National banks and many of the other commercial banks have not been lending on real estate to any considerable extent, partly because of restrictive federal and state laws. They have large savings resources, however, and are, therefore, a potential source of funds for home-owners. A law enacted in 1927 permits national banks to invest as much as one-half of their savings deposits in realty loans for periods up to five years, and many of them have commenced to devote a larger part of their assets to real-estate lending.

Second Group

Families having in the neighborhood of from 25 to 40 per cent of the amount needed to buy or build a home have fewer agencies to choose from than families in the group heretofore discussed. In some of the states which do not have laws restricting their lending on real estate there are savings banks willing to advance the amount required, and in some communities mortgage companies will make such loans where the borrower pays a commission or a higher rate of interest than that prevailing for more conservative loans. The building and loan association, however, is the most popular source of funds for families in this group.