(a) of existing law except that the maximum amount of the mortgage ranges from $4,000 in connection with single-family residences to $10,500 in connection with a four-family residence. The maximum ratio of loan to value may not exceed 90 percent, and the location of the dwelling must be in an area in which the President shall find that an acute shortage of housing exists or impends which would impede national-defense activities. The Administrator is authorized to fix a premium charge for the insurance of mortgages in an amount not less than one-half of 1 percent per annum nor more than 11⁄2 percent per annum of the amount of the principal amount of the mortgage outstanding. Under this provision the Administrator has fixed the premium at three-quarters of 1 percent per annum. The rules and regulations and the procedure set up for operations under this title are similar to those under title II of the act. There is attached a balance sheet showing the status of the fund as of June 30, 1941. Defense housing insurance fund-balance sheet—June 30, 1941 Current assets: ASSETS Cash on deposit with Treasurer of United States.. Funds available from Reconstruction Finance Corporation (see reserve below) . Fixed assets: Treasury bonds....... Total assets____ $403, 814. 40 27, 499. 98 5, 000, 000. 00 5, 431, 314. 38 4, 400, 000. 00 9, 831, 314. 38 The original appropriation for administrative expenses for the fiscal year 1942 was in the amount of $13,388,000 provided from the insurance funds of the Administration. This was based on the handling of 267,000 applications for mortgage insurance under section 203 and about 100 applications for mortgage insurance under section 207 of the National Housing Act. Since the time of preparation of estimates for the fiscal year 1942, certain amendments to the act have been passed which impose additional duties and, therefore, additional expenses upon the Administration. These amendments are as follows: 1. The creation of an entirely new function-that of defense housing insuranceunder the act of March 28, 1941, Public, No. 24, as amended by the act of September 2, 1941, Public, No. 248. 2. The extension of the insurance provisions of title I under the act of June 28, 1941, Public, No. 138. 3. The extension of the provisions of section 203 relating to the insurance of mortgages on existing construction under the act of June 28, 1941, Public, No. 138. As a result of these amendments, it was necessary to revise the estimates of the volume of business for the fiscal year 1942 upward. In order to cover the expenses of this increased business, the Third Supplemental National Defense Appropriation Act, 1942, authorized an additional sum of $1,366,453 from funds of the Administration, making a total of $14,754.453 for the fiscal year 1942. The estimated appropriation necessary for the fiscal year 1943 is $15,041.343 as shown on the accompanying schedules, all of which is to be furnished from the insurance funds of the Administration. This is $286.890 more than the total appropriation for 1942. The estimate of $15,041,343 is based upon doing a volume of new business amounting to $.502,250,000. The following is an analysis of this volume together with a comparison of the estimated business for the fiscal year 1942: It will be noted that the same volume is estimated for title I, classes 1 and 2, for both years. This is on the assumption that the Federal Reserve Board restrictions on consumer credit will remain in effect throughout the fiscal year 1943. The estimate for rental housing business under section 207 is also the same for both years. The estimate of business for the fiscal year 1943 under title I, class 3, and title II, section 203, shows an increase, while no new business is shown under title VI, the provisions of which expire by operation of law on June 30, 1942. It appears logical that some portion of the business that would ordinarily be handled under title VI if it were in effect will be diverted to class 3 and section 203. It should be pointed out, however, that while new applications for defense housing insurance will not be received after June 30, 1942, there will remain a considerable amount of work to be done in connection with cases on which commitments to insure have been issued. Since all title VI applications involve new construction, each case requires a minimum of three inspections during the course of construction. This means that much of the inspection work on title VI cases committed on during the fiscal year 1942 will have to be done in the fiscal year 1943. In addition to this, there will be added the work of final closing and endorsement for insurance. Despite the amount of work which will continue to be done in connection with title VI cases and the