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Interesting Suggestions in Reference to the BETTER HOMES EDTTION (By P. W. Nicolis, MRAILC, DMirector of HMHousing.) ~ NOTE: Undar regulations effectiv»e as Of and from January 1, 1940, loans under Part I of the National Housing Act may be made only to assist in financing single family houses. The maximum loan in respect of each single family house is aiso limited to $4,000. With the exception of these changes the other features of Part I Â¥ the act have been retained. The same loaning@ facilities which were avallable to the low=â€"cost home owner in 1940 are therefore siill available in 194 1. For the large majority of famili« contemplating the construction of new home, the matter of financin their program is of prime importanc In only a small proportion of cases the prospective owner able and wiliin to provide the entire capital from pr vate resources, It follows, therefor that for most families, resort must had to credit financing. It is also ev dent that the ease or difficulty : securing this credit onr favouraD terms will be a major factor in the d@ecision to zo forward with their prs gram. Prior to 1985 the family of moderate income was faced with certain diffiâ€" culities in building a new home. In Canada the bulk of montss availabls for investment in first mori:gages were trust Tunds, and the investment of these funds was limited by law to 6) per cent of the value of the home. In practite it was often necessary for various reasons to further restrict these investments to 50 per cent of the lending value of the home. Thus, the family was required to accumulate a substantial proportion 6f the cost or to resort to the expensive progedure of securing a second mortgage. A second difficulty was that nancing of Small Homes Mcinnis Buildiag Teleohon Mt. J. Krawic‘s Residence Sam Bucovetsky, Building McInnis Building Korson Building, Schumacher Sky Building Korman‘s Dairy Plant Marager‘s Residence, Deinite Mine Helena Rubinstein Salon Toronto. M ohen‘s Residence en‘s Resigence, Tiunmis iws‘ Residence, Tinunins modera* ain diffi rome. T B. KAMINKER Shax®‘s BRBesigecno Residence south Porcupine usual mortgage was for a short term, repayable in full at maturity, generâ€" ally in five yeurs. The mortgage was uswally renewed when it became due Eventually, however, the mertgage was not renewed and, as frequently hapâ€" pened, the borrower found himself obligated to make a large payment at just the time he was unable to do so. In order to meet this situation the Dominton CGovenment with the coâ€" operation of the lending instituttons worked out a plan for higher percentâ€" age loans, with a longer term to maâ€" turtty and with the payments to be made by the borrower arranged mors in line with the budget of the average familly. Thts was in 1935, and since then the new method of home financing has grown in popularity. In 1938 the Doâ€" minion Housing Act was repealed, and the National Housing Act, a more comâ€" prehensive measure, was passed, Under the new legislation the maxiâ€" mum loan on the new house is 80 per cent of the cost or appraised value, whichever is the lesser, or it may be for an amount ranging from 70 per cent to 80 per cent of this vailue. This is true in all cases, excepting where the lending yvalue is $2,500 or less. For very modest homes of this lower value the legislation is even more generous, and the loan may be for a maximum of 90 per cent of the lsnding value or for an amount ranging between 50 per cent and %0 per cent of value. In n~o case, however, may the loan now It must be noted that all National Housing Act loans are based on the or appraised value, whichever is the lesser," and that this lesser amount is known as the "lending value." ~Cost is the amount actually snent to produce the finished proâ€" perty ; value is the worth: of ‘the proâ€" nerty when completed. ~The owner‘s B, ARCH., M.R. A.I C. ceed $4,000 THE PORCUPINE ADVANCE,TTMMINS, ONTARIO alue is $2,500 Mr. A. L. Hancock‘s Residence Inspector Olson‘s Residence Chief Gagnon‘s Residence Mr. Thos. Belanger‘s Residence Mr. wWwm. Purdon‘s Residence Mtr. Sam Fishman‘s Residence, bDr. H. Magdar‘s Residence, Kirkland Laké Mr. J. C. Kellv‘s Residence Creighton Mines. St. Catharines‘ Wine Co., Building Mount Sinai Hospital, Toronto P. J. Philbins‘ Residence A P Store, Building, Timmins Dr. J. R. CGiardine‘s Residence, Timmins 20 Pine Street North cost includes the cost of the land, building,. architect‘s fees, legal and other expenses necessary to complete the house. A large number of factors enter into arriving at the appraised yvalue as distinct from the ownet‘s cost. and aâ€"brief outline of some of these may Aassist the prospective own*r to follow those rules of procedure which will gain for him a satisfactory apâ€" praisal, equalling or closely approxiâ€" mating his total cost. If the prospective borrower does not already own a building lot he will be wise to s*ek competent advice as to the location of the site for the new home. Many of the leading institutions keep detailed records of the growth of comâ€" munittes, and may be able to assist the arplicant in this respect. Generally, the lot should not be in a declining section of the municipality and it should be legally protected from detriâ€" mental influence by zoning ordinances. Water, sewer, electric, and other â€"servâ€" ices should be adjacent to the proâ€" perty.