Evening star., 1939-10-14
F. H. A. Facilitates
Acquisition Of Home
On Small Incomes
Questions and Answers
On Operation Of
Title !

FdullileS receiving small annual
incomes may acquire attractive and
llvable homes under the Federal
Housing Administrations Title l
home-loan insurance program in
Rugurated early in September.
The new plan differs in a number
OF major respects from the F. H. AS
Insured mortgage system under Title
II Of the National Housing Act.
Although there are no income Imi-
tations, it is felt that families re-
ceiving 5000 to $500 a year will
particularly find the new plan help
full.
Details are given in the following
questions and answers prepared by
the F. H. A.:
@. Who may obtain loan under
the new F. H. A. Title 1 program?
A. Any person with a satisfactory
credit standing and steady income
who is able to establish an equity
equal to S per cent of the appraised
property value
@. How much may be borrowed
under the plan? Must the equity be
In the form of cash?
May Borrow $500.
A. AS much as $4,000 may be bor-
rowed under the plan. The bor-
rower's equity or down payment may
take the form of cash, of land
owned, etc.
@. How are loans repaid, how
much time is allowed for repay
ment?
A. Loans may run for as long as
IS years and months; they must be
repaid in equal monthly INSTALL
ments
O. What interest rate is charged
by the lender? Must the borrower
pay an insurance premium to the
F. H. A.?
A. The interest on loans accepted
for insurance by the F. H. A. must
not exceed an amount equal to $3.50
discount per 500 face amount of the
loan. This interest includes the in
surance premium which the lending
institution will pay to the F. H. A.
each year.
@. What other charges are there?
A. The borrower pays the F. H. A.
an examination fee of $40; the lend
ing institution may collect the usual
fees, including recording fees, title
examination fees, fire insurance
premiums, etc, as we'll AS an ap-
praisal fee of not more than $40.
@. Can loans be used to refinance
existing obligations, to purchase
land or to complete partially con-
structed building?
Apply Only to House.
A. No. Loans are to be used only
to defray the cost of building or buy
ing a new house. The plan is in
tended specifically to assist lower in
come families to acquire good houses
on reasonable terms.
@. Who lends the money under
the Title I program?
A. Privately owned and operated
banks, building and loan associa-
tions, finance companies and other
lending institutions approved by the
F. H. A. to make such loans. The
Federal Housing Administration in
sures the lending institution against
loss up to 10 per cent of all funds
which it advances under Title I.
@. How does this plan differ from
the F. H. A. insured mortgage sys-
tenn CTitle IL?
A. F. H. A.-insured mortgages un-
der Title II may represent as much
as 80 per cent Tor sometimes 80 per
cent? of the appraised property
value; the interest rate is set at a
maximum of Az per cent: the re-
payment period is 20 or 25 years;
the property must conform to prop
erty standards and construction re-
ouirements; and the neighborhood
must be approved by the F. H. A.
O. Has the F. H. A. established
standards for the new Title I loans?
A. Yes. 1t has drawn up mini
mum property apd construction re-
uuirements which provide that
homes be soundly constructed and
livable. A certain space area is re-
ouired; neighborhood standards are
dependent upon local conditions.