Jamaica Mortgage Bank Pushing for Lower Home Deposits

The Jamaica Mortgage Bank (JMB) is seeking to have legislation enhanced to allow purchasers of homes to make deposits of as low as three per cent.

General Manager of JMB, Courtney Wynter, says that up to 10 years ago, down payments were as high as 20 per cent, but are now in the 10 per cent range.

The proposed amendments to the Mortgage Insurance Act, which have been drafted, will facilitate an increase in Mortgage Indemnity Insurance from 90 per cent to 97 cent.

“Mortgage Indemnity Insurance…is the means by which the government provides insurance for the upper limit of a mortgage. It allows financial institutions to facilitate lower deposits for purchasers,” Mr. Wynter explains.

Mortgage Indemnity Insurance was established through the Mortgage Insurance Act of 1960 and is facilitated by the JMB on behalf of the government.

The JMB has financed 15,100 units or just under 40 per cent of approximately 40,000 housing starts in Jamaica over the past 10 years.

Mr. Wynter tells JIS News that the institution has been a significant facilitator of housing developments since its inception in 1971.

The JMB is a statutory body of the Ministry of Transport, Works and Housing, that offers interim financing to housing developers.

The Bank, which recognises the demand for housing in the $6 million to $15 million price range, seeks to bridge the gap by financing housing developments in the $9 million to $15 million range, which is not currently served by the National Housing Trust.

The Bank financed the Long Mountain development, and approximately 50 per cent of developments in Portmore; Little Bay in Westmoreland; and Huddersfield in St. Mary.

Additionally, Mr. Wynter said the JMB also does a limited number of commercial developments, such as Angels Plaza in Spanish Town.

The JMB is also a player in the secondary mortgage market, which involves buying and selling mortgages through financial institutions.

The Bank raises funds, primarily through private financial institutions, which it then on-lends to credit unions, which lend to prospective purchasers. The money is repaid to the Bank through mortgage payments.