Financing institutions are reporting a seamless transition in the processing of mortgage applications from contributors of the National Housing Trust (NHT) under the revised External Financing Mortgage Programme (EFMP) nearly a year after the programme took effect.

In fact, early partners on the programme say they have seen a double-digit rise in mortgage applications from the addition of new NHT contributors despite an overall slowdown in mortgage volumes owing to higher interest rates.

National Commercial Bank Jamaica (NCB), one of the first to partner on the programme ahead of its official launch in August 2023, told the Jamaica Observer that it has seen roughly 45 per cent growth in loan volumes month-over-month.

NCB explained that the growth in mortgage volumes was in part due to the bank’s continuous investment in technology and digital solutions, which has helped meet the increased demand and service standards associated with being a partner under the EFMP. It added that it also maintains adequate human and technological resources to continuously improve efficiency and customer experience as the portfolio grows.

“NCB has specialised mortgage units and highly skilled sales officers that support the customer’s homeownership journey. Additionally, all our channels are equipped to handle our customers’ requests,” the bank said in responding to queries from the Sunday Finance.

Loan growth has stayed steady year-on-year for large mortgage financier JN Bank; meanwhile, the JMMB Bank said it has seen a slow but steady rise since it became a partner in September 2023.

“JMMB Bank was not a part of the pilot roll-out of the EFMP; as such, it would have resulted in a lower number of applications when compared year-over-year. Subsequent to signing an agreement with the NHT in September 2023, the bank within a few months began to see an uptick in its application and therefore anticipates that this trend will continue in 2024,” Moya Leiba-Barnes, country client partnership officer — financial life goals, said.

“Based on the number of mortgage applications at this time, JMMB Bank is able to continue to partner with its clients in a seamless way on their homeownership journey without additional resources being allocated,” she continued.

Victoria Mutual Building Society, which also manages a large mortgage portfolio, said it was too soon to give an update on the programme.

The NHT launched the EFMP last year to replace the long-standing Joint Financing Mortgage Programme. Under the revised model, contributors of the NHT earning north of $30,000 weekly must access mortgage, construction and home improvement loans at the offices of the 16 partners on the programme instead of the NHT branch office.

The prospective homeowners will have their loans processed at interest rates and terms equivalent to benefits they would receive from NHT itself, based on an agreement the Trust has with the financing institutions.

Loan rates at the NHT are capped at 5.0 per cent at the highest level. However, prospective homeowners still have the option to access additional funds for home purchases from the financing institution at its lending rate which now hovers at 9 per cent given the increase in policy rate set by the Bank of Jamaica over the past two years.

The new programme replaces the Joint Financing Programme (JFMP) which allowed qualified NHT applicants to mix their NHT proceeds with a mortgage from mortgage financing institutions to acquire additional funding for home purchases.

So far, none of the financial institutions that have responded to queries sent by Sunday Finance have reported implementing new resources to manage the increased workload.

However, JMMB Bank said it is in the process of upgrading its loan processing system.

“We want to improve our operational efficiency and client experience so that we can offer a more seamless process for not only mortgage applications, but all its loan applications, with a view of shortening disbursement timelines for clients,” Leiba-Barnes said.

Mortgagor loan applicants have long complained about the time it takes the NHT to process loans, but the new programme is designed to meet the NHT’s goal of quicker service delivery. It is also expected to boost competition in the mortgage market. The average mortgage processing time is eight to 12 weeks, after the submission of all documentation to facilitate the process.