Government Partners with Credit Union on Home Ownership Fund
BRADES – More residents of Montserrat will be able to become homeowners, thanks to a new partnership between the Government of Montserrat and the St. Patrick’s Cooperative Credit Union.
Honourable Minister of Housing and Lands Claude Hogan was the keynote speaker at Thursday’s 44th Annual General Meeting of the St. Patrick’s Cooperative Credit Union where he described it as a momentous milestone, offering the option for people to pay what they can afford.
“The Credit Union and my Ministry have entered into a partnership agreement in principle that enables homeowners to achieve their dream of a home in Paradise as part of an enhanced Credit Union Housing Support Fund the Government of Montserrat holds within the SPCCU. Housing is one of the most important sub-sectors within the construction industry. Not only does it provide short-term boost to the economy in terms of employment and cash-flow; Housing remains one of the basic needs of mankind as shelter, in addition to food and water.
“Home ownership must also be thought about as either completely private or as social housing, where social housing includes both welfare housing and any type of public assistance granted to a person or persons to assist their home ownership.
Through the credit union applicants can access:
- A Financial Grant valued at between EC$40,000-$60,000 for direct deposit in support of persons seeking mortgage financing. The applicants should have salaries that can finance their mortgage and only need some leverage to get them through to the SPCCU for a loan.
- A Government Financed Soft Mortgage Scheme:
Affordable Home Buy – where the repayment plan is on the basis of what can be paid from net earnings. i.e after deductions for childcare, car, utilities, food, maintenance allowance for self and family where applicable. The interest rate on this type of mortgage is no more than 3% per annum.
The Home Mortgage Scheme – where the SPCCU interviews and shortlists the clients based on their own SPCCU internal requirements and the GoM financing is provided for a maximum of 5% per annum.
Currently 38 service lots between Drummonds and Lookout are available at subsidized rates based on a means-test assessment undertaken by the Housing and Land Allocation Committee, which makes recommendations to the Minister in Cabinet. Applicants are asked to retrieve a form of application to purchase government land from the Ministry of Agriculture and Housing Headquarters on Brades High Road.
Hogan added that they “have agreed in principle with the SPCCU and we have promulgated that understanding within the 2015 budget statement the GoM’s intention to convert our current mortgage stock with the SPCCU valued at several million EC dollars to Permanent Shares in the St Patrick’s Cooperative Credit Union. This is subject to certain legal and regulatory requirements being satisfied. The GoM will in accordance with the credit union principle, maintain one vote where applicable within the credit union system not withstanding the large value of our permanent investment with the St Patrick’s Cooperative Credit Union.
“This conversion will guarantee a firm capital base for the SPCCU. This backing by GoM will enable the SPCCU to grant a significant number of mortgages over the next 2-3 years. This is a positive step which supports both our local banking system while providing for increased access to home ownership. Our only stipulation is that the SPCCU by guided by our low interest mortgage rates of between 3-5%.
“I note that the Bank of Montserrat and the Montserrat Building Society have reduced interest rates to within this range and I applaud them for so doing and of course we now welcome the SPCCU to join the club for promoting, enhancing and financing home ownership on Montserrat as a basic need; but a need which is at the heart of any modern and thriving economy that says to people that they can be successful,” the official said.