â€" School, church, shopping, and amusement should. be nearby without â€"being ~too close, and in .the amusement .centres should. be nearby without â€"being ~too close, and in .the larger centres transportation service should be close at hand. Pinally, the neighborhood chosen should be one made up of homes approximately the same value as that which the borrower plans for himself, and the cost of the lot must not be more than 20 per cent, and preferably not more than 10 per cent of the amount which the owner plans to spend on the entire program. In planning the house, again comâ€" petent advice should be cbtained by the prospective home owner. TL is adâ€" visable to engage an architect, but if one is not available very careful atâ€" tention should be given by the borâ€" rower to the selection Of a practical and livable plan, designed to meet his real nseds. The house should be suitâ€" awhie to the site upon which it is to be constructed, and this should be kept in mind when choosing the lot. The exâ€" terior should be pleasing, simiple, and ‘attractive, in line with the modern simplicity of design. A wise selection of materials will ensure slow physical depreciation and shculd reduce mainâ€" tenance costs. The borrower should Have a thorough understanding of his obligation to see that the house comâ€" pliss in all respects with the Minimum Department: of As we have already noted, National Housing Act loans. may be for 70 per cent to 80 per cent of the lending valus, and in the case of very modest Romes with a lending value of $2,500 or less, the loan may be from 50 per cent to 90 per cent of this value. The main factors in a determination of this perâ€" centage are the borrower‘s ability and willingness to meet his obligations. D is quite obvious, for instance, that the applicant‘s past record of meeting his obligations will have a bearing in conâ€" sidering the risk of granting him a large percentage loan, and also that a bad credit record will make any loan impossible. The borrower‘s income and his proâ€" bable futurse income will also be among the limiting factors taken into conâ€" sideration when his loan application is being considered. A borrower who wishes to build a home costing more than he can afford should not expéect to receive the maximum percentage loan on his property, and in this conâ€" nection experience would indicate that he should not spend an amount in exâ€" cess of 2 to 2% times his yéarly. inâ€" come as the total cost of his home. ‘All National Housing Act loans are secured by amortized mortgages. Each morigage provides for monthly payâ€" ments to cover 5 per cent interest on the loan, repayment of principal, ana the estimated annual taxes on the proâ€" perty. The retirement of principal is provided for in accordance with a ‘standard amortization table at a rate sufficient, in the normal case, to retire the full amount of the loan in 20 years. If, however, the borrower so desires, he may arrange for a larger monthly payment in ormder to retire his loan more quickly, say, in 10 to 15 years. Timmins. Ont. Standards of Construction and Meéemâ€" orandum Specifications which have been established under the National Housing Act, and to which all Nouses must conform. Finally, bids should 4e secured from several competent build~ ers enjoying a good reputation among those for whom they have built, in order that the best price may be ob tained on the contract. Of interest to the prospective small house builder and owner are the plans available through the Housing Adminâ€" istration. These are minrimum @ost houses ranging in cost from $2.000 to $4,000. and provide for one storey, on and oneâ€"half, and two storey houses. Sketches and data are available on ts quest to the Housing Administration, Department: of As we have already noted, National Housing Act loans. may be for 70 per cent to 80 per cent of the lending valus, and in the case of very modest Romes with a lending value of $2,500 or less, the loan may be from 50 per cent to 90 per cent of this value. The main factors in a determination of this perâ€" centage are the borrower‘s ability and willingness to meet his obligations. D is quite obvious, for instance, that the applicant‘s past record of meeting his obligations will have a bearing in conâ€" sidering the risk of granting him a large percentage loan, and also that a bad credit record will make any loan If all these details are given careful study and consideration, the cost will quite likely be in line with the lending value of the property and be satisfacâ€" tory as the basis for the loan; also, the property wili not be subject to the rapid loss of value of unprotected and poorly constructed houses. impossible. The borrower‘s income and his proâ€" bable futurse income will also be amaong the limiting factors taken into conâ€" sideration when his loan application is being considered. A borrower who wishes to build a home costing more than he can afford should not expéect to receive the maximum perecentage loan on his property, and in this conâ€" nection experience would indicate that he should not spend an amount in exâ€" cess of 2 to 2% times his yéarly. inâ€" come as the total cost of ‘his home. ‘All National Housing Act loans are The monthly payment required to fully amortize the loan in 20 years is $6.54 per thousand dollars of loan. A 15â€"year amortization requires a payâ€" ment of $7.85, and a 10â€"year amortizsaâ€" tion requires a payment of $10.5. The payment for taxes, which must be added to arrive at the total monthly instalment, is oneâ€"twelfth the estiâ€" mated annual taxes. An illustration will clarify the manâ€" ner in which the monthly payment is calculated. Suppose a property, inâ€" cluding house, lot, architectural, legal and other expenses, is to cost $3,000, and that its appraised value is about the same:; an 80 cent morigage would involve a loan of $2,400 and the equity which the borrower would have to provide, either in the form of a 104, or cash. or bboth, would be $600. Asâ€" suming that the borrower is to amorâ€" tize the mortgage over 20 years, the monthly payment for principal and inâ€" terest would be 24 times $6.54, or $1569. In one community the taxes on this house might be $48.00 a year. Therefore, the total monthly payment would be $15.69, plus $4.00, or $19 469. In another community the taxes might be $72.00, and the monthly payment would therefore be $21.69. By adding oneâ€"twelfth the estimated yearly taxes on a $3,000 property in his own community to the interest and principal charge of $1569, the prosâ€" pective borrower will be able to cailâ€" culate the approximate total monthly payment which would be required on an 80 per cent loan on a property‘ in his community. By adjustment of the factors he will also be able to deterâ€" mine the approximate paym°nt r2â€" quired for a loan more or less than $2.400. For example, on a property (Continued on Next Page) THURSD A Y, MAY 29TH, 1941