Evening star., 1934-12-08
LOAN UNITS PLACE
0VER41 MILLIONS
Building Figures Show
Home Owners Extended
Big Total in Two Months.

Statistics on residential building
permits, alterations and repairs for
September and october reflect directly
the SAL 100000 worth of home owner
credit extended by the building and
loan associations during the same
period to lift employment in the
building trades.
This is pointed out by Morton Bod
fish, executive vice president of the
United States Building and Loan
League, in comments on the building
and loan associations part in the
home moderniZation drive. It devel-
oped from recent survey by the
league that the associations made
ST., ,997 900 worth of repair and mod
ernization loans, and S17,000,000 of
new construction loans during these
two months and that they have spent
in October alone $6,201,000 to repair
home properties to which they hold
title.
Longer Credits Favored.
Mr.. Bodfish explained that the as
sociations had found modernizers
more inclined to choose their own
long-used credit plan with to II
year maturity and hence had been
unable to register most of these loans
for the insurance which is limited
to five-year obligations. The HouS-
ing Administration has insured $20,-
100000 worth of modernization loans
for all types of institutions. and the
building and loan figures, 80 per cent
of which may be counted as addi-
tional, bring the total financing for
the modernization drive up to some
S45 600 900.
Particularly important is the rela-
ton between the building permits as
listed by the Department of Labor in
geogra phical divisions and the build
ing and loan construction loans by
States" said the league official. In
IL States the associations made more
than 100000 Of new construction
loans during these two months. Three
of these States were in the Middle
Atlantic section. which reports the
largest volume OF new residential per-
mits for all divisions. Three other
States out of the IL leaders in build
ing and loan construction loans were
in the East North Central district,
which ranks second in the Labor De-
partments listing. One State was in
the Pacific group and still another in
the New England group, which ranked
third and fourth, respectively, in
building permits.
From these comparisons we can
trace almost directly the influence Of
building and loan credit in making
new building possible" he pointed out.
"The Bureau of Labor Statistics shows
that permits for S89o00,000 worth of
construction, including all types Of
building, alterations and repairs. were
issued in 766 leading cities during
September and october. From the
uueStionnaire which we sent out to
building and loan associations we find
that they disbursed SAL 100000 dur
ing that time for construction expendi-
lures"
Mr.. Bodfsh said that In a ma
jority of the States both moderni-
cation and new construction loans had
shown a great pickup in october as
compared with September, evidencing
the beginning of break in the build
ing industry deadlock. Twenty-seven
States showed an increase in the con-
struction loans made by associations,
increases ranging anywhere from 2
to 10 times the lower figure. That
modernization and repairs are getting
popular much more rapidly than con-
struction is shown in the fact that as
sociations in "a States did more mod
ernization lending in October than in
September.
How Lending Divided.
OF the total modernization financ-
ing done by the building and loan in
stitutions, $7,579000 was September
lending for modernization and repairs,
$1O,418.ooo was October lending for
the same purposes and S6,20l 900 rep
resented expenditures by the associ-
ations themselves to recondition prop
erty now.
CONSTRUCTION loans, exclusive Of
renoviIng, increased from S7,705 900
in September to S9,467 900 in October
or % per cent rise in volume of con-
struction credit" the building and
loan report continued Average size
of the construction loans was around
$4,000"
States where building and loan as
sociations have granted more than
half million dollars in modernization
loans are California, Illinois, Massa-
chusetts, Missouri. New Jersey, New
York, Ohio, Pennsylvania, Texas and
Wisconsin. Five of them have ex-
tended more than $1,O00,000 of this
kind of credit.
Comment after comment from in
dividual association managers with
regard to the modernization credit
shows that there are really two types
Of credit involved when we arrange to
finance home moderniZation. There is
the short-term personal credit for
papering. painting, putting on a new
roof and repairing or replacing the
plumbing. This type Of credit comes
within the flve-year limitation set up
by the F. H. A. for it's insurance plan.
But there are thousands of home own
ers who want to build on new rooms,
change the house structurally. and re-
model the property. This type OF ex-
penditure clearly comes in the class
Of real estate credit.
Because the Housing Administration
Ensures no loan of longer term than
five years, the building and loan asso-
Citations have had to extend the other
sort of credit entirely on their own
risk. They have been glad to do this
in the interest of cooperating in the
plan and serving the home owners who
need smaller payments and more time
to pay in, but they could have made
many times the number already con-
+l,ic Of lon term