Montgomery County sentinel. [volume] (Rockville, Md.) 1855-1974, 1936-03-12
National Housing
Act Designed To
Do Three Things
Living Standards, Unemploy-
ment And Credit Are
Features Sought

! The Congress OF the United State
passed the National Housing Act il
June, 1884. 1t was designed to d,
three things.
To improve American Living Stand
ards. To decrease unemployment by
putting men in the building trades t.
work. To make credit available for re
pairing and building.
The Modernization Credit Insurance
Plan was authorized by Congress
primarily as recovery measure. II
has conserved and enhanced property
values, and at the same time created
employment for hundreds of thous.
ands of men in the building trades
and the capital goods industries
where the effects of the depression
have been most severe. Outside OF
agriculture the largest group of mer
in any industry is in the building
trades. There is no use of me TELLING
you how the building trades suffered
in the recent depression.
Under the first phase of the Federal
Housing Administration Act person
may borrow up to $1,000 to make any
repairs to his home such as build an
additional room, new heating plant,
new garage, and paint the home.
There are no stringent requirements
nor any red tape in filling out appli-
cations. The loans are made on a
purely character basis. No indorsers
OF notes nor any collateral are requir-
ed. You borrow this money from any
approved lending institution and re-
pay it in small monthly payments at
the rate of $500 per hundred dollars
per year and have from one to five
years to repay.
Farmers may borrow up to $4,000
under this plan to modernize their
homes or farm properties. Farmers
may repay their loans seasonably,
rather than in monthly installments,
but they must make at least one pay
ment each year.
The Housing Act benefits business
men as well as farmers. Business,
commercial, or industrial properties,
as well as school, orphanges, or homes
20 be converted into multiple family
houses, may be repaired, improved, or
nave new equipment or machinery in
stalled with FILA modernization in
up to $4,000.
Title II of the Act is known as
Single Mortgage Insurance. This pro-
yides system of insuring first mort
gage loans on dwellings under a plan
If Mutual Mortgage Insurance under
The Act. Insurance is limited to first
mortgages on dwellings not to exceed
our families where the amount in
volved is not in excess of $4,000 and
not over 80 per cent of the appraised
7alue of the property. Insured loans
nay have maturities up to twenty
years and must be payable in regular
monthly installments. Installments in
dude, payment of taxes, assessments,
ire and other hazard insurance and a
small premium for Mutual Mortgage
insurance. Loans are not made by the
Federal Housing Administration nor
With Federal funds but by approved
ending institutions with private cap
tai. Title II is intended to correct
'ome of the outstanding weaknesses
n the present system of home mort
rage financing. The constant risk of
foreclosure will be greatly reduced by
he requirement that monthly pay
nents must be in proportion to the
ncome of the borrower and the ability
o carry out the contract which he
undertakes.
Under these circumstances the bor-
over must, of course, be a good
:redit risk. In many cases the month
y installments will approximate the
mount normally paid for rent.
Both borrower and lender are bene-
iciaries under this plan. The borrow
n eliminates the anxiety of large
payments in excess of his capacity to
make them and the necessity for re-
with its attendant costs and
rouble. At the same time any equity
which he possesses in the property is
preserved by the Federal Housing Ad-
in event unforeseen cir
.umstances should cause him to de-
fault. This is an entirely new phase of
mortgage financing.