Evening star., 1934-07-03
FINANCING FUNDS
AWAITING THOSE
Who PLAN HOMES
Millions in Idle Cash Avail
able Under U. S. Guar
antees.
LOAN ASSOCIATIONS
WILL SUPPLY MONEY
Double Incentive Given Moderni.
cation Campaign by The
Stars Prizes.
BY VINCENT TUTCHING.

The Capitals houses of finance,
bulging with idle funds, stand ready
and willing to cooperate with the
administration to the fullest in carry
ing out the objectiVes of the housing
act-the modernization and repair of
existing homes and the construction
of new ones
leaders In banking circles, as Federal
Housing Administrator James A. Mof-
fett conferred in New York with ad-
visers, with prospect of an early start
on the broad program for revivifying
the capital goods and construction in
dustries
For many institutions, including
various building and loan associations,
cooperation with the administration
will but mean a slight deviation from
customary procedure in making loans,
especially with respect to funds for
property improvements.
Handled by Notes.
Whereas heretofore loans for altera-
tions and improvements to real estate
have meant the writing of a new lien
or mortgage against the property, the
new process will entail simply the
signing of a note with the private
lending agency, obtaining the money
for the work and repaying monthly
installments, plus interest
Loans will be available not only TO
home owners, but for apartment
h,,il fo
other commercial properties, but a
limit of $4,000 will apply to each
individual project This type Of loans
will be at low interest rates, with the
principal payable in mstallments over
periods ranging from three to five
years, depending on the size of the
loan.
The Federal Housing Administra-
ton does not make. direct loans, either
for home Improvements or for new
construction, spokesmen for this new
Government unit emphasize. Its func-
ton is to provide security and safety
for private investors by insuring loans
for rebuilding ami modernization,
which will be based on the character
Of the borrower, and for mortgages on
new and existing buildings.
Insure 20 Per Cent.
The bank or building and loan as
sociation making loans under the Gov
eminent plan will be given insurance
on 20 per cent Of funds thus allo-
Gated.
The limit on loans for new homes, it
is pointed out, will be 80 per cent of
the completed value up to $4,000, with
the possibility Of the entire sum going
into the building. Thus the owner of a
lot properly appraised at $500 may
erect a S2,400 home with the mort
gage money, with the lot as his equity
in property worth $1,000 when COM
pleted. He would escape the burdens
and risk of a second mortgage required
under the existing mortgage system,
and would own his home free of en-
cumbrance within 20 years.
The Federal Housing Administration
is intended to assist those owners of
property who are not in distress, both
as to taking over complete mortgages
and assisting in rebuilding and reno
vation. whereas the Home Owners
Loan Corporation is restricted to as
sisting owners of mortgaged homes
who are in distress. The H. o. l.. c
can make loans for repair only on
homes on which it takes over the mort
cages. and cannot finance new con-
struction.
That the time is auspicious for
home owners to undertake long-poSt-
poned renovation and improvement
work on their properties is demon
strated by improving conditions as re-
f1ected in the discharge of obligations
to the banks during the past six
months, according to one leading bank
official. Delinquents dropped of nearly
a third during this period, as COM
pared with the preceding half year,
1t was shown.
See Recovery Factor.
The building industry and finance
houses alike are optimistic over the
outlook for the coming months in the
local construction field They feel
that the loosening of credit and res
toration of public confidence in the
future will be vital factors in the re-
covery trend.
Home owners in the metropolitan
area of the Capital who invest in
property improvements at this time
have the two-fold advantage of en-
hancing the value of their holdings
and at the same time competing for
valuable prizes In The Stars $1,000
Better Homes Contest, now in prog
reSs
When the contest closes September
Is, some Is home owners will receive
ranging from $25 to $3.50, for
property improvements.