Fed housing programs extended to NMI residents

Northern Marianas residents wishing to own their own home but could not qualify under existing local programs may now get their chance through the implementation of two federal housing programs on the islands, Commonwealth Development Authority Board Chair John S. Tenorio said.

The United States Department of Agriculture’s Rural Development Office has earmarked $1 million in initial guaranteed loan packages for Saipan residents, according to Mr. Tenorio.

The program will be extended to Tinian and Rota residents depending on the outcome of its initial implementation on Saipan, said Rep. William Torres who received the notification from the USDA on the enforcement of the Guaranteed Rural Housing in the CNMI.

The federal agriculture department earlier announced it has given the Bank of Hawaii an authorization to process at least $1 million worth of home loan packages under the program.

Another federal housing outline that will be extended to the Northern Marianas is the Federal Housing Administration Mortgage Insurance Program under the Department of Housing and Urban Development.

The implementation of FHA in the Northern Marianas came following the visit of HUD community builders Michael S. Flores and Jill B. Hurt who discussed the possible reinstatement of the program on the islands.

Mr. Flores and Ms. Hurt had initially held discussions with Gov. Pedro P. Tenorio, Northern Marianas Housing Corporation and Bank of Hawaii officials in preparation to the finalization and execution of the agreement for the program, which will be implemented on a pilot period, during which 20 cases will be tested.

Under the program, HUD insures a qualified residential mortgage. Such insurance benefits both the borrower and the lender who can file a claim with the HUD in case the borrower defaults on payment.

The FHA Mortgage Insurance increases an applicant’s chance of getting approved for a residential loan, as it reduces the lender’s risk of not being able to get his capital back.

“In the event that a loan goes bad, the lender will file a claim with HUD which will then pay the lender’s claim and have the NMHC foreclose on the property to reimburse HUD for the paid claim,” a media statement from CDA said.

NMHC Executive Director Marylou S. Ada said the implementation of both federal housing programs in the Northern Marianas is a welcome development since the idea of it being extended into the islands has been proposed for several years now. The proposed agreement has already been forwarded to Washington DC.

Ms. Ada said the two programs will increase the number of available residential loan programs in the Commonwealth, and assist applicants, who would have otherwise, been unable to obtain mortgage loans to fund their permanent homes.