Sat | Oct 19, 2019

Oran Hall | NHT housing points not transferable

Published:Sunday | October 6, 2019 | 12:23 AM

QUESTION: I need your advice. Someone is willing to sell me their NHT points. They claim they are migrating and willing to sell me their points as they are qualified for $6.5 million and would have no interest in my title or the house in particular. Is this possible, and is it legal?

– Ricketts

 

FINANCIAL ADVISER: It is not unusual for a qualified NHT contributor to apply with another qualified contributor to the National Housing Trust for a benefit to assist that person to access a benefit, such as to build on own land, buy a house on the open market, or to purchase land. The two do not have to be related at all.

To qualify for a benefit from the NHT, a contributor must satisfy the following requirements: be currently contributing to the NHT, have made at least 52 weekly contributions, 13 of which were made during the last 26 weeks just before the date of application; be able to account for all contributions and have paid up, with interest, any outstanding contributions due in the last three years; be between the ages of 18 and 65; and be earning enough to be able to pay the monthly mortgage.

If the person who is being assisted can afford the mortgage, the other person’s name need not be added to the title. If the beneficiary is not able to afford the mortgage and both applicants would be required to pay it, both names would have to be on the title. Both applicants would need to attend an interview at the NHT, taking all the documents on the NHT check-list for applicants.

Points do not apply when considering all NHT benefits. They apply in the case of NHT scheme units – that is, housing units the NHT develops on its own or with partners.

Contributors earn 20 points per year as well as additional points based on their weekly income.

Points cannot be transferred, so a qualified contributor desiring to help another qualified contributor must join with that person as a co-applicant. Both names have to be on the title if the salaries of both are used to determine affordability.

BENEFITS NOT TRADEABLE

Since the points of the primary applicant – generally the applicant contributing the longest to the NHT – are used for selection, it is important that the contributor with the most points be the primary applicant.

A non-home-owner would qualify for $6.5 million, and a home-owner would qualify for $2.5 million. Still on the NHT scheme unit, the NHT will give a qualified contributor a mortgage that is 100 per cent of the price of the unit if the contributor can afford it.

The NHT does not have a facility for contributors to sell their benefits – or points in the case of scheme units – to other contributors, but contributors may co-apply. It is not far-fetched to see cases in which some contributors who co-apply with others to make it easier for them to derive a benefit wanting to collect for facilitating them. I am not able to comment on the legality of such private arrangements.

Going beyond the issues you raised, a contributor who has chosen to emigrate may continue to make contributions to the NHT as a voluntary contributor and is entitled to a refund of contributions with interest in Jamaican dollars in the eighth year after they made them. If the contributor is an NHT mortgagor, the refund will be applied to the principal of the loan.

To become an overseas voluntary contributor, one has to be a permanent resident or a citizen of a foreign country and must first register with the NHT using the ‘Voluntary Contributor’s Application Form’. Holders of work permits are not considered overseas voluntary contributors and should file their returns – forms SO4 & SO4A – at Tax Administration Jamaica as their domicile address is in Jamaica. To qualify for loans, voluntary contributors must have paid 104 weeks (two years) of contributions, of which 52 weeks must be paid in the period leading up to the date of application.

You have met a person who just wants to make some money by offering to sell what cannot be sold. In any case, even if you were to find a qualified contributor willing to help you without asking a price and not wanting a registered interest in the property, how much you would be able to borrow would be determined by your ability to make the monthly mortgage payments.

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