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By FRANK ASAELI
NASFUND has announced good news for its members seeking to own homes.
Under an arrangement with Bank South Pacific, conditions to buy a house
for Nasfund’s over 90,000 members, have been relaxed to make it easier
to own a home.
The Nasfund announcement follows plans unveiled only last week by Public
Services Minister Peter O’Neill to build houses for public servants, and
plans by Housing Minister Andrew Kumbakor to make housing a condition of
employment.
Under the arrangement, BSP is dropping the equity rate required by a
potential home owner from 20% to 10%.
Joint chief executive officer of Nasfund Ian Tarutia said yesterday,
this scheme would benefit individuals who do not have the financial
resources to purchase or build a home outright and need further
financing.
He said under this arrangement, a person wanting a K100,000 housing loan
will only have to provide K10,000 or 10%, instead of K20,000 or 20%
equity as was required.
“This way, a Nasfund member will not have to dig deep for extra funds to
make up the 20% equity. This is the benefit of this new arrangement,” Mr
Tarutia said. This came into effect on Sept 1.
Mr Tarutia said Nasfund recognised that housing is an important issue
for everyone but not every one is able to own a home and this was why
superannuation savings were important.
“Superannuation savings are important as it provides that vital
link for bridging financing arrangements with banks and other
financial institutions.
“We are pleased with BSP’s decision to reduce the equity requirements to
10% because it will assist a lot of our members seeking housing loans.
However, we advise members that providing equity is just putting your
foot in the door. You must demonstrate to the bank that you are a good
credit risk and you must be prepared to pay the loan in a consistent
and reliable manner,” Mr Tarutia said.
This arrangement applies to Nashfund members who are planning to
purchase a home, construct a home, or carry out repairs and maintenance
to a home that is a member’s principal place of residence.
Nashfund explained in a notice to its members that this scheme ensures
that its members are not disadvantaged by the recent legislative changes
to the Superannuation Act limiting the maximum payment of a housing
advance to the member’s own contributions only.
It said as long as the value of the member’s own contributions is equal
to or exceeds 10 % of the loan sought at Bank South Pacific, the bank
will consider his or her application for a home loan, but added that
members will still have to meet the qualifying criteria of being a
contributing member for five years or more in order to qualify for a
housing advance payment.
Previously members were entitled to 60% of their total savings
comprising their contributions, the employer’s contribution and
accumulated interest.
From the May 1, this year, an amendment to the Superannuation Act was
passed limiting payment of a housing advance to the member component
only.
 
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