Borrowers on track with home payments

Hundreds of beneficiaries of the government housing program still manage to meet their monthly mortgage despite the current economic crisis that has forced layoff and cut back in working hours in the private sector and in some CNMI agencies.

The delinquency rate among home loan borrowers hovers around three percent which is low compared to commercial loans granted by the government lending agency, according to Marylou S. Ada, corporate director of the Northern Marianas Housing Corporation.

She said most families on the island have prioritized housing to make sure they meet their financial obligations to their creditors before spending their income for other household needs.

“Times are hard though because some of our clients have been laid off, some of them have their hours cut off,” Ada said in an interview yesterday, “so they are saving and cutting down their expenses somewhere else so that they will meet their monthly obligation on housing.”

NMHC, a subsidiary of Commonwealth Development Authority, has approved nearly 700 loan applications and expects to reach its target of 1,000 grants by next year.

“We are going to exceed that projection because there’s a lot of demand now and more people are coming in due to the low interest rate and because they really want to build their own house,” Ada pointed out.

Its affordable home loan package has encouraged local residents to borrow money from CDA to increase home loan availment in the commonwealth, according to officials.

Ada said owning a house is a “dream” that “meeting their mortgage payment is a priority because it’s brand new and they don’t want to lose it through foreclosure.”

Monthly dues run to as much as $1,000 depending on the package, but most borrowers have a four-bedroom housing unit that has “affordable” mortgage of $800 each month.

According to the NMHC official, the interest rate has gone down and the agency has stretched out the payment to give homeowners a lot of “breaks.”

The agency is offering deals with up to 30 years of loan repayment, but Ada said most borrowers prefer shorter term of 10 or 15 years as interest rate is less taxing than long-term grants.

Currently, the housing corporation has pegged a 9.75 percent interest rate annually for short-term loans.

Statistics from the Department of Commerce showed that real estate loans soared 66 percent to $54.7 million last year from $32.9 million posted in 1997.