Earl Samuels (left), managing director of the National Housing Trust (NHT), and Howard Mitchell, chairman of the NHT, look over images of a model housing unit on display after a press conference at the trust's offices in New Kingston yesterday. - photos by Norman Grindley/Chief Photographer

The National Housing Trust (NHT) has constructed a raft of fresh measures designed to give more Jamaicans a chance at becoming homeowners.

NHT Chairman Howard Mitchell yesterday presented a five-plank policy initiative bolstered by far-reaching modifications to existing mortgage structures.

Addressing a press conference yesterday at the NHT's head office in New Kingston, Mitchell said three of the five dimensions of the initiative - a short-term lease, combined mortgage and extended loan term facilities - took effect yesterday.

The other dimensions were a shared equity loan arrangement and the use of contributions to help meet loan funding gaps.

Mitchell revealed that technicians were still hammering out the legal implications of the proposed shared equity facility, while the facility for deposit contributions comes into effect on April 1, 2010 - the start of the next financial year.

The NHT chairman said the short-term lease arrangement was put together out of a recognition that, while some contributors were able to afford monthly payments on an NHT scheme or serviced lot, they were not able to come up with the deposit.

He said the important element of this policy was that someone who would not have been able to afford an NHT scheme unit, because he or she could not find the deposit upfront, would be able to afford the lease by way of this arrangement.

"To help these persons access solutions in NHT schemes, we have approved a short-term lease programme," Mitchell said. "A contributor applying for an NHT scheme unit will enter into a lease arrangement with the trust for a maximum of three years."

He said that, during this time, the contributor would pay no less than 15 per cent of the price of the property in monthly lease payments.

He noted that the combined loans programme was a modification of an existing policy which now enables the income of one partner to fully support that of the other.

Previously, each income would have to stand on its own merit to determine the level of the combined mortgage. The change enables partnership arrangements to access a higher mortgage.

The NHT is also facilitating the use of contributions to make up loan funding shortfalls.

Mitchell said that, as of April next year, loan applicants will be able to use up to 50 per cent of the contributions they have at the trust 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 they are buying.

Mitchell revealed that all loans, with the exception of the solar water heater loan, have been extended.

He said the tenure of loans, which until Tuesday had a 30-year maximum repayment period, have been extended to 40 years, or upon the contributor reaches age 70.

"We have also extended the tenure for those loans which had a 15-year repayment period to 20 years," Mitchell said.

He said the target market for the proposed shared equity funding arrangement consisted of applicants who could not afford the full or even subsidised price of an NHT scheme unit.

"What we plan to do for persons in this market segment is to let the trust and the loan applicant share ownership of the property in the first instance," Mitchell explained.

He said the beneficiary's initial equity in the property would be equivalent to the loan amount that his income can afford at the time he applies, provided that this amount is not less than 60 per cent of the price of the property.

At the same time, Mitchell said the NHT was modifying and implementing new policies to make housing more affordable to contributors in the short to medium term.

"Our three-year housing policy speaks to this," he said.

gary.spaulding@gleanerjm.com

Five-plank initiative

✓ A short-term lease arrangement.

✓ A shared equity loan arrangement.

✓ A combined loan programme.

✓ The use of contributions to help meet loan funding gap.

✓ An extension in the maximum loan term.