GOVERNMENT: The Payoff

In the dark days of the Depression, the New Deal tried out a plan to help the housing industry. With a $1,000,000 advance from the Treasury, the Government set up the Federal Housing Administration to insure loans for housebuilding and repair, thus spur the building industry. The experiment was a noble success. FHA's first insurance was on a loan for $125 to paint a house, repair the roof and install a water tank. Since then, the agency has insured mortgages on 3,940,000 housing units, and has made a total of 16 million loans for property improvement. FHA has not only been a mainstay of the postwar housing boom but has also been profitable. With a total of $30 billion worth of insurance issued, FHA netted $92 million from its insurance premiums last year alone.

This week in Washington FHA handed over a $16 million check to the Treasury, final payment on $65 million borrowed from the Treasury for its operations over the years (plus $20 million in interest). Now that FHA is free of debt, the Eisenhower Administration plans to liberalize its insuring power to cover mortgages for as long as 40 years, as well as loans for slum-clearance programs (TIME, Dec. 14). The goal remains the same: to keep the U.S. housing industry operating at a high level.