gram will facilitate the trading in of older homes for purchases of both new and existing homes by avoiding duplication of closing costs, while assuring that in every instance FHA's equity requirements will be met.

The maintenance and conservation of the Nation's housing inventory are vital to the country. Studies are underway by FHA to determine how its programs can contribute more to the conservation of housing and neighborhoods. In addition, top officials of FHA are working with top officials of the Urban Renewal Administration and the Office of the Administrator on a committee established to determine ways of improving FHA's participation in the rehabilitation and conservation phases of urban renewal.

In July of 1959, FHA's new "Minimum Property Standards" went into effect. This made a single set of standards for home construction applicable all over the country. At one time there were in effect as many as 53 separate editions of FHA construction requirements.

A change in the Minimum Property Standards will become effective April 1 that is important to the protection of home buyers. After April 1, all FHA field offices will require board and framing lumber used in housing built under FHA inspection to be grade marked. While certain grades of lumber have always been specified in FHA's construction requirements, only 12 FHA field offices have required that the lumber be grade marked. After April 1, grade marking will be required by all 75 field offices. This will assure that FHA inspectors can determine with accuracy that the required grade of lumber has been used.

Additional information on FHA's operations and programs is contained in the detailed statement and statistical information submitted for the record.

Thank you, Mr. Chairman.

Senator SPARKMAN. Thank you, Mr. Zimmerman. Your detailed statement will appear at the end of your remarks.

Senator Clark.

Senator CLARK. Mr. Zimmerman, I am concerned as to whether you are not taking a chance in not asking for an increase of FHA authorization from the current session of the Congress.

I wonder if you would follow me as I state the situation, and correct me if I am wrong.

As of December 31 you had unused authority of $6.7 billion. Is that right?

Mr. ZIMMERMAN. Approximately. I have $6,560 million, but $6.7 billion is close enough.

Senator CLARK. Of which about $1.5 billion is needed to cover your remaining agreements to insure?

Mr. ZIMMERMAN. I would guess that that was about the figure. Senator CLARK. So that would leave you somewhere in the neighborhood of $5 billion after you clean up the backlog of agreements to insure?

Mr. ZIMMERMAN. Not including the recovery which will be realized. Senator CLARK. That is right.

Mr. ZIMMERMAN. Yes, sir.

Senator CLARK. In 1958, before September of that year, when your authorization ran out, you were using about $500 million a month.

Mr. ZIMMERMAN. Well, as far as I know.

Senator CLARK. I think that is right.

Mr. ZIMMERMAN. Yes.

Senator CLARK. Our staff figures that the December rate, adjusted seasonally that is, December 1959-would be about the same, or $500 million.

If this is right, and I think it is, then you would run out of your current authorization about the first of October. That is assuming that the 1960 construction rate would be at about 1.2 million, which is about the same as 1958.

This leads me to conclude that you may well be taking a chance in not asking right now for an additional authorization.

If you are not positive that this existing authorization is going to carry us into next year, I want to suggest to you and to Mr. Mason it would be far wiser to come in now and ask for an additional authorization than to wait until the rush is on in the hope you could jam something through on FHA all by itself without tieing it up to anything else.

I would like your comments as to whether I am being unfair in my prognosis that there is a real chance that you will run out of authorization by October.

Mr. ZIMMERMAN. I would like to comment. The Senator has not said anything that I consider to be unfair. It is a difficult problem. First, I would like to make this observation: We have what I would consider to be sort of a standing legislative suggestion that we receive an open-ended authorization, and I am sure that the administration, even though it may not have been formalized into a submission during this session, still takes this position.

Senator CLARK. That is one of my points. The administration has not. And it now develops that, even though the administration did not ask for more, it still wants the ceiling taken off? Is that right? Mr. ZIMMERMAN. I am sure that this is the administration's position, yes, sir. Now, so far, we have been unsuccessful in our efforts to get Congress to do that.

Senator CLARK. I hope you will be unsuccessful again, because I would not like to see the ceiling eliminated.

You are

Mr. ZIMMERMAN. We are in kind of this spot, Senator. at least as aware of this as I am, and perhaps even more so: In the very difficult and complex field of forecasting, we are in a position where, if we ask for too much, it is not well received. If we ask for too little, we are in a spot. And so we have to look into that crystal ball and come in with a request for additional insurance authorization which will just take us into a certain period into the future.

This is difficult to do. For instance, when we were thinking in terms of fiscal 1961 budget, we started in the spring of 1959, and it began to be firmed up in the fall of 1959, during a time which we all realize had some factors in areas of mortgage market and others that were different than they are today.

Senator CLARK. I agree with all that, and I think your problem is difficult. I do not want to minimize it. All I am saying to you and to Mr. Mason is that I hope you will not take the chance of not acting early enough in this session of Congress to request additional authorization which will take you through into March or April of next year. Then the 87th Congress can have a crack at it.

I sincerely hope you will not come stamping in around June or July with a panic request for some more authorization with the thought that maybe we will run that through for you and will not have a general housing bill. I doubt if you can get away with that. Mr. ZIMMERMAN. My own judgment, Senator, is that here we are now in the middle of February, and in the next month or 6 weeks or 2 months we are going to learn a lot more about what is going on in the market than we know today. Also we will know more as we move farther into the construction season.

That would be my guess as to when we would be able to make the kinds of forecasts that would be sufficiently reliable to support the kind of request that we would be making.

Senator CLARK. I think our minds are in accord.

Mr. ZIMMERMAN. Yes.

Senator CLARK. One more question: Would you turn, please, to your statement where you comment on housing for the elderly? You will note that applications for 14 projects for 1,800 units are pending, that you have made 7 commitments, and have issued 1 mortgage. Are these rental apartments, or are these sales apartments?

Mr. ZIMMERMAN. Rentals, sir.

Senator CLARK. Rentals? Can you give us any idea of the average rentals which are going to be charged? If you cannot, would you get it for us? We can give you

Mr. ZIMMERMAN. I would prefer to submit it. the exact information, and I will submit it for the record. Senator CLARK. Thank you.

(The information requested follows:)

Digest of reports by FHA insuring offices to Director, Mortgage Insurance Division, re housing for elderly projects under FHA mortgage commit

ment as of Jan. 31, 1960

Digest of reports by FHA insuring offices to Director, Mortgage Insurance Division, re housing for elderly projects under FHA mortgage commitment as of Jan. 31, 1960-Continued