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FED ERAL R E SER VE BANK OF NEW YORK r Circular No. 3 7 8 2 * 1 L November IS, 1951 J REAL ESTATE CREDIT Amendment No. 7 to Regulation X of the Board of Governors of the Federal Reserve System, Effective November 19, 1951 To all Persons Engaged in the Business o f Extending Beal Estate Credit in the Second Federal Reserve District: The Board o f Governors o f the Federal Reserve System has adopted Amendment No. 7 to Regulation X , effective November 19, 1951. Follow ing is the text of a statement announcing the amendment, released by the Board for publication November 16, 1951: The B oard o f Governors o f the Federal Reserve System announced today an amendment to Regulation X — Real Estate Credit— which w ill assist persons moving from one part o f the country to another in the purchase o f a new home when there is a delay in obtaining the proceeds from the sale o f their old home. Secondary borrow ing in connection with the purchase o f a new house under such circumstances will be exempt from the regulation provided the credit is limited to a period not exceeding six months. The exemption can be obtained on the basis o f an appropriate application to a Federal Reserve Bank. The amendment also changed the maximum period specified in connection with exempt loans fo r materials, articles, and services used in new construction, from 30 to 36 months. This parallels recent changes in Regulation W — Consumer Credit. A printed copy of Amendment No. 7 to Regulation X is enclosed; additional copies will be furnished upon request. A llan S proul, President. R E A L E STA TE C R E D IT AM EN D M E N T NO. 7 TO R E G U L A T IO N X IS S U E D B Y TH E W IT H BOARD OF GOVERNORS OF T H E FEDERAL RESERVE SY ST E M T H E C O N C U R R E N C E O F T H E H O U S IN G A N D H O M E F IN A N C E A D M IN IS T R A T O R Regulation X is hereby amended in the follow in g respects, effective November 19, 1951: 1. A d d the follow in g new subsection ( n ) to section 5 : ( n ) Unavoidable Sales Delay.— I f a Registrant desires to extend credit to a person (1 ) who is moving from one m unicipality or county to another, and (2 ) who is purchasing residential property in the new location, which w ill be used in substitution for residential property presently held by such person in the old location as an owner-occupant, and (3 ) who has sold or is to sell the property presently held and apply the proceeds o f the sale to the new purchase, the Registrant may apply to a Federal Reserve Bank for an exemption from this regulation, stating in the appli cation all the relevant facts and that the Registrant is satisfied in good faith that the making or com pletion o f the sale o f the presently held property has been delayed for an unavoidable reason and that the proceeds from the sale will therefore be tem porarily unavailable to apply to the new purchase. I f the Federal Reserve Bank is satisfied that the delay is unavoidable, it will issue a certificate o f exemption to the Registrant and thereupon the Registrant may extend credit with respect to the property being purchased without regard to the secondary borrow ing prohibition in subsection (b ) o f section 4 o f this regu lation ; provided, however, any credit extended which exceeds the maximum loan value o f the property being purchased shall meet such requirements as may be specified in the certificate issued by the Federal Reserve Bank and shall not in any event have a maturity o f more than six months from the date the certificate was issued. 2. Strike out “ 30 m onths” in subsection (I) o f section 5 and insert “ 36 m onths” in lieu thereof. P R IN T E D IN NEW YORK