on dwellings owned as their homes by persons
on active duty with the Armed Forces or the Coast Guard,
on certification by the Secretary of Defense (or the Secre
tary of the Treasury, for Coast Guard personnel).
Section 223, added in 1954, authorizes the insurance
under Sections 203, 207, 213, 220, 221, 222, 231, 232, and
233 of mortgages on specified types of permanent housing
sold by Federal or State governments, or given to refinance
mortgages insured under Section 608 (before August 2,
1954), 220,221,903, or 908.
Section 225, added in 1954, authorizes the insurance of
additional advances under an open-end provision in a
mortgage insured under any section of the Act on a oneto four-family home, when the advances are made to
finance repairs and improvements to the property.
Section 231, added in 1959, authorizes the insurance of
mortgages on new or rehabilitated rental housing projects
of eight or more units designed for occupancy by elderly
persons (62 vears old or older). From August 1956 until
the enactment of Section 231, mortgage insurance on
rental housing for the elderly was authorized under
Section 207.
Section 232, added in 1959, authorizes mortgage insur
ance on new or rehabilitated nursing homes, privately
owned and operated, that provide skilled nursing care and
related medical services.
Section 233, added in 1961, authorizes the insurance of
mortgages on new one- to four-family homes and new
multifamilv projects of eight or more units that involve
the use and testing of advanced technology or experimen
tal neighborhood design, with the object of reducing costs
and improving quality.
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Section. 234, added in 1961, authorizes FHA to insure
a mortgage covering a family unit in a multifamily struc
ture and an undivided interest, in the common areas and
facilities that serve the structure (condominiums). The
structure must l>e one financed with an FHA-insured
mortgage, other than a Section 213 cooperative mortgage.
This title is now inactive except for outstanding mort
gage insurance in force.
It authorized FHA mortgage insurance on housing for
war workers and later for veterans, under Sections 603
and 60S: insurance of short-term loans on manufactured
housing under Section 609: mortgage insurance under Sec
tion 610 on specified types of permanent housing sold by
the Government : and mortgage insurance under Section
611 on projects of 25 or more single-family dwellings.
The Housing Act of 1954 provided that no new insurance
commitments should be issued under Title VI after
August 2,1954.
Title VIII, added in 1949 (Wherry Act) and rewritten
in 1955 (Capeliart Act), authorized under Section 803 the
insurance of mortgages on rental housing built on or near
military reservations for the use of personnel of the
Armed Forces, on certification by the Secretary of
Defense. The Act limited new commitments under this
section to those issued before October 1, 1962, and pro
vided that not more than 28,000 family housing units
should be contracted for pursuant to mortgages insured
after June 30, 1959.
Section 809, added in 1956, authorizes mortgage insur
ance on homes built for sale to essential civilian employees
at research and development installations of the mili
tary departments and the National Aeronautics and Space
Administration, and the research and development instal
lation of the Atomic Energy Commission in Los Alamos
County, N. Mex.
Section 810, added in 1959, authorizes mortgage insur
ance on not more than 5,000 units of off-base housing for
military and essential personnel of the armed services.
TITLE VII
TITLE IX
Title VII, added in 194S. authorizes the insurance of a
minimum amortization charge and an annual return on
outstanding investments in rental housing projects for
families of moderate income where no mortgage is
involved.
This title, added to the Act in 1951 at the time of the
Korean crisis, and now inactive, authorized FHA insur
ance of mortgages on housing programed by the Housing
and Home Finance Administrator for critical defense
areas.
TITLE VI
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TITLE VIII
requirements with respect to location, lot improve
ments, water supply, and sewage disposal. A Sec
tion 203(i) house must be a habitable dwelling,
but certain details of finishing can be completed
by the owner.
Mortgage insurance under Section 221(d) (2) in
1962 was more than three times the 1961 volume.
New-construction mortgages doubled in 1962, and
insurance on existing home units rose from 2,296
units to 12,951.
Participation payments amounting to $19.2 mil
lion were made in 1962 under the mutual mortgage
insurance system to 117,823 home owners whose
mortgages had been insured under Section 203 of
the National Housing Act and paid in full. From
1945, when the first payments of this kind were
made, through the end of 1962, payments totaling
$148.5 million were made to 1,152,703 home
owners.
The subject of participation payments is discussed in detail in Section 4 of this report.
MULTIFAMILY HOUSING
Multifamily housing represents an increasing
proportion of total housing construction, and this
is reflected in FHA operations. With increasing
urbanization of the population, the trend is likely
to continue.
At the present time, FHA multi family housing
insurance includes 11 separate active programs.
The zone multifamily housing offices established
in 1961 have a valuable role in the carrying out of
the programs.
Technical advisory staffs were established in
1962 in the Office of Technical Standards, the
Office of Field Operations, and the multifamily
housing offices, to advise the insuring offices and
to keep the Office of Technical Standards and op
erating officials in Washington informed of the
effectiveness of technical procedures and the
problems encountered.
A comprehensive continuing survey of squarefoot construction costs for multifamily housing
financed under Sections 207, 213 (management),
220, 221, 231, and 232 was initiated in 1962. The
survey will show by project the type of structure,
the square-foot area, the number of units, the
facilities included, and a breakdown of costs and
fees. The results of this and similar surveys being
made by the Public Housing Administration and
the Community Facilities Administration are
being used by the Office of the HHFA Adminis
trator to provide interagency comparisons on a
uniform basis of the cost of comparable multi
family projects built under the programs of the
respective agencies.
Instructions were sent to the field in 1962 pur
suant to Section 223(d) of the National Housing
Act, which provides that, when the mortgage
payments and expenses of maintenance and opera
tion of an insured multifamily project in its first
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2 years after completion exceed the project income, the FHA Commissioner may approve and
insure an increase in the mortgage amount to
cover the difference. FHA will Approve such an
increase when the competence and responsibility
of the project management, have been demonstrated and' when there is every indication that a
degree of occupancy will be attained by a predictable date (usually within 18 months or less) that
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rector has determined that an owner-builder is
highly qualified as to building experience and
competence, managerial ability,
and financial
capacity. When owner-builder sponsorship is
contemplated, the commitment must provide expressly for the posting of a surety bond and for
assumption by the ow* er of full liability under
the building loan agreement.
Rental Housinq
Kenrai Mousing
Mortgage insurance under Section 207, the
regular FHA rental housing program, covered
197 projects with 28,079 units and amounted to
$485 million. This is the largest volume for any
one year. All but 10 of the projects with 753 units
were proposed construction. Since 1934, Section
207 insurance has involved mortgages totaling $2
billion on 1,537 projects with 182,880 units. K
FHA’s annual occupancy survey of rental projects, made as of March 15, 1962 and covering
417,000 apartments in all the States, the District
of Columbia, and Puerto Rico, showed a vacancy
rate of 5.5 percent for all completed units on
which mortgage insurance was in force. This is
one-tenth of 1 percent higher than the 1961 rate.
Vacancies in'projects that had had titles transferred or mortgages assigned to FHA were also
surveyed as of March 15. Twenty-one percent of
these units were reported vacant, compared with
24 percent in 1961. If the projects for which
FHA holds title or mortgages are included in the
overall 1962 survey, the vacancy rate for all com-
Mortgage insurance under Section 213 of the
National Housing Act on cooperative housing
projects passed the billion dollar mark in 1962
(exclusive of individual mortgages insured on
single-family homes released from the blanket
mortgages on sales-type projects). Since Section
213 was enacted in April 1950, FHA has insured
mortgages in a total amount of $1,044 million on
1,691 cooperative projects with 83,664 living units.
Of these projects, 356 with 49,199 units are new
203,729 units. These included 274 military hous
ing projects with 84,883 units insured under the
provisions of Section 803 authorized in 1949
(Wherry housing), and 878 armed services proj
ects with 118,840 units insured under the Section
803 provisions of 1955 as amended (Capehart
housing).
Section S03 as rewritten in 1955 provided for
certification of need by the Secretary of Defense,
and further provided that if the FIIA Commis
sioner did not. concur in the Secretary’s estimate
of need he could require the Secretary to guaran
tee the Armed Services Mortgage Insurance Fund
against loss. The Commissioner was directed to
report, to the Senate and House Banking and Cur
rency Committees each instance in which he re
quired the guarantee and his reasons for doing so.
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In a memorandum of agreement between the Sec
V':retary of Defense and the Commissioner dated
December 6,1955, the Secretary agreed to guaran
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tee the fund against loss on all Armed Services
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projects. At June 30, 1962, no loss had been sus
Seattle, Wash. Bayview Manor, with 212 units, a home for
tained on the projects to which the guarantee
senior citizens sponsored by the Methodist Church (Sec. 231).
applied.
Section 207 of the Act on housing for the elderly.
In February 1961, FHA and the Defense De
partment entered into an agreement for the pur
Mortgages totaling $28.9 million were insured unpose of expediting completion of 24 large Armed
der the Section 207 provisions on 35 projects with
Sendees housing projects located in various parts
3,422 living units.
of the country that had been abandoned by the
Churches and church-related groups continued
contractor in May 1960. B}' the end of 1962, all
in 1962 to sponsor the largest volume of housing
of the projects had been completed and occupied.
for the elderly financed under Section 231, alThe Housing Amendments of 1955 (P.L. 345,
though other organizations were increasingly ac-"
S4th Cong., approved Aug. 11, 1955) authorized
five in the program. The first project sponsored
the Secretary of Defense to acquire Wherry hous
by a labor union was insured in 1962—the Brothering after completion. In accordance with the
hood Retirement Home Association, Inc., in Pas
provisions of the Act, about 89 percent of this
cagoula, Miss., sponsored by the A.F.L.-C.I.O.
housing had been acquired by the Armed Services
Boilermakers Local 693 of Pascagoula.
at the end of 1962. (No new commitments were
Nursing Homes
issued on Wherry housing after July 31, 1955.)
• More than 7.000 homes have been financed under
Section 232, made part of the National Housing
Section 809 with insured mortgages totaling $96.5
Act in 1959, authorizes FHA to insure mortgages
million.
on privately owned and operated nursing homes
Subsequent to removal by the Housing Act of
licensed or regulated by the States or by author
1961 of restrictions that had hindered the opera
ized subdivisions of the States, and certified by the
tion of the program, the first applications under
States or their appropriate agencies as being
Section 810 were received in 1962, involving 5 proj
needed.
ects with 513 units with a total mortgage amount
At the end of 1962, the third full year of opera
of $5.3 million, and 1 commitment was issued in
tions under the program, mortgages had been
October in the amount, of $1.2 million on a 100-unit
insured in a total amount of $49.5 million on 98
project.
nursing homes with 8,436 beds. In 1962 alone,
mortgages totaling $40.7 million were insured on
Housing for the Elderly
76 nursing homes with 6,635 beds, compared with
20 mortgages in 1961. Commitments issued
In 1962 FHA insured 49 mortgages under Sec
through 1962 totaled 166 on nursing homes that
tion 231 totaling$lll million and providing 8,836
will provide skilled nursing care for 13,903
units of housing for the elderly—3,076 more than
patients.
in 1961. Altogether, since the section was enacted
in 1959, there have been 116 projects with 17,844
Urban Renewal
units insured. Six of these, with 1,232 units, have
been rehabilitated projects, and the others have
Two noteworthy features of FHA urban re
been new construction.
newal activities in 1962 were the practical dem
From 1956 until the enactment of Section 231,
onstration of Section 221(d)(3) as a means of
FHA was authorized to insure mortgages under
providing housing for families just above the pub-
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Washington, D.C. Capitol Park, in the Southwest redevelop
ment area, includes 4 high-rise apartment buildings with a
total of 1.337 units, and 319 townhouses. A street view of
a few of tne townhouses is shown here (Sec. 220).
market-rate program, 8 were insured under Sec
tion 221(d)(3) at the market interest rate, and 9
under Section 221 (d) (4) (also at the market rate).
The trend toward emphasis on rehabilitation,
conservation, and the upgrading of older neighbor
hoods in urban renewal operations continued in
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Louisville, Ky.
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1962. In representative cities, local agencies and
members of FHA insuring office staffs worked to
gether on methods and procedures, under the
guidance of FHA zone multifamily housing repre
sentatives. The experience gained in this way has
been used to advantage in providing detailed infor
mation and technical assistance to property owners
and others in the many cities that have rehabilitation projects in early stages of development.
There was also an increase during the year in
cooperation by State and local official bodies, civic
and industry groups, URA, and FHA, in the development of urban renewal plans. Among other
benefits, this cooperation has made possible the
timing of acquisition, clearance, and public im
provements so as to dovetail with the completion
of relocation and redevelopment housing.
FHA insured under Section 220, in 1962, mort
gages totaling $177.5 million on proposed rental
projects with 9,092 units in urban renewal areas,
the largest number in any year so far. Four mort
gages totaling $2 million were insured on Section
220 rehabilitation projects with 250 units. This
compares with 52 units in 1961, which was the
first year in which FHA insured a Section 220
mortgage on a rehabilitated project, after the
Housing Act of 1961 had changed the basis for
Homes in a price range of $8,500 to $12,000 in the Southwick urban renewal area (Sec. 220).
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computing the insurable mortgage from appraised
value after rehabilitation to estimated rehabilita
tion cost plus estimated value before rehabilitation.
Section 220 in 1962 also covered mortgages total
ing $4.7 million on 380 proposed home units, and
mortgages totaling $920 thousand on 119 existing
home units. The number of rehabilitated homes,
although small, is the largest in any year to date,
and indicates a growing appreciation of rehabilita
tion in urban renewal.
Field offices were reminded during the year of
the need for aggressive servicing of project mort
gages insured under Sections 220 and 221 because
of their vulnerability to early financial difficulty,
which can often be averted by prompt detection
of unfavorable conditions and prompt action by
FHA and mortgagees.
The year 1962 saw a change in the longtime com
plete dependence of Section 220 multifamily proj
ects on FNMA takeout. Beginning in mid-1962,
a high proportion of Section 220 projects has been
financed by private lending institutions, and many
Section 220 mortgages have-been purchased from
FNMA by private lenders.
EXPERIMENTAL HOUSING
Twenty-seven proposals for the use of experi
mental design or construction features were sub
mitted to FHA in 1962 for review, 14 of which
were considered deserving of further study. Three
formal applications for mortgage insurance were
received during the year, all involving individual
homes.
The first commitment was issued in August on
a house to be built in Salt Lake City, Utah. The
experimental features included a high-strength
Rosegate, New Castle County, Del.
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Nashville, Tenn. The first house to be rehabilitated in the East
Nashville urban renewal area (Sec. 221(d)(2)).
bonded interior walls, and the elimination of lintels
above window and door openings because of the
high-strength mortar used.
The other two applications received in 1962 were
being processed at the end of the year.
The authority given to FHA in the Housing Act
of 1961 to insure mortgages on experimental hous
ing extended to experimental property standards
for neighborhood design. Because land represents
an increasingly large part of the total cost of prop
erty, the development of improved methods of land
use is a highly important step toward reaching the
objectives of the experimental housing program.
In addition to reducing the overall cost of housing,
it can be expected to bring about improvements in
safety, privacy, livability, and other features of
Five-room houses^in a 1^82-unit^development priced at $9,950 (row house) and $10,550
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Now Title T contracts of insurance were issued in
106‘2 to 507 lending institutions, compared with
443 in 1961.
Seven hundred names were placed on the Title I
precautionary measures list in 1962, compared
with 853 in 1962. A loan involving a dealer whose
name is on this list is insurable only if the lender
has verified all statements contained on the bor
rower's credit application, the completion cer
tificate has been signed in the presence of the
lender, and the lender has inspected the work in
every transaction where the loan is $500 or more
and in at least, every third transaction of less than
$500.
SUMMARY STATISTICS
Aggregate Insurance Volume
From the beginning of FHA operations through
December 31,1962, the total amount of FHA insur
ance exceeded $81 billion, of which $41.1 billion
was outstanding at the end of 1962. Total insur
ance written included $15 billion on 26 million
Title I property improvement loans, $56 billion on
6.4 million home mortgages, and $10 billion on
12,017 multi family projects housing more than a
million families.
Insurance outstanding at the end of 1962 in
cluded $32.3 billion in home mortgages, $7.2 bil
lion in project mortgages, and $1.6 billion in Title
I property improvement loans.
Detailed statistics on the volume and character
istics of mortgages and loans insured are pre
sented in Sections 2 and 3 of this report.
Foreclosures and Losses
From 1934 through June 30,1962, the FHA ac
quired through foreclosure or the assignment of
mortgage notes 164,156 units of housing represent
ing 2.2 percent of the 7.4 million units on which
mortgages had been insured since the beginning
of operations. Of the acquired units, 81,077 had
been sold by June 30, 1962, and 83,0t9 remained
on hand.
Losses sustained on properties acquired and sold
by FHA from 1934 through June 30, 1962
amounted to $114.3 million and represented eight
een one-hundredths of 1 percent of the total
amount of mortgage insurance written. Losses to
the Mutual Mortgage Insurance Fund on sales of
acquired properties under Section 203 amounted to
$29.0 million, representing six one-hundredths of
1 percent of the insurance written under this sec
tion.
In addition to the actual losses realized, FHA
has provided $186.9 million for estimated future
losses on the 83,079 units that remained on hand
at June 30,1962.
Financial Position
Gross income of the FHA during the fiscal year
1962, accounted for in major part by fees, insur12
ance premiums, and investment income, totaled
$262,3 <0,692. Expenses of operation during the
fiscal year were $69,640,936, leaving excess of gross
income over operating expenses of $192,729,756.
During fiscal 1962, net losses on claim payments
(including allocations to reserves for losses on
properties and notes held by FHA) amounted to
$69,843,359. The residual of $122,886,397 from
gross income in the 12 months ending June 30,
1962 was added to the reserves of the various insurance funds and/or accounts administered by
FHA to provide for future losses and expenses of
the various FHA programs.
From the establishment of the FHA in 1934
through June 30, 1962, its gross income totaled
$2,411,339,489 and its operating expenses amounted
to $761,761,803. Since 1934, net losses on claim
payments, including allocations to reserves for
losses on properties and notes still held by FHA
at the end of fiscal year 1962, have amounted to
$423,266,993, resulting in net income of $1,226,310,693. Premium repayments in the form of
participation dividends for mortgages insured
under Section 203 had totaled $137,126,418 by June
30, 1962, leaving $1,089,184,275 in the insurance
reserves available for future losses, expenses, and
participation dividends. Expenses during the
first 3 fiscal years, 1935 through 1937, were met
from funds advanced through the Reconstruction
Finance Corporation by the U.S. Treasury. During the following 3 fiscal years, 1938 through 1940,
partial payments of operating expenses were met
from income. Since July 1, 1940, operating ex
penses have been paid in total by allocation from
the various insurance funds and/or accounts.
In fiscal year 1954, the FHA completely repaid
its indebtedness to the U.S. Treasury Depart
ment, including principal and interest in the
amount of $85,882,962, for funds advanced by the
Treasury to pay salaries and expenses during the
early, years of FHA operations and to establish
certain insurance funds.
At June 30, 1962, FHA had total statutory and
insurance reserves of $1,089,184,275 accumulated
from earnings. Of this amount, $905,439,696 was
in the insurance reserves and $183,744,579 in the
statutory reserve. Insurance reserves are avail
able for future losses and expenses, and the statu
tory reserve is available for future losses, expenses,
and participation payments under the mutual
provisions of the National Housing Act.
Total reserves of each insurance fund at June
30,1962 are shown below:
Title I Insurance Fund______________
$93, 677. 646
Title I Housing Insurance Fund________
7, 052,132
Mutual Mortgage Insurance Fund______ 1730, 561, 051
Section 203 Home Improvement Account_
877, 392
Housing Insurance Fund_____________
13, 027, 773
Section 220 Housing Insurance Fund____
4, S99, 757
Section 220 Home Improvement Account_
883, 052
Section 221 Housing Insurance Fund____ —2, 241, 642
Servicemen’s Mortgage Insurance Fund_
19, 946, 677
Experimental Housing Insurance Fund__
965, 634
1 Includes statutory reserve of $183,744,579.
arate mortgage insurance authorization for all
new insurance written under Title VIII pursuant
to commitments issued on and after August 11,
1955, including both the new armed sendees housing program (Capehart housing) of Section 803
and the extended military housing program
(Wherry housing) of Section 803, as well as additional programs for home mortgages at research
and development establishments (Sec. 809) and
mortgages on homes and projects near military
establishments insured under Section 810. The
insurance authorization provides that the aggregate amount of all mortgages insured shall not
exceed $2.3 billion and that the limitation in Section 217 shall not apply to Title VIII. The Iiousing Act of 1961 extended FIIA’s authority to insure mortgages under Section 803 to October 1,
1962. Public Law 623, 87th Congress, approved
August 31, 1962, extended FHA’s authority to insure under Sections 809 and 810 to October 1,1963.
The status of the Title VIII insurance authorization at June 30, 1962 is as follows:
Section 80S
Insurance authorization
Charges:
Mortgages insured,
outstandCommitments
ing.
Total charges...............
Section 809
$2,300.000, 000
$1,853,708,236 $87,770,750
124,772,395
5,983,311
1,878,480,631
93,754,061
1,972,234,692
327, 765,308
Unused authorization,
i Includes Section 803 statements of eligibility in thp amount of $13,671,000.
tel teitete, „ HM, Projects
To prevent the possibility of “mortgaging out”
(obtaining a mortgage that equals or exceeds the
project cost) on a multifamily housing project
financed with an FHA-insured mortgage, the
mortgagor is now required to certify, before the
mortgage is finally endorsed for insurance, to the
actual cost of the project, and, if the mortgage
amount is more than the statutory ratio applied
to such actual costs as recognized by FHA, the
mortgage amount must be correspondingly reducea. Cost certification is not required under
Title VIII.
During calendar year 1962, cost certifications
were received as follows on completed multifamily
housing projects with mortgages insured by the
Federal Housing Administration:
Sec. 207.
Sec. 213.
Sec. 220.
Sec. 221..
Sec. 231..
Sec. 232..
Total.
14
Number
Costs certi
fied and rec
ognized
Amount
insured
122
47
29
18
25
11
$259,028,386
78,611,641
87,193,616
20.038,059
39, 675,495
4,658,410
$223,135,231
70,631,411
74,729, 419
19,725,500
34, 127, 447
3,731,800
252
489,205,607
426,080,808
ORGANIZATION AND PERSONNEL
At the beginning of 1962 there were 7,743 fulltime FHA employees. The number had increased
to 8,548 by December 31. Appointments and separations during the year totaled 1,893 and 1,088
respectively,
Central .office personnel account for 25 percent
of all full-time FITA employees. The other 75
percent are employed at FIIA’s 145 field offices
throughout the United States and in Puerto Rico,
The organizational pattern in effect at the end
of 1961 for the central office of FHA in Washington is shown in the chart on page 15. The area
served by each insuring office is shown in the map
on page 16, together with the location of the other
FHA field offices.
FHA has 76 insuring offices in the field. The
insuring offices other than the four in New York
State are responsible for all FHA operations in
their respective jurisdictions. New York has a
special organizational pattern in that the three in
suring offices in Albany, Buffalo, and Jamaica do
not insure mortgages on multifamily housing.
This is handled by a multifamily housing and zone
insuring office in New York City. In addition,
New York has a State director’s office in Albany
that coordinates the work of the Albany, Buffalo,
and Jamaica insuring offices.
There are five multifamily housing zone offices
respective zones in the processing of multifamily
housing applications and work with the directors
to coordinate urban renewal activities throughout,
the zones. The New York City office, besides insuring multifamily housing mortgages throughout
New York State, acts for the entire New England
area (Zone I) in the same capacity as the five zone
multifamily housing offices in the other zones,
FHA also has 17 service offices in the field, where
applications for mortgage insurance are received,
processed, then forwarded to the insuring offices
for review, commitment, and final endorsement;
and 46 valuation stations where technical personnel serve the insuring offices in their areas by pre
paring compliance inspection and valuation yreports on home mortgage insurance applications.
16
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Section 2
Volume of FHA Mortgage and Loan Insurance Operations
%
•1
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1
This section provides a detailed analysis of FHA
operations during 1962 and cumulatively from the
establishment of the agency in 1934. The analysis
includes yearly trends, distributions by State
location of property, comparisons of participation by the various types of financial institu
tions, terminations and foreclosures, and default
experience.
During 1962, insurance of mortgages and loans
was. authorized by the following provisions of the
National Housing Act, as amended:
Home Mortgages; Title II—Sections 203, 213,
220, m, 22*2'; 223,225,233, and 234; and Title
VIIT-*--Sections 803 and 810.
Pro ject Mortgages: Title II—Sections 207,213,
220, 221, 223,' 281. 232, and 233; and Title
Vin—Section 803 an d 810.
Property Improvement Loans: Title I—Sec
tion 2.
Rental Housing Investment Yields: Title VII—
Section 701.
The purposes of the various titles and sections
are summarized at the beginning of this report.
Applications were received or commitments
issued during the year under all programs except
Section 701, and insurance was written under all
except Sections 233 , 234, 810, and 701.
The influence of the Housing Act of 1961 was
more evident in 1962 than in the previous year.
Its greatest impact was in the increased activity
under the urban renewal and moderate income
housing programs resulting from the liberaliza
tion of the provisions of Sections 220 and 221.
By the end of 1962 there was a growing interest
in experimental housing under Section 233 and
in condominiums under Section 234. Some in
crease was also noted in the home improvement
programs under Sections 203 (k) and 220(h).
The year 1962 also saw notable increases in the
volumes of mortgage insurance for housing for
the elderly and for nursing homes, resulting from
more advanced development of programs under
Sections 231 and 232, both authorized by the Hous
ing Act of 1959.
Declines were reported during the year in the
program for insuring mortgages on sales-type
cooperatives and in the related insurance of home
mortgages under Section 213, in the Title I prop
erty improvement program, and in aimed forces
housing insurance, the latter anticipated with the
expiration of Section 803 on October 1, 1962.
SUMMARY OF OPERATIONS
Combined Insurance Activity
The FHA insured $7.2 billion of mortgages and
loans in 1962. This was 9.8 percent more than the
$6.5 billion in 1961, and only 7.1 percent under
the $7.7 billion reported in the record year of
1959 (Table III-l). The 395,800 home mortgages
insured in 1962 covered 405,100 housing units in
one- to four-family properties, while the project
mortgages involved additional 65,200 units and
6,600 nursing home accommodations. Title I
property improvement loans numbered 798,600. Home ana project mortgages both increased
their proportion of the total amount of insurance
written in 1962, each at the expense of property
improvement loans. Home mortgages accounted
for 73 percent of the total, or slightly more than
one-half of a percentage point more than a year
earlier. Project mortgages accounted for 15 per
cent of the 1962 total as compared with 14 percent
in 1961. Property improvement loans under Title
I constituted 12 percent of the 1962 total, down
from more than 13 percent in 1961.
Chart III-l
VOLUME OF INSURANCE WRITTEN, 1934-62
Under all Insurance Programs of FHA
8.0 —
7.0 —
6.0 —
S 5.0 —
J
4.0 —
All Programs
£ 3.0 —
2.0 —
1.0 —
0
1934
'40
'45
'50
'55
*62
Comparative data for the years 1961 and 1962
and a cumulative summary of insurance written
since 1934 are shown in Table III-2 by title and
section of the National Housing Act. In 1962
the predominance of Title II insurance became
17
i
i
in Table III-5 by sections of the National Housing
Act. The following table shows the relative
volumes of insurance written in 1962 under each
of the home mortgage programs.
Total
Existing homes
New homes
8cction
Amount
Amount i Units
Amount
Units
Units
(percent) (percent) (percent) (percent) (percent) (percent)
203...................
203 (k)............
89.7
90.5
.1
.1
.4
.1
4.6
4.1
.3
7.9
.3
6.0
4.1
4.2
.3
.2
.2
100.0
100.0
100.0
213
.3
220
.1
5.8
221
222.
809
Total.
3.8
.2
100.0
87.5
89.3
90.7
91.1
.4
i
‘.6
4.7
3.9J
I.
3.6
.3
4-®
100.0
* 100.0
.2
(0
slight variations in these percentages from year to
year may not be particularly significant. However, the trend of closing over the years is accurately portrayed m this table. As can be seen by
the high level of expirations (44.8 percent in 1962)
builders and lenders often use FHA commitments
as a means of obtaining FHA appraisals, construc
tion financing, or FHA construction inspections.
These practices have been increasing for existing
construction in recent years, causing these expirations to exceed those for new construction in 1962
for the second time in the last four years.
Table III—6-—Disposition of home-mortgage applications,
Sec. 203, selected years
1 Less than 0.05 percent.
Section 203. the principal home mortgage in
surance program, as previously noted, accounted
for about 90 percent of both the units and the
dollar amount of home mortgages insured. This
was almost S percentage points below the 1961
proportion, resulting primarily from a sharp in
crease in the percentage of Section 221 home
mortgages insured.
The Section 203 data presented in Table III-5
include mortgagees insured under Section 203 (i),
which provides for insurance of mortgages on lowcost suburban and farm homes. In 1962, mort
gages insured under this program involved 2,100
new units and $18 million, down from 6,600 units
on which mortgages were insured in 1961 for $56
million.
The year 1962 witnessed the first full year of
operations under the new Section 203 (k) home
improvement loan program. Insurance written
under this program covered 551 units for about
$3 million, but amounted to less than one-tenth of
1 percent of FHA home insurance business in 1962.
The general decline in the volume of new-home
insurance in 1962 was reflected in all programs
except Section 220, which showed an increase of
23 percent in the number of units insured, and
Section 221, which doubled in volume over 1961.
In comparison, all programs shared in the increase
over 1961 in volume of existing units insured,
except cooperative sales under Section 213, which
suffered a decline of more, than one-half.
The disposition of Section 203 home mortgage
applications for 1962 and selected earlier years is
shown in Table III-6. The 1962 totals showed
a decline of nearly 2 percentage points in rejected
applications to 8.6 percent, an increase of over
5 percentage points m the proportion of expired
commitments to 44.8 percent, and a 4 percentage
point drop to 46.6 percent in cases closed by in
surance. Since closing by rejection of applica
tions, expiration of commitments, or insurance of
mortgages in any one year may be affected by
occurrences in the previous year, due to the normal
time lags involved in processing FHA cases as
well us outside influences in the housing market,
Year
Number
of cases
closed
Percent of cases closed by—
Rejection
of appli
cation i
Expiration
of commit
ment »*
Insurance
of
mortgage
Total construction
1946
1950
1954
1955.......................
1956
1957................
1958
1959
1960................
1901
1962
145,500
539,640
357,920
584,779
49S.964
422,006
631,104
831,746
681,070
679,048
761,492
16.2
10.4
14.6
10.4
37.9
26.9
36.3
45.9
39.2
50.4
7.2
8.8
10.5
45.7
48.1
33.9
38.0
44.5
39.4
8.6
44. S
47.1
43.1
56.0
55.4
48.9
50.1
46.6
10.1
6.6
6.6
62.7
49.1
New construction
1946
1950
1954
1955
1956
1957
1958
1959
1960
1961
1962
51,522
345,478
196,291
281,065
257,098
207,096
236,733
320,469
297,389
233,140
222,84S
13.5
9.5
13.5
9.5
5.1
5.4
65.9
27.2
44.0
48.0
55.6
20.6
63.3
42.5
42.5
39.3
60.9
41.2
33.7
6.8
5.6
37.5
56.9
47.7
42.9
43.1
50.1
51.0
51.7
17.6
12.1
16.0
22.6
26.4
26.8
59.8
11.3
9.4
12. 1
12.1
31.0
35.2
57.7
55.4
35.9
29.5
52.0
58.4
7.3
9.9
38.2
54.5
42.1
4S.0
12.7
10.0
37.6
2.2
6.1
5.2
52.0
Existing construction
1946
1950
1954
1955
1956
1957
1958
1959
1960
1961
1962
93,978
194,162
161,629
303,714
241,866
214,010
394,371
511,277
383,681
445,90S
538,644
45.6
61.5
57.2
49.7
44.4
1 Excludes cases reopened after rejection or expiration.
* Includes expired agreements to insure in 195S-60.
Project Mortgages
Multifamily housing mortgage insurance in 1062
was available under the following titles and sec
tions of the National Housing Act: Title II, Sec
tion 207, covering new and rehabilitated rental
housing, trailer courts, public housing sold by
certain Federal or State agencies, refinanced Sec
tion 608 or 908 mortgages, and sales of Commis
sioner-held mortgages and properties; Section 213,
cooperative housing, including supplementary
25
-
i
106*2 in the number of dwelling units endorsed
(9,300), and second largest in total mortgage
amounts ($170.6 million). This represented an
increase over 1061 of 74 percent in the number
of dwelling units insured and a doubling of the
dollar volume.
The volume of Section 221 project mortgage
insurance written in 1062 amounted to $57.0 mil
lion and involved 5,100 units—over 7 times the
amount written in 1061. Most of this marked in
crease occurred under the special provisions
added by the Housing Act of 1961 which allowed
projects to be built with mortgages carrying below-market interest rates for families with limited
incomes. This program is described more fully
in Section I of this report. Insurance written
under the “market interest rate” provisions of
Section 221 involved $10.5 million and 1,200 dwell
ing units, while endorsements under the “belowmarket rate” program involved $46.5 million and
3,900 dwelling units.
Mortgage insurance written under Section 231
covering project dwelling units in housing for
the elderly also grew substantially in importance
in 1962, with nearly S.S00 units mortgaged for an
aggregate of $111.1 million, well over 90 percent
of which was in new construction. The dollar
volume of insurance written under this section
in 4 years of operation amounted to $208.7 mil
lion, over half of which was reported for 1962.
This section of the Housing Act includes separate
provisions for sponsors of projects who represent
either non-profit or profitmaking organizations.
Since religious organizations make up a high per
centage of the sponsors of these projects, the non
profit provisions of this program have been
utilized to a much greater extent, accounting
for over $156.6 million in mortgages and 13,400
dwelling units through 1962, as opposed to $52.1
million for 4,500 dwelling units in profit-motivated
projects. Prior to the enactment of Section 231,
mortgage insurance for elderly housing projects
was written under special provisions of Section
207 for non-profit organizations only. Mortgage
insurance written under these earlier provisions
produced 3,400 units with mortgages of $28.9
million.
Section 232 nursing home mortgages insured in
1962 contemplated the provision of 6,600 bed ac
commodations and involved some $40.7 million in
mortgages, nearly five times the dollar volume
insured in 1961. The provisions for insurance
under this program were relaxed somewhat by
the 1961 legislation allowing increases in maxi
mum mortgage amounts. However, since both
Section 231 and 232 are relatively new programs,
the sharp increases in insurance volume in 1962
probably reflect the approaching development of
these programs to their full potential, rather than
changes in social or economic conditions that
would stimulate construction of these projects.
28
Armed Services Housing mortgages insured
under Section 803 covered 3,600 units and mort
gage amounts of $59.9 million in 1962. Some 900
of these units amounting to $14.4 million were
projects refinanced after they were abandoned by
the builder and the mortgages were assigned to
FIIA. Compared with 1961, total insurance writ
ten declined 74 percent in both number of units
and total mortgage amount.
Under the provisions of the National Housing
Act, FHA’s authority to issue commitments under
Section 803 expired effective October 1, 1962.
Housing insured since the inception of the present
armed services provisions of this section in 1955
totaled 118,S00 units with mortgage amounts of
$1.9 billion, through the end of 1962. From 1949
to 1955, housing for armed forces personnel was
authorized under the earlier military housing pro
visions of Section 803, which differed mainly in
that the mortgagors were private individuals or
corporations rather than the armed services in
volved. This earlier Section 803 program pro
vided for a total of 84,900 dwelling units, with
mortgage amounts of $683.1 million on or near
military or atomic energy installations.
Title I Property Improvement Loans
Under Title I Section 2, FI-IA insures approved
financial institutions against loss on loans made to
improve existing properties or to build new non
resident ial structures. Approximately 98 percent
of these loans require no security and are classified
as consumer credit notes, based on the borrower’s
character and credit rating. Upon certification by
the lender that a loan has been made in conform
ance with the FHA regulations, the Commissioner
accepts the loan for insurance without inves
tigation, but subject to examination and verifi
cation of eligibility for insurance if a claim for
indemnification is later submitted. The portfolio
of each institution is insured up to 10 percent of its
aggregate amount of net proceeds outstanding, and
individual claim payment is limited to 90 percent
of the calculated principal loss sustained by the
lender on a defaulted note. The volume of these
improvement loans insured is shown in Table
III-8, in aggregates prior to 1950, annually from
1950, and also cumulatively. During 1962 an
average of 4,000 approved financial institutions
submitted 798,600 loans with net proceeds totaling
over $834 million. Compared with the volume in
sured in 1961, this is a decrease of 7 percent in
number and 2 percent in proceeds. A trend com
parison of the volume of net proceeds insured by
years since 1934 is presented graphically in Chart
III-5. Increasing yearly over the last decade, the
average net proceeds of individual loans reached
a new peak of $1,045 during 1962—an increase of
5 percent over 1961. By the end of 1962 a cumu
lative total of over 26 million loans with net pro
ceeds aggregating $15 billion had been insured.
Table III—8.—Title I improvement loans insured by FHA,
1934-62
Annual
Cumulative
Year
Number
1934-39...............
1940-44...............
1945-49...............
1950
1951...........
1952 >.........
1953 i.........
1954
1955
1956
1957...................
1958
Sfc:::::
1961.
1962.
Not pro Averceeds (000) ago
2, 329, 648 $821,332 $353
313
2, 468, 920
770,782
5,151, 998 2,233,205
433
479
1,447, 101
003,761
1,437, 704
707,070
492
567
1,405, 741
848,327
595
2, 244,227 1,334,287
591
1, 500,480
890,600
630
1,024, 098
645, 645
683
1,013,086
691,992
1,111,962
868, 568
781
1,038,315
868,443
996,642
909
1,096, 635
1,011,858
982,405
971
999
855, 582
854, 859
798,623
834,460 1,045
Number
2,329,648
4,788, 568
9,940,506
11,387,607
12,825,431
14,321,172
16, 565,399
18,071,870
19,096,577
20,109,663
21,221,625
22,259,940
23,356, 575
24,368,433
25,224,015
26,022,638
Net pro
Averceeds (000) ago
$821,332
I, 592,115
3,825, 320
4,519,081
5,226,151
6,074,478
7,408,765
8,299, 372
8,945,017
9,637,008
10,505,576
II,374,019
12,370,601
13,353,007
14,207,926
15,042,386
$353
332
385
397
407
424
447
459
468
479
495
511
530
548
563
578
'Since authorization controls‘limited tabulations of loans In 1952, esti
mates based on loan reports received indicate that 1,816,881 loans for
$1,047,358,000 were originated in 1952 and 1,832,180 loans for $1,092,277,000
were originated in 1953.
Chart III-5
VOLUME OF PROPERTY IMPROVEMENT LOANS INSURED,
1934 62
Under the Title I pro-jiom—exclude* small home*
1.5 —
1934
'40
'45
'50
‘55
'62
STATE DISTRIBUTION OF FHA INSURANCE
WRITTEN
The distribution of FHA insurance activity by
State location of the properties involved is pre
sented in this portion of the report. Many factor's
influence the size of FHA business in the various
States—some of the.more basic being variations
in the demand for housing and home improve
ments and the size and condition of the housing
inventory in relation to population size and growth
and general economic conditions. Other impor
tant factors that influence the volume of FHA ac
tivity in different localities are the availability of
mortgage money, and the financing policies and
practices of both borrowers and lend'ers.
Insurance Written in 1962
All Programs.—The volume of insurance written
during 1962 under each of the principal program
categories is presented in Table III-9 by State lo-
cation of property. California properties secured
the largest volume of mortgages and loans report
ed for any State during the year, accounting for
nearly $1.1 billion. New York, although ranking
second in total insurance written with $680 million,
was first in the volume of project mortgages ($308
million) and Title I property improvement loans
($112 million). Home mortgage insurance pre
dominated in almost all the States and major pos
sessions except New York, the District of Colum
bia, and the Canal Zone, where multifamily proj
ects represented the largest proportion of total
business.
Home Mortgage Programs.—The leading State
in home mortgages insured in 1962 was California
with 57,400 mortgages aggregating $868 million.
Texas with 29,100 cases for $340 million ranked
second. Florida and Michigan, which were third
and fourth, respectively, each reported over 20,000
cases (Table 111-9).
The distribution by State location of properties
for each of the home mortgage insurance programs
established by the National Housing Act is shown
in Table III-10. California led in the amount of
both new- and existing-home mortgages insured,
its existing-home volume ($650 million) being
almost three times as large as the $218 million
reported for newly-constructed dwellings. Texas
ranked second in new-home mortgages ($162 mil
lion), followed closely by Florida ($153 million).
In no other State was more than $100 million in
new-home mortgages insured during 1962. New
York was a distant second in the amount of ex
isting-home endorsements ($208 million), with
Washington fairly close behind ($192 million).
The 1962 existing-home mortgage dollar volume
insured exceeded the new-home volume in all areas
except Alaska, Arizona, Florida, Hawaii, Missis
sippi, Puerto Rico and the Virgin Islands.
The largest volumes of mortgages insured in
1962 were reported under the regular home mort
gage provisions of Section 203 for both new and
existing homes. Insurance activity under the
special-purpose programs was relatively small and,
in the case of Section 213 sales-type cooperative
housing, was concentrated mostly in Florida and
California. Section 809 civilian housing at mili
tary research installations was almost all confined
to Alabama, while Section 220 urban renewal and
Section 221 relocation and low cost homes were
fairly well dispersed among the various States.
Project Mortgage Programs.—Of the 65,200 mul
tifamily dwelling units insured in 1962, some
16,500 units or over 25 percent were located in
New York State. California, the second ranking
State in volume of project units insured, reported
9,700 units, or 15 percent of the total. Multi
family project mortgages were insured in 42
States, the District of Columbia, the Canal Zone,
and Puerto Rico in 1962.
Section 207 accounted for 28,100 units insured,
or 43 percent of the total. Over 43 percent of
29
Table III—9.—Volume of FHA-insurcd mortgages and loans, by State location of property, 1962
_____________________________
[ D ollar amounts in t housan ds]
Home mortgages1
State
Number
$98, 273
13,151
174,015
51,573
1,052,223
87, 50S
101,503
37, 290
22,953
398,186
132, 6S6
42,122
35,565
218,845
143, 256
54.889
57,125
51, 515
101,773
23, 555
13S, 158 ,
134, 788
354, 760
116,075
55, 939
116, 587
28, 402
72,652
68. 432
15,358
274, 852
44,400
679,942
62,514
15, 509
335, 837
125,492
88,098
237,718
30,283
44, 252
19,160
117, 708
434, 978
53,595
7, 579
159, 400
288,298
22, 556
51, 510
16,696
3,145 .
37
107, 944
387
Alabama______ ____
Alaska..........................
Arizona................... ......
Arkansas.... ............. .
California.....................
Colorado...................... .
Connecticut.................
Delaware.......................
District of Columbia.
Florida................
Georgia_______
Hawaii.............. ..
Idaho............— ■r ■
Illinois_______ _
Indiana_______
Iowa__________
Kansas...............
Kentucky--------Louisiana........... .
Maine........... - Maryland...........
Massachusetts..
Michigan______
Minnesota_____
Mississippi..........
Missouri.........—
Montana_______
Nebraska...........
Nevada.................
New Hampshire.
New Jersey------- :
New Mexico-----New York______
North Carolina..
North Dakota—.
Ohio.................. .
Oklahoma______
Oregon--------------Pennsylvania___
Rhode Island___
South Carolina__
South Dakota___
Tennessee......... Texas......................
Utah____________
Vermont.................
Virginia--------- ---Washington.......... .
West Virginia____
Wisconsin_______
Wyoming_____ ...
Canal Zone______
Guam_____ ______
Puerto Rico............
Virgin Islands-----Total *...........
7,229,334
1 For volume by sections see tables 10 and 11.
* Units under Sec. 232 are in terms of beds and are excluded from totals.
these units were located in New York, with the
remainder scattered throughout 28 States, the Dis
trict of Columbia, and Puerto Rico. Section 213,
the second largest multifamily housing insurance
program in terms of units (10,200), was con
centrated in 10 States. Nearly 9,300 units or
91 percent were management-type cooperative
units about one-half of which were located in
California, with Florida and New York account
ing for another 15 percent each. Insurance writ
ten under Sections 221 and 232 showed the great
est increase from 1961 to 1962 in the number of
States participating. Section 221 spread from
5 States and the District of Columbia in 1961 to
17 States, the District of Columbia and Puerto
Rico in 1962, while Section 232 activity spread
from 13 to 31 States and the District of Columbia.
Section 803, since it expired during 1962, showed
30
Project mortgages 1
Total
amount
6,720
479
9,903
3,159
57, 446
5,115
5,580
2, 440
281
23,731
8.609
1,703
2,205
6, 429
9,463
3,124
3,028
3,071
5,900
1, 925
8,237
7,616
20,080
5,924
3,952
6, 569
1, 723
3,712
3, 484
1,119
13,338
3, 057
18, 558
3, 632
480
17,746
9,140
5,566
15, 626
2,441
3,267
1,194
7,902
29, 099
3,118
639
9,181
18,234
1,167
2, 836
1,117
Amount
$89,233
12,410
127,204
37, 768
867, 930
73, 339
80, S64
32,720
4,000
298, 864
113, 633
30,730
28,662
89, 725
120,147
41,121
37,329
37, 829
80,214
20,621
116,900
103,048
249,262
86,661
47,500
85, 643
24, 487
50, 957 ,
56, 832
13,280
185,607
40,846
260,074
44, 542
6,304
247, 236
108,629
66, 702
178, 389
28, 717
37, 520
14, 450
94, 732
339,975
46,038
6, 964
134,880
245, 645
16,293
37,380
16,173
Units >
Amount
12
$557
2,924
458
9,666
253
1,045
231
910
4,301
501
699
32
4, 750
35,979
7,495
159,677
3,265
16, 470
4,456
14,177
69, 838
8,688
11, 387
554
81,873
663
78
878
367
222
8,293
729
12,465
462
459
1,768
210
321
279
7,900
8, 830
34,440
3,894
4, 089
5,414
163
960
1,071
14, 756
10,660
3, 992
64,861
16,’450
231
382
2, 386
173
920
1, 516
307,’843
3,547
6, 185
32, 494
3,200
10,776
29, 670
200
102
496
2,094
164
3," 936
1,642
7,782
33,028
038
981
895
14,821
12, 461
737
8, 570
200
’3," 145'
3
8,826
26
33
91,349
353
594
398, 920
5,307,742
65, 197
Property improvement
loans
Number
Net
proceeds
8,048
435
11,951
7,452
21, 890
10, 928
2,769
85
4,045
31,311
11,145
6
5,397
45,430
23,029
13,190
11, 877
18, 149
9,114
2,967
12,787
$8,483
741
10,832
6,310
24, 616
19, 281
68,856
26,858
5,527
30,156
3,214
6,573 !
I
073
I
1,962
16, 552
3,001
81,767
16,36-1
2,85-1
62,62?
12,385
8,900
28,131
1, 499
3,047
2,833
19,372
63,023
6,576
535
10,733
25, 965
6,018
5,101
446
1
1
!I
1
|
|
j
*
10, 904
4, 169
115
4,770
29, 485
10,365
5
6.349
47,247
22,741
13, 546
11, 503
12,956
9,094
2,934
13,357
22,910
71,058
25,520
4.350
25,530
3,752
6,939
940
2,078
24,384
3, 554
112,026
14, 424
3,019
56,107
13, 663
10, 620
29, 659
1, 565
2,796
3,068
15,193
61,974
6,920
615
9,700
30,192
6,263
6,560
523
7,607
5
4,854
20
4
8, 988
34
1,087,132
798,623
834, 460
J Based on cases tabulated In 1962 including adjustments not distributed
by States.
activity in only 13 States as compared with 27
States and Puerto Rico in 1961. Table III-ll
shows the State distributions of project mort
gage insurance in 1962 for all programs com
bined as well as for the individual sections.
Title I Property Improvement Program.—The num
ber and net proceeds of improvement loans insured
by State location of property during 1962 are also
shown in Table III-9. Improvements to proper
ties in 3 States—New York, Michigan, and
Texas—were responsible for approximately 30
percent of the total net proceeds insured. The
largest amount, $112 million, was in New York,
followed by Michigan with $71 million and Texas
with $62 million. Although average net proceeds
are not shown by States, they vary widely, rang
ing from a high average of $1,852 in Puerto Rico
to a low of $554 in South Carolina.
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31
Table HI—11.— Volume of FHA-insured multifamily housing mortgages, by State location of projects, by sections, 1962
[Dollar amounts In thousands]
Sec. 213
All sections
See. 220
2
Alabama.....................
Alaska..........................
Arizona........................ 28
6
Arkansas.....................
California.................... 125
3
Colorado......................
15
Connecticut...............
Delaware.....................
6
District of Columbia.
41
Florida......... ...............
4
Georgia...........-...........
2
Hawaii. ......................
2
Idaho...........................
17
Illinois..........................
1
Indiana____________
Iowa______ _____ _
1
5
Kansas______ _____
2
Kentucky................
7
Louisiana....................
Maine__________...
4
Maryland.............—
6
Massachusetts-------21
Michigan....................
3
Minnesota-................
2
Mississippi..............
3
Missouri----------------Montana_____ ____
11
Nebraska....................
Nevada.......................
10
New Hampshire..........
26
New Jersey-----------New Mexico..................
New York............ ..
3
North Carolina.........
4
North Dakota-------15
Ohio.............................
6
Oklahoma..................
10
Oregon____________
9
Pennsylvania............
Rhode Island............ -.
South Carolina____
2
South Dakota............
1
7
Tennessee—................
Texas............. .............
18
2
Utah.............................
Vermont................... . —
7
Virginia___________
Washington................
15
West Virginia.................
Wisconsin_________
11
Wyoming--------------1
Canal Zone________
7
Puerto Rico...............
Total.
561
Amount No.
12
$557
2,924
458
9,666
253
1,045
231
910
4,301
501
699
32
4, 750
35,979
663
7S
S7S
7
3
21
2
4
1
2
9
-if
060
218
1,621
214
333
231
195
1,737
"7*966
5
1,692
1
422
2
140
1
2
1
4
4
296
701
*3,*992
*64,*861* ’*19
2.947
16,*450
231
382
2.3S6
173
920
1,516
307,*843
3,547
6,185
32,494
3,200
10,776
29,670
200
102
496
2,094
164
**3*936* ””!
1,612 .......
7.782 .......
33,028
3
638
1
960
1,071
8.830
34,440
3,894
4.0S9
5,414
4
1
1
163
14, 756
10,660
13S
20
494
17
1
12
1
40
9
2
00 4,377
7
2
022
2
454
1
3
944
1
316
1
201
582
96
Sec. 232
Soc. 803
8 1,403
737
8,576
6
335
200
594
*3,'145*
7,607
5
345
197 28,079
2
1
2
1
30S
79
428
1
1
40
9 1*431
39
1
1
63
163
2
1
52
1
5
200
(364)
2
250
2
300
1
3
1
(184)
(349)
100)
1
32
2
1
241
26
1
5
1
1
2
(64)
(893)
(60)
(46)
(64)
1
2
8
(540) j----
277
150
466
2
1
1
108
206
119
5
1
664
150
17 1,202
1
1
2
1
iiSi
376
1
(100)
1
95
5
1
(702)
(71)
3
817
2
3
2
3
(94)
(233)
(96)
(244)
1
008)
2
6
1
(197)
(520)
(75)
42
105
;si:
1
116
19
29 9,342
1
4
359
948
2
1
2
712
63
380
114
1
(81)
(04)
(150)
(595)
1
3
5
■f"
1
88 9,292
399
113
83
27
1
2 1,116
933
121
7 2,828
1
46
4
1
1
2
8
117
1
1
586
240
599
2
107
4
1
4
1
425
164
681
102
5 1,498
5 2,136
1
4
5
65,197 1,087,132
1
582
9 1,417
199
**68 12,214
--------694
7
120
2
397
3
......
14, 821
12,461
981
895
5
.SIS
554
81,873
367
222
8,293
729
12,465
Sec. 231
Belowmarkot
rate
Units No. Units No. Units No. Units No. Units No. Units No. Units No. Beds' No. Units
154
230
657
108
115
160
462
459
1,76S
216
321
279
Market
rate
Manage
ment
Sales
State
No. Units
Sec. 221
Sec. 207
160
5 1,177
2
65
1
209
1
264
2
138
1
144
27 3,867
49 8,836
2
1
4
13G
382
4
400
1
1
4
2
200
102
382
290
3
6
300
500
1
200
32
3,646
(86)
76 (6,635)
> Units under Sec. 232 are in terms of beds and are excluded from totals; no units are shown in the all sections column when activity was exclusively under
Sec. 232.
Cumulative Insurance Written, 1934—62
All Programs.—The State distributions of the
cumulative volume of mortgage and loan insur
ance written by FHA from the beginning of its
operations in 1934 through 1962 are presented in
Table III-12. California continued to lead all
other States in total cumulative volume of insur
ance written through that date with $10.6 billion,
followed by New York with $7.4 billion. Over
one-third of all FHA insurance activity has oc
curred in four States; California, New York,
Michigan, and Texas, reflecting the position of
these States among the leaders m population size
and growth and the generally high percentage of
their residents living in urban areas, where most
FHA insurance activity occurs.
