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Federal Reserve Bank OF DALLAS Dallas, Texas, June 10,1952 REAL ESTATE CREDIT AMENDMENT TO REGULATION X To A ll Persons Engaged in the Business o f Extending Real Estate Credit in the Eleventh Federal R eserve D istrict: There is quoted below a statement issued June 9, 1952, jointly by the Board of Governors of the Federal Reserve System and the Housing and Home Finance Administrator relating to an amendment to Regulation X. “ The Board of Governors of the Federal Reserve System and the Housing and Home Finance Administrator 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. At 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 FHAinsured mortgages and VA-guaranteed loans to bring them generally in line with the revised Regulation X. FHA and VA 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 case of FHA 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. At the other end of the scale, the down payment has been reduced from 50% to 40% 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 40% 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 VA mortgage is 35% compared with the previous 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 40% for such housing 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 next three pages there are shown the down payment and maximum loan schedules required: (1) under Regulation X and for 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.” This publication was digitized and made available by the Federal Reserve Bank of Dallas' Historical Library (FedHistory@dal.frb.org) REAL ESTATE CREDIT TERMS EFFECTIVE JUNE 11, 1952 UNDER REGULATION X AND FOR LOANS INSURED BY THE FEDERAL HOUSING ADMINISTRATION One- to Four-Family Residences I f the “ Value per Family Unit” is The “ Maximum Loan Value per Family Unit" is The “ Minimum Down Payment per _________ Family Unit” is_________ Not more than $7,000 95% of “value per family unit” 5% of “ value per family unit” More than $7,000 but not more than $10,000 $6,800 (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 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 More than $15,000 but not more than $21,000 $11,300 plus 45% of excess of “ value per family unit” over $15,000 $8,700 plus 55 % 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 $7,000 plus 75% of excess of “ value per family unit” over $21,000 $ 21,000 Over $25,000 60% of “ value per family unit” 40% of “ value per family unit” SCHEDULES OF AM OUNTS AND PER CEN TAGES OF M AXIM UM LOAN V A L U E S AND DOWN P AY M EN TS A T $1,000 IN TE R V A L S Value (Transaction Price) Per Family Unit $ 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 13,000 14,000 15,000 16,000 17,000 18,000 19,000 20,000 21,000 22,000 23,000 24,000 25,000 Over $25,000 Maximum Loan Value_____ Dollar Per Cent Amount o f Value $ 4,750 5,700 6,650 7,050 7,800 8,550 9,100 9,650 10,200 10,750 11,300 11,750 12,200 12,650 13,100 13,550 14,000 14,250 14,500 14,750 15,000 — 95.0% 95.0 95.0 88.1 86.7 85.5 82.7 80.4 78.5 76.8 75.3 73.4 71.8 70.3 68.9 67.8 66.7 64.8 63.0 61.5 60.0 60.0 ______ Minimum Down Payment Dollar Per Cent Amount o f Value $ 250 300 350 950 1,200 1,450 1,900 2,350 2,800 3,250 3,700 4,250 4,800 5,350 5,900 6,450 7,000 7,750 8,500 9,250 10,000 — 5.0% 5.0 5.0 11.9 13.3 14.5 17.3 19.6 21.5 23.2 24.7 26.6 28.2 29.7 31.1 32.2 33.3 35.2 37.0 38.5 40.0 40.0 REAL ESTATE CREDIT TERMS EFFECTIVE JUNE 11, 1952 FOR HOME LOANS GUARANTEED BY VETERANS’ ADMINISTRATION One- to Four-Family Residences I f the P rice per Family Unit is The Minimum Down Paym ent* per Family Unit is Not more than $7,000 Closing costs More than $7,000 but not more than $10,000 $280 plus 10% of excess of sales price over $7,000 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 More than $16,000 but not more than $21,000 $3,100 plus 57% of excess of transaction price over $16,000 More than $21,000 but not more than $25,000 $5,950 plus 70% of excess of transaction price over $21,000 Over $25,000 35% of transaction price SCHEDULE OF MINIMUM DOWN P AY M EN TS AT $1,000 IN TE R V A L S Price per Family Unit $ 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 