Indianapolis Times, Indianapolis, Marion County, 8 August 1952 — Page 13
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FRIDAY, AUG. 8, 1952
BENEFITS FOR KOREAN VETERAN—
(Fifth of a series) By JOHN TROAN
If you're a veteran of the Korean War, Uncle Sam may help you buy your “dream house.” And the new GI Bill of Rights contains some added provisions hopes will prevent that dream from
. turning into a nightmare,
The GI lnan benefits available to World War II vets have been extended to men who have served in the Armed Forces since June 27, 1950. The Korea vets may obtain home, farm and busines® loans
‘on the same basis as War II _. vets, And they may apply for
"person who
, to be set, ‘may quality J
“their® GI loans {ip to 10 years after the President or Congress fixes a ‘‘cutoff” date. As. things now stand, any served between June 27, 1950, and a date yet for ‘a
+ ‘GI loan.
Rn
= > = ”
TO BE eligible, the vet must have put in at least 90 days on active duty—unless sooner discharged for service-incurred injury—and must have heen released under other than dishonorable conditions.
There is a common misconception ‘about the GI loan program, however. Many vets think all they have to do is_ go to the Veterans Administration and get the money,
This is far from -the truth. Indeed, the VA seldom issues any loans f{tself. It will only guarantee a loan which a vet is able to obtain from a bank, a mortgage house or some other lending agency. o » = BRIEFLY, if you are a vet seeking a loan to purchase a house, you should first get a certificate of eligibility” from the VA. Then, you should pick out the property you want to buy and go to a bank or a lending agency to apply for the money. This is strictly a business deal. You must prove to the lending agency that you are a ‘satisfactory credit risk” and that youll be able to meet the mortgage payment every month. Alsa, the property has to be appraised through the VA because the law forbids the VA to back up any lean if the purchase price is deemed to be “unreasonable.” 8 ” Ed If you're getting the money to buy a home, the VA will guarantee up to 60 per cent of the loan—but the guarantee can't exceed $7500. If “you're getting the money to buy a .farm or other real estate which you intend to use for business purposes, the VA will guarantee up to one-half of the loan—but the guarantee can't exceed $4000. If vou're getting the money for the purchase of personal property—like an auto to use in your business, or equipment for your: cleaning shop, or merchandise for your grocery—the VA will guarantee up to one- | half - of the loan, but the guarantee can't exceed $2000. ou EJ n
THE GUARANTEE means | [E
the government will make good | that portion of the loan which it agrees to back up should you default. But this doesn’t relieve you of any obligations because the VA can come after you for
Ives Recovering
From Infection
HONOLULU, Aug. 8 (VP)—|
Folk ballad singer Burl Ives was, recovering in a local hospital to-!§ day from a virus infection which!
forced him to cancel one of two scheduled Honolulu concerts.
His manager here said the in-|R fection started with a cold during
the week end.
Mr. Ives arrived here Saturday 2 from Australia and will be ‘here
through Aug. 12. Earlier, in Hollywood, the singer's wife had reported him. in
serious condition from a virus in-| |
fection in Honolulu.
any money it may be forced to lay out on your account. Thus, as far as loans are concerned, the GI bill means primarily this: The vet usually is able to. get money more easily and at a lower interest rate than the nonvet because Uncle Sam is behind him, A VA guaranty also carries with it a small gratuity for the vet. This comes to 4 per cent of the guaranteed portion of the loan—up to $160. THIS money is paid by the VA to the lender, to be applied to the principal of the loan. In the long run, it means an extra saving on the interest charges. The interest on a GI loan cannot exceed 4 per cent. Where the VA determines that loans
at such a low interest rate aren't available to vets, it can issue the money itself. But
that's the only condition under which any veteran can obtain a loan directly from the VA. Direct VA loans—up to $10,000 sare available in about 2600 counties in the U. 8S. Your nearest VA office will tell you whether you are eligible. ® = = Appropriations are now made to the field offices quarterly— the last of $509,000 was made July 1. That's enough for only 80 average GI direct loans. Since the Indianapolis offices get about 450 loan applications per month it is first come, first
served, officials say.