32
Home Mortgage Programs.—Table III-13 shows
the State distribution of the total cumulative num
ber and amount of FITA home mortgages insured
from 1935 through 1962, along with the number
of home mortgages insured for the individual sec
tions of the National Housing Act. California
continued to lead all other States in the cumulative
amount of home mortgage insurance with $8.6
billion. Texas and Michigan also continued in
second and third positions with $3.5 billion and
$3.4 billion, respectively. These three States and
New York are the only ones that have insured over
$3 billion in home mortgages since the inception
of the agency, and together they have accounted
for one-third of the total dollar volume insured.
Of the States, Vermont with $63 million recorded
'
J
Table III—12.—Volume of FHA-insured mortgages and loans by State location of property, 193/,-62
[Dollar amounts In thousands]
Home mortgages 1
State
Project mortgages '
Total
amount
Number
Alabama........................
Alaska............................
Arizona................ .........
Arkansas.......................
California.................... .
Colorado........................
Connecticut................ .
Delaware.......................
District of Columbia.
Florida...........................
Georgia..........................
Hawaii...........................
Idaho............................ .
Illinois...........................
Indiana.........................
Iowa_______._______
Kansas.............. ............
Kentucky.................... .
Lousiana....... ............ .
Maine............................
Maryland.......... ..........
Massachusetts...........
Michigan___________
Minnesota__________
Mississippi..................
Missouri...._______
Montana...._______
Nebraska.. _______
Nevada.............. ..........
New Hampshire*-----New Jersey..................
New Mexico._______
Now York...................
North Carolina..........
North Dakota............
Ohio...............................
Oklahoma....................
Oregon..........................
Pennsylvania.............
Rhode Island.............
South Carolina..........
South Dakota............
Tennessee....................
Texas...........................
Utah..............................
Vermont................ ..
Virginia.................... .
Washington-----------West Virginia______
Wisconsin__________
Wyoming---------------Canal Zone.................
Guam........ ...................
Puerto Rico..............
Virgin Islands............
$1,083,013
170,200
1,392,222
015,728
10, G29,400
949,750
1,000,098
280,924
373.090
3,273,004
1,534,284
395,857
423,893
3,129,017
2,053,895
782,834
1,125.599
702,409
1,300,741
311,322
1.521,170
1,190,201
4,887.710
1,100,011
557,874
1,925,945
321,371
710,721
378,239
152,603
3,131,447
552,004
7,3S3,027
1,009, GIG
102,381
3,984,054
1,443,231
945,723
3,307,010
209, G30
002,370
240,988
1,441,953
4,820,145
692,264
79,375
1,913,453
2,668,918
350,052
710,187
193,001
8,544
29,778
007,109
1,751
Total *...............
81,086,330
86,808
6,217
114,292
59,25-1
969.8S3
78, 452
80,750
20,975
Amount
8.553
255,776
123.979
21,678
34,964
219,090
187,794
62,998
105,309
58,144
112,817
26,123
99.324
08,161
398,265
71,317
50.553
157,167
24,041
02,048
25,577
11,742
224,627
45, S48
329.878
77,314
7,349
304,086
144,905
86,118
297,770
22, 904
56,110
21,744
129,396
427,027
58,584
8,612
144,876
246,951
33,651
53,609
19,938
$787,632
118,171
1,000,203
402,950
8,588,824
735,188
814,330
220.273
73,296
2,424,111
1,127,776
254,817
301,026
1.797,340
1,506,153
545,527
801,318
486,124
1,007,874
204,499
889,335
095,729
3,400,577
707,154
418,837
1,362.751
229,5S0
539,819
294,853
99.073
1,910, 939
439,518
3,062,424
635.969
68,232
2,832,179
1,153.265
70S, 370
2,326.585
211,270
436,231
175.597
1,076,795
3.504,574
530,189
63.322
1,336,977
2,092,793
263,074
486,046
170,985
319
54,528
13S
4,478
463,647
1,658
6,398,818
56,036,470
Units
Property improvement
loans
Amount
Number
Net
proceeds
14.616
3.853
16,674
4,773
87,372
6,111
13,211
5.950
26,466
33.134
27,570
10.198
1,748
34,870
10,534
2,670
9,5-18
10,233
13.853
4,307
40.877
10,164
23, 905
$113,321
371,487
$182,960
45,765
4,536
6,330
169.521
242,706
156,497
57,147
180.038
95.630
929, 433 2,390,236
1,111,203
02,802
256,228
151,760
141,213
202,808
110,555
59,130
15,696
7,521
217,707
137,806
82.631
389,225'
685,224
459,668
228,387
337,121
178,121
137,889
4,125
3,151
19.471
154.552
103,397
373,076
1,581,251
959,231
87,953
880.039
459,790
24,287
373,014
213,020
104,182
291.146
160.099
102.666
341,276
173.618
131,652
272,712
161,215
48.845
10S.738
57,977
341,834
559.761
290,006
119,896
658,415
374,636
265, S63 2.181,921
1,221,277
8,288
73,160
675,639
379,698
5,174
52,913
169.146
86,123
17,700
751.767
181,448
381,745
2,665
36, 045
77,446
55,746
6.306
76,187
157,733
94. 714
33.190
4,898
58.614
24.773
I,344
64.913
34,604
18,326
75,525
685.538
789,644
534, 970
5,063
59.901
69.315
52,645
200.950
2,232,915
2,796,110
2, OSS. 2S8
23.878
194,305
308,204
179,341
56.256
36,304
3,655
57.845
31.890
277,758
1.624, 5S9
874,118
7,384
78,449
375,421
211,517
7,967
291,923
165,902
71,451
31,837
299.825
1,281,468
680,600
41,004
1,528
17,355
78,656
II,252
119,312
60,249
105,896
57.S29
2,365
27.569
37,822
547,567
266,365
13,759
98,793
44, 433
3S4,302
1,612,930
937,269
21,042
141,033
2,674
251,781
14,541
193
1,512
27,250
370,258
199,750
50,762
376,726
409,915
166,209
671. 710
16,196
142,721
88,195
900
5,383
62,263
304,209
161,878
6.628
15,390
711
6,626
22,653
8.544
530
449
499
1,270
24,801
74,447
69,015
8,785
57, SOI
92
93
1,015,153
10,007,474
26,022,638
15,042,386
1 For volume by sections see Tables 13 and 14.
,, _ x
* Based on cases tabulated through 1962, including adjustments not distributed by States, and excluding Sec. 609.
the lowest volume of cumulative home mortgages
insured.
The ranking of States by the volume of home
mortgage insurance is determined to a great degree
by the volume of Section 203 business in each
State, since this program has been the preponder
ant program in all areas. The now expired Sec
tion 603, which was used extensively m lieu of
Section 203 during the immediate postwar years,
as well as Sections 213,222, and 903, also tended to
correlate with the size of the population in the
States, as demonstrated by California’s leadership
in these programs too. The special-purpose pro
grams that require some Federal Governmental action before they can be implemented, such as Sec
tions 220 and 809, showed almost no correlation
between insurance activity and population. For
example, Utah led in the number of Section 220
mortgages endorsed, while Alabama and Florida
have reported the bulk of Section 809 insurance.
Project Mortgage Programs.—By the end of 1962,
FTIA had insured multifamily housing mortgages
in all States, the District of Columbia, Guam,
Puerto Rico, and the Canal Zone for a total of
1,015,000 units, exclusive of 8,400 bed accommoda
tions in nursing home projects. Nearly 20 percent
or 201,000 units were located in New York, with
California second with 87,400 units and New Jer
sey third with 75,500 units. The leadership of
these States in multifamily project, insurance re
flects, in addition to population size, growth, and
urbanization, the size and density of their urban
areas, which, in turn, influence land costs and scar
city and often occasion apartment development. A
33
Table 111-13.— Volume of FHA-in$ured home mortgages by State location of properly, by section, 1936-62
[Dollar amounts In thousands)
All sections
Number of mortgages
State
Number
Alabama......................
Alaska..........................
Arizona.........................
Arkansas......................
California....................
Colorado......................
Connecticut................
Delaware...... ...............
District of Columbia.
Florida......................... .
Georgia..........................
Hawaii...........................
Idaho.......................i...
Illinois............................
Indiana......... ................
Iowa................................
Kansas...........................
Kentucky......................
Louisiana___________
Maine.................. .........
Maryland......................
Massachusetts.............
Michigan..... .................
Minnesota__________
Mississippi....................
Missouri.....................
Montana______ _____
Nebraska........................
Nevada........... ................
New Hampshire......... .
New Jersey.....................
New Mexico...................
New York....... ...............
North Carolina______
North Dakota................
Ohio..................................
Oklahoma..... .................
Oregon............................
Pennsylvania________
Rhode Island.................
South Carolina...............
South Dakota................ .
Tennessee.........................
Teias.................................
Utah..................................
Vermont...........................
Virginia______________
Washington.....................
West Virginia..................
Wisconsin-........................
Wyoming_____________
Guam...............................
Puerto Rico......................
Virgin Islands..................
Total *.
Amount
Sec. 2
and
Sec. S
$787,632
916
21
118.171
2,672
1,066,203
462.950
273
8,5SS. 824 15.283
735,1SS
1,995
814.330
264
220.273
41
73,296
1
255-‘"0
2,424, 111
4.3S0
1,127,776
1,568
254.817
6
301,026
107
1,797,340
3.065
1.733
1,506,153
545,527
905
S61,318
1,854
105.309
292
4S6,124
1,067, S74
1,056
204.499
46
26-123
SS9.335
1,728
650
695,729
7,273
3,400,577
707,154
401
752
41S.S37
1,362,751
33S
41
229.5S0
6S1
62.048
539.819
69
294, S53
165
99.673
2,632
224.627
1.910,939
86
439.518
3,062,424
9, 111
657
635,970
6S.232
10
2,832.179
301.0S6
1,620
144,905
1,153,265
1,866
789
86.118
70S. 370
297,770 2,326.585
1,211
51
22,904
211,270
56.110
664
436,231
206
21,744
175,597
129,396
1,076,795
1,131
427,027
9,553
3,504,574
177
58.5S4
530,1S9
8,612
63,322
17
144.876
1.336,977
3,289
246.951
2,092,793
1,873
263,074
141
33.651
327
53.609
486,046
122
19,938
170,985
319
4,478 463,647
54,528
465
138
1,658 -
*8?
•S2B
114, 292
as
tss
II*
II
iSiS
&£
II
If
6,398,818
56,036,470
84,460
67,009
6.017
94.007
50.343
7S9.S53
6S.G64
70,380
17,695
5,445
200,409
96.132
19.0S9
33.610
1SS.93S
165, S99
5S.113
S6.997
50,376
92,457
23,275
78,255
60,531
343,197
64,620
43.055
146,663
23,600
51,960
21,124
10.295
200,260
39.440
293,289
4
1
21
5
2
4
1
16
5
6
10
9
number of States with smaller populations rank
fairly high in FHA multifamily project units
insured because of the large number of military
and armed services housing units built in their
areas.
By programs, the Section 608 War and Veterans’
Emergency Housing Program, although active
for only a decade (1942-52) accounted for slightly
less than half of all units insured in the United
States and a high percentage of units insured in
most States. New York was the leader in Sec
tion 608 projects with 86,400 units insured, fol
lowed by New Jersey with 51,500 and Maryland
with 34,700. One or more projects were insured
under Section 608 in every State and Puerto Rico.
Military housing mortgage insurance, author
ized in 1949 under Section 803 and armed services
housing, which superseded it in 1955, together
45
6,476
552
10,954
355
Sec.
2201
94
55
134
176
3
24
4.133
57
306
20
7
3
17
2
51
198
39
70
1,057
1
13
125
15
2
1,791
771
46
10
5
365
1,361
3
3
36
809
2
1
66
3
38
7
5
4
10
6
2
5
1
6
47
4
3
10
7
8
1
18.440 .
314
48,562
134
5,416,314
Sec.
213
351
5
1
3S
1
5
2
29
16
2
6
3
1
64,123
6,907
266,815
119,177
77,235
260,541
19,333
42,212
19,838
104,643
346,555
48,767
8,183
106,810
217,408
32,049
47,271
1Includes improvement loans under Sec. 220(h).
1 Includes Sec. 603-610.
34
Sec.
203(k)
Sec. 203
305
52
25
19
9
7
57
126
999
37
4
40
19
637
205
31,809
2,402
Sec. 222
3,511
1.473
122
272
773
2,153
31
175
247
232
6,627
4,33S
421
23
1,138
1,162
1.214
16,007
2,120
1,894
154
428
1,672
1,389
15
314
82
3,305
32
373
1,006
114
31
97
4
870
110
369
20S
1,874
378
3,698
916
3,530
3,526
740
420
1,483
997
391
2,948
247
881
3,032
1,779
2,308
1,161
966
993
11
33
1
3
192
25
398
173
225
Sec.
221
4,414
219
463
1,873
11
108
120
4,264
4,164
1
1,340
1,984
94
457
21
414
52,223
172
94
8,616
5,328
1,023
302
1,033
615
75
3,245
3,830
461
1,373
2,169
4,392
874
1,398
10,892
457
126
11,941
4,730
25
253
190
5
690
2
118,832
Sec. 603 2
9,836
1
7,132
5,377
126,012
5,069
7,537
2,631
2,780
26, S95
13,350
544
527
21,975
15,823
2,551
10,368
4,737
12,381
1,290
14,409
3,076
41,334
4,810
4,168
7,118
334
5,868
1,925
337
Sec.
611
Sec.
809
3,197
723
50
164
25
244
2,333
583
9,083
213
472
189
3,112
1, 581
3,198
272
367
2,880
2, 512
716
3,782
7
17,0i4
2,624
23,699
8,829
162
24,786
17,741
6,847
31,454
1,263
6,378
34
605
741
565
956
294
550
241
720
1,024
158
194
761
50
778
930
1,027
i, 549
117
520
16,056
52,145
7,920
283
18,898
20,143
1,325
4,444
1,125
237
2,863
1,401
258
1,120
76
2,326
178
1,206
3,372
34
2,526
783
856
'4,*162
5
2
028,015
Sec.
903
75
6,995
57,156
3 Cases tabulated through 1962, including adjustments not distributed by
States.
accounted for the second largest amount of proj
ect mortgage insurance, with 204,000 units or 20
percent of the total. California and Texas, both
with extensive military installations, led in these
units insured with 26,900 and 16,300, respectively.
The remainder were scattered fairly evenly
through all but 3 States and the District of Colum
bia. This section expired in October 1962 and,
like Section 608, will gradually diminish in rela
tion to total cumulative project insurance writ
ten. The regular Section 207 rental housing
program authorized by the original National
Housing Act in 1934 ranked third in the number
of units insured through 1962 with 182,900 or 18
percent of the total. The cumulative volume of
insurance written in each State for all multifamily
housing programs is shown in Table III-14.
I
Table III—14.—Volume of FHA-insured multifamily housing mortgages by State location of projects, by sections, 1936-62
[Dollar amounts In thousands]
All sections
Number of units
Sec. 213
State
Number
Units
Amount
Sec.
207
Sales
Alabama....................
Alaska.........................
Arizona___________
Arkansas....................
California..................
Colorado....................
Connecticut..............
Delaware...................
Dist. of Columbia.!
Florida........................
Georgia.......................
Hawaii........................
Idaho..........................
Illinois.........................
Indiana...................
Iowa............................
Kansas........................
Kentucky................ .
Louisiana............. .
Maine____________
Maryland..................
Massachusetts......... I
Michigan.................
Minnesota................
Mississippi...............
Missouri.....................
Montana....................
Nebraska...................
Nevada.......................
New Hampshire...
New Jersey................
New Mexico.............
New York.................
North Carolina........
North Dakota..........
Ohio.............................
Oklahoma..................
Oregon.......................
Pennsylvania...........
Rhode Island...........
South Carolina........
South Dakota..........
Tennessee..................
Texas........................
' Utah...........................
Vermont.....................
Virginia......................
Washington..............
West Virginia..........
Wisconsin..................
Wyoming...................
Canal Zone................
Guam..........................
Puerto Rico.............
Total.
:
5
\
255
34
332
74
1,570
121
144
29
203
736
210
;
134
19
352
165
53
120
126
211
38
355
91
505
230
62
205
24
103
99
12
75
1,390
102
43
408
176
174
431
19
119
20
184
535
47
7
412
187
18
218
11
4
14
47
14,616
3.853
16,674
4,773
87,372
6,111
13,211
5,950
26,466
33,134
27, 570
10,198
I,748
34,870
10,534
2, 676
9,548
10,233
13.853
4,307
46.877
10,164
23,905
8,288
5,174
17,700
2,665
6,306
4,898
1,344
75, 525
5,063
200,950
23.878
3,655
31,890
7, 384
7,967
31,837
1,528
II,252
2, 365
13,759
44,433
2, 674
193
50,762
16,196
900
6,628
711
530
1,270
8, 785
12,017 1,015,153
$113,321
45, 766
169, 521
57,147
929, 433
62,802
141,213
59,130
217,767
389,225
228,387
137,889
19,471
373,076
87,953
24,287
104,182
102,666
131, 652
48.845
341,834
119.896
265,863
73,160
52,913
181,448
36,045
76,187
58,614
18,326
685, 538
59,901
2,232,915
194,305
57.845
277, 758
78,449
71,451
299,825
17,355
105.896
27, 569
98, 793
384, 302
21,042
1,512
376, 726
166,209
5,383
62,263
6,626
8, 544
24,801
74,447
674
1,496
2,334
550
10,811
823
4,628
909
3,443
3,561
2,190
499
8ec. 221
Man
agement
48
20
6,547
578
11,117
365
124
4,430
57
*311
Sec.
220
Market Below
rate
market
rate
72
7,853
148
235
2,314
250
240*
599
539
261
399
682
3,792
1,916
298
201
582
991
659
1,403
48
117
32
92
4,450
70
1,060
454
52
135
138
1,950
773
712
184
327
832
1,554
156
10
214
1,785
666
1,105
366
1,370
71
168
12,'976
11
62
317
320
150
466
113
2,239
2,984
30*239
12*764
5
680
1,104
3,073
79
1,360
27
3,182
116
209
95
307
607
52
262
460
277
25
188
343
206
119
158
690
150
817
144
52
712
77
1,300
206
25
79
398
173
226
48
486
272
42
160
1,818
174
65
1,021
264
320
25
20
9
41
40
94
104
100
100
311
500
144
32,637
51,027
35,671
7,120
4,187
33
448
Sec.
608 2
(81) 10,295
2,357
(64)
947
932
(150)
(671) 21,633
1,896
(364) 3,013
3,791
(184) 19,037
(399) 10,669
GOO) 19,032
850
(64)
571
(1,189) 17,012
(60) 6,065
(46) 1,591
(64) 3, 593
(50) 2,247
7,221
688
(84) 34,707
(175
3,186
(669
7, 714
(92) 5,036
1,852
-(ii2) 9,439
(42)
135
(140)
1,786
(100)
240
Sec.
611
Mill- Armed
tary services
1,005
160 i,'6ifl
973 13,693
50
680
450
4,168
195 2,150
2,077
500
3,416
510
25
(1,040) 86,373
(71) 9,192
43
(156) 16,217
(270) 2,974
(198) 5,155
(244) 19,924
210
(108) 6,329
258
(197) 7,165
(616) 19,432
(75)
737
137
30,112
6,369
(75)
609
(127) 3,828
71
4,947
17,844
"Klii
3,199
4,329
3,100
3,997
4,141
1,983
2,395
556 1,642
5,571
2^528
500
25
2,384
400
706
585
891
1,740
9,072
854
823
3,465
782
1,924
4,794
1,502
661
500
886
Sec.
908
"L869‘
2,399
13,235
1,700
1,490
1,250
5,762
670
983
930
235
4,079
2,754
2,500
1,695
1,668
2,258
3,913
240
1,670
3,943
1,670
2,116
951
1,100
3,054
1,563
4,011
5,614
3,380
400
2,347
464
631
576
3,998
1,012
1,194
7,216
50
858
120
592
611
801
244
(359) 51,451
277
376
828
553
10,007,474 182,880
40
2,477
74
3,900
185
113
199
351
'4,*686'
2,167
6,430
1,556
588
2,070
65*360
3,086
16
5,130
430
692
5,456
36
290
125
2,456
6,520
633
56
11,698
1,147
188
1,343
Sec.
232 »
80
597
20
7,910
1,869
499
768
929
1,534
Sec. 803
Sec.
231
38
994
264
2,083
200
55
16
961
12
204
108
44
no
462
176
95
922
389
82
469
501
300
280
100
530
1,270
1,344
(8,436) 469, 589 1,984 84,883 118,846
8,485
1 Units under Sec. 232 are in terms of beds and are excluded from totals.
3 Includes Sec. 608-610.
i
;
I
\
;
'
:
*
*
i-
r
>
Title I Property Improvement Loans.—The cumu
lative volume of improvement loans insured in
States (Table III-12) reflects principally the den
sity of housing and the extent to which financial
institutions in the area participate actively in the
Title I program.
In New York from 1934 through 1962 nearly 2.8
million improvement loans with net proceeds of
$2.1 billion had been insured by FHA. Califor
nia ranked second in number of loans (2.4 mil
lion), with net proceeds of $1.1 billion. The
amount of $1.2 billion insured in Michigan was
greater, but loans numbered only 2.2 million.
Property improvements in these 3 States have been
responsible for 28 percent of all loans and 29 per
cent of the total net proceeds insured under Title I.
LENDING INSTITUTION ACTIVITY
FHA mortgages and property improvement
loans may be originated only by FHA-approved
financial institutions. Governmental institutions
such as the Federal Reserve Banks, Federal Home
Loan Banks, National Mortgage Associations, and
certain other Federal, State, or municipal agencies
are automatically approved as mortgagees under
provisions of the National Housing Act. Mem
bers of the Federal Reserve System and institu
tions whose accounts or deposits are insured by
the Federal Savings and Loan Insurance Corpora
tion or the Federal Deposit Insurance Corporation
may be approved as mortgagees upon application.
Other types of institutions may be approved if
they meet, certain qualifications and comply with
35
Table III—15.—Financing of FHA-insured mortgages and loans by type of institution, 1962
[Dollar amounts In thousands]
Typo of institution
Section
National
bank
Number of mortgages and loans:
Home programs:
Sec. *203(1).............................
Sec. 203 (other)...................
Sec. 203(k)............................
Sec.. 213..................................
Sec. 220..................................
Sec. 220(h)............................
Sec. 221..................................
Sec. 222..................................
Sec. S09..................................
State
bank
Mortgage
company
10S
46.1S5
133
12
104
1, 565
202.212
100
1.098
416
1,046
1,375
18
18,142
9,800
924
Insurance
company
Savings
and loan
association
Savings
bank
Federal
agency
All
other 1
Total 2
156
37,017
63
8
36
115
25,392
16
6,454
40
17
34
3,977
3
2
9
419
851
1
2,028
1,589
393
935
6
5
3
105
195
2,082
355,175
389
1,185
685
2
22,953
15,300
1,009
4S.9S1
23,807
234,257
13, S46
40,897
26,896
5, 479
4,325
398,780
18
39
5
61
53
60
15
8
1
1
4
49
6
4
4
1
6
180
67
5
3
4
9
8
8
8
1
2
6
7
6
6
11
14
20
36
1
3
1
3
3
3
6
1
4
1
6
9
Total..........................................
60
135
216
25
11
74
Title I improvement loans:
Sec. 2.....................................................
383,544
254,588
29,635
108
95,850
18,124
432,5S5
27S, 530
264,108
13,979
136,758
Sec. 203(i)............................. .
Sec. 203 (other).................... .
Sec. 203(k)............................ .
Sec. 213..................................
Sec. 220.................................
Sec. 220(h).............................
Sec. 221..................................
Sec. 222..................................
Sec. 809........ .........................
$903
646,304
749
$643
312, 731
359
$164
183,025
24
266
1,174
489
6
9,320
8,076
1,081
$13,371
2,731,931
511
18,053
5,039
Total..................................
680,834
50,891
Total.
Project programs:
Sec. 207........................................
Sec. 213 sales..............................
Sec. 213 management.............
Sec. 220.................. ....................
Sec. 221 market rate................
Sec. 221 below-market rate..
Sec. 231.........................................
Sec. 232.........................................
Sec. S03 armed services...........
Total all programs........................
Face amount of mortgages and loans:
Home programs:
189
1,764
19,470
Project programs:
Sec. 207...........................................
Sec. 213 sales.................................
Sec. 213 management..................
Sec. 220...........................................
Sec. 221 market rate...... .............
Sec. 221 below-market rate___
Sec. 231............................................
Sec. 232............................................
Sec. 803 armed services..............
189
4,489
16,638
4,338
8,408
23,038
4,002
16,151
Total............................................
2
8
16,774
708, 623
45,094
5,486
21,107
l, 197 939
$1,338
463,038
322
$1,016
345,704
139
$46,853
$292
54,972
21
86
266
118
371
481
194
28
110
$17, 737
4,788, 325
2,124
.19, 648
S, 724
189,'196
136,161
14, 603
4,658
13,097
20,022
21, 430
4,278
13,575
40
1,134
2, 558
6
239,977
214, 698
16,037
333,878
3,108,864
201,332
506,639
365,268
47,125
59,114
5,307,276
83,523
1,581
79, 664
66,621
210
22,684
86
7,355
38, 661
7,347
141, 655
562
6,597
2,411
‘167196
64
21,100
1,671
16, 594
3, 624
8,759
103,200
17,911
26,995
12, 665
6,085
18, 722
28, 777
18,344
1,642
14,511
2,426
8,668
1,048
1,720
1,540
3, 685
14,866
416, 458
19,767
131,110
167,301
11,679
30,167
85,508
34,564
60,080
234,342
94,392
12, 580
193,096
12
75
1,366
262,246
390,796
267,462
31,159
133
101,947
23,189
Total all programs...........................
1,199.774
863,586
3,374,365
295,857
621,166
Sec. 203(1)...............................
Sec. 203 (other)......................
Sec. 203(k)..............................
Sec. 213...................................
Sec. 220...................................
Sec. 220(h)...............................
Sec. 221....................................
Sec. 222....................................
Sec. 809................................... .
5.1
13.5
35.3
1.0
20.3
75.4
57.1
24.0
91.9
57.8
0.9
3.8
1.1
.4
3.0
4.7
9.1
1.6
3.6
6.5
16.9
6.0
5.6
100.0
3.9
3.8
6.7
78.9
63.5
91.1
Total....... ............................ .
12.8
6.3
12.2
1.0
3.4
10.6
Total.
1,561
993
63
128,144
Project programs:
Sec. 207.................................
Sec. 213 sales...........................
Sec. 213 management..........
Sec. 220..................................
Sec. 221 market rate............ .
Sec. 221 below-market rate.
Sec. 231.......................................
Sec. 232..................................... .
Sec. 803 armed services------
2
7
Title I Improvement loans: *
Sec. 2...................................................
Percentage distribution of amount:
Home programs:
88
27
17
22
40
65
30
1
1
703
536
1,928
9,913
19, 774
834, 460
581,553
49,053
88,802
7,078,377
7.6
9.7
15.2
.6
4.3
5.7
7.2
6.6
1.0
1.7
1.2
1.0
0.1
1.3
1.9
0.1
.1
8.3
10.0
1.8
0.3
.5
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
10.00
58.6
3.8
9.6
6.9
.9
1.1
100.0
20.1
8.0
60.8
42.4
24.8
90.0
20.6
8.0
6.4
.4
5.6
24.6
1.8
34.0
.1
1.6
1.8
37.1
27.9
20.9
11.6
32.2
1.8
5.5
19.4
10.5
17.5
52.1
62.1
33.7
53.1
3.3
r*7.8
13.4
17.0
7.0
17.3
1.2
6.0
1.8
10.6
29.7
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
13.7
28.0
25.0
10.1
1.3
20.0
(‘)
2.2
5.5
w
<4>
930,641
0.5
1.2
1.0
.5
8.5
4.6
2.2
.2
100.0
1.1
See footnote at end of table.
36
I
1
a
!
Table III—15.—Financing of FHA-insured mortgages and loans by type of institution, 1962—Continued
[Dollar amounts In thousands]
Type of institution
Section
National
bank
State bank
Mortgage
company
Insurance
company
Savings
and loan
association
Savings
bank
Federal
agency
All other
Title I improvement loans:
Sec. 2...............................................
46.8
32.1
3.7
12.2
2.8
Total all programs..................
17.0
12.2
47.7
4.2
8.8
8.2
.7
23
972
31
1
14
166
1,091
45
12
85
6
150
1
1
7
64
1,265
40
1
12
9
352
12
2
88
11
1,040
17
2
13
1
79
121
3
97
6
498
605
39
11
29
1
196
256
121
2
13
1
4
5
3
4
8
8
3
19
1
11
4
1
2
4
7
3
39
8
10
5
5
7
16
29
1
3
1
1
2
4
19
i
1
6
3
1
Number of financing institutions:
Home programs:
6cc.203(i)...............................
Sec. 203 (other)....................
Sec.203(k).............................
Sec. 213...................................
Sec. 220...................................
Sec. 220(h).............................
Sec. 221...................................
Sec. 222...................................
Sec. 809...................................
Project programs:
Sec. 207.....................................
Sec. 213 sales...........................
Sec. 213 management_____
Sec. 220................................ .
Sec. 221 market rate______
Sec. 221 below-market rate.
Sec. 231.................................
Sec. 252.............. ..................
Sec. 803 armed services___
(«>
18
34
Total
2.4
100.0
1.2
100.0
2
125
3
1
4
271
4,997
149
18
164
1
921
1
14
1
17
1
3
1,247
60
101
11
33
21
11
14
32
67
12
1
1
1
2
3
2
1
4
1
4
3
2
i On this mid following lending institution tables, Includes industrial banks, finance companies, endorsed institutions, private and State benefit funds, etc.
* As tabulated in Washington including adjustments not distributed by mortgagees.
» Based on net proceeds of co-insurance only.
«Less than 0.05
percent.
regulations prescribed for such approval. As of
December 31, 1062, there were some 14,700 finan
cial institutions on FITA’s approved roster.
The tables in this section covering lending insti
tution activity are based on tabulated data and,
due to time lags, the totals shown do not always
agree with the corresponding reported totals in
other sections of this report.
Chabt III-6
INSTITUTIONS FINANCING
FHA INSURED MORTGAGES, 1962
By type of institution originating mortgages
Mortgage
Companies
Mortgage and Loan Financing During 1962
A total of $7.1 billion of FHA-insured mort
gages and property improvement loans was fi
nanced by an estimated 5,000 lending institutions
during 1962. As shown in Table III-15, mort
gage companies were the most active financers of
FITA mortgages with 48 percent, followed by na
tional banks with 17 percent and State banks with
12 percent.
The following table shows the extent, of partici
pation in the various FITA programs by the dif
ferent types of lending institutions, based on loan
amounts:
Home Mortgages
I_
L
L
L
L
L
National
Banks
Savings and
Loan Ass'ns
Savings
Banks
State Banks
Insurance
Companies
Other Types
Federal
Agencies
Percentage distribution
Type of institution
National bank............................
State bank....................................
Mortgage company...................
Insurance company...................
Savings and loan association..
Savings bank...............................
All other—................................
i Less than 0.05 percent.
Homo
mortgages
Multi
family
project
mortgages
50.7
38.6
92. 1
68. 1
81.0
02.8
66.0
30.4
7.0
31.9
2.0
33.2
11. 1
10.7
Property
improve
ment
loans
Total
60
40
20
S88&
0
I
I
0
Multifamily
Mortgages
I
20
40
Percent distribution of face amount
100.0
100.0
100.0
100.0
100.0
100.0
100.0
Home mortgages accounted for the largest share
of FHA mortgages and loans originated by each
type of financial institution in 1962, ranging from
39 percent for State banks to 92 percent for mort
gage companies.
37
I
3
:
!
to a large degree to the $54 million decrease in
the volume of projects originated under this pro
gram, which expired in October 1962. (See Table
III-15.)
Title I Property Improvement Loan Financing
Continuing a well established pattern, commer
cial banks originated and financed 4 out of 5 of
the Title I loans insured during 1962. Table HI15 shows that national banks reported 384,000
loans with net proceeds of $391 million and State
banks 255,000 loans with $267 million in proceeds.
Savings and loan associations financed an addi
tional 96,000 loans with net proceeds of $102
million.
Relative percentages of net proceeds insured, by
type of institution, in 1962 and for selected earlier
years are compared in Table III-16. Since 1950,
national banks have financed nearly one-half of
all Title I improvements and State banks have
supplied proceeds that averaged roughly another
30 percent. In recent years savings and loan asso
ciations have increased their participation to ac
count for 11 to 14 percent or approximately three
times their volume in 1950.
Mortgages and Loans Held in Portfolio
FHA-insured mortgage holdings totaled $44.9
billion in face amount at the end of 1962. Title
I loans outstanding were estimated at an addi
tional $1,954 billion. The distributions of home
and project mortgages, by type of institution, are
shown in Table III—17, while Title I holdings are
covered separately. Holding institutions for
home mortgages numbered over 12,000 at the yearend ; for project mortgages, over 400; and for Title
I loans, about 5,500.
Insurance companies, with holdings totaling
$12.3 billion and accounting for 27 percent of all
holdings, were the leading investors in home and
project mortgages at the end of 1962. Savings
banks ranked second with investments of $9.8 bil
lion, or 22 percent of the total, followed by national
banks with $5.5 billion, or 12 percent. Not shown
separately in Table III-17 are the holdings of
State and municipal funds and of public em
ployee retirement funds, which together accounted
for nearly $2.0 billion or about 82 percent of the
holdings of “all other” institutions. At the yearend State and municipal funds held $39 million in
home mortgages and $634 million in project mort
gages. Puolic employee retirement funds held
$384 million in mortgages on homes and $902
million on projects. These mortgagees acquire
their holdings largely through purchases. In
1962 State and municipal funds bought $5 million
in home mortgages and $56 million in project mort
gages, while public employees retirement funds
purchased $71 million of home mortgages and
$207 million of project mortgages.
Home Mortgage Holdings.—The 3.4 million
FHA-insured home mortgages with face amounts
of $37.1 billion held by all mortgagees at the end
of 196*2 represented an increase of 6 percent in
number and almost 11 percent in amount over com
parable holdings at the end of 1961.
Insurance companies, maintaining their tradi
tional position as the largest holders of FIIAmsured home mortgages, held 29 percent of the
total amounts held among all institutions. Sav
ings banks, with 21 percent, and national banks,
!
with almost 14 percent, ranked second and third
(Table III—17). For these latter, the percentages
were practically unchanged from the 1961 yearend, as were the relative shares held by State banks
(7 percent), savings and loan associations (13 per
cent) and Federal agencies (8 percent). Mort
gage companies displayed the largest relative
gain over the year—from 4 percent in 1961 to 7
percent in 1962. Under the most-used programs—
Sections 203, 222, and 603—insurance companies
were the largest holders. Federal agencies
(largely FNMA) held most home mortgages under
special-purpose programs—Sections 213, 220, 221,
809, and 903.
Data shown in Table III-17 include as their own
holdings any mortgages sold to private investors,
organizations, or pension funds under special
regulations effective from July 1960 through
March 15, 1962 and held in custody for servicing
by the mortgagees making the sales. No account
ing was made of the number of such mortgages
when the authority for .these special sales expired
on March 15, but as of September 30, 1961 they
numbered some 3,125 and involved $38.3 million.
Project Mortgage Holdings.—Project mortgages
totaling $7.9 billion in face amount were held in
portfolio by financing institutions at the end of
1962. Savings banks, with 27 percent of the total,
led in volume of project mortgages held, followed
by miscellaneous institutions (accoimted for
largely by State and municipal funds and public
employees’ retirement funds, which were discussed
earlier) with 21 percent, and insurance companies
with 20 percent. These percentages remain little
changed from.the relative holdings of these insti
tutions at the end of 1961, mainly because the
year-to-year net additions to holdings among types
of mortgagees do not have a great effect on their
cumulative holdings. Long-term changes do oc
cur, however, as, for example, in the case of savings
banks. The actual change in position for these
instiutions from 1961 to 1962 was a slight increase
from 26.8 percent to 27.4 percent. From 1951^56,
the years in which they held 37 percent of the total
and displaced insurance companies for first place,
until 1962, savings banks have held a progres
sively smaller percentage.
The dominance of savings banks among institu
tional holders of project mortgages results from
large holdings under Section 207, 213, 608, and
803 (military). The decline in position of in
surance companies stems from the fact that their
holdings are heavily weighted by mortgages under
41
Table III—IS.—Purchases of FHA-insured mortgages and loans, by type of institution, 1962
[Dollar amounts In thousands]
Typo of institution
Section
National
bank
Number of mortgages and loans:
Home programs:
Sec, S----------------------- Sec. 203.........................
Sec. 203(k)......................
Sec. 213...........................
Sec. 220...........................
Sec. 221...........................
Sec. 222...........................
Sec. 603...........................
Sec, $09...........................
Sec. 903...........................
Total.
Total.
Total all programs-......................
Face amount of mortgages and loans:
Home programs:
Sec. S....................................
Sec. 203.................................
Sec. 203(k)............................ .
Sec. 213..................................
Sec. 220..................................
Sec. 221..................................
Sec. 222........... ......................
Sec. 603 *................................
Sec. 809..................................
Sec. 903..................................
Total.
Project programs:
Sec. 207...................................
Sec. 213 management..........
Sec. 220..................................
Sec. 221 market rate..............
Sec. 221 below-market rate.
Sec. 231......................................
Sec. 232......................................
Sec. 60S......................................
Sec. 803 military.....................
Sec. 803 armed services........
Total.......................................
Mortgage
company
Insurance
company
Savings
and loan
association
9
22,264
44
55,165
51
436
10
54S
3,263
33
216
14
32,585
2
1,324
140
3,947
2,378
177
412
59,715
Savings
bank
57
23.2SS
4
9,690
10
10,448
5
49,617
2
1
1S3
393
2,569
97
13
112
444
97
1
4
8
21
104
449
47
360
129
12
254
2,547
47
153
26,601
10,354
11,447
52,764
3
1
2
1
11
1
1
6
23
25
5
28
11
9
1
4
1
1
4
2
3
4
8
7
4
6
1
6
5
9
2
10
14
2S
15
77
2
69
39,872
29,309
190
196
1
Project programs:
Sec . 207.................................... .
Sec. 213 management..........
Sec. 220.....................................
Sec, 221 market rate.............
Sec. 221 below-market rate.
Sec. 231.....................................
Sec. 232.....................................
Sec. 60$------------ --------------Sec. $03 military____ _____
Sec. $03 armed services------
Title I improvement loans:
Sec. 2..................................
State bank
317
816
27
6
4
23,494
Federal
agency
All other
9,208
143
214, 678
2
17
29
78
257
2
1
1,967
217
5,669
10,824
3,021
1,246
40,979
9,592
237,689
5
7
18
10
2
12
24
4
1
100
49
22
9 !
94
54
1,123
fi
10,855 |
66,4S7
39,691
11,652
62,841
23,692
59,785
$273
268,603
$20
118,596
$57
136,705
$25
680,933
$50
255,215
$227
736,514
22
1,143
5, 930
644
15
37
121
230
1,058
6,032
254
5,170
1,805
156
2,644
36,886
306
2,182
717
10
1,775
5,508
12, 063
1,308
8S
6,793
112
5,476
45,716
311
3,362
$67
427,374
9
17,883
2,065
39,739
31,910
1,006
6,170
289,62S
126,408
149,626
724,937
798,500
526,222
127.651
3,044,662
14,151
751
3,952
1,072
11,241
4,793
10,028
5,568
37,471
20, 885
26,078
89,514
31,991
6,861
754
49,329
8,685
8,869
§,’485
2,031
75
8,277
1,520
494
4,229
14,248
2,784
3,252
2,420
11,047
7,910
58,739
12,110
1,852
13,029
524
10,167
8,884
13,622
3,764
13,938
6,296
178,147
218, 322
75,014
114,027
13,936
1,852
59,062
8,756
669
6,296
229,046
26,041
46,520
18,680
115,088
3,764
148,729
104,687
263,369
726,879
949
54,696
231,969
3,826,237
3,080
9,844
186
99
28
269,220
$720
2, 774,483
9
298
288
853
3,720.
9
12
27,639
2,898
56,005
149, 508
14,932
18, 308
160
12,543
35,529
17,922
87
208
1
190,850
168, 393
840,025
273,192
947,231
630,910
37.9
9.8
2.9
4.3
7.9
5.0
3.4
24.8
7.0
9.3
31.6
26.8
.3
3.2
3.8
81.6
7.2
57.6
.1
.4
8.0
1.9
4.1
1.7
28.2
6.5
5.5
4.7
25.3
2.1
11.9
2.6
2.1
4.1
4.3
.1
24.1
24.6
3.9
9.8
31.4
2.1
18.3
9.3
15.6
100.0
64.7
22.2
71.3
21.9
6.8
33.7
1.1
10.1
1.5
2.6
.1
.1
9.6
4.2
5.0
24.1
26.5
17.5
4.2
See footnotes at end of table.
42
6.5
6.8
1.3
.5
18.3
8.9
308,779
$122,472
351,199
Total.
70,691
41,033
Total all programs----------------
Sec. 8..................................
Sec. 203...............................
Sec. 203(k)..........................
Sec. 213......................... •—
Sec. 220...............................
Sec. 221..............................
Sec. 222...............................
Sec. 603................................
Sec. 809......................... —
Sec. 903................................
12
2
44
16
4
9
127
14ft
Title I improvement loans:
Sec. 2...........................................
Percentage distribution of amount:
Home programs:
Total
4.4
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
1
Table III-18.—Purchases of FHA-insured mortgages and loans, by type of institution, 1962—Continued
_____________________________ [Dollar amounts in thousands]
Typo of institution
Section
National
bank
Project programs:
Sec. 207.....................................
Sec. 213 management...........
Sec. 220.....................................
Sec. 221 market rate............
Sec. 221 below-market rate.
Sec. 231.....................................
Sec. 232.....................................
Sec. 608________ __ _______
Sec. 803 military.................. .
Sec. 803 armed services___
State bank
Mortgage
company
Insurance
company
Savings
and loan
association
Savings
bank
Federal
agency
6.5
1.0
3.5
7.7
5.1
6.4
8.8
2.5
17.2
27.8
22.9
41.0
42.7
6.0
5.4
5.9
23.2
13.2
14.0
17.4
86.8
7.2
24.1
31.8
5.5
27.6
All other
22.6
11.6
7.3
5.1
10.5
51.5
86.9
100.0
22.1
100.0
77.8
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
14.4
36.2
100.0
1.7
100.0
10.3
100.0
21.2
.2
4.4
3.9
6.0
1.6
6.1
3.6
6.4
2.6
15.8
.5
20.5
Title I improvement loans:
Sec. 2...................................................
64.9
32.8
.2
Total all programs.................... .
9.3
5.0
4.4
22.2
7.2
25.0
16.6
7
541
4
653
6
464
2
308
4
743
7
300
4
2
2
27
102
21
7
3
2
32
114
8
11
3
9
3
73
180
4
19
1
2
1
1
1
1
Total.
Number of purchasing institutions:
Home programs:
Sec. 8.......................... .............. .
Sec. 203......................................
Sec. 203(k).................................
Sec. 213.......................................
Sec. 220......................................
Sec. 221......................................
Sec. ryfl......................................
Sec. 603......................................
Sec. 809......................................
Sec. 033......................................
Project programs:
Sec. 207.....................................
Sec. 213 management...........
Sec. 220................................... .
Sec. 221 market rate______
Sec. 221 belr. iv-market rate.
Sec. 231.....................................
Sec. 232.....................................
Sec. 608______ ____________
Sec. 803 military....................
Sec. 803 armed services----Title I improvement loans:
Sec. 2...................................
.4
Total»
(*)
!
.
i
i
1
43
104
28
2
4
48
no
23
1
2
95
175
11
4
4
3
1
1
1
4
1
1
4
11
7
3
16
6
2
1
2
1
1
3
2
2
3
6
7
4
4
1
2
1
1
46
35
2
»Includes adjustments not distributed by mortgagees.
1 Includes Sec. 610.
Sections 608 and 803 (military), both inactive
programs.
Title I Property Improvement Loan Holdings.—
Institutional holdings of property improvement
loans under Title I are estimated on the basis of
periodic call reports. At the end of 1962, out
standing loans were estimated to number more
than 2.3 million with face amounts of $1,954 mil
lion. Of these totals, national banks held 1,157,000 loans with amounts of almost $919 million;
State chartered banks, 752,000 with $653 million;
savings and loan associations, 319,000 with $271
million; and finance companies, 20,700 with $16
million. Miscellaneous institutions held an ad
ditional 102,000 loans amounting to $96 million.
Mortgages and Loans Purchased and Sold in
1962
Almost 309,000 FHA-insured mortgages and
loans amounting to more than $3.8 billion were
traded among more than 4,000 approved lending
institutions during 1962. About 80 percent of
the amount of transfers was in home mortgages,
1
1
1
1
1
1
1
1
151
2
2
19
47
2
2
31
3,162
1
24
11
338
833
98
47
10
2
2
2
20
50
19
9
3
1
22
14
3
2
29
12
1
3
99
11
3
1
3
* Less than 0.05 percent.
19 percent in project mortgages, and 1 percent in
property improvement loans.
Savings banks and insurance companies account
ed for almost half (47 percent) of the amount of
purchases. Mortgage companies, which are in
terested more in earnings from origination and
servicing of mortgages than in income from in
terest on long-term investment, accounted for 61
percent of the amount of all mortgages sold. De
tails of purchases and sales of FHA-insured obli
gations are presented in Tables III-18 and III-19.
The amount of mortgages and loans transferred
was off 8 percent from 1961. Home mortgage
transfers and property improvement loans were
both down, by 15 percent and 32 percent, respec
tively, but project mortgages showed an increase
of more than half (56 percent).
Home Mortgages.—Transfers of insured home
mortgages in 1962 involved 238,000 mortgages with
face amounts of more than $3.0 billion. "Section
203 accounted for 215,000 mortgages amounting
to $2.8 billion, or more than 90 percent of both the
number, and amount of home mortgages trans
ferred. Savings banks displaced insurance com
panies in 1962 as the leading purchasers of home
43
884-285 0-63-4
i
I
category. Sales were heaviest among State banks,
which represented almost a third of all such
dispositions.
Trading was most active in mortgages insured
under Section S03 (armed services housing), with
purchases by State and municipal fluids ($26 mil
lion) and public employees’ retirement funds ($153
million) accounting for the bulk of $229 million
purchased. Sales of these, mortgages were chiefly
by national banks ($76 million), savings and loan
associations ($53 million), and State banks ($42
million). Trading was also heavy in Section 207
mortgages, with savings banks the leading pur
chaser ($90 million) and State banks the leading
seller ($77 million). Purchases by Federal agen
cies decreased from 17 percent of the total in 1961
to 14 percent in 1962 when total acquisitions
amounted to $105 million. Heaviest purchases by
FNMA were under special-purpose programs
(Sections 220,221, and 231).
Title I Property Improvement Loans.—Purchases
and sales of improvement loans during 1962 num
bered 70.7 thousand with net proceeds of $54.7 mil
lion. This was a decrease of 44 percent in number
Table III-20.—Terminations of FHA-insured home mortgages, by type, 1986-62
[Dollar amounts in thousands]
Total >
Sec. 8
Sec. 203(k)
Sec. 203
Sec. 213
Sec. 220
Sec. 221
Disposition
Amount
Number
Mortgages insured.......... ..
Num- Amount Num- Amount Num- Amount Num- Amount
ber
ber
ber
ber
Amount
6,356,127 $55,940,027 38.345 $204,260 5,419,537 $48,921,358
Mortgage insurance termi
nated:
Prepaid in full................ 2,197,845
Prepaid by superses
sion................................
53S, 090
Matured loans...............
36,031
Default terminations
(total):
(101,425)
Mortgages as
signed by mort
gagee:
Mortgages
held or sold
by FHA........
430
Titles acquired
by FHA........
1
Titles acquired by
mortgagee:
Property
transferred
to FHA____
89,633
Property re
tained by
mortgagee...
11,361
Voluntary termina
tions................. .............
5,310
Other terminations___
830
3,476, 596
13,501,207
6,540
33,295 1,824,140
3,676,8S7
138,3SS
3,068
18
16,006
81
426,004
35,053
(929.165) 0,397)
(7,742)
(65,060)
547
11,386,406
3
13
3,020.692 ..........
134,829 ...........
(633,023)
(—)
24, 094
23
274
87
754
1,043
10,611
11
107 |
26 |
221
(16,742)
(41)
(-) (1,404)
59
666
1
12
7,049
56,632
471,299
1,398
16,676
8,368
61,046
6
67
624
14
4,733
659
38,375
3,695
18,295,641 11,159
57,763 2,355,649
15,217,020
3
37,644,386 27,186
146,497 3,063,888
33,704,338
544
2,937 27,114
Sec. 603-610
Sec. 611
1,267
79,546
130
42,390
4,604
133
3
Sec. 222
Sec. 603
Disposition
13
$513,231
2,326
12
845,321
$25,981 52,500
$2,950 31,888 $385,282 2,152
4,286
Total terminations... 2,879,531
Mortgages in force.
Num- Amount Number
ber
1
11
4, 774
51, 458
(424) ,'3.137)! (26,927)
41
424
19
3,130
26,865
5
43
3,250
27,902
25,176 49,250
485,329
805
75
333,825 2,077
2
Sec. 809
Sec. 903
Number Amount Number Amount Number Amount Number Amount Number Amount Number Amount
Mortgages Insured..........................................
Mortgage insurance terminated:
Prepaid in full........................ .................
Prepaid by supersession.......................
Matured loans........ ..................... ...........
Default terminations (total):
Mortgages assigned by mortgagees:
Mortgages held or sold by
FHA.........................................
Titles acquired by FHA----Titles acquired by mortgagee:
Property transferred to
FHA.........................................
Property retained by mort
gagee....................................... Voluntary terminations------------------Other terminations------------------------ Total terminations.
Mortgages in force.
118,897 $1,611,193 624,652 $3, 645,214
5,321
3,849 ;
(2,748)
70,892
50,027
354,116 1,947,207
555, 901
101,237
935
3,410
(32,103) (14,675)
(93, 513)
28
484
3,363
1,288
238
25
(15)
$16,109
5,460
1,003
68
(60)
75
$556
7,013
$96,495
15
5
110
38
79
53
1, 007
657
(108)
(1,275)
(1)
(7)
57,156 $517,270
3,907
2,556
34,590
21,619
(12,'839) (117,350)
341
3,117
1, 275
12, 489
114,152
1
13
9
1
80
9
2,720
31,759
11,834
75, 770
13
46
28
7
7
344
99
90
2,813
428
160
17,258
3,227
794
2
7
14
41
11,932
153,210
471, 551 2,604,052
1,573
6,632
21
155
241
2,952
19, 303
173, 568
106,965 1,457,983
153,101 1,041,162
1,790
9,477
54
401
6,772
93,543
37,853
343,703
1
7
108
1 Excludes Sec. 2 home loans. Includes Sec. 225 open-end advances of $122,539; of which $111,954 represents mortgage insurance terminated and $10,585 in
force. Also includes 2 home improvement loans for $6,000 under Sec. 220(h), both in force.
46
i
I
of loans and 32 percent in dollar volume from the
1961 secondary market transactions in Title I
loans.
In 1962, purchases by commercial banks account
ed for 98 percent of both loans and proceeds, with
national banks acquiring 56 percent of the loans
and 65 percent of the proceeds. Sales by banks
were responsible for 94 percent of the loans that
had 80 percent of the proceeds, with national banks
marketing 63 percent of the loans and 59 percent
of the proceeds. Mortgage companies and institu
tions classified as “all other”, acting mainly as
agents to service loans, sold an additional 17 per
cent of the total proceeds transferred.
.
TERMINATIONS, DEFAULTS, AND CLAIMS
PAID
This section presents data on terminations of
mortgage insurance contracts, default status of
insured home and project mortgages, and claims
paid on defaulted Title I improvement loans. In
surance terminated by the end of 1962 amounted
to $32.2 billion or 39,7 percent of the $81.1 billion
in total insurance written (Table III—3). Ter
minations c-f insurance on home mortgages ac
counted for $18.3 billion of this amount, project
mortgages for $1.9 billion, and Title I improve
ment loans for $11.9 billion. During the year
1962, total terminations aggregated almost $3,052
million—$2,022 million in home mortgages, $260
million in project mortgages, and $770 million in
property improvement loans.
Chart III-8
FORECLOSURES OF FHA HOME MORTGAGES,
1935-62
Home mortgages foreclosed or deeds accepted in lieu of
foreclosure as a percent of mortgages in force*
1.0 —
Terminations of Home and Project Mortgages
by Type of Termination
Home Mortgages.—The insurance contract on
a home mortgage terminates as the result of any
of the following actions:
1. The matured loan is paid off according to
schedule.
2. The loan is prepaid, either with or without
refinancing. When refinanced with a new
FHA-insured mortgage, the transaction is
termed prepayment by supersession.
3. The mortgage is foreclosed upon default and
title to the property is acquired by the mort
gagee. The mortgagee has the option of
either transferring title to FHA in exchange
for debentures and a certificate of claim (for
interest losses and foreclosure expenses not
covered by the debentures), or of withdraw
ing from the insurance contract for the pur
pose of marketing the property on his own
terms. Also classed as withdrawals are the
cases in which the foreclosed property is pur
chased by a party other than the mortgagee.
