The Waterbury Democrat., 1938-01-03

age man. 1G mas Deen passed Dy both houses in the special session and now is in conference awaiting final action.
 Washington, Jan. 3-(UPl-The new housing bill is designed to put home ownership within economic reach of the average citizen whose annual salary is below $2,00O.
 Hope of the average man of acc quiring home of his own has been blocked in the former Federal Hous- ing measure by requirement. of a 20 per cent down payment and monthly payments which probably exceeded what the average citizen now pays as rent.
 How It Would Work
 The proposed new program would work like this:
 The average citizen decides to build home costing not more than $6, ,000.
 He will go to bank, mortgage as- sociation or other lending agency and apply for a loan. To come within scope of the program, he must make a down payment of 10 per cent or $500 of the appraised value of the property he is to &C., quire. The lending agency will sub- init his application to the Federal Housing Administration for approv- al.
 The citizen and the financing agency will work out the date on which the mortgage will be due, but the time must not exceed 20 years. All the arrangements must be ap- proved by the Federal Housing Ad- ministrator.
 An Example Given
 For example, the citizen may de- eide that he will make payments on the $5,4O0 principal remaining after the down payment in monthly hl- stallments of $2250 for 20 years.
 In addition, he must pay the f1- nancial agency five per cent interest per year on the amount of the prin- cipal outstanding at any time. For the first year, the monthly interest payments will be $22.50-the same as the payment on the principal-and will be scaled down annually as he reduces the principal of his debt.
 Another fixed charge the citizen must meet is the premium payment on the mortgage insurance. The government promises by insurance features of the bill to make good any amount that he fails to pay on his mortgage. The financial agency will pass the insurance premium obligation on to the citizen for pay ment.
 Premium Charge
 To encourage such builders as the citizen, the bill provides that if he makes his application for mortgage insurance before July 1, 1889, the premium charge will be only one fourth of ore percent on the amount of principal outstanding at any time.
 He then will add $1.35 to his monthly payments for mortgage in- Surance.
 Summing it up, the citizen will have to pay each month for the first year: Payment on principal, $2250; interest payment, $2250; mortgage insurance charge, $1.35 or monthly fixed payment total charge of $46.35.
 He also must make allowance for taxes, assessments, fire and other kinds of insurance, and the other incidental charges,
 After First Year
 After the first year, the interest and mortgage insurance charges will decline, as they are based on the amount of the principal outstand- ing. Thus, as the citizen reduces his principal he also reduces the in- surance and interest charges.
 In the event that he defaults on his mortgage, the lending agency may obtain from the government the amount he failed to pay on his debt in addition to any additional costs, such as taxes or special as- Sessments. In return, the govern ment will take over the property for liquidation.