Hundreds of NHT housing units untaken
The National Housing Trust (NHT) has indicated that in the last two years, hundreds of persons who have applied and were chosen for housing in its schemes have not been able to take up the offers.
So far, more than 250 houses and serviced lots have been placed back in the pool of available homes for sale as a result, but it is likely that the problem is much greater.
The NHT told Wednesday Business that there are six schemes in which take-up has faltered by those chosen as home buyers, but only provided data for two of them.
The advertised schemes with unsold housing solutions are at: Sandhills Vista (Hellshire Phase IV), in St Catherine; Longville Park Phase III in Clarendon; Perth in Manchester; Creighton Hall, St Thomas; Meylersfield in Westmoreland; and Hampden, Trelawny.
For the two developments on which it made disclosures, the NHT indicated that Longville has 238 of 841 lots and homes available, while in Perth 15 of 245 lots are untaken.
In explaining the failure of some applicants to close the deal on the homes applied for, the NHT said: "Some persons changed their minds between the time of application and results publication or the applicants' incomes were not sufficient to allow for the take-up of a mortgage loan."
Among the qualifying factors for mortgages, the Trust looks at an applicant's current level of indebtedness.
"The NHT's policy is that mortgage payments should not exceed 33.3 per cent of the applicant's gross income - the debt service ratio or DSR," said the housing agency. "Sometimes at the interview stage, it is discovered that the applicant cannot satisfy the DSR."
President of the Incorporated Masterbuilders Association of Jamaica, Carvel Stewart, who had first made the observation in late 2014 that there was lower take up of NHT homes, said many who apply are financially incapable of acquiring the properties advertised.
Stewart said he was advised that out of some 10,000 applicants for a scheme in Clarendon there were only about 800 qualified contributors.
"Something must be wrong with the qualification criteria. In fact, the reality is that after two years, a significant number of the houses and lots are still not sold; this despite the over 10,000 applications," he told Wednesday Business.
The engineer said his "main concern is that there are contributors who may never qualify for a NHT mortgage. The existing criteria ensure that. This, in fact, means that those earning the least are doomed to either rent or go homeless. I believe there should be changes to the criteria that enable qualification of all contributors over time."
Stewart suggested that the NHT expand its system of grants to contributors to get around the problem.
The NHT lends a maximum $4.5 million to each contributor, but they must show ability to repay in order to qualify for the mortgage loan. The maximum loan for land lots is $1.5 million on the open market and $2.5 million for lots in NHT-funded schemes.
Mortgage payments vary according to gross income and age, a representative of the Trust said.
The NHT said it has not placed the unsold homes on the open market for sale. They will first be offered to contributors who applied but were not selected among the first batch.
The agency said the properties will be held "until the entire queue of eligible applicants is exhausted. Properties will go to market after the queue of eligible applicants is exhausted", it added.
The pricing range for solutions in the six schemes is $3.5 million for serviced lots at Sandhills Vista; $10.2 million to $12.5 million for homes at Hellshire; at Longville, serviced lots range from $1.5 million to $3 million, while the homes range from $3.2 million to $7.3 million; at Perth, unsold solutions range from $1.5 million to $3.9 million; while at Hampden, the first-step homes are priced at around $1.8 million.