4. The defaulted mortgage is assigned by the
mortgagee to FHA.
5. The insurance is voluntarily terminated.
This action is accomplished upon the request
of the mortgagor and the mortgagee and
upon payment of a termination fee.
By the end of 1962, insurance had been termi
nated on nearly 2.9 million homes, or 45 percent of
the total number of home mortgages insured.
Table III-20 shows the distribution by type
of termination for all home programs com
bined, together with the variation reported for
the individual programs.
Insurance on three-fourths of the mortgages in
sured under Section 603, the last of which were
underwritten in 1954, had been terminated by
December 31, 1962. Newer programs had only
small proportions of terminated cases; for ex
ample, Section 220 and Section 809, each with less
Table III—21.—Disposition of FHA-acquired home prop
erties, Dec. SI, 1962
0.8 —
o
o
Number of initial sales
>i
Section
.£
8gi 0.6 —
!
I
£o
f 0.4 —
Foreclosures
u
:
£
'}
0.2 —
.
I <\ I I I I I I I I I
1935
'40
'45
1 I I I I I I I I I I I 1 11
'50
• Includes cases held In mortgagee Inventory.
1
Total
8
203
213.
220.
221.
222
603*
611
809
903.
Total.
0
Total
number
acquired *
'55
'60 '62
Sold for
all cash
Number
of prop
Sold for erties on
cash and hand *
notes 1
270
27,053
S02
33
2,621
1,720
307
3
652
930
27,334
562
8
505
97S
8,602
1
41
6,222
6,205
45,183
38,763
1,267
56,633
1.39S
41
3,130
2,720
11,847
1
108
12,489
1,011
29,749
607
S
519
1,002
11,573
1
44
6,874
81
2,415
45
89,634
51,388
14
24
2,971
64
5,893
i Excludes FHA repossessions.
* Or contracts of deeds,
a Includes 517 repossessions.
1 Includes Sec. 603-610.
47
Table II1-23.— Disposition of FHA-acquired multifamily
housing properties and mortgages, December 81, 1962
FHA-acquired multifamily housing properties
Properties sold by FHA
!
Section
Total
!
Total
30
1
8
Number of projects:
Sec. 207........................
Sec. 213 sales......... ..
Sec. 213 manage
ment........................
Sec. 221 market
rate...........................
Sec. 6082.....................
Sec. 803 military___
Sec. 908...................
6
559
20
21
2
400
10
13
Total........................
659
456
4,205
26
46
1
10
12
1
1
107
5
2
1
28C
5
n
4
159
10
8
15
125
316
203
1,705
1,508
992
26
2,240
11
5,038
676
220
116
18,009
851
781
814
13.495
1,868
748
7,453
20,775
19,686
6
Number of units:
Sec. 207.....................
6,445
Sec. 213 sales...........
20
Sec. 213 manage
ment........... .......
521
Sec. 221 market
rate..........................
941
Sec. COS1..................... 37,591
Sec. 803 military__
3,395
Sec. SOS.......................
1,749
Total.
On
With- With hand
out
mort
reingage
sur- held by
ance
FHA
With
rein
sur
ance
50,668
16
6
7
521
127
24,096
1,527
1,001
1,049
30,982
2,754
Mortgage notes assigned to FHA
Mortgage note disposition
Section
Total
Total
Number of projects:
Sec. 207........................
Sec. 213 sales........... .
Sec. 213 manage
ment........................
Sec. 220........................
Sec. 221 market
rate...........................
Sec. 608.......................
Sec. 803 military___
Sec.
803
armed
services....................
Sec. 908........................
Total.
Number of units:
Sec. 207........................
Sec. 213 sales.............
Sec. 213 manage
ment.........................
Sec. 220........................
Sec. 221 market
rate...........................
Sec. 608.................... ..
Sec. 803 military___
Sec.
803 armed
services....................
Sec. 908........................
TotaL.
Sold
with
rein
sur
ance
64
3
19
2
8
2
1
4
589
25
1
366
14
24
30
10
16
10
749
419
11
7,587
211
2,704
170
1,102
880
334
70
289
39,688
5,461
116
21,201
2,861
2,866
2,237
1,162
1,559
1,152
59,553
29,833
2,254
Sold
without
reinsurance
Fore
closed
with
prop
erty
acquir
ed by
FHA
1
18
1
45
1
1
7
2
1
330
14
3
233
11
16
14
14
27
381
330
144
1,602
26
4,883
41
70
810
334
116
20.380
2,861
173
18,487
2,600
1,559
1,714
678
26,614
29,720
1
26
821
965
On
hand
* Includes repossessions; other columns do not show these cases.
* Includes sec. 608-610.
prised 3.1 percent and withdrawals 0.4 percent.
Withdrawals represented only 11 percent of total
foreclosures in 1962 as compared with 15 percent
in 1961,19 percent in 1960, and 21 percent in 1959.
These successive declines attest to growing difficul
ties encountered by mortgagees in profitably dis
posing of acquired properties.
Assignments of mortgages in lieu of foreclosure,
first authorized in 1959, increased from 7 in 1961
to 430 (on an on-hand basis) at the end of 1962.
An additional assigned note was foreclosed in 1962
and the property acquired.
Although the number of voluntary terminations,
also initially authorized in 1959, remained in
significant in relation to the total, they increased
in 1962 to 5,300 from less than 400 at the previous
year end.
Of the 89,600 home properties acquired by the
end of 1962, FIIA had sold 51,400, or 57 percent50 percent for cash and mortgage notes and an
additional 7 percent for cash. The unsold inven
tory, including 500 repossessions, amounted to
38,800 (Table III-21).
Section 203, under which 63 percent of the home
properties were acquired, showed the largest vol
ume of acquisitions during the year—almost
24,600. This section, however, also showed one of
the more favorable experiences in the disposition
of properties, since sales during the year num
bered almost 14,100, or the equivalent of 57 per
cent of the year’s acquisitions. Section 603 set
the best record on dispositions, having sales which
exceeded new acquisitions by two-thirds. The
year’s disposition rate was also favorable for Sec
tions 903 (90 percent of new acquisitions), Sec
tion 8 (66 percent), and Section 809 (60 percent).
Dispositions lagged most for the newer programs,
Sections 220 and 221, which had 1962 sales repre
senting 17 percent and 22 percent, respectively,
of new acquisitions. Detailed information on the
financial experience with acquired properties is
presented in Section 5 of this report.
Project Mortgages.—At the end of 1962, mort
gage insurance had been terminated on 4,000
project mortgages with face amounts totaling $1.9
billion. These terminations represented 33 per
cent of the number and 19 percent of the amount
of mortgages insured through 1962.
Terminations of project mortgage insurance
result from the same actions as for home mort
gages, with an additional provision for termi
nating insurance of mortgages, under certain sec
tions and reinsuring them at a lower rate of
interest under Section 221(d) (3). A cumulative
summary of terminations, by types and by pro
gram, is presented in Table III-22. Prepayments
comprised the greatest number of project mort
gage terminations, over 70 percent being prepay
ments in full and an additional 1 percent being
prepayments by supersession. The latter figure
differs considerably from the 19 percent of home
mortgages which were prepaid by supersession.
Only 3 of the 4,000 terminations of project mort
gage insurance represented loans paid off at
maturity.
49
m
1
Table III-24.-^-Terminations of FHA-insured home mortgages, selected years, 1960-62
Insurance written
Total terminations
Cumulative through
end of year
Year
Number of Cumulative
cases for
through
the period end of year
Number
for the
period
Percent
of total
Insured
Number
Total: *
1950
1952.
1954
1955
1956
1957
1958
1959
1960
1961
1962
341,032
234, 426
214,237
310,870
248,121
198, 429
381,883
495,172
366,213
368,561
395,808
2,628,197
3,116,292
3.591,070
3,901,940
4,150,061
4, 348,490
4,730,373
5,225,545
5,591,758
5,960,319
6,356,127
Section 8:
1952
1954
1955
1956
5,815
15,897
6,714
139
12,203
32,479
38,193
38,332
38,345
38, 345
38, 345
38,345
38,435
38, 345
338,125
212,748
175,698
294,772
234,929
181,680
353,418
460,966
333,107
340,337
354,171
Default terminations»
131,833
101,134
131,910
177,746
159,458
117,661
117,393
196,240
146,968
164,174
216,633
FHA acquisitions
Cumulative through
end of year
Number
for the
period
Percent
of total
Insured
Number
Cumulative through
end of year
Number
for the
period
Percent
of total
Insured
Number
1,116,795
1.327.724
1,583.258
1,761,004
1,920,462
2,038,123
2,155,516
2,351,756
2.498.724
2,662,898
2,879,531
42.50
42.62
44.09
45.13
46.28
46.87
45.57
45.01
44.69
44.68
45.30
2,610
1,478
3,415
4,021
5,268
3,405
3,087
5,223
9,332
20,724
32,248
16.301
19.302
23,849
27,870
33,138
36,543
39,630
44,853
54,185
74,909
107,157
0.62
.62
.66
.71
.80
.84
.84
.86
.97
1.26
1.69
1,860
893
1,573
3,796
4,677
2,657
2,271
3,613
7,113
18,670
29,789
12,707
14,742
17,048
20.844
25,521
28.178
30,449
34,062
41,175
59.845
89,634
0.48
.47
.47
.53
.61
.65
.64
.65
.74
1.00
1.41
.75
1.75
3.46
5.89
8.18
5
45
79
5
114
193
174
217
367
584
.04
.35
.51
.96
1.62
2
25
46
141
219
2
82
128
.02
.25
.34
879
1,028
2,042
1,446
1,492
2,016
91
567
1,321
2,256
3,135
4,163
6,205
7,651
9,143
11,159
269
189
171
137
172
169
773
944
1,081
1,253
1,422
2.02
2.46
2. 82
3.27
3.71
.70
1.27
10.86
16.18
19.95
23.84
29.10
155
155
146
152
171
643
798
944
1,096
1,267
1.68
2.08
2.46
2.86
3.30
2,000,812
2,459,014
2,866,157
3,160,929
3,395,858
3,577,538
3,930,956
4,391,922
4,725,029
5,065, 366
5,419,537
97,144
81,301
105,603
144,937
133,083
99,659
101,436
166.847
126,874
141.163
186,563
880,845
1,047,652
1,255,087
1,400,024
1,533,107
1,632,766
1,734,202
1,901,049
2,027,923
2,169,036
2, 355,649
44.02
42.60
43.79
677
684
1,131
1,096
2,089
1,514
2,061
3,190
7,133
16,846
26,606
6,324
7,768
9,640
10,736
12,825
14,339
16,400
19,590
26,723
43,569
70,175
.32
.32
.34
.34
.38
.40
.42
.45
.57
.86
1.29
225
282
427
485
1,572
910
1,328
1,828
5.0S2
15,125
24,591
4,333
5,022
5,712
6,197
7,769
8,679
10,007
11,835
16,917
32,042
56,633
.22
.20
.20
.20
.23
.24
.25
.27
.36
.63
1.04
539
547
3
3
.55
3,235
4,502
1,054
677
4,233
5,827
2,162
3,023
2,952
1,221
3,548
10,739
11,793
12,470
16,703
22,530
24,692
27,716
30,667
31,888
1
22
106
216
205
200
1
33
139
355
560
760
.03
.31
1.18
2.85
3.35
3.37
710
1,470
2,041
2,955
4,774
5.95
7.36
9.64
14.97
4
46
62
55
66
109
107
304
S60
4
50
112
167
233
342
449
753
1,613
.04
.42
.90
1.00
1.03
1.39
1.62
2.46
5.06
3
14
63
71
53
87
111
249
747
3
17
SO
151
204
291
402
651
1,398
.03
.14
.64
.90
.91
1.18
1.45
2.12
4.38
Section 220:
1957
1958
1959
1960
1961
1962
455
544
163
165
345
423
512
1,056
1,219
1,384
1,729
2,152
7
12
55
1
1
1
8
20
75
.20
.09
.08
.58
1.16
3.49
1
5
6
30
1
6
12
42
.08
.43
1.95
6
5
30
6
11
41
.43
.64
1.91
Section 221:
1958
1959
1960
1961
1962
4,394
7,745
9,241
7,383
23,201
4,930
12,675
21,916
29,299
52,500
3
50
415
1,234
1,548
3
53
468
1,702
3,250
.06
42
2. 14
5.81
6.19
3
74
432
1,296
1,476
4
78
510
1,806
3,282
.08
.62
2.33
6.16
6.25
2
43
1,204
1,483
2
45
443
1,647
3,130
.04
.36
2.02
5.62
5.96
Section 222:
1955
1956
1957
1958
1959
1960
1961
1962
6,635
11,457
10,779
16, 374
22,517
19,151
16,733
15, 241
6,645
18,102
28,881
45,255
67,772
86,923
103, b56
118,897
13
133
258
565
1,996
1,505
2,543
4,919
13
146
401
969
2,965
4, 470
7,013
11,932
.20
.81
1.40
2.14
4.37
5.14
6.77
10.04
1
7
19
120
320
Sll
1,582
1
S
27
147
467
1,278
2.S60
.01
.03
.06
.22
.54
1.23
2.41
4
17
47
294
SOS
1,550
4
21
6S
362
1.170
2,720
01
05
10
42
1.13
2.29
1957
1958
8
1959
1960
1661
1962
Section 203:
1950
1952
1954
1955
1956
1957
1958
1959
1960
1961
1962
283
754
935
44.29
45.15
45.64
44.12
43.29
42.92
42.82
43.47
Section 203(k);
1962
Section 213:
1952
1954
1955
1956
1957
1958
1959
1960
1961
1062
571
914
1,819
1
See footnotes at end of table.
51
:
'
Table III—25.—Terminations of FHA-insured multifamily housing mortgages, selected years, 1960-62—Continued
Total terminations
Number for the period
Default terminations»
Cumulative through end of year
Number for the period
Cumulative through end of year
Year
Dwelling units
Number of Number of Numbor of
mortgages
units
mortgages
Percent of
total
insured
Number
Section 213 sales:
1952
1954
1955
1956
1957
1958
1959
1960
1961
1962.
Section 213 management:
1954.................................
1955
1956
1957
1658
1959
I960
10
65
89
12
168
326
152
116
198
146
1,794
2,874
3,029
420
3,083
6,723
3,186
1,904
3,616
2,340
1
1
1
12
44
70
22
46
692
844
960
1,158
1,304
2,062
8,964
11,993
12,413
16,496
21,219
24,405
26,309
29,925
32.265
12
56
126
104
150
150
428
19
97
186
198
1
144
3
3
3
144
211
211
211
211
211
211
211
211
211
.80
1.84
1.74
1.58
1.10
.89
.84
.74
.67
.65
1
2
2
2
5
70
92
92
92
370
.30
.36
.32
.29
L03
1
3
3
3
3
3
.06
.26
. 55 •
.40
.53
.48
1.20
1
1
70
22
3
278
I
278
1961
1
112
8
540
1.29
1
112
6
482
L15
1962
11
1,533
19
2,073
4.06
7
849
13
1,331
2.61
2
2
138
254
2
4
138
392
.52
1.10
1
1
132
202
1
2
132
334
.50
.94
6
1
7
930
11
806
5
6
13
930
941
1,747
17.78
5
1
3
930
11
173
5
6
9
930
941
1,114
3.45
6.21
9.25
11.48
14.30
15.66
17.86
20.47
23.24
28.39
33.26
66
37
70
76
53
49
57
63
83
58
45
2,646
2,998
5,026
4,359
5,608
3,047
4,472
4,174
6,029
3,778
3,500
87
206
339
415
468
517
574
637
720
778
823
4,522
11,826
22,021
26,380
. 1
4
2
11
4
7
55
1,069
550
952
1
5
7
18
22
29
29
30
31
55
1.124
1,674
2,626
3,612
5,669
5,669
5,965
5,995
.07
1.35
1.99
3.09
4.26
6.68
6.68
7.03
7.06
12
24
24
1,362
2.866
2,866
1.35
2.49
2.41
33
Section 221 market rate:
1900................ .............
1961
1962
. Section 608:3
1954
1955
1956.
1957
1958
1959
1960
1961
1962
Section 803 military:
1954
1955
1956
1957
1958
1959
1960
1961
1962
8ection 803 armed services:
1959.....................................
1960
1961
1
3
118
1954
1955
1956
1957
1958
1959
1960
1961
1962
^£3
14,880
29,170
43,452
53,902
67,173
73, 516
83,851
96,112
109,121
133,295
166,179
68
110
166
131
100
133
168
157
284
252
7,978
5,122
7,357
10,450
13,271
6,343
10,335
12,261
13,009
24,174
22,884
225
424
639
805
936
1,036
1,169
1,337
1,494
1,778
2,030
1
4
2
11
4
8
65
1,069
650
952
980
2,557
1
1
296
30
1
5
7
18
22
30
30
31
32
55
1,124
1,674
2,626
3,612_
6,169
6,169
6,465
6, 495
.07
1.35
1.99
3.09
4.26
7.27
7.27
7.62
7.65
8
12
12
2,000
1,362
1,604
8
20
32
2.26
3.32
4.22
32
2,000
3,362
4,866
4,866
4
253
4
253
1962
Section 908:
8
594
12
7
7
5
948
265
200
2
5
72
163
19
26
31
31
33
38
38
2,057
1
296
30
12
12
1,362
1,504
253
4.09
31.988
35,035
39,507
43,681
49,710
53,488
56.988
4
3.02
4
847
9.98
8
594
12
1,795
2,060
2,260
2,260
2,332
2,495
2,495
21.15
24.28
26.64
26.64
27.40
29.40
29.40
7
7
4
948
265
160
2
3
72
135
19
26
30
30
32
35
35
• Includes mortgage notes and property titles transferred to FHA. Also
Includes foreclosed projects retained by mortgagees with termination of
FHA insurance contracts: Sec. 207, 7 projects with 348 units; Sec. 608, 5
projects, 89 units.
of 43.47 percent of mortgages insured reversed a
4-year downward trend for this program. The
volume of both default terminations and FHA
acquisitions for Section 203 exceeded all other
programs in terms of number, but. in relation to
!
11.42
78.12
99.03
92.88
80.49
89.03
96.73
91.97
94.39
98.86
Percent of
total
insured
Number
1
2
3
3
4
4
7
Section 220:
:
Dwelling units
Number of Number of Number of
mortgages
units
mortgages
253
847
1,795
2,060
2,220
2,220
2,292
2,427
2,427
17.78
15.08 'O'
15.65
1.05
2.52
4.69
5.62
6-81
7.46
8.41
9.30
10.59
11.39
12.14
3.02
9.98
21.15
24.28
26.16
26.16
27.01
28.60
28.60
* Includes Sec. 611.
3 Includes Sec. 608-610.
volume of insurance each had the lowest ratio of
all programs, 1.29 percent and 1.04 percent,
respectively.
The highest default termination and FHA ac
quisition ratios occur under Section 903. This
53
Table III-25.—Default status of FHA-insured home mortgages, selected years, 1950-62
Defaults and potential FHA acquisitions
As of year end
Insured mort
gages In force
Total defaults
Number
Percent of
in force
Foreclosures in process
Mortgagee inventoryi
Number
Number
Percent of
in force
Percent of
in force
Total: *
1950
1,511,402
1,-7S7,56S
2,007.812
2,140, 936
2,229,599
2,310,367
2,574,857
2, S73, 789
3.093,034
3,297, 421
3,476,596
17,058
10,562
16,231
14.9SS
11,973
10,333
14,455
16,970
26,850
40, 713
46,186
209
12,112
31,912
36,872
36,076
35,210
34,182
32,140
30,694
29,202
27,186
0.08
.04
.05
.13
.08
.04
.07
.59
.87
1.23
1.33
i, 167
646
1,091
2,765
1,731
1,013
1,878
2,550
4,201
7,359
8,931
87
207
418
533
470
521
446
394
479
403
.72
.65
1.13
1.48
1.33
1.52
1.39
1.28
1.64
1.48
1,119,967
1,411,362
1,611,070
1,760,905
1,862, 751
1,944,772
2,196,754
2,490,873
2,697,106
2, S96,288
3,064,432
9,480
7,141
8,966
8,866
7,985
7,790
11,001
14,023
22,490
34, 799
40,593
Section 213:
1952
1954
1955
1956
1957
1958
1959
1960
1961
1962
3,547
10,706
11,654
12,115
16,143
21, 770
23,222
25,674
27, 712
27,114
Section 220: *
1956.........
1957
1958
1959
1960
1961
1962
1952
1954.
1955
1956
1957
1958
1959
I960
1961
1962
Section 8:
1950
1952
1954
1955
1956
1957
195S
1959
1960
1961
1962
Section 203: *
1950
1952
1954
1955
1956
1957
195S
1959
1960
1961
1962..
Section 221:
1956
1957
1958
1959
1960
1961
1962
Section 222:
1954
1955
1956
1957
1958
1959
1960
1961
1962
See footnotes at end of table.
54
1.13
.59
.81
.70
.54
.45
.56
0.06
.03
.07
.04
.03
.04
.09
.14
.22
.26
950
513
1,371
807
695
821
1,040
1,858
3,276
4,478
5,732
5
19
47
75
57
63
65
57
71
69
.04
.06
.13
.21
.16
.18
.20
.19
.24
.22
3
21
49
73
61
76
70
43
39
25
.02
.07
.13
.20
.17
.22
.22
.14
.13
.09
.85
.51
.56
.50
.43
.40
.60
.56
.83
1.20
1.32
502
438
681
1,515
830
803
1,161
1, 919
3,523
6,232
7,530
.04
.03
.04
.09
.04
.04
.05
.08
.13
.22
.25
306 |
176 .
387
430
422
615
759
1,474
2,844
3,839
5,115
.03
.01
.02
.02
.02
.03
.03
.06
.11
.13
.17
84
133
145
98
184
186
370
612
841
.78
1.14
1.20
.61
.85
.80
1.44
2.21
3.10
16
12
27
20
33
31
78
196
258
.15
.10
.22
.12
.15
.13
.30
.71
.95
1
33
31
14
27
48
44
98
209
.01
.28
.26
.09
.12
.21
.17
.35
.77
57
511
1,055
1,218
1,376
1,709
2.079
5
4
12
12
.41
.29
.70
.58
1
.08
1
.08
5
.24
1
1
.06
.05
16
536
4,927
12,622
21,448
27,597
49,250
1
55
194
835
1,205
1,287
.19
1.12
1.54
3.89
4.37
2.61
7
46
199
416
432
.14
.36
.93
1.61
.88
1
2
32
64
154
145
.19
.04
.25
.30
.56
.29
10
6,632
17,056
28,477
44,286
64,807
82,453
96, 613
106,965
1
18
25
88
322
614
991
1,324
.02
.10
.09
.20
.50
.74
1.03
1.24
1
4
17
68
116
221
306
.01
.01
.04
.10
.14
.23
.29
1
4
4
74
94
86
112
.01
.01
.01
.11
.11
.09
.10
.04
.06
.11
.14
.16
Table III—27.—Default status of FHA-insured multifamily housing mortgages, selected years, 1960-62
Insured mortgages
in force
Insured mortgages in
default
Mortgage notes being
assigned to FHA
Projects being acquired
by mortgagee
As of year end
Number
of mort
gages
Number Number
of units of mort
gages
Number
of units
Percent
of units
in forco
Number
of mort
gages
Number
of units
Percent
of units
in force
Numbor
of mort
gages
Numbor
of units
1.47
1.04
1.21
1.24
.63
.55
1.41
1.11
12
2
12
2
8
8
8
11
11
212
208
962
224
179
254
900
476
0.05
.04
.17
.04
.03
.04
.13
.12
.06
36
17
21
9
7
1
4
2
11
1,933
526
1,314
485
394
70
97
400
1,410
0.44
.10
.23
.09
.06
.01
.01
.06
.19
2
160
.43
1
22
.10
1
120
.29
7
941
2.67
All sections:
1950
1952
1954.
1956
1958
195*.
1960
1961
1962
6,673
7,149
7,321
7,045
7,553
7.599
7, S26
7,901
8,016
443,106
538,395
573,101
560,696
639,684
662,534
691,857
718,730
753,485
113
70
90
52
62
42
66
83
63
6,495
5,585
6,959
6,962
4,334
4,197
3,781
10,110
8,368
Section 207:
1950
1952
1954
1956.
195S.
1959
1960
1961.
1962
76
193
354
3S4
526
607
727
863
1,033
8,650
18,323
34,836
3S.207
52,3S0
65,334
82,558
104,224
129, 708
1
2
7
800
42
9.25
.23
2.54
1
104
.30
1
7
9
10
14
208
4S4
1,356
1,707
1,339
.40
.74
1.64
1.64
1.08
3
4
3
436
622
215
.53
.60
.17
6
24
76
39
111
59
147
121
21
2S5
3, S32
2,510
951
2,614
S24
2.29S
1,779
372
1
274
10.92
57
109
125
165
190
220
270
347
12,169
20,367
22,917
28,179
31,236
35,383
41,195
48,954
Section 213 sales:
1950....... .........
1952
1954
1956
1958
1959
1960
1961
1962
Percent
of units
in force
Section 213 management:
1952
1954
1956
195S
1959.
1960
1961
1962
1
22
.10
1
1
2
5
141
112
214
546
.45
.32
.52
1.12
Section 220:
1956
1953
1959
1960.
1961
1962
5
42
75
96
121
148
1,051
8,862
16,489
20,956
26,191
35,279
1
5
254
1,075
2.87
6.62
17
22
4,'702
4,654
17.95
13.19
Section 221 market rate:
195S
1959.
1960
1961
1962
11
17
25
31
41
2,024
3,569
4,302
4,977
5,373
2
3
1
84
302
180
1.95
6.07
3.35
See footnotes at end of table.
56
112
.32
I
Table III-27.—Default status of FHA-insured multifamily housing mortgages, selected years, 1960-62—Continued
Insured mortgages
In force
Insured mortgages in
default
Mortgage notes being
assigned to FHA
Projects being acquired
by mortgagee
As of year end
Section 221 below market rate:
1961
1962
Section 231:
1959
I960
1961
1962
Number
of mort
gages
Number
of units
1
28
320
4,187
l
25
67
116
Number
of mort
gages
Number
of units
1
2
74
631
Percent
of units
in force
0.82
3.54
Number
of mort
gages
Number
of units
Percent
of units
in force
1
74
0.41
Number
of mort
gages
Number Percent
of units of units
in force
Section 232:»
1900
1961
1962
2
22
98
(171)
(1 ,801)
(8,436)
1
(75)
Section 608:«
1950
1952
1954
1956
1958
1959
1960
1961
1962
6, 628
6,648
6,429
6,132
5,898
5,730
5,573
5,289
5,037
416,854
440,694
426,146
402,416
385,738
373,477
360, 468
336,294
313,410
112
67
66
38
50
27
63
50
18
5,695
5,524
4,025
5,689
1,788
1,869
2,079
3,111
958
1.37
1.25
.94
1. 41
.46
.50
.58
.93
.31
12
2
9
1
7
8
4
7
7
212
208
766
24
141
254
352
267
187
.05
.05
.18
.01
.04
.07
.10
.08
.06
36
17
14
3
7
1
4
1
4
1,933
526
814
192
394
70
97
280
469
.46
.12
.19
.05
.10
.02
.03
.08
.15
56
186
259
265
252
244
4
7
9
2
708
968
2,046
628
.87
1.17
2.52
.80
1
200
.24
2
200
199
.25
.24
1
150
.19
243
242
16,669
59, 585
81,021
82,645
81,271
78,714
78,714
78,418
78.388
17
482
610
703
814
846
5,819
72,391
86,459
97,777
110,334
113,980
36
92
78
66
3,207
8,126
6,690
6,225
6,225
6,163
5,990
5,990
12
6
1
1,066
283
38
13.12
4.23
.61
Section 803 military: *
1950
1952
1954
1956
1958
1959
1900
1961
1962
Section 803 armed services:
1956....................................
1958....................................
1959....................................
1960
1061
1962
Section 908:
1962
1964
1956
1958
1059
1960
1961
1962
244
64
59
69
■
* Includes Sec. 611.
* Units under Sec. 232 are in terms of beds and are excluded from totals.
* Includes Sec. CIO.
i
i
2
92
1.13
1
38
.61
4
3
150
72
1.85
1.08
4 Includes acquisitions by the Department of Defense pursuant to the
Housing Act of 1955. At the end of 1962, acquisitions numbered 221 projects
Involving 73,608 units.
i
l
i
;
I
:
1
57
:
'
!
!
!
:
i
■
A
;
Chart III-10
DEFAULTS OF FHA HOME MORTGAGES,
1950-62
Mortgages in default under all home mortgage programs
Number of mortgages in default
45 —
40 —
| 3005
|
o
___
20 “
__
£ io —
o
i
|
i
i
i
I
I
l
l
I
l
I
Home mortgages in default as a percent of mortgages in force
=
1.0 —
o
-
1
£
£
0.5 —
0
’50 ‘51 '52 '53 '54 '55 ’56 '57 '58 $9 '60 '61 '62
reported a year earlier. This rate of increase in
defaults was substantially below the 52 percent
increase from 1960 to 1961. The home default
ratio—defaults as percentage of mortgages in
force—stood at 1.33 percent as of December 31,
1962. Project mortgages, on the other hand, had
17 percent fewer defaults in terms of dwelling
units than at the end of 1961. The project default
ratio was 1.11 percent at the end of 1962.
Home Mortgages.—The year-end default status
of home mortgages is shown in Table III-26 for
each section for selected years 1950 through 1962.
Total defaults in this table include those for which
foreclosure had been started and potential acquisi
tions (mortgagee inventory). The 1961 and 1962
totals also include defaults under forbearance
agreement, numbering 245 and 358, respectively.
These agreements, first authorized in 1961, permit
lenders under certain circumstances to defer fore
closure when the borrower has a good prospect for
curing the default.
Eighty-eight percent of all defaults at the end
of 1962 were under Section 203. Because of the
large number of mortgages in force under Section
203, however, this program had one of the low
est default ratios—only 1.32 percent.
Section 603 had the second highest volume of
home mortgages in force, but because the number
of defaults at the end of 1962 was relatively small
(669) the default ratio of 0.43 percent for this
section was the lowest for all home programs.
This low ratio can be attributed largely to the
fact that virtually all insurance under this section
was written prior to 1952. The generally higher
incomes in 1962 available for payments on homes
58
purchased at 1940 and early 1950 prices reduce
• the likelihood that mortgage payments will be
come delinquent. Moreover, the equities built up
over the period increase the incentive of mort
gagors to meet their obligations.
The highest 1962 default ratios were under Sec
tion 213 (3.10percent), Section 903 (2.63 percent),
and Section 221 (2.61 percent). For Section 213
this ratio was an increase over the 2.21 percent at
the end of 1961, but for the other two programs
the ratios dropped from 4.35 percent and 4.37 per
cent, respectively.
The trends in foreclosures in process tend to
foretell foreclosure trends shown earlier in this
report in Table III-24. On the basis of the high
level of foreclosures in process at the end of 1962—
21 percent more than at the end of 1961—it is
reasonable to anticipate a continuing high rate
of foreclosures for the year 1963. Similarly, the
increase of 28 percent in the size of the mortgagee
inventory at the end of 1962 as compared with
1961 suggests a sustained high rate of FITA ac
quisitions in 1963.
Project Mortgages.—Multifamily housing mort
gages in default, along with the number of dwell
ing units involved, are shown by program and by
selected years, 1950-62, in Table III-27. De
faulted mortgages with notes in the process of
assignment to FHA in lieu of foreclosure and projChart III-ll
DEFAULTS OF MULTIFAMILY MORTGAGES.
1950-62
Mortgages in default under all multifamily programs
Number of dwelling units covere
10 —
8
3-5 -
£
.s
s
2.5 —
Defaults as a percent of units in force
O,
O)
i is_
1950
'56
'58
’60
'62
1
i
ects in the process of being acquired by the mort
volume of current terminations in each State more
gagee are shown in separate subtotals. All of the
meaningful by relating it to the volume of insur
default totals are represented in terms of dwelling
ance in force. For example, Florida, with the
highest total volume (5,924) also had the high
units as a percentage of units in mortgages in force.
est ratio of default terminations to mortgages in
Projects in default dropped 24 percent from
force (3.78 percent). While total default termi
83 at the end of 1961 to 63 at the end of 1962, and
nations in Texas were second highest in volume,
dwelling units comprising them dropped 17 per
numbering 5,257, the ratio of 2.19 percent reveals
cent from 10,100 to 8,400. This decline produced
that foredosures in Texas may be relatively less
a default ratio of 1.11 percent for 1962 as com
of a problem than in Louisiana, which had a
pared with 1.41 percent for the 1961 year end.
ratio of 3.23 percent based on volume of termina
Chart III—11 depicts quarterly trends of project
tions numbering only 1,928. California, with the
defaults. The chart shows more clearly the over
greatest volume of mortgages in force, had a ratio
all trend for project defaults than is apparent
of only 0.33 percent. Two areas had no default
from the table because of the omission of certain
terminations during the year—Hawaii and the
years.
Virgin Islands.
The highest volume and the highest rate of de
Detailed data by program do not necessarily re
faults for 1962 were under Section 220. The 4,700
flect current economic conditions. Section 203
units in defaulted projects under this program
has had wide general use, but the high default
constituted more than half of the total of de
termination ratios under some of the special pur
faulted units, while the ratio to units in force un
pose programs need to be examined in light of
der this program was 13.19 percent. Although the
such factors as the objectives for which they were
number of defaulted units was practically the
authorized, age of mortgages in force, and
same in 1962 as at the end of 1961, the 1962 ratio
whether the life of the program provides sufficient
represented a decline from almost 18 percent be
experience on which to base judgment.
cause of the greater volume of insurance in force
Eleven States, led by Illinois with a percentage
in 1962. It was only under Section 220 that the
of 64.54, had more than half of their insured
mortgages in default produced any significant vol
mortgages terminated (Table III-29). Most
ume of projects in the process of being acquired.
terminations, as discussed earlier, were the result
The 7 such projects, involving 941 units, portend a
of prepayments. Only Alaska and South Caro
possible quadrupling of default terminations for
lina had foreclosures amounting to more than
this program by the end of 1963 (Table III-25).
5 percent of cases insured since 1935. TwentySales-type cooperative mortgages under Sec
three States had fewer than 1 percent foreclosures.
tion 213, below-market interest rate mortgages un
The Virgin Islands had none. The high propor
der Section 221, and mortgages under both Sec
tion of FHA acquisitions among total foreclosures
tions 803 and 908 were all in good standing at
in most States is evident from the closeness of the
the end of 1962. Of the programs with mort
foreclosure and acquisition ratios. The difference
gages not in good standing, Section 608 had the
between these ratios represents not only properties
lowest default ratio—only 0.31 percent. This low
retained by mortgagees for their own disposition
rate is attributed to the fact that this program
but those which have been foreclosed and may
is no longer active (with respect to new insur
yet be transferred to FHA.
ance) and all mortgages in force have been suffi
Mortgages in default at the end of 1962 were in
ciently seasoned to reduce the likelihood of
somewhat more favorable position in relation to
delinquency.
the situation a year earlier than were foreclosures,
the over-all default ratio having risen from 1.24
Terminations and Defaults by States
percent to 1.33 percent as compared with the rise
from 1.26 to 1.68 percent for foreclosures. By
State distributions of mortgage insurance termi
State, however, there was considerable variation
nations and mortgages in default are presented
in these comparisons. While States in general
for homes in Tables III-28 and 29 and for proj
showed slight increases, some of the States with
ects in Table III-30. Home mortgage default
relatively high ratios in 1961 displayed decreases
terminations for the year 1962 are summarized in
at the end of 1962—for example, Florida’s de
Table III-28, including information by program
fault ratio dropped from 3.10 to 2.68, Rhode Is
on the number of insurance terminations resulting
land’s
from 2.26 to 1.52, Georgia’s from 1.53 to
from default and the ratio of these terminations
.97, and Alabama’s from 1.23 to .74. Seven States,
to mortgages in force at the beginning of 1962.
led by Michigan and Florida, had more than 2 per
The two succeeding tables are on a cumulative
cent of their mortgages in default at the end of
basis, with terminations as percentages of total
1962. Guam and the Virgin Islands had none,
insurance and defaults as percentages of mort
and 21 States had fewer than 1 percent.
gages in force.
Project Mortgages.—Terminations of project
Home Mortgages.—The analysis of default
mortgage insurance by State are shown in Table
terminations by State in Table III-28 makes the
59
684-285 0-03-5
.
;
Table 111-29.—Terminations and default status of FHA-insurcd home mortgages, by States, as of Dec. SI, 1962
Defaults ns of Dec. 31, 1962
Terminations 1935-62
State
Total
mortgages
insured
1935-62
Total
Foreclo
sures »
FI IA
acquisi
tions
Insured
mortgages
in fora'
Dec. 31,
1962
Total *_......................
86.547
6.196
112, SSI
59.1S4
954.957
77.653
SO, 646
20.935
S, 552
255.053
123. 735
21,678
34.870
217.473
1S7.562
62.91S
105,1S1
5S.024
112,359
26.107
9S. 106
67.S36
396,467
70.983
50.339
156.962
24.610
62.044
25, 510
11.696
222.590
45.S03
324.4S5
76.795
7,341
303.216
144.718
85. 4S5
297.019
22.879
55.583
21.737
129.31S
422.522
5S, 509
8,601
141,754
245.461
33.630
53.342
19,844
319
54.528
13S
6,352,703
36.83
32. 2S
25.33
43.34
52.47
42.47
41.79
33. 21
63. SS
2S.39
36.02
36.95
4S. 17
64.54
49.03
47.00
48.10
45.03
41.25
47.54
44.45
37. 38
46.35
42.41
35. 2S
45.55
44.24
48.42
32.65
48.14
51.12
31.17
42.80
39.05
44.41
52.16
42. 49
48 00
52. 40
38.84
40.12
49.91
36.49
35.04
46.89
54.12
40.88
50. 44
58.22
51.99
51.96
10.66
16.33
3.62
3.40
5.62
2.33
2.41
.55
.72
2. 43
3.17
.70
4.10
3.63
.04
■ 5S
.53
1.04
.73
3.67
1.19
4. 55
2.11
1.84
1.99
2.07
.87
2.31
.99
.27
.71
.80
1.88
1.59
.97
1.13
1.47
.S3
1.10
1.55
.93
.88
1.58
5.88
.44
1.29
3. 56
.98
1.41
1.23
.82
1.33
.76
.39
.31
- .29
45.33
1.68
1 Terminations with titl°s transferred to FIIA or retained by mortgagees;
and foreclosed properties in mortgagee inventory.
1 Titles to foreclosed properties subject to redemption or held by mortgagees
pending final disposition.
62
Foreclo
sures in
process
Mortgagee
inventory z
Insured
mortgages
in good
standing
Dec. 31,
1962
As percent of in force
As pcra'nt of insured
Alabama...........................
Alaska.............................. .
Arizona............................ .
Arkansas......................... .
California.......................
Colorado...........................
Connecticut.....................
Delaware..........................
Disti ict of Columbia—
Florida..............................
Georgia..............................
Hawaii...............................
Idaho..................................
Elinois................................
Indiana............ .................
Iowa................ ............. ..
Kansas......... .....................
Kentucky................. .
Louisiana...........................
Maine................................ .
Maryland...................... .
Massachusetts..................
Michigan...........................
Minnesota.........................
Mississippi........................
Missouri.............................
Montana........................ ...
Nebraska............................
Nevada................................
New Hampshire_______
New Jersey____________
New Mexico......................
New York..........................
North Carolina................
North Dakota____ _____
Ohio..................................... .
Oklahoma.......................... .
Oregon__________ ______
Pennsylvania_____ _____
Rhode Island.....................
South Carolina..................
South Dakota....................
Tennessee......... ..................
Texas.....................................
Utah......................................
Vermont...............................
Virginia................................
Washington........................
West Virginia.....................
Wisconsin............................
Wyoming______________
Guam______ ___________
Puerto Rico.....................
Virgin Islands.....................
Total
3. IS
5.55
1.82
2. 06
.44
.54
2.17
2. 92
.49
3. 78
3.41
.01
.45
.32
.84
. 4S
3.26
1.02
4.13
1.57
1.62
1.66
1.20
.56
2.04
. S7
.09
.45
.76
1.15
1.27
.74
.81
1.21
.48
.93
1.38
.73
1.16
5.63
.20
1.11
3. 24
.84
.92
1.08
.57
1.11
.62
.29
.17
1.41
54.670
4,196
84. 2S4
33.533
453,8S4
44.670
46.946
1?. 9S3
3,0S9
182,652
79,164
13. 668
18.073
77,116
95,600
33.344
54,585
30,154
66,012
13.697
54,496
42.482
212,723
40,881
32,578
80,232
13, 727
32.002
17.182
6,066
108,811
31,527
185,613
46,810
4,081
145, 045
83, 225
44,454
141,386
13.993
33.281
10,887
82,134
274,465
31,072
3.946
8o, 800
121,654
14,049
25,607
9.533
285
45,624
133
3,473,172
0.74
1.29
2.32
1.20
.70
.54
.82
1.71
.68
2. 68
.97
.22
1.17
1.34
1. 69
1.23
1.57
.74
2. 08
2.29
.47
.99
2.97
1. 27
1.80
.82
1.19
1.00
.48
2. 47
1.44
1.11
1.37
.68
1.67
1.76
.65
.76
1.34
1.52
1.01
.46
.76
1.37
.56
2.33
.44
1.03
.86
1.49
.80
0.10
.19
.52
.15
.17
.06
.13
.39
.10
.86
.10
.01
.12
.24
.56
.07
.41
. 13
.53
.38
.04
.27
.58
. 10
.16
.06
.11
.22
.09
.08
.20
.29
.21
.10
.10
.35
.20
.07
.11
.06
.23
.02
.09
.20
.05
.28
.02
.07
.10
.46
.07
0. 08
.02
, 5o
.04
.03
.13
.03
.10
.03
.20
.07
.01
.06
.22
.03
.23
.21
05
.24
.10
.03
.04
1.04
.29
. .17
.05
10
.06
.01
1.00
.20
.02
.26
.17
.06
. 19
.04
.04
.39
.00
.02
. 12
.08
.03
.03
.06
.05
.19
.00
.13
.02
.17
.06
.04
.10
54,268
4,142
82,328
33,129
450,688
44,428
46,563
13,744
3,068
177,749
78,390
13,638
17,882
76,079
93,985
32,935
63, 730
29,932
64,640
13,384
54,242
42,061
208,407
40,362
31,993
79,573
13, 563
31,683
17,100
5,910
107, 240
31,176
183,070
46,493
4,013
142, 494
82.680
44,114
139,496
13,780
32,944
10, 837
81,509
270,699
3,854
83.429
120, 404
13.928
25, 226
9.457
285
45,160
133
3,420,086
3 Cases tabulated in Washington through Dec. 31, 1962, excluding Title I,
Sec. 2, homes.
!
Table III-30.
Terminations and default status of FHA-insuredmuUifamily housing mortgages, by State location of projects,
Units in terminated mortgages 1935-62
Units in default
as of Dec. 31, 1962
Default terminations
State
Total units
covered by
insurance
1935-62
With claim pay
ments by FHA
Total
Total i
Property
titles
acquired
by FIIA *
Other *
Units
covered by
mortgages
In force
as of
Dec. 31,
1962
Total 5.
14,616
3.853
16,074
4,773
87,372
6,111
13,211
5,950
26,460
33,334
27,570
10,198
I,748
34,870
10,534
2,676
9,548
10,233
13.853
4,307
46.877
10,164
23,905
8,288
5,174
17,700
2,665
6,306
4,898
1,344
75, 525
5,063
200,950
23.878
3,655
31,890
7,384
7,967
31,837
1,528
II,252
2,365
13,759
44,433
2,674
193
50.762
16.196
900
6,628
711
330
1,270
8,785
22.87
33. 38
41.32
29.65
27.65
1§. 44
15.84
37.43
42.99
29.34
27.44
6.63
32.84
33.22
26.35
24.29
19.83
15.57
69. 61
11.12
29.82
20.13
24.41
39.61
23.70
28.16
4.13
14.18
27.97
13.69
34.07
1C. 99
14. 70
15.83
27.03
25.76
39.42
25.69
35.19
9. 95
25.92
11.25
19.56
28. 70
26.29
37.31
28.05
26.09
28.81
20.17
10.27
18.90
18.90
18.90
1,015,153
25.78
8.28
4.99
15.91
33.38
1.03
e. 95
7.07
1.57
1.06
18.84
4.34
13.02
17.23
13.68
15.91
.59
8.95
.53
1.57
1.06
8. 29
2.80
7.97
10.33
31.69
17.85
4.04
8.80
10.93
38.19
4-16
6.28
7.01
4.99
17.91
22.83
7.30
4.13
24.60
.14
13.02
1.20
5.92
9.55
21.04
4.16
1.84
7.01
2.49
7.19
22.28
6.50
1.88
12.20
5. 93
12.20
3.58
2.24
8. 45
23.94
10.36
27.25
11.65
7.75
4.45
23.28
9.30
6.10
22.92
16.98
22.80
6.50
14.73
8.56
4.19
1.24
4.14
1.83
4.25
19.03
1.90
2.78
1 Includes all eases with debentures issued by FIIA and 12 projects involv
ing 437 units retained by mortgagees with termination of FIIA mortgage
insurance contracts.
z Titles transferred by mortgagees after foreclosure as well as titles acquired
by FIIA through foreclosure of assigned mortgages.
18. 46
2.25
21.46
3.89
22.80
5.50
10.32
5.00
Potential
acquisi
tions «
Total
As percent of
units in force
As percent of insured units
Alabama.......... ............
Alaska...........................
Arizona..........................
Arkansas.......................
California...... ...............
Colorado........................
Connecticut....... .........
Delaware........... .•.........
District of Columbia.
Florida..................... .
Georgia..........................
Hawaii..........................
Idaho..............................
Elinois............................
Indiana.............. ...........
Iowa...... ........... .............
Kansas.... .....................
Kentucky..................
Louisiana................. ..
Maine_____ ________
Maryland_______ ...
Massachusetts___ ...
Michigan................ ..
Minnesota_______ ..
Mississippi............. .
Missouri........................
Montana......................
Nebraska......................
Nevada........ ................
New Hampshire.........
New Jersey..................
New Mexico________
New York....................
North Carolina...........
North Dakota______
Ohio................................
Oklahoma...................
Oregon________ ____
Pennsylvania.......... ..
Rhode Island_______
South Carolina...........
South Dakota..............
Tennessee..... ...............
Texas...........................
Utah...............................
Vermont........................
Virginia____________
Washington............. ..
West Virginia.............
Wisconsin____ _____
Wyoming....................
Canal Zone...............
Guam.............................
Puerto Rico.................
Units
covered
by insured
mortgages
in good
standing
Dec. 31,
1962
2.13
17.47
.43
1.01
6.54
10.55
1.55
5.05
6.91
7.09
.54
4.82
2.84
2.78
1.38
17.14
4.44
2.60
10.59
.54
.75
2.25
2.31
.86
4.31
22.11
6.12
8.22
9.75
4.97
4.45
4.82
9.30
3.85
1.31
13.09
1.00
4.34
3.56
4.19
3.24
11,274
2,567
9,785
3,358
63,218
4,984
11,118
3,723
15,087
23,553
20,005
9, 522
I,174
23,285
7,758
2,026
7,655
8,640
4,210
3,828
32,899
8,118
18,069
5,005
3,948
12,716
2,555
5,412
3,528
1,160
49,791
4,203
171,411
20,098
2,667
23,675
4,473
5.920
20,633
1,376
8,335
2,099
II, 068
31,679
1,971
121
36,521
11,970
i640
5,291
63S
330
1,270
7.125
753,485
0.76
0.76
2.20
2.24
2.20
.76
.76
1.78
66
.68
.34
.34
2.08
1.30
.27
.76
8.57
.30
.55
3.74
.13
7.77
5.82
3.06
.51
.08
.08
13.22
1.11
.25
11,188
2,567
9.785
3,284
61,805
4,984
11,034
3,723
15,087
23,134
20,005
9,522
I,174
23,285
7,705
2,026
7,629
8,640
4,210
3,828
32.S99
7,949
17.835
5,005
3,918
II,626
2,555
5,382
3,528
1,160
47,928
4,203
171,181
20,098
2,667
21.836
4,473
5,920
20,001
I,376
8.335
2,099
11,012
31,655
1,971
105
36,521
II,970
640
5.291
638
330
1,270
7,125
745,117
s Includes assigned mortgages sold by FHA and assigned mortgages held
by FIIA.
1 Includes mortgage notes in process of assignment to FHA and property
titles in process of acquisition by mortgagees.
» Nursing home units (beds) are excluded from this table.
63
XII—30 in terms of units as percentages of units in
insured projects, along with default termination
and acquisition ratios. Similarly units in de
faulted projects are shown as percentages of units
covered by mortgages in force. Properties ac
quired through default terminations derive both
from foreclosures by the mortgagees with trans
fers of the properties to FHA and from foreclos
ure by FHA of mortgages assigned by the
mortgagees in lieu of foreclosure.
In Louisiana, almost 70 percent of the project
dwelling units were in projects for which the
mortgage insurance had terminated—the highest
proportion reported for any State. Thirty-eight
percent of the units were in projects terminated
through default, with 21 percent of the units hav
ing been acquired. In contrast, Hawaii, Montana,
and Rhode Island all had terminations amount
ing to less than 10 percent of their insured units,
while the Canal Zone and Guam had no
terminations.
Default terminations accounted for high per
centages of the total terminations in some States.
These were generally States with few projects to
begin with, as for example, Alaska, Montana, and
Puerto Rico, where all terminations were through
default, and Idaho, Mississippi, and South Caro
lina, each with 90 percent or more of the units in
terminated projects attributable to default.
Only 19 States reported project mortgages in
default at the 1962 year end. Of those reporting
any defaulted projects, New York, with the
highest number of mortgages in force, had one
of the lowest ratios, only 0.13 percent of the units
being in default. Vermont, which had only 121
units in active projects, had the highest ratio—
13.22 percent. Nine of these States reported
projects in process of acquisition or assignment
of mortgage notes. The most serious situation
was in Ohio, which reported almost 6 percent of
its units covered by insurance in force as potential
acquisitions.
Claims Paid on Title I Property Improvement
Loans
Claims paid during 1962 amounted to $15.3 mil
lion on 22,400 defaulted loans, a decrease of 11
percent in dollar volume and 17 percent in num
ber from 1961.
Cumulatively, claim payments to insured finan
cial institutions have amounted to $273 million,
or 1.81 percent of the $15 billion net proceeds in
sured. Of this $273 million in claims, FHA has
recovered over $128 million and expects to collect
an additional $13 million. These recoveries are
expected to reduce the roral claim ratio loss to
less than nine-tenths of 1 percent. Since authori
zation of insurance premiums in 1939, all claims,
salaries, and operating and miscellaneous ex
penses relating to Title I have been paid out of
income. In addition, an insurance reserve of $97
million has been accumulated.
64
Chart III-12
TITLE I
IMPROVEMENT LOANS, 1934-62
1.6 —
Volume of Property Improvement
Loans Outstanding
s
to —
.1
£ 0.5 —
0
1 I 1 I II I I I I I I I I I I I I I I I I I I I I I
25 —
s
20 —
Volume of Claims
Paid by FHA
15
|
" 10 —
'<1
i
0
I |/| I I I I I I I I
J L.l I LLLI. I I ! i l l 1 I I
5—
I 4S
I 3c
o
l
Claims Paid as a Percent
of Loans Outstanding
2 —
I—
0
I III I I I I I I I I I I I 1 1 I 1 I I I I I I 1 ! I II
1934
’40
45
'50
'55
'62
Trend.—Comparisons of claims paid and aver
age net proceeds outstanding by years are shown
in Table III-31 and in Chart III-12.
In 1962 the $15 million payment in claims was
0.96 percent of the average $1.6 billion proceeds
outstanding—0.11 points below the 1961 ratio.
Chart III-12 illustrates rather dramatically the
consistently lower level of claim ratios that has
been recorded since the provision for 10 percent
co-insurance by the lenders became effective in
late 1954.
State Distribution.—Table III-32 presents the
number and amount of claims paid by State loca
tion of property. Defaulted loans in 4 States were
responsible for $6.9 million or 45 percent of the
total $15.3 million paid in claims in 1962—New
York $2.5 million, 16 percent; Michigan $1.9 mil
lion, 12 percent; Illinois $1.5 million, 10 percent;
and Ohio $1.1 million, 7 percent. The average
claim payment of $684 in 1962 was $51 or 8 per
cent higher than was paid in 1961. Average claim
payments by States in 1962 ranged from $1,306 in
Alaska and $1,259 in Nevada to $146 in Wyoming
and $304 in Mississippi. Of the total $273 mil-
Table III—33.—Claims paid on Title I improvement loans
1062 and 1950-62, and net proceeds insured 1050-62,
1950 reserve
Table III-34.—Number of payments received prior to
default by term of Title I improvement loans, 1962
TOTAL CLASS 1 AND 2 LOANS
{Dollar amounts in thousands]
Type of institution
Claims paid 1962:
National bank._______
State bank.......................
Mortgage company.........
Insurance company........
Savings and loan asso
ciation...........................
Savings bank...................
Federal agency................
All other...........................
