Newspaper Page Text
HURSDAY. OCTOBER 2/ 1951,
Vets Find Conditions Eased For
Home Buying Through G. 1. Loans
ition under which World'
wfro;ld veterans may finance home
ownership with the aid of GI loans
ore eased considerably by pro
aré s contained in the new Ce=
sense housing act, approved by
the President September 1 as Pub
lic Law 139.{Veterans Administra
' aid today.
ton &% ew law_(1) reduces sub
stantially the minimum down pay
ment required on homes priced up
1o $12,000, (2) make eligible for
additional home loan guarantees
many of the 91, million veterans
who previously used all or part of
mleir guaranty entxt}ement for
nome, farm and business loans,
T (3) revives the direct Gov
erament loan program for veterans
in areas where 4 p_ercent mortgage
sinancing 18 unavailable from pri
;Ane 5111]1'(‘C5<
New Echedule
The new schedule, which gov
erns the minimum amount the vet
eran must pay down when buying
o home costing up to-$12,000 with
a GI loan, involves the use of two
terms, the sales price and the
transaction price. The sales price
is the price at which the property
is offered for sale, while the trans
action price is the total amount of
the sales price plus any closing
costs or settlement charges which
{he veteran is required to pay.
Three percentage brackets are
established, based upon the sales
price: 4 percent up to $7,000; 6
percent from $7,000 to SIO,OOO, and
8 percent from SIO,OOO to $12,000.
The appropriate percentage figure,
however, is computed against the
transaction price in arriving at the
amount of the minimum down
payment. Co
This distinction is important in
cases where the sales price, plus
closing costs, would otherwise car
rv the total cost from one percent
age bracket into the next higher
one. For example, a home may be
priced at $9,850, with $250 closing
costs required, making a total cost
of SIO,OOO. Since the sales price
($9,850) is under SIO,OOO, the 6
percent rate applies, but the min
imum down payment is 6 percent
of the transaction price ($10,100),
or 606.
Comparison
Comparing the new schedule for
GI loans with the one in effect
previously, the minimum cown
payment on a $7,000 transaction is
280 instead of $500; at SIO,OOO, it
is S6OO instead of $1,300, and at
$12,000, it is $960 instead of $1,900.
some downward adjustments
are offered in the new down pay
ment schedule for homes priced
ahove $12,000. For example, a
$13,000 home may now be pur
chased for $1,790 down, which is
$660 less than was required under
the old schedule. However, a
$15,000 purchase required $3,450
cash and at $16,000, $4,200 is re
quired, each being SIOO less than
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for real table flavor!” says Mrs. Filbert.
{“: ; “The happy letters you wives write has the same table-fresh flavor. Grand
"i e |= me say my margarine tastes country- for richer cooking! And 15,000 units
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i Get fresher flavor! Every golden Mrs. Filbert. Just send her the carton
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Mrst..V- Filbert, ’Save money! My new Golden Pound pound. Ask your grocer for Mrs.
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D MURRAY BROS, Inc., 307 Hale St., Augusta, Ga.
the old minimums,
A substantial preference {s
maintained in the lower and mid
dle price ranges for veterans buy
ing homes with the aid of GI loans,
but VA pointed out that the sche
duled down payments represent
only the minimum required by
regulations and may be increased
at the discretion of the lender
making the loan.
The regulations apply alike to
new construction, homes already
buiit, and homes to be buiit by
veterans with the aid of VA-gua
ranteed construction loans.
Additional Effect
Another effect of the new law
is to extend the term for repay
ment to a maximum of 25 years
on loans of $12,000 or less. Previ
ously, a 25-year maturity was al
lowable only for homes priced
from $7,000 downward. In spe
cial cases, as under the old law,
VA may authorize maturities up
to 30 years where the veteran
could not otherwise meet the re
quired monthly payments.
Veterans who, in past years,
used all or part of their loan gua
ranty entitlement for home, farm
or business loans become eligible
for additional home loan benefits
under another provision of the
new law. The Housing Act of
1950, approved last April 20,
raised the maximum guaranty on
a GI home loan from 50 percent
to 60 percent of the loan and from
$4,000 to $7,500, but only for vet
erans who previously had wused
none of their guaranty entitlement.
The new law grants to most
veterans who used all or part of
their guaranty rights the differ
ence between what they used and
$7,500 for home loans only. How
ever, if the veteran obtained a
home loan after April 20, 1950 no
additional guaranty is provided.
