Gov. Pedro P. Tenorio has signed a bill into law that would authorize the Commonwealth Development Authority to write off some $6.63 million in unpaid loans accumulated by the defunct Marianas Islands Housing Authority.
In effect, the law would allow the Northern Marianas Housing Corporation, a CDA subsidiary created to replace MIHA, to secure financing package for its home loan program designed for low and moderate income families.
The amount represents portion of the $10 million in principal loan and interest payment due to CDA under an agreement entered into with MIHA on January 1987 for the construction of 150 housing units.
However, MIHA was only able to built 52 units until it was dissolved in 1994 by Executive Order 94-3, which paved the way for the creation of NMHC.
All assets and debts of MIHA were assumed by the housing corporation, impeding its ability to generate revenues necessary to carry out is home loan program for the commonwealth’s citizens.
“This legislation will resolve the long unsettled issue concerning the CDA-MIHA loan,” the governor said in his letter to the Legislature after signing the bill.
According to Tenorio, “Authorizing CDA to write off portion of its loan to former MIHA would enable the Northern Marianas Housing Corporation to pursue financing with private lenders in order to enhance its housing program.”
Under Public Law 11-57, NMHC will be obliged to pay only $3.36 million to CDA, the lone government-run lending agency, for the construction of 52 housing units located at Sugar King II.
The measure stipulates that NMHC will sell 42 of the 52 housing units in Garapan in order to raise funds to pay back its balance to CDA. The law prescribes that a two-bedroom unit shall be sold at $59,000, a three-bedroom unit at $64,000, and a four-bedroom unit at $70,000, while the 10 other units will be sold based on the existing fair market value to qualified CNMI descent.
However, the law gives the CDA the go signal to “take appropriate measure to recover the amount written off…and any and all interest that has accrued and will accrue…from other parties involved in the CDA-MIHA loan.”