AFFORDABLE HOUSING FOR JAMAICANS

BY: BALFORD HENRY

Prime Minister the Hon. Bruce Golding (left); Minister of Water and Housing, Hon. Dr. Horace Chang (2nd right), and Chinese Ambassador to Jamaica, Chen Jinghua (right), break ground for the Belle Air Development housing project in St. Ann, in December.

The National Housing Trust (NHT) had a good year in 2010, rolling out a number of new initiatives and benefits to contributors, while continuing its thrust toward re-organisation for financial viability. During the year:
• Mortgage rates for homeowners were reduced by one per cent for persons earning between under $7,500 and approximately $20,000 weekly.
• The loan ceiling increased by $1 million to $4.5 million for scheme units, open market purchases and build-on-own land developments, and for serviced lots from $1.2 million to $1.5 million.
• First-time Mortgagors aged 55 and over who have been contributors for a minimum of 10 years began to benefit from a two per cent reduction in interest rates.
• A new subsidy programme to allocate 40 per cent of NHT’s quarterly pre-tax surplus to selected mortgage applicants earning less than $10,000 per week was announced.
• The NHT discontinued its requirement for applicants of housing scheme units to pay a minimum five per cent deposit.
• Interest charged on interim construction loans reduced from eight to three per cent, to spur growth in the construction sector.
• The NHT also announced a deferred mortgage system for contributors whose salaries made it impossible for them to purchase a house. Under the new scheme, the applicant is able to qualify for a mortgage equivalent to 60 per cent of the price of the house, while the other 40 per cent is converted into a deferred mortgage. Hence the person gets to live in the whole house while only paying for a part of it.

In August, Prime Minister, the Hon Bruce Golding announced other initiatives to enhance the affordability of housing to poorer Jamaicans, in keeping with the Government’s commitment to make housing more affordable. Among the initiatives announced was the decision to extend the life of mortgages up to 70 years.

“People are active and healthy longer and, therefore, they can afford to service a mortgage longer. We have made certain changes in relation to how people can combine to secure a mortgage. Our challenge is how to keep the price of houses as low as possible,” he told a Gleaner’s Editors Forum IN Kingston, on December 20.

In November, Mr. Golding announced even more measures to make home ownership easier.

Speaking at the handing over of houses in Union Estate, a joint NHT/Jamaica Confederation of Trade Unions project, the Prime Minister disclosed that the NHT would join the Land Administration Management Programme (LAMP), in making $100 million available through a revolving loan scheme to assist persons who need support for land titling.

He also announced that a loan would be made available to assist persons seeking an NHT mortgage to finance their deposit on the property, against the value of contributions they have made already to the Trust.

Under Parent Assist II, persons over 65 who have never used their NHT contributions can co-apply for up to $4.5 million with an offspring to assist in purchasing a home. Public sector employees, who are NHT mortgagors, were also granted a special one per cent reduction in interest on their loans for three years, effective July 1, 2010. In addition, applications were accepted for 87 Home Grants, enabling contributors who earn a maximum of $10,000 per week to apply for up to $1.2 million per person to top up loans to buy or build a house.

Since September 2009, qualified contributors applying for a benefit in an NHT scheme who cannot find the difference between the price and the maximum loan available from the Trust can apply for a three-year lease of the unit, at the end of which the lessee will become a mortgagor and will be able to access the rest of the purchase price as a regular mortgage.

The NHT has already given up over $1 billion in revenues to support these initiatives, but its chairman, Howard Mitchell, insists that this is a small price to pay in addressing the critical housing needs of Jamaicans.

About 700 Jamaicans are expected to benefit from the extended mortgage terms, while about 15,000 persons should benefit from the no-deposit scheme, which came into effect on July 1.