The newly signed Housing and Community Development Act, which raised mortgage limits for FHA-insured homes and lowered down payment requirements, also has expanded the ability of federal savings and loan associations to invest in houses.
Federal Home Loan Bank Board Chairman Robert H.McKinney said the act was a "major step" that has removed restrictions on investments in apartment units and permits expanded investment in construction loans for residential properties and farm lending.
"The tools are at hand and the opportunities are here to serve the public," he said.
Described as the most significant peice of legislation for urban redevelopment and assisted housing in three years, the new bill:
Increased the mortgage limit for FHA-insured home loans under Sections 203 (the most widely used, traditional program for insuring loans on single houses), 220 and 234 programs from $45,000 to $60,000.
Lowered the basic FHA down payment requirement to 3 per cent of the first $25,000 of the home purchase price plus 5 per cent of the amount above that. The previous down payment requirements were higher for larger loans.
Increased the ceiling for single-family home loans made by federal savings and loan institutions to $60,000 and raised the ceiling on property improvement loans made by S&Ls to $15,000.
Increased the Title 1 FHA home improvement loan limit to $15,000 and extended the payout term maximum to 15 years.
Increased the loan limits for mobile (also now called manufactured) homesto $16,000 for single-wide units and to $24,000 for double-wide units, pins extending the amortization limit to 23 years to pay off loans on double wides.
The Department of Housing and Urban Development has scheduled eight, one-say briefings on provisions of the new act. The first will be held Thursday at Johns Hopkins University in Baltimore.Others will be held later in New York City, Atlanta, Chicago, Kansas City, Dallas and Los Angeles.
Additionally, HUD announced recently that people interested buying houses on which HUD has ownership (usually through foreclosure) will be eligible for 3 per cent, 20 year-term loans up to $27,000 per dwelling if they meet other loan requirements. HUD area offices now are authorized to made the Section 312 rehibilitation loans available.