Usually, commercial banks require that customers who want to borrow for a housing mortgage put down 10% of the total cost of the home. For persons without savings or assets, this is often an obstacle to home ownership.
However, Prime Minister Dean Barrow announced on Thursday, November 1, at the Second Business Forum aimed to solidify private-public sector partnership, that the government has earmarked $3.5 million for a new mortgage guarantee program which would enable 350 first-time home owners to meet their down-payment requirement.
Barrow said that the program is intended to help the middle-class, and the mortgage limit is $100,000.
“The proposal here is for Government to provide a repayment guarantee of up to 10% of a housing mortgage loan from a commercial bank or DFC (or other approved lender) for first time buyers of residential property to be owner-occupied, provided that the original loan amount does not exceed $100,000,” Barrow announced to a room full of businesspersons, chief executive officers and ministers, who were gathered for the forum at Old Belize.
He said that the loan repayment calculations would be made after this guaranteed amount is subtracted.
“Loans would be extended on normal commercial bank/DFC lending criteria,” he continued to say. “The intention would be to assist first-time buyers experiencing difficulty in raising their 10% contribution, so that the lending institution would then be in a position to provide a 100% housing mortgage loan.”
Barrow said that this would mean $35 million in new housing construction.
He reported at the summit that the banking system is holding $131 million in excess liquidity, and lending rates are averaging a historic low of 12.23%.