Benefits Announced by PM will not Impact NHT Negatively – Chairman

Board Chairman of the National Housing Trust (NHT), Mr. Howard Mitchell, has pointed out that the recently announced strategies by Prime Minister, the Hon. Bruce Golding, aimed at making it more affordable for individuals to own a home, will not have a negative financial impact on the Trust.
“The financial integrity of the fund is not affected because three or four of these policies will be funded out of surpluses that we have made and that we will make. If the surplus is not there, the benefit will not be there and we will manage that prudently,” Mr. Mitchell said.
He was speaking at the weekly post Cabinet press briefing, held today (April 21), at Jamaica House.
Mr. Mitchell said that the financial shock which the reduction in interest rates would cause, would be managed, “because we have reduced the interest on refunds to contributors.”
In his presentation in the 2010/11 Budget Debate on Wednesday (April 20), the Prime Minister announced that mortgage rates will be reduced by one per cent across all four income bands.
In addition, first-time applicants who are 55 years and over would qualify for a two per cent reduction in their mortgage rates if they have contributed to the NHT for not less than 10 years, and fall in the three per cent, five per cent and seven per cent income bands. This means they will pay one per cent, three per cent or five per cent interest rates, depending on their income band.
The Prime Minister also disclosed that qualified applicants for scheme units and serviced lots will no longer be required to pay the minimum five per cent deposit, adding that many first-time buyers are unable to find the down payment for a house, even when they can manage the mortgage payment. They will, however, be required to pay the legal and professional fees associated with the mortgage agreement.
There is also to be an increase in the maximum mortgage loans allowable as of May 1, 2010, with scheme units, open market purchases and build-on-own land moving from $3.5 million to $4.5 million. The loan ceiling for serviced lots will move from $1.2 million to $1.5 million; construction loans will be increased from $2.3 million to $3 million; and home improvement will go from $1.2 million to $1.5 million.
Another measure being implemented by the NHT is its subsidy programme. Under this programme, the NHT will allocate 40 per cent of its pre-tax surplus at the end of each quarter to provide subsidies to selected mortgage applicants who earn less than $10,000 per week and who have been contributing to the NHT for not less than 10 years. The existing points criteria will be used in selecting applicants for this benefit.
Meanwhile, the Board Chairman said the new measures are a further attempt by the NHT to provide accessibility and affordability to contributors in the housing market.
“We seek to reduce the burden of those people who are meeting their mortgage commitments, because it is a difficult time in Jamaica and it’s a difficult time globally,” Mr. Mitchell said.