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$.6M Loans for Homes
Government has increased the limit on loans for low-income first-time home owners to $625,000. The loans will also be granted at a two per cent interest rate. This was revealed by the managing director of the T&T Mortgage Finance Company Ltd (TTMF), Ingrid Lashley, yesterday, during a meeting with a parliamentary joint select committee in Port-of-Spain.
She said the TTMF received notice from the Ministry of Finance and the Economy of the increase in the loan limit from $450,000 to $625,000 on January 10 and consequently, the TTMF had gone back to the ministry to ask for clarification. She said the request for information was made because a customer had tried to get a loan and had said when he constructed his house on former Caroni lands he would have spent more than $625,000. She said, “That is not in keeping with the spirit of the programme.”
At that point, Land and Marine Resources Minister Jairam Seemungal, a member of the JSC, said: “Under the Lands for the Landless programme, some of the lands in central and south were valued more than $500,000 for the land alone.” He asked if the TTMF could make any adjustments in specific instances. Lashley, in response, said, “The flexibility with the two per cent mortgage programme is not within our discretion.”
She said when the programme was first developed, it was on the basis of cost and not value and previously the cost of the land was determined by Government with properties valued at $425,000 but sold at $200,000. “We took cost as equal to value in applying the programme at the time,” she explained. “We have gone back to the Ministry of Finance and the Economy for permission to use cost rather than value in respect of, for example, the Caroni Lands.”
Seemungal then enquired whether the limit for applicants to qualify for a low-income home could be increased from a salary of $8,000 a month to $12,000, because young engineers and other professionals could not qualify as their salaries were more than the current limit. Lashely said on two occasions the TTMF had asked the Government to increase the limit to $10,000 and $12,000, but the requests were rejected.
“In their discretion, particularly with regard to the subsidy of the programme, they have not taken action on it yet,” she added. She said the TTMF was ready whenever the Government was ready. Responding to questions from Opposition MP Dr Amery Browne on the Land for the Landless programme, Lashley said the 500 beneficiaries had pre-qualified for loans and were awaiting the allocations of the Land Settlements Agency before they could apply for a mortgage.
Lashley said the Cabinet is to consider shortly a proposal to establish a holding company, as Government proceeds to merge the TTMF and the Home Mortgage Bank. She said the firm PricewaterhouseCoopers was appointed transaction advisers for the first phase and in its report, dated January 6, recommended that the merger be effected under a holding company.
Lashley said the recommendation provided for “TTMF to remain whole, HMB will remain whole and the wholly-owned subsidiary of a company to be called T&T Mortgage Bank (be established).” The report, with an appropriate recommendation, “is to be made to the Cabinet and we will be guided thereafter,” she said.
In response to a question from JSC chairman Senator Elton Prescott, SC, Lashley said the need for the holding company “arises from the constraints at TTMF in respect of its funding resources and the constraints on HMB in respect of its ability to garner new business.” She told the JSC the merger “will allow each entity to operate where it is strongest and that the National Insurance Board (major shareholder) will benefit by these synergies to the benefit of pensioners.”
At the start of the meeting, Prescott paid glowing tribute to former Senator Corinne Baptiste-McKnight, who died yesterday and whose contributions, he said, were “always pointed and direct.” He said her passing was regretted.