Ralvey Bryan, Contributor
As a former employee of the National Housing Trust (NHT), where I held the position of director of mortgage operations, I wish to make the following points to clarify some misconceptions being discussed in the public sphere concerning the operation of the NHT and the proposed drawdown of $45.6 billion from the Trust over the next four years.
1 During the period 1976 to the mid-1980s, the selection of beneficiaries was done on the Random Selection System. The selection process was changed in the mid-1980s to what was called the Priority Entitlement Index (PEI) System. The PEI System was based on the selection of persons who were closer to housing schemes financed by the Trust. The reality is that even when persons were selected, the question of affordability was required.
I recall vividly a teacher who applied and got selected for a housing unit in Mineral Heights and whose salary could not qualify her for the unit. She wept uncontrollably in my office when she realised that after 25 years of teaching, she was not able to take up the benefit. Affordability is key to getting a benefit from the Trust.
2 The NHT, although having 'Trust' as part of its name, does not operate like a trust company in its classical sense. There has never been an annual meeting of contributors to examine the financial statements and to select trustees to oversee the operation of the entity.
The Government of Jamaica, through the relevant minister, is the one who selects the board of directors, not the contributors. This is a clear contrast between the NHT and credit unions, where contributors select their board of directors and approve the distribution of surplus.
3 In the absence of receiving a mortgage from the NHT, the only entitlement there is for each contributor is to receive a refund of his contributions every seven years, so long as there is continuous employment and where the employer files annual returns identifying how much each employee contributes for each year.
4 Apart from financing scheme units, the NHT provides mortgages for build-on-own-land (BOL) and home improvement (HI) and open market (OM) units. These policies may change from time to time. Up to the mid-1980s, all scheme units did not require a deposit on equity. It is my understanding that this policy has been changed, and, no doubt, based on past experience.
I recall that shortly after the 1980 election, persons were driven out of units in Bay Farm Villas, Trench Town and Mountain View schemes by so-called bad men. Many keys to these units were returned. The NHT lost a lot of money on these schemes.
5 Persons who received BOL and HI loans had their refundable contributions applied to their loans. The same principle was applied to scheme units.
6 Employers' contributions are currently non-refundable and, consequently, are not eligible for a benefit. It is my opinion that different rules are applied to two sets of contributors. I would like to advise the Government to change the employers' contribution to a tax which goes to the Consolidated Fund. With the build-up of the Reserve Fund, the NHT can finance its mortgages without the employers' portion. This will ensure that no future government will have to amend laws to source NHT funds.
7 Finally, NHT surplus funds could go towards financing indigent houses and units affected by natural disasters. By so doing, the mandate of the Trust would not be compromised, as these are not contributors' money, but funds generated by proper management after expenses are cleared. Housing Trust funds should not be used to invest in government bonds, as taxpayers are the ones who are called upon to fund such interest income for the Trust by way of taxation by the Government.
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