Increase in Rural Housing Authority loan limits

14/5/94

Housing Minister Kevin Prince has announced an increase in loan limits and values for homes purchased under two Rural Housing Authority lending schemes.

Mr Prince said he approved the new limits, which applied to both direct advance and indemnified loans, in response to increases in building costs since the schemes were last reviewed in mid-1990.

The schemes provided finance to build homes on farming properties as a principal place of residence for the farming family, or for an employee if the farmer also lived full-time on the property.

Direct advances were financed from the Rural Housing Authority's internal funds.  They were currently advanced at 8.75 per cent, the standard owner-occupier interest rate applied by most banks.

Indemnified loans were provided by lenders such as banks and building societies at their normal rate of interest, and the institutions were indemnified against loss by the Treasurer.

The Minister said farm house building costs had risen by about nine per cent since 1990, and in consequence loan limits and allowable property values had been increased by approximately the same amount.

At the lower end of the scale, direct advance maximum loans had been lifted from $73,000 to $80,000 in the inner farming area on a maximum value of $92,000, up from $84,000. The inner farming area covered much of the south-west triangle, from a point about halfway between Perth and Geraldton to a point about halfway between Albany and Esperance.

The maximum direct advance loan for the remote farming areas, which included areas around Geraldton, Esperance and Southern Cross, had increased from $77,000 to $84,000, while the maximum cost was up from $90,000 to $98,000.

In pastoral areas, direct advance loans in the Kalgoorlie area had been increased from $81,500 to $88,500 on a maximum value of $103,500, up from $95,000, while in the Kimberley, the most expensive area in which to build, the maximum direct advance loan had been increased to $138,000 on a maximum value of $152,500, up from $126,500 and $140,000 respectively.

Media contact:  Tony Barker-May 325 4133