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F E D E R A L R E SE R V E BANK
O F NEW YORK
f Circular N o. 3 8 6 3 "1
L
June 9, 1952
J

REAL ESTATE CREDIT
Amendment No. 10 to Regulation X , Effective June 11, 1952

To all Persons Engaged in the Business o f Extending Beal Estate Credit
in the Second Federal Reserve D istrict:

W ith the concurrence o f the Housing and Home Finance Administrator, the Board o f Gov­
ernors o f the Federal Reserve System has issued Amendment No. 10 to Regulation X , effective
June 11, 1952. Following is the text o f a statement, issued jointly by the Board and the Housing
and Home Finance Administrator, released fo r publication today:
The Board of Governors of the Federal Reserve System and the Housing and Home Finance Admin­
istrator today announced revisions of Regulation X and related restrictions on housing credit affecting 1- to
4-family houses and multi-unit residences, effective June 11, 1952. No change was made in terms affecting
nonresidential properties, although the Board indicated that a change in this area was still under consideration.
The revision in Regulation X will permit more liberal credit terms for conventionally financed 1- to
4-family housing built after August 3, 1950. A t the same time the Federal Housing Administration and the
Veterans’ Administration have been authorized by the Housing and Home Finance Administrator to change
their related regulations covering FIIA-insured mortgages and VA-guaranteed loans to bring them generally
in line with the revised Regulation X . F H A and V A regulations apply to both old and new housing. A
similar revision is authorized for the terms applicable to farm housing loans made by the Farmers Home
Administration.
The lowered down payments apply in varying degrees from the lowest to the highest priced homes. In
the ease of F H A and conventional loans on 1- to 4-family residences, the down payment has been reduced
from 10% to 5 % on houses costing $7,000 or less. A t the other end of the scale, the down payment has been
reduced from 50% to 4 0% for houses costing $25,000 or more. In the range of $7,000 to $25,000, the new
down payment schedule represents a gradual curve rising from 10% to the 4 0% maximum.
The schedule of down payments for VA-guaranteed mortgages has been proportionately adjusted to
maintain a preference for veterans as required by the Defense Production Act. No down payment is required
on veterans housing costing up to $7,000, although closing costs must be paid in cash. The down payment
required for houses costing $25,000 or more financed with a V A mortgage is 35% , compared with the pre­
vious maximum of 45% .
The minimum down payment requirements for multi-unit housing (residential structures containing
more than 4-family units) have also been revised downward. The range is from 10% to 4 0% for such hous­
ing, as compared with a range of from 17% to 50% under the previous schedule.
No change was made in the time allowed for paying off mortgage credit subject to any of these restrictions.
The maximum amortization period on properties valued at $12,000 or less is 25 years and for higher priced
properties 20 years, except that veterans may be allowed a longer period if there is a finding by the Veterans’
Administration that a shorter amortization would cause hardship.
The Board of Governors also announced two technical amendments to Regulation X . The first of these
provides special assistance for tenants and home owners whose homes have been destroyed or damaged in
areas where major disasters have occurred. In addition, Regulation X has been amended to provide for
longer term sale agreements where properties being purchased will not be occupied or used by prospective
owners until the financing terms comply with Regulation X .

On the following pages are schedules which were attached to the statement. They show the
down payments and maximum loans: (1) under Regulation X and fo r FHA-insured loans on 1- to
4-family houses, (2) under VA-insured or guaranteed credit on 1- to 4-family houses, and (3) under
Regulation X and FHA-insured loans on multi-unit residences.
A copy o f Amendment No. 10 to Regulation X is enclosed; additional copies o f this circular and
o f the amendment will be furnished upon request.




A

llan

S

pro tjl,

President.

R E AL ESTATE CR ED IT TERM S E F F EC T IVE JUNE 11, 1952
U N D E R R E G U L A T IO N X AN D FOR LOANS INSURED B Y T H E F E D E R A L HOUSING A D M IN IS T R A T IO N
One- to Four-Family Residences

If the “ Value Per Family
Unit” is

The “ Maximum Loan Value
Per Family Unit” is

The “ Minimum Down Payment
Per Family Unit” is

Value
(Transaction
Price)
Per Family
Unit

Maximum
Loan Value

Dollar
Amount

Per
Cent
of
Value
95.0%
95.0
95.0

Minimum
Down Payment

Dollar
Amount

Per
Cent
of
Value

Not more than $7,000

95% of “ value per family unit”

5 % of “ value per family unit”

$ 5,000
6,000
7,000

$ 4,750
5,700
6,650

More than $7,000 but
not more than $10,000

$6,300 (i.e. 90% of $7,000) plus
75% of excess of “ value per
family unit” over $7,000

$700 (i.e. 10% of $7,000) plus
25% of excess of “ value per
family unit” over $7,000