Total.
Claims paid 1950-62:
National bank.................
State bank.......................
Mortgage company.........
Insurance company.........
Savings and loan asso
ciation...........................
Savings bank...................
Federal agency.................
All other..........................
Total.............................
Net proceeds insured 1950-62:
National bank.................
State bank.......................
Mortgage company.........
Insurance company------Savings and loan asso
ciation...........................
Savings bank...................
Federal agency——------All other...........................
Total______________
Number
Amount
Percent of Average
claim
amount
42.7
$631
675
6S4
10.359
6.963
491
$6, 533
4.69S
3,559
301
3,040
342
19.9
2.2
854
1,136
700
361
2.3
516
>22,372
>15,309
100.0
684
164,866
88,482
2,317
74, S9S
42,363
1.2S6
49.4
27.9
0.9
454
479
30.7
2.2
336
3
2
30,730
4.24S
3
28,901
18,230
2,255
1
12,595
319.550
151,630
8,061.109
4,809. 9S1
136,366
5,461,197
3,404, 260
132,530
704
836
327,928
270
1,012,494
1.0S7.099
244, 263
153
714,154
15,718,782
11,044,360
1,369.798
(’)
12.0
1.5
555
667
(»)
8.3
593
531
333
436
100.0
475
49.5
30.8
708
972
842
9.8
794
745
567
(’)
(l)
677
1.2
2.2
6.5
705
100.0
703
lion paid in claims since 1935, defaulted loans in
New York were responsible for 14 percent, Cali
fornia 9 percent, Michigan 8 percent, and Illinois
6 percent.
Financing Institutions.—Claims paid during 1962
and cumulative data on claims paid and net pro
ceeds insured under the 1950 reserve, all by type
of financial institution, are shown in Table HI33. In 1962, national banks received $6.5 million
or 43 percent of the total $15 million in claims
paid, markedly lower than their proportionate
f
66
Term of defaulted loanpercentage distribution
.2
100.0
100.0
100.0
Percent of total...
9.8
49.8
Median.
8.1
16.3
1 to 5.....................
6 to 11...................
12J0 17..................
IS to 23..................
£U>29..................
30 to 35..................
36 and over...........
Total.
Percentage
distribution
Less 27 to 37 38 to 61 62 or Total Total
than 2G months months more Hum- amount
months
months ber
4.6
15.4
16.8
15.5
12.5
11.9
9.0
14.3
0.
> Components do not add to totals because of adjustments.
5 Less than 0.05 percent.
1
Number of pay
ments received
prior to default
. 8.1
31.1
30.3
18.8
11.3
.3
.1
3.4
14.4
18.8
18.5
17.5
15.7
11.5
16.1
9. 6
6.5
18.1
4.4
16.5
19.1
17.3
14.0
12.6
9.3
5.9
22.4
18.0
12.5
9.0
4.8
4.3
100.0
100.0
100.0
39.5
.9
100.0
17.1
18.1
15.5
5.0
23.1
13.1
8.5
0.6
22.4
Averago
claim
paid
1,042
925
801
710
570
486
355
492
684
amount of loans financed in recent years. Con
versely, savings and loan associations received 1
out of every 5 dollars paid in claims, which is con
siderably higher than their normal share of origi
nations. Cumulatively, under the 1950 reserve,
the claims paid to each type of financial institution
are within 3 points of their respecti ve shares of
net proceeds insured.
Payments Received Prior to Default.—Payments
of claims shown in Table III-34 are distributed
according to the number of payments received
prior to default and according to the term of the
note. Repayments of Title I notes are principally
over periods of 24, 36, 60, or 84 months, but on
origination the notes may be phrased in such a
manner ‘that the terms extend 32 days beyond the
number of payments required.
In 1962 tlie typical claim payment involved a
loan going into default between the 15th and 16th
payment. Forty percent of the claims and 51
percent of the amount of claims paid related to
notes on which fewer than 12 payments had been
made. Four percent of the loans and 7 percent
of the claim amounts involved notes on which no
payment had been made.
1
Section 3
Characteristics of Mortgage and Loan Transactions Insured by FHA in 1962
Statistical analyses of the characteristics of the
individual transactions insured by FHA in 1962
under each of its major types of programs—home
mortgages^ multifamily project mortgages, and
property improvement loans—are presented in
this section of the report, together with compara
ble data for selected earlier years.
SECTION 203 HOME MORTGAGE
TRANSACTIONS
!
!
S
i
V
i
:>
:
According to estimates of the Bureau of the
Census, some 1,429,000 privately-financed nonfarm dwelling units were placed under construc
tion in the United States during 1962—an increase
of 11.2 percent over the 1961 figure of 1,285,000
units. Construction and sale of the great prepon
derance of these living accommodations was made
possible by funds advanced by the privately owned
financial institutions of the country. Structures
approved for FHA mortgage insurance prior to
the start of construction and subject to FHA com
pliance inspections during the course of construc
tion accounted for some 261,000 units or about 18
percent of the total. This was the lowest FHA
participation reported for any year since 1957.
About 76 percent of the new units started under
FHA inspection were in one- to four-family dwel
lings, the bulk of which secured mortgages proc
essed and insured under the provisions of Section
203 of the National Housing Act, the principal
home mortgage insurance program established by
the Congress for the FHA. The following analy
sis is confined to mortgages insured under this
program,1 and covers, on a national basis, the char
acteristics of the insured mortgages and of the
properties and occupant-mortgagors involved in
these transactions.
Data comparable to those presented in this por
tion of the report are also available on a quarterly
basis for the nation as a whole. For those users
interested in comparative data by State and stand
ard metropolitan statistical areas, summary infor
mation is available for 1962 and other recent years
on both annual and quarterly bases. All of these
data are available upon request to the Division
of Research and Statistics, Federal Housing Ad
ministration, Washington 25, D.C.
1 The discussion is based on a sample of mortgages insured
under Sec. 203(b) only. See technical notes, page 69. Mort
gages insured under Sec. 203(1) and the Certified Agency Fro*
gram are excluded, although these cases are included in the
volume data for Sec. 203 operations presented earlier In this
report.
As shown in the following tables, virtually all
of the 1962 single-family home mortgagors were
owner-occupants. Of the mortgage insurance
transactions involving multifamily dwellings,
most of the two-family homes were processed as
amenity cases, while the bulk of the three- and
four-family cases—mostly existing structures—
were classified as rental units.
New homes
Type of mortgagor
Owner occupant___
Landlord................ .
Builder................... .
Total................ .
:
Existing homes
1962
1961
1960
1959
1962
1961
1960
99.8
.1
.1
99.8
.1
.1
99.9
.1
0)
99.9
.1
99.8
99.8
.1
.1
99.9
.1
99.9
.1
(0
100.0 100.0 100.0 100.0 100.0 100.0 100.0
100.0
(■)
.2
0)
1959
(>)
> Less than 0.05 percent.
Structures and dwelling units, 1- to 4-family homes,
Sec. 203, 1962, percentage distribution
New homes
Units per structure
Structures
One...
Two..
Three.
Four..
Units
Total.
Average.
Structures
99.1
99.6
(>)
Existing homes
.1
.2
.1
100.0
89.1
6.8
3.1
1.0
95.0
3.6
1.1
.6
.3
Units
.3
100.0
1.01
100.0
100.0
1.07
» Less than 0.06 percent.
Some 98 percent of the new-home owner-occu
pant transactions reflected the purchase by the
mortgagor of a newly constructed dwelling erected
by a commercial builder. The remainder of the
new-home transactions reflected the construction of
a house by or for a mortgagor on his own lot. Of
the existing-home cases, some 94 percent involved
the purchase of an existing dwelling and the bal
ance the refinancing of existing indebtedness or
the financing of improvements.
1-family amenity income cases
Existing homes
New homes
1962
Financing new con
struction................... 2.3
Financing purchases. . 97.6
Refinancing existing
.1
loans..... ................ —
Financing improve
ments........................ («)
Total............. .
1961
1960
1959
1962
2.1
97.8
2.4
97.6
3.4
96.6
94.3
95.0
96.4
5.3
4.6
3.2
.1
.1
.1
.1
C1)
(•)
(>)
0.3
1961
0.3
1960
0.3
100.0 100.0 100.0 100.0 100.0 100.0 100.0
1959
0.4
94.5
5.1
(>)
100.0
Less than 0.05 percent.
67
»
market price of site by almost 5 percent, result
ing in the indicated increase from 17.1 percent to
17.5 percent in the site-value ratio. The mort
gagor’s expense-income ratio remained unchanged
at 20.8 percent, reflecting relatively proportionate
declines in both the mortgagor’s prospective in
come and his estimated housing expense.
The typical existing-home transaction insured
in 1962 involved a mortgage amount of $13,100—
94.4 percent of total property value of $14,082.
It was scheduled to be amortized over a period of
27.4 years, with the monthly mortgage payment of
$100.90 plus other costs of home ownership bring
ing the buyer’s estimated monthly housing ex
pense to $127.39, or about 20.4 percent of his $7 ,135
income. The typical existing dwelling securing
mortgages insured during the year was as large as
the typical new home in terms of calculated area
and contained virtually the same number of rooms.
The average number of bedrooms was somewhat
smaller, however, for existing dwellings than for
newly constructed ones.
Compared with the typical existing-home mort
gage reported for 1961, the 1962 mortgage amount
s
y
e
9
y
l
n
,
g
e
t
,
4
e
y
e
e
was about 5 percent higher and the loan-value
ratio fractionally higher. The average mortgage
term was some 8 months longer, which served
to minimize the increase in monthly mortgage pay
ment. The typical property value increased by
about 4.5 percent and the price of an equivalent
site by nearly one percentage point in the sitevalue ratio. As with newly built dwellings, the
average room count and bedroom count were virtu
ally unchanged. The calculated area, however,
increased from 1,077 to 1,099 square feet, identical
with that reported for new homes. The average
expense-income ratio for the existing-home
buyer declined very slightly, although both the
median mortgagor’s income and prospective hous
ing expense increased by 2.4 percent.
JPostwar trends of selected characteristics of the
typical Section 203 new- and existing-home mort
gage cases are also shown in Table 111-35. The
higher levels of mortgage amounts, loan-to-value
ratios, and, consequently, mortgage payments,
which have been rather consistently reported for
recent years are at least partially attributable to
the progressive liberalizations of the provisions of
Technical Notes
i
I
-
i
;
;
:
i
3
Size of Sample.—Data presented in this section of the report are based on 37,100 new-home and 65,100 existing-home
cases. These eases represent 70 percent of the new- and existing-home cases reported as insured under Section 203(b)
during the first 9 months of 1962, selected on the basis of case number in order to assure a random distribution.
Definition of Terms.—Throughout the FHA annual report the use of technical terms is in keeping with the following
definitions established for use in the underwriting system in connection with the appraisal of properties and the evalu
ation of mortgage risk :
Calculated Area is the area of spaces in the main building above basement or foundations, measured at the outsdie
surfaces of exterior walls. Garage space, finished spaces in attics when less than 50 percent of the ground floor area,
and areas with ceiling heights of less than 5 feet are excluded.
Heating and Utilities include the cost of heating, electricity, gas, water, and other items generally known as utili
ties, excluding those services which are provided under the lien of a nonprepayable special assessment which continues
indefinitely for supplying water, sewage disposal, removal of garbage, or other services necessary for the occupancy
of the premises.
Incidental Costs are the total estimated closing costs customarily chargeable to the mortgagor for items which are
incidental to the transaction regardless of whether included in whole or in part in the contract price. These costs
include FHA examination fee, mortgagee’s initial service charge, cost of title search, charges for the preparation of
deed and mortgage documents, mortgage tax, recording fees, and similar items. Deposits for unaccrued taxes, insurance
premium, and similar items are treated as prepayable expenses and are not included as incidental costs.
Maintenance and Repair Expense is the average yearly cost of maintaining the physical elements of the property
to prevent acceleration of deterioration, and to assure safe and comfortable living conditions.
Market Price of Site is the FHA-estimated price for an equivalent site including street improvements or utilities,
rough grading, terracing, and retaining walls, if any.
Mortgagor's Effective Income is the FHA-estimated amount of the mortgagor’s earning capacity (before deductions
for Federal income taxes) that is likely to prevail during approximately the first third of the mortgage term.
Number of Bathrooms is the number of full bathrooms having a tub or shower stall, a lavatory and a water closet,
plus the number of half bathrooms having a lavatory and a water closet. Example: a full bath- plus a half bath has
been considered as two baths for the purpose of this report.
Number of Rooms excludes bathrooms, toilet compartments, closets, halls, storage, and similar spaces.
Property Value is the FHA-estimated price that typical buyers would be warranted in paying for the property
(including the house, all other physical improvements, and land) for long-term use or investment, assuming the buyers
to be well informed and acting intelligently, voluntarily, and without necessity.
Prospective Monthly Housing Expense includes total monthly mortgage payments for the first year and the FHAestimated cost of monthly maintenance and repair, and heating and utility expenses.
.
Replacement Cost of Property is the FHA-estimated cost of the building (in new condition) and other physical
improvements, market price of site, and miscellaneous allowable costs for the typical owner.
....
,
,.
Sale Price is the price stated in the sale agreement, adjusted to exclude any portion of closing costs, prepayable
expenses, or costs of non-real estate items which the agreement indicates will be assumed by the seller.
Taxes and Assessments include property taxes and any continuing non-prepayable special assessments, as estimated
Total Monthly Mortgage Payment includes monthly payment for the first year to principal, interest, FHA insurance
premium, hazard insurance premium, taxes and special assessments, and miscellaneous items including ground rent,
if any
Total Acquisition Cost includes the total amount, including mortgage funds, necessary to close the transaction less
any prepayable expenses such as unaccrued taxes, insurance premiums, and similar items.
-5
!
!
;
s
69
%
;
i
and of existing-home mortgages of $14,000 or
more. Only about 7 percent of the 1962 new-home
mortgages involved amounts of less than $10,000,
while some 18 percent of the existing-home transactions fell into this group.
These trends in the amount of mortgage debt
being assumed by FHA mortgagors reflect both
the increasing cost of housing in recent years and
the fact that borrowers have been able to obtain
mortgage loans representing higher proportions
of property value under the provisions of suecessive National Housing Act amendments from
1954 to 1961.
Term of Mortgage.—Mortgages insured by FHA
under Section 203 may have terms of up to 35
years for proposed construction and up to 30 years
for existing construction cases unless the existing
construction was originally built under FHA or
VA inspection, in which case the 35-year limit for
new homes applies. In any instance, however,
the term may not exceed three-fourths of the remaining economic life of the structure. Mortgages are written for durations of 10, 15, 20, 25,
30, or 35 years.
The growing acceptance of the longer-term
mortgages fcv FHA mortgagees and the effects of
legislation m recent years is clearly shown in
Table 111-37. The table demonstrates a marked
tendency toward increasing proportions of FHA
insured mortgages with the maximum allowable
term. For example, the 1962 distribution for new
homes shows almost 93 percent with terms of 30
years or more, including 15 percent with the 35year term first authorized under the 1961 amend
ments. In contrast, only 27 percent of the newhome mortgages insured‘in 1955 involved terms of
as much as 30 years. The same general trend is
apparent, in the existing-home figures, with the
proportion of 30-year mortgages increasing from
7 percent in 1955 to over 59 percent in 1962.
Table III-37.—Term of mortgage, 1-family homes, Sec.
203, selected years
Total Monthly Mortgage Payment.—FHA-in-
!
sured home mortgages provide for repayment on
a monthly basis over the mortgage term. The
mortgagor’s payment covers the major portion of
the recurring charges which the home owner is
called upon to meet, including principal amortization and interest, monthly installments for property taxes, the FHA mortgage insurance premium,
hazard insurance, special assessments, and such
miscellaneous items as ground rent, if any.
The distributions of total monthly payments
called for in the new and existing single-family
home mortgage transactions insured under Section 203 in 1962 are shown in Table III-38 and
Chart III-14. In the chart, the bars show that
mortgage payments are most common in the $100$119 range for new homes and in the$80-$99 range
for existing dwellings. Of the mortgages insured
in 1962, nearly 60 percent of the new-home cases
contemplated monthly payments of $100 or more,
The median mortgage payment for the 1962
new-home cases was $105.20, slightly below the
$106.60 reported for 1961 but nearly double
the 1950 figure of $54.31. For existing homes
the typical payment reached the $100 level for the
first time in FHA’s history, the median of $100.90
being about 2 percent above the $98.48 reported a
year earlier and, again, nearly double the 1950
level of $56.65.
The levels of mortgage payments are influenced
not only by the size of the mortgage involved but
also by such factors as’ the mortgage term, the
levels of real estate taxes and hazard insurance
TOTAl
Chart in-14
monthly mortgage payment,
j
;
i
1962
.. 0ft,
S-co 503
hm.ly h40
'
New Homes
§ 30
*
!
.2
20
-o
Percentage distribution
Term of mortgago
in years
1962
1961
1960
1959
1955
NEW HOMES
0.1
.8
6.5
77.5
15.1
(‘>
0.1
1.1
8.1
90.4
.3
(»)0.1
(')0.2
1.7
12.1
86.1
2.2
19.2
78.4
0.1
.7
13.7
58.4
27.1
100.0
30.3
100.0
29.5
100.0
29.2
100.0
28.8
100.0
25.6
10
15
20
25
30
35
(')
Total
Average
Total
Average
40
.1
1.2
9.8
28.8
59.2
.9
100.0
27.4
.1
1.6
12.4
36.0
49.9
.1
1.9
16.8
43.6
37.6
.1
1.8
18.2
54.8
25.1
.4
4.9
42.1
45.2
7.4
100.0
26.7
100.0
25.8
100.0
25.1
100.0
22.7
(>)
3
Existing Homes
I
130
*
.1
EXISTING HOMES
10.
15
20
25
30
35
8 10
£
0
20
c
5
fc 10
o-
0
59
or less
6079
8099
100119
120139
140159
160more
Monthly mortgage payment in dollars
1 Less than 0.05 percent.
71
1
Table III-3S.—Total monthly mortgage payment, 1-family
homes, Sec. £03, selected years
Percentage distribution
Total monthly
mortgage payment
1962
1961
1960
1955
1950
NEW nOMES
Less than $60..........
$60 to $69..................
$70 to $79..................
$$0 10 $$9..................
$90 to $99..................
$100 to $109..............
$110 to $119...............
$120 to $139...............
$140 or more.............
Total.
Average.
Median.
69.2
1.6
3.9
7.4
12.1
16.4
16.6
14.5
IS. 3
9.2
0.5
2. S
7.4
11.4
16.0
17.9
16.0
IS. 9
9.1
0.3
2.4
7.5
13.3
18.8
20.2
15.3
16.1
6.1
15.2
24.6
23.5
18.0
10.1
4.6
2.2
1.4
.4
20-4
i.7
•4
.22
100.0
$106. 39
$105.20
100.0
$107. 74
$106.60
100.0
$104. 90
S103. 81
100.0
$76. 08
$74.32
100.0
$55. 38
$54.31
3.3
7.0
10.7
13.6
14.2
13.9
12.4
15.3
9.6
2.4
6.9
12.8
15.1
15.1
14. 1
11.8
14.1
7.7
2.4
8.1
13.0
16.3
16.1
14.2
11.1
12.5
6.3
16.4
22.3
23.3
16.5
9.5
5.2
3.0
2.6
1.2
100.0
$102. 73
$100.90
100.0
$100.73
$98.48
100.0
S9S.69
$96. 50
100.0
$77.15
$74.81
EXISTIN’r. HOMES
Less than $60.
$60 to $69........
$70 to S79........
$S0 to $S9........
$90 to $99........
$100 to $109—
$110 to $119—
$120 to $139...
$140 or more—
Total.
Average............
Median-----------
59.0
19.3
io |
2.6
1A
100.0
$5S. 94
$56.65
premiums, and the maximum permissible rate of
interest for FHA insured mortgages. After 1951,
when the Treasury-Federal Reserve accord was
reached on policies for support of Treasury bond
prices, until early 1961, maximum interest rates
permitted by FHA Section 203 regulations in
creased from 414 percent in 1951 to 4y2 percent
as of May 2, 1953, to 5 percent as of December 3,
1956, to 5^4 percent as of August 5, 1957, and
ultimately to 5% percent as of September 23,1959.
Reflecting the gradual declining yields in the
money market throughout 1960, the maximum in
terest rate permitted on Section 203 mortgages
was reduced to 5% percent on February 2, 1961
and to 514 percent on May 29 of that year.
Ratio of Loan to Value.—Mortgages insured in
1962 were processed under the loan-to-value pro
visions of the Housing Act of 1961 which raised
the maximum permissible ratios for new-home
owner-occupant cases, or for existing construction
completed one year or more, to 97 percent of the
first $15,000 of FHA appraised value plus 90 per
cent of the value above $15,000 but not over $20,000
and 75 percent of the value above $20,000. For
non-owner-occupant transactions, the maximum
insurable mortgage is limited to 85 percent of the
amount available to an occupant borrower.1 In
those instances where the escrow commitment pro
cedure is utilized for non-occupant mortgagors,
the same formula is used as for owner-occupant
mortgagors, with the provision that 15 percent of
the mortgage proceeds be withheld and placed in
escrow pending sale of the property to an accepta
ble owner-occupant mortgagor within 18 months.
1 In Alaska, Hawaii and Guam, these specified amounts can
be as much as 50 percent higher in recognition of the greater
construction costs in those areas.
72
Trends in the ratios of mortgage amount to
property value are shown in Table III-39 and
Chart III-15. The typical loan-value ratios for
Section 203 insured transactions reached new alltime highs in 1962, with the new-home ratio increasing by four-tenths of a percentage point to
9-4.4 percent and the existing-home ratio rising
four-fifths of a point to 94.4 percent. This was
the first year in FHA history in which the typica'l ration for existing-construction transactions
equaled that associated with purchases of newly
constructed dwellings, a development which is of
course attributable to the effects of the legislative
liberalization of insurable amounts for existinghome mortgages which have occurred progres
sively since 1954. The most significant change
in the distributions of loan-to-value ratio during
1962 is reflected in the marked increase in the
proportion of both new-and existing-construction
transactions which involved loan-to-value ratios
of 96 to 97 percent—these increases occurring at
the expense of declining proportions in all of the
other groups where significant concentrations of
cases are found. It may also be noted that 40.3
percent of the existing-home cases were-in this
highest loan-to-value group as compared with
36.6 percent of the new-home mortgages.
Table III-40 shows the loan-value distributions
by property value groups for Section 203 mort
gages insured in 1962. As in other recent years,
a great preponderance of these mortgages was at
or near the maximum percentages authorized
under the legislation and the FHA rules and reguTable III-39.—Ratio of loan to value, 1-family homes,
Sec. 203, selected years
Percentage distribution
Ratio of loan to value
(percent)
1962
1961
1960
1955
1950
NEW HOMES
50 or less.
51 to 5550 to 60..
61 to 65..
66 to 70...
71 to 75..
76 to 80...
81 to 85—
86 to 90...
91 to 95...
96 to 97...
0)
0.1
.1
.3
.5
1.2
2.3
4.2
11.8
42.9
36.6
0.2
' .1
.1
.2
.5
1.2
2.5
4.9
13.3
45.2
31.8
0.1
.1
.2
.3
.7
1.6
3.3
6.3
15.7
42.9
28.8
0.8
.4
.7
1.2
2. 1
4.1
9.5
14.2
33.7
33.3
0.6
.4
.5
.9
1.6
3.2
8.8
10.9
57. 1
16.0
Total.
Average.
Median _
100.0
92.7
94.4
100.0
92.2
94.0
100.0
91.4
93.5
100.0
85.0
88.5
100.0
85.0
88.0
50 or less.
51 to 5556 to 6061 to 6566 to 7071 to 7576 to 80—
81 to 85—
86 to 90...
91 to 96—
96 to 97...
(*)
.1
.3
.5
1.0
3.0
6.4
17.0
31.3
40.3
.1
.1
. 1
.2
.6
1.2
3.4
• 7.7
19.9
32.2
34.5
.1
.1
.1
.3
.8
1.7
4.5
9.7
23.0
30.9
28.8
.6
.4
.9
1.5
4.3
5.9
13.2
30.2
32.1
10.9
2.1
1.4
2.2
3.7
8.8
13.5
51.5
4.4
9.8
2.6
Total
Average
Median.
100.0
92. 1
94.4
100.0
91.4
93.6
100.0
90.5
92.6
100.0
82.2
84.8
100.0
76.4
77.8
EXISTING HOMES
.r
1 Less than 0.05 percent.
l
\
Chart III-15
lations. For example, in the new-home value
groups below $15,000 the median loan-value ratios
all exceeded 96 percent, with the existing-home
ratios being virtually as high. The distributions
of both new and existing loan-value ratios con
tinued to shift upward in 1962, with the typical
ratios associated with property value groups of
$13,000 and above increasing over 1961 and the
median in the $20,000 to $21,999 group exceeding
90 percent for the first time.
RATIO OF LOAN TO VALUE, 1950-62
Single family home mortgages, Section 203
]
Median
95 —
I
New Homes
D
D
90 —
\
I
!
£ 80 —
1
75
;
Property Value Characteristics
f 85 —
1
i
1
1
1
95 —
1
i
1
1
1
1
1
Median
“I 90 —
Existing Homes
Z 85 —
o>
N.
;
£ 80 —
75.... pm
1950
I
'52
I
I
'54
I
I
'56
I
1
I
'58
i
'60
1
'62
In the FHA underwriting procedure one of
the very important determinations is the develop
ment of an estimate of value for each property
proposed as security in an application for mort
gage insurance. In the development of these esti
mates, consideration is given to such factors as
the estimated replacement cost of the property,
sale prices of comparable dwellings, neighborhood
stability, market price of equivalent sites, materi
als and quality of construction, the size of the
house, and some of its characteristics. The fol
lowing pages are devoted to an analysis of some
of the inter-relationships of the significant char
acteristics of properties involved in mortgage
transactions insured under Section 203 during
1962.
Table III-40.—Ratio of loan to value by property value, 1-family homes, Sec. 203, 1962
FHA estimate oi property
value
Percent
age dis
tribution
Ratio of loan to value—percentage distribution
Median
loanvalue
ratio
50
percent
or less
51 to 60
percent
0.1
.1
0.1
61 to 70
percent
71 to 75
percent
76 to SO
percent
81 to 85
percent
86 to 90
percent
91 to 95
percent
96 to 97
percent
Total
NEW HOMES
Less than $8,000_____________
$8,000 to $8,999..............................
$9,000 to $9,999..............................
$10,000 to $10,999..........................
$11,000 to $11,999..........................
$12,000 to $12,999..........................
$13,000 to $13,999..........................
$14,000 to $14,999..........................
$15,000 to $15,999..........................
$16,000 to $16,999..........................
$17,000 to $17,999..........................
$18,000 to $18,999..........................
$19,000 to $19,999..........................
$20,000 to $21,999..........................
$22,000 to $24,999..........................
$25,000 and over...........................
0.1
.8
3.8
3.7
G. 1
10.1
11.1
12.5
11.6
10.2
8.3
6.7
4.4
5.0
3.8
1.8
96.3
96.2
96.1
9C.3
96.3
96.2
96.2
96.1
95.0
93.5
92.9
92.7
92.6
92.0
89.7
87.7
(«)
Total.....................................
100.0
94.4
(0
$25,000 and over.......... ............... .
3.1
4.1
5.5
7.5
8.5
9.9
10.5
10.0
9.3
8.2
6.4
5.0
3.3
4.1
3.1
1.5
96.2
96.3
96.2
96.2
96.1
96.1
96.1
95.7
94.6
93.3
92.2
91. S
91.6
91.1
89.4
86.4
Total................................... .
100.0
94.4
.1
.2
.1
.1
.2
.1
.1
.4
.2
.6
.6
1.8
.2
.4
.2
... .2
.2
.7
.5
.7
.9
1.3
1.1
1.6
4.3
2,1
0.4
.4
.7
.4
.8
.6
.9
1.4
1.2
1.4
1.7
3.4
4.4
2.8
2.4
..4
.5
1.5
.6
1.7
1.0
1.5
2.0
2.7
2.9
2.7
3.5
4.4
4.7
6.8
2.4
1.4
1.0
1.5
3.0
2.6
3.0
2.7
3.8
4.9
5.9
5.4
5.9
7.1
S.2
14.0
7.1
2.5
10.4
8.1
6.0
6.8
6.9
7.4
10.3
12.3
9.9
13.1
13.9
'20.9
37.2
64.5
16.7
31.2
32.6
21.3
21.0
28.5
27.4
30.5
40.4
55.4
74. S
75.4
73.5
61.6
40.0
7.5
69.0
61.5
51.7
66.7
6S.4
59.6
59.9
56.5
4L8
22.5
4.3
.2
.1
.2
.3
.2
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
.2
.8
1.2
2.3
4.2
11.8
42.9
3a 6
100.0
.1
.1
.1
.1
.1
.2
.1
.1
.1
.2
.2
.4
.1
.4
.4
2.5
.3
.2
.6
.3
.5
.7
.6
.7
.9
.8
.9
.7
.7
.9
1.8
6.7
.6
.8
.7
.8
.7
.8
1.0
.9
.9
1.3
1.1
1.1
1.7
1.6
1.8
4.1
2.1
1.2
2.0
2.5
2.4
2.0
2.4
2.5
2.9
2.9
3.5
3.9
4.4
5.3
a9
11.3
4.6
3.8
3.6
4.0
4.1
4. S
4.9
6.2
6.7
6.8
S. 4
8.7
9.5
10.7
13.8
20.9
10.3
8.0
S. 3
9.9
11.3
12.2
13.2
15.1
17.8
21.3
22.9
25.9
26.3
29.7
3a 7
48.3
24.1
21.0
21.5
24.0
24.2
23.6
23.9
26.0
2S.6
3a 3
53.9
59.1
57.9
64.9
63.2
5S.4
56. 7
55.7
53.9
4S-5
42.1
30.3
9.1
.2
.4
.4
.3
100.0
10 .0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
100.0
10a 0
100.0
100.0
100.0
100.0
100.0
.2
.8
1.0
3.0
a4
17.0
31.3
40.3
100.0
2.4
(0
.1
.1
.1
.1
.2
.3
EXISTING HOMES
Less than $8,000............................
$8,000 to $8,999..............................
$9,000 to $9,999.............................
$10,000 to $10,999..........................
$11,000 to $11,999.........................
$12,000 to $12,999.....................
$13,000 to $13,999.....................
$14,000 to $14,999.....................
$15,000 to $15,999.....................
$16,000 to $16,999..........................
$17,000 to $17,999......................... .
$18,000 to $18,999..... ................... .
$19,000 to $19,999.................
$20,000 to $21,999.........
$22,000 to $24,999............. .......
0
0
0
(‘
0
(0
(0
(0
(>)
.1
.1
.2
.5
sas
51.0
3S. 1
5.7
1 Less than 0.05 percent.
73
;
!
1
i
■
Chart III-16
Chart III-17
FHA ESTIMATE OF PROPERTY VALUE, 1962
FHA ESTIMATE OF PROPERTY VALUE, 1950-62
Single family home mortgages, Section 203
Single family home mortgages, Section 203
30 —
§
3
£ 20 —
20 —
New Homes
c 15 —
3
3
g
Median
New Homes
O
"O
-D 10 ---
10 —
o
£
0
o
- ~l
£ 5 -
111*1
0
25 —
I
I
Median
- 15 —
Existing Homes
o
_o
.3
103
o
-o 10 —
o
§
0
7 or less 8-9
10-11
12-13
14-15
16-17 18 or more
5-
!
Estimate of value in thousand dollars
0
Property Value.—Over 55 percent of the new
homes and almost one-half of the existing dwell
ings securing mortgages insured by FHA during
1962 were valued by the agency at between
$12,000 and $16,999. The greatest concentration
of new homes was in the $14,000 to $15,999 value
range, with the highest frequency—12.5 percent—
in the $14,000 class. Existing-home cases tended
to be distributed more evenly over a wider range
from $10,000 to $16,999, with a slight concentra
tion in the range between $13,000 and $14,999
which accounted for slightly more than one-fifth
of the total number of transactions. About oneeighth of the existing dwellings were appraised
at less than $10,000, compared with only about
4 percent of the new homes. (See Chart III-16.)
In contrast, almost equal proportions of the
Section 203 mortgages—10.6 percent of the new
homes and 8.7 percent of the existing dwellings—
were valued at $20,000 or more.
Comparison of the 1962 distribution with that
for the preceding year shows that the median val
uation for new homes increased by 1.6 percent and
that for existing dwellings by over 4.5 percent.
Table III-41 and Chart III-17 permit longerterm comparisons which indicate that the aver
age appraisal of $15,489 for a new home in 1962
exceeded the comparable 1950 valuation by slightly
more than 80 percent, while the existing-home
average of $14,323 was only about 54 percent
above the $9,298 reported for 1950. Valuation
increases during this postwar period reflected
changes in structure size, quality, and equipment
74
.
20 —
Existing Homes
§ 20 —
3
£
I
I I
1950
I I
'52
I
'54
I I I I
‘56
‘58
i
'60
i
i
'62
for new construction, as well as increases in both
land and construction costs.
Transaction Characteristics.—Characteristics of
the single-family home mortgage transactions in
sured by FITA under Section 203 of the National
Housing Act in 1962 are presented in Table HI42. Generally speaking, these data are based on
all types of single-family home transactions, in
cluding purchases, the construction of a home for
or by the owner on his own lot, the refinancing
of existing indebtedness without change in ownersliip, and the financing of major improvements to
the property. It should be noted? however, that
the data relating to total acquisition cost, sale
price, and incidental costs are based on purchase
transactions only and consequently are not exactly
comparable with the averages shown in the table
for the other characteristics. Although purchase
transactions predominated in both new- and exist
ing-home cases, varying proportions of the other
types of transactions in the individual value
groups may result occasionally in variations
among value! groups in the relationships shown
between averages for FHA value and total acqui
sition cost and sale price.
A comparison of the new- and existing-home
averages of the various characteristics reveals that,
as would be expected, increases in replacement cost
of properties, total acquisition costs (including
sale price and incidental costs), mortgage amounts,
and mortgagor’s annual income accompanied increases in property value, while the reverse tended
I
Table III—42.—Transaction characteristics by properly value, 1-family homes, Sec. 208, 1962
Average
FHA estimate of property value
Percentage
distributlon
Property
value
Property
replacement cost
Total
acquisition
cost
Sale
price 1
Incidental
costs •1
Amount of
mortgage
$208. 77
246.68
275.06
290. 56
281. 39
292. S3
283.10
284. 02
301. C5
315. 75
329. 61
343. 9S
351.64
382.47
413. 49
471.85
$7,156
8,122
8, 941
9, 947
10, 922
11.803
12, 724
13, 631
Mort
gagor’s
annual
income
Ratio of
loan to
property
value
NEW ROMES
Less than $8,000.........................
$8,000 to $8,909............................
$9,000 to $9.999............................
$10,000 to 10.999..........................
$11,000 to $11.999........................
$12,000 to $12,999........................
$13,000 to $13,999........................
SmS! !o
$16,000 to $16,999........................
BSSS^Sk:=:
$19,000 to $19.999..........................
$20,000 to $21.999..........................
$22,000 to $24.999..........................
$25,000 and over...........................
Total.
$7,590
S, 4 OS
9,437
10,492
11,500
12. 470
13,466
14, 454
15.45S
16,430
17,413
15, 406
19. 405
20, $23
23, 212
26.769
18, 136
19. 219
20.062
21,460
23, S69
27.53S
15.463
16.460
17. 482
18,497
19, 472
20. 963
23.259
26, 792
$7,390
8,279
9,121
10, 213
11,222
12.162
13.154
14,179
15,159
16,129
17,146
18.155
19,121
20,542
22, 812
26,264
100.0
15.4S9
16,130
15, 485
15,169
3.1
4.1
5.5
7,061
8,440
9,429
10,428
11,419
12.426
13, 420
14.413
15,389
16,384
17,377
18,358
19,349
20, 755
23,103
27, 214
10, 497
11,350
12,101
12, 978
13, 6S2
14, 587
15,369
16,278
17,174
18,161
19, 120
20,197
20.985
22, 491
24, 774
29, 159
7,258
8, 577
S, 548
10.5SO
11,563
12, 598
13, 646
14, 643
15, 640
16, 653
17,676
18. 690
19, 700
21.197
23, 568
27,428
14,323
16,407
14,507
0.1
S
3.8
3.7
61
10.1
11.1
12.5
11.6
10.2
8.3
67
4.4
5.0
3. S
1.8
$8,290
S, 90S
10.023
11,071
12.054
13,067
14.029
15.028
16.113
17,16S
$7, 596
8,505
9,365
10, 493
11,500
12, 445
13.462
14, 468
14, 466
15,252
16,104
16,897
17, 738
18, 706
20, 299
23, 062
$4, 423
4,646
5,149
5, 493
5,883
6.288
6,698
7,177
7,576
8,137
8, 671
9,144
9.688
10, 258
11,339
12, 733
94.3
95.0
94.7
94.8
95.0
94.7
94.5
94.3
93.0
92.8
92.5
91.8
91.4
89.8
87.5
86 2
313. 71
14,358
7,695
92.7
6,978
8,324
9, 296
10,307
11,279
12,304
13, 320
14,322
15,314
16 307
17, 319
18, 316
19.318
20.790
23,125
26,971
209.91
216. 52
228.63
245.97
260.68
267.30
279.18
291.23
306 34
320. 91
331. 74
346.88
357.16
376.15
406.32
427.85
6,638
7,972
8,891
9.807
10, 721
11,640
12, 552
13,426
14,255
15, 072
15,876
16, 685
17,531
18,606
20, 291
22, 700
£13
0,394
6. 707
7,012
7,465
7.859
8. 307
S, 861
9, 405
9, 950
10. 617
11.708
13, 322
94.0
94.5
94.3
94.0
93.9
93.7
93.5
93.2
92.0
92.0
91.4
90.9
00.6
89.6
87.8
83.4
14.184
292.46
13,194
7,629
92.1
EXISTING HOMES
Less than 8S.000..........................
$8,000 to 8S.999............................
$9,000 to $9.999............................
$10,000 to $10.999........................
$11,000 to $11.999.........................
f 1^.000 to $12,999........................
$13,000 to $13,999........................
$14,000 to $14,999........................
|15.CW0 to $15,999........................ .
$16,000 to $16,999....................... .
$17,000 to $17.999....................
$18,000 to 81S.999....................
$19,000 to $19.999...................
$20,000 to $21.999..........................
S2.0W to $24,999..........................
$25,000 and over...........................
Total........................................
7.5
S. 5
9.9
10.5
10.0
9.3
8.2
64
5.0
3.3
4.1
3.1
1.5
100.0
km
1 Data reflect purchase transactions only.
* Includes estimated costs to mortgagor for items incidental to financing purchase of property, but excludes prepayable expenses.
providing 6 rooms or more and only 5 percent of
the dwellings including less than 5 rooms. For
existing homes, over 40 percent were in the 5-room
category, with 15 percent containing less than that
number of rooms and about 45 percent including
6 or more rooms.
The distribution of bedrooms indicates that 3bedroom homes continued to predominate in the
market. Over four-fifths of the new homes and
about three-fifths of the existing dwellings were
in this category. While consistent with earlier
years, this represents a minor shift from 1961 when
87 percent of the new homes were in this category.
Year Built.—Table 111-45 indicates that the
typical existing-home transaction insured in 1962
was secured by a house 10 years old which
was appraised by FHA at $14,082. The table
further reveals that nearly two-thirds of the exist
ing homes insured that year were constructed after
1949. The remainder were about equally divided
between homes that were built during the 1940‘s
and those built earlier. It is, of course, to be ex
pected that the older dwellings were less liberally
appraised than those constructed more recently.
For example, the typical age of the $8,000 house is
approximately 13.7 years, while that of the typical
dwelling in the $22,000 to $24,999 class is 6.4 years.
76
The majority of the homes valued at $20,000 or
more were built in 1955 or later, with about onefifth built during the 1950-54 period.
Market Price of Site.—In the FHA underwriting
process the available market price of site is con
sidered as the FHA estimated price of an equiva
lent site including street improvements and
utilities, rough grading, and terracing and retain
ing walls, if any. The increase in the average
market price of site over the years since 1950 is
shown graphically in Chart III-18, while Table
III-46 presents information on the distribution
of price of site within property value groups. The
median land price involved in FHA-msured newhome transactions in 1962 was $2,649, the ratio
of average land cost to average property value
being about 17.5 percent. For existing homes, the
price of site ($2,653) was slightly larger and, on
the average, represented 19.1 percent of total value.
About one-third of the new- and existing-home
transactions insured in 1962 involved land costs
of between $1,500 and $2,499. In addition, about
38 percent of the new-home sites were valued at
between $2,500 and $3,499, compared with about
one-fourth of the existing-home sites.
In the lower price classes, represented by the
$9,000 dwelling, 60 percent were built on lots
1
Chart III-18
MARKET PRICE OF EQUIVALENT SITE, 1950-62
Single family home mortgages, Section 203
3 ----
Average
New Homes
=
2“
-o
"O
o
O
i
I ------ •
0
I
I
I
I
1
3 —
Average
Existing Homes
£
-°
T>
"c
o
_c 1 —
O
0 -1-1-1
I960
'52
1
I
1
'54
I
I
'56
I
i
'58
'60
I
‘62
valued between $1,500 and $2,499, while nearly 7
out of every 10 existing homes were built on sites
valued between $1,000 and $1,999. The bulk of
the new $15,000 homes were constructed on sites
valued between $2,000 and $2,999, while the heav
iest concentration of existing-home sites was
reported in the range from $2,500 to $3,499. With
respect to the higher priced dwelling as repre
sented by the $22,000-or-more classes, some 60
percent of the new- and existing-home sites were
valued at $4,000 or more. Moreover, between onethird and one-half of all higher valued homes were
on sites valued at $5,000 or more.
Water and Sewer Supply.—Table III-47 indi
cates that 95 percent of all homes securing mort
gages insured by FHA in 1962 are serviced by
public water supplies. The principal exceptions
are in the most expensive homes and in some of the
least expensive new dwellings, which frequently
are not in subdivisions and consequently may be
some distance from public pipe lines. The table
also indicates that about 80 percent of these homes
have public sewer systems, with some 14 percent
of the newly constructed dwellings and about 21
percent of the existing homes having individual
sewer systems, generally septic tanks. Less than
5 percent of the new homes and only about 1 per
cent of the existing homes are served by community
systems.
Table III-43.—Property characteristics by property value, 1-family homes, Sec. 203, 1962
FHA estimate of
property value
Average
Percent
age dis
tribution Property Market
price of
value
site
Average
Price of
site as
Number Number
percent
Calcu
of bed
of value lated area of rooms
rooms
(sq. ft.)
Percent of structure with —
More
than 1
bath
1 story
Full or
part
basement
Oarage
Carport
NEW HOMES
I
Less than $8,000................. .
$8, 000 to $8, 999........... .........
$9, 000 to $9,999....................
$10,000 to S10, 999............. $11, 000 to $11,999.................
$12,000 to $12,999................
$13,000 to $13,999................ .
$14,000 to $14,999..;..........
$15,000 to $15,999..................
$16,000 to $16,999................ .
$17,000 to $17,999................ .
$18,000 to $18,999................ .
$19,000 to $19,999................ .
$20,000 to $21,999................ .
$22,000 to $24,999________
$25,000 and over..................
0.1
.8
3.8
3.7
6.1
10. 1
11.1
12.5
11.6
10.2
8.3
6.7
4.4
5.0
3.8
1.8
$7,590
8,498
9, 437
10,492
11,500
12, 170
13, 466
14, 454
15, 458
16,430
17,413
18,406
19,405
20, 823
23,212
26, 769
$1,316
1, 670
1,858
1,904
1,943
2,138
2,202
2,426
2,598
2,821
2,992
3,222
3, 501
3.953
4, 690
4,878
17.3
806
19.7
19.7
18.1
16.9
17.1
16.8
16.8
16.8
17.2
17.2
17.5
18.0
19.0
20.2
18.2
789
823
S94
973
1,008
1, 060
1,093
1,149
1,213
1,273
1,359
1,382
1,445
1,513
1,712
4.7
4.6
4.7
4.9
5.1
5.2
5.3
5.4
5.0
5.7
5.9
6.1
6.1
6.2
6.3
6.7
2.5
2.8
2.9
2.8
2.9
2.9
3.0
3.0
3.0
3.1
3.1
3.2
3.2
3.3
3.4
3.5
4.9
3.6
11.2
16.6
30.6
37.2
44.7
51.1
60.9
70.0
76.3
85.0
88.9
93.4
93.2
92.3
100.0
99.6
99.1
95.9
93.7
92.9
93.0
92.3
88.5
86.1
83.9
78.5
79.6
79.2
78.4
73.0
2.4
.4
2.1
5.1
14.3
22.0
27.5
33.5
39.8
33.6
39.7
36.6
32.2
29.2
29.0
32.5
40.5
22.9
29.2
42.7
46.4
50.6
56.7
59.8
63.9
69.0
73.4
78.3
79.7
m
71.0
11.9
23.7
28.5
30.3
24.9
24.5
17.2
15.4
12.2
12.8
12.5
10.9
11.7
12.8
15.2
13.7
Total.........................
100.0
15,489
2,715
17.5
1,162
5.6
3.1
58.0
88.2
29.5
61.8
16.7
$22,000 to $24,999...............„
$25,000 and over....................
3.1
4.1
5.5
7.5
8.5
9.9
10.5
10.0
9.3
8.2
0.4
5.0
3.3
4.1
3.1
1.5
7,061
8, 440
9,429
10,428
11,419
12,426
13, 420
14, 413
15, 389
16,384
17, 377
18,358
19, 319
20,755
23,103
27.214
1,173
1,416
1,612
1,826
2, 037
2,302
2,553
2.797
3,047
3,233
3,452
3,643
3,875
4,229
4,611
5,092
16.0
16.8
17.1
17.5
17.8
18.5
19.0
19.4
19.8
19.7
19.9
19.8
20.0
20.4
20.0
18.7
938
951
979
1,012
1,030
1,062
1,090
1,124
1,159
1,203
1,244
1,309
1,350
1,421
1, 544
1,701
4.9
4.9
5.0
5.1
5.2
5.3
5.3
5.4
5.5
5.6
5.8
5.9
6.0
6.2
6.4
6.6
2.4
2.4
2.5
2.6
2.7
2.7
2. S
2.8
2.9
3.0
3.0
3.0
3.1
3.1
3.2
3.4
2.2
3.0
4.6
8.2
11.0
17.2
22.4
29.9
36.2
43.7
51. S
60.8
68.9
76.4
83.7
90.6
67.9
79.5
81.6
81.2
82.1
83.6
S4.0
82.3
81.2
78.9
76.9
75.5
75.6
72.4
6S.3
66.8
40.8
31.9
31.6
36.1
37.0
36.7
37.3
40.2
42.5
46.3
4S.5
4S.1
45.9
47.8
51.0
52.3
38.4
48.5
52.0
56.7
58.7
63.0
66.4
68.3
72.3
73.3
75.7
79.4
79.4
80.5
80.3
77.0
6.0
8.5
10.4
10.3
10.6
10.5
9.9
9.1
7.9
S. 3
7.8
7.4
7.7
7.8
9.3
13.0
Total................. ..........
100.0
14,323
2,738
19.1
1,145
5.5
2.8
31.7
79.6
40.8
66.4
9.1
EXISTING ROMES
Less than $8,000.....................
$8,000 to $8,999.......................
$9,000 to $9,999......................
$10,000 to $10,999.............. .
$11,000 to $11,999___ ____
$12,000 to $12,999........ .......
$13,000 to $13,999.............. .
$14,000 to $14,999....................
$15,000 to $15,999....................
$16,000 to $16,999___ _____
$17,000 to $17,999................
$18,000 to $18,999...............
$19,000 to $19,999________
$20,000 to $21,999...............
:
3
<
iL
77
Table ITT—44.—Number of rooms and bedrooms by "property value, 1-family homes, Sec. 808, 1968
Number of rooms
FHA estimate of property value
Percent
age dis
tribution
Number of bedrooms
Percentage distribution
Percentage distribution
Average
Average
4 or less
5
8
7
8 or more
lor 2
3
4 or more
NEW HOMES
0.1
.S
3. S
3.7
4.7
4.6
4.7
4.9
40.5
42.3
33.5
23.9
42.8
55.9
60.9
64.4
16.7
1.8
5.6
11.5
0.2
$25,000 and over...................
6.1
10.1
11.1
12.5
11.6
10.2
S. 3
6.7
4.4
5.0
3. S
1.8
5.1
5.2
5.3
5.4
5.6
5.7
5.9
6.1
6.1
6.2
6.3
6.7
11.9
5.5
3.7
3.1
1.9
1.1
.5
.2
.2
.4
.4
.5
67.8
69.8
66.3
63.3
62.3
43.2
35.6
25.7
23.4
21.8
21.0
9. S
19.8
24.1
26.6
28.8
35.1
40.7
45.6
44.9
49.0
39.2
37.1
36.1
.4
.6
3.1
3.8
8.3
11.1
13.3
22.8
20.7
30.3
27.3
27.2
.3
1.0
2.4
3.9
5.0
6.4
6.7
8.3
14.2
26.4
Total............................
Median value.......................
100.0
$15,151
5.6
5.0
$11,004
49.9
$14,153
32.1
$16,260
9.6
$18,451
3.1
4.1
5.5
7.5
8.5
9.9
10.5
10.0
9.3
8.2
6.4
5.0
3.3
4.1
3.1
1.5
4.9
4.9
5.0
5.1
5.2
5.3
5.3
5.4
5.5
5.6
5.8
5.9
6.0
6.2
6.4
6.6
45.8
40.8
32.1
25.0
20.4
18.5.
15.1
10.2
7.1
5.0
3.5
2.3
1.9
1.5
1.3
2.3
25.6
34.2
41.3
44.9
46.5
47.1
47.7
47.9
46.2
41.5
38.1
32.2
25.8
19.7
13.4
10.6
20.6
17.6
19.9
23.2
26.3
26.7
28.9
32.8
36.2
40.4
41.6
44.3
47.1
46.4
43.1
33.7
Less than $8,000.................
$8,000 to $8,999....................
$9,000 to $9,999....................
$10,000 to $10.999................ .
$11,000 to $11,999.................
$12,000 to $12,999.—............
$13,000 to $13,999—............
ILtiooolSl!!^:.*::::::::
8*«S5Sfc:—:
$1S,000 to SIS,999..................
$19,000 to $19,999..............
$20,000 to $21,999..............
$22,000 to $24,999—..........
2.5
2.8
2.9
2.8
35.7
17.2
16.3
15.5
64.3
82.8
82.2
83.7
2.9
2.9
3.0
3.0
3.0
3.1
3.1
3.2
3.2
3.3
3.4
3.6
11.4
8.7
5.8
5.7
3.2
3.0
1.8
1.4
.9
1.6
1.3
4.2
88.1
91.7
90.3
89.3
88.6
85.2
86.3
70.9
76.7
65.5
61.9
44.5
.5
1.8
3.9
6.0
8.2
11.8
11.9
21.7
22.4
32.9
36.8
51.3
3.4
$19,087
3.1
5.3
$12,853
83.8
$14,922
10.9
$18,659
5.9
5.2
4.9
6.5
4.9
6.0
6.4
7.2
8.1
10.5
13.2
16.6
19.8
26.4
30.6
32.9
2.1
2.2
1.8
1.4
1.9
1.7
1.9
1.9
2.4
2.6
3.6
4.6
5.4
7.0
11.6
20.5
2.4
2.4
2.5
2.6
2.7
2.7
2.8
2.8
2.9
3.0
3.0
3.0
3.1
3.1
3.2
3.4
66.2
67.0
67.8
48.4
40.5
35.8
29.5
23.4
18.2
15.5
12.6
10.7
7.6
7.7
6.6
5.6
28.3
27.7
37.7
47.1
54.0
67.7
63.4
75.8
75.7
77.5
74.6
70.2
57.8
5.5
5.3
4.5
4.5
5.5
6.5
7.1
7.8
9.1
10.0
11.0
13.6
14.9
17.8
23.2
36.6
9.9
$16,814
3.1
$17,170
2.8
29.3
$11,855
61.6
$14,897
9.1
$16,151
0.1
1.5
.8
EXISTING HOMES
Less than $8,000..........................
SS.000 to $8,999—........................
$9,000 to $9,999.......................
«0,000 to $10,999....................
$11,000 to $11,999.........................
$12,000 to $12,999-....................
P.OOO t0 P.909.........................
$14,000 to $14,999.........................
$15,000 to $15,999-.................... .
$16,000 to $16.999-.....................
lisiooo \o $}s.m::::::::::::::
$22,000 to $24,999—......................
$25,000 and over............................
100.0
$14,082
Total..................................
Med km value..................................
5.5
14.6
$11,287
40.2
$13,726
32.2
$15,205
S?
74.6
Table III-45.—Year built, by property value, 1-family homes, Sec. 203, 1962
FHA estimate of
property value
Percentage
dis
tribution
Median
age of
structure
(years)
Year built—percentage distribution
Prior to
1920
1920 to 1929 1930 to 1939 1940 to 1944 1945 to 1049 1950 to 1954 1955 to 1969
1960
through
1962
EXISTIN': HOMES
10.9
13.7
12.3
11.9
11.1
10.7
9.9
9.3
9.0
8.7
8.0
7.3
6.7
6.7
6.4
6.4
20.6
8.9
6.4
$20,000 to $21,999........... .............
