STATE OF BUSINESS: Moderate Optimism

To spur the upswing in residential building, the Federal Housing Administration last week eased credit for home buyers, second such move in two weeks. Most buyers will no longer have to put up cash for closing costs in buying a new house, but can tack them on the mortgage loan, thus lowering down payments. To attract more lenders, the agency increased allowable discounts (to a maximum 3%) on FHA-backed mortgages in 17 Western states, where mortgage money is tight.

But the Federal Reserve Board kept other forms of credit tight, despite the rising clamor of businessmen for easier money. The...

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