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1962 actual 1963 estimate 1964 estimale

Mortgages insured under section 234, condominium housing, are on individually owned units in multifamily structures, together with an undivided interest in the common areas and facilities which serve the structure. This program is limited to structures which are or have been covered by Federal Housing Administration mortgages, and as each individual unit is sold, it is released from the over-all mortgage. Statutory limits for mortgage insurance under section 234 are 97% of the first $13,500 of appraised value, plus 90% of the next $4,500 and 70% in excess of $18 thousand, up to a maximum mortgage of $25 thousand. The maximum term of the insurance is 30 years.

Workload data are as follows:

Initiation: 1

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Properties and mortgages on hand, end of year (units).

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Units insured..

49,624

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I Workload included for nursing homes is in terms of beds rather than units.

4. Urban renewal, rehabilitation, relocation, and moderateincome mortgage insurance programs (secs. 220 and 221).Section 220 provides mortgage insurance for the construction or rehabilitation of single or multifamily housing in urban renewal or disaster areas. For single-family homes the maximum ratio of loan to replacement cost is 97% of the first $15 thousand of cost, plus 90% of the next $5 thousand and 75% in excess of $20 thousand up to a maximum mortgage of $25 thousand. For multifamily housing the maximum ratio of loan to replacement cost is 90%. Section 220h authorizes the insurance of secured loans at an interest rate of 6% for the alteration, repair and improvement of existing 1- to 4-family and multifamily housing in urban renewal areas with maximums of $10 thousand per unit and 20-year term.

Section 221 provides mortgage insurance for new or rehabilitated low-cost single or multifamily housing for families displaced by governmental action or for low or moderate income families generally. For single-family homes the maximum ratio of loan to value is 100% in the case of proposed construction with a maximum mortgage of $11 thousand. The maximum term for displaced families is 40 years and for other families 35 years or 40 years if the mortgagor cannot make the higher monthly payments under a 35-year mortgage.

The Housing Act of 1961 gives the Commissioner latitude under section 221 to provide a program of multifamily housing for displaced families or other low or moderate income families at interest rates below the market level. The Commissioner was also given the authority to waive the insurance premium.

5. Armed services mortgage insurance program (secs. 803, 809, and 810).-The authorization to insure under section 803, which provided mortgage insurance for multifamily housing at or near military installations for military and civilian personnel of the Armed Forces, expired October 1, 1962.

Section 809 provides mortgage insurance on 1- to 4family homes for civilian personnel at qualified research or development installations of the Armed Forces (or a contractor thereof), Atomic Energy Commission, or National Aeronautics and Space Administration. The maximum. loan-value ratio and term are identical to that under section 203b; however, neither economic soundness nor acceptable risk is required.

Section 810 provides mortgage insurance on single or multifamily project housing for military personnel at installations of the Armed Forces or for essential civilian personnel serving or employed in connection therewith. The maximum loan is $5 million. Neither economic soundness nor acceptable risk is required. The Secretary of Defense may be required to guarantee the armed services housing mortgage insurance fund against loss. Workload data are as follows:

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650100-63- -49

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Summary of operating expense estimates.-Federal Housing Administration operating expenses are paid out of operating income. It is estimated that operating expense for 1963 will be $69,485 thousand for nonadministrative operations and $10,775 thousand for administrative operations. The 1964 estimate is $78,150 thousand for nonadministrative and $9.9 million million for administrative expenses.

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Financing. Mortgage insurance claims are met by the issuance of debentures that are subsequently redeemed out of income and proceeds from the sale of acquired properties and mortgages. In 1962, $348 million of debentures were issued. Debentures to be issued in 1963 are estimated at $401 million and in 1964, $474 million. Debentures were retired in 1962 in the amount of $144 million. Retirements of debentures in 1963 and 1964 are estimated at $260 million and $545 million, respectively.

Retained earnings.-Operations in 1962 resulted in retained earnings of $123 million. These earnings were distributed as follows: $74 million to the general surplus account, $24 million to the participating reserve account of the mutual mortgage insurance fund, and $25 million to the general insurance reserves under the other insurance funds.

Net income is expected to be $120 million in 1963 and $144 million in 1964. In the 2-year period it is estimated that income totaling $161 million will be added to the general surplus account, $59 million to the participating reserve account of the mutual mortgage insurance fund, and $45 million to the insurance reserves under other funds.

Retained earnings increased to $1.1 billion during 1962 and are expected to reach $1.2 billion during 1963 and $1.3 billion during 1964.

Insurance authority. The housing repair and improvement insurance authorization, title I, section 2, was extended to October 1, 1965 by Public Law 87-70.

This law also amended the general mortgage insurance authorization, section 217, to apply it to all loan and mortgage insurance programs, except section 2, section 221, and title VIII and to provide insurance authorization through October 1, 1965.

The authority provided by Public Law 87-70 to insure sales or profit multifamily housing, with respect to the moderate income housing program under section 221, expires July 1, 1963, and for the below market interest rate multifamily program, July 1, 1965, except that there is no time limitation for families displaced from urban renewal areas or as a result of other governmental action.

Total charges against authority... Unused authority..

1,941,479 2,027,570 2,103,050 30,756 56,020 40,900 1,972,235 2,083,590 2,143,950 327,765 216,410 156,050

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LIMITATION ON ADMINISTRATIVE AND NONADMINISTRATIVE
EXPENSES, FEDERAL HOUSING ADMINISTRATION

For administrative expenses in carrying out duties imposed by or pursuant to law, not to exceed $10,400,000 $9,900,000 of the various funds of the Federal Housing Administration shall be available, in accordance with the National Housing Act, as amended (12 U.S.C. 1701), including uniforms or allowances therefor, as authorized by the Act of September 1, 1954, as amended (5 U.S.C. 2131): Provided, That funds shall be available for contract actuarial services (not to exceed $1,500): Provided further, That nonadministrative expenses of all kinds regardless of source classified by section 2 of Public Law 387, approved October 25, 1949, including all appraisal fees regardless of source or method of financing shall not exceed [$67,500,000 $78,150,000: Provided further, That the foregoing limitation shall not apply to fees and other expenses paid by and between private parties in connection with cases processed under the Certified Agency Program. (Independent Offices Appropriation Act, 1963.)

Program and Financing—Administrative Expenses (in thousands of dollars)

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183.745 193,465 206,545 806,053 905,440 998,318 1,111,218 982,254 1,089,185 1,191,783 1,317,763

Analysis of Government Equity (in thousands of dollars)

Unpaid undelivered orders 1
Unobligated balance...
Invested capital and earnings..

Total Government equity....

357 414 414 414 750,968 768,840 814,801 907,354 230,929 319,931 376,568 409,995

1 The changes in these items are reflected on the program and financing schedule. Object Classification (in thousands of dollars)

3. Basic multifamily mortgage insurance programs (title II, secs. 207, 213, 231, 232, and 234)..

Financing:

2. Basic 1-4 family mortgage insurance programs (title I, sec. 8; title II, secs. 203, 222, 225, and 233)...

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4. Urban renewal, rehabilitation, relocation, and moderate-income mortgage insurance programs (title II, secs. 220 and 221).

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5. Armed services mortgage insurance program (title VIII)..

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6. Emergency and other special incentive programs (titles VI, VII, and IX)....

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