increase in volume under title I and II, it is estimated that the expenses of the Administration, such as salaries, travel, etc., will be about $388,000 less than it would be if title VI were allowed to remain in effect. Explanation of the items appearing on page I follows: The amount indicated above as the salary appropriation for the fiscal year 1942 does not include the amount necessary for administrative promotions in accordance with Public Law No. 200, dated August 1, 1941. The Third Supplemental National Defense Appropriation Act, 1942 (which appropriated the funds for certain agencies for carrying out the provisions of Public Law No. 200), did not include any funds for this purpose for the Federal Housing Administration. As reported to the Bureau of the Budget, such administrative promotions to be made October 1, 1941, January 1, 1942, and April 1, 1942, would result in an annual cost of $208,660. As a result of these promotions and reclassifications necessary to be made during the fiscal year 1942 to bring certain positions in line with civil-service classifications, the annual payroll of the Federal Housing Administration will be increased in the amount of about $403,000. The amount included for administrative promotions to be made in accordance with the plan set out in Public Law No. 200 during the fiscal year 1943 amounts to $153,343. Adding the total of these administrative promotions and reclassifications to the amount appropriated for salaries in the fiscal year 1942, there would result a total of about $12,500,000, which would be the basis for the estimate for the fiscal year 1943. However, because of the fact that title VI of the National Housing Act will expire by operation of law on June 30, 1942, it is estimated that there will be a reduction of 114 positions, amounting to about $248,200. It will be necessary to add 23 additional positions in the Comptroller's Division, amounting to $44,340. A summary of these changes is shown in the following statement: Salary appropriation fiscal year 1942.. Add salary increases fiscal year 1942 (not included in 1942 appropriation): Annual basis: Administrative promotions in accordance with Field reclassifications__ Add cost of administrative promotions, fiscal year 1943, in accordance with Public Law No. 200. Less positions to be abolished, fiscal year 1943 (see p. 33) Add new positions to be created, fiscal year 1942 (see p. 33) 153, 343 12, 501, 531 248, 200 12, 253, 331 44, 340 12, 297, 671 Estimated salary appropriation, fiscal year 1943. The following positions which were provided in the appropriation for the fiscal year 1942 have been eliminated from the 1943 estimates: The new positions required for the fiscal year 1943 are as follows: All of these additional positions will be needed in the Comptroller's Division. The work of this division is cumulative each year as the amount of insured business carried on the books increases. Through the end of the fiscal year 1941, there had been recorded on the books of the Administration insured business amounting to $4,614,492,684. According to our estimates, this will be increased by $1,199,753,085 during the current fiscal year and by $1,098,599,325 during the fiscal year 1943. There is a tremendous amount of accounting work involved in setting up the new business on the books, as well as maintaining the accounts on insurance previously written. This is particularly true in the maintenance of mortgages insured under section 203, which requires the classification of mortgages into group accounts according to the similar maturity dates and similar risk characteristics. To each of these group accounts must be credited all income derived from the insurance of mortgages included in a particular group and to which must be charged all applicable expenses, both direct and indirect. This division is also charged with the billing, collection, deposit, and accounting for the annual insurance premiums and the recording of transfers on the books to reflect the sales of insured mortgages. In order to efficiently carry on its operations, it is felt that the foregoing additional positions will be needed in the fiscal year 1943. Additional rent, Washington office, $70,268.