Iowa County democrat. [volume] (Mineral Point, Wis.) 1877-1938, 1916-08-17
Provides System For
Lending Money on
Farm Lands at Rea-
scnabie Interest For
Relatively Long Pc
RODS - Amortization
Plan For Easy Repay
ment Prescribed @

| loans it makes through the association.
| If a prospective borrower has no
| money with which to pay for his asso-
/ citation stock he may borrow the price
| Of that stock as part Of the loan on
| his farm land.
| Under this plan, then, every borrower
/ must be a stakeholder in his local asso-
! citation and every association a stock
! holder in it's district bank Each stock
! holder i'll al association is liable for
| the acts Of that association up to twice
the amount of his stock.
How Loans Are Obtained.
A member Of a national farm loan as
| ISOLATION before obtaining loan must
! first ill out an application blank sup
| piled to the loan association by the
federal farm loan board. This applica-
ton Blank and other necessary papers
viii then be referred to q loan commit
| tee OF the association. which must Gp-
! praise the property offered as security.
! Such Application as is approved by the
! loan committee is then forwarded to
! the federal land bank and must be in
! yestigateJ and reported on by a sal
| AIRED appraiser Of the bank before the
! loan is granted. This appraiser is re
/ quirod to investigate the SOlyency and
| character Of the prospective borrower
as well as the value Of his land. When
! q lean is granted the amount is for
warded to the borrower through the
! loan association.
The act specifically defines the pur-
| poses for which loans may be obtained,
| These are:
(a) To provide for the purchase Of land
! for agricultural use.
% To provide for the purchase Of equip
! ment, fertilizers and live stock necessary
| for the proper and reasonable operation
| of the mOrtgaged farm, the term 'eQulp-
| mcnt" to be defined by the federal farm
! loan board.
Co TO provide buildings and for the i'm
| provement Of farm lands, the term "in1-
prOVement' to be defined by the federa
| farm loan board.
! (d) To iiquidate Indebtedness of the own
er of the land mortgaged existing at the
| time Of the organization Of the first ma
! t0nal farm loan association established in
! or for the county in which the land mort
! gagged is situated or indebtedness subse-
| uuently incurred for one Of the purposes
! lAACllbl''iICN - tiiIh - Ci''ll'
Loans may be made only on first
mortgages on farm land.
Only those who own and cultivate
| farm land or are about to own and cul-
| tivate such land are entitled to borrow.
No one can borrow save for the pur-
poses stated in the act, and those who
after borrowing do not use the money
for the purposes specified in the mort
gage are liable to have their loans re-
| duced or recalled. The sccretary-treaS-
lrer Of each association is required to
report any diversion of borrowed mon
ey from the purposes stated in the
mortgages.
No individual can borrow more than
$4,000 or less than 800.
No loan may be made for more than
90 per cent Of the value of the land
mortgaged and 20 per cent of the value
of the permanent insured improve
ments upon it.
The loan must run for not less than
five and not more than forty years.
Every mortgage must provide for the
repayment Of the loan under an amor
| llL0tlOl Jl<lli ~ IICCllo Vi al uACO IuIll-
| Der of annual or seniannual INSTALL
ments sufficient to meet all interest
and pay off the debt by the end Of the
| term Of the loan The inStallments re
CURED viii lie those published in amor
tizatiOn tables to be prepared by the
! farm loan board.
The Interest Rate Paid by the Bor-
rover.
No federal land bank is permitted to
charge more than per cent per annum
on its farm mortgage loans, and in no
case shall the interest charged on farm
mortgages exceed by more than 1 per
cent the rate paid on the last issue of
! bonds.
For example. if the bank pays only +
per cent on an issue of bonds. it can
not charge more than per cent for the
next farm loans it makes
Out of this margin of not to exceed
per cent. together with such amounts
as it can earn on its paid in cash cap
ital, the bank must set aside certain re-
serves and meet all its expenses. Any
balance or net profits can be distrib-
uted as dividends to the loan associ-
ations or other stockholders. The loan
associations from their bank dividends,
after setting aside the required re-
serves and meeting expenses, can de
clare association dividends to their
members In this way the profits. if
any. viii be distributed among the Dor
rowers and will to that extent reduce
the amount OF interest actually paid by
them
The federal land banks are specifcal-
ly prohibited from charging in connec-
ton with making a loan any fees or
commissions which are not authorized
by the farm loan board. The author
tied fees need not be paid in advance
but may be made part of the loan.
Amortization Plan of Repaying Loans
It has been said that all loans are to
be repaid on the amortization plan
This plan calls for a number Of fixed
annual or semiannual payments. which
include not only all interest and