The Nome daily nugget., 1935-07-08
Regulations For S5O,OOO Limit In
 Title l Are Public
EXTENSION OF CREDIT SEEN AS STIMULATING WIDER
 ACTIVITY.

WASHINGTON, D. C.-New reg
 ulations governing the administra-
 tion of the modernization credit plan
 of the Federal Housing Administra-
 ton have been announced by Acting
 Administrator Stewart Mcdonald following the extension of the ann ount insurable under the plan from
 $2,000 to S50,000.
 These revised regulations have
 been forwarded to all Federal Hous
 ing headquarters and all approved financial institutions and are eX
 pected to open new market for
 building materials, machinery and equipment which should be of di rect benefit to practically all indus try and indirectly, to the Nation as whole
 Under the amended Act, the regu- latons governing modernization ere dit for improvement of individual homes, farm properties, churches, clubs, public buildings, and similar properties remain substantially the same The maximum limit for each such property is fixed under provi- sions of the Act at $2,000. This type of credit is being handled as a separate class and is being extended for the purpose of making additions, alterations, repairs, and improve ment of real property, including also I such new construction as garages and certain other similar structures.
 Classified Credits.
 The class of modernization credit made possible by the $50,00O amend 4 ment also is being handled separate q ly. This type of credit is extended @ for additions, alterations, repairs, and improvements for real proper = ty improved by or to be converted
 into apartment or multiple-family I houses, hotels, office, business or 6 other commercial buildings, hospi-
 tals, orphanages, colleges, schools
 or manufacturing or industrial plants The maximum llllllt iol
 each property is $50,000.
 Purchase and installation of ma chinery and equipment in the types of property mentioned in the pre- \ ceding paragraph are eligible for modernization credit under the new : regulations, provided they are pc Y oI1 tn tho hIICInpSC
 ducted therein or necessary to the l operation thereof
 All charges, including interest,tor | both types of mOdernizatlon credit ] are to be determined by the finan-
 cial institution and the applicant for , credit. the rates to be as low as Is
 consistent with the character ot business in the particular territory
 in which the loan is negotiated. Under no circumstances can the in N terest. together with all other char ges combined, exceed the equivalent of S5 discount per $l00 original face
 amount of a 1-year note to be paid i in equal monthly installments. Determine Risk.
 Determination of the credit risk involved is left largely to the dis
 cretion of the financial institution
 advancing the funds, it was stated.
 This was substantially true under
 the old regulations.
 ''The amendments to the National
 Housing Act covering the extension
 of modernization credit for improve
 ment. conversion, or equipment of
 commercial properties are of direct
 interest and benefit to everyone pro ducing goods or services requiring 1 buildings or permanent equipment l MT. Mcdonald stated. They are of | particular interest to all those who l manufacture or deal in machinery. Under the amended Act, the mod l ernization market has been inclcaS- ed so as to include practically every user of permanently installed ma | chinery or equipment, as well as