loans insured under this section were on new properties, but beginning in 1943, by far the larger number of the loans insured under this section were on existing homes. Following the enactment of title VI in 1941, new home mortgages were processed in increasing proportions under the terms of this program, which was liberalized in May 1942 by making "an acceptable risk in view of the emergency" instead of "economically sound" the basis for determination of appraisal value. The preponderance of new home mortgages processed under title VI continued under the Veterans' Emergency Housing Program, enacted in May 1946, which instituted the concept of estimated necessary current costs in determining the amount of loan to be insured under section 603.

The volume of mortgages insured on multifamily rental projects under section 207 also declined sharply during the war for the same reason as indicated above for the section 203 operation. Some increase in volume of loans insured under section 207 occurred during the period 1944–46, but this included principally refinancing of previously insured mortgages and insurance of mortgages on acquired projects which had been sold.

The data in this table are all taken from tabulations of the operating records of the Federal Housing Administration, except for the amount of amortization of principal which was estimated by the Federal Housing Administration. The data, therefore, represent a tabulation of information on all Federal Housing Administration insured. mortgages.

The proportion of nonfarm dwelling units started which was constructed under FHA inspection is as follows:

ing Administration standards. This number does not agree with number of new units financed with insured mortgages because some units may be started under this program for which insurance is not written. Also, until June 30, 1946, dwelling units encumbered with mortgages insured under section 203 were classified as new, according to legislative definition, if applications for insurance were submitted within 12 months after completion of construction. The total number of units started is an estimate published by the Bureau of Labor Statistics and is based upon building permit records.

Title I of the National Housing Act provides for the insurance of property improvement loans as well as loans for new construction. The face amounts of property improvement loans insured by the Federal Housing Administration under title I are as follows:

NOTE.-These figures represent title I loans: Class 1 (a) loans, the proceeds of which financed the improvement of existing structures; class 1 (b) loans, the proceeds of which financed the conversion of existing structures to provide additional living accommodations for veterans of World War II in special areas designated by the President; class 2 (a) loans, the proceeds of which financed new structures for other than residential or agricultural purposes: and class 2 (b) loans, the proceeds of which financed new nonresidential structures to be used in whole or in part for agricultural purposes. The above figures include a relatively small proportion of loans on commercial, industrial, farm and other types of property.

Class 3, new small home loans-38,941 loans totaling $99,641,750-are excluded from the amount of property improvement loans. Source: Federal Housing Administration.

These figures are affected by changes in legislation, particularly the figures for 1937 and 1938 since the title I operation was discontinued, with minor exceptions, from April 1, 1937, to February 3, 1938. The decline in 1943, however, reflects restriction in the extension of consumer credit in cooperation with the regulations of the Board of Governors of the Federal Reserve System.

The data on property improvement loans were compiled from the operating records of the Federal Housing Administration and include all such loans insured, rather than estimates based on a sample of such loans.

Federal Home Loan Bank Administration

The influence of the Federal Home Loan Bank Administration on the mortgage market is exercised through the Federal Home Loan Bank Sys

Source: Federal Home Loan Bank Administration.

tem, the Federal Savings and Loan Insurance Corporation, and the Home Owners' Loan Corporation.

The Federal Home Loan Bank System was created in 1932, under the Federal Home Loan Bank Act, to serve as a source of credit for home financing institutions. The Federal Savings and Loan Insurance Corporation was established in 1934, under title IV of the National Housing Act, to insure the safety of share accounts of savings and loan associations.

The Federal Home Loan Bank Administration also charters Federal savings and loan associations which are private home financing institutions chartered under provisions of the Home Owners' Loan Act. The Bank Administration examines and supervises the Federal associations and, jointly with State supervisory authorities, the Statechartered insured associations. In addition, the Federal associations must abide by the terms of their Federal charters. It is mandatory for each Federal association to be a member of the Federal Home Loan Bank System and to have its share accounts insured by the Federal Savings and Loan Insurance Corporation. Federal associations and State-chartered insured associations must abide by the rules and regulations for the insurance of accounts as established by the Federal Savings and Loan Insurance Corporation. State-chartered savings and loan associations may apply for insurance of their share accounts but for this type of association such insurance is not mandatory. Statechartered associations which are not insured but are members of the Federal Home Loan Bank System may obtain advances from the Federal

To summarize, the activities of the Federal Home Loan Bank Administration and of the agencies which it supervises are directed toward encouraging and protecting savings in home financing institutions, and providing credit for such institutions when needed.

The Federal Home Loan Bank System, which is self-supporting, operates through 11 regional Federal home loan banks. Funds are secured by (1) issuing consolidated bank obligations to the general public, (2) requiring member institutions to subscribe to a minimum amount of capital stock, and (3) accepting deposits of member institutions. In addition, the Federal Government provided an initial investment in capital stock. Dividends are paid on all capital stock and interest is paid on bank obligations and deposits. The Federal home loan banks in turn utilize these funds to make advances to member institutions.

Table 94 shows the growth in the membership of the Federal Home Loan Bank System, by type of institution. The great bulk of the member institutions, both in number of institutions and in amount of assets, is made up of savings and

loan associations. Only a relatively few mutual savings banks and insurance companies are members. The statistics shown in this table are compiled from annual reports which members are required to submit. Annual reports are received from virtually all members.

