Evening star., 1934-11-17

plumbing and make other badly need
ed repairs? He borrows it as loan.
Any property owner with regu-
lar income and good credit standing
may borrow money under the act. He
must be able to prove. however, that:
He owns the property which he de-
sires to irnprove-he has yearly in
come at least five times greater than
the yearly payment he will be asked
to make on his loan. CThus, If the
yearly payment on his loan amounts
to $500, his total income must be at
least $2,500)-Any mortgage he holds
is in good standing-There are no past
due taxes or other liens on his prop
erty-The proceeds of the loan will
be used only for improvements to his
property
If property owner wishes to make
repairs to his home or business build
ing meets these requirements, he may
proceed to apply for a loan. He can
get the loan from any national or
Slate bank, trust company. savings
bank, industrial bank, building and
loan association, finance company or
similar agency approved by the Hous-
ing Administration. 1t is not neces-
Sary for him to have any previous
dealings with the bank or agency to
which he applies. 1t is not necessary
that he be a depositor at the bank he
asks for a loan
The home owner may borrow as
little as 500 or as much as $4,000 on
any one property. The size of the
loan in each case depends upon the
applicants income. If his income is
large enough he may borrow the max
imum amount of $4,000 on each of
several properties he may wish to i'm
prove Special approval of the Hous-
ing Administration is required, how
ever. If he desires to borrow the max
imum of $4,000 on more than five
pieces of property.
Gives Personal Note.
In return for the loan the home
owner gives his personal note to the
bank or lending agency concerned II
he does not wish to pay of the loan
in one year. he may arrange to pay 1t
off in two or three years. In excep-
tional cases loans may be made for
five years. The loan is paid of in
equal monthly installments, except in
the case Of farmers. whose income is
received at other than monthly
periods. The loans are not real estate
loans. They are not mortgage loans.
They are personal character loans and
are extended on the basis of the own
er's personal credit standing The
money SO obtained must be used en-
tirely for property improvements.
Movable equipment cannot be bought
with it.
After the applicant has satisfied the
lending agency that he can meet the
requirements laid down under the act,
has filled out a credit statement giving
all the necessary information and has
signed his personal note for the money,
he gets the cash and can direct the
improvement work himself. This
means that he may hire his own con-
tractor and buy his own material.
If the property owner prefers, he
can go ahead and engage contractor
to do the necessary work, submit all
information as to his credit standing
W lllUl dllu lCt bllC COIltA attoA SCI t1lC
loan approved by the bank. Under
this arrangement, when the work is
done the contractor is given promis-
sorry note by the home owner covering
the cost of the work The contractor
takes the note to the bank and the
bank takes it over after paying him
cash for his work.
What is the cost of the loan to the
property owner? The maximum
amount any lending agency is allowed
to charge is SIS for each 500 loaned
on a one-year note 1t means that II
a home owner needs as much as S285
for repair work on his house. he may
sign a note for $500 due in one year
and payable in twelve equal install
ments. In this case, the note would
not bear interest. as the maximum
charge permitted-Sl5-wou be in
cluded in the face value of the note
There are no other charges. unless the
home owner is more than IS days late
with any payment. In such case he
is charged five cents on each dollar.
Lowest Ever Offered.
The cost of these loans is higher
than ordinary so or 80 day bank loans.
Compared with the same type of loans
payable in monthly installments, how
ever, it is much lower than hereto
fore available In fact, the type of
loan made possible under the housing
act for home improvements is by far
the lowest in cost ever offered for such
purposes.
No down payment is required. The
borrower does not have to keep money
on deposit with the bank making the
loan. He does not have to give a
mortgage. He does not have to ask
his friends to sign his note. He spreads
his payments over a long period.