Republic Bank Ltd approves loans for new homeowners with no down payment

…as Home Construction Assistance Facility Programme launched in Reg 6

Republic Bank Limited in Region Six (East Berbice-Corentyne) on Tuesday started approving home loans for persons without having them make a down payment as equity. The initiative is a collaborative effort between the bank and the Housing and Water Ministry through the Home Construction Assistance Facility Programme (HCAFP).

The programme allows persons to complete their transactions so they can be pre-qualified for a loan. At the launch of the initiative on Tuesday in New Amsterdam and Corriverton, persons were given on-the-spot pre-qualification by Republic Bank Limited – once the necessary documents were presented and the applicant satisfied the eligibility criteria for the programme.
The Home Construction Assistance Facility Programme (HCAFP) is the brainchild of President Dr Irfaan Ali. Housing and Water Minister Collin Croal explained that it is a part of the Government’s housing drive which seeks to accelerate home ownership for Guyanese.

In addition, it addresses the challenges faced by Guyanese families who have acquired house lots but are unable to build their homes, due to inaccessibility to financing.
“First of all, there are a number of criteria that you have to satisfy; you have to own the land and this is not only relevant to the Housing Ministry programme (the Ministry of Housing lots) it is also relevant to private owners. So, if you are a private land owner and you want to be able to construct your own home, this is an enabling programme to do that. The bank can look at your situation and pre-qualify you based on the information you provide,” Croal explained.

Under the HCAFP, applicants can select one of three categories of units available. These are two-bedroom flat units costing $7 million, three-bedroom flat units for $9 million and three-bedroom elevated units at $12 million.
In explaining the difference between the HCAFP and other housing drives that are being rolled out by the Housing Ministry, Croal said in this case the land is being used as equity.
“The land will be used to be that initial sum that the banks normally ask for when you are taking a loan or a mortgage. So, you can have a minimum of zero dollars saving but once you show that you pre-qualify and can pay X amount per month and they are satisfied with the duration of years, you can pre-qualify because the same amount you pay monthly for your rent will go towards your monthly mortgage.”
Regional Bank manager Imran Sacoor stated that the financial institution fully supports the initiative while noting that the initiative is been viewed as a low-cost mortgage initiative.
“Customers can access up to $15 million to build their homes. The rates are as low as 4.15 – 5.95 per cent and the repayment period are within 15 – 30 years.
In explaining the 5 per cent down payment, Sacoor pointed out that a $10 million loan will attract a $500,000 equity.
“Practically we are reaching out to persons who are interested in acquiring home ownership.”
He further stated that instalments are between $35,000 and $67,000 under the programme.
Delinda Fraser, who pre-qualified for a housing loan, noted that she was given a house lot at Kilcoy/Chesney Housing Scheme on the Corentyne but due to certain circumstances, she was unable to construct her home.
“I will like to say thanks to the Government of Guyana for assisting people with low income and who cannot afford to construct their homes.”
Another beneficiary, Royan Abrams, applied for the moderate-income home which is $5.5 million. He explained that the process at the launch on Tuesday was simple.
“They asked some basic questions. The process was very smooth. I spoke with the officials from Republic Bank and at the end of it I was approved,” Abrams said.
On May 16, Dr Ali announced a series of new measures to boost the housing and construction sector including the establishment of a Home Construction Assistance Facility and the removal of Value Added Tax (VAT) on specific construction materials.
Under the assistance facility, President Ali had explained that Government will support the applicant through the process of applying for bank financing, to meet the cost of constructing the home and would also look at helping in the initial phase of construction by releasing resources to expedite the construction process and help in bringing the banks and the homeowners together so that persons own their own homes faster.
The initiative has already been launched in the capital city Georgetown, Region Four (Demerara-Mahaica) and Region 10 (Upper Demerara-Berbice).
Meanwhile, 30 families from Region Six will soon be occupying their new homes at Ordinance Fortland, as construction progresses. The first-time homeowners on Tuesday were allowed to select their lot number during an allocation exercise at the New Amsterdam RDC compound.
Director of Operations Denise King Tudor, Regional Housing Officer Kristina Muthusami and the team led the exercise as the allottees continued the documentation process.
The allottees who have been in the housing database for a long while had indicated their interest in built units.
A total of 100 single flat two-bedroom units are currently under construction at Ordinance Fortland, with another 100 completed at Williamsburg/Hampshire. Also, another 59 units will be constructed at Williamsburg/Hampshire as the Ministry continues its mandate to provide affordable housing for all.