—The increase in the item of rent was discussed in the justifications for the 1942 deficiency. As stated therein, arrangements have been made to obtain 74,156 square feet of space at 1015 Fourteenth Street at a cost of $1.95 per square foot, including maintenance, on or about April 1, 1942. This will enable the Administration to give up 30,303 square feet of space at 1322 New York Avenue, 1324 New York Avenue, 1401 K Street, and 1430 K Street. This change will provide 43,853 additional square feet, which will alleviate the crowded conditions now existing and permit the consolidation of units now widely scattered, thereby increasing immeasurably the efficiency of the Administration. The basis of the rent estimate, amounting to $322,753, and the basis of the rent estimate, amounting to $393,021, for the fiscal year 1943, are shown below. Since the preparation of these estimates, there has arisen the possibility that some of the Federal Housing Administration field offices may be required to give up space now occupied in Federal buildings to make room for War, Navy, and other departments. For example, we have received definite notice to vacate our quarters in the post-office building in Los Angeles. About 2,000 square feet of commercial space is now being sought, the annual rent for which will amount to about $25,000 or $30,000. It is understood that a survey of field space is now being conducted by the Public Buildings Administration which may result in further cancelations of assignments of Government space to Federal Housing Administration field offices. The additional cost has not been included in the estimates submitted herewith, and while every effort will be made to absorb this additional cost out of savings, the matter is called to the attention of the committee, since it may become necessary to submit a supplemental estimate for the item of rent. 1 232,277 square feet July 1 to Mar. 31. 276,130 square feet Apr. 1 to June 30. Space to be occupied for fiscal year 1943 Transfers to other Government agencies, $3,990.-The gross increase involved in this item amounts to $25,590, which is partly offset by a decrease of $21,600. The increases represent additional amounts required by the Treasury Department and the Federal Loan Agency, justifications for which have, no doubt, been supplied with the Budget estimates for those agencies. The decrease of $21,600 is not an actual saving but represents the estimated amount to be paid to the Public Debt Service, which was formerly shown as a transfer but which is included as a miscellaneous expense of the Comptrollers Division in the fiscal year, 1943. This amount is to cover the cost of work done by the Public Debt Service in connection with the handling of debentures issued by the Federal Housing Administration. Decrease in estimates, $140,017.-Reductions in the items of "Communication," "Travel," "Printing," and "Equipment," amounting to $140,017 as shown on page 1 are due primarily to the expiration of title VI on June 30, 1942. INCOME The following is a statement showing the actual income from fees, premiums, and interest on investments, for the fiscal year, together with the estimated income in the fiscal years 1942 and 1943: Statement of actual and estimated income from fees, premiums and interest on It is proposed to furnish the entire cost of administrative expenses amounting to $15,041,543 for the fiscal year 1943 from income. APPROPRIATION LANGUAGE ADMINISTRATIVE EXPENSES The following is the proposed appropriation language for the fiscal year 1943. New language not appearing in the 1942 act is shown by underscoring. Language appearing in the 1942 act which is not to be included for 1943 is shown in brackets. FEDERAL HOUSING ADMINISTRATION Administrative expenses: Not to exceed [$11,283,000 of] $15,041,343 of the various funds of the Federal Housing Administration, as follows, (1) the mutual mortgage insurance fund, [$1,065,000 of】 (2) the housing insurance fund, [and $1,040,000 from] (3) the account in the Treasury comprised of funds derived from premiums collected under authority of section 2 (f) title I of the National Housing Act [(48 Stat. 1246)] as amended [by the Act of June 3, 1939, in all $13,388,000] (12 U. S. C. 1701) and (4) the defense housing insurance fund, shall be available for expenditure, in accordance with the provisions of said Act, for the administrative expenses of the Federal Housing Administration, including: Personal services in the District of Columbia and elsewhere; travel expenses, in accordance with the Standardized Government Travel Regulations and the Act of June 3, 1926, as amended (5 U. S. C. 821-833), but there may be allowed in addition to mileage at a rate not to exceed 4 cents per mile for travel by motor vehicle reimbursement for the actual cost of ferry fares and bridge, road and tunnel tolls, and employees engaged in the inspection of property may be paid an allowance not to exceed 4 cents per mile for all travel performed in privately owned automobiles within the limits of their official posts of duty when such travel is performed in connection with such inspection; printing and binding; lawbooks, books of reference, and not to exceed $1,500 for periodicals and newspapers; not to exceed $1,500 for contract actuarial services; procurement of |