THE National Housing Trust (NHT) announced yesterday that the $1-million increase in the loan ceiling is only for those buying or building new houses.

“Applicants to benefit from the increased loan limit are those who are buying properties in new housing developments as well as those constructing new housing units,” the NHT said in a release.

NHT Board Chairman Dr Carlton Davis says the policy change is a move to stimulate the construction of new housing developments and to boost the purchasing power of contributors. Individual borrowers who qualify for loans for the new home purchase or construction are now entitled to a maximum of $5.5 million, up from $4.5 million. Two persons making a joint purchase can now get $11 m.

However, persons purchasing houses on the open market that are not new can only access $4.5 million for individuals and $9 million for joint applications.

At the same time, the NHT has reduced interest rates by one percentage point across the board, for all new loan applicants.

“This means that new beneficiaries earning up to $7,500 weekly will now enjoy home loans interest-free, while at the upper end persons earning more than $20,000 weekly will repay loans at a rate of six per cent,” the NHT said.

“New applicants employed to the public sector will benefit from this rate concession while continuing to enjoy the one per cent interest rate reduction that had been granted to them in 2010,” the NHT said.

“Construction is a vital economic driver. It provides jobs for thousands of skilled workers and increases the net worth of persons who buy homes,” Davis said. “Over time we have seen an increase in costs and this has restricted the ability of would be homeowners to buy new properties [so] as the primary mortgage source for thousands of Jamaicans, we are moving to address that situation,” he added.

The NHT last increased its loan limit and reduced lending rates in May 2010.