In Central Indiana ‘the following counties are approved for direct loans: Brown, Hamilton, Hancock, Henry, Morgan, , Owen, Rush and Tipton. Throughout the state, 51 of the 89 counties handled by the | local VA offices are approved for direct loans. A word of caution, however, with regard to direct loans: ; Don't expect miracles. The waiting list is long, and the money i8 short. It takes a good while to get an application through. ” » » ON GI HOME loans, the vet may be given up to 25 years to pay off a loan of $12,000 or less, and up to 20 years to pay
off a loan over .$12,000. In special hardship cases, the VA may extend the time to 30 years. *
On farm loans, the time limit is 40 years. On non-realty loans, it's 10 years. The lending agency may insist on a shorter time period, if it so wishes. The law fixes only the maximum, not the
minimum. = n ”
THE GI BILIL says nothing about down payments. But these are governed by regulations of the Federal Reserve Board and the Housing & Home Finance Agency. Under these rules, few vets can get a 100 per cent loan to buy a house. Most must make some kind of down payment. On houses priced at $7000 or less, the vet must pay at least the closing costs.. However, if these costs should exceed 4 per cent of the purchase price (which they probably wouldn’ t),
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the lending agency could let the vet get off without paying the full closing costs, » s ” ON HOMES priced between $7001 and $12,000, the minimum down payment is $280 plus 10 per cent of the sales price in excess of $7000. Plus the closing costs. Thus, on a $10,000 home the
vet must put down at least $280 plus 10 per cent of $3000 (the excess dver $7000)—or a
total of $580, in addition to the Closing costs Costs.
THE INDIANAPOLIS TIMES 4
. rh
still more money to put down. From this, it should be clear to any vet that, GI bill or no, he still must have a fair amount of money on hand to
transaction price is the sales run between $12,001 and $16. 000, the vet must put down at least £900 plus 55 per cent of the transaction price in excess of $12,000. Plus the usual closing costs. The figures are higheg.as you £0 up the price ladder but few down payment is figured on.a Vets can afford upper-bracket different basis. Here, it's not homes, so we'll skip those. the sales price which counts 2.» but the transaction price. The INCIDENTALLY,
he may draw on ‘them up to 10 years after the new ‘‘cut-off date” is set. The July 25, 1957, deadline, which applies to the old GI bill, no longer affects get a mortgage to buy a house. War II vets with post-Korea And remember: These are mini- service, mum down payments which we 8 H.R are discussing; any lending TO PROTECT the GIs and agency is free to demand higher the government, Congress wrote down payments of anyone. specific provisions into the loan Vets who served both in War programs under which the VA 1I and the Korea conflict can-, may blackball unscrupulous
On homes priced between £10,001 and $12,000, the minimum down payment is $580 plus 16 per cent of the sales price in excess of $10,000. Plus the closing costs. | = = w ON HOMES selling at more than $12,000, the minimum
prepaid
prige plus the closing. costs. items such as taxes and insur- not qualify for double loan contractors and lenders. So--if the price of the house - ance. must be covered hy the = henefits. However, if a War II This penalty provision, barand the closing c costs Jogether vet in all cases. This means vet has any loan benefits left ring or Suspending such indi- ~
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viduals from the veterans’ market, applies to builders “identi fled with housing previously sold to veterans (under the GI as to which substantial deficiencies have been discov-
bill)
ered.”
Also, to builders who fail to live up to their
abilities”
ment”
government.
NEXT — Pensions and Mis-
PAGE 13
ew GI Bill Of Rights Helps Veteran Buy ‘Dream Home’
“contract I~ to vets, and to Tenders who ‘“exercige poor credit judgor otherwise take advantage of a vet or the
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