NMHC told to maximize credit line with MPLT

Representative William S. Torres is pressing the Northern Marianas Housing Corporation to take advantage of a multi-million dollar credit loan extension from the Marianas Public Land Trust.

The additional MPLT funds provided to NMHC was part of a negotiated agreement by the two agencies and has been awaiting signing since February of this year.

“Signing such an agreement with MPLT would immediately provide NMHC over $3 million of a needed cash infusion to more adequately serve those low income clients of the housing agency,” the lawmaker said.

The cash infusion would prove doubly important to people who look up to the NMHC to finance their dreams of building their homes either in their eviction-prone homestead lots or private property.

Under the proposed consolidated financing agreement for low to moderate income housing with MPLT, NHMC’s cash flow would be significantly strengthened and its liquidity enhanced, Mr. Torres revealed.

By signing the deal, the housing arm of the Commonwealth Development Authority will receive a cumulative sum of $10 million for low to moderate income housing throughout the Commonwealth.

Aside from that, the lawmaker stressed, NMHC will also be relieved of its debt service obligations on the entire $10 million.

Since 1998, NMHC has been the recipient of over $6 million in MPLT loans. By October of last year, NMHC would have generated a commutative debt service revenue of $272,000 to the day.

According to the lawmaker, this is as a direct result of a moratorium by law in debt service repayment to MPLT by NMHC. The moratorium applies to the total disbursements to NMHC of $10 million of which over $6 million has already been remitted to housing agency.

Representative Torres went on to say that NMHC should have immediately signed the “sweet heart” agreement. He argued that not even the CDA would have extended the housing arm with such good loan terms .

He further said, “Finally by lawfully forgiving NMHC from repaying MPLT its debts for 10 years would likely result in NMHC’s immediate windfall and unencumbered revenue from its deferred debt service.

By signing the “sweet heart” deal with MPLT, NMHC would make over $1 million every year in its debt service (principal plus interest) over the life of the ten-year moratorium, the lawmaker revealed.

MPLT, for its part, will benefit from the negotiated loan agreement because after 10 years it would have generated enough funds for its diversified housing financing portfolio. Mr. Torres said, it will have accrued an estimated amount of $12 million from its debt service.

MPLT reportedly approved the $3 million loan extension for the NMHC since November 2000.