$22,000 to $24,999.........................
$25,000 and over..........................
3.1
4.1
5.5
7.5
8.5
9.9
10.5
10.0
9.3
8.2
6.4
5.0
3.3
4.1
3.1
1.5
Total..........—.....................
Median value......... ..................—
100.0
$14,082
10.0
Less than SS.000........................ .
$8,000 to $8,999............................
$9,000 to $9,999. ................... .
$10,000 to $10,999..................
$11,000 to $11,999................. .
$12,000 to $12,999........................
$13,000 to $13,999....................... .
$14,000 to $14,999...................... .
$15,000 to $15,999........................
$16,000 to $16,999....................... .
$17,009 to $17,999...................
$18,000 to $18,999...................
$19,000 to $19,999...................
78
4.0
4.1
2.7
2.6
1.8
1.5
1.2
1.3
.8
1.4
1.0
.8
14.5
15.2
12.8
11.9
9.5
7.9
7.8
7.4
7.1
6.4
5.8
5.5
3.6
4.0
4.0
4.6
6.2
5.9
6.1
6.3
6.0
5.9
5.0
4.7
4.9
0.1
6.8
5.5
4.9
4.8
5.4
6.2
7.1
7.9
8.0
7.6
7.0
6.9
6.6
4.9
4.6
4.4
4.0
5.1
4.7
4.3
4.9
3.3
17.3
16.5
16.8
15.2
14.2
13.6
11.9
10.2
9.7
9.0
7.8
7.0
7.4
6.8
6.0
6.7
27.5
34.9
35.8
35.5
37.2
35.2
35.0
33.2
32. 1
31.0
29.3
25.3
22.8
22.5
20.8
20.5
0.0
9.8
12.3
15.3
18.7
22.7
26.3
30.0
32.0
32.6
36.1
39.7
42.8
44.5
42.4
40.2
0.8
.9
2.2
2.7
3.4
3.7
5.7
7.0
7.8
9.0
10.0
10.6
13.0
11.7
15.5
17.7
3.8
$10,919
8.3
$12,491
5.5
$13, 508
5.9
$12, 823
11.5
$12,716
32.1
$13,440
26.6
$15, 329
0.4
$10,164
5.5
Table III—48.—Financial characteristics by property value, 1-family homes, Sec. 203, 1962
Average
FHA estimate of property value
NEW
Percentage
distribution
Property
value
!
Average monthly
Term of
mortgage
(years)
Property
taxes
29.3
$7.62
Total
mortgage
payment
Prospective
housing
expense
Mortga
gor’s In
come
Heating
and
utilities
Mainte
nance and
repair
homes
Less than $8,000..
$8,000 to$8,999...
$9,000 to $9,999...
$10,000 to $10,999.
$11,000 to $11,999.
$12,000 to $12,999.
$13,000 to $13,999.
$14,000 to $14,999.
$15,000 to $15,999.
Sio.uOu to $1(3,999.
$17,000 to $17,999.
$18,000 to $18,999.
$19,000 to $19,999.
$20,000 to $21,999.
$22,000 to $24,999.
$25,000 and over..
11.1
12.5
11.6
10.2
8.3
6.7
4.4
5.0
3.8
1.8
$7,590
8,498
9,437
10,492
11,500
12,470
13, 466
14,454
15, 458
16,430
17,413
18, 406
19,405
20,823
23,212
26,769
Total..........
100.0
0.1
30.5
30.5
30.5
30.4
30.4
30.3
30.6
30.3
30.0
30.1
6.76
7.40
9.71
11.63
12.92
14.29
15.85
17.69
19.08
20.58
21.90
22.39
23.96
25.35
29.99
$53.51
57.08
64.50
72.65
79.95
86.87
93.52
100.48
107.31
113.62
120.42
126.76
131.74
140.11
152.32
174.28
$71.00
75.97
83.43
93.01
102.20
110.30
118.50
126.35
134.92
142.58
150.02
157.65
162.70
172 02
187.31
216.79
$368.59
387.17
429.06
457.79
490.28
524.02
558.15
598.06
631.35
678.11
722.68
761.96
807.34
854.82
944.88
1,061.06
$12.66
14.30
14.44
15.17
16.69
17.68
18.80
19. 42
20.69
21.57
21.90
22.44
22.24
22.45
24.98
30.23
15,489
30.3
17.13
106.39
133.48
641.24
20.07
7.03
7,061
8,440
9,429
10,428
11,419
12,426
13, 420
14,413
15,389
16,384
17,377
18,358
19,349
20, 755
23,103
27,214
22.3
24.5
25.5
26.4
27.1
27.4
27.9
28.1
28.3
28.4
28.3
28.3
28.5
28.4
28.3
27.8
9.49
10.32
11.03
12.38
13.48
14.45
16.20
18.09
19.78
21.09
22.82
24.45
25.62
27.83
30.14
33.70
67.47
65.25
70.85
77.09
83.27
89.65
96.50
103.63
no. 13
116.38
123.19
130.04
136.07
145.23
158.43
179.09
80.18
88.57
94.70
101.59
108.17
115.15
122.48
130.34
137.74
145.01
152.77
160.79
167.37
178.14
193.63
219.14
432.85
460.45
480.12
507.62
532.84
558.94
$13,009 to $! 3,999.
$14,00'' to $14,999.
$15,000 to *15,999.
$16,000 to $16,999.
$17,0( 0 to $17,999.
$18,000 to >18,999.
$19,W0 to $10,999.
$20,000 to $21,999.
$22,000 to $21,999.
$25,000 and over..
3.1
4.1
5.5
7.5
8.5
9.9
10.5
10.0
9.3
8.2
6.4
5.0
3.3
4.1
3.1
1.5
586.86
622.08
654.90
692.27
738.41
783.73
829.66
887.26
980.65
1,110.13
16.87
17.20
17.50
18.02
18.24
18.68
18.91
19.39
19.98
20.65
21-24
21.93
22.20
23.30
24.95
28.51
5.84
6.12
6.34
6.48
6.66
6.83
7.06
7.33
7.62
7.98
8.35
8.81
9.09
9.61
10.25
11.54
Total.
100.0
14,323
27.4
18.00
102.73
129.99
635.76
19.76
7.50
.8
3.8
3.7
6.1
10.1
30.2
29.4
29.7
30.3
30.2
$4.83
4.59
4.49
5.19
5.56
5.76
6.18
6.45
6.92
7.38
7.70
8.45
8.71
9.45
10.01
12.28
EXISTING HOMES
Less than $8,000.
SlO.OOfUo5$ioW
BffiSSi#
home cases, the average new-home term being be
low 30 years only for the value groups of less than
$11,000. Mortgage terms lengthened as values
increased, reaching peaks of 30.5 years for new
homes valued between $13,000 and $15,999 and of
28.5 years for existing dwellings in the $19,000
range.
Property taxes were an important item in the
monthly mortgage payment, representing 16 per
cent of the total payment for new homes and about
17.5 percent in the case of existing dwellings. As
would be expected, average taxes were generally
proportioned to property values, indicating that
wide variations in local tax rates and in special
assessments affected all value groups about equally.
In all corresponding value classes, property taxes
were higher for existing dwellings than for new,
the differential being smallest in the central por
tion of the value scale where the preponderance
of the cases are concentrated, and somewhat
greater for both the higher- and lower-valued
properties.
The total monthly mortgage payment also in
creased with value, reflecting the heavier debt serv
ice on higher average mortgage amounts, together
with increased taxes. While the average term in
all instances averaged longer for new-home mort
gages than for existing-home transactions, the
mortgage principal was still enough larger than
the corresponding existing-home amount to re
quire higher monthly payments, averaging $106.39
compared with $102.73.
Prospective housing expense showed similar
variations, ranging, by value groups, from $71 to
$217 per month for new-home buyers and from
$80 to $219 for purchasers of existing homes.
Because of differences in the two distributions,
the average housing expense of $133.48 for all
new-home cases exceeded the $129.99 reported for
all existing dwellings even though the reverse was
true within each of the corresponding value
groups. Monthly expenses attributable to house
hold operations and maintenance and repair av
eraged $27.10 for new-home buyers and a few
cents higher for purchasers of existing dwellings.
Incidental Costs.—The incidental or closing costs
necessary to complete a mortgage transaction and
chargeable to the mortgagor, regardless of whether
they are included in whole or in part in the contract price, are summarized in Table III-49.
These charges may include the FHA examination
fee, mortgagee’s initial service charge, cost of the
title search and title insurance, recording fees,
charges for the preparation of the deed, and other
similar items. Excluded, however, are such
charges as deposits for unaccrued taxes, insurance
premiums, and similar items which are regarded
81
I
Table III—49.— Incidental costs by property value, 1-family homes,1 Sec. 208, 1962
Incidental costs—percentage distribution
FHA estimate of property value
Median
Percent
age dis incidental
costs
Loss than
§100
tribution
§100 to
§199
$200 to
$299
§300 to
$399
$400 to
$499
$500 to
$599
$600 to
$699
11.9
3.1
1.5
.8
.9
2.5
3.1
2.4
2.2
1.4
.9
.5
1.2
1.1
35.9
5.7
15.8
12.0
15.5
10.6
9.2
8.9
7.6
5.8
5.2
4.9
3. S
3.0
2.1
1.2
56.4
41.4
32.7
39.2
41.3
42.4
44.4
42. S
37.2
36.7
32.8
29.9
30.1
19.8
13.1
8.3
5.1
39.8
43.4
29.2
29.7
30.9
30.4
27.4
30.5
25.9
27.1
26.5
2S.4
29.4
28.8
15.1
2.6
1.2
2.1
14.9
9.7
11.2
10.3
14.7
18.9
23.2
25.9
20.8
23.2
26.0
19.3
11.6
2.9
3.0
2.6
3.3
2.5
2.2
2.7
4.7
6.5
8.9
11.0
15.4
27.5
51.1
0.2
.4
.0
.5
.8
.6
1.2
1.0
1.7
2.2
3.9
6.0
11.0
1.4
$700 to
$799
$800 or
more
NEW ROMES
0.1
.8
3. S
3.7
6.1
10.1
11.1
12.5
11.6
10.2
S, 3
6.7
4.4
5.0
3. S
1.8
Less than $8,000.
$8,000 to $8,999...
$9,000 to $9.999...
$10,000 to $10,999
$11,000 to $11 999
$12,000 to $12,999....................
$13,000 to $13,999....................
$14,000 to $14,999....................
$15,000 to $15,999....................
$16,000 to $16,999....................
$17,000 to $17,999....................
$18,000 to $18,999....................
$19,000 to $19,999....................
$20,000 to $21,999.................... .
$22,000 to $24,999.....................
$25,000 and over
Total.
existing
$225.00
18
290.73
II
I
S£S
100.0
314.96
1.9
7.9
35.9
29.0
17.2
6.4
3.1
4.1
5.5
7.5
218.53
224.41
23$. 65
256.27
266.53
270.47
27S. 76
2S7.44
296.5S
314.05
327. 56
349.08
360.71
379.88
400. S5
434.40
2.4
1.4
1.1
.7
.8
.6
.6
.7
.5
.5
.5
.2
.3
.5
.1
.2
40.5
38.4
31.7
24.5
17.7
15.6
11.9
10.2
7.8
6.4
4.5
4.2
3.8
2.4
1.8
1.8
38.1
41.9
44.6
44.1
47.4
48.0
47.6
44.8
43.1
39.8
38.6
33.2
30.7
23.4
16.7
14.1
16.7
15.4
19.2
24.7
26.1
25.4
26.2
25.8
26.5
24.0
23.2
25.3
25.0
29.7
31.3
29.2
2.0
2.7
3.1
5.4
6.2
8.3
11.3
14.3
15.3
20.4
22.4
23.2
23.3
23.1
15.9
13.6
.1
.2
.3
.6
1.7
1.8
2.0
3.4
5.5
6.9
7.9
9.8
13.2
15.5
25.9
27.0
286.24
.7
13.9
41.1
24.7
12.8
5.2
(2)
0.1
.2
.1
(2)
.2
.1
.3
.5
.9
1.6
1.2
(2)
(2)
0.1
.1
(’)
.1
.3
.4
.5
.5
.2
.1
HOMES
Less than $8,000............. .........
$8,000 to $8,999....................
$9,000 to $9,999....................
$10,000 to $10,999.................
$11,000 to $11,999.................
as
S1S.000 to S1S.999.......................
$19,000 to $19,999..................... .
$20,000 to $21,999.....................
$22,000 to $24,999......................
$25,000 and over........................
9.9
10.5
10.0
9.3
8.2
6.4
5.0
3.3
4.1
3.1
1.5
Total........ ........................
100.0
$12,000 to $12,999......................
$13,000 to $13,999......................
$14,000 to $14,999......................
$15,000 to $15,999.................
$16,000 to $16.999.................
$17,000 to $17,999................
.1
8
(2)
.1
.3
.3
.7
1.1
1.6
2.0
3.1
2.4
3.7
5.9
9.8
(3)
8(2)
<*)
(2) ’ 1 |
.7
.7
1.0
.9
1.5 I
2.8
.1
,i
.1
.2
.3
.3
.8
.9
1.5
.3
.1
■l
.3 i
1.2
.1
i In this table data are based on purchase transactions only.
* Less than 0.05 percent.
as prepayable expenses rather than as incidental
costs.
With respect to the new-home mortgages insured
in 1962, the typical amount of closing costs was
$315, or about 10 percent above the $286 reported
for existing-home purchasers. For both construc
tion categories, closing costs increased with prop
erty values, ranging from a low of about $220 to
highs of $527 for new-home transactions and $434
for existing dwellings. Roughly 65 percent of
all the home mortgages insured by FHA in 1962
involved closing costs between $200 and $399, al
though fees of less than $200 were reported for
about 10 percent of the new-home cases and nearly
15 percent of the existing dwellings. About 7
percent of the mortgages involved closing costs
exceeding $500—this wide variation reflecting the
marked geographical differences in mortgage
financing practices.
Size of House Characteristics
This portion of the report is devoted to an
analysis of the size of the homes securing mort
gages insured by FHA under Section 203, includ
ing a description of property characteristics by
floor area groups (Table III-51) and area data by
age of mortgagor ( Table III-52).
82
Calculated Area.—The year 1962. was note
worthy in that the new and existing homes secur
ing mortgages insured during the year were iden
tical in size—each containing a median calculated
area of 1,099 square feet. For new homes, this
represented an increase of 1 percent over the 1,088
square feet reported for the preceding year; for
existing dwellings, the increase was slightly larger,
the 1961 figure having been 1,077 square feet. It
was the largest typical area for new homes re
ported for any year since 1957, while for existing
dwellings it was the largest reported for any y ear
in FHA history. As indicated in Table III -50
and Chart III-19, over one-half of all the new
homes included from 900 to 1,199 square feet, with
the greater concentration—almost 20 percent—in
the 1,000 square-foot range. Existing omes were
spread over a wider range, but with about onesixth also in the 1,000-1,099 square-foot class. In
general, existing homes were reported relatively
more frequently in the size groups below 900
square feet and new homes between 900 and 1,099
square feet. Slightly over one-third of both new
and existing properties involved areas of 1,200 or
more square feet.
Characteristics by Calculated Area.—Average
characteristics by calculated areas of new and ex
isting dwellings are shown in Table 111-51. They
include the average floor area, property value,
E
Chart III-20
MORTGAGOR'S EFFECTIVE ANNUAL INCOME,
1950-62
Single family home mortgages, Section 203
10 —
Median
10 “
Median
Existing Homes
s
"o
~o
1 5 ~
0
j-J— 1
1950
'52
1
I
‘54
1
I
‘56
I
i
'58
1
I
‘60
I
'62
of the transaction. Included in this procedure
is consideration of such items as the mortgagors
income, his financial assets, his credit record, his
current and anticipated recurring obligations, and"
his apparent motivation in entering into the pur
chase or construction of a home. Since owneroccupants are the mortgagors in practically all of
the Section 203 single-family cases, the mortgagor’s
ability to bear the cost of home ownership is pri
marily determined by his effective income. As
estimated by FHA, this is the mortgagor’s proba
ble earning capacity during the first third of the
mortgage term, which experience has indicated is
likely to be the most hazardous portion of the life
of an individual mortgage. Incomes of co-mort
gagors or endorsers may or may not be included,
depending on specific circumstances. The follow
ing portion of this report presents a description
and analysis of the Section 203 owner-occupant
transactions insured in 1962 from the viewpoint
of the mortgagor’s income and prospective housing
expenses.
Mortgagor's Income.—Charts III-20 and III-21
and Table III-53 indicate the marked similarity
in the income distributions of new- and existinghome buyers.
Along with the average incomes of the total pop
ulation there has been a definite upward shift in
the incomes of home buyers during the last 12
years, with the median income rising 89 percent
between 1950 and 1962 for new-home buyers and
at a slightly slower rate for purchasers of existing
homes. In 1950 the typical new-home owner had
an income of $3,861; by 1955 it had risen to $5,484;
and by 1961 and 1962 to about $7,300. The slight
decline in the typical income of new-home buyers
from $7,328 in 1961 to $7,289 in 1962 is believed to
reflect variations in the geographic mix of the sam
ples for the 2 years. The trend of growth has
been somewhat slower for purchasers of existing
homes, starting from a higher base in 1950 when
existing-home buyers, on the average, repotted
higher incomes than purchasers of new homes.
Since 1956, the incomes of purchasers of new
dwellings have typically exceeded those of exist
ing home buyers, though the differential was small
er in 1962 than in other recent years.
During 1962, the incomes of FHA new-home
buyers averaged $7,695 and those of existing-home
purchasers $7,629. More than one-half of both
groups had annual effective incomes (before taxes)
of $5,000 to $7,999. Incomes of $6,000 to $6,999
accounted for the largest proportion—nearly onefifth—of the incomes of all FHA mortgagors. In
comes of $10,000 or more were reported in a grow
ing proportion of the total cases, accounting for
about one-sixth of the 1962 new- and existing-home
mortgagors. At the other end of the scale, only
about 1 in 11 FHA mortgagors reported incomes
of less than $5,000. This is in marked contrast
to 1950 when roughly 75 percent were in that
category.
Chart III-21
MORTGAGOR’S EFFECTIVE ANNUAL
INCOME, 1962
Single family home mortgages, Section 203
25 —
§2°-
New Homes
~ 15 —
$
=5
i:: /
o
r i
i
i
i
i
J__I
20 —
S
Existing Homes
15 —
*
£
-5
2
£
10
5 —
0
I
$3
1
1111
$5
$10
I
$15
Mortgagor's annual income in thousand dollars
85
Table III-54.-— Transaction and property characteristics by mortgagor's income, 1-family homes,' Sec. SOS, 196S
Average
Mortgagor’s effective monthly income
NEW HOMES
Less than $300.
$300 to $349....
$350 to 399........
$400 to $449....
$450 to $499....
$500 to $549....
$550 to $599....
$600 to $649....
$650 to $699....
$700 to $749—
$750 to $799___
$800 to $849....
$850 to $899—
$900 to $999—
$1,000 to $1,199.
$1,200 or more.
Total___
EXISTING HOMES
Less than $300.
$300 to $349....
$350 to $399....
$400 to $149....
$450 to $499....
$500 to $549....
$550 to $599....
$600 to $649....
$650 to $699___
$700 to $7 -9....
$750 to $799___
$800 to $$49___
$850 to $899....
$900 to $999----$1,000 to $1,199.
$1,200 or more.
Total....
Percent
age dis
tribution
Mortga
Ago of
Total
gor's
principal acquisition
annual mortgagor
cost1
income
Sale
price*
Property
value
Mort
Calcu
Number
gage
lated area
of
amount (sq. ft.)
rooms
0.7
2.2
4.7
8.6
10.2
12.2
10.0
9.7
8.0
7.3
6.2
5rl
3.6
4.8
4.1
2.0
100.0
$3,225
3,936
4,601
5,092
6,663
6,258
6, 863
7, 437
8,032
8, 644
9,227
9,863
10,461
11,280
12,803
17,060
7,695
40.0
32.4
30.0
29.9
30.7
32.0
32.8
33.6
34.2
35.1
35.6
36.4
37.4
37.4
38.9
41.6
33.7
$9,730
10, 355
11,412
12,433
13,414
14,243
15,100
15,668
16,272
16,856
17,441
17,831
18,175
19,116
20,013
21,060
15, 485
$9, 602
10,096
11.135
12,154
13.135
13,951
14,790
16,342
15,955
16, 533
17,094
17, 463
17,824
18,749
19, 624
20, 668
15,169
$9,813
10,477
11,510
12,490
13,476
14,276
15,104
16,656
16,260
16,826
17,393
17,773
18,135
19,016
19,868
20,996
.9
3,241
3,920
4,504
5,087
5,662
6,254
6,863
7,426
8,036
8, 639
9,235
9,861
10, 461
11,288
12,822
17,170
33.0
30.4
30.6
30.8
32.0
32/8
33.8
34.9
35.4
36.2
36.8
37.2
38.0
38.5
39.6
8,449
9,489
10,384
11,448
12,400
13,290
14,146
14,820
15,614
16,136
16,699
17, 111
17, 491
18, 336
19,612
21,209
8,201
9,239
10,112
11,167
12, 111
12,976
13,836
14,499
15,278
15,794
10,332
16,744
17,140
17,970
19,212
20,804
8,444
9,449
10,317
11, 356
12,284
13,146
13,949
14, 589
15,334
15,853
16,386
18, 777
17,133
17,918
19,158
20, 845
7,835
8,842
9,635
10,570
11,412
12,185
12,897
13,477
14,116
14,588
15,030
15,383
15,683
16,341
17,339
18,654
948
978
1,004
1,042
1,081
1,112
1,152
1,179
1,222
1,246
1,270
1,293
1,321
1,378
1,483
14,507
14,184
14,324 |
13,197
1,145
2.6
5.1
9.4
10.9
12.4
9.7
9.3
7.9
6.3
5.7
4.9
3.4
4.5
4.8
2.2
100.0
7,629
41.3
34.5
15,475
$9,036
9,765
10,767
11,708
12,602
13, 320
14,053
14, 559
16,096
15,602
16,078
16,306
16,655
17, 422
18,125
18, 899
14,349
Percent
ratio of
loan to
value
Ratio of
property
value to
Income
836
872
934
984
1,028
1,085
1,131
1,168
1,209
1,253
1,277
1,312
1,325
1,378
1,432
1,488
1,161
4.6
4.7
5.0
5.1
5.2
5.4
5.5
5.6
5.7
5.8
5.9
5.9
6.0
6.1
6.2
6.2
5.6
92.1
93.2
93.5
93.7
93.5
93.3
93.0
93.0
92.8
92.7
92.4
92.3
91.8
91.6
91.2
90.0
92.7
3.04
2.60
2.66
2.45
2.38
2.28
2.20
2.11
2.02
1.95
1.89
1.80
L 73
1.69
1.55
1.23
892
4.7
92.8
2.61
89.5
92.1
1.21
1.88
4.9
5.0
5.1
5.2
5.3
5.4
5.5
5.6
5.7
5.8
5.8
5.8
5.9
6.0
93.6
93.4
93.1
92.9
92.7
92.5
92.4
92.1
92.0
91.7
91.7
91.5
91.2
90.5
6.2
5.5
2.01
2.41
2.29
2.23
2.17
2.10
2.03
1.96
1.91
1.84
1.77
1.70
1.64
1.59
1.49
1 In this table data are based on 1-famlly occupant cases.
1 Based on purchase transactions only.
Tables III-55.—Financial characteristics by mortgagor's income, 1-family homes,1 Sec. SOS, 196S
Average
Mortgagor’s effective monthly income
NEW HOMES
Less than $300.
$300 to $349....
$350 to $399....
$400 to $449—
$450 to $499___
$500 to $549—
$550 to $599—
$600 to $649....
$650 to $699—
$700 to $749—
$750 to $799—
$800 to $849—
$850 to $890___
$900 to $999....
$1,000 to $1,199.
$1,200 or more.
Total___
EXISTING HOMES
Less than $300.
$300 to $349—
$350 to $399....
$400 to $449—
$450 to $499—
$500 to $549___
$550 to $599—
$600 to $649....
$650 to $699___
$700 to $749—
$750 to $799..
$800 to $849—
$850 to $899.
$900 to $999..
$1,000 to $1,199.
$1,200 or more.
Total—
Average monthly
Percent Ave:rage
■age dis
monthly
Term of
Total
Prospec
tribution income Mortgage mortgage Property mortgage
tive
amount
payment housing
(years)
taxes
expense
0.7
2.2
4.7
8.6
10.2
12.2
10.0
9.7
8.6
7.3
6.2
5.1
3.6
4.8
4.1
2.0
100.0
.9
2.6
5.1
9.4
10.9
12.4
9.7
9.3
7.9
6.3
5.7
4.9
3.4
4.5
4.8
2.2
100.0
$268.75
328.04
375.06
424.27
471.89
521.54
571. 91
619.76
669.37
720.31
768.94
821.90
871.71
939.96
1,066.94
1,421.68
641.24
270.06
326.70
375.33
• 423.90
471.84
521.18
571. 90
618. 84
669. 66
719.92
769. 57
821.72
871.75
940.67
1,068.51
1,430.85
635.76
$9,036
9,765
10. 767
11,708
12,602
13,320
14,053
14,559
15,096
15,602
16,078
16,396
16,655
17,422
18,125
18, 899
14,349
30.2
30.2
30.3
30.4
30.5
30.5
30.4
30.3
30.3
30.3
30.3
30.2
30.2
30.3
30.0
29.7
30.3
$5.83
7.86
9.86
11.79
13. 87
15.44
16.92
17.88
18.85
19.42
20.26
20.99
21.00
22.54
23.62
25.54
17.13
$62.36
69.18
77.19
84.86
92.12
98.17
104.22
108.41
112.65
116.30
120.29
122.99
124.75
130.60
136.72
144.39
106.39
$82.73
89.44
98.42
107.77
116- 39
123.73
130.78
135.97
140.92
145.47
149.91
153.14
155.30
162.09
170.08
179.01
7,835
8,842
9,635
10,670
11,412
12,185
12,897
13,477
14,116
14,588
15,030
15, 383
15,683
16,341
17,339
18, 654
25.6
a 53
9.60
11.25
12.99
14.80
16.01
17.49
18.60
19.79
20.42
21.45
22.15
22.41
23.89
25.89
2a 40
60.86
68.11
74.52
81.64
88.26
94.18
99.96
104.77
109.93
113.72
117.34
120.36
122.82
12S. 00
136.79
149.24
102.73
82.46
90.88
98.18
106.12
113.65
120.27
126.59
132.08
13S. 09
13,197
26.3
26.5
26.9
27.3
27.5
27.6
27.6
27.7
27.6
27.7
27.7
27.6
27.8
27.6
27.1
27.4
ia 00
133.48
142.51
146.52
150.05
152.68
158.53
16a 97
183.74
129.99
Percent of income
Heating
and
utilities
Malnteance and Mortgage Housing
payment expense
repair
$15.85
15.39
16.05
17.24
1a 27
19.10
19.80
20.51
20.92
21.51
21.70
21.93
22.17
22.71
24.23
24.92
20.07
$4.52
4.87
5.19
5.67
5.99
6. 46
6.75
7.05
7.35
7.66
7.93
a 22
a 38
a 78
9.13
9.70
7.03
15.99
16.79
17.44
17.95
ia 61
19.00
19.27
19.75
20.38
20.72
21.09
21.27
21.43
21.75
22.99
24.54
19.76
5.61
5.99
6.22
6.52
6. 77
7.09
7.36
1:8
a 07
8.09
8.42
a 43
8.7S
9.19
9.96
7.50
23.2
21.1
20.6
20.0
19.5
18.8
ia2
17.5
16.8
16.1
15.6
15.0
14.3
13.9
12. S
10.2
16.6
30.8
27.3
26.2
25.4
24.7
23.7
22.9
21.9
21.1
20.2
19.5
ia6
17.8
17.2
15.9
12.6
20.8
22.5
20.8
19.9
19.3
ia?
iai
17.5
16.9
16.4
15. S
15.2
14.6
14.1
13.6
12. S
10.4
16.2
30.5
27.8
26.2
25.0
24.1
23.1
22.1
21.3
20.6
19.8
19.0
ia3
17.5
16.9
15.8
12. S
20.4
In this table data are based on 1-family occupant cases.
87
j
i:
I
Age of Principal Mortgagor by Mortgagor's In
come.—Table III-56 presents information on the
income levels of the principal mortgagor in various
age classes, the age classes also being shown graph
ically in Chart III-22. Generally speaking, in
comes rise with the age of the mortgagor, although
wide ranges of income are indicated for each age
group. The highest typical income of new-home
mortgagors—$696—was reported for those buyers
between the ages of 40 and 44. The range of me
dian monthly income extends from $489 for those
mortgagors less than 25 yea is of age to the peak of
$696 in the 40- to 44-year class. The same pattern
is apparent for existing-home buyers, ranging
from $474 for the youngest group of home buyers
to a high point in the 40- to 44-year group, and de
clining to $5S7 for the oldest group.
Chart 111-22
AGE OF PRINCIPAL MORTGAGOR, 1962
Single family home mortgages; Section 203
30 —
§
£ 20 —
New Homes
2
£
1 10 —
«3
o_
transactions insured under Section 203 in 1962.
The typical (median) housing expense for each
income group indicates that housing expense rose
with increased income but at a progressively slower
rate. For new-home owners, estimated housing
expense ranged from $82.65 per month for those
with monthly incomes of less than $300, to $177.05
for those earning $1,200 or more each month. For
existing-home owners, the range was slightly
greater, extending from $81.50 to $184.12. In
general, estimated housing expenses were higher
for new-home mortgagors than for purchasers of
existing homes with comparable incomes. However, as is shown more clearly in Chart III-23, a
broad distribution of housing expenses existed at
all income levels. The chart reveals that as mort
gagor’s income rose the range of housing expenses
expanded, and that, in the bulk of transactions,
housing expenses foi the higher income brackets
rose at a slower rate than income.
As previously mentioned, new-home mortgagors
generally had higher housing expenses than exist
ing-home buyers with similar incomes. About
one-sixth of the existing-home owners contem
plated housing expenses of less than $100 per
month, compared with slightly over 10 percent of
the new-home purchasers; characteristically both
groups of these families earned less than $465 a
month. Slightly over one-third of both newand existing-home mortgagors, most of whom
earned less than $550 monthly, were expected to
have housing expenses between $100 and $129
each month. Over half of the new-home pur
chasers were incurring monthly expenses in excess
0
Chart 111-23
25 —
HOUSING EXPENSE RANGE
BY MONTHLY INCOME, 1962
§20 —
I
Percent of
Mortgagors
Single family home mortgages, Section 203
Existing Homes
I
.2
-o
? 10 —
§
10%
above
220 —
20%
£
_2
©
2 180 -
0
25
25or less 29
30- 3534 39
4044
4549
5059
60
or more
25%
.E
©
.25% :
| 140Age of principal mortgagor by years
20%:
0)
05
Housing Expense by Mortgagor's Monthly In
come.—The relationship between the mortgagor’s
income and his prospective housing expense is one
of the basic considerations in the determination of
mortgage risk under the FHA underwriting pro
cedures. Table III-57 presents distributions of
prospective monthly housing expense by income
classes of owner-occupant mortgagors involved in
88
3
== 100 —
:
60
J___I___L
34
1
56789
10%
below
1
10
Monthly effective income in hundred dollars
;
Table III-75.—Number of bedrooms by type of structure,
cooperative housing, Sec. 213 management type, 1962
Number of bedrooms
Percentage distribution of dwelling
units
All
projects
o
1
2
3
4
Total.
Walk-up Elevator
Onefamily
3.1
33.7
53.3
8.7
1.2
0.5
18.5
60.1
20.6
.3
6.6
47.5
38.5
7.3
.1
24.2
69.1
3.6
3.1
100.0
100.0
100.0
100.0
1.7
2.0
1.5
1.9
Average.
entirely from the predominance of small units in
walk-up and single-family structures, particularly
in Arizona and California, as discussea previously
with reference to type of structure and size of
dwelling unit. Although more than two-fifths of
the total dwelling units were in projects averaging
less than $12,000 per unit, none of the elevator
type projects averaged less than this amount.
Except for the concentration of units below
$12,000 in mortgage amount allocable to dwelling
use in 1962, there was a fairly even distribution
of units over the complete range (Table III-76),
with a noticeable increase in the proportion of
averages exceeding $24,000 at the upper limit of
this range—6.3 percent in 1962 as against 2.5 per
cent a year earlier.
Table III-76.—Amount of mortgage allocable to dwellings,
cooperative housing, Sec. 213 management-type, selected
years
Percentage distribution of dwelling units
Average amount of mortgage
per dwelling unit •
1962
$8,000 to $8,999...
$9,000 to $9,999...
$10,000 to $10,999.
$11,000 to $11,999.
$12,000 to $12,999.
$13,000 to $13,999.
$14,000 to $14,999.
$15,000 to $15,999.
$16,000 to $16,999.
$17,000 to $17,999.
$18,000 to $18,999.
$19,000 to $19,999
$20,000 to $20,999.
$21,000 to $21,999.
$22,000 to $22,999.
$23,000 to $23,999.
$24,000 to $24,999.
$25,000 or more..
Total..........
Median.
1961
1960
2.9
17.7
21.7
8.1
.2
.9
7.0
7.4
9.7
2.0
4. 1
3.3
5.4
.7
2.6
3.6
2.7
11.2
2.8
.5
6.4
5.0
2.6
5.1
14.8
12.7
2.0
8.7
6.6
14.0
2.4
2.7
.8
1.7
3.2
6.3
2.3
4.3
11.1
18.2
20.9
10.3
2.6
5.4
11.4
4.0
100.0
100.0
100.0
1955
8.9
23.8
48.9
18.4
1951
99.2
.3
.5
100.0
100.0
|$12,942 $17,124 $16.211 $10,248
$8,550
1 Data based on the average unit amount per project.
Ratio of Mortgage Amount to Replacement Cost—
Section 213
The ratios of mortgage amounts to replacement
costs in Table III-77 reflect the progressive liber
alization in insurable mortgage amounts over the
years represented. In 1951, mortgages were lim
ited to 83 percent of replacement cost, with
higher ratios for projects occupied predominantly
by veterans. In 1955, the maximum ratios were
set at 90 percent for non-veterans and 95 percent
for veterans. In 1959 the established maximums
continued at 90 and 95 percent with an additional
limitation at 85 percent for investor-sponsored
projects, first authorized in 1956. The Housing
Act of 1959 raised the maximum ratios to 97 per
cent for management sponsored projects and to 90
percent for investor-sponsored projects. The bimodal distributions for each of the years in the
table, beginning with 1955, reflect the respective
limits for the two types of sponsors. In 1962, the
97 percent mortgages and the 90 percent mortgages
each accounted for slightly more than 27 percent
of the total.
Table III-77.—Ratio of amount of mortgage to replacement
cost, cooperative housing, Sec. 213 management type,
selected years
Mortgage as a percent of
replacement cost
Percentage distribution of dwelling units
1962
Less than 70.0........
70.0 to 74.9...............
75.0 to 79.9...............
80.0 to 82.4..............
82.5 to 84.9...............
85.0 to 87.4..............
87.5 to 89.9............
90.0
90.1 to 92.4
92.5 to 94.9
95.0 to 96.9
97.0
Total.
Median.
1.4
.9
1961
1960
1965
5.8
1961
.....oh
6.6
2.4
6.8
27.4
2.1
8.5
16.7
27.2
1.1
6.9
3.2
.5
2.4
47.4
10.0
6.8
5.4
16.3
1.7
3.1
62.4
3.6
2.4
4.2
22.6
100.0
100.0
100.0
100.0
100.0
93.2
90.0
90.0
84.5
85.0
24.0
13.5
8.4
11.4
36.9
49.8
34.5
15.6
Land Costs—Section 213
Ratios of land cost to replacement costs for
Section 213.projects classified by type of structure
adhere to the same general pattern as for Section
207. For Section 213, however, there were some
what greater variations between types of struc
ture. The ratios of land cost to replacement cost
were lowest for elevator projects—typically only
9.8 percent—as compared with 22.4 percent for
walk-ups and 26.9 percent for 1-family units
(Table III-78). Practically all elevator units
were in projects utilizing land costing less than 14
percent of replacement cost. In contrast, 94 per
cent of the single-family units and 53 percent of
the walk-up units were in projects having ratios of
22 percent or more.
There was a difference of more than $1,000 be
tween the average per-unit cost of land for ele
vator structures and that for both other types
(Table III-79). Elevator units had a median
land cost of $2,158, about the same as in 1961. The
median for single-family units rose from $2,755 in
1961 to $3,239 in 1962, while the figure for walk-up
units declined from $3,862 to $3,204 over this same
period.
i
99
;
w
Table III-7S.— Ratio of land cost to replacement cost,
cooperative housing, Sec. 21S management type, 1962
projects. The resulting rents in redeveloped
areas frequently exceed the amounts which the
displaced families are able to pay. Projects
under Section 221 are especially designed for lowand moderate-income families.
Percentage distribution of dwelling units
Land cost as a percent of replace
ment cost
All
projects
Onefamily
Walk-up Elevator
Urban Renewal Projects
6 to 7.9....................
8 to 9.9....................
10 to 11.9................
12 to 13.9................
H to 15.9................
16 to 17.9................ .
IS to 19.9.................
20 to 21.9.................
22 to 23.9.................
24 to 25.9.................
26 to 27.9.................
25 to 29.9.................
Total.
Median.
6.5
IS. 5
11.7
7.0
3.9
2.5
.S
1.5
7.1
6.7
30.6
3.2
8.3
4.2
20.0
11.9
2.4
15.6
26.3
11.3
14.8
3S.6
26.3
13.8
0.7
.5
7
5.8
.6
.9
3.2
4.3
4.4
76.9
8.5
100.0
100.0
100.0
100.0
17.9
22.4
9.8
26.9
Urban Renewal and Moderate Income
Housing
■
Housing projects built in the redevelopment or
rehabilitation of slum and other areas being
cleared under federally aided programs are eligi
ble for mortgage insurance under Section 220.
To complement this program, Section 221 pro
vides for mortgage insurance for projects to house
persons displaced by urban renewal or other gov
ernmental actions. The Housing Act of 1961 ex
tended the provisions of Section 221 to cover fami
lies of moderate or low income whether or not
ail}’ relocation is involved.
While Section 220 and Section 221 both figure
prominently in the renewal of urban areas, they
differ greatly from one another in the nature of
their operations. Projects built and insured
under Section 220 are generally larger and more
expensive than those under Section 221, reflecting
the higher land values of central city locations
which are usually involved in area redevelopment
and the appeal to families of higher incomes in
the planning and marketing of the units in new
Table 111-79.—Land cost by type of structure, cooperative
housing, Sec. 213 management type, 1962
Percentage distribution of dwelling
units
Average land cost per dwelling
unit1
$1,000 to $1,499.
$1,500 to $1,999.
$2,000 to $2,499.
$2,500 to $2,999.
$3,000 to $3,499.
$3,500 to $3,999.
$4,000 to $4,499.
$4,500 to $4,999.
$5,000 to $5,499.
$5,500 to $5,999.
$6,000 or more..
Total____
Median.
All
projects
Walk-up
6.8
15.1
15.8
9.7
39.5
1.1
2.8
1.4
5.4
1.0
1.4
8.8
11.2
13.9
4.2
28.9
2.4
7.3
19.6
3.7
11.5
29.3
29.2
14.8
3.3
2.5
5.4
Onefamily
0.5
.9
6.7
87.6
4.3
.7
3.3
100.0
100.0
100.0
100.0
$3,033
$3,204
$2,158
$3,239
Data based on the average unit amount per project.
100
Elevator
High land costs in central city locations con
tributed to the fact that elevator structures ac
counted for 72 percent of the projects and 91 per
cent of the units committed for insurance under
Section 220 in 1962. Walk-up structures repre
sented 24 percent of the projects but only 6 per
cent of the units, while single-family structures
represented 4 percent of both projects and units.
The typical urban renewal unit in 1962 con
tained 5.0 rooms. This average takes into account
the same room-count criteria as apply to Sec
tion 207. In terms of number of bedrooms, the
distribution of units by size is shown in Table HI80. One-bedroom units were most numerous in
1962, accounting for half of the elevator units, 44
percent of the walk-up units, but none of the units
in single-family structures.
Table III-80.—Number of bedrooms by type of structure,
rental housing, Sec. 220, 1962
Percentage distribution of dwelling units
Number of bedrooms
All proj
ects
0.
1.
2
3
4.
Total.
Average.
Walk-up Elevator
Onefamily
21.3
47.6
25.6
5.1
.4
20.0
43.6
35.3
1.1
21.4
49.8
22.9
5.4
.5
100.0
100.0
100.0
100.0
1.2
1.2
1.1
1.7
18.9
77.0
4.1
Of the one-family units, 77 percent had 2 bed
rooms. The unusual situation of 19 percent of
the 1-family units having no separate bedrooms is
attributable to one project of the row- or townhouse type which offered a substantial number
of units with sleeping and eating accommodations
in combination with the living room.
The median amount of mortgage allocable to
dwelling use, as based on unit averages for each
project, was $17,081 (Table III-81). Sixty-four
percent of the units were in projects with perunit mortgage amounts between $15,000 and
$19,000. Twenty-four percent involved mortgages
of $19,000 or more, and only 12 percent involved
mortgages less than $15,000. The high mortgage
amounts were largely based on per-room limita
tions of $2,500 for walk-up structures and $3,000
for elevator buildings, with locality allowances in
most cases for high construction costs, rather than
the $9,000 and $9,400 maximum amounts allocable,
respectively, for walk-up and elevator structures
with averages of fewer than 4 rooms.
were in walk-up 811110(01*66. These averaged 5.0
rooms per unit. Size in terms of number of bed
rooms is shown in the following distribution, the
average number of bedrooms per unit being 1.8.
X timber
of bedrooms
Percentage
of unite
0.
1
3.3
34.2
45.5
17.0
o
3
The. typical project had a mortgage amount
allocable to dwelling space of $8,398 per unit.
Eight, out of every 10 of the dwelling units had
mortgage amounts between $7,000 and $9,000.
All Section 221(d) (4) projects and all limiteddividend projects, whether at or below market in
terest. rate, are limited in their maximum mortgage
amount to 90 percent of replacement cost. Non
profit. organizations other than limited-dividend
corporations may have mortgages as high as the
total FHA estimate of replacement cost. In this
latter category, just under half of the dwelling
units were in projects with mortgages of 100 per
cent of the cost, with the remainder ranging from
less than 70 percent to 90 percent.
The median ratio of land cost to replacement
cost was 11.6 percent, being in projects with ratios
in the narrow range of from 8 percent to 16 per
cent, as shown in the following distribution:
Land cost as percent
of replacement cost
Percentage distribution
of dwelling units
S to 9.9_______
10 to 11.9_____
12 to 13.9_____
14 to 15.9_____
16 to 21.9_____
22 to 23.9_____
24 to 29.9_____
30
1.6
62.4
11.4
3.6
._ 11.1
Table III-85.—Monthly rental by number of bedrooms,
multifamily housing, Sec. 221, market interest rate, 1962
Average
number
of bed
rooms
$60 to $79.99..
$80 to $99.99..
$100 to $119.99.
$120 to $139.99.
$140 to $159.99.
Total.
1 Excludes cooperative housing.
102
Table III—86.—Number of bedrooms by type of structure,
multifamily housing, Sec. 221 below-markel interest
rate, 1962
Percentage distribution of dwelling units
Number of bedrooms
0.
9.9
The median land cost of market rate projects
was $968 per unit, with slightly fnore than threefourths of the units averaging less than $1,500.
Monthly rentals proposed for market rate proj
ects, shown in Table III-85, ranged from $60 to
$160, half in the range between $100 and $120.
None of the efficiency units was expected to rent
for more than $100, and none of the 2- and 3-bed
room units for less than $80.
Monthly rental per dwelling
unit 1
Below-Market Rate Interest.—Section 221 proj
ects committed in 1962 with interest rates below the
market rate were largely walk-up structures. The
62 percent of the projects in walk-up structures ac
counted for TO percent of the total units. Thirtyone percent of the projects, representing 19 percent
of the units, were single-family structures, while
the remainder—7 percent of the projects and 11
percent of the units—were elevator buildings.
The typical dwelling unit contained 5.5 rooms,
somewhat larger than the 5.0 for market rate
projects. With respect to the number of bedrooms,
the typical unit had 2.1. As shown in Table HI86, the walk-up and 1-family projects were composed typically of 2-bedroom units, whereas the
elevator projects had a majority of 1-bedroom
units.
The median unit secured an amount of mortgage
allocable to dwelling space of $11,317. Mortgage
amounts per unit began with averages between
$8,000 and $9,000, 9 percent of the units falling
within this range. Fifty-eight percent of the unit
mortgage amounts ranged from $10,000 to $12,000,
while above these amounts the highest averages
were between $18,000 and $19,000 (8 percent).
0.8
1.9
1.6
1.8
Percentage distribution of dwell
ing units
All
units
3.8
35.2
50.1
7.1
2.0
3.8
1.7
100.0
Number of bedrooms
0
1
2
0.7
.6
3.1
14.2
18.2
1.5
7.5
31.9
5.6
1.3
37.0
48.8
3
12.9
3.8
12.9
All
projects
0.1
19.1
l.
2
3
4.
Total.
Average.
Walk-up Elevator
Onefamily
0.2
60.6
22.4
1.8
15.2
61.0
22.5
1.1
64.4
35.0
100.0
100.0
100.0
100.0
2.1
■2.1
1.4
2.4
7.0
52.4
35.2
5.4
Below-market interest rate projects, except
those of limited-dividend corporations, are eligi
ble for mortgages of 100 percent of the FHA esti
mate of replacement cost. Projects accounting
for 51 percent of the total dwelling units had the
advantage of this ratio. An additional 14 percent
had mortgage amounts from 97.5 to 100 percent
of replacement cost. Limited-dividend projects,
eligible for mortgages of 90 percent of replace
ment cost, accounted for another concentration
around the 90 percent level, with 12 percent rang
ing from 87.5 to 90 percent and an additional 15
percent at 90 percent.
The typical project had a ratio of land cost to
replacement cost of 13 percent. Land-replacement
cost ratios were highest for walk-up and 1-family
projects, each with a median somewhat over 14
percent. In contrast, land costs for elevator proj
ects constituted only 5.1 percent of replacement
cost. (See Table III-87.)
Table III—87.—Ratio of land cost to replacement cost,
mullifamily housing, Sec. 221 below-market interest rate,
1962
Land cost as a percent of
replacement cost
Less than 4.
4 to 5.0.......
6 to 7.9.......
8 to 9.0.......
10 to 11.9—
12 to 13.9—
14 to 15.9...
16 to 17.9—
18 to 19.9...
20 to 21.9...
22 to 23.9...
24 to 26.9...
Total.
Median.
Percentage distribution of dwelling units
All
projects
Walk-up Elevator
2.3
3.3
20.2
1.4
24.6
9.6
6.9
10.0
1.9
12.8
4.8
21.3
Onefamily
9.6
6.1
10.0
32.4
28.5
10.6
22.7
2.2
5.3
5.4
1.5
16.3
3.1
100.0
100.0
100.0
100.0
13.2
14.4
5.1
i4.2
—
5.7
3.8
3.6
11.4
Less than $500.
$500 to $999....
$1,000 to $1,499.
$1,500 to $1,999.
$2,000 to $2,499.
$2,500 to $2,999.
$3,000 to $3,499.
$3,500 to $3,999.
$4,000 to $4,499.
Total-...
Median.
Percentage distribution of dwelling units
2.3
10.9
27.0
39.9
5.0
Average
number
of bed
rooms
Less than $60.
$60 to $79.99...
$80 to $99.99...
$100 to $119.99.
$120 to $139.99.
$140 to $159.99.
13.4
Table III-88.—Land cost by type of structure, multifamily housing, Sec. 221 below-market interest rate,
1962
All
projects
Monthly rental per
dwelling unit >
Percentage distribution of dwelling units
Number of bedrooms
All
units
l
0
90.4
Land costs for walk-up projects, which consti
tuted a majority of all below-market proje6ts,
ranged from less than $500 to as much as $4,500
per unit, with more than two-thirds in the range
of $1,000 to $2,000 per unit. All of the 1-family
units fell within this range, while all elevator units
had per-unit land costs of less than $1,500, in a
range from $500 to $1,500. (Table III-88.)
Average land cost per
dwelling unit1
Table III-89.—Monthly rental by number of bedrooms,
mullifamily housing, Sec. 221 below-market interest rate.
1962
Walk-up Elevator
Onefamily
Total.
1.2
1.9
2.1
2.2
2.9
4.0
2.1
4.7
25.4
42.0
20.1
0.2
3.6
7.0
3.8
7.6
.2
100.0
.2
14.4
2
3
1.1
13.1
31.1
16.2
4
1.2
.9
3.9
7.1
3.9
6.5
62.4
21.4
1.6
.2
.2
1 Excludes cooperative housing.
While the primary purpose of these projects is to
provide shelter, in many cases they offer additional
facilities and special services generally associated
with institutional care.
Structures in elderly housing projects are clas
sified either as elevator or non-elevator, since all
buildings of more than a single story generally
provide elevator service. In 1962, elevator struc
tures comprised 59 percent of the projects and pro
vided the same percentage of dwelling units. The
remainder—41 percent—were non-elevator.
Dwelling units in elderly housing projects varied
in size from single rooms (combination livingbedrooms) in nonhousekeeping units to more than
6 rooms in housekeeping units (Table III-90).
Practically none of the units in nonhousekeeping
projects had more than 3 rooms, while almost 45
percent of those in housekeeping projects had 4 or
more rooms.
3.3
1.4
31.4
90.4
9.0
35.6
20.8
79.2
7.0
7.1
9.9
7.9
11.3
100.0
100.0
100.0
100.0
$1,622
$1,695
$777
$1,684
Table III-90.—Size of dwelling units, elderly housing,
Sec. 231, 1962
Percentage distribution of dwelling
units
i Data based on the average unit amount per project.
Eighty-eight percent of the monthly ' rentals
were expected to fall between $60 and $120 as is
seen in Table III-89. This distribution excludes
cooperative housing projects. Almost 5 percent of
the units had proposed rents of less than $60 per
month, all having either 1- or 2-bedrooms.
Housing for the Elderly
Projects under Section 231 include in their
design those special features which make them
particularly adaptable to the elderly persons for
whom they are intended. These features include
extra handrails, nonskid floors, specially designed
bathrooms, doors wide enough to accommodate
wheelchairs, and other structural amenities suited
to the varying degrees of old-age infirmities.
Rooms per unit
All >mits
12.1
.8
27.1
16.4
1.1
48.1
43.5
8.1
100.0
100.0
100.0
3.4
3.5
1.6
12.4
24.5
4
56 or more
Average.
Nonhouse
keeping
units
37.6
1.
2
3
Total.
House
keeping
units
30.0
20.2
17.8
.3
Number of bedrooms as a measure of dwelling
unit size is shown in Table III-91. Slightly
more than one-third of all units had no separate
bedrooms, 14 percent in non-elevator structures
and 48 percent in elevator. Practically all other
units contained either 1 or 2 bedrooms. Most of
the units with more than 2 bedrooms indicated 3person occupancy.
The typical elderly housing unit had a pro rata
share of the project mortgage of $12,122 in 1962.
I
103
i
,
This amount, compares with $9,883 in 1961 and
$9,215 in 1960. As seen in Table III-92, all unitmortgage amounts in 1962 fall within the range
$6,000-20,000, whereas in 1961 the range was from
$2,000—$13,000.
Table III-93.—Land cost by type of structure, elderly
housing, Sec. 231, 1962
Percentage distribution of dwelling
units
Avoragc land cost per dwelling unit1
All projects
Table III—91.—Number of bedrooms by type of structure,
elderly housing, Sec. 281, 1962
Percentage distribution of dwelling
units
Numbers of bedrooms
All
projects
Nonelevator
312
50. S
14.7
.3
0
1
2
3
4.
13.7
61.7
24.6
(0
0)
Total.
Elevator
48.4
43.2
7.8
.6
100.0
100.0
100.0
.8
1.1
.6
Average.
1 Less than 0.05 percent.
Elderly housing projects sponsored by nonprofit
organizations are eligible for mortgages equal to
the full FHA estimate of replacement cost. In
1962, 37 percent of the units were in projects
qualifying for 100 percent mortgages. Projects
expected to be operated for profit can have mort
gages insurable up to 90 percent of replacement
cost. Only 11 percent of the units in profit-moti
vated projects were represented by 90 percent
mortgages.
The typical land cost as a percentage of re
placement cost for 1962 elderly housing projects
was 17.3 percent for non-elevator projects and 6.5
percent for elevator structures. The median perunit cost of land for nonelevator projects was
$2,273 as compared with $928 for elevator. These
costs are shown in Table III-93.
Mont lily charges shown in Table III-94 repre
sent regularly recurring charges which in addition
to shelter rent may include standard fees for food
and medical care. These charges vary substan
tially among projects, depending on the amount of
entrance or founders’ fees, the amount of subsidy
in some projects supported by churches or social
service agencies, and, as stated above, the extent
to which the charges include sendees not separable
from shelter rent.
