The Friendly

funds. This was substantially true under the old regulations.

Dealers, contractors, salesmen and all others of the building industry, coming in contact with prospects for modernization who are considering the obtaining of credit under the $50,000 limit provisions, should be particularly well posted on certain provisions of these regulations. The most important information the prospect will require is contained in the following paragraphs taken from the regulations:

The Note

The applicant for credit will be required to sign a promissory note, which must be in the form generally considered to be valid and enforceable in the State in which it is issued.

The financi"r in.tituJoT f"tittll,"., as interest and/or discount and/or fee of any kind, a total charge not in excess of an amount equivalent to $5 discount per $100 original face amount of a one-year note to be paid in equal monthly installments. This charge is a permitted maximum and not a mandatory rate and a loan at any lower rate is eligible for insurance and such charge correctly based on tables or calculations issued by the Administrator is deemed to comply rvith this regulation.

Charge for Being in Arrears

Notes may provide for the payment by the maker of a "late charge" not to exceed five cents for each dollar for each payment more than 15 days in arrears, but not to exceed $5 in respect of any one such late payment. In lieu of, but not in addition to, the "late charge," the note may provide for interest on overdue payments from the clue date of the payment at a rate not to exceed the maximnm legal rate permitted in the State where the loan is macle.

Final Maturity Limit

Notes may not have a final maturity in excess of five years, except in the case of savings, building and loan associations, cooperative banks, ancl similar institutions. However, the permission to take notes with maturities in excess of five years is limited to those cases lvhere the amount advanced is $2.000 or less.

Monthly Installment Payments

Notes must be payable in equal monthly installments, except the final installment, which may be slightly more or less, subject to such exceptions as may be made by the Administrator. Monthly installment notes may not provide for a first payment less than six nor more than 6O clays after date of the note. Even in such cases at least one payment must be .made yearly, however, and the proportion of .total principal to be paid in later years must not exceed the pro. portion of total principal payable in earlier years.

Status of Taxes, Assessments, Etc.

Taxes, assessments, and payments on principal and/or interest on mortgages on the property to be improved need only be in such standing as is acceptable to the financial institution. The status of such items, whether delinquent or not, shall not affect the eligibility of a note for insurance if the financial institution is u'illing to extend the credit.

Financial Condition of the Borrower

The rule that the income of the borrower be five times the annual payment is no longer a flat requirement. The question of the financial condition of the borrower is left to the reasonable judgment of the financial institution as a credit matter. The borrower must furnish the lending institution a financial statement approved as to form by the Administrator which in the judgment of the financial institution shows the borrower to be solvent, with reasonable ability to pay the obligation and in other respects a reasonable credit risk in view of the insurance provided by the National Housing Act.

Purpose for Which Cred:ts Can Be Used

An advance of credit in excess of $2,000 but not in excess of $50,000 must have been made for the purpose o{ ('1) repair, alteration, or improvement of real property already improved by, or to be converted into, apartment or multiple family houses, hotels, office, business or other commercial buildings, hospitals, orphanages, colleges, schools, or manufacturing or industrial plants, or (2) the purchase and installation, in connection rvith the foregoing types of property of such equipment and machinery, with or without any structural changes in the buildings, as are peculiarly adapted to the business conducted therein or necessary to the operation thereof.

Back From

Kenneth Shipp, California Oakland, is back at his desk High Sierras.

Vacation

Builders Supply Company, after a vacation spent in the