New law grants ten-year reprieve on NMHC’s loan

The Northern Marianas Housing Corporation is hoping to finally achieve its target of sealing 1,000 home loan packages by the end of next year, following the passage of legislation granting the agency a 10-year reprieve on the payment of its $10 million loan to the Marianas Public Land Trust.

NMHC Board Chair John S. Tenorio said the signing of House Bill 12-171 into public law will expand the opportunity of many Northern Marianas families to achieve home ownership through the agency’s loan programs.

The new law guarantees that payment of NMHC’s loans, which was sealed through Public Law 10-29, be paid out of the revenues MPLT turns into the General Fund each year. It also grants NMHC a 10-year moratorium on the repayment of $10 million to the CNMI.

According to Mr. Tenorio, both the Commonwealth Development Authority and the administration of Gov. Pedro P. Tenorio have strongly supported passage of the bill in efforts to revitalize the islands’ economy.

“It is the Corporation’s goal to increase the housing stock of single-family dwellings throughout the Northern Marianas. The signing of the bill into law will infuse much-needed funds for residential loan applicants,” said Mr. Tenorio.

Slowdown in economic activities and banking institution’s conservative attitude toward giving out advances forced NMHC to lower by 40 percent the number of home loan agreements it projected to close by end-December 1999.

The housing corporation managed to close only 600 home loan agreements be end of last year, short from the original target of 1,000 housing loan packages but added that the agency intends to close more home loan agreements this year.

Mr. Tenorio said CDA is now processing 300 housing loan applications with almost half of it expected to be closed in the next couple of months while NMHC targets to approve the rest by this year.

CDA has been receiving an average of 20-40 housing loans every month, making CDA a major instrument in ongoing housing projects which include the construction of almost three hundred residential units.

Mr. Tenorio said there remains a strong demand for home financing but private banks have taken a conservative approach on long-term loans primarily because of Article 12 restrictions.

However, Mr. Tenorio pointed out that CDA was able to encourage some of the banking institutions operating in the Northern Marianas to earmark a portion of their portfolio for long-term housing loans to meet the demand.

The CDA chief also mentioned as a major factor the restrictions imposed by Article 12 which limits to the indigenous people the right to own land in the Northern Marianas. (Aldwin R. Fajardo)