The extent to which savings and loan associations have participated in various activities under the Federal Home Loan Bank Administration is indicated in table 95. With respect to membership in the Federal Home Loan Bank System, 60 percent of the number of associations representing 89.5 percent of the assets of the savings and loan industry were members as of the end of 1946.

The insured member associations represent 40.8 percent of the total number of associations and 72.8 percent of the assets of all associations. In an insured association, the savings of each investor are protected up to a maximum of

$5,000 by the Federal Savings and Loan Insurance Corporation. The Insurance Corporation has been meeting its administrative expenses and accumulating reserves primarily by charging insured associations an annual premium of oneeighth of 1 percent of the association's share and creditor liability-that is, the amount owed by the institution to its savers and to its creditors.

The insured associations fall into two categories, Federal savings and loan associations and Statechartered savings and loan associations. The Federal savings and loan associations represented 24.1 percent of the total number of associations and held 46.5 percent of the assets of all associations, at the end of 1946. The State-chartered insured associations are chartered by the State in which they are located, while their savings are insured by the Federal Savings and Loan Insurance Corporation.

The Federal Home Loan Bank member associations which are not insured are also shown in table 95, as are the associations which are not members of the Federal Home Loan Bank System. Nonmember associations comprised 40 percent of the total number but held only 10.5 percent of the total assets of savings and loan institutions at the end of 1946.

The volume of new mortgage loans made by all savings and loan associations and by the various classes of associations are presented in table 96. The total for all associations increased substantially during 1945, and even more during 1946.

The figures presented in this table are based on reports submitted by associations. Close to 100 percent of the insured associations furnished monthly reports. Of the uninsured bank mem bers, which accounted for 14.6 percent of the loans made by all associations in 1946, monthly report were received from associations representing mor than 50 percent of the total assets of this group The estimated total of loans made by the group i derived by preparing separate estimates for each Federal Home-Loan Bank district. The estimat for all associations in each bank district is ob tained by expanding the figures for reporting asso

ciations on the basis of the relation of loans made to assets. The separate estimates are then reviewed for reasonableness in relation to insured associations in the same district and uninsured associations in nearby districts.

The estimates of loans made by nonmember associations, which accounted for 7.3 percent of the loans made in 1946, are prepared in a similar manner on the basis of reporting associations representing about 20 percent of the assets of all associations in this group.

The estimates for the uninsured bank member and the nonmember associations are believed to be reliable. The nonreporting associations account for such a small proportion of the total volume of loans made by all associations that any margin of error which may be involved in preparing these estimates would have little effect on the national totals.

Table 97 shows the amount of advances made by the Federal Home-Loan Banks to member institutions, the amount of repayments made by the members on these advances and the balance of advances outstanding at the end of the year. The amount of advances made in 1946 reached a new high, and although repayments were at a high rate, the balance of advances outstanding also reached a new high. Advances may be long-term, up to 10 years, and secured by home mortgages, or by obligations of, or obligations guaranteed by, the United States Government; and short-term, up to 1 year, on a secured or unsecured basis.

Table 97.-Federal Home Loan Bank advances: Principal amount of advances, repayments and balances outstanding, by year, 1932-46

Program Under the United States Housing Act

The permanent low-rent public housing program is based upon Public Law 412 (United States Housing Act of 1937), and Public Law 671 (enacted in 1940), which authorized the use of United States Housing Act funds for the construction of housing for defense workers. It also includes 21,639 units built by the Public Works Administration. Public Law 671 projects were to revert to low-rent status after they were no longer required to serve war needs, and all but 14 of them were officially transferred to the low-rent program `during 1946.2

The United States Housing Act program is administered by the Federal Public Housing Authority along with the other housing programs which were developed to house war workers and veterans. These latter programs are not part of the low-rent, slum clearance, public housing program.

Under the United States Housing Act, the Federal Public Housing Authority borrows money from the Treasury and loans it to local housing authorities (up to a maximum percentage of total development cost) to assist them in financing the construction of public housing projects. In addition, the Federal Public Housing Authority makes annual contributions to local housing authorities to assist them in establishing rents commensurate with the rent-paying ability of low-income families for whom the program is intended.

Originally, the Federal Public Housing Authority obtained funds for making loans to local housing authorities from the sale of Government guaranteed obligations to the general public. In recent years, however, these funds have been borrowed from the Treasury at 1 percent interest. The interest rate charged by the Federal Public Housing Authority on loans to local housing authorities is fixed by statute at not to exceed the going long-term rate on Federal Government bonds at the time of signing the contract, plus onehalf of 1 percent; the interest rate charged by FPHA under contracts made in recent years has been 3 percent. The spread between the 1 and 3 percent interest produces a net income for the Federal Public Housing Authority, which is applied to its administration expenses. At the end of 1946, the total outstanding obligations of the Federal Public Housing Authority relative to the United States Housing Act program amo inted to $360 million.

The table 26 and 21 for data on the number of asita involved in the Tained States Housing Act Program.