Table III-92.—Amount of mortgage allocable to dwellings,
elderly housing, Sec. 281, 1962
Percentage
distribution
Average amount of
mortgage per dwelling of dwelling
units
unit i
$6,000 to $6,999..
$7,000 to $7,999..
$8,000 to $8,999._
$9,000 to $9,999...
$10,000 to $10,999.
$11,COO to $11,999.
$12,000 to $12,999.
$13,000 to $13,999.
$14,000 to $14,999.
0.6
5.8
10.2
2.8
12.2
16.8
13.0
14.8
7.4
Average amount of
mortgage per dwelling
unit1
$15,000 to $15,999.
$16,000 to $16,999.
$17,000 to $17,999.
$18,000 to $18,999.
$19,000 to $19,999.
Total...........
Median.
* Data based on the average unit amount per project.
Percentage
distribu
tion of
dwelling
units
6.3
7.0
3.1
100.0
$12,122
Less than $500.
$500 to $999___
$1,000 to $1,499.
$1,500 to $1,999.
$2,000 to $2,499.
$2,500 to $2,999.
$3,000 to $3,499.
$3,500 to $3,999.
$4,000 to $4,499.
$4,500 to $4,999.
$5,000 to $5,499.
$5,500 to $5,999.
Total....
Median.
Nonelevator
4.0
34.2
15.8
11.8
8.3
19.0
3.1
1.4
10.8
10.8
21.4
12.8
27.4
7.6
3.5
2.0
.4
4.8
.9
Elevator
6.8
60.6
19.3
5.2
5.1
13.0
100.0
100.0
100.0
$1,373
$2,273
$928
i Data based on the average unit amount per project.
Two-thirds of the units in projects committed in
1962 were housekeeping units with standard
charges covering shelter only. Rents in these
cases do not differ from those in other rental proj
ects, in that they are on a unit basis rather than
on the basis of number of occupants. Rents in
housekeeping units began at less than $60, the
lowest cost in any category, with a median of $127.
On the other hand, they also included the most ex
pensive, 3 percent of them costing $2-10 or more.
In projects with charges for medical care included
in the monthly charges of housekeeping units the
median monthly charge was $139 per month.
Most of the charges which included medical care
ranged from $80 to $180, but one-fifth exceeded
$240 per month.
In general, the most expensive elderly housing
units were those with single nonhousekeeping ac
commodations offering both food and medical care.
These units averageef (median) $180 per month.
The individual costs in nonhousekeeping units
with double occupancy, either with or without
medical care, were the least costly of the monthly
charges based on occupancy. They were not neces
sarily the least expensive, since the individual
costs m some of the housekeeping units are only
half the unit charges when the apartments are
shared by two occupants. The charges per person
in the double occupancy units ranged between $80
and $120 per month for shelter only. In one
church-sponsored project the charges between $60
and $100 included limited medical care.
Nursing Homes
Nursing home projects under FHA commit
ment in 1962 ranged in size from 24-bed accom
modations to 246, with a median size of 74 beds.
The minimum size of project, by FHA regula
tion, is 20 beds.
FHA regulations, reinforcing most State and
local nursing home licensing requirements, re
quire elevators in all structures of more than one
story. Single-story nursing homes in 1962 repre-
104
r
1
i
about I percent of the accommodations, was $267.
This was exceeded by the median of $281 per bed
in rooms containing 4 or more beds. Beds in
these rooms or wards represented 8 percent of the
total.
Armed Services Housing
All Section 803 projects committed for insur
ance in 1962 were single-family homes. These
projects are the last to be processed under this
program, the legislative authorization to issue
commitments under it having expired October 1,
1962.
In all of its years of operations—first as the
Wherry Housing program from 1949 to 1955, then
as the Capehart Housing program—Section 803
projects have been predominantly 1-family, as
shown in Table III-97. This predominance of
1-family units accounts, in part, for the relatively
high average number of rooms per unit—7.2 in
1962,6.3 in 1961, and 5.7 in 1960.
Table III-97.—Type of structure, rental housing, Sec. 808,
selected years
Type of structure
1962
1961
1960
1955
1950
Percentage distribution of pro
jects:
V alk-up___________________
Elevator.....................................
One-family.................................
4.0
7.4
22.2
100.0
96.0
92.6
77.8
29.5
1.3
69.2
All projects.............................
100.0
100.0
100.0
100.0
100-0
P e rcentage distribution of dwell111S “its:
V alk-up___________________
Elevator......................................
One-family.. ......... ........... .........
4.3
8.0
14.3
100.0
95.7
92.0
85.7
28.0
.7
71.3
All units..................................
100.0
100.0
100.0
100.0
100.0
All the 1962 projects had at least 2 bedrooms
per unit. Almost four-fifths of the units had 3
bedrooms, and almost another fifth had 4. Those
with only 2 bedrooms represented less than 1 per
cent of the total units.
The typical amount of mortgage per unit in
1962 was $15,413. This median was the lowest
since 1957, when the median was $15,433. The
distribution of these averages is shown for selected
years in Table III-98.
Although mortgages with amounts equal to
project replacement cost have been eligible for in
surance since 1955, projects accounting for only
22 percent of the total units had mortgages with
ratios of loan to replacement cost of as high as 100
percent.
No analysis of Section 803 rents is available
because these projects are owned and managed by
the Department of Defense and rental charges are
not required to be reported to FHA.
106
Table III—98.—Amount of mortgage allocable to dwellings,
rental housing, Sec. 80S, selected years
Percentage distribution of dwelling units
Average amountof mortgage per
dwelling unit1
Less than $7,000..
$7,000 to $7,999...
$8,000 to $8,999...
$9,000 to $12,999..
$13,000 to $13,999.:
$14,000 to $14,999.
$15,000 to $15,999.
$16,000 to $16,999.
$17,000 to $17,999..
$18,000 to $18,999..
$19,000 to $19,999..
$20,000 or more...
Total--------Median.
1962
1961
1960
1955
12.1
72.2
15.7
3.8
24. 1
53.3
16.9
1050
6.3
26.8
60.0
1.9
4.1
13.3
41.8
27.9
8.7
4.2
0.8
13.6
35.3
34.7
8.8
6.4
.4
100.0
100.0
100.0
100.0
100.0
$15,413 $15,781 $16,006
$7,622
$8,088
1 Data based on the average unit amount per project.
CHARACTERISTICS OF TITLE
IMPROVEMENT LOANS
I
PROPERTY
The typical Title I improvement loan made in
1962 had net proceeds ox $743, exceeding by $47
the previous record of $696 set in 1961. The typi
cal loan was to be repaid in 38 monthly install
ments of $22.64, including payments to both
principal and interest. Single-family residences
again ranked first among the types of structure
to be improved, while ad ditions and alterations
were the most prevalent type of improvement.
Amount of Loan
The typical note of $743 in net proceeds insured
in 1962 represented the continuation of steady
rises in median amounts for Title I improvement
loans—almost 7 percent higher than in 1961 and
more than double the median net proceeds re
ported for 1950. The increasing importance of
larger loans is seen in Table III-99. The propor
tion of aggregate insured net proceeds accounted
for by loans exceeding $1,000 increased to 73 per
cent of the total in 1962, compared with 71 per
cent in 1961 and 70 percent in 1960.
Duration of Loan
The distribution of loans and net proceeds ac
cording to repayment terms shown for selected
years in Table III-100 indicates that in 1962 the
greatest number of loans (37 percent) had a modal
term of 36 months but that the greatest proportion
of net proceeds (50 percent) had a modal term
of 60 months. Data for the years 1960-62 in the
table reflect the extensions of terms authorized
for certain loans by amendments to regulations
in 1956 and in 1961. Prior to 1956, loans were
generally limited to repayment in 36 months or
less. In 1962, for the first time, more than half of
the net proceeds of loans insured under Title I
was provided by loans with repayment terms of
5 years or more.
Table III—99.—Amount of Title I improvement loans, selected years
Not proceeds of Individual loan
Number of loans—percentage distribution
1062
1960
1961
1956
Net proceeds—percentage distribution
1950
1962
Less than $200.
$200 to $299....
$300 to $390___
$400 to $409___
$500 to $599....
$600 to $799....
$800 to $999....
$1,000 to $1,499
$1,500 to $1,999
$2,000 to $2,499
$2,500 to $2,999
$3,000 to $3,999
$4,000 to $4,999
$5,000 or more.
5.4
9.9
11.3
8.1
7.6
10.8
7.0
15.3
9.5
5.6
4.0
5.1
.2
.2
6.1
10.8
11.8
8.5
7.5
10. C
7.2
14.4
8.7
4.9
3.7
4.4
.2
1.2
6.5
11.3
12.6
8.6
7.4
10.6
7.3
14.6
8.3
4.7
3.4
4.3
.2
.2
12.6
16.8
15.0
10.4
9.4
11.7
7.1
9.9
4.1
1.8
1.9
.2
.1
21.2
20.5
15.4
9.6
8.0
9.1
5.0
7.1
2.0
1.0
1.0
.1
0)
Total....
Median.
Average
100.0
$743
100.0
100.0
$660
100.0
$464
100.0
$354
8
1961
1960
1955
I960
0.8
2.3
3.7
3.4
3.9
7.0
5.9
17.3
15.2
11.5
10.0
1&6
.7
1.7
0.9
2.7
4.1
3.7
4.0
7.3
6.5
17.2
14.8
10.8
9.9
15.4
.8
1.9
1.0
2.9
4.4
3.9
4.1
7.5
6.6
17.8
14.3
10.6
9.3
14.9
.8
1.9
2.9
6.2
8.1
7.3
8.0
12.8
9.9
18.3
10.7
6.2
7.9
.8
.4
.5
6.8
11.3
10.9
8.8
8.8
13.0
9.2
13.3
6.8
4.2
5.2
.9
.4
.4
100.0
100.0
100.0
100.0
100.0
$1,045
$999
$971
$630
$479
* Less than 0.05 percent.
cent of the loans and 31 percent of net proceeds.
Insulation accounted for the next highest share of
improvement loans (13 percent) but represented
only 6 percent of the total net proceeds (Chart
III-26).
The average loan amount of $1,521 for additions
and alterations was the highest, followed by $1,411
for new nonresidential construction, $1,309 for
exterior finish, and $1,243 for interior finish.
Type of Property and Improvement
Table III-101 presents the percentage distribu
tions of the number and amount of net proceeds
of loans insured in 1962 by type of property and
by type of improvement, along with the related
averages. Ninety percent of the loans and 85 per
cent of the net proceeds were for the improvement
of single-family dwellings. Improvements to
mnltiiamily dwellings accounted for an additional
7 percent of the loans and 10 percent of net pro
ceeds. Average loans for these types, $964 and
$1,524. respectively, were exceeded by the $1,891
average for commercial and industrial structures,
while farm homes and buildings averaged $1,300.
The classification of loans according to type of
improvement in Tables III-101 and III-104 is
governed by the major improvement. For ex
ample, many improvements classed as additions
and alterations mvolve plumbing, heating, elec
tricity, or other items. The additions and altera
tions designation prevails, however, since the other
factors are considered incidental.
In 1962, as in the previous 6 years, additions
and alterations were reported as the most prevalent
type of FHA-insured loan, accounting for 21 per-
Chart III-26
TYPE OF IMPROVEMENTS FINANCED
BY FHA TITLE I PROPERTY IMPROVEMENT LOANS, 1962
LEGENO
TfPE OF IMPROVEMENT
IOO.C
3
AOOITIONS
a ALTERATIONS
20.6%- 30B%
100.0%
NUM8
LOANS
PUIMBWG
ROOFING
9.0%- 5.9%
6.0%- 4.1%
NON-RESIDENTIAL
CONSTRUCTION
EXTERIOR FINISH
3.8% - 5.2%
13.2% - 16.9%
WSULATION
MISCELLANEOUS
13.3% - 6.0%
II.6%- 7.2%
HEATING
MTERX3R FINISH
11.4% - 10.3%
11.1% - 13.6%
Table III-100.— Term of Title I improvement loans, selected years
Modal term
6.
12
18
24
30
36
48
60.
Interval
6-8
9-14
15-20—
21-26—
27-32__
33-41__
42-53__
54-63—
Over 63
Total
Median.
Average
Net proceeds—percentage distribution
Number of loans—percentage distribution
Term in months
1962
1961
1960
0.4
8.5
4.7
13.2
2.0
37.3
3.8
29.7
.4
0.5
8.8
5.0
13.0
2.3
41.8
3.1
25.1
.4
0.5
8.8
5.0
13.0
2.1
44.2
2. G
23.3
.5
100.0
38.1
100.0
37.4
100.0
36.7
0.6
10.0
6.9
11.3
3.0
67.5
(')
1962
1950
1955
.6
.1
100.0
36.3
0.8
10.1
6.0
10.2
9.8
62.5
0)
.4
.2
100.0
36.4
1961
1960
1955
1960
0.2
2.9
1.9
7.2
1.2
28.8
5.4
50.4
2.0
0.2
3.1
2.1
7.2
1.5
33.1
4.8
45.9
2.1
0.2
3.2
2.1
7.3
1.3
35.5
4.1
43.9
2.4
0.3
4.4
3.7
7.7
2.2
79.1
.1
2.0
.5
0.5
4.9
3.4
7.1
9.8
71.1
.1
1.7
1.4
100.0
100.0
100.0
100.0
100.0
39.4
38.0
37.6
31.0
30.7
1 Less than 0.05 percent.
;
i
107
.
684-285 O - 63 - B
t
r
’
Amount of Loan by Type of Property and
Improvement
Table III-101.—Type of improvement by type of property
for Title I improvement loans, 1962
Typo of property improved
Differences in costs of the various types of im
provements account for the wide dispersion in the
amounts of net proceeds shown in Table III-102.
The greatest concentration in any single interval
was the 15 percent occurring between $1,000 and
$1,500. Twenty-seven percent of all loans had net
proceeds below $400. A significant difference be
tween loans on improvements to single-family
dwellings and those for other types is revealed in
the percentages of loans of $1,000 and over. Such
loans comprised 37 percent of the total for single
family residences in 1962, compared with 53 per
cent for multifamily dwellings, 51 percent for
farm homes and buildings, and 73 percent for
commercial and industrial structures.
Comparable distributions of loans by type of
improvement in Table III-103 show that notes
to finance additions and alterations were typically
the largest of the loans insured in 1962, the median
amount being $1,375. This median, however, ex
ceeded that for new nonresidential structures by
only $60. At the other end of the scale were loans
to finance insulation—typically only $361.
Slngle
Major typo of Improvement Total family
dwellings
Percentage distribution of
number of loans:
Additions and altera
tions................................. 20.6
Exterior finish.................. 13.2
Interior finish................... 11.1
Roofing...............................
6.0
Plumbing..........................
9.0
Heating.............................. 11.4
Insulation........................
13.3
New nonresidential con
struction......................... 3.8
Miscellaneous................... 11.6
Total.
Percent of total.
Percentage distribution of
net proceeds:
Additions and alterations...
Exterior finish
Interior finish.
Roofing..
Plumbin e
HeatingInsulation..........................
New nonresidential con
struction.........................
Miscellaneous_________
Total.
Claims Paid by Type of Property and
Improvement
Distributions of claims paid by type of property
and type of improvement in Table III-104: show
that loans to improve single-family dwellings ac
counted for 88 percent of the number and 82 per
cent of the amount of claims paid in 1962. These
percentages are consistent with the proportions of
loans insured in 1962, as well as with claims paid
in previous years for single-family residential
properties.
The average claim on defaulted loans ranged
from $634 for one-family dwellings to $1,087 for
multifamily dwellings. Claims on loans for im
provements to commercial and industrial struc
tures averaged $1,084, and on farm homes and
buildings $861.
Defaulted loans for additions and alterations ac
counted for 20 percent of the number and 28 per
cent of the amount of claims paid in 1962 for all
types of improvements. These percentages were
slightly lower than those representing the propor
tions of loans and net proceeds that additions and
alterations constituted in new business in 1962, as
was shown previously in Table III-101. The
next-ranking percentage of number of claims was
that for loans for insulation (19 percent), but these
claims accounted for only 9 percent of the amount
of claims, since their average amount was only
$329, the lowest for any improvement type.
108
Average net proceeds:
Additions and alter
ations_______________
Exterior finish..................
Interior finish....................
Roofing.......... .....................
Plumbing....... ...................
Heating..............................
Insulation..........................
New nonresidential con
struction.........................
Miscellaneous...................
All improvements----1 Less than 0.05 percent.
Multifamily
dwellings
Commcrcial
and
indus
trial
Farm
homos
and
Other
buildings
21.1
13.0
10.9
5.8
8.9
11.1
13.7
16.6
16.6
15.5
7.0
8.3
15.4
11.9
24.7
9.6
13.4
8.0
6.1
14.8
3.6
11.6
11.7
4.6
6.8
17.6
8.0
9.9
18.8
9.7
13.6
10.0
9.7
18.4
2.2
3.4
12.1
1.1
7.6
9.0
10.8
26.7
3.1
9.7
7.9
100.0
100.0
100.0
100.0
100.0
100.0
100.0
90.0
6.9
1.0
1.8
.3
30.8
16.9
13.6
4.1
5.9
10.3
6.0
27.5
14.5
11.4
3.4
4.6
8.3
5.3
2.3
1.9
1.7
.5
1.0
1.6
.6
i
I!
.3
.3
.1
.3
.2
(') . !
.1
0)
5.2
7.2
4.0
6.1
.1
.8
.1
.2
1.0
.I
8
100.0
85.1
10.4
1.8
2.9
$1, 521 $1,478
1,309 1,269
1,243 1,187
693
659
674
583
922
848
459
441
$2,053
1, 629
1,617
893
1,796
1,487
689
$2,825
1,691
2.016
1,194
1,479
1,828
568
1,411
635
1,307
570
1,321
1,635
2,251
1,895
1,936
1,336
1,375
1,483
1,045
964
1,624
1,891
1,300
1,497
1
i
3
.2
(0
8
:
:
.1
.4
$1,553 $1,648
1, 567 1,370
1,477 1,908
821 1,573
760 1,149
851
1,263
540
(2)
* Insufficient sample.
Table III-102.—Amount of Title I improvement loans by
type of property, 1962
Type of property improved
Net proceeds of
Individual loan
Percentage distribution
of number of loans:
Less than $200...
$200 to $299_____
$300 to $399...........
$400 to $499............
$500 to $599...........
$600 to $799............
$800 to $999............
$1,000 to $1,499—
$1,500 to $1,999—,
$2,000 to $2,499...,
$2,500 to $2,999—.
$3,000 to $3,999...,
$4,000 to $4,999—.
$5,000 or more___
Total
Median.
Average
Total
Single
family
dwellings
Farm
Com
Multi- mercial homes
and Other
and
family
dwell- indus
build
ings
ings
trial
5.5
10.2
11.7
8.2
7.7
10.8
6.9
15.0
9.3
5.4
3.9
5.0
.2
.2
5.8
10.8
12.2
8.4
7.8
11.0
6.9
14.9
9.1
5.1
3.6
4.4
2.8
6.3
6.8
6.3
7.6
10.3
7.6
16.6
10.3
7.2
5.7
8.1
2.1
3.4
100.0
$783
$1, 045
100.0
$692
$964
100.0
$1,103
$1,524
1.6
1.9
3.7
2.9
3.9
7.2
5.8
13.8
13.3
9.3
9.8
26.9
100.0
$1,845
$1,891
3.1
6.0
9.4
8.1
6.6
8.2
7.6
14.4
11.1
9.1
6.1
10.3
0.9
3.1
3.1
4.4
7.0
10.5
11.8
17.1
13.1
7.0
7.5
14.6
100.0 100.0
$1,034 $1,269
$1,300 $1.407
’
Table III—103.—Amount of Title I improvement loans by type of improvement, 1962
Major typo of Improvement
Net proceeds of individual loan
Total
Percentage distribution of number of loans:
Less than $200.............
$200-$399........................ .
$400-$599........................ .
$600-$799........................ .
$S00-$999........................ .
$1,000-$1,499...................
$1,500-$1,999...................
$2,000-$2,499...................
$2,500-$2,999...................
$3,000-$3,999...................
$4,000-$4,999................. .
$6,000 or more.............. .
Total
Median.
Average
Percentage distribution of net proceeds:
Less than $200—.
$200-$399...........$400-$599..............
$600-$799..............
$800-5999..............
$l,000-$l,499-----
ISlsE
$3,000-53,999—$4t000-$4,999—$5,000 or more—
Total................
Addi
tions and
altera
tions
6.6
21.8
15.9
10.8
6.9
15.0
9.3
5.4
3.9
5.1
.2
.2
2.0
8.9
9.8
8.8
6.6
18.4
13.7
10.2
8.4
12.5
.3
.4
100.0
$743
1,045
100.0
$1,375
1,521
.8
6.3
7.5
7.2
5.9
17.2
15.1
11.3
0.9
16.5
.6
1.7
100.0
Exterior
finish
Interior
finish
1.5
8.6
10.6
9.9
8.7
24.2
17.7
8.8
5.1
4.7
.1
.1
100.0
$1,222
' 1,308
.2
1.7
3.1
3.9
3.8
14.0
14.8
14.2
14.4
27.5
.8
1.6
100.0
Hoofing
3.0
12.9
14.2
10.9
6.6
18.4
12.1
8.0
5.9
7.5
.2
.3
100.0
$1,066
1,243
.2
1.9
3.9
5.1
5.9
22.3
23.1
14.6
10.4
11.8
.4
.4
.3
2.9
5.4
5.8
4.6
16.8
15.8
13.6
12.3
20.1
.7
1.7
100.0
100.0
PlumbIng
6.8
32.3
21.9
12.9
6.2
10.6
5.2
2.3
1.3
1.4
.1
(>)
6.1
38.5
25.0
8.1
4.6
7.9
4.3
2.0
1.3
1.7
.1
.4
100.0
$509
693
100.0
$443
674
Heating
2.6
13.0
18.3
20.8
13.6
17.8
6.5
2.6
2.0
2.3
.2
.3
100.0
$754
922
1.3
13.9
15.2
12.4
7.7
17.6
12.3
7.0
4.9
7.1
.4
.2
1.3
17.6
17.5
7.9
5.9
13.3
10.3
6.3
5.0
8.2
.7
6.0
.5
4.2
9.7
15.4
12.9
22.5
11.5
6.1
5.6
8.2
1.0
2.4
100.0
100.0
100.0
Insulation
13.9
4-1.8
21.7
9.1
3.7
4.0
1.5
.6
.4
.3
8
100.0
$361
459
4.6
28.8
22.5
13.4
7.1
10.4
5.5
2.7
2.5
2.0
.2
.3
100.0
New non
residen
tial con
struction
0.5
3.3
6.1
9.2
10.4
32.7
18.5
8.4
4.5
6.4
(*)
100.0
$1,315
1,412
0)
.7
2.1
4.4
6.6
27.9
21.8
12.0
8.4
15.4
.1
100.0
Miscel
laneous
12.9
38.4
18.6
9.3
4.0
7.1
3.8
2.1
.1
.3
100.0
$393
635
3.1
17.4
13.9
9.7
5.5
12.8
9.7
6.9
5.3
10.8
.7
4.2
100.0
i Less than 0.05 percent.
Table III-104.—Type of improvement by type of property
for claims paid on Title I improvement loans, 1962
Type of property improved
SlngleMajor type of improvement Total famlly
dwellings
Percentage distribution of
number of claims paid:
Additions and altera
tions...........................— 19.6
Exterior finish................ 14.6
8.4
Interior finish................
4.1
Roofing.
8.0
Plumbin g
10.5
Heating.
Insulation.......................... 18.5
New nonresidential
construction_________
3.8
Miscellaneous................. . 12.6
Total............................... 100.0
Percent of total—.................. . 100.0
Percentage distribution of
amount of claims paid:
Additions and altera
28.3
tions...............................
19.7
Exterior finish........ .......
10.4
Interior finish.................
3.3
Roofing................. -.........
5.4
Plumbing...................—
11.3
Heating............................
8.9
Insulation......................
New nonresidential
5.1
construction..............
7.6
Miscellaneous------------Total............................. 100.0
Average claims paid:
Additions and altera
$987
tions..............................
930
Exterior finish-----------852
Interior finish-----------548
Roofing.
464
Plumbin g
732
Heating.
329
Insulation...........—-—
New nonresidential
904
construction_______
412
Miscellaneous................
684
All Improvements-----
Farm
Multi- Comfamily merical homes
Other
dwell- and in
and
ings dustrial buildings
20.0
14.7
8.0
15.8
14.1
12.8
30.7
8.6
9.7
7.1
13.3
4.2
15.0
5.0
12.5
3.9
8.0
9.5
19.3
5.6
7.6
21.0
14.6
4.8
6.2
15.2
7.2
6.2
15.7
5.6
5.0
7.5
10.0
5.0
15.0
3.4
13.2
100.0
88.4
1.0
7.5
100.0
8.6
6.9
10.7
100.0
1.3
37.6
5.3
100.0
1.5
25.0
5.0
100.0
.2
25.0
17.2
8.4
2.5
4.0
7.0
8.0
2.5
2.0
1.7
.6
1.1
3.9
.8
.7
.2
.1
.1
.1
.3
.1
.1
.3
.1
.1
.2
(*) 1
')
*)
3.7
6.3
82.1
.2
1.0
13.8
.2
.2
2.0
.9
.1
1.9
0
$965
005
810
497
394
567
319
$1,226
1,142
1,093
821
1,120
1,448
446
$1,236
1,279
1,014
1,050
862
1,136
403
$S1S
1,052
919
667
513
609
279
$505
1,473
1,123
303
1.373
1,965
818
841
369
634
1,341
1,049
1,087
1,336
923
1,084
1,118
653
861
762
782
900
(»)
:
.1
■
0
l>
I
.
:1
.2
Less than 0.05 percent.
109
i
to policyholders or stockholders. With mortality
experience well established, expected mortality—
one of the major elements in the valuation of re
serve liabilities—can be predicted reasonably well.
Consequently, the reserve liabilities of life orga
nizations can be determined with a fair degree of
accuracy and are the expected future liabilities.
There is a noteworthy difference between the
reserve liabilities of life organizations and those
of FHA’s insurance funds. The future losses
and expenses which the liabilities of FHA’s in
surance funds measure are principally contingent
upon a general deterioration of business condi
tions—a development which does not readily lend
itself to prediction. Since the incidence of an
economic reversal cannot readily be predicted, the
most conservative basis for reserve valuations for
such future losses and expenses is to assume that
adverse economic conditions of approximately de
pression magnitude might develop immediately.
The reserve valuations are designed to measure the
liabilities resulting from the development of such
a contingency. Thus, the liabilities of FHA’s
insurance funds are contingent liabilities.
Table 111-105.—Insurance funds and insurance programs
of the Federal Housing Administration, as of June SO, 1962
insurance fund
Date estab
lished
Title I Housing Insurance Fund........ Apr. 30,1950
Mutual Mortgage Insurance Fund... June 27,1934
Section 203 Home Improvement Ac June 30,1961
count.
Housing Insurance Fund................... Fob. 3,1938
Section 220 Housing Insurance Fund.
Section 220 Home Improvement Ac
count.
Section 221 Housing Insurance FundServicemen's Mortgage Insurance
Fund.
Experimental Housing Insurance
Fund.
Apartment Unit Insurance Fund.
War Housing Insurance Fund—
Insurance program
Title I, Sec. 8.
Title II, Secs. 203,
207 1 and 225.
Title II, Sec. 203(k).
Aug. 2.1954
Juno 30,1961
Title II, Secs. 207210, 213, 231, and
232.
Title'll, Sec. 220.
Title II, Sec. 220 (h).
Aug. 2,1954
Aug. 2,1954
Title II, Sec. 221.
Title II, Sec. 222.
June 30.1961
Title II, Sec. 233.
June 30,1961 Title II, Sec. 234.
Mar. 28,19412 Title VI, Secs. 603,
603-610, 608, 608610, 609 and 611.
Aug.
10.1948
Title
VII.
Housing Investment Insurance Fund.
Armed Services Housing Mortgage Aug. 8.1949s Title VIII, Secs. 803,
809,
and 810.
Insurance Fund.
National Defense Housing Insurance Sept. 1,1951 Title IX, Secs. 90o
and
908.
Fund.
Title I Insurance Fund............ .........- June 3,1939 Title I, Sec. 2.
i Insured
J For predecessor ^und^’ Defense Housing Insurance Fund. Successor
fund established May 26, 1942.
3 For predecessor fund, Military Housing Insurance Fund. Successor fund
established Aug. 11 1955.
The risks which the funds underwrite are in
the nature of a catastrophe hazard which may be
characterized as economic in nature and cyclical
in pattern. The events insured against do not
occur in substantial proportions except under the
contingency of a depression. In this sense,
FHA’s reserve liabilities are not designed to
measure the solvency of the funds according to
its accepted meaning in the underwriting of conventional risks. To emphasize this distinction,
the reserve liabilities of FHA’s insurance funds
are described as “estimated reserve requirements.
They are thus the amounts of reserves which an
insurance fund requires to cover the insurance
losses and administrative expenses which the fund
t
might incur if an economic reversal of approxi
mately depression magnitude were to develop im
mediately. Although based on accepted actuarial
'
principles, such valuations of reserve requirements
for insurance funds underwriting risks which are
predominantly economic in nature are unique in
insurance practice.
Distinct from the reserve requirements are the
;
“insurance reserves,” i.e., the capital and surplus
which an insurance fund has accumulated from
its operation. Capital and surplus of FHA’s in
surance funds are identified in its financial state
ments as insurance reserves. A balance status for
a fund exists when its insurance reserves are equal
to or greater than the estimated reserve require
ments. When a balance status is attained, the
fund has sufficient resources to meet such future
insurance losses and expenses as might be incurred
in the event that adverse economic conditions of
approximately depression magnitude were to
develop immediately.
The comparative reserve position of a fund is
thus determined by changes in insurance reserves
and reserve requirements. Insurance reserves of
a fund are principally affected by the net income
it earns during an accounting period. Reserve
requirements are affected by the volume of new
insurance written, the aging of the insurance con
tracts in force, and terminations of the insurance
contracts in force. A substantial increase in the
amount of new insurance written has the effect of
raising significantly the reserve requirements, for
the reason that reserve requirements are at their
highest level for new insurance. Aging of the
insurance in force lowers reserve requirements for
the reason that reserve requirements for contracts
in force become progressively lower the longer the
insurance has remained on the books. Termina
tions of insurance, of course, reduce reserve
requirements.
One of the principal purposes served by the ex
cess of insurance reserves over reserve require
ments is to protect the reserve position of the fund
from a more rapid increase in the volume of new
insurance than that for insurance reserves. In
the case of the Mutual Mortgage Insurance Fund,
another purpose served is in the allocations from
this fund’s net income to the Participating Re
serve Account from which participation payments
are distributed to eligible mortgagors upon the
termination of mortgage insurance. Such allo
cations will tend to remain relatively high as long
as favorable economic conditions prevail.
Another noteworthy feature of the reserve re
quirements for a mortgage insurance fund is that
they take into account the fact that, when a claim
is paid, the mortgage insurance fund acquires a
property, or a mortgage note upon assignment,
in exchange for its debentures (or cash in the case
of some mortgage insurance). As properties are
111
■■
—
i
'
Actuarial Schedule 2.—Annual termination rates' for
1- to 4-family home mortgages by type of termination
based on aggregate termination experience by policy year
for Sec. SOS mortgages insured from 1935 through 1960
and exposed to policy anniversaries in 1961 or prior
termination dates
Actuarial Schedule 3.— Decrement table of a group of
1- to 4-family home mortgages based on aggregate termina
tion experience by policy year for Sec. 203 mortgages
insured from 1935 through 1960 and exposed to policy
anniversaries in 1961 or prior termination dates
Decrement by type of termination
Type of termination
Policy year
Titles acquired by
Prepay
mortgagees
Prepay ments by
ments in
super
full
session Retained Trans
by mort ferred to
gagee
FHA
Policy
year
Others
Total
1st.
... 0.0162098 0. 0055089 0. 0000997 0. 0005611 0.0000262 0.0224057
2d
... .0258452 .0085888 .0002050 . 0017886 .0000220 . 036-4496
3d
... .0399142 .0129231 .0003482 .0016459 .0000304 .0548621
4th
... .0546389 .0165242 .0003585 .0009419 .0000576 .0725211
5th
... .0678297 .0184804 . 0003734 .0006203 .0001438 .0874470
6th
... .0803404 .0197528 .0003303 .0005668 .0001664 .1011567
7th............. ... .0882066 .0192100 . 0003193 .0003992 .0001249 .1083200
8th
... . 0S95487 . 0181263 .0003065 .0003578 .0002092 .1085485
9th
__ .0929481 . 0182268 .0002686 . 0002017 .0003867 .1120319
... .0916512 . 0166904 .0002557 .0001002 .0026882 .1113857
... .0935851 . 014C078 . 0002537 .0000878 . 0027970 .1113314
... .0935772 .0117003 .0002304 .0000555 .0021533 .1127167
13th
... .1086514 . 0086059 .0001253 .0000245 .0024855 .119S92G
14th
...! . 1193673 . 0063636 .0000888
.0022557 . 1280754
15th
...! .1371948 . 0050277 .0000454 .0000050 .02C9488 .1692217
16th
...l .1225193 . 0040297 .0000579
.0295210 . 1561279
17th
.0048502 .1251656
... . 1169006 . 0033596 .0000552
18th
... .1160999 . 0033400 . 0000279
. 0009676 .1204354
19th
... .1458880 . 0027798 .0000220
.0088227 . 1575125
20th
... .2542185 . 0026910 .0000317
.1216798 . 3786210
21st........... ... .0882954 .0020174 .0000409
.1623589 .2533126
22d
...i .1125070 . 0028043 .0001122
.0003365 .1157600
23d
...! .1256018
. .1256018
* The method of determining these rates Is identical with the standard
method of computing probabilities.
for titles acquired by mortgagees and transferred
to FHA to give a total default termination or
foreclosure rate for that policy year. When the
annual rates for the different types of terminations
are added together, they give the total annual
termination rates shown in both actuarial
schedules.
The annual rates by policy year for the different
types of terminations measure the distribution of
expected terminations during a policy year. These
rates of termination for the different types of
terminations when applied against the initial
group of 100,000 mortgages and their survivors
provide numbers of terminations for each type
during a policy year. These numbers are shown
in the decrement table presented in Actuarial
Schedule 3, where the different types of termina
tions during a policy year appear as decrements
from the survivors at the beginning of a policy
year.
The decrement table is a convenient form for
viewing the relative importance of the different
types of terminations at each duration, i.e., the
number of policy years during which an insurance
contract is exposed to the risk of termination. A
comparison of the numbers of prepayments in full
with total terminations by policy year discloses
the extent to which these prepayments account for
total terminations. Prepayments in full in 14 of
the 23 policy years in which prepayments obtain
represent more than four-fifths of the total ter
minations. They account for about three-fourths
in the first 5 policy years.
1st
2d
3d.
4th
5th
6th
7th
8th
9th
10th
llth
12th............
13th
14th
15th
16th
17th
18th
19th
20th
21st
22d
23d
Mortgage
survivors
Titles acquired
at the
Prepay
by mortgagees
beginning Prepay ments by
of policy ments
superyear
in full
session Retained Trans
by mort ferred
gagee toFHA
100,000
97,759
94,196
89,028
82,572
76,351
67,729
60,393
53,837
47,806
42.481
37,752
33,497
29.481
25,705
21,355
18,021
15,765
13,866
11,682
7,259
6,420
4,793
1,621
2.526
3,760
4,864
5,601
6,054
5,978
5,408
5,004
4,381
3,975
3,721
3,640
3,519
3.527
2,616
2,107
1,830
2,023
2,970
641
610
602
551
840
1,217
1,471
1,626
1,488
1,301
1,095
981
798
620
442
288
188
129
86
61
53
39
31
19
15
0)
(i
(i)
»
10
20
33
32
31
25
22
18
14
12
11
9
4
3
1
1
1
1
56
175
155
84
51
43
27
22
11
5
4
2
1
(*)
Others
3
2
3
5
12
12
8
13
21
129
119
81
83
66
693
631
87
15
122
1,422
1,179
2
Total
2,241
3,563
5.168
6,456
7,221
7,622
7,336
6,556
6,031
5,325
4,729
4.255
4,016
3,776
4,350
3,334
2.256
1,899
2,184
4,423
1,839
627
602
i Less than 1.
Prepayments by supersession, which account for
nearly a fourth of total terminations during the
first policy year, become progressively less im
portant a decrement as the duration increases.
Most of the terminations are accounted for by
these two types of terminations.
Default terminations or foreclosures, the com
bination of titles acquired by mortgagees and re
tained by mortgagees and those transferred to
FHA,5 are considerably less important decrements
than either type of prepayment. These relatively
small decrements reflect the favorable economic
climate to which this regular home mortgage in
surance program has been exposed. Consequently,
it would be premature to describe a pattern
based on their decrements or rates of termination.
Exposure to adverse changes in economic condi
tions could change their rates significantly.
Actuarial Schedule 4 presents a survivorship
table for all maturities and the separate classes of
maturities along with their respective estimated
life expectancies. This table is designed to show
the survivors at the beginning of a policy year on
a comparative basis.
The rates of termination shown in the actuarial
schedules from which survivors, decrements, and
expectancies are estimated are “crude” or actual
rates as distinguished from “graduated” or
smoothed rates. ^They are based on numbers of
mortgages only and include mortagages with the
various terms of financing eligible for insurance
under the administrative regulations for Title II,
Section 203. Because this insurance program has
not been in operation long enough for many of
117
}!
i.
1
its long-term mortgages to mature, the rates of
termination for later policy years are based on a
smaller aggregate amount of experience than those
for earlier years. The rates of termination for
the first policy year for all mortgages are based
on the terminations from contracts endorsed for
insurance in each calendar year from 1935 through
1960. For the second policy year, they are based
on the terminations from endorsements in each
calendar year from 1935 through 1959.
Actuarial Schedule 4.—Survivorship tabic for a group of
1- to 4-family home mortgages of various maturity classes
based on aggregate termination experience by policy year
for Sec. SOS mortgages insured from 19S5 through 1960
and exposed to policy anniversaries in 1961 or prior termi
nation dates
Mortgage survivors at the beginning of policy year
Maturity class of mortgage
Policy year
1st
la::::::::::::
4th
5th
6th
7th
Sth
9th
ioth::::::::::
nth
12th
13th
14th
15th
16th...............
17th
ISth
19th
20th
2lst_
22d:
23d
24th
Estimated life
expectancy in
years.................
All
ma
turities
Less
IS
23
26
13
than
through through through through
13 years1 17 years « 22 years 1 25 years * 30 years1
100,000 100,000
97. 759
94.825
94,196
87.6SS
89,028
78.59S
S2.572
6S.100
75,351
56,949
67,729
46,206
60,393
36,615
53.S37
28,113
20,202
47,806
11,065
42.451
37,752
4.5S6
33,497 :
2,149
29.451
25,705
21,355
18.021
15.765
13.866
11.6S2
7,259
5.420
4,793
4.191
9.88
5.85
100,000
96,228
90. 6S5
83.198
74.5S6
65,619
56,630
4S, 164
40.601
34,194
2S, 670
24,096
20,354
17,026
13.198
5.378
85S
100,000
96.6S6
92,131
86,065
79.115
71,874
64,558
57,481
51,202
45.520
40,465
35,966
31,898
28,163
24,755
21,697
18,925
16,404
13,936
10,553
2,165
27
7.49
9.40
100,000
9S, 775
96,413
92,720
87,562
81,011
73,60S
66,815
60,735
54,863
49,936
45, 449
41.250
37.251
33,299
29,732
26,622
23,949
21,638
19,567
17,609
15,801
13,970
12,215
100,000
99,448
97,874
95,507
92,259
88,346
84,269
79,774
75.5S6
71,174
67,535
63.9S3
60, 750
<11.58
<‘)
1 Based on aggregate termination experience for mortgages insured from
1935 through 1960 and exposed to policy anniversaries in 1961 or prior termi
nation dates.
7 Based on aggregate termination experience tor mortgages insured from
193S through 1960 and exposed to policy anniversaries in 1961 or prior termi
nation dates.
3 Based on aggregate termination experience for mortgages insured from
1949 through 1960 and exposed to policy anniversaries in 1916 or prior termi
nation dates.
< Based on termination experience observed over a 23-year period and its
projection to 25 years.
5 Not estimated.
With time, the accumulation of termination
data will provide the merged experience of home
mortgage insurance contracts through that policy
year which will represent the longest maturity
eligible for insurance under this program. Not
only can additional termination experience in
fluence these rates by duration, particularly in
the later durations where the aggregate experi
ence is smaller, but changing economic conditions
will also influence the rates of termination. It
should be noted that the FHA mortgage insurance
programs have not been exposed to a serious re
versal of economic conditions. The cumulative
experience of foreclosures, therefore, reflects a rel-
118
atively favorable period of exposure. Accord
ingly, it must be emphasized that the pattern of
termination rates shown in the actuarial schedules
is only an emerging one and cannot be said to be
definitive for total terminations or for the differ
ent types of terminations.
MUTUAL MORTGAGE PARTICIPATION
PAYMENTS
The Mutual Mortgage Insurance Fund is the
only FHA insurance fund in which mortgagors
are authorized by statute to share in any excess
premiums—charges in excess of expenses, insur
ance losses, and provisions for reserve liabilities.
In this respect, for home mortgage insurance writ
ten under Section 203 the fund is operated like a
mutual insurance organization. The payments
which mortgagors receive are similar to policy
holders’ dividends. A noteworthy difference,
however, is that dividends (or participation pay
ments, as they are called) are terminal dividends,
payable at termination of the mortgage insurance
contract, when the mortgage is paid off at matu
rity or prepaid prior to maturity, as distinct
from annual dividends which most mutual insur
ance organizations pay to their policyholders.
Provision for the operation of the principle of
mutuality for mortgages insured under Section
203 of the National Housing Act was made in the
original legislation approved June 27, 1934, and,
except for subsequent technical amendments to
improve on the operation of mutual insurance,
such provision has remained a part of the legis
lation in effect today. The mutual mortgage in
surance system so far -as practicable was to be selfsupporting and was to cost the mortgagor no more
than the amount needed to cover the risk involved
plus necessary administration expenses. Pre
mium charges in excess of those needed for its
operation were to be returned to the mortgagor as
“dividends.”
Mortgagors who pay off their mortgages—
whether paid off at the maturity of the mortgage
note, or paid off prior to maturity, as, for exam
ple, in the case of a mortgagor who prepays from
savings or from the proceeds of the sale of his
home—are eligible to receive dividends or partici
pation payments from the Mutual Mortgage In
surance Fund. Thus, mortgagors with mortgage
insurance contracts that were terminated as a re
sult of a default are not eligible to receive such
payment. Since 1959 termination of insurance
contracts has been permitted through agreement
between the mortgagor and mortgagee, with ap
propriate notice to FHA. Participation pay
ments are payable in such cases as if the mortgage
had been prepaid. Payments are made to the
mortgagor of record as reported by the mortgagee
at the date the final payment is made.
Periodic sample tabulations of mortgages paid
in full and participation payments made to the
1
mortgagor of record reveal that in three-fourths
or the cases terminated in this wav the recipient
or the participation payment had been the mortgagor at the time the mortgage debt was originated
hy the lender and insured by FHA. No doubt a
“ISj1. proportion of the remaining terminations
ox this kind involved mortgagors who had assumed
the insured mortgage debt from builders or other
original mortgagors soon after FHA endorsement
of the insurance contract and had, accordingly,
made most, if not all, of the annual payments of
the mortgage insurance premium.
Payments to mortgagors are made from the Participating Reserve Account, one of two insurance
reserve accounts in the fund. This account, a statutory reserve, is authorized to receive allocations
semiannually from the net income of the fund, or
be charged with any net loss in a semiannual
period. The amounts are required to be allocated
in accordance with sound actuarial and accounting
practice.
Because of the statutory requirements for alioeating the net income of the Mutual Mortgage Insurance Fund semiannually or charging any net
loss to the Participating Reserve Account, participation shares—the rate of payment per $1,000 of
the original face amount of mortgage terminated—
are established semiannually as of June 30 and
December 31 for paying participations to eligible
mortgagors with insurance terminating in the subsequent 6-month period.
Table III-108 shows selected participation
shares for eligible mortgagors paying off their
mortgages during the 6-month period ending December 31, 1962. Participation shares may in no
event exceed the aggregate scheduled annual premiums on the mortgage to the year of termination
of the insurance.
A.s of Jime 30,1962, the account bad $183,744,519
available for distribution to eligible mortgagors as
participation payments. Since January 1, 1944,
when participation payments were first made, a
total of $137,126,418 has been distributed to 1,082,876 mortgagors. In the aggregate, these amounts
equal 30 percent of total FHA premium collections
through June 30, 1962 under this home mortgage
insurance program. The average dividend was
approximately $127.
Table III-108.—Selected participation shares per $1,000
of original face amount of mortgage payable from the
Mutual Mortgage Insurance Fund, to eligible mortgagors
with insurance contracts terminating between July 1, 1962
and Dec. SI, 1962
Maturity class of mortgage
Year mortgage was
endorsed for insurance
1956
1954
1952
1950
1948
1946
10 years
15 years
20 years
25 years
$2. 80
6.59
12. 50
$6.02
11.64
18.93
28.79
41.73
$7.39
14.17
21.39
31- 34
45.12
54.37
$2.15
9.92
19.20
27.46
42.10
58.15
30 years
$4.18
12.07
18.27
The basis for distributing dividends or particiI
pation payments from the Participating Reserve
Account is an adaptation of the method known in
actuarial science as the asset share method. Ac
!
cording to this method, a class of insurance business contributing to a fund or account shares in
that fund in relation to its net contribution to the
fund. Classes with more favorable insurance experience share more favorably than classes with
less favorable experience. This method thus provides an equitable basis for distributing an amount
from a fund among different classes of business.
The amount in a fund or account which is to be
distributed is determined separately on the basis
of actuarial and accounting considerations,
The participation payment which an individual
mortgagor receives when he pays off his mortgage
is determined on the basis of the average insurance
experience for his class of business and its respective reserve requirements. The characteristics
identifying a class of business are maturity, i.e.,
the original term of the mortgage; and duration,
i-e-> the number of policy years a contract has been
m force at the time of termination. For example,
one c^ass .°f business would be all 20-year mortgages which had been in force for 14 years. At
the end of 1962 it would be made up of 20-year
mortgage insurance contracts endorsed in 1949
4nd also all other 20-year mortgages endorsed for
insurance in prior years which had had a 14th
policy year of experience.
The insurance experience of a given class of business reflects the estimated combined fee, premium,
and investment income as well as the initiation,
maintenance, and settlement expenses and insurance losses of that class. In other words, the insurance experience of a class represents its estimated earned surplus. In the above example, it
would be the combined earned surplus for all 20year mortgages which had attained a 14th anni
versary. When the combined earned surplus is
related to the total amounts of insurance in force
for businesses in a class, an average earned sur
plus per $1,000 of original amount of insurance in
force is provided. Thus all classes of business are
put on a comparable basis.
The average earned surplus per $1,000 of orig
inal amount of insurance in force is known as the
asset share factor. When the reserve factors for
each class of business—the same factors per $1,000
of insurance in force that are used in making the
semiannual valuations of the reserve liabilities of
the Mutual Mortgage Insurance Fund to deter
mine its reserve positions—are taken out of the
asset share factors, the so-called relative share fac
tors are obtained. These relative share factors
for each class of business together with the amount
of insurance currently in force in each class, and
the amount in the Participating Reserve Account
then provide the basis for determining the mort
gagors’ participation share factors. They are lit
erally rates for sharing in the account on an equit
able and actuarially sound basis.
119
j
These factors are so determined that if all mortmortgage funds available for reinvestment. When
gagors eligible to receive dividends were (o pay off
such retirements are related to the outstanding
their mortgages during the designated 6-month balances of mortgages in force, they measure the
period, the total amount in the Participating Re- rate of turnover of the mortgagee’s investment,
serve Account would be paid out to those mortFrom the rate of turnover, the average life of the
gagors. Since only a part of the total mortgages
dollar amount invested would also be indicated,
will actually be terminated during the semiannualTables III-109 and III-110 present measures
period, the part which is not paid out during the
of gross debt retirement for all l^HA-msured
period remains in the account and, together with
home and project mortgages in force. Ketirewhatever allocation of net income is made to it,
ments are estimated from insurance written and
is available for distribution in the next semiannual
outstanding balances m force. Since the estipCrj0(j
mates of outstanding balances reflect scheduled
In the early durations mort mi ire classes do not
amortization of principal and outstanding balon the average accumulate sufficient resources to
ances of all types of terminated mortgages, the
meet insurance costs and reserve requirements.
retirements (1) include outstanding balances of
Consequently, mortgagors prepaying their mortmortgage default termination, i.e., tor mortgage
gages within the earlv years after endorsement do
notes assigned and property titles transferred to
not receive participation payments. Beyond these FHA and property titles retained by mortgagees
vears, the payments made increase with duration: with termination of FHA mortgage insurance
that is, the longer a mortgage insurance contract contracts, and (2) do not include partial prepaylias been in force at the time of termination, the
m^PTt.s;
.
...
, ,
,.
higher the participation payment. For many
, With respect to the former, their outstanding
classes of business with durations of 15 years or
balances generally do not reflect a backflow of cash,
more, participation payments currently are almost
since the mortgagee receives debentures from most
equal to the cumulative premiums paid by the
FHA insurance funds for approximately the
mortgagor. The statute provides that no mortamount of the outstanding balance, or the mort
gagor with a mortgage insured under Section 203
&a»ee takes title to property which, is acquired
has any vested right in the Participating Reserve
through foreclosure proceedings or cic-ed m lieu of
Account of the Mutual Mortgage Insurance Fund.
foreclosure and retains title ir* lieu of making a
The share amounts, of course, also depend on
$laun for insurance To the extent tout such dethe amount of insurance in force and the amount
faldt terminations do not reflect a backflow of
in the Participating Reserve Account. The size
casb> tb® amount °f mortgage debt retirement exof the account is based on considerations of the reoe.eds *e
of repayments available for
serve position of the fund, for, as the statute rereinvestment. The overstatement of retirements
quires the amount of net income which may be
«
.repayments of indebtedness is probably
allocated to this account must be determined in
not significant, because (1 the majority of mortaccordance with sound actuarial and accounting
foreclosures and most mortgage assignments
practice. The varying amounts of the Mutual
debentures; (2) the debentures are negoMortgage Insurance Funds semiannual net intlable and callable and can also be used for the
come which have been allocated to the ParticipatPay“ent of mortgage insurance premiums; and
ing Reserve Account have reflected, among other
(?) tbe relative amounts involved m default terthings, recent changes in insurance loss experience
mmations are not substantia . With respect to
as will as changes in reserve requirements because
tbe Partlal prepayments what understatement of
of the levels in new mortgage insurance volume.
retirements as repayments there may be is offset
The share amounts have been relatively high beh7 the overstatement from foreclosures and ascause the Mutual Mortgage Insurance Fund has
fignments of mortgages, although the extent of
not been exposed to a serious economic reversal.
this offset cannot now be estimated.
1
Estimated retirements for insured home mort
gage indebtedness amounted to about $168 million
ANALYSIS OF DEBT RETIREMENT EXPERIENCE
m 1940. After that year the amount continued to
Related to the termination experience of mort
rise, reaching a little over $800 million in 1946.
gages is the experience of mortgage debt retire
In the subsequent period a postwar low of $573
ment. The termination experience discussed in a
million was reached in 1949. Since that year
preceding part of this section is based on numbers
there was an overall growth in retirements result
of mortgages terminated. Debt retirement is
ing in a top figure of $2,493 million in 1962. This
measured in terms of dollar amount. The main
23-year record of retirements of home mortgages
kinds of retirement of insured mortgage indebted
is illustrated in Chart III-27.
ness are (1) amortization of principal paid in
The retirement figures for home mortgages un
accordance with the terms of the loan, and (2) pre
der all sections are largely determined by the
payment in part in advance of scheduled amortiza
retirements of Section 203 mortgages. These ac
tion, or prepayment in whole in advance of ma
count for almost all of the retirements in 1940,
turity. To the lending institution both kinds of
over three-fifths in 1947, and over seven-eighths in
retirement of principal represent a backflow of
120
Salaries and expenses, fiscal year 1962 (July 1, 1961 to
June 80, 1962)—Continued
Income from insurance operations through
June SO, 1962—Continued
Fund
Title and section
Amount
Title VI War Housing Insurance Fund
(war and veteran’s emergency housing)
Title VII Housing Investment Insurance
Fund (yield insurance)______________
Title VIII Armed Services Housing Mort
gage Insurance Fund (home mortgages
and rental housing projects)_________
Title IX National Defense Housing In
surance Fund (home mortgages and
rental housing projects)_____________
397, 199, 005
240, 248
56, 681, 204
24, 244, 066
Title VI:
See. 603.
Sec. 60S.
Sec. 611.
Title VII:
Title VIII:
Sec. S03.
Sec. 809.
Sec. SIO.
Title IX:
Sec. 903.
Sec. QOS.
Total.
Percent
387,609
1,495,6S9
.55
2.11
6*359
.01
375,135
101,207
42.472
.63
.14
.06
787,419
59.473
1.11
.08
70,873,277
100.00
2, 335, 647, 688
Total
Capital and Statutory Reserves of Combined
FHA Funds
Salaries and Expenses
The current fiscal year is the twenty-third in
which the Federal Housing Administration has
met all expenditures for salaries and expenses by
allocation from its insurance funds.
