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Changes to conditions for new loans made by Commissioner for housing from 16 August 1978



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STATEMENT FOR PRESS

THE MINISTER FOR THE

CAPITAL TERRITORYm

A number of changes have been made to conditions applying to new loans

made by the Commissioner for Housing from 16 August 1978. The maximum

loan amount has been increased from $20 000 to $23 000 and loans will now

be available to purchase established as well as new houses. This change

as with many of those outlined below will bring the ACT scheme more into

line with similar schemes operating in the States.

The family income limit for eligibility is increased from $246.00 to

$255.60 per week. This results from a change in the maximum allowable

income to 120% of the Australian Seasonally Adjusted Male Average Weekly

Earnings. Previously it was 95% of ACT average male weekly earnings. The

allowance of $2.00 per week for dependent children in excess of two will

continue to apply. Family income in this context means income of breadwinner

and spouse in the case of a married couple. For de facto or engaged couples

the income of both parties is taken into account. In the case of a single

person who is providing accommodation for a dependant in receipt of an income

it includes the income of the applicant and the dependant. Loans will not

be available to applicants whose liquid or convertible assets exceed $15 000.

The initial interest rate will remain at 5 3/4% per annum. However, for new

loans this will be automatically increased by 1/2% on 30 June each year follow­

ing the first 12 months of the loan until the interest rate is equivalent to

the long term bond rate. For existing loans the arrangement for review of

interest rate each two years will continue for the present. There will be ·

provision for the interest rate to be reduced or not increased where

borrowers, through a reduction in income, demonstrate that they are suffering

hardship. .

There will also be a change in the method of making applications. Intending

applicants need apply only to have their names put on a'waiting list. About

a months before a .loan is expected to become available the applicant will be

required to submit a firm proposal nominating the house to be purchased or

erected and the usual declaration of income and assets. The waiting period'

will vary according to the level of funds available. Initially the period

is expected to be about two months.

Applications received up to and including 15 August 1978 will be processed

in accordance with the conditions prevailing at the time of application.

If an applicant decides to cancel an application made prior to 15 August

which has not yet been approved he may do so but any new application will

subject to initial waiting time and to automatic increases in the rate of

interest.

In 1978/79 it is expected that $13.7m will be available for Commissioner

for Housing loans. Of this amount $8.9m will come from Budget appropriation

and the balance from loan discharge moneys which are available for re-lending.

It is not proposed that there will be any private borrowing by the Commissioner

foi Housing in 1978/79.

The funds available for lending in the current year, taking into account the

increase in the loan amount, will enable the Commissioner for Mousing to make

about 600 loans. The new conditions are in keeping with the policy of pro- ^gfp

viding housing assistance to those most in need. Availability of loans for

established as well as new houses will provide eligible applicants with a

wider choice of houses.

The introduction of a waiting list for applicants will help to facilitate a

more even release of funds throughout the year and should prevent a recurrence

of the situation which developed in 1977/78 in which uncertainty about the

availability of funds created difficulties in forward planning for builders

and borrowers alike. _ '

Rents of 908 Government flats and 363 houses are to be reduced from 17 August

following a review of market rental levels. The flats covered are Kanangra,

Condamine, McPherson, Windeyer, A'Beckett and Lachlan Courts and other flats ^

in Lyneham, Dickson, Ainslie, Braddon, Reid, Red Hill and Griffith. ' The

largest reduction is $5.95 per week for bedsitting room flats at Red Hill

and the smallest is 35φ for one bedroom flats in Braddon and Reid. The

houses involved are the demountables at Narrabundah where the reductions

range from $4.55 to $3.15 depending on the type of house. Tenants will receive

individual rent decrease notices in the mail shortly.

15 August 1978