Evening star., 1934-04-30

funds for other improvements, such
as additions, alterations, etc.
Under the new set-up, the added
funds may be advanced for these
property improvements, provided the
total OF mortgage refinancing, repairs
and modernizatlon does not exceed 80
per cent of the appraised value of the
property.
An important feature is the fact
that the appraisal will be made on the
home with Improvements, which IN
many instances may enhance the
value several hundred dollars.
The amendments to the home
owners loan act make available $780,
O00, 900 for moderniZation of homes on
which the H. o. L. c. holds mort
cages, and it Is estimated some 750,-
900 homes throughout the country viii
come within this category by the end
OF the year. This fund, Chairman
John H. Fahey of the Federal Home
Loan Bank Board said today, may
provide employment for 125,000 men
for year or more.
Five Major Objectives Cited.
Five major objectives and several
minor ones are seen by Fahey as ac-
compllShed under the amendments to
the act, providing speedier relief for
distressed home owners. increased
credit for new home builulng and re-
pair, wider employment in the build
ing trades. and strong Federal pro-
lection for private savings.
First of all" Fahey said, "the Gov
ernment now guarantees both princi-
pal and interest of the bonds of the
Home Owners Loan Corporation, pre-
viously guaranteed only as to interest.
A second important provision of the
act rigidly restricts loans by the COR
poration to home owners who were in
involuntary default on June 10, 1898,
or whose default at later date has
been due to circumstances beyond
their control. Only in exceptional
cases will loans be made to applicants
whose default has occurred since then.
"A third feature Of the new amend
ment, which may provide employment
for the equivalent Of 125, 1000 men for
year or more. Is the authorization
OF 5000 900, 900 to be advanced by the
Home Owners Loan Corporation from
its own funds for reconditioning
houses. This fund is strictly limited
to homes on which the corporation
makes relief loans.
Moratorium Withdrawn.
"The fourth important change ef-
fected by this new legislation permits
the United States Treasury to buy
full-paid income shares in any Fed
eral Savings and Loan Association.
Fifth, the optional moratorium for
borrowers from the Home Owners
Loan Corporation is now withdrawn.
The former privilege of paying no in
stallments on principal until June IS,
1886, has been abused by many bor-
rowers who are actually able to make
such payments. No postponement Of
principal payments will now be per-
mitted except in necessitous cases."
Money for new homes becomes
available through the provision for
increasing the capital of Federal
savings and loan associations. Up
to now, these associations could get
half their capital from the Govern
ment up to only 100000. Under the
new provision, these associations may
get three-fourths of their capital
from the Government, and no limi-
tation Is placed on the amount which
an individual association may get,
although 100000, 900 Is the limit Of
money available for this purpose now.
The money Is subscribed through the
purchase Of full paid income shares