Prime Minister Holness Announces Stimulus Measures to the Housing Sector and Benefits to NHT Contributors
Prime Minister Andrew Holness has announced a raft of measures aimed at stimulating the housing sector in the wake of the global pandemic COVID19 which is also affecting Jamaica.
The announcements came yesterday (March 19) as the Prime Minister made his contribution to the 2020/2021 Budget Debate in Parliament.
As part of the measures, Prime Minister Holness outlined specific measures that would be applied to National Housing Trust (NHT) contributors and borrowers to provide greater access to housing.
Specifically, in its response to the impact of COVID-19, the NHT will implement measures to ensure the social protection of its mortgagors and contributors.
Prime Minister Andrew Holness noted that:
“These measures are to safeguard persons from losing their homes while improving their disposable income. The Government through the NHT put in place special relief for mortgagors who may lose their jobs as a result of COVID-19. Effective immediately, mortgagors who are laid off can apply for a moratorium on all loan payments of three months in the first instance.”
The Prime Minister said effective immediately, the NHT will provide a special one-off offer to contributors, the option to reschedule delinquent loans. The option will only be made available where the Trust has not already entered into a commitment to dispose of the property.
The opportunity will be extended for 6 months, effective April 1, 2020. During this period, the NHT will consider each mortgage on a case-by-case basis, with the option to extend the tenor of the loan or reduce the interest rate.
The measures include:
- Effective April 1, 2020 the NHT will reduce interest rates on all new loans by 1% (benefitting some 8,000 new mortgagors annually)
- All existing NHT loans will be reduced by 0.5% (benefitting some100,000 existing mortgagors).
- Interest rate discounts currently offered to special groups, such as mortgagors aged 55 years and over, the disabled as well as public sector workers will continue.
- The interest rate discounts for the disabled will be effective April 1, 2020 and will also be extended to include the parents of disabled children.
- The NHT will expand the Intergenerational Mortgage Programme. Beginning April 1, 2020, the NHT will extend this benefit for eligible applicants for other loan products, such as open market purchases and construction loans. Funding under this Programme will be capped at the prevailing loan limit.
- The NHT will also provide greater benefits to contributors over 65 years. Persons in this category will be designated as Voluntary Contributors and therefore be able to access housing benefits with tenures extending up to age 70.
- The NHT will establish a special arrangement whereby, following maturity of the loan, the insurance arrangement at special rates may be continued. The cost savings will enable beneficiaries to continue the protection of their properties in a period of life when their earning power may be at its lowest.
- The NHT will, during FY2020/21, seek to leverage its current mortgage loan portfolio through a securitization transaction to generate additional inflows.