Metropolitan Mortgage Loans

The Metropolitan has aided in the solution of the national housing problem through cooperation with official agencies. In 1926 the New York State Housing Law was enacted, authorizing municipalities to extend tax exemption to buildings erected by publicly regulated, limited dividend corporations, which were organized to provide housing at cost and at rentals fixed by the State Board of Housing.

The 1939 report of the Board shows that of the total $22,000,000 loaned under this act on 14 projects, more than $5,000,000 was taken by the company. This was 77 percent of the total loaned by other than United States Government agencies. The Metro­politan was the only insurance company which up to that time has loaned on projects built in accordance with the provisions of the act. Thus the company assisted in the creation of modern housing totaling 6,024 rooms at moderate rentals for 1,578 families.

Through the company's interest in investments in dwell­ings and apartments during those years, loans amounting to $1,377,643,784 were authorized on new construction and on older buildings to accommodate 356,453 families, or well in excess of 1,000,000 people. These figures are an index of the social use to which Metropolitan funds have been put.

The company's experience with urban mortgage loans over the years has been generally satisfactory. In addition to an excellent record of safety, its real estate loans have also been a reliable source of interest return. In general, the trend of the interest yield for this type of investment has paralleled that for the interest rate in the country as a whole: a decline from the post Civil War period until the beginning of the 20th century, an upward trend through the first World War, and then another downward movement. In the early 1920's the largest proportion of loans outstanding was on a 6 percent basis.

A decade later 5.5 percent was the predominating rate, and in the early 1940's more than 60 percent of the city mortgage loans brought 4 ½ percent or less. The trend toward lower interest rates results from surplus money seeking investment and from competition by lending organizations for well- secured mortgages.