Oran Hall | Can children use their parents’ NHT benefits?
Does the NHT have a facility that allows parents to use their NHT benefits to assist their children to own a home?
The Parent Assist Programme allows parents to assist their children who are contributors to the National Housing Trust (NHT) to achieve the goal of home ownership. There are two arrangements in this programme: one is applicable to parents who are under the age of 65 and the other to parents who are over 65.
In the case in which the parent is under 65, the parent must own a home but has never received an NHT benefit. Such a parent can borrow up to $6.5 million to assist an offspring to build a house or to buy one on the open market. The parent must have made NHT contributions for at least 10 years and should not have applied for and received a total refund of contributions.
Applicants for NHT benefits desiring to partner with their parents in this way should make a special request in writing to the manager of the NHT in the parish in which they are located. The letter should state their desire to utilise the Parent Assist Programme to acquire a home by building or by buying on the open market. The letter should be accompanied by a copy of the applicant’s birth certificate, a copy of the parent’s birth certificate, a copy of the title of the parent’s property to prove ownership, and the parent’s last two pay slips.
The child can also make an application, meaning there would be two loans with different repayment terms and amounts based on the age and income of each applicant. Both would make such payments to the NHT, but the parent’s payment would stop at age 70. Like the parent, the applicant may borrow up to $6.5 million based on affordability.
The other Parent Assist Programme facility is for parents over 65, meaning they would no longer be contributors to the NHT. They would not be eligible to receive a benefit by virtue of age but would be able to use the points accumulated from their years of contributing to the NHT to replace the points accumulated by a biological or legally adopted child to increase the likelihood of the child qualifying for selection to own a housing unit in an NHT scheme or for a serviced lot by using their points.
The significance of this is that the weekly contributions have a strong bearing on the number of points earned toward qualifying for a benefit. The child’s current income is important in determining affordability, that is, the ability of the child to service the debt.
Only the child would qualify for a loan in this case and must have never received an NHT housing benefit. The parent should never have received an NHT benefit (Non-homeowners Loan or Homeowners Loan) and must not have received all NHT refunds, meaning that at least one refund should still be due to the parent, who must have made NHT contributions for at least 10 years.
Children who desire to use the NHT benefits of their parents are required to meet the following requirements. They must be contributing to the NHT; have made at least 52 weekly contributions, 13 of which were made during the 26 weeks prior to the application; are able to account for their contributions; and have paid up, with interest, any outstanding contributions due in the last three years are at least 18 years old, and earn an income that allows them to repay the loan.
Age determines the term of the mortgage, that is, for how long the applicant will be able to borrow the money, and it also has a place in determining how much the applicant can borrow. The rate of interest payable is dependent on the income of the applicant.
The Parent Assist Programme is not restricted to contributors who are in the employ of others so self-employed contributors are eligible. Before applying to the parish manager to use the facility, they should get a mortgage memo from the compliance department of the NHT to show that their contributions are up-to-date.
In respect of an application for a unit in an NHT-developed scheme that has been put on the market, an applicant who can afford it can get a 100 per cent benefit, meaning, for example, the applicant can get a benefit of $13 million, if that is the price of the unit, subject to the satisfactory completion of credit checks.
There is a way for NHT contributors who have never received a benefit to receive one – even if indirectly – by partnering with their children to achieve their goal of home ownership.
Oran A. Hall, the principal author of ‘The Handbook of Personal Financial Planning’, offers personal financial planning advice and counsel. Email firstname.lastname@example.org