IN an effort to plug a loophole that was being exploited, the National Housing Trust (NHT) now requires that the names of all parties applying for a benefit are on the certificate of title.

“It’s a new position the NHT has taken… with loan benefits across the board,” said NHT assistant general manager for corporate communications and public affairs Dwayne Berbick.

He was briefing members of the Realtors Association of Jamaica recently, on a raft of policy changes now in effect at the NHT and implications for property buyers. Some of the changes took effect June 16 while others became effective July 1.

“I’ve heard of people using their helpers’, their gardeners’ benefit and giving them something on the side. That doesn’t really contribute to that person’s homeownership goal. To cut down on that kind of abuse, the NHT has taken the position that where loans are concerned, all parties’ names must be on the title — and that applies to the home grant as well,” Berbick said.

Apart from those nefarious players, it is not uncommon for people to legitimately co-apply for an NHT mortgage to increase their chances of success. According to Berbick, in previous years some applicants did this as “a favour” to the other party but had no real interest in having their name on the title. However, that act of kindness has later led to remorse, in some cases. This is because the NHT categorises each co-applicant as a homeowner, even if his name is not on the title. That makes him ineligible for benefits available to first-time homeowners, a number of which are now significantly improved.

For example, a first-time homeowner looking to make a purchase on the open market may access $9 million, up from $7.5 million. Two co-applicants may access up to $17 million, and three co-applicants up to $23 million. If a single NHT contributor earns between minimum wage and $30,000 per week, the NHT will provide $12 million in financing to assist with a purchase.

Of note, if a house costs less than $12 million but will need a bit of repairs, the NHT has a facility in place for that.

“We do understand that not all houses are in move-in shape…If a property you’re buying is less than that $12 million, let’s say it cost $10 million, the NHT will give you the financing for the $10 million and you can access the additional $2 million if you need to make repairs to that property. The NHT will actually process you for the entire $12 million,” said Berbick.

Another change now in effect is to the amount available for individuals who already own land but need to borrow funds to build.

“We’re moving from $7.5 million to $11 million for [single-applicant] build on own land loan, and we’ve made that decision in keeping with what we’re seeing: a greater interest from individuals to pursue construction as an option,” explained Berbick.

The loan limit for two co-applicants is $17 million while the limit for three co-applicants borrowing money to build on their own land is $23 million, the same as the upper limits for open market property purchases.

Other policy changes impact limits for the homeowner’s loan. Available to individuals who already bought property but did not use NHT financing, the ceiling for this has moved from $3.5 million to $5 million for a single applicant. Two-co-applicants can now access up to $10 million. In addition, the waiting period to access a second loan from the NHT for home improvement purposes has been reduced from 10 years to seven (referred to as the seven-plus loan). According to Berbick that downward trend will likely continue.

“We are…retiring this differential of ‘home improvement’ versus ‘seven-plus’ loan, and just call it a home owner’s loan, which makes it easier to reference; because next year we may be going to five-plus. It’s a little tricky from a communication and marketing standpoint, so we’re just going to call the product a home owner’s loan,” he said.

NHT explains other changes now in effect

Reduced deposit and service charge

“To complement loan limit increases and further improve affordability among contributors, the NHT will be offering a reduction in its service charge for new mortgagors. Additionally, contributors in the NHT’s zero per cent income band (earning less than $30,000 weekly) may access up to 98 per cent financing for their purchase.”

Expanded home grant

“To offer greater assistance to a larger segment of contributors, the qualifying ceiling income to access an NHT Home Grant will increase from $18,000.99 weekly to $30,000.99 weekly. Starting July 1, persons earning $30,000 per week or less who have contributed for at least seven years, can access up to $3.5 million to supplement an NHT loan to either build or purchase a house. Additionally, two co-applicants may also apply to access a combined grant amount of up to $7 million.

The NHT is also expanding the use of the home grant to assist contributors in the lowest income band who are engaged in construction and are unable to complete the unit (bring it to a habitable state) due to insufficient funds. The NHT will provide financing support to mortgagors who earn less than $30,000 weekly (or at retirement); accessed a build-on-own-land or construction loan; or whose unit has been incomplete for two years or more.

The NHT will provide an additional loan of the difference between the current loan balance and a loan limit of $11 million, subject to affordability. In the event that the additional financing is insufficient to bring the unit to a habitable stage, or, in the case of pensioners, the NHT may provide a home grant of up to $3.5 million to assist in bringing the unit to completion.”

Expanded smart energy grant to private sector pensioners

“The NHT will extend applications for SMART Energy Grants to private sector pensioners, where it was previously only accessible to public sector pensioners. The grant of $1.5 million will be available to these individuals who have incomes of less than $30,000 weekly at the time of retirement. A total of 420 grants, 30 per parish, are to be issued annually.”

A first-time homeowner looking to make a purchase on the open market may access $9 million, up from $7.5 million.