Home Loan Bills Now Belore Congress

A. Bill, H. R. 6,{60, to amend the Home Owners' Act of 1933 authorizing loans in ,cash for the construction of homes, repairs, modernization or alterations of homes was introduced in the House of Representatives at Washington by Congressman W. J. Duffey of Ohio on January 5,1934, The Bill follows:

To amend the Home Owners' Loan Act of 1933 by adding after se,ction 4 thereof a new section; and to authorize home-mortgage loans, and to appropriate the sum of $500,000,000 therefor, and for other purposes.

Be it enacted by the Senate and lfouse of Representatives of the United States of America in Congress assembled, That the Home Owners' Loan Act of 1933 be, and it is hereby amended by adding after section 4 thereof a new section, as follows:

"Sec. 4-A (1) The Corporation is further authorized, for a period of three years from June 13, 1933, to make loans in cash for the construction of homes. but no su'ch loan shall exceed 75 per centum of the value of the structure and the land, or the sum of $20,000. Each such loan shall be a first lien on the property 'covered thereby, and shall be secured by a duly re,corded mortgage bearing interest at the rate of 5 per centum per annum and shall be amortized by means of monthly, quarterly, semi-annual, or annual payments sufficient to retire the interest and principal within a period not to exceed eighteen years.

" (2) The Corporation is further authorized for a period of three years from June 13, 1933, to make loans in cash for repairs, modernizations, or alterations of homes, but no such loan shall exceed 60 per centum of the value of the structure and the land before the improvement is made, or the sum of $3,500. Each such loan shall be a first lien on the property covered thereby, and shall be secured by a duly recorded mortgage bearing interest at the rate of 5 per centum per annum and shall be amortized by means of monthly, quarterly, semi-annual, or annual payments sufficient to retire the interest and principal within a period not to exceed ten years. No su'ch loan shall be made for the purpose of ,changing a home into any other type of structufe.

"(3) The Corporation is further authorized to purchase or agree to purchase from any building and loan association, savings and loan association, cooperative bank, homestead association, insurance company, savings bank, or mortgage loan 'company any mortgage which the Corporation might have obtained under the provisions of paragraph I or 2 of this section. Su'ch mortgage shall have been executed after June 13, 1933, and the purchase thereof or the agreement to purchase it shall be made under such rulings and regulations as the Board may pres,cribe, and all such purchases shall be ,consummated within four years from June 13, 1933.

" (4) The amount of the loans which the Corporation may make under paragraphs 1 and 2 of this section and the amount which it may use to make purchases under paragraph 3 of this section, shall not exceed, in the aggregate, $500,000,000, and the Secretary of the Treasury on behalf of the United States shall pay to the Corporation such sums of money from time to time as the Corporation may request for such purposes. In order to enable the Secretary of the Treasury to make such payments when 'called, the Reconstruction Finance Corporation is authorized and directed to allocate and make available to the Secretary of the Treasury the sum of $500,000,000 or so much thereof as may.be necessary and for such purpose the amount of the notes, bonds, debentures, or other such obligations which the Reconstruction Finance Corporation is authorized and empowered under section 9 of the Re'constru,ction Finance Corporation Act, as amended, to have outstanding at any one time, is hereby increased by such amounts as may be necessary.

"(5) The provisions of subsection (i) of section 4 of this Act shall not apply to indebtedness to the Corporation created under the provisions of subsections 1, 2 or 3 hereof.

" (6) As used in this section the term 'home' means a dwelling for not more than two families."

Another Bill, H.R.6564, is also before Congress in Washington. This Bill was introduced by Congressman Ellenbogen on January 8, 1934. Congressman Ellenbogen's bill is also an amendment to the Home Owners' Loan Act of 1933 to revive the construction industry by financing the construction of new homes rvith bonds of the Home Owners' Loan Corporation, to guarantee the principal of and to give cir,culation privilege to the bonds of the Home Owners' Loan Corporation, amend the laws relating to national banking associations and to Federal Reserve Banks, and for other purposes.

The Bill authorizes the Corporation to issue bonds in an aggregate amount not to exceed $5,000,000,000 which rnay be sold by the corporation to obtain funds for carrying out the purposes of the Bill. Su,ch bonds shall be issued in su'ch denominations as the Board shall prescribe, and shall mature within a period of not more than eighteen years and shall bear interest at a rate not to exceed 3% pelcent per annum. Until June 13, 1936, in cases where an owner of a vacant lot of land erects a home, the Corporation shall accept from the home owners a bond and home mortgage in exchange for bonds issued by the corporation, the face value of such bonds exchanged plus accrued interest thereon and the,cash so advanced shall not exceed in any case $14,000, or 75 per cent of the value of the home and lot. "llome" as defined in the Bill means a dwelling for not more than four families, on real estate in fee simple or on a leasehold for not less than ninety-nine years, used by the owner as a home or held by him as a homestead, and having value not exceeding $20,000.

Copies of both Bills, H.R. 646O and H.R. 6564, have been mailed to the Association Directors and Secretaries of the various lumber groups in the state for distribution to the lumber dealers in their district by President Harry A. Lake of the California Retail Lumbermen's Association. Stanley D. Baldwin, president of the National Retail Lumber Dealers' Association, advises President Lake that both these bills are good, and, undoubtedly will be con-

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