18,000 14,000 15,000 16,000 17,000 18,000 19,000 20,000 21,000 22,000 23,000 24,000 25,000 Over $25,000 Minimum Down Payment* Dollar Per Cent Amount o f Value 0 0 0 380 480 580 740 900 1,450 2,000 2,550 3,100 3,670 4,240 4,810 5,380 5,950 6,650 7,350 8,050 8,750 — $ 0.0 0.0 0.0 4.8 5.3 5.8 6.7 7.5 11.2 14.3 17.0 19.4 21.6 23.6 25.3 26.9 28.3 30.2 32.0 33.5 35.0 35.0 *If the sale price (which excludes closing costs) is $7,000 or less, closing costs must be paid m 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). If the sales price 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. REAL ESTATE CREDIT TERMS EFFECTIVE JUNE 11, 1952 UNDER REGULATION X AND FOR LOANS INSURED BY THE FEDERAL HOUSING ADMINISTRATION Multi-Unit Residences The “ Minimum Down Payment per Family Unit” is The “ Maximum Loan Value per Family Unit” is I f the “ Value 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 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 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 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 Over $25,000 60% of “ value per family unit” 40% of “ value per family unit” SCHEDULES OF AM OUNTS AND PERCEN TAGES OF MAXIM UM LOAN V ALU E S AND DOWN PAYM EN TS AT $1,000 IN TE R V A L S Value (Transaction Price) per Family Unit $ 5,000 6,000 7,000 8,000 9,000 10,000 11,000 12,000 18,000 14,000 15,000 16,000 17,000 18,000 19,000 20,000 21,000 22,000 28,000 24,000 25,000 Over $25,000 Maximum Loan Value Dollar Per Cent Amount o f Value $ 4,500 5,400 6,300 6,850 7,400 7,950 8,490 9,030 9,570 10,110 10,650 11,150 11,650 12,150 12,650 13,150 13,520 13,890 14,260 14,630 15,000 — 90.0 90.0 90.0 85.6 82.2 79.5 77.2 75.2 73.6 72.2 71.0 69.7 68.5 67.5 66.6 65.8 64.4 63.1 62.0 61.0 60.0 60.0 Minimum Down Payment Dollar Per Cent Amount of Value $ 500 600 700 1,150 1,600 2,050 2,510 2,970 3,430 3,890 4,350 4,850 5,350 5,850 6,350 6,850 7,480 8,110 8,740 9,370 10,000 — 10.0 10.0 10.0 14.4 17.8 20.5 22.8 24.8 26.4 27.8 29.0 30.3 31.5 32.5 33.4 34.2 35.6 36.9 38.0 39.0 40.0 40.0 The text of the amendment is enclosed. Any information which may be desired concerning the Regulation will be gladly furnished by this bank and its branches at El Paso, Houston and San Antonio, Texas. Your very truly, R. R. GILBERT President REAL ESTATE CREDIT AMENDMENT NO. 10 TO REGULATION X Issued by the Board of Governors of the Federal Reserve System with the concurrence of the Housing1and Home Finance Administrator 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 ex tended pursuant to a program established by the Hous ing and Home Finance Administrator to relieve distress caused by flood, fire or other similar 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 contract 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 Supplement delete the table and insert therefor the following: I f the “ value per fam ily unit” is The “ maximum loan value per family unit” is Not more than $7,000 95% o f “ value per fam ily unit” More than $7,000 but not more than $6,300 (i.e., 90% o f $7,000) plus 75% o f excess of “ value per family unit” over $7,000 $10,000 More than $10,000 but not more than $15,000 $8,550 plus 55% of excess o f “ value per fam ily unit” over $10,000 More than $15,000 but not more than $21,000 $11,300 plus 45% o f excess o f “ value per family unit” over $15,000 More than $21,000 but not more than $25,000 $14,000 plus 25% o f excess o f “ value per family unit” over $21,000 Over $25,000 60% o f “ value per fam ily unit” (OVER) 4. In the maximum loan value provision of Schedule II of the Supplement delete the table and insert therefor the following: If the “ value per fam ily unit” is The “ maximum loan value per family unit” is Not more than $7,000 90% of “ value per fam ily 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% o f “ value per family unit” in excess of $10,000 More than $15,000 but not more than $20,000 $10,650 plus 50% o f “ value per fam ily unit” in excess o f $15,000 More than $20,000 but not more than $25,000 $13,150 plus 37% o f “ value per fam ily unit” in excess o f $20,000 Over $25,000 60% o f “ value per fam ily unit”