Legal Definitions - building and loan

A building and loan is an older term for a type of financial institution, more commonly known today as a savings and loan association. Historically, these institutions were specifically designed to help individuals save money and then provide them with loans, primarily for the purpose of purchasing or constructing homes. They played a crucial role in facilitating homeownership by linking community savings directly to residential real estate financing.

• Example 1: Financing a First Home in the Mid-20th Century

  In the 1950s, a young couple named Eleanor and George diligently saved a portion of George's weekly earnings by depositing them into an account at the "Community Building and Loan." After several years, they had accumulated enough for a down payment, and the same institution then provided them with a mortgage to purchase their first house in the growing suburbs.

  This example illustrates how a building and loan served as both a repository for personal savings and a source for home loans, fulfilling its core mission of helping individuals achieve homeownership.

• Example 2: A Town's Primary Financial Hub

  For decades, the small rural town of Oakhaven relied almost exclusively on the "Oakhaven Building and Loan" for its financial needs. Local farmers and shopkeepers kept their savings there, and when new families wanted to build homes or existing residents needed to finance renovations, they would apply for loans directly from the Oakhaven Building and Loan, which understood the local real estate market intimately.

  This demonstrates the community-centric role of a building and loan, acting as a vital local institution that pooled community savings to provide essential financing for residential property development and purchases within that specific area.