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Oran Hall | NHT loan for house under construction

Published:Friday | May 19, 2017 | 12:00 AM

Q: I am interested in an NHT loan, but I have already started the building and would like to do an expansion on my house. Please advise.


A: If you are a contributor to the National Housing Trust (NHT), and have never received a benefit from it, the fact that you have started to build your house does not disqualify you from getting a benefit.

It is not clear what benefit you would qualify for from the information you have provided. It would have been useful if you had mentioned if what has been constructed so far is habitable or not. You could qualify for the Build on Own Land Loan or the Home Improvement Loan. If the former, your benefit would be $4.5 million. If the latter, it would be $2.5 million.

Before applying for a loan from The NHT, you should ensure that you meet the minimum requirements. To know if you do, you should answer the following questions:

- Are you now contributing to the NHT?

Have you made at least 52 weekly contributions, 13 of which were made during the last 26 weeks?

- Are you able to account for your contributions and have paid up, with interest, any outstanding contributions due in the last three years?

- Are you between the age of 18 and 65 years?

- Do you earn an income that allows you to repay the loan?

If your answer to all the questions above is 'yes', you meet the minimum requirements for applying. You should then follow the NHT's loan processing steps:

- Call or visit the NHT to determine if you pass the affordability test.

- Gather all of the documents needed.

- Take all the documents to the Customer Service Department or the Mortgage Information Department.

At the end of this visit, you should obtain an eligibility letter. Thereafter, do the following:

- Prepare all the required prequalification documents outlined in the loans checklist on the NHT website.

- Contact the NHT to set an appointment for a prequalification interview.

- Attend the prequalification interview, taking with you all the required prequalification documents. The type of loan you qualify for Build on Own Land or Home Improvement will be determined based on what you present.

- All issues that need to be discussed or resolved will be addressed. You will then be given a loan interview date.

- Attend the loan interview at the New Loans Department, taking all the documents you are required to present.

- At the end of this interview, you should obtain a letter of commitment if the loan has been approved.

- The NHT will then process your loan and contact you once processing has been completed. One important action that the NHT will take during this process is registering the loan on the registered title.

- A project officer will be assigned, whether it is a Build on Own Land loan or a Home Improvement loan. The project officer will oversee the disbursement of funds in tranches based on the stage of the work.

Here are some matters you should consider as you contemplate approaching the NHT.

First, you will be required to verify your contributions at the time of the loan interview in the form of a letter from your present and previous employers. For self-employed persons, proof of contributions is the NHT payment receipt.

Second, it will be necessary to state the specific months and years that you worked with each employer, for example, January 1995 to December 2000 ABC Retailers Limited. You should declare only income on which you have paid NHT contributions. If you have additional income that you have not paid NHT contributions on, do not include it on the application.

- Oran A. Hall, principal author of 'The Handbook of Personal Financial Planning', offers personal financial planning advice and counsel.