Loans For Homes

Press, Volume C, Issue 29588, 10 August 1961, Page 14

Loans For Homes

(New Zealand Press Association)

WELLINGTON, August 9. The Government’s election policy promise to give mortgage guarantees on existing houses, as well as on hew homes, is implemented by a State Advances Corporation Amendment Bill, introduced in the House of Representatives today. The corporation already operates a scheme for the guarantee of portions of amounts advanced on first mortgage by specified financial inriitutions for the erection of hoi res. The bill enables the corporation to extend the scheme to the purchase of bouses. The maximum amount which may be advanced by the financial institutions shall be 85 per cent of the estimated value of existing homes and 90 per cent of

the estimated value of houses to be erected.

It provides that the r- -tgagor shall be required to contribute 2 per cent of the amount guarant; to the

corporation’s general reserve fund. The amount can be paid in cash or added to. the amount of the loan.

The corporation may also guarantee portions of loans granted to persons providing hotel accommodation of a standard, and in a locality approved by the Minister in charge of Tourist and Health Resorts. The 2 per cent, contribution to the corporation’s general reserve fund will be required. In a short discussion on the introduction of the bill, the Leader of the Opposition (Mr Nash) said the decision to guarantee portions of loans on existing homes would tend to force up the price of such homes.