The Indianapolis times. [volume] (Indianapolis [Ind.]) 1922-1965, 1933-10-02

lana OanK Oh LOUISVILLE IN applying
the act.
Issuance Of s., 1000, OOO. 900 in bonds
to federal land banks is authorized
by the mortgage act. Interest of
per cent on these bonds is guaran-
teed by the United States treasury
Loans can be made to farmers at
an interest rate of Az per cent
through National Farm Loan Asso
Citations and at per cent in terri
tory where there are no such or
CARNATIONS.
Principal May Be Delayed
Questions answered by Mckinley
follow:
OWN there be payments on the
principal in addition to the inter-
est?
Aft a borrower is not in default
with respect to any covenant in his
mortgage, that is, if his taxes and
interest are paid and his insurance
is maintained, he will not be re-
quired to pay on the principal OF
his loan during the first three years
He may, however, make payments
on the principal if he wishes to do
so.
Q-Are funds provided for loans
on second mortgage and chattel Sc
curity?
A-Congress provided that the
Reconstruction Finance Corporation
should furnish the land bank COM
missioner with 100000 900 to be
loaned on farm real estate and per-
sonal property, including crops of
the farmer. If on real estate only
such loans may be made on regular
land bank terms, but If personal
property is included the term of
laon can not exceed thirteen years,
including the first three years when
no payment on the principal may
be required.
Limits Are Set Out
Q-How much can an individual
farmer borrow under these two
plans?
Ale may borrow from a Federal
Land bank, an amount not eX-
ceeding so per cent of the normal
value of his land and 20 per cent of
the value of the permanent in
surable improvements to the farm
and not exceeding $4,000; from the
land bank commissioner, he may
borrow not more than IS per cent OF
the normal value of the property
including all prior liens and not ex-
ceeding SIS 1000, the interest rate to
h per cent. OF course, the farm
er'S ability to make the payments
on his loans, if given normal prices,
must be taken into consideration in
determining the amount to be
loaned
Q-On what basis is farm land
being appraised?
A-The loan act provides that in
making the appraisal the value of
the land for agricultural purposes
shall be the basis of appraisal and
the earning power Of the land shall
be principal factor.
Estimate Crop Earnings
GLOW do the appraisers estimate
the earning power of the land?
A-They estimate what the land
will produce in terms of crops. live
stock, and livestock products COM
mon to the farm, and community
and what such products would be
worth at normal prices.
Q-What is meant by normal
prices?
A. The prices of 1909 to 1914 have
been adopted as representing a stable
and normal period of agriculture,
with the exception that for tobacco,
the normal price is defined as the
average Of the period 1919 to 1929.
The appraisal force in Indiana had
to be expanded very rapidly to meet
the recent flood of applications and
some mistakes are bound to be made,
but every effort is being made to
give the farmer fair appraisal.
Secretary to Assist
Q-How does a farmer proceed to
get his Indebtedness ref1nanced I'M
der these plans?
A-The farmer should get in touch
with the secretary-treasurer Of the
National Farm Loan Association in
his territory, who will be prepared
to give him advice and help him in
making out his application. The To-
cal banker or the county agent
should be able to put the farmer in
touch with the local secretary
treasurer, or he may write the
Federal Land bank of Louisville.
Off the farmers Indebtedness
exceeds the amount he can expect to
get under appraisal Of his property,
is there anything he can do?
A. The law provides that COM
missioner's loan can not be granted
unless it clears up the entire in
debtednesS of the farmer, it having
been felt that unless the farmer
had Is per cent equity in his farm,
his chances of working out were
very remote. Frequently. however.
the creditors of a heavily involved
farmer, in order to get cash at
once, are willing to accept less than
the face value of the obligations
which they hold. but which they
might never be able to collect. Any
such debt adjustments must be
worked out by the farmer and his
creditors.
Q. If farmers have other questions
about these loans where should they
send them?
A. To the Federal Land Bank,
( Louisville, Ky, which serves the
Fourth Federal Land Bank district.