needs in the way of environment, climate, and general character of the community.

So, with that end in mind, I bought a large lot in that city, with a view of the ocean from one side and the bay from the other. Here, I plan to build a house for my retirement years. The lot cost me $4.750. Last summer, I could have sold it for $6,300.

When I had the lot free and clear, I began to look around for someone to design and build a house for me. I don't plan to wait until I'm ready to retire and then start building the house. I want, instead, to build it now, use one floor as a rental property with the other reserved for my own use during my vacations, and have it ready to move into when I finally retire. Having settled tentatively upon a duplex plan, I consulted several builders in the area. Up came the subject of financing.

I'm an ex-serviceman and, of course, I told the builder I wanted to use my GI entitlement to help finance the construction of the house. At this point, I began to get some inkling of what I was up against. I had blithely assumed that this law passed by Congress was readily workable for any GI, and not just for those who want to buy newly built tract houses or existing single-family dwellings.

After the builder had been turned down by six different lending sources, I decided to do a little checking myself. I stopped into the offices of a building-and-loan association that announced on its windows mortgage loans at 434 percent, 5 percent, and 54 percent. They informed me that in the first place they didn't handle individual GI loans. In the second place, they didn't take duplexes at all, because there was too much risk involved in a case where a person might expect to have the rentals cover mortgage payments.

I then explained to them my financial position, and that I did not so expect. When I retire, I will do so with the rank of captain in the Navy, at an income of $7,000 per year. In addition, I am now employed by the Federal Government in a high level job that pays me an excellent salary, and I expect to continue in that job until I retire. I have $20,000 worth of insurance which could be made payable to lender, since I have no heirs whatsoever. I will be fully able to meet the monthly mortgage payments out of income, and plan only to use the rentals to afford me a few trips I have never had a chance to make. Still, the building-and-loan people were not interested. So I talked to a top official of a branch of California's big bank in this locality. He was cordial, but very dubious about securing a GI loan for me— promised to write me if he could do something for me, but I've never heard anything from him.

Nearly a year has passed. My preliminary plans have been drawn and O. K.'d, and the designer is starting on the final plans. The builder is ready to build any time I say so, but I've developed a stubborn streak. I want to get my GI loan that I'm entitled to. With the lot all paid for, and the cost of construction estimated at about $22,000, with the prospective owner gainfully employed at a good salary, his retirement income guaranteed at a good deal more than enough to cover the payments, and his insurance available to cover possible default due to his death, why can't he get a GI loan?

I don't have to build the house right now. I can afford to wait, but I'd like to get it built and furnished, and have it ready to use.

85551-57-4

I'd like to rent half of it to people who are very anxious to occupy it. And, I'd like to get my World War II GI entitlement while there is still time. Does anybody know the answer?

EDITOR'S NOTE.-Unofficial VA view is that two factors may be hindering this loan: (1) A local interpretation that the house is not being built "for own use and occupancy," as the law requires; (2) heavy discounts for construction loans cannot be charged an individual ĞI, as they can a builder, and so California lenders may be reluctant to advance the money.

ON LONG ISLAND: RETIRED WANT TO LIVE WITH YOUNGER FAMILIES

Two important things stand out in Bernard Krinsky's experience with building houses for older persons: (1) Financing is no problem; (2) older people like their houses integrated with the rest of a regular community.

Krinsky is president of Housing Associates, which is building Eastwood Village, a 2,500-home community in Centereach, Long Island. The development includes 300 two-bedroom houses designed to take care of what Krinsky astutely recognized as a lucrative and growing market of home buyers: the retired.

In recent years, there has been a heavy exodus to Long Island of New York City civil servants, such as policemen and firemen, who have retired and want to settle down in a quiet village atmosphere, but close to old friends and haunts.

To take care of this market, Krimsky planned a separate adjunct to his regular 3- and 4-bedroom houses for young families. He had put up only a few of the two-bedroom houses when he learned he was making a mistake.

"I had this section laid out with a little park and walkway for the older people, but I found out they didn't go for it," says Krinsky. "They wanted to be among the younger folks and they liked to have kids around. They didn't want to be set apart as a class. I quickly changed my plans and began integrating the retirement housing with the other."

He learned early that most of the retirees had ample funds, and financing was relatively easy. In fact, he says, many of these customers were able to pay cash outright for the $9,990 homes. Others make large downpayments and are able to get 25-year mortgages, either conventional or FHA-insured.

"Many of them have recently sold at a substantial profit the houses they bought 20 years ago for, say, $5,000," Krinsky says. "In addition, they've saved. They have money in the bank and generally are in good health."

Not only are the retired good customers but they do a lot for a community, Krinsky finds. They are avid about maintaining and improving their premises: they put in and cultivate garden patches, repaint with bright colors, and engage in all sorts of handiwork about the house.

Krinsky's 2-bedroom house with basement offers 1,079 square feet of living space on lots 75 by 125 feet. Designed by Architect Herman York, they feature open interior planning specially favored by older couples, because it makes for companionship while they are occupied with their respective activities.

Essentially the same design and planning is offered in the higher priced houses to preserve architectural harmony.

