NMHC posts $18.4M loan receivables in FY’07

The Northern Marianas Housing Corp. posted $18.4 million in total principal loan receivables in Fiscal Year 2007, based on an audit report recently issued by the Commonwealth Development Authority.

The housing agency, which is an umbrella organization of the CDA, recorded $11.9 million in loan receivables from its direct family home loans and $3.7 million from its Home Investment Partnerships Act grant—the biggest receivable items listed on its audit report.

The corporation also had $1.4 million to be collected under the general loan category; $552,000 from housing construction; $500,000 from the Tinian turnkey; $46,000 from the housing reservation grant; $82,000 from the home revenue bond; and $168,000 from the Section 8 housing choice vouchers program.

NMHC makes loans for the specific purpose of providing residents with approved low-cost housing. These loans have terms from 10 to 35 years in duration at interest rates that range from 4.5 percent to 12 percent.

The report showed that of the $18.4 million receivables, $1.5 million are considered fully matured loans.

With maturities of one to six months, NMHC has $551,635 receivable; $1.1 million with 7-18 months maturity; $1.5 million matured in 19 months to three years; and $13.6 million from those that mature after three years.

The audit report also indicated that, by the end of FY 2007, the housing agency had a note payable to Marianas Public Land Trust amounting to $8.9 million, bearing interest at 8.5 percent per year and due in March 2016.

CNMI Public Law 12-27 approved the repayment of the loan through legislative appropriation of operating transfers to the general fund of the government from the investment income of MPLT.

Saipan Tribune learned that operating transfers to the general fund reduce NMHC’s liability to MPLT and repayment of the loan principal were initially deferred for a period of 10 years. However, through Public Law 15-48 the 10-year repayment moratorium on NMHC was lifted and required the housing corporation to begin making loan payments to MPLT.

NMC maintains depository accounts with financial institutions that are restricted for various purposes. As of September 2007 and 2006, restricted cash and cash equivalents amounted to $6.1 million in 2007 and $5.2 million in 2006 respectively.

The $6.1 million for FY 2007 included an escrow account maintained as a guarantee for any deficiency in foreclosure proceeds related to the U.S. Farmers Home Administration loans, which amounts to $256,872; a savings account restricted for the Koblerville Section 8 project, $196,425; guarantee for housing loans, $74,888; MPLT collateral account, $1.04 million; time certificates of deposit for the MPLT loan program, $2.6 million; checking account maintained for Section 8 housing choice voucher program, $1.6 million; and other depository accounts reserved for other purposes, $263,082.

The report indicated that of these accounts, $135,358 and $145,338 in FY 2007 and 2006 were FDIC insured.

In FY 2006, NMHC had $255,588 in escrow account for U.S. Farmers Home Administration loans; $196,033 for the Koblerville project; $93,172 for housing loan guarantees; $2 million for MPLT collateral account; $1.07 million in MPLT loan program; $907,649 in collateral account for defaulted loans; and $624,368 for other depository accounts reserved for various purposes.