8,000
9,000
10,000

7,050
7,800
8,550

88.1
86.7
85.5

950
1,200
1,450

11.9
13.3
14.5

More than $10,000 but
not more than $15,000

$8,550 plus 55% of excess of
“ value per family unit” over
$10,000

$1,450 plus 45% of excess of
‘ ‘ value per family unit ’ ’ over
$10,000

11,000
12,000
13,000
14,000
15,000

9,100
9,650
10,200
10,750
11,300

82.7
80.4
78.5
76.8
75.3

1,900
2,350
2,800
3,250
3,700

17.3
19.6
21.5
23.2
24.7

More than $15,000 but
not more than $21,000

$11,300 plus 45% of excess of
“ value per family unit” over
$15,000

$3,700 plus 55% of excess of
“ value per family unit” over
$15,000

16,000
17,000
18,000
19,000
20,000
21,000

11,750
12,200
12,650
13,100
13,550
14,000

73.4
71.8
70.3
68.9
67.8
66.7

4,250
4,800
5,350
5,900
6,450
7,000

26.6
28.2
29.7
31.1
32.2
33.3

More than $21,000 but
not more than $25,000

$14,000 plus 25% of excess of
“ value per family unit” over
$21,000

$7,000 plus 75% of excess of
‘ ‘ value per family unit ’ ’ over
$21,000

22,000
23,000
24,000
25,000

14.250
14,500
14,750
15,000

64.8
63.0
61.5
60.0

7,750
8,500
9,250
10,000

35.2
37.0
38.5
40.0

Over $25,000

60% of “ value per family unit”

40% of “ value per family unit”

Over $25,000




—

60.0

$

250
300
350

—

5.0%
5.0
5.0

40.0

R E AL ESTATE CR ED IT TERM S EF F EC T IVE JUNE 11, 1952, FOR
HOM E LOANS G U A R A N T E E D B Y T H E V E T E R A N S A D M IN IS T R A T IO N
One- to Four-Family Residences

Minimum
Down Payment*
I f the Price Per Family
_________Unit is________

The Minimum Down Payment*
______ Per Family Unit is______

Not more than $7,000

Closing costs

Price Per
Family Unit

Dollar
Amount

Per Cent
of Value

$280 plus 10% of excess of sales
price over $7,000

0 .0 %

0

0.0

7.000
More than $7,000 but
not more than $10,000

0

6,000

0

0.0

8.000
9,000

380
480
580

4.8
5.3
5.8

12,000

740
900

6.7
7.5

$ 5,000

10,000

$

More than $10,000 but
not more than $12,000

$580 plus 16% of excess of sales
price over $10,000

More than $12,000 but
not more than $16,000

$900 plus 55% of excess of
transaction price over $12,000

13.000
14.000
15.000
16.000

1,450
2,000
2,550
3,100

14.3
17.0
19.4

More than $16,000 but
not more than $21,000

$3,100 plus 57% of excess of
transaction price over $16,000

17.000
18.000
19.000
20.000
21,000

3,670
4,240
4,810
5,380
5,950

21.6
23.6
25.3
26.9
28.3

More than $21,000 but
not more than $25,000

$5,950 plus 70% of excess of
transaction price over $21,000

22,000

6,650
7,350
8,050
8,750

30.2
32.0
33.5
35.0

Over $25,000

35% of transaction price

11,000

23.000
24.000
25.000
Over $25,000

11.2

35.0

*
I f the sales price (which excludes closing costs) is $7,000 or less, closing costs must be paid in cash. I f the sales price is more than $7,000
but not more than $12,000, the minimum down payment is computed on the basis o f sales price. The maximum loan is the difference between such
down payment and the transaction price (which includes closing costs). I f the sales pricc is more than $12,000, both the minimum down payment
and the maximum loan value are computed on the basis o f the transaction price.




R E AL ESTATE C R ED IT TERM S E F F E C T IV E JUNE 11, 1952
U N D E R R E G U L A T IO N X AN D FOR LOANS INSURED B Y T H E F E D E R A L H O U SIN G A D M IN IS T R A T IO N
Multi-Unit Residences

If the “ Value Per Family
Unit” is

Maximum
Loan Value

Value
(Transaction
Price)
Per Family
Unit

Dollar
Amount

Per
Cent
of
Value

$ 5,000
6,000
,
7,000

$ 4,500
5,400
6,300

90.0%
90.0
90.0

Minimum
Down Payment
Per
Cent
of
Value

The ‘ ‘ Maximum Loan Value
Per Family Unit” is

The “ Minimum Down Payment
Per Family Unit” is

Not more than $7,000

90% of “ value per family unit”

10% of ‘ ‘ value per family unit ’ ’

