Builders’ claims on loan funds untrue

Press, Volume CXV, Issue 33917, 9 August 1975, Page 17

Builders’ claims on loan funds untrue

si (By

CEDRIC MENTIPLAY)

I ‘ WELLINGTON. J The target figures of houses to be built or purchased with Housing Corporation loans in the 1975-76 year have not been changed, and there is no truth in repeated claims by builders ! that the corporation will exhaust its relevant funds in November.

Some confusion has been caused by the re- ; lease of apparently conflicting statements about temporary restrictions aimed at clearing a back-] log of work caused by the sheer bulk of loan; ! applications. j Funds are available to ! build 11,500 new houses in the period. The number was i originally announced as ]9500, but was increased to sustain employment, and to (help compensate for restricted private finance. Funds are also available I to but' 4000 existing homes.

.The figure was originally ’4500. but 500 were transferred to the priority area of mew building. 1 Lending for other purposes, such as mortgage ■ refinance and home improveIment, will be about the ’same as last year: .1700 : authorisations — (500 for I refinance, and the others for home improvement, addition, iand alteration. RECORD NUMBER - The minimum number of loans thus will be about 17,200, not counting loans for purchase of sections. This will be a record. The total loans for purchase of new and existing houses will be 15,500, also a record. The previous best was 14,180 loans, last year. The 1973 figure was 13,379. During the year, the Government will finance, wholly or partly, more than 18,000 new dwellings. These will comprise 11,500 corporation building loans, 3000 corporation rental houses. 1000 housing units for the elderly, 1000 departmental rental units, 1000 Maori new-housing loans, 200 loans to buyexisting Maori houses, 500 rural houses, and 500 community homes. Much of the confusion relates to restrictions which, it has been emphasised, are only temporary. These come simply from the fact that the number of loan applications has overloaded the facilities available. MINISTER'S EXPLANATION The Minister of Housing (Mr Douglas) explained this in a release on July 11, in which he announced an additional 2000 Housing Corporation loans, and at the same time explained the reason for temporary restrictions. He said then: “Unprecedented demands for loans has meant that some temporary restrictions on both lending to buy existing houses and lending to build new ones.”

i The other restrictions are ]regarded as deferments only.] ■ “Other applications, such as I those from young married (couples without dependants, i ■ will be subject to delays. In (the meantime, these will: (have to be deferred for three: months in order to reduce ] the backlog of more than ;4000, and to enable appli-| I cations from family groups’ Ito be processed.” TALKS WITH BANKS The Government has been holding talks with savingsl banks and other financial institutions to try to fill the gaps left by these restric-] tions. The simple fact is that the! ’Housing Corporation has': been swamped with appli-i ’cations of all sorts of lend-1 ling, Total applications have! been about 28,000, of which 17,000 have been for home building. The total number of building loans authorised in 1972 was only 6340. The problem is being handled with great efficiency in the corporation, and the backlog is diminishing. The best advice for anyone requiring housing finance, and having a qualification, is for: him to make a personal in- 1 quiry.

| He said that corporation ■ building loans would in the I meantime, be confined to ; first-home seekers, excluding ■ single people without ■ dependents. Nearly all coriporation lending' to buy ] existing homes would be I suspended, but “exceptions lin the cases of both types of ■loan would include former ] servicemen qualifying for re- ] habilitation assistance, pub- ■ lie servants on transfer, special cases of hardship, and leases where a loan comimitment had already been: ]made by the corporation to] | a prospective borrower.” i Explaining the limitations,] Mr Douglas said: “The Gov-] eminent has to budget like everyone else. The present level of activity brings prob- i lems in the corporation's ability to finance and handle applications ... a complete bottleneck would be inevitable without the new limitations.” PRIORITY TO BACKLOG Mr Douglas has given an assurance that all loan applications with the corporattion before the date of the announcement would not be subject to restriction. Priority is being given to clearing the present backlog, and then to proceeding with new applications from family groups.