The RECD is the primary source of residential construction finance in Micronesia. I was interested in how the money supply influences the final product in housing. I wanted to know the typical process that someone goes through when building a new home. Sheldon explained that the purpose of the first meeting with prospective homebuilders was to establish an estimate of the borrower's resources and to present them with six different house plans they could chose from. While the design is not limited to the six stock plans, choosing one of these options is highly recommended.
Applicants fill out the loan forms and are sent home to decide on a house design.
There is a wait of about one-month to see if they qualify for the loan. After they qualify, applicants finalize their house design and put together a cost schedule. The loan most often used for new construction was Section 502. This was the only loan option mentioned until I asked about alternatives. If one is willing to use one of the stock plans, the Section 502 package would be quite attractive.