On Wednesday, September 9, the National Housing Trust announced five initiatives to make loans more affordable and accessible for contributors. These policy changes demonstrate the NHT’s commitment to addressing the challenges its contributors face in buying their homes. In presenting the revised policies, NHT Chairman, Howard Mitchell said “It is very difficult for some contributors to overcome the affordability hurdle to home ownership. But as long as there is an NHT, we believe the drive to help contributors overcome this hurdle must continue.”
Following are the announced initiatives. These arrangements are available only to new loan applicants. Applicants whose loans have been approved but who have not yet received loan funds may request a change of terms if any of the policies apply.
EFFECTIVE SEPTEMBER 9, 2009.
Short Term Lease
WHO WILL BENEFIT: Any qualified NHT contributor applying for a benefit in an NHT scheme but who cannot find the difference between the price of the unit and the maximum sum that he is able to borrow from the NHT.
THE POLICY: Contributors who apply and are selected for NHT scheme units, but who cannot find the difference between the price that the unit is being sold for, and the sum that they can borrow from the NHT, may be allowed a three-year lease of the units. The contributor will pay no less than 15 per cent of the price of the property plus NHT finance charges. At the end of the lease period, the lessee will be converted to a mortgagor and will access the balance of the purchase price as a regular mortgage.
EXAMPLE: A contributor wishes to buy an NHT scheme house, which is being sold for $5.6 million. He can access an NHT loan of $3.5 million but cannot find the additional sum of $2.1 million. The NHT will allow that contributor a three-year lease on the property during which time he will pay $840,000 plus finance charges. At the end of the lease he will enter into a regular mortgage arrangement.
Combined Loan
WHO WILL BENEFIT: Contributors applying jointly for a loan.
THE POLICY: When two people join to buy a property, based on their individual incomes, they may each receive a maximum $3.5 million in loan funds. However, if the income of one applicant does not allow him/her to access the full individual benefit of $3.5 million, but the other applicant’s income will allow him/her to access more than the maximum individual benefit, the combined incomes will be used to determine the final loan amount up to $7 million.
EXAMPLE: Two contributors wish to access the maximum loan allowed for an open market unit. The limit for this loan is $3.5 million per applicant. If one contributor can only afford $2.5 million but the other can afford the maximum as well as the additional $1 million, both incomes can be combined to allow them the full $7 million. Under the previous arrangement, both contributors would have been able to access only $6 million.
Extension of Loan Term
WHO WILL BENEFIT: All new loan applicants and all persons who applied prior to September 9 but who have not yet received any loan payment.
THE POLICY: The NHT has extended the maximum repayment period for all loans except the solar water heater loan. The age of the applicant will however, affect the final loan term. This policy change will result in more affordable monthly mortgage payments while some contributors will be able to borrow more.
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Benefit Type
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Old Loan repayment term
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New Repayment term
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