Buyers Eligible for Quake Loans

Prospective apartment building owners can apply for a total of $24 million in low-interest loans to buy quake-damaged buildings under a new program approved Friday by the Los Angeles City Council.

The council’s unanimous vote to issue $24 million in bonds will provide three banks and lending institutions money to lend to buyers at an interest rate of 4% to 5%.

Under the new program, Home Savings of America, First Federal Bank and Glendale Federal Bank, the three institutions chosen to participate in the program, will lend the money and will be responsible for paying off the bond.

The goal of the program is to get new buyers to repair and rent out damaged apartment buildings that were abandoned after the quake, said Gary Squier, manager of the city’s housing department.

City officials decided not to lend the money themselves--as they do in other quake recovery programs--because they wanted to cut out some of the bureaucracy and allow the lending institutions to use their judgment on selecting borrowers, he said.

If the program proves to be effective, Squier said, the city may take out a second bond in the near future.