The National Housing Trust (NHT) has been mandated to not construct any houses above the $14-million price point going forward.

Prime Minister Dr Andrew Holness made the announcement of the Government’s shift in policy position during his contribution to the 2025/26 Budget Debate in the House of Representatives on Thursday.

Having earlier announced an increase in the loan limit for individual contributors from $7.5 million to $9 million effective July 1 during his speech, Holness said, “Each time we increase the loan limit, we notice an increase in the price of houses; it is the most frustrating thing.”

He acknowledged that it is a matter of economics that when the loan limit is increased it affects demand as more people seek houses than there are in the market.

“So what we’ve done is to give a greater loan limit for houses that are going at what we call the affordable price point. The affordable price point for the NHT is $14 million. In fact, we have given a policy directive to the NHT that all their resources should now be directed at producing houses that are around this price point,” Holness told the House.

Stressing that the NHT will not get involved in any new development of houses above this price point, Holness, who is also the minister of housing, said the houses will not always be constructed for exactly $14 million “but you have to be in that target range, because the truth is that the real housing crisis is in the low income and affordable housing market”.

Both the NHT and the Government faced widespread criticism in 2021 when the NHT announced that the prices for the 86 units at Ruthven Towers in New Kingston ranged from $27.7 million to $28.9 million for a one-bedroom apartment and $35 million to $37.7 million for a two-bedroom apartment. Initially, they were to be sold for between $16 million and $22 million.

The prime minister addressed the criticism during the handing-over ceremony for another NHT project, Twickenham Glades in St Catherine, on December 1, 2021, noting that while the units were expensive, there was a demand for them.

“What we have done in doing that property is to ensure that some of our contributors are able to benefit,” he said. He stated that the NHT’s provision of housing in New Kingston ensures that certain communities are not reserved for the rich.

“The Government has an overriding duty that all these developments that are taking place in our capital city and in our prime locations, that the gentrification does not leave out the average person. We don’t want to be building communities and it just becomes exclusive, only [the] rich can afford it. So we also have that duty, and when we are looking at how we are redeveloping our city, we have to make sure that we leave options in there for people to access affordable housing,” he said then.

On Thursday, the prime minister announced a slew of initiatives to make housing more affordable for the average NHT contributor.

The more people apply together, the easier it will be to acquire an NHT mortgage.

“For two co-applicants, the combined maximum loan limit will be increased from $15 million to $17 million. And for three co-applicants, it will increase from $21 million to $23 million,” Holness said.

He said that if an individual mortgagor is purchasing a unit priced at $14 million or less, the NHT will lend that individual up to $12 million, subject to affordability.

“Also, for construction of houses by individual contributors, the individual construction loan limit will be increased to $11 million. For two co-applicants, it will be $17 million; and for three applicants, $23 million,” he said.

Meanwhile, private sector workers, like their Government counterparts, will now be eligible for contribution refunds while carrying an NHT mortgage.

The prime minister noted that, currently, all contributors who do not have a mortgage processed directly at the NHT are eligible for a cash refund of their contributions as they fall due.

“Public sector workers are, however, able to access cash refunds even while servicing a mortgage. This option is currently not available to private sector mortgagors. Effective July 1, 2025, private sector mortgagors will have the option for either a cash refund or the application of their refund amounts to their existing mortgage obligations, provided that the loan is free of arrears,” Holness said.

“This will be assessed on a year-by-year basis, based on NHT’s cash flow position,” he added.

And effective July 1, the NHT will reduce the time for mortgagors to access a home improvement loan from 10 to seven years. The loan limit for this benefit will be increased to $5 million up from $3.5 million.

The prime minister had more good news for NHT contributors.

Pointing out that prospective home owners are required to find five per cent of the cost [downpayment] to purchase an NHT scheme house, house lot, or property on the open market with the NHT funding 95 per cent, Holness said the figure will be reduced to two per cent effective July 1.

“For contributors who earn less than $30,000 weekly, the deposit requirement on open market loans will be reduced to two per cent if the housing solution being acquired is priced at or below $14 million,” he disclosed.

And starting July 1, the service charge will be reduced as follows:

• For prospective mortgagors who earn $30,000 or less each week, their service charge will reduce from two per cent of the loan amount to zero.

• For prospective mortgagors earning between $30,000 and $42,000 per week, their service charge will be reduced from five per cent of the loan amount to two per cent.

Meanwhile, for prospective mortgagors earning $42,000 per week and above, their service charge will remain at five per cent.

Additionally, the NHT will expand the scope of its $3.5-million home grant, which is reserved for minimum wage earners who have contributed to the Trust for at least seven years.

“We are modifying the eligibility requirements in order to make the grant available to more contributors. The maximum qualifying income for home grants will now be $30,000 per week,” said the prime minister.