Kremlin Permits Big Loans for Home Building

MOSCOW — Soviet citizens will be allowed to take out large bank loans to build private homes under a government decree published Sunday that marks a major change in tackling the tenacious housing problem.

The decree published in the Communist Party daily Pravda said the government hopes to “activate the human factor” and get Soviets to build their own homes with the help of government loans.

It also calls on large industrial enterprises to take up a bigger share of the burden in providing housing. It makes clear that small groups of Soviets who want to produce building materials or work as carpenters in their spare time are encouraged to do so.

The new decree orders officials to make building plots available and appears to especially encourage construction in rural areas.

Loans of up to 20,000 rubles--about $33,000 at the official exchange rate--can be taken out by those living in rural regions and paid back over 50 years, Pravda said. The money borrowed by city dwellers must be repaid within 25 years.

Previous Limit Was $5,000

Under the previous regulations governing private construction, no more than $5,000 could be borrowed from state banks and had to be repaid within a decade.

The amount of interest to be charged on the larger loans was not specified in the decree, but borrowing rates traditionally have been between 1% and 3% a year.

Monthly pay for a Soviet industrial worker averages $330.

One in five Soviet families currently lives in what is referred to as communal housing, which can be anything from a bunk in a collective farm barracks to a couple of rooms in an urban apartment shared with another family.

Soviet leader Mikhail S. Gorbachev has followed in the footsteps of his predecessors in promising a separate home or apartment for every family, vowing to eradicate the housing shortage by the year 2000.

Frequent Citizen Complaints

But progress in putting up new apartment buildings has been slow, much of the existing urban housing is in poor condition and construction quality remains the subject of frequent citizen complaints.

Statistics published last month on the nation’s economic performance in 1987 said 13 million families had been given improved housing. But the yearly statistical reports do not indicate how many families are displaced by major renovation or demolition projects under way in many cities.