Trade-ins can help everybody

A guest editorial by Norman Mason, commissioner, Federal Housing Administration

The No. 1 purpose for which Congress created fha 22 years ago was "to encourage improvement in housing standards and conditions."�

To us at fha today this means a lot more than raising the standard of housing for buildings. It means raising the standard of housing for people.

It means helping people buy better homes, as we do with our mortgage insurance program. It means helping people improve old houses, as we do with our home improvement plan program. It can also mean helping people sell the old house and move to a better one if the old house no longer meets their needs or measures up to their wants. That is what we hope to do with our new Trade-in House financing program.

We believe this fha Trade-in house program could be a wonderful help to the 30 million Americans who move from one house to another each year and to perhaps 60 million other Americans who would like to move if they could only sell the house they already own.

We also believe the new FHA Trade-in program could be of very great importance to builders, lenders and realtors.

It could bring into the market millions of customers for better new homes and better used homes. It would make it much easier for homeowners to convert their present equities into the down payments needed to buy better homes. In fact, we believe:

The Trade-in program may be the key to the quality market

Some people want to trade up for larger houses.

Some people want to trade down for smaller houses as children leave home.

Some people want to trade out to enjoy country living.

Some people want to trade in to live closer to where they work.

Some people want to trade for a new house; some people want to trade for a used house. Regardless of income bracket, just about as many fha borrowers bought used houses as bought new houses last year. The median income of fha new house buyers was $468.92 a month; of used house buyers just a little higher  $480.72 a month.

We believe all these homeowners should be able to change houses more easily as their economic or family conditions change.

To help make the Trade-in house market a real American institution like the Trade-in car, fha already has the nucleus of a working plan. We issue firm commitments to builders and real estate firms who take an old house in trade if they agree to put it in good repair. We will take a look at any house old or new to see what its possibilities for insured mortgage financing might be in the event of a trade.

These are good techniques for individual house traders. What we have lacked is a good plan to provide builders and realtors with interim financing for an inventory of traded-in houses before they go back into the market. This is what we hope our new program (page 126) will provide. It is the result of studies we have made with the help of industry advisory groups of builders and real estate men.

In our Trade-in house program as in all our insured mortgage program-� fha cannot do the job alone. But through teamwork with industry we hope the Trade-in house program we have just adopted may open a great new market and bring improved living conditions to millions of American families./END