NMHC soliciting support from banks on home lending program

Discussion is already underway between the Northern Marianas Housing Corporation and two private banking companies for a joint effort in intensifying the government’s home lending program, according to Executive Director Marylou S. Ada.

Ms. Ada disclosed that housing officials have been trying to encourage Hong Kong and Shanghai Banking Corporation and the First Hawaiian Bank to provide guaranteed mortgage financing to beef up NMHC efforts in promoting the advantages of home ownership.

NMHC has an existing agreement with the Bank Pacific and the Bank of Hawaii. Earlier this year, the housing corporation signed a residential financing agreement with the Bank of Guam.

In an interview, Ms. Ada said the Union Bank of California is not interested in home financing while Bank of Saipan is more focused on commercial and consumer loans.

Under the proposed agreement, the private banks would provide guaranteed loans to borrowers for purposes of home construction and renovation, as well as for the purchase of single family residential homes.

Ms. Ada explained that NMHC has been trying to get as much private financial institutions into the home financing program in order to enhance residential loans assistance to borrowers for purposes of new home construction and improvements.

The housing corporation remains to be swamped with residential loan applications, with demands for residential financing exceeding NMHC’s supply of available funding. CDA has been receiving an average of 20-40 housing loans every month.

However, Ms. Ada admitted that Article 12 in the Commonwealth Constitution which restricts land ownership in the islands to local residents hamper the housing corporation’s efforts to entice private banks to provide home mortgage financing.

Article 12 narrows the chances for both private and government financial institutions to sell the property into the local market in case of foreclosure since only indigenous people can own a land here.

Still, the housing corporation is expecting to exceed the targeted number of approved home loan agreements before year-end, after failing to meet its goal of closing 1,000 mortgage applications before the Year 2000 rollover.

At least 100 home loan agreements have already been approved by the housing corporation since the beginning of the new century. NMHC has processed and approved loan applications for the expansion of 45 houses and the construction of at least 51 new housing units at the Sugar King II.

Based on the trend recorded by the housing corporation during the first three months of the year, NMHC will be able to surpass its target to close 1,000 mortgage agreements by end-December 2000.

Ms. Ada said there is an increasing demand for home ownership among indigenous population in the Northern Marianas, resulting from intensified campaign by the NMHC that includes partnership with private banks to provide housing mortgages.

NMHC is now processing 300 housing loan applications with almost half of it expected to be closed in the next couple of months while the housing corporation targets to approve the rest by end-December this year.