The Daily Alaska empire., 1938-02-12
REDUCTIONS IN HOME FINANCING ARE OUTLINED
FILA Administrator Gives Results ofRecent Amend
 ment :. to Housing Law

WASHINGTON, Feb. 12.-Reduc- tions in the cost of home financing under the Federal Housing Admin istration plan in accordance with the National Housing Act amend ments approved by Congress and signed by the President on Thurs day, February 3, were announced today by Administrator Stewart Mcdonald
 The total maximum annual car rying charge for an FILA insured mortgage on which commitment is hereafter issued will be five and one-half percent.
 This will include five percent interest and one-half of one per- cent mortgage insurance premium In the case of newly constructed homes securing mortgages not ex- ceeding $5.400 and meeting certain other conditions the premium rate will be one-fourth of one percent making the total annual carrying charge to the borrower five and one-half percent
 The annual service charge of one-half of one percent which the lending institutions have been per- initted to charge under FILA regu- lations will be discontinued on all mortgages for which commitment to insure is issued hereafter.
 The insurance premium in the future will be based upon the out standing balance instead of the original face value of the mortgage as provided in the old law
 Elimination of the annual service charge and the reduced cost of the mortgage insurance will represent a maximum saving of approximate ly one percent per annum to home builders and buyers on newly con- structed houses carrying mortgages Of $5.400. or less. On all other irsurable mortgages the saving will be approximately three -fourths of one percent per annum.
 On newly constructed houses ap- praised at $6000 or less, the mini mum permissible down payment or equity requirement. will be reduced from twenty percent to ten per- cent. Thus, on a s6,000 newly con- structed house, the minimum down payment would be $500 and the maximum insurable mortgage would be $5,400, representing ninety per cent of the appraised value.
 On newly constructed houses ap- praised at $l0,000 or less, the in- surable limit will be ninety percent of the appraised value up to $6,- GOO, plus eighty percent of the ap- praised value about $6,000. For example, on newly constructed Sl0,000 house the minimum down payment would be $l,400 and the insurable mortgage limit would be $8,600. On all other homes housing from one to four families, the insurable mortgage limit will re- main at eighty percent of the ap- praised value, but not in excess of sl6,000 under any circumstances.
 This program" said Administra- tor Mcdonald, lis designed to assist families of moderate means to ob- tain decent and adequate housing rr the most favorable terms in the history of the country. I am con- i4uenJ that it win safeguard the interest of both the borrower and the lender. It should prove a stim- L-4.s to the construction industry but too much should not be ex- pected of. it at once. The machin- cry is here for the government to do it's part. The success of the program in the long run, however, depends upon the wholehearted, voluntary cooperation of private capital and private industry, by which I mean the lending institu- tions, the material and equipment manufacturers and distributors, the builders and developers, and labor"
 Under the mutual mortgage in- surance program established by the old National Housing Act. the Fed eral Housing Administration up to February had accepted for in