Financial Adviser | What it takes to qualify for NHT starter home
QUESTION: My fiance and I applied for one of the National Housing Trust starter houses but we weren't selected. Can you give some advice as to how they make the selection?
FINANCIAL ADVISER: The National Housing Trust makes selections for its starter homes on three primary bases: points accumulated by the applicants, the income of the applicants and whether the applicants live or work in the area where the houses are located. All three are used in combination.
The fact you were able to apply suggests that you met a basic qualification, that is, that you had contributed to the Trust for at least one year and that you had made at least 13 weekly contributions immediately before making the application.
The amount of points accumulated is based on the years of contribution; 20 points are allocated for each year of contribution. Points are also allocated based on income; the higher the income, the lower the points.
There is no specified amount of points required to be selected. All contributors may apply but it is the persons with the highest points who are selected.
Your failure to be selected could mean that you fell outside of the points range and thus did not meet the selection criteria. Perhaps, for example, your combined income was high relative to the income of the other applicants. It is also possible that you did not qualify based on where you reside or work relative to location of the housing units.
If the latter was the problem, you would probably be more successful by applying for a unit closer to your residence or place of employment. But the challenge with that is that such a situation may not present itself in the near future.
You have the option of applying again to the Trust for such a benefit so you have to keep looking out for new schemes that it advertises.
Bear in mind, though, that there are other options. You can, for example, choose the course of buying a house on the open market and accessing funding from the Trust. Getting funding using this approach removes the competition you clearly experienced when you tried to purchase a starter home from the Trust.
You may also go the route of purchasing land and then building thereon, which can also be facilitated by the Trust. I would not be surprised though if these other options cost more than the option of purchasing an NHT starter home. A major challenge would be whether you would pass its affordability test.
I am quite aware of the rising cost of housing solutions and that incomes are not keeping up with these costs. My suggestion is that you do not give up and even consider one of the alternatives I suggested.
Oran A. Hall, the principal author of 'The Handbook of Personal Financial Planning', offers personal financial planning advice and email@example.com