KENTUCKY REPORT

Erecudve Vlce Preeldent

by Don A Crmpb€ll

fUe Kentucky Housing Corporation

! recently agreed to sell $20 million worth of housing bonds. They will provide 30 year home loans at 10.62590 interest to about 500 families. The funds were to be available to lenders sometime in Januarv.

Forty one mortgage companies, banks and savings & loans have said they can take more than $90 million worth of this kind of loan but federal limits on housing revenue bonds would not allow more than the amount agreed upon. The borrowers can have household incomes of up to $25,000 and their homes can cost up to becomes more important in a rising market situation. Watch your sales price and stay with the market. Many have sold too low and not known it until time to buy came aroundan excellent way to go broke.

One item of good news regarding interest rates. HUD announced that effective Dec. I it no longer sets maximum interest rate ceilings on FHA insured home loans. This change allows lenders, builder and buyer to negotiate interest rate and discount points. Many builders refused to build under FHA because they were required to pay discount poinr. The changes will no doubt make life easier for all concerned and make the FHA program much more attractive.

$46,m. In eastern Kentucky this amount can increase to $52,ffi.

Home mortgage rates have remained stable in the past month and most p€ople think that it is likely to continue that way for a while. Last weck the interest rate on standard home loans was 13.49c. Before November mortgage rates generally had declined from the summer peak. Many economists feel that federal budget deficits will force the Fed to tilt toward restraint, but many of these so called hotshot economists contend that other factors, lower inflation and slower economic growth, will offsct concern over hefty federal deficits. At present, the averaSe term of mortgages closed in November remains unchanged at 26 years with loans averaging 76.1s/o of the purchase price.