Franklin D. Roosevelt

Letter Recommending Financial Assistance for Home Building.

February 07, 1938

Dear Jesse:

In order that the benefits of the new Federal Housing Act may be made immediately available to all who wish to build and to those who wish to invest in the debentures of national mortgage associations, I wish the Reconstruction Finance Corporation to organize a national mortgage association in Washington with a paid-in capital stock of $10,000,000, and provide it with management. I should also like the Corporation to reserve $40,000,000 more for capital in other national mortgage associations, or as additional capital for the National Mortgage Association of Washington.

It is my hope that builders, material and supply people, working men, prospective home owners, and those who may desire to build private or multiple dwellings for rent or sale will cooperate in taking advantage of this new law.

The obvious effect of such whole-hearted cooperation will stimulate business and provide employment for hundreds of thousands.

Inasmuch as the debentures of national mortgage associations can only be issued against first mortgages that are insured by the Federal Housing Administration, they are backed indirectly, but nevertheless effectively, by the credit of the United States Government.

These debentures will be exempt both as to principal and interest from all taxation (except surtaxes, estate, inheritance, and gift taxes) now or hereafter imposed by the United States, by any Territory, dependency, or possession thereof, or by any State, county, municipality, or local taxing authority. They will afford an attractive and absolutely safe investment for people of small or large means, and should be issued with this in view so as not to be a drain on the Federal Treasury.

Very sincerely yours,

Mr. Jesse H. Jones,

Reconstruction Finance Corporation,

Washington, D.C.

Franklin D. Roosevelt, Letter Recommending Financial Assistance for Home Building. Online by Gerhard Peters and John T. Woolley, The American Presidency Project

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