Leonard Ray Blanton and Betty Blanton - Page 8

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            son" to petitioner.  Hood and the Hams were the three                                       
            participants in a State-sponsored, low-income housing project in                            
            Jackson, Tennessee, known as the Royal Arms Apartment project                               
            (the Royal Arms or the project).                                                            
            The Royal Arms Apartment Project                                                            
                  In late 1977, the Tennessee Housing Authority (THA) was                               
            going to provide permanent financing for construction of the                                
            Royal Arms.  The Hams submitted a construction proposal for the                             
            project to the THA, which was approved in the early part of 1978.                           
            Accordingly, Redi-Built would be the general contractor on the                              
            project.  Although the THA provided the permanent financing for                             
            the project, the Hams had to provide their own construction                                 
            financing of $2.5 million.                                                                  
                  During that time, the banking industry nationwide was                                 
            charging interest rates on loans of up to 14 percent.  The State                            
            of Tennessee, however, had set a restrictive cap on interest                                
            rates, proscribing banks from making intrastate loans at an                                 
            interest rate exceeding 10 percent.  As a result, Tennessee banks                           
            were reluctant to make intrastate loans at 10 percent, knowing                              
            that they could go out of State and charge rates as high as 14                              
            percent.  Given the industry climate, the Hams found it difficult                           
            to obtain the necessary construction financing.  Jack Ham, to no                            
            avail, even offered to pay a man at Merrill Lynch a $15,000                                 
            finder's fee if he could help the Hams obtain a construction                                

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