AS expected, there has been an uptick in the number of people willing to consider the benefits of solar energy since Hurricane Beryl plunged sections of the country — some for longer, more agonising periods than others — into darkness.

Anecdotal data from suppliers of solar-related items and systems indicate more queries from clients. The National Housing Trust (NHT), which began accepting applications for its $1.5-million SMART energy loan two days before the hurricane gave Jamaica a glancing blow on July 3, has also seen more questions coming in. But just how practical would it be, for anyone spooked by Beryl and determined to install a solar system, to get through the loan application process before the current hurricane season ends in November? The Jamaica Observer turns to NHT’s Assistant General Manager of Corporate Communications and Public Affairs Dwayne Berbick for answers.

As he explained to the Observer, in addition to the items usually needed when applying for the typical NHT loan, an applicant for the SMART energy loan will also need a surveyor’s ID report, a pro forma invoice from the company supplying the item and a letter of undertaking from that company. The interest rate is five per cent and the borrower has up to 10 years to repay.

A wide range of renewable energy products — solar, windmills, rainwater harvesting — can be purchased under the loan.

Question: Are the items required to apply for the NHT’s SMART energy loan the same whether you currently have an existing mortgage with the NHT or it has already been paid off?
Dwayne Berbick (BD): It’s the same checklist but you’ll run into some variations based on whether your mortgage is being serviced or if it is closed [paid off].

If it is that your mortgage is closed, you collected your title, then you have the option of using the same property as security for the loan, making the title available for the NHT to now register this new loan on it.

If you’re still a mortgagor, and your mortgage is with the NHT, we have the title already. So if you’re using the property as the security, then you wouldn’t need to be submitting any title for that.

Our approach is for you to apply where your mortgage is serviced. So if your mortgage is not with the NHT, we have the flexibility with our other mortgage partners so that you can actually go into any of them and access the loan through them. It will be the same loan terms, same five per cent interest rate for 10 years and each person may borrow up to $1.5 million. Two contributors whose names are both on the title may co-apply to access $3 million.

Another option is, if you are currently contributing to the NHT and you have enough contributions that can offset the loan amount that you’re borrowing, then the NHT may use those contributions as collateral as well.

Question: There are costs involved in getting the application process going. For example, the supplier charges a fee for a site visit in order to generate the pro forma invoice, there is a cost for the surveyor’s ID, etc. Will those be out of pocket expenses the homeowner has to bear?

DB: Yes, where we are at now, the customer has to make those payments themselves. I say ‘where we are at now’ because it’s a new product that we have and so we’re constantly getting feedback on it. I have been in at least two fora where that has come up: as to whether the NHT could assist in some of the processing fees. One of the recommendations people made is whether, in the same way when you’re doing a new property and you have contribution refund towards deposit, if individuals could access those refunds to assist in offsetting those fees that you will need upfront. It is something we’re looking at. But for now, those fees would be borne by the customer.

Question: What are some of the major elements on the checklist of items required for the application?

DB: The main things that we’re looking at: you have to ensure that the property taxes are up to date, and the mortgage payments are up to date on the property if it’s an active mortgage. We also want a surveyor’s ID report to ensure that there are no breaches, no encroachments just in case anything happens down the road, we need to know the NHT’s loan is secure and there’s no challenge in liquidating.

Also, there needs to be a pro forma invoice from the supplier. We’ll need a pro forma invoice and a letter of undertaking from the supplier as well. This is the supplier giving a promise that they will supply and install the technology within 30 days of receipt of NHT’s letter of undertaking and a deposit will be remitted to the NHT should the supplier be unable to provide the system.

Payment will be made directly to the supplier, but the NHT won’t disburse all $1.5 million in one go. We’ll disperse in two tranches. We will give 50 per cent deposit so the work can be started, because we understand the supplier may need to mobilise some amount of resources to get the job done. Once the work is certified as being completed then the NHT will provide the balance of 50 per cent.

Question: A surveyor’s ID report is among the items required. Why would the NHT need that again from someone who had a loan with them in the past?

DB: A surveyor’s ID report done within the last year is needed because there are things the customer may have done since purchasing the house. They could have changed the structure of the house and if that happens, you need to get a new surveyor’s ID report done. It will look at things such as, if you’ve built a wall, is the wall in the right place? The surveyor’s ID report helps really to determine the boundaries of the property and determine if there are any breaches.

It may not even be the customer who is in breach, it may be that their neighbour has come over too far on their property and that causes a breach on the customer’s property. So it really is to determine if there are any breaches. Breaches can’t necessarily be taken for granted because, in general, even if you just want to sell your property, you couldn’t sell it with that breach on it.

When we’re lending money we have to ensure that the security is what my lawyers would call ‘good security’. Otherwise, the NHT’s financing of the project would be at risk.

Question: If there is a breach, does that mean the loan would not be approved?

DB: It depends on the nature of the breach; some breaches can be fixed easily. You have to correct the breach or at least start the process to correct the breach. Or in some instances, you can give an undertaking to correct the breach within a particular time.

Question: For applicants who have no breach, there is no issue with any of the items submitted, how long will it take to process the loan?

DB: If you get all the documents to the NHT in one day we can do same-day loan processing. It’s a matter of scheduling, your availability for the interview. The interview is just to ensure that you understand your obligations under this particular loan facility and have you sign the requisite forms and documents to do that.

However, it follows a similar mortgage process in terms of working through title’s office and the other agencies of government to have the loan registered. That part is outside of the NHT’s control in terms of time. We don’t know what may be happening with any other institution at any given time so that part is a little bit difficult to predict.

Generally people say mortgage processing is 30 days, but no two circumstances are the same. I don’t think it will take long. Stamp office and titles office have made significant improvements in terms of how transactions flow through them.

Question: Does the NHT recommend suppliers of items that can be purchased under the SMART energy loan?

DB: The NHT does not recommend suppliers. The supplier is selected based on the applicant’s own research and due diligence. Shop around and also ensure that you’re using someone who’s reputable, someone who is duly registered with the necessary bodies, associations and have their requisite licensing where needed. Make sure you have clauses as it relates to warranty.

More information about the NHT’s SMART Energy Loan is available at https://www-2.nht.gov.jm/smart-energy-loan.