Evening star., 1919-04-26
NEW HOME OWNER
MUST Be FINANCED
Novel Means of Helping Pros
= pective Buyer Necessary,
ls. Says U. S. Report.

Financing the prospective home
owner continues to be one Of the chief
obstacles to the movement. "own
your own home" says the United
states Department of Labor in a re-
port Just issued on the subject. 1t ts
said conventional banking practices
in loan making. and present restric-
lions on building and loan associa-
1ions preclude the possibility that
these regular sources of capital will
meet the increased demands for home
loans If home owning is to be made
possible to an overwhelming circle OF
The population, in the opinion OF ex-
perts who are studying the situation
Tor Information and education service
of the Department of Labor. new ma
chinery must be devised for financing.
and this new machinery must provide
for longtime loans, at low interest
rates, made on an amortization plan.
Also it is imperative that substantial
and artistic dwellings, are made avail
able at the very minimum construc-
lion costs.
Depends on Private Interests.
The dispatch shown by private in
terests in breaking from the profit
making conventions in this field.
doubtless, will determine the future
attitude of the government II pri-
Vate initiative does not discover a
way to permit the realization of the
homecoming aspirations of the peo-
PIE it seems inevitable that the gov
crnment in some fashion must step
into the field. the report states.
The Canadian government already
has passed the legislation enabling
the Dominion government to loan to
the Ontario government the money es-
Sentialzto certain housing operations
The Ontario government, in turn, is
prepared to make loans to municipal
tiles and, companies incorporated un-
der he~housing accommodations act,
for acquiring lands and constructing
houses for returning soldiers, work
ing men and women and those of linn
tied means who. without aid on ex-
ceptionally advantageous terms. would
he unable to own their homes.
Plans to Aid.
In the Canadian scheme the type Of
house must not exceed $2.500 in con-
struction costs and the maximum cost
of each house and real estate is not
to exceed $4,000.
The municipality supervises the
laying out of land, the plans for the
dwelling. form of construction, etc
The loans are for not more than
twenty years and at per cent.
Where municipalities acquire land
and construct houses they-the cities
may borrow from the government
fund the full amount required for
this development and building. A
housing company. complying with the
of the value Of land and buildings.
A loan may be made to a farmer and
to persons who own their land and
erect thereon a house for their own
occupancy. to the full value of the
building. Loans are made by the
palfties on progress estimates as re-
quired. The monthly payments for
twenty years to cover interest and
repayment Of principal. on a three
thousand-dollar property will be
abount $50. but the whole or any
at any time during the twenty-year
period. The person buying covenants
to repair and to pay the taxes and
insurance. A perscn may sell his
interest in property at any time.
Building Arrangements.
In the United States the meeting of
che finance problem remains in the
hands OF private interests and own
Your own nome committees In various
cities are meeting the problem in
various ways. In Spokane, WASH.
for the most part. the conventional
methods of handling building loans
prevail. The financing is worked out
by the seller and building contractor.
Some lot owners are willing to build
to suit the purchaser II the latter
pays down 20 to IS per cent of the
purchase price and the balance in
monthly payments over three to nve
years at per cent. When 50 per cent
of the purchase prizes has been paid
fhe buyer can obtain loan accommo-
dations on more favorable conditions
from the mortgage companies and
building and loan associations. In
the Spokane campaign especial care
is taken not to permit a person to
buy-beyond his possibilities OF pay
ment
In st. Paul, Mimi, an effort is be-
ing made to organize a civic home
1oah corporation with a capital stock
of $250,ooo. 1t Is proposed to lend to
prospective home owners and build
ers up to s5 per cent Of the invest
1nent on the contract basis, at 6 per
cent on deferred payments and with
the elimination Of discounting sec
ond mortgages and commissions.
Salt Lake City is depending on the
mutual building society and the
building and loan associations.