Expenses during the first 3 fiscal years, 1934
through 1937, were met from funds advanced
through the Reconstruction Finance Corporation
by the U.S. Treasury. During the following 3
fiscal years, 1938 through 1940, partial payments
of operating expenses were met from income.
Since July 1, 1940, operating expenses have been
paid in total by allocation from the various insur
ance funds.
In fiscal year 1954, the FHA completely repaid
its indebtedness to the U.S. Treasury Department
in the amount of $85,882,962 ($65,497,433 princi
pal and $20,385,529 interest) for funds advanced
by the Treasury to pay salaries and expenses dur
ing the early years of FHA operations and to
establish certain insurance funds.
The amount that may be expended for salaries
and expenses during a fiscal year is fixed by Con
gress. Under the terms of the National Housing
Act, expenditures for the operations of each title
and section are charged against the corresponding
insurance fund.
The amounts charged against the various titles
and sections of the Act during the fiscal year 1962
to cover operating costs and the purchase of furni
ture and equipment are as follows:
Salaries and expenses, fiscal year 1962 (July 1, 1961
June 80, 1962)
Title and section
Title I:
Sec. 2________...
Sec. 8___________
Title II:
Sec. 203................
See. 203 HIA___
Sec. 207-210..........
Sec. 213................
Sec. 220 HI_____
Sec. 220 HIA____
Sec. 221 HI............
Sec. 222................ .
Sec. 231...................
Sec. 232...................
Sec. 233................ .
Sec. 234...................
124
Amount
Amount
$4,531,991
122,577
51,596,422
180,762
3,953,569
1,648,747
1,121,733
138,276
1,550,939
662.071
1,019,222
907,740
54,999
129,966
to
Percent
6.39
.17
72.80
.26
5.58
2.33
1.58
.20
2.19
.93
1.44
1.28
.08
.18
The combined capital including statutory re
serve of all FHA funds on June 30,1962, amounted
to $1,089,184,275, and consisted of $905,439,696
insurance reserves, and $183,744,579 statutory
reserve as shown in statement 1.
Statement 1.—Comparative statement of financial con
ditions, all FHA funds conbined, as of June 30, 1961 and
June 80, 1962.
June 30, 1961
June 30,1952
Cash with U.S. Treasury.............
$52,265,134
$92,336,068
$40,070,934
Investments:
U.S. Government securities
(amortized)................................
Other securities (stock in
rental housing corporations).
754,067,454
723,079,204
-30, 988,250
465,060
457,240
-7,820
754,532,514
723,536,444
-30,996, 070
Loans receivable:
Mortgage notes and contracts
for deed......................... .............
Less allowance for losses_____
202,194, 580
5,839,392
291,833.962
7,410,104
89,639,382
1,570,712
Net loans receivable.
In crease or
decrease (—)
ASSETS
Total Investments..........
196,355,188
284,423,858
88, 068, 670
Accounts and notes receivable:
Accounts receivable—Fees and
insurance premiums...............
Accounts receivable—Other...
5,424,027
786, 047
9,531,811
852,809
4,107,784
66,762
Total accounts and notes
receivable------------- -------
6,210,074
10,384,620
4,174, 546
41,084,137
60,496,637
9,412,500
3,021,454
1,763,681
2,836,425
2,436,998
-185,029
673,317
55,770,060
9,900,788
Accrued assets:
Insurance premiums_________
Interest on U.S. Government
securities_______________ __
Other_____________________ _
Total accrued assets......... .
45,869,272
Land, structures, and equip
ment:
Furniture and equipment____
Less allowance for deprecia
tion.......................... ...................
4,743,313
850,996
2,128,643
2,095,640
-33,003
Net furniture and equip
ment............... ................... ..
1,763,674
2,647,673
883,999
Acquired security:
Real estate fat cost plus ex
penses to date)__________ „
Less allowance for losses...........
304,948,793
99,236,976
490,588,125
122,169,575
185, 639,332
22,932,599
Net real estate.......... ...........
205,711,817-
368,418,550
162,706,733
Mortgage notes acquired un
der terms of Insurance______
199,274,510
213,468,158
14.193,648
3,892,317
:
Excludes unfilled orders in the amount of $74,376.
Statement 1.—Comparative statement of financial condi
tions, all FI-IA funds combined, as of June 80, 1961 and
June 80, 1962— Continued
Juno 30, 1961 Juno 30,1962
Increase or
decrease (—)
earmarked for participation payments to mort
gagors under the mutual provision of Title II of
the National Housing Act.
The insurance and statutory reserves of each
fund are given below:
assets—continued
Acquired security—Continued
Less allowance lor losses........
$60,064,097
$64,701,765
$4,637,668
Net mortgage notes acqulrod unde r terms of
insurance___
139,210,413
148,766,393
9,555,980
Defaulted Title I notes.............
Loss allowance for losses_____
46,258,643
31,935,379
50,343,973
36,722,113
4,085,330
4,786,734
Net defaulted Title I notes.
14,323,264
13,621,860
-701,404
Net acquired security____
359,245,494
530,806,803
171,661,309
Other assets—held for account
of mortgagors............ ...................
4,229,313
4,721,529
492,216
Total assets........................... 1,420,470,663 1,704,627,055
284,156,392
LIABILITIES
Accounts payable:
Bills payable to vendors and
Government agencies............
Group account participations
payable......................................
» 7,659,422
9,355,138
1,795,716
3,455,526
4,813,898
1,358,372
Total accounts payable...
11,014,948
14,169,036
3,154,088
Accrued liabilities:
Interest on debentures..............
5,697,318
9,520,004
3,822,686
Trust and deposit liabilities:
F"! deposits held for future
disposition.................................
E:;eess proceeds of sale..............
repos!:.;: held for mortgagors,
lessees, and purchasers..........
Due general fund of the U.S.
Treasury...................................
Employees’ payroll deduc
tions for taxes, etc................
6,195,437
2,211,647
6,265,311
3,030,826
69,874
819,179
12,319,044
14,273,500
1,954,456
602
443
-159
1,764,719
2,057,127
302,408
Total trust and deposit
liabilities............................
22,481,449
26,627,207
3,145,758
Deferred and undistributed
credits:
Unearned insurance pre
miums.........................................
Unearned Insurance fec3..........
Other..............................................
69,478,943
844,022
1,799, 631
64, 469,800
756,928
2,495,154
-5,009,143
-87,094
695,623
Total deferred and undis
tributed credits..............
72,122,496
67,721,882
-4,400,614
Bonds, debentures and notes
payable:
Debentures payable...................
Other liabilities:
Reserve for foreclosure costs—
Mortgage notes acquired
under terms of insurance___
Total liabilities.
325,029,760
496,437,900
171,408,150
1,870,389
1,966,751
96,362
438,216,350
615,442,780
177,226,430
RESERVES
Statutory reserve for participapation payments and future
losses________________________
Insurance reserve—available for
future losses and expenses___
176,201,014
183,744,679
7,543, 565
806,053,299
905,439,696
99,386,397
982,254,313 1,089,184,275
106,929,962
Total liabilities and re
serves................................... 1,420,470,663 1,704,627,055
284,156,392
Total reserves....... ............. -
Certificates of claim relating to
properties on hand......................
13,197,331
19,403,073
6,205,742
J Excludes unfilled orders In the amount of $414,120.
The insurance reserves of $905,439,696 are
available for future contingent losses and related
expenses. The statutory reserve of $183,744,579
under the Mutual Mortgage Insurance Fund is
Insurance reserves
(including statutory
reserve)
Fund
Title I Insurance Fund_______________
Title I Housing Insurance Fund________
Mutual Mortgage Insurance Fund______
Section 203 Home Improvement Account.
Housing Insurance Fund...........................
Section 220 Housing Insurance Fund........
Section 220 Home Improvement Account.
Section 221 Housing Insurance Fund___
Servicemen’s Mortgage Insurance Fund..
Experimental Housing Insurance Fund...
Apartment Unit Insurance Fund_______
War Housing Insurance Fund..................
Housing Investment Insurance Fund____
Armed Services Housing Mortgage Insur
ance Fund_______________________
National Defense Housing Insurance
Fund____________________________
Total all funds.
$93, 677, 646
7, 052, 132
730, 561,051
877, 392
13, 027, 773
4, 899, 757
883, 052
-2, 241, 642
19, 946, 677
965, 634
917, 351
216, 545, 113
934, 410
5
16, 623, 006
|
-15, 485, 077
;
1,089, 184, 275
In addition, the various insurance funds had col
lected or accrued $756,928 unearned insurance fees
and $64,469,800 unearned insurance premiums as
shown below which will be allocated to income
each month as they are earned.
Deferred
fee
income
Title I Insurance Fund.................... .......
Housing Insurance Fund................ .
Mutual Mortgage Insurance Fund—
Section 203 Home Improvement
Account.....................................................
Housing Insurance Fund........................ $589,371
61,117
Section 220 Housing Insurance FundSection 220 Home Improvement
Account..................................................... .
80,057
Section 221 Housing Insurance FundServicemen’s Mortgage Insurance
Fund.........................................................
Experimental Housing Insurance
Fund..........................................................
Apartment Unit Insurance Fund........
War Housing Insurance Fund
Housing Investment Insurance.Fund,
ortgage
Armed Services Housing Mo
26,383
Insurance Fund......................
National Defense Housing Insurance
Fund......... ...........
Total.
766,928
Deferred
premium
income
Total
deferred
fee and
premium
income
$27,964,662
224,488
17,976,122
$27,964,662
224,488
17,976,122
6,183,419
1,250,039
6,772,790
1,311,156
127,780
207,837
497,738
497,738
6,059,253
6,059,253
3,431,461
3,457,844
754,838
754,838
64.469.S00
65,226,728
1
i
i
Combined Income, Expenses, and Losses,
All FHA Funds
Total income from all sources during the fiscal
year 1962 amounted to $262,370,692, while total
expenses and insurance losses amounted to $105,556,582, leaving net income of $156,814,110 before
adjustment of valuation allowances. Increases in
valuation allowances for the year amounted to
$33,927,713, leaving $122,886,397 net income for
125
!l
lit
L
r
Statement 2.—Combined statement of income and ex
penses for all FHA funds through June SO, 1961 and
June SO, 1962
June 30,1934 July 1, 1961 June 30,1934
to
to
to
June 30, 1961 June 30, 1962 June 30, 1962
Income:
Interest and dividends:
Interest on U.S. Govern
ment securities.................... $156, 780,493
Interest on mortgage notes
222,900
and contracts for deed___
Interest and other income
11.156,8S7
on defaulted Title I notes.
48,401,207
Interest—Other.......................
Dividends on rental hous
30,725
ing stock............. ...................
216,592,212
f
Insurance premiums and fees:
Premiums___________ _____
Fees________________ _____
I
Other Income:
Profit on sale invest
ments.....................................
Income retained on settled
properties.-_____ _______
Miscellaneous income............
a
Total Income.
|
i
■
:
$23,172,464
$179,952,957
70,521
293,421
972.418
6,297, 716
12,129,305
54,698, 923
2,100
32,825
30,515,219
247,107,431
201.3S3,314
25,865,777
1,831,818,140
322,365,826
1,926,934.875
227,249,091
2,154,183,966
1,463,254
14,686
1,477,940
3,927, 496
50,960
4,591,006
690
8,518, 502
51,650
5, 441,710
4,606,382
10,048,092
2,14S, 968, 797
262,370,692
2,411,339, 489
20,385,529
Administrative expenses:
Operating costs (including
adjustments for prior
years)......................................
J 667,891,857
69,492, 719
737,384. 576
Other expenses:
Depreciation on furniture
and equipment....................
Miscellaneous expenses____
3,330,893
512,588
61,725
86,492
3,392,618
599,080
3,843,481
148,217
3,991,698
84,437,857
29,815,897
114,253,754
-59,940
71,969,873
-12,994
6,112,743
-72,934
78,082,616
156,347,790
35,915,646
192,263,436
848,468,657
105,556,582
954,025,239
Net income before adjustment
of valuation allowances............. 1,300,500,140
156,814,110
1,467,314,250
-5.839,392
-1,570, 712
-7,410,104
-99,236,976
-22,932,599
-122,169,575
Losses and charge-offs:
Loss on acquired security____
Loss (or profit —) on equip
ment_______ ______________
Loss on defaulted Title I notes.
Total expenses.
Increase (—) or decrease (+) in
valuation allowances:
Allowance for loss on loans
receivable..................... .............
Allowance for loss on real
estate_____________________
Allowance for loss on mort
gage notes acquired under
under terms of insurance___
Allowance for loss on de
faulted Title I notes..............
20,385,529
June 30,1934 July 1,1961 June 30,1934
to
to
to
Juno 30,1961 June 30,1962 June 30,1962
Distribution of net income:
Statutory reserve-participat
ing reserve:
Balance at beginning of
period.....................................
Adjustments during the
period.....................................
Net income allocated for the
period.....................................
$297,370,997
23,600,000
297,370,997
199,701,014
320,870,997
Participations in mutual
earnings distributed___ -121,169,983
-15,956,435
-137,126,418
176,201.014
183,744,579
183,744,579
Balance at end of period..
Insurance reserve:
Balance at beginning of
period.........................................
Adjustments
during the
period..........................................
Net income for the period........
Capital contributions to other
FHA insurance funds...........
Capital contributions from
other FHA insurance funds.
Balance at end of period..
$320,870,997
806,053,299
806,053,299
99,386,397
806,053,299
905,439,696
905,439,696
-23,310,000
-3,276,000
-26,585,000
905,439,696
23,310,000
3,275,00(i
26,685,000
806,053,299
905,439,695
905.439,698
982,254,313 1,089,184,275
1,089,184,278
—
Mortgage Notes and Sales Contracts
Through June 30, 1962, 35,211 purchase money
mortgages totaling $384,466,057, face amount, had
been taken on the sale of 36,497 acquired prop
erties. There have been 9,449 liquidations, of
which 4,411 had been sold, and 5,038 paid in full,
leaving a balance of 25,762 purchase money mort
gages on hand as of June 30,1962, as shown below:
Statement of purchase money mortgages on hand, for all
FHA funds, as of June 30, 1962
Number
of notes
Face
amount
Unpaid
balance
HOMES
Title I
Sec. 2
Sec. 8
Title n
Sec. 203
Sec. 213
Sec. 220.
Sec. 221.
Sec. 222.
Title VI
Sec. 603.
Sec. 611.
Title VIII
Sec. 809.
Title IX
Sec. 903.
Total homes.
-60,064,097
-4,637,668
-64,701,765
-4,786,734
-36,722,113
Net adjustment of valua
tion allowances________ -197,075,844
-33,927,713
-231,003,557
1,103,424, 296
122, 886,397
1,226,310, 693
Title H
Sec. 207
Sec. 213
Sec. 221
Title VI
Sec. 608.
Title VIII
Sec. 803.
Title IX
Sec. 908,
1 Excludes unfilled orders in the amount of $339,744.
Total multifamily.........
Total home and multifamily.
126
$176,201,014
90
834
$373,642
4,604,765
$242,833
4,210,667
14,963
335
6
305
621
143,322,288
3,060,060
65,200
2,615,700
6,806,250
137,842,603
2,946,417
64,656
2,491,222
5, 733,149
3.689
1
29,991,297
8,000
20,722,414
7,624
18
207,150
205,379
4,227
37,601,205
35,171,041
24,989
227,555,547
209, 637,804
38
241
2
4,658,763
2,547,500
755,000
3,635,243
2,266,806
747,417
447
77,960,800
70,549,624
38
1,893,800
1,836, 067
7
3,325,000
3,162,001
773
91,140,863
82,196,158
318,696,410
291,833,962
MULTITAMILT
-31,935,379
Net income..
ANALYSIS OF INSURANCE RESERVES
Total reserves at end of period..
Bxpenses:
Interest expenses:
Interest on funds advanced
by U.S. Treasury_______
.
!
Statement 2.—Continued
the period. Cumulative income from June 30,
1034 through June 30, 1962 was $2,411,339,489,
and cumulative expenses and insurance losses were
$954,025,239, leaving net income of $1,457,314,250
before adjustment of valuation allowances.
25,762
x
i
Contributed Capital
National Housing Act, as amended, is added to or
deducted from the insurance reserves of the in
surance funds affected. An analysis of capital
contributions at June 30, 1962 is shown in State
ment 3.
Contributed capital of $26,585,000, representing
funds transferred from earnings of insurance
funds to establish other insurance funds and trans
fers under the provisions of Section 219 of the
Statement 3. Analysis of capital contributions to FHA insurance funds from other FBA insurance funds as of
June SO, 1962
:•
,
Capital contributions
Fund
To establish
insurance funds
Pursuant to
See. 219
Total
contributions
Contributions
returned
Contributed
capital
;
TITLE I HOUSINQ INSURANCE
From: Title I Insurance.
$1,000,000
$1,000,000
$1,000,000
1,000,000
1,000,000
1,000,000
$3,200,000
90,000
4,400,000
1,000,000
3.200.000
90,000
4.400.000
1,000,000
-1,000,000
3,400,000
7,690,000
8,690,000
-4,290,000
4,400,000
SEC. 203 HOME IMPROVEMENT
From: War Housing Insurance.
HOUSING INSURANCE
From:
Mutual Mortgage Insurance_______
National Defense Housing Insurance
Housing Investment Insurance_____
War Housing Insurance........................
Total.............................................
1,000,000
1,000,000
SEC. 220 HOUSING INSURANCE
From: War Housing Insurance.
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
2,500,000
2,500,000
1,000,000
2.600,000
1,000,000
2,500,000
3,500,000
3,500,000
1,000,000
1,000,000
1,000.000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
1,000,000
SEC. 220 HOME IMPROVEMENT
Fjrom: War Housing Insurance.
SEC. 221 HOUSING INSURANCE
From:
Title I Insurance.............
Wiir Housing Insurance
1,000,000
Total..................... .........
1,000,000
SERVICEMEN’S MORTGAGE INSURANCE
From: War Housing Insurance.
EXPERIMENTAL HOUSING INSURANCE
From: War Housing Insurance.
APARTMENT UNIT INSURANCE
From: War Housing Insurance.
’
HOUSING INVESTMENT INSURANCE
From:
National Defense Housing Insurance
War Housing Insurance____________
To: Housing Insurance..................................
Total.................................................
1,000,000
910,000
-90,000
1,000,000
910,000
-90,000
-1,000,000
1,820,000
1,820,000
-910,000
1,900,000
1,900,000
-1,900,000
775,000
10,000,000
775,000
-3,200,000
-1,000,000
-3,200,000
-1,000,000
907666"
910,000
910,000
ARMED SERVICES HOUSING MORTGAGE INSURANCE
From: War Housing Insurance......................................... ....................
NATIONAL DEFENSE HOUSING INSURANCE
From:
War Housing Insurance.............
Title I Insurance..........................
To:
Housing Insurance.......................
Housing Investment Insurance
10,000,000
|
;
10,000,000
775,000
Total..............................................
10,000,000
-3,425,000
6,575,000
4,200.000
10,775.000
Grand total.
19,000,000
10,485,000
29,485,000
-2,900.000
26,585,000
TITLE I: PROPERTY IMPROVEMENT LOANS
Loans Insured and Claims Paid
Operations under Section 2 of Title I cover the
insurance of qualified institutions against loss on
•:
3^.000
1,000,000
loans made to finance the alteration, repair, and
improvement of existing structures, and loans not
exceeding $3,500 for the construction of new nonresidential structures.
ily
'.;
127
j
J
Loans aggregating 25,641,169 in number and
$14,722,494,857 in amount (net proceeds) liad been
reported for insurance and 725.515 claims had been
paid for $208,550,522 under this section through
June 30, 1962. The total claims paid represents
approximately 1.82 percent, of the total net pro
ceeds of loans insured, as shown in Statement 4.
In fiscal year 1962, 830,114 loans were insured
for an aggregate of $847,927,821, and 24,499 claims
were paid for $16,192,70S.
Recoveries
Upon payment of insurance claims, the notes
and other claims against the borrowers become the
property of the Federal Housing Administration
for collection or other disposition.
Real properties acquired are managed and sold
bv
v' the Property Disposition Division of the Fed
eral Housing Administration, which also handles
the acquisition, management, and disposition of
real properties acquired under the various other
FHA insurance programs.
During fiscal year 1962, four properties insured
under Title I Section 2 had been acquired under
terms of insurance. Through June 30,1962, a total
of 594 properties had been acquired under the
Title I Insurance Fund at a total cost of $1,672,899,
and 590 had been sold at prices which left a net
charge against the fund of $133,118.
On June 30, 1962, there remained on han-d four
properties insured, under Title I Insurance Fund.
The cost of these properties was :
I
Title I Insurance Fund, statement of properties on hand
at June SO, 1962
Title 1
Section 2
(4 properties)
Expenses:
Unpaid balance of claim at acquisition___
Taxes and insurance.___ ____________
Maintenance and operating___________
Miscellaneous______________________
$5, 307
146
33
850
Total expenses___________________
Income:
Rent and other income (net)
6, 336
Net acquired security on hand__
6, 091
245
Insurance losses and reserves for losses through
June 30, 1962 amounted to $129,669,635. These
losses and reserves represent 0.88 percent of the
total amount of loans insured ($14,722,494,857).
A summary of transactions through June 30, 1962
follows:
Statement 4.—Summary of Title I transactions for the period June 80,1984 to June SO, 1962
Recoveries
Fiscal years
1934-39.
1940-49.
1950.
1951
1952.
1953
1954
1955.
1956.
1957
1958
1959
1960.
1961
1962.
Totals................ .....
Percent to claims paid..
Net proceeds
of notes
insured
Losses
Insurance
claims paid
Cash on notes
and sale of
equipment
real properties
On real
properties and
equipment
On defaulted
notes»
$3, 653,335
705,417
5,374
-6,886
15, 295
-1,389
6, 289
-5, 446
67, 036
3,105
-822
-559
1,965
-286
$2,639,974
32,460,801
8,961,961
7,333,705
7, 962, 274
6, 448,978
9, 656,814
9, 708,367
2,682,631
7,520,687
2, 282,385
1,790,667
2, 526, 985
12,451,307
10,899,477
$839,559,605
2,748,876,077
662, 405.207
699,905,186
852, 405,554
880,694,582
1,272. 424,935
757,809.935
667,145,094
765,329.916
865,102,646
950,368,643
1,014,441,973
89S, 097,683
847,927,821
$21, 499, 306
62,657,462
18,8SS, 090
15,379, 217
10, 730,364
13,049, 520
19, 461,206
20, 570, 283
13,389,730
10,537,410
9,506, 917
10,261,214
10,789,77C
15, 637,229
16,192,798
$3,791,225
27,718,195
4,224, 678
5,943, 969
6,645,986
7,656, 512
7,180,340
7,418,127
9,108, 983
9, 428,960
8,317,281
7,538,038
6,935,029
5,951, 973
5,989,417
$770,662
-170
94,106
356,361
84,423
26,750
16.615
10, 993
32, 275
11,348
-146
559
944
5,594
14.722.494.857
268.550,522
123,848,713
1,410,314
4,442,622
125,227,013
100.000
46.118
.525
1. 654
46.631
i Includes reserve for losses on defaulted Title I notes in process of collection
at June 30, 1962, in the amount of $36,722,113.
Notes.—In addition to the above recoveries, $14,418,529 interest and other
income on outstanding balance of Title I notes, and $275,475 interest on mort-
Title I Insurance Fund
The Title I Insurance Fund was established by
amendment of June 3, 1939 to the National Hous
ing Act for the purpose of carrying out the pro
visions of Title I (Section 2) on insurance granted
on and after July 1, 1939. This is not a mutual
insurance fund in the sense that any portion of the
net income from operations will be shared by mort
gagors in the form of participation payments.
Section 2(f) of the Act provides that moneys in
194
Net notes in
process of
collection at
June 30, 1962
13,621,860
6.072
gage notes had been collected through June 30,1962.
Included in the losses is $3,979,705 representing the cost (claim amount) of
equipment repossessed by FHA and subsequently transferred to other
Government agencies for their use and without the exchange of funds.
the Title I Insurance Fund shall be available for
defraying the operating expenses of the Federal
Housing Administration under this title, and any
amounts which are not needed for such purpose
may be used for the payment of claims in connec
tion with the insurance granted under this title.
Section 2(f) of the Act as amended August 2,1954
provides that moneys in this fund not needed for
current operations may be invested in bonds or
other obligations of, or in bonds or other obliga
tions guaranteed as to principal and interest by
128
J
J
the U.S. Government. During the fiscal year 1962,
net investments amounting to $155,000 (principal
amount) were made for the account of this fund,
and at June 30, 1962 the fund held U.S. Govern
ment securities in the principal amount of $103,678,000, yielding 3.50 percent, as follows:
Statement 5Comparative statement of financial condi
tion, Title I Insurance Fund, as of June SO, 1961 and
June 30,1962—Continued
June 30,1001 June 30,1962
Increase or
decrease)—)
assets—continued
Investments of the Title I Insurance Fund, June SO, 1962
Series
1962
1962
1963
1963
1964
1964
1964
1964-69
1965
1965
1965-70
1966
1066.
1967.
1967.
Interest
rate
(percent)
3 yt
m
*7/*
3
3*
4V<
2W
2H
456
2Yi
3
3H
2
354
Average annual
yield 3.60 per
cent..................
Purchase
price
$1,525,444
3,870,937
2.922.000
14,745,875
4,172,066
8,257,125
6,536,800
4,910,903
17.944,580
7,909,725
2,543, 556
2,177,344
1.350.000
23,179,000
1,000,000
102,045,355
Par value
$1,650,000
3.800.000
2.922.000
14.750.000
4.150.000
8.298.000
6.519.000
5.510.000
18.710.000
7.880.000
2.810.000
2.250.000
1.350.000
23.179.000
1,000,000
103,678,000
Book value
(amortized)
$1,545,042
3,806,033
2,922,000
14,748,491
4,167,327
8,277,684
5,527,532
5,002,659
18,352,194
7,898,490
2,680,689
2,201,208
1,350,000
23,179.000
1,000,000
102,648,340
Accounts receivable—Inter
fund......................... ..................
$222,020
$281,590
$59,570
Total accounts and notes
receivable..........................
2,260.940
2,575,390
314,450
Accrued assets:
Interest on U.8. Government
securities................................. .
Other.............................. ..............
536,448
1,607
532,960
1,479
Total accrued assets.
538,055
534,439
-3,616
6,092
531
6,092
531
Acquired security:
Real estate (at cost plus ex
penses to date)........................
Less allowance for losses_____
Net real estate.....................
5,561
5,561
50,343,973
38,722,113
4,085,330
4,786,734
14,323,264
13,821,860
-701,404
14,323,264
13,627,421
-695,843
121,398,608
123,034.154
1,635,546
2,280,894
1,380,699
-900,195
Defaulted Title I notes_..........
Less allowance for losses..........
46,258,643
31,935,379
Net defaulted Title Inotes.
Net acquired security___
Total assets..........................
LIABILITIES
Since the establishment of the Title I Insuran.ee Fund, all operating expenses have been paid
out of earnings of the fund, and since July 1,
1944 all insurance claims relating to this fund
have been paid out of accumulated earnings and
recoveries in the fund. Prior to July 1, 1944, a
portion of the insurance claims was met from
income and recoveries while the remainder was
paid from funds advanced by the Federal
Government.
The total insurance reserve of the Title I Insur
ance Fund as of June 30,1962, as shown in State
ment 5, was $93,677,646, consisting entirely of
earnings. In accordance with Public Law 5, 83d
Congress, approved March 10, 1953, the amount
of capital contributed to this fund by the U.S.
Government, $8,333,314, was established as a lia
bility of the fund as of June 30, 1953. On July
1, 1953, the entire amount was repaid and the
liability liquidated.
Statement 5.—Comparative statement of financial condi
tion, Title I Insurance Fund, as of June SO, 1961 and
June 80, 1962
June 30,1961 June 30, 1962
Increase or
decrease (—)
ASSETS
Cash with U.S. Treasury.............
$1,815,928
$3,509,365
$1,693,437
Investments: U.S. Government
securities (amortized).................
102,170,864
102,548,349
377,485
Loans receivable:
Mortgage notes and contracts
for deed_____ ____ ___ ____
Less allowance for losses...........
293,967
4,410
242,832
3,642
-51,135
-768
Net loans receivable_______
289,557
239,190
-50,367
Accounts and notes receivable:
Accounts receivable—Insur
ance premiums______
2,038,920
2,293,701
254,871
Accounts payable:
Bills payable to vendors and
Government agencies.......... .
Trust and deposit liabilities:
Deposits held for mortgagors,
lessees, and purchasers..........
9,344
6.871
-2,473
Deferred and undistributed
credits:
Unearned Insurance premi
ums........................ ........................
Other..............................................
27,035,781
2,749
27,964,662
4,276
928,881
1,527
Total deferred and undis
tributed credits...............
27,038,530
27,968,938
930,406
Total liabilities.
29,328.768
29,356,508
27.740
Insurance reserve—available for
future losses and expenses___
92,069,840
93.677,646
1,607,806
I
Total liabilities and re
serve...................................
121,398,608
123,034.154
1,635,546
i
RESERVE
-
For the fiscal year 1962, Title I Insurance Fund
income totaled $20,334,633, while expenses and
losses amounted to $10,731,491, leaving $9,603,142
net income before adjustment of valuation allow
ances. After the valuation allowances were in
creased by $4,786,497, there remained $4,816,645
net income for the year.
The maximum amount of claims that a quali
fied institution may present for payment is lim
ited to 10 percent of the eligible loans reported
by that institution for insurance. Section 2(a)
of the Act, as amended August 2, 1954, provides
that with respect to any loan, advance of credit,
or purchase made after the effective date of the
Housing Act of 1954, the amount of any claim for
loss on such individual loan, advance of credit,
or purchase paid by the Commissioner under the
provisions of this section to a lending institution
•f
129
Y
lected as interest and other income, making a total
of $40,573,885 accountable funds.
Funds accounted for at August 1, 1954
amounted to $40,541,285: $19,218,917 represent
ing recoveries and interest on claims deposited in
the general fund of the Treasury, and $21,322,368
representing expenses and losses, leaving a balance
of $32,600 for transfer to the Title I Insurance
Fund. This balance was represented by the net
assets on hand at August 1, 1954, which consisted
of $798 real property and $31,802 accounts and
notes receivable.
TITLE I HOUSING INSURANCE FUND
An amendment of April 20, 1950 to the Na
tional Housing Act (Public Law 475, 81st Con
gress) created the Title I Housing Insurance Fund
to be used by the FHA Commissioner as a revolv
ing fund for carrying out the provisions of Sec
tion 8 of Title I of the Act. This section provided
for the insurance of mortgages to assist families
of low and moderate income, particularly in sub
urban and outlying areas. The Housing Act of
1954 terminated the authority to insure under this
section of the Act. For the purposes of this fund,
the Act authorized the Commissioner to transfer
the sum of $1 million from the Title I Insurance
Fund. This is not a mutual insurance fund in the
sense that any portion of the net income from op
erations will be shared by mortgagors in the form
of participation payments.
Statement 7.—Comparative statement of financial condi
tion, Title I Housing Insurance Fund, as of June SO,
1961 and June SO, 1962
June 30,1961 June 30,1962
Increase or
decrease (—)
ASSETS
Cash with U.8. Treasury_____
$352,874
$612,166
$259,292
Investments: U.S. Govern
ment securities (amortized)...
2,203,157
2,048,157
-155,000
Loans receivable:
Mortgage notes and contracts
for deed................................
Less allowance for losses..........
3,862,880
57,943
4,210,667
63,160
347,787
5,217
Net loans receivable..........
3,804,937
4,147,507
342,570
Accounts and notes receivable:
Accounts receivable—Insur
ance premiums.....................
Accounts receivable—Other...
Accounts receivable—Interfund......................................
14,729
33
20,030
5,301
-33
1,776
3,367
1,591
Total accounts and notes
receivable____ ______
16,538
23,397
6,859
Accrued assets:
Interest on U.S. Government
securities............ .................
Other.......................................
4,870
22,915
4,927
28,042
57
5,127
Total accrued assets..........
27,785
32,969
5,184
Acquired security:
Real estate (at cost plus ex
penses to date).................. .
Less allowance for losses.........
1,131,744
219,117
1,542,085
135,452
410,341
-83,665
Net acquired security___
912,627
1,406,633
494,006
Total assets.......................
7,317,918
8,270,829
952,911
Accounts payable: Bills pay
able to vendors and Govern
ment agencies........... -..............
10,618
23,192
12,574
Capital and Net Income
Accrued liabilities: Interest on
debentures...................... ........
13,679
15,091
1,412
Assets of the Title I Housing Insurance Fund
at June 30, 1962 totaled $8,270,829, against which
there were outstanding liabilities of $1,218,697,
leaving $7,052,132 insurance reserve. Included in
the insurance reserve is the sum of $1 million
which was transferred from the Title I Insur
ance Fund in accordance with Section 8(h) of the
Act.
The total income of the Title I Housing Insur
ance Fund for fiscal year 1962 amounted to $878,672, while expenses and losses totaled $142,337,
leaving net income of $736,335 before adjustment
of the valuation allowances. The valuation al
lowances were decreased $78,448, resulting in a
net income of $814,783 for the year.
Trust and deposit liabilities:
Fee deposits held for future
disposition______________
Excess proceeds of sale______
Deposits held for mortgagors,
lessees, and purchasers....... .
45,812
67,557
21,745
60,371
65,928
5,557
Total trust and deposit li
abilities..........................
108,183
133,485
27,302
Deferred and undistributed
credits:
Unearned insurance pre
miums.................. ...............
Other.......................................
311,038
22,915
224,487
28,042
-86,551
5,127
Total deferred and un
distributed credits........
333,953
252,529
-81,424
LIABILITIES
Bonds, debentures, and notes
payable:
Debentures payable_______
616.551
794,400
177,849
Total liabilities______
1,080,984
1,218,697
137,713
Insurance reserve—available for
future losses and expenses.......
6,236,934
7,052,132
815,198
Total liabilities and re-,
serve...-------------------
7,317,918
8.270,829
952,911
Certificates of claim relating to
properties on hand_________
56,760
69,580
12,820
RESERVE
Investments
Section 8(i) of the Act provides that moneys in
the Title I Housing Insurance Fund not needed
for current operations shall be deposited with the
Treasurer of the United States to the credit of
the fund, or invested in bonds or other obligations
of, or in bonds or other obligations guaranteed as
to principal and interest by the United States; or
the Commissioner may, with the approval of the
Secretary of the Treasury, purchase debentures
issued under the fund, provided that such pur-
chases are made at a price that will produce an
investment yield of not less than the yield obtain
able from other authorized investments. During
fiscal year 1962, $178,650 of debentures were re
deemed in payment of mortgage insurance premi131
1/
Statement 11.—Comparative statement of financial con.mutual Mortgage Insurance Fund, as of June
SO, 1961 and June 30, 1962—Continued
June 30,1901 June 30,1962
Statement 12.—Income and expenses, Mutual Mortgage
Insurance Fund, through June 30, 1961 and June 30.
1962—Continued
Increase or
Decrease (—)
June 30,1934 July 1,1961 June 30,1934
to
to
to
June 30,1961 June 30, 1962 June 30, 1962
RESERVES
Statutory reserve—for partici
pation payments.................... $170,201,014
Insurance reserve—availablc'for
future losses and expenses...... 472, 608,082
$183,744,579
$7,543,665
546,816,472
74,308,390
Total reserves...................
648,709,09G
730,561,051
81,851,955
Total liabilities and re
serves........................... .
781,391,388 1,002,646,135
221,254,747
Certificates of claim relating to
properties on band.................
4,685,520
9,671,495
4,985,975
Expenses—Continued
Other expenses:
Depreciation on furniture
and equipment.................
Miscellaneous expenses___
$2,319,396
17,764
$44,868
48,198
$2,364,061
65,962
2,337,160
93,066
2,430,023
11,714,430
17,281,439
28,995,869
-66,463
-9,446
-75,897
11,647,977
17.271,993
28,919,972
498,418,303
68,587,988
566,961,155
796,192,605
Increase (-) or decrease (+)
in valuation allowances:
Allowance for loss on loans
receivable.............................
-900,887
Allowance for loss on real
estate........................ ........... -24,412,659
Allowance for loss on mort
gage notes acquired under
terms of Insurance_________
111,413,571
907,651,312
Losses and charge-offs:
Loss on acquired security...
Loss (or profit—) on equip
ment.................................
Total expenses...............
Income and Expenses
During fiscal year 1962 the income to the fund
amounted to $180,001,559, while expenses and
losses amounted to $68,587,988, leaving $111,413,571 net income before adjustment of valuation al
lowances. After the valuation allowances had been
increased $13,650,317, the net income for the year
was $97,763,254.
The cumulative income of the Mutual Mortgage
Insurance Fund from June 30, 1934 to June 30,
1962 amounted to $1,474,612,467, while cumulative
expenses amounted to $566,961,155, leaving
$9G7,651,312 net income before adjustment of valu
ation allowances. After $38,963,843 had been
allocated to valuation allowances, the cumulative
net income amounted to $868,687,469.
Statement 12.—Income and expenses, Mutual Mortgage
Insurance Fund, through June 30, 1961 and June SO,
1962
June 30,1934 July 1,1961 June 30,1934
to
to
to
June 30, 1961 June 30,1962 June 30,1962
Income:
Interest and dividends:
Interest on U.S. Govern
ment securities.................. $119,968,136
Interest—other.....................
2,429,5S5
Interest on mortgage notes..
Dividends on rental hous
ing stock.........................
311
122,398,032
Insurance premiums and fees:
Premiums______________
Fees.......................................
Other income:
Profit on sale of investments.
Income retained on settled
properties..........................
Miscellaneous income..........
Total Income.
$17,388,189
-336,102
4,557
$137,356,325
2,093,483
4,567
311
17,056,644
139,464,676
959,933,674
208,719,454
142,167,699
17,807, 383
1,102,101,373
226,526,837
1,168,663,128
159,976,082
1,328,628,210
1,829,815
12,445
1,842,260
1,723,054
6,879
2,957,382
6
4,680,436
6,885
3,559,748
2,969,833
6,629,581
1,294,610,908
180,001,559
1,474,612,467
Expenses:
Interest expense:
Interest on funds advanced
by U.S. Treasury.............
17,059,847
Administrative expenses:
Operating costs (including
adjustments for prior
years)........'.............. ......
467,373,319
17,059,847
51,222,929
618,551,313
Net income before adjustment
of valuation allowances...........
-1,237,271
-2,138,138
-12,390,177
-36,802,836
-22,869
-22,869
Net adjustment of valua
tion allowances________
-25,313,526
-13,650,317
-38,963,843
Net income.......................
770,879,079
97,763,254
868,687,469
ANALYSIS OF INSURANCE RESERVE
Distribution of net Income:
Statutory reserve:
Balance at beginning of
period..............................
Adjustments during the
riod
Net income allocated for
the period—.................
$176,201,014
$297,370,997
23,500,000
297,370,997
199,701,014
320,870,997
-15,956,435
-137,128,418
183,744,579
183,744,579
Participations in mutual
earnings distributed.. -121,169,983
Balance at end of period.
Insurance reserve:
Balance at beginning of
period...............................!
Adjustments during the
period................................
Net Income for the period...
Capital contributions to
other FHA Insurance
funds..........................
176,201,014
$320,870,997
472,508,082
473,508,082
+45,136
74,263,254
547.816,472
473,508,082
546,816,472
547,816,472
-1,000,000
-1,000,000
Balance at end of period.
472,508,082
546,816,472
546,816,472
Total reserves at end of
period.
648,709,096
730,561,051
730,561,051
Investments
Section 206 of the Act provides that excess mon
eys in the Mutual Mortgage Insurance Fund not
needed for current operations shall be deposited
with the Treasurer of the United States to the
credit of the fund, or invested in bonds or other
obligations of, or in bonds or other obligations
guaranteed as to principal and interest by the
United States; or the Commissioner may, with the
approval of the Secretary of the Treasury, pur
chase debentures issued under the fund, provided
that such purchases are made at a price which will
135
account of this fund, and at June 30, 1962 the
fund held U.S. Government securities in the prin
cipal amount of $850,000, yielding 2.00 percent, as
follows:
Investments of the Seo. 208 Home Improvement Account,
June SO, 1962
Series
1966.
Interest
rato
Purchase
(percent)
price
2
Average annual yield
2.00 percent..................
Book valuo
Par value (amortized)
$850,000
$850,000
$850,000
850,000
850,000
850,000
TITLE II: HOUSING INSURANCE FUND
The insurance risks on rental and group hous
ing insured under Sections 207 and 210 after Feb
ruary 3, 1938 on cooperative housing insured un
der Section 213, on housing for the elderly insured
under Section 231, and on housing for nursing
homes insured under Section 232 are liabilities of
the Housing Insurance Fund, which was estab
lished by an amendment to the National Hous
ing Act approved February 3, 1938.
Section 213, which was added to the Act by an
amendment approved April 20, 1950, authorizes
the insurance of mortgages on cooperative housing
properties. To be eligible for insurance under
Section 213, the mortgagor must be a nonprofit
cooperative ownership housing corporation, the
permanent occupancy of the dwellings being re
stricted to members (management type project),
or a nonprofit corporation organized for the pur
pose of building homes for members (sales type
project), or a corporation (investor sponsor) in
tending to sell proposed or rehabilitated housing
on completion to a nonprofit cooperative owner
ship housing corporation. In a sales type project,
when all the houses are completed the individual
properties may be released from the blanket mort
gage, and individual mortgages on the released
properties may be insured under Section 213.
The Housing Act of 1961, Public Law 87-70,
extended the provisions of Section 213 to permit
FHA to insure, under certain conditions, supple
mentary cooperative loans made with respect to
a management-type cooperative project for im
provements and repairs or necessary community
facilities.
Sections 231 and 232 were added to the Act by
amendments approved September 23, 1959.
Section 231 authorizes the insurance of multi
family property mortgages to assist in relieving
the shortage of housing for elderly persons and to
increase the supply of rental housing for elderly
persons.
Section 232 authorizes the insurance of multi
family property mortgages to assist in providing
urgently needed nursing homes for the care and
treatment of convalescents and other persons who
are not acutely ill and do not need hospital care,
but who require skilled nursing care and relatea
medical services.
Appraisal fees, insurance premiums, interest on
investments, and income from security acquired
under the terms of insurance are deposited with
the Treasurer of the United States to the credit of
the Housing Insurance Fund. Foreclosure losses
and general operating expenses of the Federal
Housing Administration under Sections 207 and
210 since February 3,1938, and under Sections 213,
231, and 232 are charged against the fund.
This is not a mutual insurance fund in the sense
that any portion of the net income from operations
will be shared by mortgagors in the form of participation payments. Any increase in the rund
resulting from operations is retained as a general
reserve to meet possible insurance losses and future
expenses in connection with Sections 207, 210, 213,
231, and 232 insurance. In accordance with Sec
tion 207(h) of the Act, the excess proceeds, if any,
from the sale of an acquired multifamily prop
erty, after deducting all costs incident to the acqui
sition, handling, and final disposition of the
property, are applied to the mortgagee’s certificate
of claim and increment thereon, and any remain
ing balance is credited to the Housing Insurance
Fund, except that with respect to individual mort
gages insured under the provisions of Section 213
(d), any excess remaining after payment of the
certificate of claim and increment thereon is for
refund to the mortgagor. Prior to enactment of
the amendments of August 10, 1948 to the Na
tional Housing Act, any excess remaining after
payment of the certificate of claim and increment
thereon was refunded to the mortgagor.
Capital and Net Income
Assets of the Housing Insurance Fund as of
June 30, 1962 totaled $70,861,276, against which
there were outstanding liabilities of $57,833,503.
The insurance reserve of the fund amounted to
$13,027,773, represented by $4,400,000 capital conStatement 17.—Comparative statement of financial con
dition, Housing Insurance Fund, as of June SO, 1961
and June SO. 1962
June 30,1961 June 30,1962
Increase or
decrease (—)
ASSETS
$2,769,598
$7,194,568
$4,424,970
Investments:
U.S. Government securities
(amortized)..........................
Other securities (stock in
rental housing corporations).
7,316,584
8,061,256
744,672
97,100
108,500
11,400
Total investments............
7,413,684
8,169,756
756,072
Loans receivable:
Mortgage notes and contracts
for deed_________
Less allowance for losses.
6,866,526
202,527
8,848,467
253,687
1,981,941
51.160
6,663,999
8.594,780
1,930,781
Cash with U.8. Treasury.
Not loans receivable.
139
684-285 0-63-10
\V
tributions from other FHA insurance funds and
earnings of $8,627,773.
In accordance with Public Law 94, 83d Con
gress, approved June 30.1953, the amount of capi
tal contributed to this lund by the U.S. Govern
ment for salaries and expenses in the amount of
$4,170,024 was established as a liability of the
fund as of June 30, 1953. This amount, together
with interest thereon in the amount of $1,386,666,
was repaid during fiscal year 1954, the final pay
ment being made on October 31,1953.
During the fiscal year 1962 the income of the
fund amounted to $16,910,643, while expenses and
losses amounted to $8,456,165, leaving $8,454,478
net income before adjustment of valuation allow
ances. After the valuation allowances had been
increased by $959,726, a net income of $7,494,752
resulted for the fiscal year.
the Treasury, used for the purchase of debentures
issued under Section 207 and Section 204. In the
fiscal year 1962, $3,733,250 of debentures were
redeemed in payment of mortgage insurance pre
miums and $2,206,500 were redeemed by debenture
calls. During the fiscal year 1962, net investments
amounting to $750,000 (principal amount) were
made for the account of this fund, and at June
30, 1962 the funds held U.S. Government securi
ties in the principal amount of $8,068,000, yield
ing 2.29 percent, as follows:
Investments of the Housing Insurance Fund, June SO, 1962
Interest
rate
Series
(percent)
1962
1962-67
1963
1965
1967
1967-1972
Investments
Section 207(p) of the National Housing Act
provides that excess moneys not needed for CUrrent operations under the Housing Insurance
Fund shall be deposited with the Treasurer of
the United States to the credit of the Housing
Insurance Fund or invested in bonds or other ob
ligations of, or in bonds or other obligations guar
anteed as to principal and interest by the United
States, or, with the approval of the Secretary of
VA
2
2
2
2Yx
Average annual yield
2.29 percent....................
Purchase
price
Par value
Book value
| (amortized)
$1,080,015
1.500.000
3.070.000
460.000
148.000
1,801,438
*1,090,000
1.500.000
3.070.000
460.000
148.000
1.800.000
$1,082,832
1.500.000
3.070.000
460.000
148.000
1,800,424
8,059,453
8,068,000
8,061,256
Property Acquired Under the Terms
of Insurance
During fiscal year 1962, 17 additional multi
family properties or assigned mortgage notes
(1,363 units) were acquired by the FHA Commis-
Housing Insurance Fund, statement of properties and assigned mortgage notes on hand as of June SO, 1962
Multifamlly
8ec. 207
15 projects,
2,169 units
Expenses:
Acquisition costs................................. .......... .............
Interest on debentures................................ ...............
Taxes and insurance..-------- ---------------------------Additions and improvements...............;............. .
Maintenance and operating......................................
Service charge........................................................ .......
Miscellaneous-........................................................... Accrued expenses payable.........................................
Total expenses...........................................................
Income and recoveries:
Rent and other (net).............................................—
Collections on mortage notes_______ __________
Undisbursed mortgage proceeds........ ............. .......
Total Income_________________ ______ ______
45 mortgage
notes, 4,768
units
$13,467,995 *$40,018,931
1,710,460
2,666,700
686,850
15,122
1,201,118
85,377
........31*212
5,225
20,360
5 projects,
319 units ‘
$6,092,093
282,711
62,827
57’762
12*451
46
6 mortgage
notes, 521
units *
4 *5,450,237
395,092
Total 635
properties,
51 mortgage
notes, 8,393
units
*7,901,592
313,855
62,977
1*347'
39,932
$72,930,848
5,368,818
812,654
15,122
1,392,873
96,309
53,475
60,338
“■*i34,'663'
10,932
3,240
17,133,117
42,770,233
6,507,880
5,859,501
8,453.706
80,730,437
2,372,540
2,982,494
677,705
244,333
328,227
225,401
102,471
1,315
5,928,909
903,106
102,471
2,372,540
3,660,199
244,333
656,099
1,315
6,934,486
14,760,577
39,116,034
5,203,402
8,452,391
72,866,856
Proceeds from partial sales of multifamily projects:
Estimated net Investment (sales price)................
Net acquired security on hand------------------------------
8ec. 213
homes, 615
properties,1
616 units
Sec. 213
-929,095
-929,095
1 Excludes 82 units in two partially sold multifamily properties with
estimated net investment of $929,095.
* Includes 17 units released in accordance with the provisions of the mort
gage.
1 Includes 14 properties and one large-scale unit repossessed and carried at
the asset value at time of repossession.
5,334,452
4 Seo following table:
Seo. 207
Outstanding balance of notes re
ceivable at date of acquisition. *40,018,931
Less:
Collection to principal.........
677,705
Undisbursed mortgage pro
ceeds__________________ ______ .......
Unpaid principal balance— *9,341,226
Sec. 213
Total
*5,450,237
*45,469,168
225,401
903,108
102.471
102,471
5,122,365
44.463,681
,/
/
1
141
\s
i
:
i
Statement 22.—Comparative statement of financial con
dition, Sec. 220 B ousing Insurance Fund, as of June SO,
1961 and June 30,1962
June 30,1961 June 30, 1962
I
r
:
:
■
Investments:
U.S. Government securities
(amortized)...............................
Other securities (stock in
rental housing corpora
tions).........................................
4,2S8,433
$1,765,853
2,937,785
Insurance reserve—available for
future losses and expenses........
$4,018,330
$4,899,757
$881,427
-1,350,648
Total liabilities and re
serve----------------------------
4,941,602
6,444,898
1,503,296
Certificates of claim relating to
properties on band------ ----------
1,147
60,058
48,911
$1,317,558
8,800
10,100
1,300
4,297.233
2,947,8S5
-1,349,348
31,277
469
64,655
970
33.378
501
Net loans receivable.
30. SOS
63.6S5
32,877
Accounts and notes receivable:
Accounts receivable—Fees and
insurance premiums—........
Accounts receivable—Inter
fund______________________
85,090
142,160
57,070
7,720
20,972
13,252
92,810
163,132
70,322
32,308
44,165
11,858
5,036
337
4,989
39,253
-47
38,915
Total accrued assets.
37.6S1
88,407
50,726
Acquired security:
Real estate (at cost plus ex
penses to date)------------- ....
Less allowance for Josses...........
40,670
5, S95
353,196
79,536
312,526
73,641
34,775
273,660
238,885
2,214,126
1,071,850
2,214,126
1,071,850
Total accounts and notes
receivable_______ ...__
Accrued assets:
Insurance premiums................
Interest on U.S. Government
securities.....
Other...................
Net real estate__
Mo rtgage notes acquired
under terms of insurance...
Less allowance for losses.........
Net mortgage notes ac
quired under terms of
insurance________________
:
1,142,276
1,142,276
Net acquired security............
34,775
1,415,936
1,381,161
Total assets...... .....................
4,941,602
6,444,898
1,503,296
33,754
33,754
2,190
2,029
LIABILITIES
Accounts payable: Bills pay
able to vendors and Govern
ment agencies------------...____
:■!
Accrued liabilities: Interest on
debentures___ ____________ _
Trust and deposit liabilities:
Fee deposits held for future
disposition.................................
Excess proceeds of sale.......... ..
Deposits held for mortgagors,
lessees, and purchasers—
161
15,100
22,325
1,786
7,225
1,786
234
17,161
16,927
15,334
41,272
25,938
Deferred and undistributed
credits:
Unearned insurance premi
ums_______________________
Unearned insurance fees...........
Other___ _____ ______________
837,657
58,965
1,255
1,250,039
61,117
40,029
412,382
2,153
38,773
Total deferred and undis
tributed credits________
897,877
1,351,185
453,308
Bonds, debentures, and notes
payable: Debentures payable.
9,900
95,050
85,150
21,690
21,690
923,272
1,545,141
621,869
Other liabilities: Reserve for
foreclosure costs—Mortgage
notes acquired under terms
of insurance__________________
Total liabilities.
144
Increase or
decrease (—)
BESEBVE
$448,295
Loans receivable:
Mortgage notes and contracts
for deed............................
Less allowance for losses.
!
:
;
June 30, 1961 June 30,1962
Increase or
decrease (—)
ASSETS
Cash with XJ.S. Treasury.
Total investments...........
I
Statement 22.—Comparative statement of financial con
dition, Sec. 220 Bousing Insurance Fund, as of June 30,
1961 and June 30,1962—Continued
Investments
Section 220(g) of the Act provides that moneys
in the Section 220 Housing Insurance Fund not
needed for current operations shall be deposited
with the Treasurer of the United States to the
credit of the fund, or invested in bonds or other
obligations of, or in bonds or other obligations
guaranteed by the United States; or the Commis
sioner may, with the approval of the Secretary of
the Treasury, purchase debentures issued under
this fund, provided that such purchases are made
at a price which will produce an investment yield
of not less than the yield obtainable from other
authorized investments. In the fiscal year 1962,
$35,000 of debentures were redeemed in payment
of mortgage insurance premiums and $2,143,700
were redeemed by debenture calls. During the
fiscal year 1962 net redemptions of $1,360,000
(principal amount) were made for the account
of this fund, and at June 30, 1962 the fund held
U.S. Government securities in the principal
amount of $2,940,000, yielding 2.61 percent, as
follows:
Investments of the Sec. 220 Housing Insurance Fund,
June SO, 1962
Series
1962
1963
1963
1964
1964
1965
1967
Average annual yield
2.61 percent......................
