STATE LOANS

Poverty Bay Herald, Volume LXV, Issue 19584, 16 March 1938, Page 14

STATE LOANS

BUILDING OF HOMES

THE SPECIAL SCHEME

CONDITIONS OF ADVANCES

Under a special loan policy of the Government the State Advances Corporation has drawn up a scheme of advances for house building in approved localities, including, where the circumstances so justify, a proportion of the cost of the section. Under its normal lending policy the corporation grants loans up to two-thirds of the value of the property, but in the case of special loans the two-thirds margin will be exceeded.

The previous income restriction of £G a week is removed under the special scheme, and any person with stability of employment and sufficiency of income is eligible to apply, provided the home is for the sole occupation of himself and family, and that lie. or his wife do not own any other house property. The maximum loan is £1250, but the corporation may authorise an increase of the limit defined to meet special family requirements when in its opinion the circumstances so warrant.

Setting a Standard of Design

One of the features of the scheme is that the corporation has prepared over 100 different designs for houses adapted for regional centres a,nd incorporating in each division any special local fhquTrcments. It is proposed to add to the designs from time to time. By the provision of plans the corporation has the idea of lowering the cost to the applicant of obtaining special plans, specifications and tenders, and at the same time setting a higher standard of design and construction at the lowest cost for a class of prospective owners who do not usually, and mainly on the score of expense, engage the services of an architect. Moreover, it presumably has worked out details of cost on each of its plans, and so can check builders’ estimates.

Applicants may, however, submit their own plans and specifications, which must contain full details and comply with the corporation’s minimum standards of construction and materials, as applicable to the particular district Collateral Security

Loans will be granted on a table basis and, in addition to interest and principal payments a mortgagor will be required to provide for (a) premium for fire insurance cover and life or mortgage repayment insurance where required; (b) rates levied against the property by local bodies; and CcJ repairs and upkeep. In granting loans the corporation may require weekly, fortnightly or monthly payments not only on account of the instalments, but also for the other provisions just mentioned. The corporation may require a life policy in Ihc Government Life Deparment for an approved amount to be assigned by way of collateral security. Or, in lieu of such policy, it may require a special mortgage repayment policy with the Government Life Department under which, on the death of the mortgagor, the department would pay it the whole or part of the balance owing.

Covenants anil Fees

In addition to the usual covenants a mortgage will contain covenants to the following effect: —(1) That on completion of the dwelling the mortgagor will occupy and continue to occupy the dwelling as a home for himself and family; (2) that the mortgagor will not, without prior consent of the corporation, sell, lease or part with possession of the property; and (3) that in the event of a sale or letting at a profit, the whole amount outstanding under the will become immediately repayable. “Prolit" will be interpreted with due reference to improvements made subsequent to the loan.

Various fees are laid down to be paid by applicants for loans. To defray the cost of the preliminary investigation and assessment of values, the furnishing of full sets of plans and specifications and the making of inspections for progress payments, there is a fee of £lO. Applicants’ solicitors for the preparation of documents must be approved by the corporation. Before applying for a loan an applicant must have a title or option over a section. Not less than three tenders are required for buildings.