NHT Announces Measures to Assist First-Time Homebuyers

The National Housing Trust (NHT) has unveiled five new policy initiatives, some of which take effect today (Sept. 9), that are designed to make it easier for first-time homebuyers to own a home.
At a press briefing this morning at the NHT’s head office in New Kingston, Chairman of the Trust, Howard Mitchell, stated that the initiatives have become necessary as contributors have continued to find it difficult to qualify for loans. He noted that the situation has worsened in the current economic climate.
“In today’s Jamaica, where incomes are lagging far behind increases in house prices, it is very difficult for some persons to overcome the affordability hurdle to homeownership,” he noted.
Effective today, persons able to make monthly loan payments but unable to come up with a deposit for a house, can benefit under a Short-Term Lease policy. This measure will allow qualified applicants to lease a house in an NHT scheme with the option of buying the unit within the three-year lease period. During the period they are expected to pay at least 15 per cent of the price of the property in monthly lease payments.
At the end of the lease period, persons can access the balance of the cost of the property as a regular NHT mortgage. Mr. Mitchell informed that the NHT has committed to allocating up to 10 per cent of the units in all NHT schemes for lease.
Another of the measures announced is the Shared Equity facility, which will allow qualified applicants to share ownership of their units with the NHT. The facility is designed for contributors, who cannot afford the full or subsidised price of an NHT scheme unit.
Under the Shared Equity facility the applicant’s interest in the property must not be less than 60 per cent and the beneficiary can sell his/her interest in the property at any time. The beneficiary can also purchase the NHT’s interest in the property at any time.
The date for implementation of this is to be announced, as Mr. Mitchell noted that some legal issues are yet to be worked out.
The NHT has also modified its Combined Loan facility to make it easier for two qualified contributors to combine their individual loans to build or buy a house.
“If you were joining with a spouse to take up an NHT loan and you could afford $5 million while your spouse could only afford $2 million, then under the old policy, you could only both have received a loan of $5.5 million. As of today what will happen is that you and your spouse can access $7 million as the combined loan, based on your ability to afford $5 million and your spouse’s to afford $2 million,” Mr. Mitchell explained.
Come April 1, 2010, contributors will be able to use up to 50 per cent of contributions to help bridge any funding gap they may have between the loan amount they can afford as their NHT benefit and the price of the unit or lot they are buying. However, the NHT said only contributions made prior to the year of the application for the benefit and which have not yet been refunded can be accessed under this facility.
Also effective today (Sept 9), NHT mortgagers can benefit from an Extended Loan Term. This will see the tenure for loans under the benefit types – Build-on-own Land, Open Market, and NHT Financed Scheme Unit moving from 30 years to 40 years.
In addition, the loan repayment period for NHT Financed Service Lot, House Lot, Home Enhancement Loan Plan and Home Ownership by Exception will move from 15 years to 20 years.