Interest
rate
(percent)
2
3 y*
2
354
2
2
Purchase
price
Par value
Book value
(amortized)
$331,951
140.000
1,130,000
550.000
85,000
250.000
450.000
$335,000
140.000
1,130,000
650.000
85,000
250.000
450.000
$332,785
140.000
1,130,000
650.000
85,000
250.000
450.000
2,936,951
2,940,000
2,937,785
Properties Acquired Under the Terms
of Insurance
During fiscal year 1962, 1 mortgage. note as
signed (132 units) and 32 home properties insured
under Title II, Section 220 were acquired by the
Commissioner under the terms of insurance and 3
were sold. Through June 30, 1962, a total of 39
home properties had been acquired at a total cost
of $428,572, and 6 had been sold at prices which
!
!
Statement 23.—Income and expenses, Sec. 220 Housing
Insurance Fund, through June 30, 1961 and June SO,v
1962
Aug. 2,1064 July 1,1961
Aug. 2, 1954
to
to
June 30,1061 Juno 30, 1962 Juno 30, 1962
to
Income:
Interest and dividends:
Interest on U.S. Govern
ment securities...................
Interest—Other.......................
Other Income:
Profit on sale of Invest
ments__________________
Income retained on settled
properties...........................
Total Income.
Expenses:
Administrative
expenses:
Operating costs (including
adjustments for prior years) _
$385,160
16,979
267,246
134,893
402,139
3,305,509
2,949,440
1,715,132
1,218,641
6,020,641
4,167,987
6,264,956
2,933,673
9,188,628
27
27
366
2,112
2,478
366
2,139
2,606
6,522,567
3,070,705
9,593,272
3,479,416
Other expenses:
Depreciation on furniture
and equipment__________
Miscellaneous expense_____
Losses and charge-offs:
Loss on acquired security.
Loss (or profit —) on
equipment.........................
Total expenses.............
1,040,515
4,517,354
16,029
932
19
16,949
19
16,029
951
16,968
3,172
4,604
7,776
-743
-196
-939
2,429
4,408
6,837
3,497,873
1,045,874
4,641,159
3,024,694
Increase (—) or decrease (+) in
valuation allowances:
Allowance for loss on loans
receivable..................................
Allowance for loss on real
estate...........................................
Allowance for loss on mort
gage notes acquired under
terms of Insurance..................
•
2,024,831
Sec. 220 Homea,
6 properties,
0 units
Proceeds of sale:
8ales price1............................................................
Less commission and other selling expenses.
$67,600
2,955
Net proceeds of sales...................................
64,645
Expenses:
Debentures and cash adjustments.
Interest on debentures......................
Taxes and insurance.......................
Maintenance and operating............
66,458
1.844
672
1,661
Total expenses............ .................. .......................................
70,635
Net profit (or loss -) before distribution of liquidation
profits..............................................................................................
-5,990
Less distribution of liquidation profits:
Certificates of claim........................... ....................................
Increment on certificates of claim................................... ’*
Refunds to mortgagors...................................... ..........
592
9
1,185
Loss (—) to Sec. 220 Housing Insurance Fund...........
-7,770
Analysis of terms of sales:
Terms of sales.
Number
of prop
erties
Number
of notes
6
6
Cash
Mortgage
notes
$2,400
$65,200
Sales
price
$67,600
5,062,113
-469
-601
-970
-5,895
-73, 641
-79, 536
-1,071,850
-1,071,850
-6,364
-1,145,992
-1,162,356
3,018,330
878,839
3,899,757
The turnover of Section 220 acquired security by
calendar year is shown below:
Statement 25.—Turnover of properties acquired and
mortgage notes assigned under Sec. 220 of Title II con
tracts of insurance by years and cumulative through
Dec. SI, 1962
Properties and notes acquired
ANALYSIS OF INSURANCE RESERVE
Distribution of net income:
Insurance Reserve:
Balance at beginning of
period.........
during
the
Adjustments
period..........................................
Net Income (or loss -) for the
period.........................................
Statement 24.—Statement of profit and loss on sale of
acquired properties, Sec. 220 Housing Insurance Fund,
through June SO, 1962
Properties sold for
cash and notes..
Net income before ad
justment of valuation
allowances......................
Net Income..........................
$118,044
16,849
Items
Insurance premiums and fees:
Premiums................................
Fees............................................
Net adjustment of valua
tion allowances................
$267,116
130
left a net charge against the fund of $7,776, or
an average of $1,296. Certificates of claim issued
on the six properties sold amounted to $2,318, of
which $592 was to be paid and $1,726 was to be
canceled.
Year
Number
Properties sold,
by calendar years
1960
1961
Properties
and notes
on hand
Dec. 31,1962
1962
$4,018,330
+2,588
$3,018,330
878,839
$3,899,757
3,018,330
4,899, 767
3,899,757
Capital contributions from
other FHA Insurance funds.
1,000,000
Balance at end of period..
4,018,330
1,000,000
4,899,757
4,899,757
1960
1961
1962
Total.
6
6
32
3
2
2
1
1
4
31
44
3
5
136
i Includes 33 of the 41 home properties acquired.
Note.—On the 8 home properties sold, the average time between acquisi
tion and sale by the Federal Housing Administration was 11.02 months.
t
684-285 0-63-10
145
cipal and interest, by the United States. During
the fiscal year 1962, net investments amounting
to $850,000 (principal amount) were made for the
account of this fund, and at June 30, 1962 the
fund held U.S. Government securities in the prin
cipal amount of $850,000, yielding 2.00 percent, as
follows:
less $3,500,000 transferred from other insurance
funds.
Statement 28.—Comparative statement of financial con
dition, Sec. 221 Housing Insurance Fund, as of June
30,1961 and June SO, 1962
Juno 30,1961 June 30, 1962
Investments of the Sec. 220 Home Improvement Account,
Jwne 30, 1062
Scries
1960.
Interest Purchase
rate
price
(percent)
2
Par
value
ASSETS
Book
value
(amortized)
Cash with U.S. Treasury...........
$530,552
Investments: U.S. Govern
ment securities (amortized)__
100,000
Loans receivable:
Mortgage notes and contracts
for deed.......................
Less allowance for losses.
974,125
14,612
3,238,639
72,831
2,264,514
58,219
Net loans receivable.........
$850,000
$850,000
$850,000
850,000
850,000
850,000
Average annual yield 2.00
percent.............. .................
Increase or
decrease (-)
TITLE II: SECTION 221 HOUSING
INSURANCE FUND
Section 221 Housing Insurance Fund was
created by Section 221 of the National Housing
Act as amended August 2, 1954 (Housing Act
of 1954, Public Law 560, 83d Congress), which
authorized the insurance, in communities that
have requested it, of mortgages on low-cost hous
ing for families displaced because of urban renewal projects.
The Housing Act of 1961, Public Law 87-70,
amended Section 221 and provides that Section 221
mortgage insurance program will apply to home
and rental housing for low and moderate income
families as well as families displaced from urban
renewal areas or as a result of governmental action.
In addition, Section 221 was amended to provide
a “below market” (low interest rate) rental hous
ing program. Under this program the FHA
Commissioner may insure, with reduced or no in
surance premiums, a mortgage bearing an interest
rate below the market rate, provided that the
mortgagor is (a) a private nonprofit corporation
or association (b) a limited dividend corpora
tion (c) a cooperative or (d) a public body or
agency which certifies that it is not receiving fed
eral financial assistance exclusively for public
housing. This is not a mutual insurance fund in
the sense that any portion of the net income from
operations will be shared by mortgagors in the
form of participation payments.
For the purposes of this fund, the act authorized
the Commissioner to transfer the sum of $1 mil
lion from the War Housing Insurance Fund.
Capital and Net Income
At June 30, 1962, assets of the fund amounted
to $25,533,145. There were outstanding liabili
ties of $27,774,787, leaving a deficit of $2,241,642.
This represents an operating loss of $5,741,642,
$1,374,600
$844,048
-100,000
959,513
3,165,808
2,206,295
Accounts and notes receivable:
Accounts receivable—Fees
and insurance permiums___
Accounts recc ivable—Other—
Accounts receivable—Inter
fund......................................
47,147
23
144,320
104
97,173
81
4,825
21,709
16,884
Total accounts and notes
receivable......................
51,995
166,133
114,138
519,698
729,187
209,489
1,477
6,154
24,712
-1,477
18,558
Accrued assets:
Insurance premiums...............
Interest on U.S. Government
securities......... ....................
Other............. .........................
Total accrued assets.
527,329
753,899
226,570
Acquired security:
Real estate (at cost plus ex
penses to date)......................
Less allowance for losses..........
16,211,933
3,088,667
26,375,901
6,662,860
10,163,968
3,574,193
Netrealestate...................
13,123,266
19,713,041
6,589,775
850,413
490,749
850,413
490,749
Mortgage notes acquired un
der terms of insurance_____
Less allowances for losses___
Net mortgage notes ac
quired under terms of
insurance.—............ ......
359,664
359,664
Net acquired security.......
13,123,266
20,072,705
6,949,439
Total assets.......................
15,292,655
25,533,145
10,240,490
Accounts payable: Bills payablo to vendors and Govern
ment agencies........ .................
11,155
65,561
54,406
Accrued liabilities: Interest on
debentures...............................
352,689
561,008
208,319
Trust and dcpositliabilities:
Fee deposits held for future
disposition............................
Excess procecdsof sales...........
Deposits held for mortgagors,
lessees, and purchasers____
145.925
2,271
383.550
4,763
237,625
2,492
44,561
104,206
59,645
Total trust and deposit
liabilities........................
192,757
492,519
299,762
Deferred and undistributed
credits:
Unearned insurance pre
miums...................................
Unearned Insurance fees_____
Other............... -......................
151,976
5,803
12,196
127,780
80,057
39,925
-24,196
74,25i
27,729
Total deferred credits.......
169,975
247.762
77,787
Bonds, debentures, and notes
payable: Debentures payable
15,374,950
26,399,700
11,024,750
8,237
8,237
16,101,526
27,774,787
11,673,261
LIABILITIES
Other liabilities: Reserve for
foreclosure cost—Mortgage
notes acquired under terms of
Insurance........................... ......
Total liabilities..
. !
ir
147
s
■
I
r
r
Statement 2S.—Cotnparntim statement of financial con
dition, See. 221 Housing Insurance Fund, as of June
SO, 1961 and June SO, 1902—Continued
June 30, 1961 Juno 30,1962
RESERVE
—SS0S.S71
-$2,241,642
-$1,432,771
Total liabilities and re
serve...............................
15.292.655
25,533,145
10,240,490
I
374,473
6SS.914
Income:
Interest and dividends:
Interest on U.S. Govern
ment securities.................
Interest on mortgage notes
and contracts for deed__
$123,668
$2,785
Investments
Section 221 (h) of the Act provides that moneys
in the Section 221 Housing Insurance Fund not
needed for current operations shall be deposited
with the Treasurer of the United States to the
credit of the fund, or invested in bonds or other
obligations of, or in bonds or other obligations
guaranteed by the United States; or the Commis
sioner may, with the approval of the Secretary of
the Treasury, purchase debentures issued under
this fund, provided that such purchases are made
at a price which will produce an investment yield
of not less than the yield obtainable from other
authorized investments. In the fiscal year 1962,
$971,550 of debentures were redeemed in payment
of mortgage insurance premiums. During the
fiscal year 1962 net redemptions of $100,000 (prin
cipal amount) were made for the account of this
fund.
Properties Acquired Under the Terms
of Insurance
During fiscal year 1962, 3 multifamily proper
ties or assigned mortgage notes (104 units) and
1,424 home properties or assigned mortgage notes
insured under Title II, Section 221 were acquired
by the Commissioner under the terms of insur
ance. Also, there were sales of 2 multifamily
properties (127 units) and 188 home properties
during the fiscal year. Through June 30, 1962,
a total of 6 multi family properties (941 units)
and 2 mortgage notes assigned (93 units) were
acquired at a total cost of $8,891,962 and 2 multi
family properties (127 units) were sold, leaving a
net charge of $429,759 to the fund, or an average
of $3,384 per unit. A total of 2,500 home prop-
Insurance premiums and fees:
Premiums.............................
Fees...........................-.........
Other income:
Profit on sale of invest
ments.............................
Income retained on settled
properties........... ...........
$128,453
344
344
123,668
3.129
126,797
2,238,148
1, 539,198
1,509,016
788,734
3, 747,164
2,327, 932
3,777,346
2,297,750
6,075,096
109
109
29,449
66, 948
96,897
374,473
During the fiscal year 1962, the income to the
fund amounted to $2,367,936 while expenses and
losses amounted to $2,164,533, leaving an oper
ating income of $203,403 for the period before
adjustment of valuation allowances. Valuation
allowances were increased in the amount of
$4,123,161 resulting in net loss of $3,919,758 for
the year. From inception August 2, 1954, to
June* 30. 1962, operations resulted in a net loss of
$5,741,642 as shown on Statement 29.
148
Aug. 2, 1954 July 1, 1961 Aug. 2, 1954
to
to
to
Juno 30, 1961 Juno 30, 1962 Juno 30,1962
Increase or
decrease (-)
Insurance reserve—available for
future, losses and expenses.......
Certificates of claim relating to
properties on hand...................
Statement 29.—Income and expenses, Sec. 221 Housing
Insurance Fund, through June SO, 1961 and June SO,
1962
29.449
67,057
96,606
3, 930, 463
2,367,936
6,298,399
Expenses:
Interest expense:
Interest on debenture obli
gations........... ...................
1,863
80,064
81,927
Administrative expenses—
Operating costs (including
adjustments for prior years).
2,461,886
1,372,649
3,847,489
11,525
1,216
4,315
12,799
4,315
11,525
5,531
17,114
161,259
706,546
867,805
-478
-257
-734
160,781
706,289
867,071
Total expenses___ _____
2,636,055
2,164, 533
4,813,601
Net income (or loss —)
before adjustment of
valuation allowances__
1,294, 408
203, 403
1,484,798
Total income.
Other expenses:
Depreciation on furniture
and equipment_________
Miscellaneous expense.........
Losses and charge-offs:
Loss on acquired security—
Loss (or profit —) on equip
ment_______________
Increase (—) or decrease (+) In
valuation allowances:
Allowance for loss on loans
receivable______________
Allowance for loss on real
estate......................... ..........
Allowance for loss on mort
gage notes acquired under
terms of insurance...............
-14,612
-58,219
-72,831
-3,088,667
-3,574,193
-6,662.860
-490,749
-490,749
Net adjustment on valu
ation allowances______
-3,103,279
-4,123,161
-7,226,440
Net income (or loss —)...
-1,808,871
-3,919,758
-5,741,642
ANALYSIS OF INSURANCE RESERVE
Distribution of net Income:
Insurance reserve:
Balance at beginning of
period.......
Adjustments during the
period___ ____________
Net Income (or loss —) for
the period.........................
Capital contributions from
other FHA insurance funds.
Balance at end of period..
-$808,871
-13,013
-$1,808,871
-3,919,768
—$5,741,642
-1,808,871
-4,741,642
-6,741,642
1,000,000
2,600,000
-808,871
-2,241,642
3,600,000
-2,241,642
erties and one mortgage note assigned were ac
quired through June 30, 1962 at a total cost of
$22,639,537, and 315 had been sold at prices which
left a net charge against the fund of $438,046. or
an average of $1,391 per case.
Statement 30.—Statement of profit and loss on sale of
acquired properties, Sec. 221 Housing Insurance Fund
through June SO, 1962
’
under this fund was as shown in the table (at the
to p of page 182.)
Statement 31 shows the turnover of Section 221
Housing Insurance Fund acquired security since
the first such acquisition in 1958 through December
31, 1962.
Sec. 221
Items
Total Sec. 221
Fund, 317
properties,
442 units
Homes, 315
properties,
315 units
Multifamily,
2 properties,
127 units
Proceeds of sale:
Sales price *.............................
Less commissions and other
selling expenses....................
$2,659,380
$778,000
116,333
4,118
120,461
Net proceeds of sales........
2,643,047
773,882
3,316,929
Income:
Rental and other Income
(net).....................................
Mortgage note income______
Recovery prior to acquisition
on defaulted notes...............
9,831
Total income............ .......
9,907
47,144
29,604
56,976
29,604
76,748
86,655
860,630
3,403,584
1,163,858
3,923,401
76
2,662,954
Expenses:
Debentures and cash adjust
ments....................................
Asset value acquired after de
fault of purchase money
mortgages.............................
Purchase of land held under
lease............... ......................
Interest on debentures............
Additions and improvements.
Taxes and insurance..... ..........
Maintenance and operating...
Service charge..........................
Miscellaneous..........................
2,769,643
-17,138
Total expenses.................. .
Net profit (or loss —) before dis
tribution of liquidation profits.
Less distribution of liquidation
profits:
Certificates of claim________
Increment on certificates of
claim..................................... I
Refunds to mortgagors............
Loss (-) to Sec. 221
Housing
Insurance
Fund......................... .
-17,138
60
68,432
590
41,936
132,745
21
68
92,796
60
17,169
3,626
2,327
563
50
161,228
640
59,105
136,371
2,348
621
2,986,237
1,280,389
4,266,626
-433,283
-429,759
-863,042
1,842
1,842
26
2,895
28
2,895
-438,046
-429,769
-867,805
1 Analysis of terms of sales:
Terms of sales
Num
ber of
prop
erties
Num
ber of
notes
Cash
Mortgage
notes
Sales
price
Properties sold for
cash........................
Properties sold for
cash and notes (or
contracts for deed) .
307
307
103,976 $3,270,700
3,374,676
Total...............
317
307
166,680
3,437,380
10
Properties acquired
$3,437,380
76
Total proceeds of sold
properties..................... .
Statement 31.—Turnover of properties acquired and
mortgage notes assigned under Sec. 221 of Title II con
tracts of insurance, by years and cumulative through
Dec. SI, 1962
$62,705
$62,706
3,270,700
The certificates of claim issued on two multi
family projects in the amount of $23,808 is to be
canceled. In addition, certificates of claim were
issued on 315 homes sold in the amount of $107,938,
with $1,842 to be paid and $106,096 canceled or to
be canceled.
The cost on June 30, 1962 of the 2,186 home
properties and mortgage notes assigned and the
6 multifamily properties and mortgage notes
assigned (907 units) which remained on hand
I
Year
1958
1959
1960
1961
1962
Properties sold, by calendar year Properties
and notes
on band
Number 1958 1959 1960 1961 1962 Dec. 31,1902
2
43
403
1,205
1,488
Total.
3,141
1
1
1
13
14
12
54
66
62
45
21
153
146
15
286
1,007
1,342
110
320
« 2,630
3
1 Includes 2,623 of the 3,132 home properties acquired and mortgage notes
assigned.
Note.—On the 509 home properties sold, the average time between ac
quisition and sale by the Federal Housing Administration was 7.92 months;
on the 2 multifamily projects sold the average time was 6.77 months. The
number of properties sold has been reduced by 10 properties repossessed
because of default on mortgage notes. Of these repossessions, none had been
sold by Dec. 31, 1962.
TITLE II: SERVICEMEN’S MORTGAGE
INSURANCE FUND
The Servicemen’s Mortgage Insurance Fund
was created by Section 222 of the National Hous
ing Act as amended August 2, 1954 (Housing
Act of 1954, Public Law 560,83d Congress). The
purpose of this section is to aid in the provision
of housing accommodations for servicemen in the
Armed Forces of the United States and in the
Coast Guard of the United States, and their fami
lies. Section 222 provides for the insurance of
mortgages which would be eligible for insurance
under Section 203, except that when executed by
a mortgagor who is a serviceman and who, at the
time of insurance, is the owner of the property,
and either occupies the property or certifies that
his failure to do so is a result of his military or
Coast Guard assignment, the maximum ratio of
loan to value may, in the discretion of the Com
missioner, exceed the maximum ratio of loan to
value prescribed in Section 203. but not to exceed
$20,000, or such higher value as may be approved
by the Commissioner in high cost areas. This is
not a mutual insurance fund in the sense that any
portion of the net income from operations will be
shared by mortgagors in the form of participation
payments.
For the purposes of this fund, the Act author
ized the Commissioner to transfer the sum of $1
million from the War Housing Insurance Fund.
Capital and Net Income
As of June 30, 1962, the fund had assets of
$36,058,548 and outstanding liabilities of $16,111,871, leaving $19,946,677 insurance reserve. In-
i,
tr
149
Li
f I
See. 221 Housing Insurance Fund, statement of properties and assigned mortgage notes on hand at June SO, 1962
See. 221
Homes
2,185 proper
ties,! 2,185 units
i
■
Expenses:
Acquisition costs...............................................................
Interest on debentures......................... ...........................
Taxes and insurance........ .................................................
Additions and improvements....................................... .
Maintenance and operating............................................
Service charge......................................................................
Miscellaneous____________________ _____________ _
Accrued expenses payable................................................
i
■
?
:.
1 mortgage
note, 1 unit
$18,459,048
728,765
184,437
3,037
165,714
$9,464
4 properties,
814 units
2 mortgage
notes, 93 units
*6,489,849
482,546
170,418
54,511
477,146
1*468
102
Total, 2,189
properties, 3
mortgage notes,
3,093 units
$823,660
17,151
$25,782,021
1,228, 452
354,855
57,548
642,860
138
1,570
35,443
138
276
35,167
Total expenses..............................................................
Income and recoveries: Rent and other income (net)
19,576,260
43,613
9,464
7,676,214
832,960
840,949
28,102,887
876, 673
Net acquired security on hand--------------------- ........
19,532,647
9,464
6,843,254
840,949
27,226,314
!
1
Multifamily
;
> Includes 2 properties repossessed and carried at asset value at time of repossession.
eluded in the insurance reserve is the sum of $1
million which was transferred from the War
Housing Insurance Fund.
For the fiscal year 1962, income of $7,101,918
was earned, while expenses and losses were $1,294,452, leaving net income of $5,807,466 before ad
justment of valuation allowances. Valuation
allowances were increased in the amount of
$817,201, resulting in a net income of $4,990,265
for the year. Total net income from inception,
August 2, 1954, to June 30, 1962 was $18,946,677,
as shown in Statement 33.
Investments
Section 222(f) of the Act provides that moneys
in the Servicemen’s Mortgage Insurance Fund not
needed for current operations shall be deposited
with the Treasurer of the United States to the
credit of the fund, or invested in bonds or other
obligations of, or in bonds or other obligations
guaranteed by the United States; or the Commis
sioner may, with the approval of the Secretary
of the Treasury, purchase debentures issued under
this fund, provided that such purchases are made
at a price which will produce an investment yield
of not less than the yield obtainable from other au
thorized investments. In the fiscal year 1962,
$627,800 of debentures were redeemed in payment
of mortgage insurance premiums, $3,494,050 were
redeemed by debenture calls, and $30,000 were re
deemed in exchange of mortgage notes for deben
tures, During the fiscal year the fund decreased
150
its investment in U.S. Government securities by
$2,281,000 (principal amount), and. as of June 30,
1962 the fund held U.S. Government securities in
the principal amount of $8,132,000, yielding 3.46
percent, as follows:
Investments of the Servicemen's Mortgage Insurance
Fund, June SO, 1962
Series
1962
1963
1963
1961
1964
1964
1961-69
1965
1965
1966
1967
1967.
Average annual yield
3.46 percent............ .........
Interest
rate
(percent)
Purchase
price
Par valuo
Book value
(amortized)
$1,227,539
100,000
240.000
524,063
1,339,325
531.000
*y*
85,812
2H
2
100.000
2H 2,025,074
2
650.000
2
925.000
270.000
3H
$1,240,000
100,000
240.000
540.000
1.344.000
528.000
100.000
100,000
2.195.000
550.000
925.000
270.000
$1,231,526
100,000
240.000
532,875
1,341,658
529,292
89,629
100.000
2,114,060
550.000
925.000
270.000
7,917,813
8,132,000
8,024,040
4U
3
3%
Properties Acquired Under the Terms
of Insurance
During fiscal year 1962, 1,189 properties were
acquired by the Servicemen’s Mortgage Insurance
Fund and 371 were sold. Through June 30,1962,
a total of 1,936 home properties had been acquired
at a total cost of $23,680,662 and 542 had been sold
at prices which left a net charge against the fund
of $825,011, or an average of $1,522 per case.
i
}
j
Statement 34.—Statement of profit and Joss on sale of
acquired properties, Servicemen's Mortgage Insurance
Fund, through June SO, 1962
Sec. 222
(542 properties)
Item
Proceeds of sales:
!
;
:
1
Sales price1...... ................................................
Less commissions and other selling expenses.
$6,276.710
285,363
Net proceeds of sales.......................................
5,991.347
Income:
Rental and other income (net).....-...................
Mortgage note income..........................................
Recovery price to acquisition of defaulted notes
38,099
11,614
1,772
51,485
Total Income...............................
6,042,832
Total proceeds of sold properties.
6,852,953
Total expenses................................. .............................
i
Net profit (or loss-) before distribution of liquidation
profits.............. —.................................. -............................
Less distribution of liquidation profits:
Certificates of claim.........................................................
Increment on certificates of claim........................... ........
Refund to mortgagors.......................................................
-810,121
8,054
86
6,750
-825,011
Loss (—) to Servicemen’s Mortgage Insurance Fund.
!
i Analysis of terms of sales:
Terms of sales
Num Num
ber of ber of
prop notes
erties
Cash
Mortgage
notes
Sales
price
Properties sold for all
cash.----- -----------Properties sold for
cash and notes (or
contracts for deed)..
527
527
250,360 $5,876,100
6,126,460
TotaL...............
542
527
400, 610
5,876,100
6,276,710
$150,250
$150,250
15
On June 30, 1962, the cost of the 1,394 prop
erties which remained on hand under the Service
men^ Mortgage Insurance Fund was as follows:
Servicemen's Mortgage Insurance Fund, statement of
properties on hand at June 30, 1962
Sec. 222 (1,394
properties) »
Expenses:
Acquisition costs-------------- Interest on debentures---------Taxes and insurance_______
Maintenance and operating...
Additions and improvements.
Miscellaneous------------- ------ Accrued expenses payable-----
$15,714,042
539,386
133, 691
173,320
25
158
70,520
Total expenses----------------Income: Rent and other (net)-----
16,631,142
52,201
Net acquired security on hand—
16,578,941
i includes 1 property repossessed and carried at the asset value at time of
repossession.
Statement 35 shows the turnover of Section 222
acquired properties since the acquisition of the
152
'
Properties acquired
Year
1957
195S
1959
1960
1961
1962
Properties sold, by calendar year Properties
on hand
Deo. 31,
Number 1957 1059 1959 1960 1961 1962
1962
4
17
47
294
810
1,548
3
2,720
3
1
7
7
11
8
18
1
17
54
72
2
7
3
9
122
79
119
39
334
316
1,232
207
692
1,720
.
:
367
6,364,602
-12,979
165,629
106,615
120
228,224
753
-11
\
Statement 35.—Turnover of properties acquired under
Sec. 222 of Title II, contracts of insurance, by years and
cumulative through Dec. SI, 1962
Total.
Expenses:
Debentures and cash adjustments...................................
Asset value acquired after default of purchase money
mortgages........................................................................
Interest on debentures......................................................
Taxes and insurance.........................................................
Additions and improvements...................... -....... ——
Maintenence and operating.............................................
Service charge....................... .............. .—.......................
Miscellaneous....................................................................
i
first such property in 1957 through December 31,
1962.
Note.—On the 1.000 properties sold, the average time between acquisiton
and sale by the Federal Housing Administration was 8.17 months. The
number of properties sold had been reduced by 4 properties repossessed
because of default on mortgage notes. Of these repossesions, 2 had been sold
by Dec. 31, 1962.
Section 222 of the Act contains provisions iden
tical to Section 204(f) under the Mutual Mortgage
Insurance Fund with respect to the issuance of
certificates of claim on properties acquired. Cer
tificates of claim issued m connection with the 542
Section 222 properties which had been acquired
and sold through June 30, 1962 totaled $245,876,
of which $8,054 was to be paid and $237,822 had
been or was to be canceled. In addition, there were
excess proceeds amounting to $6,750 on 14 of the
542 properties sold, for refund to the mortgagors.
TITLE II: EXPERIMENTAL HOUSING
INSURANCE FUND
The Experimental Housing Insurance Fund
(Section 233) was created by an amendment of
June 30,1961, Public Law 87-70, which authorized
the insurance of mortgages on homes or rental
housing involving the use' of advanced technology
in housing design, materials, construction, or ex
perimental neighborhood design, deemed signifi
cant in reducing cost or improving quality.
The purpose of tliis program is to assist in
lowering housing costs and improving housing
standards, quality, livability, or durability through
advanced techniques. This is not a mutual fund in
the sense that any portion of the net income from
operations will be shared by mortgagors in the
form of participation payments.
Capital and Net Income
On June 30,1962, the assets of the Experimental
Housing Insurance Fund totaled $965,659. The
outstanding liabilities were $25, which left insur
ance reserve of $965,634. Included in the reserve
is a $1 million contribution from War Housing
Insurance Fund.
During the fiscal year 1962, the income of the
fund amounted to $13,852, while expenses
amounted to $48,218, leaving a. net expense of
i
Statement 41.—Income and expenses, War Housing In
surance Fund, through June SO, 1961 and June SO,
1962
;
Mar. 28, 1941 July 1,1961 Mar. 28,1941
to
to
to
June 30,1961 June 30, 1962 June 30,1962
i
1
1
Income:
Interest and dividends:
Interest on U.S. Govern
ment securities....................
Interest—Other.......................
Dividends on rental hous
ing stock.................................
f
)
i
Insurance premiums and fees:
Premiums________________
Fees.............................................
Other Income:
Profit (or loss —) on sale of
investments..........................
Income retained on settled
properties...............................
Miscellaneous income...........
.1
:
I
Total Income.
$15,684,275
39,60S, S73
$828,172
5,605,230
$16,512,447
45,214,103
23.6S9
1,756
25,445
55.316.S37
6,435,158
61,751,995
321.439.5S2
45,156,036
14,566,179
29,220
336,005,761
45,185,256
366,595,618
14,595,399
381,191,017
1,220,626
3,493
246,252
MS
1,466.878
4,141
694,216
246,900
941,116
422,606,671
21,277,457
443, SS4,128
-529,903
-529,903
1,390,010
Administrative expenses:
Operating costs (including
adjustments for prior years).
81.912.5S5
1,515,070
83,361,450
Other expenses:
Depreciation on furniture
and equipment__________
Miscellaneous expenses____
428,070
11,300
1,685
842
429,456
12,142
439,370.
2,527
441,598
56,396,405
2,232,965
58,629,370
-21, M5
-355
-21,897
56,374,860
2,232,610
58,607,473
140,116,825
3,750,207
143,800,531
282,489,846
17,527,250
300,083,597
Total expenses__________
Net income before adjustment
of valuation reserves_________
Increase (—) or decrease (+) in
valuation allowances:
Allowance for loss on loans
receivable.................................
-3,910,732
Allowance for loss on real
estate............................. ............. -27,214,958
Allowance for loss on mort
gage notes acquired under
terms of insurance.................. -26,844,261
1,390,010
29,073
-3,881,659
-2,901,316
-30,116.274
-1,386,290
-28,230,551
Net adjustment of valu
ation allowances_______
-57,969,951
-4,258,533
-62,228,484
Net income.............. .............
224,519,895
13,268,717
237,855,113
ANALYSIS OF INSURANCE RESERVE
Distribution of net income:
Insurance reserve:
Balance at beginning of
period_____ _____ _______
Adjustments during the
period....... ................. .............
Net income for the period— $224,519,895
$203,209,895
224,519,895
216,546,113
Capital contributions to other
FHA Insurance funds______
-21,310,000
Balance at end of period..
203,209,895
156
Investments of the War Housing Insurance Fund,
June SO, 1962
Series
Expenses:
Interest expenses: Interest on
hinds advanced by U.S.
Treasury....................................
Losses and charge-offs:
Loss on acquired security...
Loss (or profit —) on equip
ment........................................
30, 1962 to $42,117,500, principal amount, yield
ing 2.41 percent, as follows:
+66,501
13,268,717
$237,855,113
237,855,113
-21,310,000
216, M5,113
216,545,113
1962
1963
1964-69
1965
1966-71
1967
1967-72
Average annual yield 2.41
porcent..............................
Interest
rate (per
cent)
2
2H
2
2H
3H
2)6
Purchase
price
Par value
Book value
(amor
tized)
$11,775,710 $11,885,000
972,000
972,000
9,992
11,000
8, 635,000
8,635,000
4,000,000
4,000,000
13, 600
13,500
16,868,736 10, 601,000
$11,806,703
972,000
10,354
8,636,000
4,000,000
13,500
16,676,336
42,117,500
42,112,893
42,274,938
Properties Acquired Under the Terms
of Insurance
The Federal Housing Administration acquired
title in fiscal year 1962 under the terms of insur
ance, to 47 properties (61 units) insured under
Section 603 and sold 74 (86 units). Through June
30, 1962, a total of 11,820 Section 603 properties
(16,156 units) had been acquired at a cost, of
$79,677,176, and 11,497 properties (15,615 units)
had been sold at prices which left a net charge
against the fund of $11,404,192, or an average of
$992 per case. There remained on hand for future
disposition 323 properties having 541 living units.
During fiscal year 1962, 57 additional rental
housing properties or assigned mortgage notes
(3,694 units) insured under Section 608 were ac
quired by the FHA Commissioner under the terms
of insurance and 45 (1,763 units) were sold or
liquidated. Through June 30, 1962, a total of
534 multifamily properties (35,212 units) and 264
mortgage notes (19,551 units) had been acquired
by the Commissioner. Three hundred and ninetyfive multifamily properties (24,203 units) had
been sold and 24 mortgage notes (618 units) had
been liquidated, which left a net charge against
the fund of $46,437,658, or an average of $1,871
per unit. There remained on hand at June .30,
1962, 139 multifamily properties (11,009 units)
and 240 mortgage notes (18,933 units).
There was no additional activity under Section
609 or 611. The 2 Section 609 manufacturers’ notes
and 65 discounted purchasers’ notes previously as
signed were settled with a resultant loss to the
fund to $787,520. The one Section 611 home prop
erty acquired in 1959 was sold in 1959 at a price
which left no charge against the fund. The aver
age time held by FHA was 3.93 months.
t
i
j
Statement 43.—Statement of properties and assigned mortgage notes on hand, War Bousing Insurance Fund, as of
June SO, 1962
.
I
f
Sec. 608, multifamily
See. 603,
323 properties,1
641 units •
l
Total, 462 prop
erties, 240 mort
gage notes,
139 properties.1 240 mortgage notes,
30,483 units
11,009 units*
18,033 units
i
;
Erpenses:
Acquisition costs.................................................................................................................
Interest on debentures......................................................................................................
Taxes and insurance................................................................................... .......................
Additions and improvements.......................-............................................ -.................
Maintenance and operating______ _______ -______________ ___ ____________
Service charge......................................................................................................................
M iscellanoous.......................................................................................................................
Accrued expenses payable................................................... ..............................-...........
!
s
j
$2, 614, 286
457, G16
260,140
64,042
590,230
$190, 664,799
22, 986, 978
3, 666,079
144, 345
7,563, 643
431,161
260,717
163,499
431,151
48,214
2i6'i42'
123,159
.........2*360*
30,340
Total expenses..................-.................................... .................................... .......
4,024,994
79, 954,909
141,791,208
225,771, 111
Income and recoveries:
Rent and other (net)................................................... .......................................................
Collections on mortgage notes....................................... ........... ........... ......................
902,556
9,968,931
21,925,035
10,307,718
32,796, 622
10,307, 718
Total income................................................................................................-................
902,550
9, 968,931
32,232,763
43,104, 240
-1,080, 960
Proceeds from partial sales of projects: Estimated net investment (sales price).
;
* $126, 034,405
15,277,438
$62,016,128
7,261,924
3,290, 940
80,303
6,973,313
3,122,438
Net acquired security on band---------- -------------------- ------------ --------------------- ...
j
-1,080,960
68,905,028
109, 558,455
181, 685,921
;
1 Includes 30 propert:es (34 urn'ts) and 2 large scale un-'ts repossessed and carried at the asset value at time of repossession.
* Includes S large-scale projects (625 units) repossessed and carried at the asset value at the time of repossession.
* Excludes 191 units in 7 partially sold multifamily properties with estimated net investment of $1,080,950.
Section 608
$126,034,405
* Outstanding balance of notes receivable at date of acquisition.
Less:
Collection to principal..........................................................—
10,307,718
115,726, 687
Unpaid principal balance...........................................................
The turnover of Sections 603 and 608 acquired security, by calendar year, is given below:
i
Statement 44.—Turnover of properties acquired and mortgage notes assigned under Sec. 608 of Title VI contracts of
insurance by years, and cumulative through Dec. 81, 1962
Year
1943
1944
1945
1946
1947.
194S
1949
1950
1951
1952
1953
1954
1955
1956
1957
395S
1959
1960
1961
1962
ber
158
Number 1943 1944 1945
49S
l-M
29
220
36
110
685
187
99S
16
116
507
1,635
735
609
412
427
717
101
ISO
76
38
64
68
74
Total
Properties
and n otes
on hand
Dec. 31,
1962
Properties sold, by calendar years
Properties acquired
11,875
29
256
982
1946
139
1,178
1,050
431
2,798
1947
386
317
302
5
1,010
1948 1949 1950 1951 1952 1953 1954 1955 1956 1957 1958 1959 1960 1961 1962
140
350
210
9
23
732
87
139
43
1
21
93
384
17
6
11
65
243
421
763
7
8
1
1
1
75
460
411
964
6
5
4
28
246
193
209
691
2
9
103
53
122
56
345
18
80
27
05
58
42
290
8
144
36
73
125
43
407
836
12
111
16
38
34
338
31
60
629
5
10
7
16
4
20
2
10
10
43
4
181
45
33
2
6
15
3
6
5
10
-2
5
14
11
3
66
14
16
3
21
’ 20
12
337
125
114
1
1
53
6
13
19
2
17
7
26
13
114
72
3
-4
-4
7
16
22
6
67
62
69
2
11
34
4
5
20
4
9
21
70
69
335
properties^sold^iias ^^^^iuced by^590 jfn^erti^r^oKieMe^berause^f defauft on morigage no^es^o^whidfow bad^bMn'^sold^by^ec.^li, 1962^ num'
!
I
Statement 52.—Armed Servioes Bousing Mortgage In
surance Fund, statement of properties and assigned
mortgage notes on hand at June SO, 1962
Sec. 80S, multlfamily
!
;
11 proper
ties, 1,968
units
Sec 809,
55 proper
ties, 55
units
27 mortgage
notes, 4,552
units
Total, 66
properties
and 27
notes,
6,575
units
i
Expenses:
Acquisition costs............ $13,190, 790 i $50,624,178
Interest on debentures.
1,756,000
4,612,056
262,677
110,294
Taxes and insurance...
Additions and im
5,845
provements.
Maintenance and operating..___
526,312
122,939
Service charge
Completion and pres
2,368,593
ervation......... ...............
50,653
98,413
Miscellaneous..............
Accrued expenses pay
6,211
able.................................
;
Total expenses____
!
Income and recoveries:
Rent and other income
(net).............................
Collections on mort
gage notes..... ............. .
Undisbursed mortgage
proceeds_________ ...
Total income--------
$829,441 $64,444,399
25,910
6,393,966
8,457
381,428
5,845
2,633
528,945
122,939
2,368,593
149,066
49
6,260
666,490
74,401,441
16,798,478
57,936,473
1,358,520
4,791,773
6,150,293
907,735
907,735
2,291,517
2,291,517
1,358,520
7,991,025
9,349,545
14.439,958
49,945,448
666,490
MHI
ASHMI
Asset value at acquisition-------- $18,320,882 $32,303,295
Less:
554,925
352,810
Collection to principal..........
Undisbursed mortgage pro
2,291,517
ceeds.....................................
Outstanding note balanoe------
17,765.957
29,658,968
Properties sold by cal
endar years
Properties acquired
Number
1
15
35
1959
1960
1
1961
6
3
57
108
14
1
9
34
Increase or
decrease (—)
;
ASSETS
521,791
482,471
-39.320
8,600
8,700
100
Total Investments..............
530,391
491,171
-39,220
$50,624,177
Loans receivable:
Mortgage notes and contracts
for deed..................... ................
Less allowance for losses..........
31,988,251
676,279
38,333,041
824,840
6,344,790
148,561
907,735
Net loans receivable...........
31,311,972
37,508,201
6,196,229
2,291, 517
Accounts and notes receivable:
Accounts receivable—Insur
ance premiums.........................
Accounts receivable—OtherAccounts receivable—Inter
fund..............................................
31,473
892
67,305
120,621
25,832
119,729
Total
47,424,925
:
14,287
10,897
35,755
192,213
150,458
Aecu red assets:
Interest on U.S. Government
securities.....................................
Other...............................................
1,667
161,866
1,667
407,939
246,073
Total accrued assets--------
163,533
409, 000
246,073
Acquired security:
Real estate (at cost plus ex
penses to date).........................
Less allowance for losses_____
62,947,563
28,438,617
66,081,079
28,880,412
3,133,510
441,795
43
Net real estate.................... .
34,608,946
37,200,607
2,691,721
64
Mortgage notes acquired
under terms of insurance___
Less allowance for losses_____
2,904,310
543,482
6,414,411
1,011,210
3,610,101
407, 728
5
16
Housing and Community Facilities and Services
Act of 1951, Public Law 139,82d Congress), which
provides that this fund shall be used by the Com
missioner as a revolving fund for carrying out the
prolusions of Title IX of the Act. This title of the
Act provides for the insurance of mortgages in
areas which the President shall have determined
to be critical defense housing areas. To accom
plish this purpose, the Act authorized the Com
missioner to transfer from the War Housing
.:
'
I
3,390
Properties
on hand
Dec. 31,
1962
i
;
Total accounts and notes
receivable...........................
1962
4
16
June 30,1962
$1,681,966
Note.—On the 44 properties sold, the average time between acquisition
and sale by the Federal Housing Administration was 9.68 months.
164
i
June 30,1961
$3,546,848
Statement 53.—Turnover of properties acquired under
Sec. S09 of Title VIII contracts of insurance by years,
and cumulative through Dec. SI, 1962
TotaL.
Statement 54.—Comparative statement of financial con
dition, National Defense Bousing Insurance Fund, as
of June SO, 1961 amd June SO, 1962
$1,864,882
803
1962
As of June 30, 1962, the assets of the National
Defense Housing Insurance Fund totaled $84,792,841, against which there were outstanding liabili
ties of $100,277,918, leaving a deficit of $15,485,077.
This represents an operating deficit of $26,260,077
less $10,775,000 transferred from other insurance
funds in accordance with Section 219 of the Act.
Investments:
U.S. Government securities
(amortized)...............................
Other securities (stock in rent
al housing corporations)___
65,051,896
i See the following table:
1959
1960
1961
Capital and Net Income
Cash with U.S. Treasury.
Net acquired security on
hand
...................... -
Year
Insurance Fund the sum of $10 million. The au
thority to issue commitments to insure under this
title expired August 1,1955. This is not a mutual
insurance fund in the sense that any portion of the
net income from operations will be shared by mort
gagors in the form of participation payments.
i
:
i
;
(
Net mortgage notes ac
quired under terms of
Insurance.........................—
2,360,828
6,403,201
3,042,373
Net acquired security____
36,869,774
42,603,868
6,734,094
Other assets—held for account of
mortgagors.....................................
13,490
40,934
27,444
Total assets...........................
70,789,797
84,792,841
14,003,044
I
I
LIABILITIES
Accounts payable: Bills pay
able to vendors and Govern
ment agencies...............................
58,768
167,379
98,611
Accrued liabilities: Interest on
debentures.....................................
1.117,450
1,345,569
228,119
Statement 54.—Comparative statement of financial con
dition, National Defense Bousing Insurance Fund, as
of June SO, 1961 and June 80, 1962—Continued
June 30,1961 June 30,1962
Statement 55.—Income and expenses, National Defense
Bousing Insurance Fund, through June 30, 1961 and
June 30,1962
Increase or
decrease (—)
Sept. 1,1951 July l, 1961 Sept. 1,1951
to
to
to
June 30,1961 June 30,1962 June 30,1962
liabilities—continued
Trust and deposit liabilities:
Fee deposits held for future
disposition
Excess proceeds of sale........__
Deposits held for mortgagors,
lessees, and purchasers........
$226, 746
Total trust and deposit
liabilities............................
$284,490
$57,744
629,917
954,613
324,696
856, 663
1,239,103
382,440
Deferred and undistributed
credits:
Unearned insurance premi
ums........................................... .
Other..............................................
949,003
161,915
754,838
355,723
-194,165
193,808
Total deferred and undis
tributed credits...............
1,110,918
1,110,561
-357
Bonds, debentures, and notes
payable:
Debentures payable..................
81,382,300
96,381,450
14,999,150
Other liabilities:
Reserve for foreclosure costs—
Mortgage notes acquired
under terms of insurance—
34,480
43,856
9.376
84,560,579
100,277,918
15,717,339
Insurance reserve (deficit —)— -13,770,782
-15,485,077
-1,714,295
Total liabilities.
RESERVE
Total liabilities and re
serve....................................
70,789,797
84,792,841
14,003,044
Certificates of claim relating to
properties on hand................... -
2,050,166
2.104,444
54,278
Income and Expenses
During fiscal year 1962 the income to the fund
amounted to $2,630,150, while expenses and losses
amounted to $4,066,695 leaving a net loss of
$1,436,545 before provision for valuation allow
ances. An increase of $1,058,084 in the valuation
allowances resulted in a net loss of $2,494,629 for
the year.
The cumulative income of the National Defense
Housing Insurance Fund from September 1,1951
to June 30, 1962, amounted to $27,273,906 while
cumulative expenses amounted to $22,817,521,
leaving cumulative net income of $4,456,385 be
fore adjustment of valuation allowances, Valuation allowances of $30,716,462 were established,
leaving a cumulative net loss of $26,260,077.
Investments
I
Section 905(a) of Title IX contains a pro
vision similar to that under Title II with respect
to investment of moneys not needed for current
operations by the purchase of U.S. Government
securities or the retirement of debentures.
During fiscal year 1962, $1,275,400 of debentures
were redeemed in payment of mortgage insurance
premiums.
Income:
Interest and dividends:
Interest on U.S. Govern
ment securities........ ...........
Interest on mortgage notes
and contracts for deed___
Interest—Other......... ............
Dividends on rental hous
ing stock...............................
Insurance premiums and fees:
Premiums____ ____ ...____
Fees................ '....11'.'..
Other income:
Profit on sale of investments.
Income retained on settled
properties..............................
Miscellaneous income...........
$1,065,790
$19,417
$1,085,207
1,491,784
53,083
-406,140
53,083
1,085,644
413
50
463
2,557,987
-333,590
2,224,397
18,494,241
2,722,931
1,877,365
20,371,606
2,722,931
21,217,172
1,877,365
23,094,537
1,086,471
-96
1,888,705
2,408
63,859
802,234
2,504
63,859
868,597
1,088,375
1,954,972
24,643,756
2,630,150
27,273,906
Expenses:
Administrative expenses:
O perating costs (including
adjustments for prior
years)........................ ........... .
8,663,285
794,254
9.352,209
Other expenses:
Depreciation on furniture
and equipment.............. .
Miscellaneous expenses___
41,291
29,729
753
14,769
42,020
44,498
71,020
15,522
86.518
10,122,639
3,257,078
-764
-159
10,121,875
3,256,919
13,378,794
Total expenses.....................
18,756,160
4,066,695
22,817,521
Net Income before adjustment
of valuation allowances............
5,887,596
-1,436,545
4,456,385
Total income.
Losses and charge-offs:
Loss on acquired security__
Loss (or proflt-f) on equip
ment........................................
Increase (—) or decrease (+) in
valuation allowances:
Allowance for loss on loans
receivable................................
Allowance for loss on real
estate..........................................
Allowance for loss on mort
gage notes acquired under
terms of insurance--------- ...
13,379,71
-92l
-676,279
-148,561
-824,840
-28,438,617
-441,795
-28,880,412
-543,482
-467,728
-1,011,210
-29,658,378
-1,058,084
-30,716,462
Net income (or loss —)... -23,770,782
-2,494,629
-26,260,077
Net adjustment of valua
tion allowances------------
ANALYSIS OF INSURANCE RESERVE
Distribution of net income:
Insurance reserve:
Balance at beginning of
-$13,770,782
period____
Adjustments during the
+5,334
period.......................... ...........
Net income (or loss—) for
—2,494, 629
period.................................... . -$23,770,782
-$26,260,077
-16,260,077
-26,260,077
-23,770,782
Capital contributions from
other FHA insurance
funds________ _________
10,000,000
775,000
10,775,000
Balance at end of period.. -13,770,782
-15,485,077
-15,485,077
165
|
PUBLICATIONS
The following are the principal new or revised FHA publications issued in 1962. Unless other
wise indicated, they can be obtained without charge from the Federal Housing Administration,
Washington, D.C., 20411.
A Comparison of FHA Home Improvement
Programs. (A fact sheet of general information
to assist in selecting the appropriate type of
FHA-insured loan for home improvement and rehabilitation; discusses FHA-insured loan programs under Title I, under Section 203(b), and
under Section 203 (k) of the National Housing
Act.) (FHA 770.)
Dealers' and Contractors' Guide for Property
Improvement Loam. (FHA 30.) Revised June
1962. 10*.*
Estimating Ability to Pay for a Home. (A
guide to FHA mortgage credit analysis.) (FHA
201.) Revised May 1962.
FHA and the Home-Buying Serviceman.
(FHA 895.) Revised April 1962. 10*.*
FHA Expelemental Housing Program. (A fact
sheet of general information about the program
authorized by Section 233 of the National Housing
Act.) (FHA 246.)
FHA Financing for Home Purchases and Home
Improvements. (A guide to financing costs and
home-buying ability.) (FHA 428.) 5* each;
$3.75 per 100 copies.*
FHA Forbearance Provisiom. (A fact sheet
explaining the steps a lender can take, with FHA
approval, to avert foreclosure of an insured mort
gage when a home owner is temporarily unable to
meet his mortgage payments because of circum
stances beyond his control.) (FHA 467.) Re
vised October 1962.
FHA Home Mortgage Insurance. (A fact sheet
of general information for the home buyer.)
(FHA 208.) Revised May 1962. 5*.*
FHA Home Owner's Guide. (FHA 100.)
Revised July 1962. 15*.*
FHA Loro Cost Housing for Small Towns and
Outlying Areas. (A fact sheet of general information about the mortgage insurance program
authorized by Section 203 (i) of the National Housing Act.) (FHA 492.) Revised December 1962.
FHA Mortgage Imurance for Rental and
Cooperative Housing for Persom of Low and Mod
erate Income. (A fact sheet of general informa-
\
i
•Available at price shown from Superintendent of Documents,
U.S. Government Printing Office, Washington, D.C., 20402.
tion about the below-market interest rate program
authorized by Section 221(d)(3) of the National
Housing Act.) (FHA 221.) Revised October
1962.
FHA Mortgage Insurance on Condominiums.
(A fact sheet of general information about the
program authorized by Section 234 of the National
Housing Act to provide for FHA insurance on
individually owned units in multifamily structures.) (FHA 491.) Revised November 1962.
FHA Mortgage Imurance on Housing for the
Elderly. (A fact sheet of general information
about the rental housing program authorized by
Section 231 of the National Housing Act.)
(FHA 247.) Revised November 1962.
FHA Mortgage Insurance on Low-Cost Homes.
(A fact sheet of general information about the
program authorized by Section 221(d) (2) of the
National Housing Act.) (FHA 219.) Revised
November 1962.
FHA's New Home Improvement Programs.
(A booklet of general information about the home
improvement and rehabilitation programs authorized by Section 203(k) and Section 220(h) of the
National Housing Act.) (FHA 206.) Revised
December 1962. 15*.*
How To Do Business With the FHA ... A
Message to Builders. (FHA 232.) Revised No
vember 1962.
Minimum Property Standards for Mobile Home
Courts. (FHA 2424.) Revised August 1962.
30*.*
Minimum Property Standards for Nursing
Homes. (FHA 334.) Revised July 1962. 30*.*
(FHA
Nursing Home Mortgage Insurance.
696.) Revised February 1962. 15*.*
Technical Studies by the Federal Housing Administration. (Of interest to industry, Govemment agencies, educational institutions, and various research organizations in the housing field,
this list is designed to help avoid duplication of
effort and to stimulate technical studies by others;
lists studies under FHA contract or consideration,
as well as those of potential interest to the agency,
and includes the source and cost—if any—of com
pleted studies and reports.) (FHA 470.) Re
vised June 1962.
!
I
169
1LS. GOVERNMENT PRINTING OFFICE: 1B83 O—884-285
@FedFRASER