Oran Hall | Acquiring a NHT housing unit

QUESTION: How can I get a National Housing Trust house?

– Lenox

FINANCIAL ADVISER: The National Housing Trust, NHT, develops or finances the development of scheme houses, which are sold directly to contributors. When these units become available, they are advertised in the print and electronic media and contributors are invited to apply. The NHT Scheme House Loan is a non-homeowners loan which can be used to purchase such housing units.

I am assuming that, when you refer to an NHT house, you mean one of its scheme units.

Successful applicants for a scheme house can borrow as a single applicant or may co-apply with one other qualified NHT contributor to access a higher loan limit to purchase the housing unit. Applicants who need – and can afford – to borrow more money may seek additional funds from another lending institution willing to enter into a Joint Finance Mortgage with the NHT.

When the NHT advertises the completed units, it also makes a fact sheet with all the necessary information available. The information includes: details about the scheme units, including the location and sale price; NHT loan information for applicants; closing costs; who may apply for the units; when to apply; and how the selection is done under the PIE system, which is based on the applicant’s parish of residence or employment and number of points derived from weekly contributions and current income.

A contributor applying for a scheme unit is selected for an interview, based on a combination of different factors, including:

• Proximity of the scheme in which the unit is located to the applicant’s workplace or residence;

• The number of weekly contributions made to the NHT by the applicant; and

• A system that awards points based on the number of years the applicant has contributed to the NHT and on the contributor’s income, with those earning less income earning more points in the selection system.

To be eligible for the benefit, you should be a current contributor to the NHT, have made at least 52 weekly contributions of which 13 must have been made in the last 26 weeks just before the date of your application, have paid up, with interest, any outstanding contributions, be between the ages 18 and 70, and be earning an income which allows you to repay the loan.

The NHT provides 100% financing for scheme units, but interest rates vary, depending on the income of the applicant at the time of the application. The rates are as follows:

• 0% for income bands of $15,000 to $30,000.99

• 1% to 2% for the income band of $30,0001 to $42,000.99

• 2% to 4% for income bands of $42,0001 and over.

If you are interested in buying one of the NHT’s scheme units, you should keep your eyes open for announcements in the media and take the necessary steps to apply, but bear in mind that you can only be eligible for a unit in the parish where you live or work. There is no guarantee that you will succeed in acquiring one of these units, and it is also possible that no housing unit may be available where you live or work for quite some time.

Perhaps you should also consider other avenues to home ownership to improve your chances of realising that dream. You could consider an Open Market Loan and, if you own land, a Build On Own Land Loan. In each case, the limit for individual borrowers is $6.5 million and $13 million for joint applicants.

The NHT also has a House Lot Loan for open market property for which the limit is $2.5 million for one borrower and $5 million for joint applicants if building is an option that is available to you.

The housing agency also provides 100 per cent financing for its serviced lots – that is, land with basic infrastructure such as paved road, water supply and electricity. This is only a worthwhile option if you want to build and are able to do so.

However you take it, housing is not cheap and prices keep increasing. To be able to own your own home, you may have to make serious sacrifices, but it will be worth it in the end.

- Oran A. Hall, principal author of The Handbook of Personal Financial Planning, offers personal financial planning advice and counsel. finviser.jm@gmail.com