VA cited examples of how this will
operate.
A. The veteran used his entire
$4,000 guaranty for a home loan..
He now is entitled to a home loan
guaranty of 60 percent up to $3,-‘
500,
B. The veteran got a combina
tion FHA-GI loan on which VA
guaranteed in full a second mort
gage for $1,500. Prior to the new
law he had a balance of $2,500 for
a 50 percent guaranty on real es
tate; he now is entitled to a 60 per-
FOR PROMPTNESS, EFFICIENCY & COURTESY
I N
WRECKER SERVICE
ALWAYS CALL
SILVEY MOTOR COMPANY
Phone 246 Day Phone 3932 Night
cent guaranty up to $6,000,
This veteran got a $2,000 non
realty business loan on which VA
issued a guaranty of SI,OOO. Since
‘the maximum guaranty on such
loans is $2,000, he used half of his
entitlement. Under the old law
he would have been eligible for a
50 percent guaranty for rea] es
tate up to $2,000; these limits now
are raised to 60 percent and $5,500.
Business Loan
D. As in the above example,
this veteran got a $2,000 business
loan, the only difference being
that it was made by a bank which
operates under the so-called “in
surance plan.” Under this plan,
which may be used only for in
suring non-realty loans, the vet
eran’s guaranty entitlement is
charged with only 15 percent of
the amount of the loan, or S3OO in
this case. Until enactment of the
new law, he was entitled to a home
loan guaranty of 60 percent up to
$3,700; now it is 60 percent up to
$7,200.
The 4 percent gratuity payable
by VA for credit against the loan
may not exceed a total of $l6O for
all GI loans the veteran gets.
Of particular importance to vet
erans in rural and the less-popu
lated areas is a provision of the
new law which revises VA’s au
thority to make direct home loans
in areas of the country where pri
vate mortgage financing at the GI
4 percent rate of interest is un
available,
Direct Loans
The direct loan program, origi
nally authorized by the housing
act of 1950 to continue only until
June 30, 1951, is extended to June
30, 1953. No additional funds are
made available beyond the $150,-
000,000 upon the %otal of direct
loans which might be made, makes
possible the reuse of the author=
ized funds as a revolving fund.
Thus, payments made to apply
against direct loans and proceeds
from the sale of direct loan mort
gages to private investors will go
into the fund and become availa
ble for new loans.
Currently, about $39,000,000 re
mains available for the making of
FEEL ACHY ?
S
66 6 symptomatic
RELIEF
THE BANNER-HER.
direct loans, the balance of the
$150,000,000 or $111,000,000 having
been commitied prior to last June
30 to finance the home purchases
of some 17,000 approved appli
cants.
The amount remaining will fin
ance a total of about 6,000 to 7,000
loans, VA said, pointing out that
the size of the program is small
when compared to the regular GI
home loan program, under which
(even in the present period of
scercity of mortgage financing)
private lenders are making more
on _ I , ‘
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Washington at Pulaski-and-Broad at Spring
), ATHENS, GEORGIA
E than 80,00.0-—laans per month,
z (Veterans living in Georgia who
| wish further information about
| their benefits should write the VA
"| Regional Office at 105 Pryor
_| Street, Atlanta, Georgia, or con
)| tact VA Office, Room 306, New P.
| O. Building, Athens.)
l e
[ STOP THE NOISE
1| SINGAPORE -~ (AP) — The
' | Royal Air Force has directed its
| bombing planes to avoid flying
'over the palace of the Sultan of
Johore "wherever possible,
It so acted after the Sultan, Maj-
Gen, Sir Ibrahim, had complained
of the “damnable noise” caused by
aircraft flying over almost daily
to attack Red targets in the jungles
of Malaya, The 78-year-old Sultan
complained that the noise was in
jurious to his health and that of
his Sultana and one-year-old Prin
cess Mariam,
But, nevertheless, the Sultan
has announced that he and his
family are going back to England.
Ee wor{?s longost mnt!on
system will be that of the Central;
Valley in Caiifornia when it isi
l completed, ]
BUY IT TODAY
$0 man "
gy Fr b SRR
o "Size of Tablets Allows for
:(N e More Accurate Dosage” FOR mw“
PAGE THIRTEEN
| E. hare—not the rabbit—t{akes
readily to water and one instance
is recorded of an animal swim
ming a mile in salt water.