Included in the lower priced house is a gas range; no refrigerator. Given a choice of linoleum for floor covering, because it would make for easy house cleaning, most of the older buyers rejected it, preferring the uncovered wood. A safety factor in the houses for the aging is a one-step ascent at the front. Also, all these houses are sited on level ground.

FINANCING HOUSING FOR OLDER PEOPLE

By E. Everett Ashley III, Chief, Reports and Statistics Section, Housing and Home Finance Agency

The problem of financing has undoubtedly been a major deterrent to builders' output of homes specially planned for older persons. Reports on satisfactory permanent financing for such housing have been especially discouraging. There is no question that financing for buyers past 60 is harder to find than for those in younger age groups. Nevertheless, it can be found, and more and more builders are finding it each year.

In discussing the subject of home financing for older persons a Detroit lender recently observed:

"When I first went into the mortgage business, lenders were reluctant to make loans to people over 55. Today, that picture is changing as lending institutions are beginning to realize that the loans are perfectly good, if other factors are equal, almost without regard to the age of the borrower. The effective life of the average mortgage is only 7 to 8 years today, and the life expectancy of your borrower at age 65 is often that much or more."

Too often the home builder, seeking permanent financing on houses for older persons, expects to find the same low downpayment terms afforded younger purchasers. Unfortunately, such easy financing is seldom available. The lender, understandably, wants a larger equity from the older home buyer.

TWO ALTERNATIVES

There are, however, two practical courses open to the builder who wants to enter the field of housing for the aged. The first is construction of a smaller, less costly house for elderly couples who now own a larger home no longer suited to their needs. The builder can either take the larger home in trade or acquaint the prospective buyer with a reliable real-estate dealer who can sell it.

The older person who owns his home will have a substantial equity in it, and through the sale will have sufficient cash to handle a smaller home. The important thing here is that the builder be prepared to explain the financing fully and make it easy for the prospective buyer. A second alternative is open to builders where the prospective home buyer is not presently a home owner and cannot make a substantial down payment. This is to get a third party, often a relative, to make the downpayment and become a cosigner on the mortgage. In this case, if the credit rating of the cosigner is satisfactory, lenders are inclined to offer more generous terms. Loans of this nature are made

conventionally and under section 2031 of the Housing Act. Congress is being asked to amend the Housing Act to permit similar arrangements under regular section 203 mortgages.

It is important for builders contemplating construction of homes for older persons to investigate fully the possibilities under section 2031. Since this section provides for lower minimum construction requirements than other parts of section 2, lower cost homes are possible. There are numerous reports from lenders around the country indicating that the $7,000 homes being built under this program are especially appealing to older persons.

A Long Island development using 2031 financing has found a ready market among retired couples. While the development was not primarily designed for oldsters, about a quarter of the units were purchased by people past 60. And they were making substantial downpayments raised from the sale of another home.

Proposed amendments to section 207 of the Housing Act may open the retirement housing field to builders interested in the rental housing market.

While many problems remain to be resolved in financing housing for the aged, there is some money available in almost every market for such building. And experience shows that the more exposure lenders have to this market the more receptive they become to lending money to older people for new homes.

Consequently, the builder aggressively seeking financing for homes for the aged is doing himself a service by broadening his market, and our older citizens a service by helping to broaden the financing frontiers of the industry.

7. PROBLEMS OF THE AGED: HOUSING AND LIVING ARRANGEMENTS

REPORT OF THE GOVERNOR'S COMMISSION TO STUDY PROBLEMS OF THE AGED, STATE OF RHODE ISLAND AND PROVIDENCE PLANTATIONS, JULY 1953 1

The goals of older people in housing and living arrangements are in general similar to those of the rest of the population. It can be taken for granted that the aged person wants comfort, convenience, cheerfulness and safety embodied in his dwelling place. Usually he wants companionship or access to it in his living arrangements. He would like also to have a degree of choice and of independence.

Aged persons, however, are confronted by conditions and circumstances which make housing and living arrangements a more important matter and a more difficult problem for them than it is for younger people. Needs vary and few generalizations apply to all of the aged.

SPECIAL PROBLEMS OF THE AGED

What are some of the circumstances which have to be considered? More than half of the aged in Rhode Island are single and the majority of these are widowed. Women predominate in number. The housing requirements of single persons are different from those of persons living with a spouse. Psychological factors are involved, especially for some who must adapt themselves to living alone after years of marriage.

Almost half of the aged in Rhode Island are in poor health or have physical defects which constitute a handicap. Infirmities increase with age. About one-third of the aged population are 75 years of age or more. Another one-third are from 70 to 74. People who are ill or infirm often require some special attention which makes living alone impossible. Safety features in housing are also important. Floor level and general location are even more so.

Some persons arrive at an age or condition when they require a type of care which can best be given in an institution. About 3,500 of the aged in Rhode Island live in homes for the aged or in hospitals or custodial places.

Aged persons in general have low income. This obviously is an outstanding limiting factor in determining where and how the majority can live.

Details on the quality of housing and on living arrangements of the aged have been presented in section I of this report. It is not the

Source: Old Age in Rhode Island: Report of the Governor's Commission To Study Problems of the Aged, State of Rhode Island and Providence Plantations (July 1953), pt. C, pp. 57-64.