Oran Hall | Joining the NHT contributors list
QUESTION: I would like to get some information about NHT contributions and benefits. I am 20 years old and my salary is less than $12,000 weekly. How can I get started on this journey?
FINANCIAL ADVISER: The current policy is that only employed individuals are required by law to make contributions to the National Housing Trust (NHT). Under the National Housing Trust Act, an employee is someone 18 years of age and over and under the age of retirement and is gainfully occupied in employment and earning at least the minimum wage.
Only contributors to the National Housing Trust qualify for benefits from it.
To qualify for an NHT benefit, you must be currently contributing to the Trust; 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 due in the last three years; be between the ages 18 and 65; and be earning an income which allows you to repay the loan.
Individuals residing and working in Jamaica but not making contributions to the NHT can register as self-employed persons by going to the tax office with their National Insurance Scheme or NIS card, Taxpayer Registration Number or TRN card, valid identification and proof of income and are required to pay NIS, income tax and education tax in addition to their NHT contributions. This information is also applicable to persons who are self-employed but are not contributing to the NHT.
In cases in which an employer deducts but does not remit contributions to the tax authorities, the affected employees should take their payslips to the NHT, whose inspectors will visit the employer. Based on the assessment made by the inspector, arrangements can be made for the employer to remit the money to the authorities so that the employee can access NHT benefits.
The maximum sum a National Housing Trust contributor can borrow for each benefit is as follows:
- Open Market Loan: $5.5 million
- Build-on-Own-Land Loan $5.5 million
- NHT Scheme House Loan: $5.5 million
- Construction Funds Loan: $5.5 million
- NHT Serviced Lot Loan: $2.5 million
- House Lot Loan: $2.5 million
- Home Improvement Loan: $2.5 million
- 15 Plus Loan: $1.5 million
- Home Grant: $2.5 million
The Home Grant is a special offer of up to $2.5 million to contributors earning less than $12,000 per week and who do not own a home.
The NHT will lend eligible contributors money to pay the closing costs as a part of the loan to purchase property if they meet the following two conditions: if they pay a deposit of at least ten per cent of the purchase price of the property; and if the sum they borrow is less than the amount for which they qualify.
The NHT also assists its contributors with closing costs by allowing them to access their contributions that are not yet due to be refunded with the exception of the contributions for the year immediately before the year in which the loan application is being made.
JOINT FINANCING MORTGAGE
The Joint Financing Mortgage Programme is a facility for non-home owners and it allows qualified NHT contributors to buy or build their homes using funds from the NHT and mortgage-lending financial institutions which have established a partnership with the NHT to provide such funding.
Two persons can join to apply to borrow the money required to own the same house. This is advantageous to the applicants as it makes them eligible for more funds than each would have been able to borrow individually as the total loan amount is determined by the income of both applicants.
Contributors can assist another to own a home by co-applying but choosing not to have their name on the title, meaning they would have no interest in the property but would not be able to apply for another loan until 15 years have passed if the full amount of the entitlement has been used.
The NHT would effectively grant two loans, the terms and amounts of which would be determined by the age and income of the applicants, both of whom must be contributors and thus younger than 65 years. An applicant opting not to have an interest in the property who has never owned a home would have an entitlement of $5.5 million, and one owning a home but without previously receiving an NHT benefit would have an entitlement of $2.5 million.
Another facility, the Parent Assist Programme, is for parents over 65, meaning they would no longer be contributors to the NHT. They would not be able to get a loan but would be able to assist their children to qualify for selection to own a housing unit in an NHT scheme by using their points. Only the child would qualify for a loan in this case.
Such parents should never have received an NHT benefit and must have not have received their full NHT refunds, meaning that at least one refund should still be due to them.
There are several benefits, so you should ensure that your employer deducts and remits your contributions, or you can make them as a self-employed person so that you can benefit later.
- Oran A. Hall, principal author of 'The Handbook of Personal Financial Planning', offers personal financial planning advice and counsel. firstname.lastname@example.org