Federal Home Loans and Housing

Report Outline
Social Aspects of Housing and Home Loan Program
Federal Aid in Refinancing of Home Mortgages
Permanent Federal Aid in Home Financing
Federal Activity in Housing and Slum Cearance
Special Focus

Social Aspects of Housing and Home Loan Program

Nearly $50,000,000 has so far been made available by the Public Works Administration for residence construction, through loans to limited dividend corporations, out of the $3,300,000,000 public works fund established by the National Recovery Act. In addition to future alloeatians of the same sort, a substantial sum is to be set aside to finance the operations of the recently created Public Works Emergency Housing Corporation. While these expenditures, by affording a certain amount of employment, will make their proportionate contribution to the general program for economic recovery, their primary purpose is social rather than economic. The only residence projects eligible for federal aid are those involving clearance of slum areas, with substitution of decent living quarters for insanitary tenements, and those for provision of proper housing at low rentals in districts where there is a demonstrated need for such accommodations.

Social considerations are likewise dominant in the Roosevelt administration's policy with respect to the mortgage problem. The Home Owners Loan Corporation was set up to lift the threat of foreclosure from distressed home owners in cities and towns, while extension of mortgage relief to owners of farm property was made a special concern of the Farm Credit Administration. At the same time, the Federal Home Loan Bank System, established more than a year ago, is continuing its function of strengthening the nation's home loan machinery and indirectly expanding the credit resources available to prospective home builders. That machinery is now being supplemented by the creation of federal savings and loan associations. Preservation of homes for their present owners and provision of new homes for others, at a price they can afford to pay, are patently regarded by the President and his advisers as essential elements of the New Deal.

Extent of the Mortgage Problem in the Depression

Mortgages on homes in the United States are far greater in aggregate amount than farm or commercial mortgages. According to Horace Russell, general counsel of the Federal Home Loan Bank Board and the Home Owners Loan Corporation, home mortgages total approximately $20,000,000,000, while mortgages on commercial properties total about $12,000,000,000 and farm mortgages about $8,000,000,000. Statistics gathered by the Federal Home Loan Bank Board from 1,037 communities scattered throughout the United States, representing 54.1 per cent of the total population, show that the number of foreclosures on all types of properties was 221.5 per cent greater in 1932 than in 1926. The number of foreclosures in the same communities during the first nine months of 1933 was 232.6 per cent greater than in the Corresponding period of 1926 but only 1.3 per cent greater than in the first nine months of 1932.