More than $7,000 but
not more than $10,000

$6,300 plus 55% of excess of
“ value per family unit” over
$7,000

$700 plus 45% of excess of
“ value per family unit” over
$7,000

8,000
9,000
10,000

6,850
7,400
7,950

85.6
82.2
79.5

1,150
1,600
2,050

14.4
17.8
20.5

More than $10,000 but
not more than $15,000

$7,950 plus 54% of excess of
“ value per family unit” over
$10,000

$2,050 plus 46% of excess of
“ value per family unit” over
$10,000

11,000
12,000
13,000
14,000
15,000

8,490
9,030
9,570
10,110
10,650

77.2
75.2
73.6
72.2
71.0

2,510
2,970
3,430
3,890
4,350

22.8
24.8
26.4
27.8
29.0

More than $15,000 but
not more than $20,000

$10,650 plus 50% of excess of
“ value per family unit” over
$15,000

$4,350 plus 50% of excess of
“ value per family unit” over
$15,000

16,000
17,000
18,000
19,000
20,000

11,150
11,650
12,150
12,650
13,150

69.7
68.5
67.5
66.6
65.8

4,850
5,350
5,850
6,350
6,850

30.3
31.5
32.5
33.4
34.2

More than $20,000 but
not more than $25,000

$13,150 plus 37% of excess of
“ value per family unit” over
$20,000

$6,850 plus 63% of excess of
“ value per family unit” over
$20,000

21,000
22,000
23,000
24,000
25,000

13,520
13,890
14,260
14,630
15,000

64.4
63.1
62.0
61.0
60.0

7,480
8,110
8,740
9,370
10,000

35.6
36.9
38.0
39.0
40.0

Over $25,000

60% of “ value per family unit”

40% of “ value per family unit”

Over $25,000




—

60.0

Dollar
Amount
$

500
600
700

—

10.0%
10.0
10.0

40.0

R E A L E STA TE C R E D IT
AMENDMENT NO. 10 TO REGULATION X
ISSUED B Y T H E BOARD OF GOVERNORS OF TH E FEDERAL RESERVE SYSTEM
W IT H T H E CONCURRENCE OF T H E HOUSING AND HOM E
F IN A N C E ADM INISTRATOR

Regulation X is hereby amended in the following respects, effective
June 11, 1952:
1. In paragraph (e) of section 5 strike out the words “ real estate
construction credit as to which’ ’ and insert therefor the following:
real estate construction credit (1) which is extended pursuant
to a program established by the Housing and Home Finance
Administrator to relieve distress caused by flood, fire or other simi­
lar disaster, or (2) as to which
2. Add the following sentence at the end of paragraph ( /) of
section 5 :
None of the provisions of this regulation shall apply to any con­
tract to sell real property under which the purchaser is not to
receive title, and not to have any occupancy or other use of the
property, until the terms of the credit conform to the applicable
provisions of this regulation and the Supplement thereto in effect
on the date the contract was entered into.
3. In the maximum loan value provision of Schedule I of the Sup­
plement delete the table and insert therefor the following:
I f the ‘ ‘ value per family unit ’ ’ is

The “ maximum loan value per
family unit ’ ’ is

Not more than $7,000

95% of “ value per family unit”

More than $7,000 but not more
than $10,000

$6,300 (i.e., 90% of $7,000)
plus 75% of excess of “ value
per family unit” over $7,000

More than $10,000 but not more
than $15,000

$8,550 plus 55% of excess of
“ value per family unit” over

$ 10,000
More than $15,000 but not more
than $21,000

$11,300 plus 4 5% of excess of
“ value per family unit” over
$15,000

More than $21,000 but not more
than $25,000

$14,000 plus 25% of excess of
“ value per family unit” over

$21,000
Over $25,000




60% of “ value per family unit”
( oveb)

4.
In the maximum loan value provision of Schedule II of the Sup­
plement delete the table and insert therefor the following:
I f the ‘ ‘ value per family unit ’ ’ is

The “ maximum loan value per
family unit ’ ’ is

Not more than $7,000

90% of “ value per family unit”

More than $7,000 but not more
than $10,000

$6,300 plus 55% of “ value per
family unit” in excess of
$7,000

More than $10,000 but not more
than $15,000

$7,950 plus 54% of “ value per
family unit” in excess of

More than $15,000 but not more
than $20,000

$10,650 plus 50% of “ value per
family unit” in excess of
$15,000

More than $20,000 but not more
than $25,000

$13,150 plus 37% of “ value per
family unit” in excess of

Over $25,000

60% of “ value per family unit”




I’ R IN T E D

$10,000

$20,000

IN

NEW

YORK


Federal Reserve Bank of St. Louis, One Federal Reserve Bank Plaza, St. Louis, MO 63102