1.

2.

Insured Loans

Farm labor housing loans: Loans are made to a farm owner, to certain broad-
based public or private nonprofit organizations or to a nonprofit organization
of farm workers incorporated within a State to provide modest living quarters
(including basic household furnishings) and related facilities, and land neces-
sary for an adequate site, for domestic farm labor. These loans are repayable
in not more than 33 years and bear interest not in excess of one percent.

Rural rental and cooperative housing loans: Loans are made to individuals, corporations, associations, trusts, or partnerships to provide moderate cost rental or cooperative housing and related facilities for elderly persons and other persons of low and moderate incomes in rural areas. These loans are repayable in not more than 50 years and bear interest in fiscal year 1971 at 7-1/4 percent with provision for interest credits up to 6-1/4 percent under certain circumstances. These loans are made only if the need for necessary housing cannot be met with financial assistance from other sources including assistance under 236 of the National Housing Act. No loan may exceed $750,000. Loans are limited to rural areas which include towns, villages or other rural places with a population up to 10,000, which are not part of an urban area.

3. Rural housing loans: Building loans to individuals are made to enable eligible applicants in rural areas to construct, improve, alter, repair or replace dwellings and essential farm service buildings. Loans may include funds to buy a house, building site and farm service buildings. If the borrowers are persons of low or moderate incomes, and if their need for necessary housing cannot be met with financial assistance from other sources, including assistance available under section 235 of the National Housing Act, the loans made by the Farmers Home Administration in fiscal year 1971 will bear interest at 7-1/4 percent with provision for interest credits up to 6-1/4 percent under certain circumstances. Such loans may not exceed amounts necessary to provide adequate housing, modest in size, design and cost. Loans to persons other than those of low or moderate incomes were made in fiscal year 1970 at a rate of 8-1/2 percent interest, plus a 1/2 of one percent insurance charge. Insured building loans are made to farm owners, owners of other real estate in rural areas, others who are or will become rural residents, and long-term leaseholders. These loans are repayable in not more than 33 years. Loans are limited to rural areas which include towns, villages or other rural places with a population up to 10,000, which are not part of an urban area.

4. Availability of private capital controls the success of the insured loan program and requires constant awareness of the money market. Sales of insured loans to private investors are controlled by adjusting the optional redemption period and/or the interest rate to the lender as needed in line with changes in availability of credit. As of February 15, 1971, interest rates to lenders were 5-3/4 percent for notes held for 3 to 4 years, 6-1/4 percent for notes held from 5 through 9 years, and 6-3/4 percent for notes held from 10 through 25 years. Insured loans outstanding which are contingent liabilities against the fund are expected to increase from $1,813 million on June 30, 1970, to approximately $3,019 million on June 30, 1971, and $4,319 million on June 30, 1972.

Status of Direct and Insured Rural Housing Loans

During the 1970 fiscal year, a total of $11,890,931 was obligated for direct rural housing loans from the authorization to make such loans. Obligations for low-tomoderate income building loans, including small loans of less than $1,000 and natural disaster loans, totaled $5,338,391; for very low-income housing repair loans, $5,244,590; and for rural rental housing loans, $1,307,950. Insured rural housing loans totaled $779,695,600 in the 1970 fiscal year. Of this amount, $1,549,260 was obligated for farm labor housing loans; $27,132,790 for rural

rental housing loans; $729,440,950 for low-to-moderate income building loans; and $21,572,600 for above-moderate income building loans.

The Appropriation Act for 1971 provided authority to use $19,000,000 from funds available in the Rural housing insurance fund for direct rural housing loans. Estimates for low-to-moderate income building loans are $7,000,000; for very lowincome housing repair loans, $10,000,000; and for rural rental housing loans, $2,000,000. Insured loan estimates for 1971 are as follows: farm labor housing loans, $10,000,000; rural rental housing loans, $35,000,000; low-to-moderate income building loans, $1,413,000,000; and rural housing site loans, $5,000,000. 1. Applications: During the 1970 fiscal year a total of 158,166 applications for new loans were received. Loan applications on hand June 30, 1970 totaled 71,192. It is expected that applications for both direct and insured loans in 1971 will approximate 250,000.

2. The following tables show the number and amount of direct and insured rural housing loans made for 1970 and the estimates for the 1971 fiscal year.

3.

4.

5.

Use of Direct Loan Funds: A total of 298 new dwellings at an estimated cost of $3,647,830 and the purchase of 25 new and old existing dwellings were planned by the 590 borrowers receiving direct initial Section 502 building loans in fiscal year 1970. There were 4,171 dwellings to be repaired and other farm buildings were planned to be constructed, purchased, or repaired through the proceeds of all initial loan funds.

About 37 percent of the 1970 initial funds were planned to be used for constructing new dwellings. The average planned cash cost of new dwellings was $12,241 including loan funds and cash contributions by borrowers but not including any labor contribution by the borrower. In addition, the construc

tion of 139 units was planned with direct rental housing funds.

Use of Insured Loan Funds: Fifty-two percent of the initial insured funds in fiscal year 1970 was scheduled for the construction of 31,973 new dwellings. The purchase, repair and refinancing of existing dwellings represented 43 percent of the funds available. From the proceeds of the insured rental housing funds for 1970, 2,856 units were planned for the benefit of the elderly and low income families. Also, 352 family units and 122 separate accommodations were to be constructed or improved through the labor housing program.

Loan Repayments:

A. Direct Loans: Direct rural housing loans are made with an annual common maturity date of January 1. As of January 1, 1970, $954,541,672 had been advanced to 136,889 borrowers under the direct rural housing program. Principal payments of $400,790,895 and interest payments of $223,641,720 had been made. The principal and interest payments included contributions in the amount of $155,184 which were applied to some borrowers' accounts with Section 503 loans to assist them in developing adequate farms. Principal write-offs and judgments totaled $476,905.

By January 1, 1970, 43,792 borrowers had paid their direct rural housing
loans in full. As of the same date, cumulative annual installments in
the amount of $291,174,702 were due from the 93,097 borrowers with out-
standing loan balances. The regular principal and interest payments on
these installments were $300,555,827. This represents cumulative regular
payments to cumulative installments of 103 percent. Extra payments and
refunds of $7,533,821 were also applied to these borrower's accounts.
On January 1, 62 percent of the total borrowers with outstanding loan
balances were ahead of schedule an average of $240 and 10 percent were
behind schedule an average of $477.

As of January 1, 1970, 135 organizations had received direct loans totaling $14,059,700 to build or repair rental units for the benefit of the elderly or other persons of low income in rural areas. On January 1, $898,532 had become due. Seventy-four of the borrowers were on schedule in their payments, 43 were ahead of schedule, and 18 were behind schedule. B. Insured Loans: As of January 1, 1970, $1,794,461,053 had been advanced under the insured Section 502 rural housing loan program to 178,979 borrowers. Payments totaled $259,605,332 including $105,565,368 in principal and $154,039,964 interest. The 174,612 borrowers with outstanding balances had paid two percent more than the $211,186,197 due on January 1. Fifty-eight percent of the borrowers were ahead of schedule in their payments, 30 percent on schedule and 12 percent behind schedule.

Of the $35,743,278 loaned to 786 borrowers for insured rental housing projects $1,172,825 had been repaid in principal as of January 1, 1970. Interest payments totaled $2,051,688.

The labor housing loan advances totaled $15,273,264 on January 1, 1970. The 130 borrowers, including 47 organizations, had made principal and interest payments of $1,320,402.

$993 $10,583