Grand Forks herald. [volume] (Grand Forks, N.D.) 1916-1955, 1922-03-06
NO BONDS Can
Be ISSUED BY
HOME BUILDERS
Amendment to Law Makes
Such Action Illegal at
- Present Time.

Bismarck, N. D., March e.-No
bonds Of the Home Building series
can be issued for several years under
the terms of the laws governing the
HON ebuilders' association, in the
opinion Of F.: E. Diehl, manager Of the
There appears to be no
legal manner in which operations
could be resumed in the Homebuild-
ers' association until tho legislature
has revised the laws he believes.
The legislature also probably Will
making up the huge deficit which the
BODYBUILDING association now faces.
There are only three ways provided
by the Home Builders law of 1919 for
raising money, Mr.. Diehl points out In
q report to the Industrial Commission
on the operation of the association.
These are: %{1) BY sale of bonds.
(2) BY appropriation. (3) BY pay
ments of home purchasers or derived
from deposits made by them.
An amendment to the law. enacted
by the special session in 1919, how
ever, provides that no 1nortgnGe may
set.e.sfs1sf taus,s htue 81 the property to
be. ,mortgaged. Under the amortiza-
ton plan Of payment, after the pur-
chaser has paid 20 per cent Of the
value of the, property before the
amortization begins, it would require
1874 months. or 10 years and months
before one-half Of the amount would
be paid. . -.
The Original Law.
Section 6, Chapter $50, of the laws
of 1919 provided:
whenever funds shall be available.
derived from the sale Of bonds issued
by the state and delivered to the In
dustrial Commission for negotiation to
carry on the business of the associa-
ton; or derived from appropriations
made by the legislative assembly for
such purpose; or derived from de-
posts received by the association as
hereinafter provided; or derived from
payments made for homes by pur-
chase as thereof; such funds shall be
used. under proper regulations of the
Industrial Commission, for investment
in building or purchasing homes with
in the state for members of the Home
Buyers league, as such leagues. are
hereinafter provided.
The above section, in the opinion of
Mr.. Diehl, provides only three meth
DDS of procuring funds for operating
this department and that there Is alb
solutely no provision of law, which
authorizes the officers of this depart
ment to execute"notes in the name of
the department or procure loans in
the name Of the department.
The association, however, owes the
Bank Of North Dakota about $413,000.
AS the association is unable to issue
bonds for several years the only way
from payments by the home pur-
cliasers or by legislative appropria-
tton-> ,
The Amendment.
Chapter 80 Of the amendments to
the Home Building law. enacted by
the special session of 1919, has the
following Limitation regarding bond
issues:
Provided. however. that no such
mortgage, note or obligation shall be
SO assigned Ito the state treasurer) as
security for bonds SO to be issued if
the total amount remaining unpaid
and payable upon such mortgage shall
exceed one-half the value Of the real
estate by which such mortgage, note
or obligation is secured, nor unless it
shall be first mortgage upon such
real estate."'
The loan of the Bank of North Da-
kota is for 6 per cent, the interest
amounting to approximately $25,3S0
a year.
Under theNaaw prohibiting the as
sociation from loaning more than $4,-
900 to an individual home purchaser,
the amortization payment on $4,000
loan would be $2S.65 per month.
There are 54 houses built by the as
sociation. This would make the
amount paid $1,547.10 month, or
SIS. 9.725.20 year which the home
purchasers would pay the association.
This limit, however, was not observed
by thA former adminlatration ~