CIG seeks better terms for mortgage initiative

| 13/10/2015 | 19 Comments

Cayman News Service(CNS): The Cayman Islands Government is renewing the Government Guarantee Home Assisted Mortgage (GGHAM) Programme as a result of significant success in helping more than 300 local families buy their own home. The National Housing Development Trust, which is working with CIG on the initiative said officials are currently trying to provide more lenient terms for more families. The programme helps Caymanians buy their first home up to a value of $200,000 with a government guarantee of up to 35% of the mortgage.

The Trust said that since the programme began in 2008, $59 million has been borrowed by 327 successful applicants, with government guaranteeing $20.5 million of it. Only six clients in the programme have ever defaulted, amounting to just $290,000 over seven years that government had to cover.

“This pay-out is interpreted as 1% credit risk on the overall government guarantee and is significantly low in comparison to the equivalent loan facility as issued independently by the local financial institutions,” the housing trust said in a recent update of its programmes.

As well as helping many families buy a home, 44 mortgages have been released from the guarantee after applicants secured refinancing or paid off their loans.

“The fact that this programme has facilitated 327 families with a 1% default pay-out risk is an indicative of its success,” the Trust said. As soon as a new agreement regarding terms with the banks has been finalised, an update will be released to the public and would-be first-time local homeowners can apply for the guarantee-backed mortgages, officials said.

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Category: development, Local News

Comments (19)

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  1. Brad Smith says:

    Don’t forget with this the responsibilities a new home owner has. I’ve seen three places go into foreclosure in our complex from buyers involved in this scheme the last time. Our property values have dropped drastically because of this. Don’t get me going on the insurance fees and strata fees that are ignored to the tune of $15K per over the years. We are bound by law to have strata plans in place , but try to get the courts on your side….no such luck. I am not saying all that benefit from these schemes are deadbeats but a better job of filtering them out and educating them on their responsibilities ongoing after the fact couldn’t hurt.

  2. Anonymous says:

    What needs serious revision and amendments in this country are the Health Insurance/laws. You pay out your a$$ to them every month and they offer such shitty service and never want to pay for anything.

  3. Anonymous says:

    The figures on the default rate for this are absolutely false. I worked for a financial institution and at the time all applications had to be pre-approved by NHDT before coming to me. These applications were altered and incorrect information was given to make sure the applicant was granted approval. Even though this seems like a helping hand, it gives a different view of the clients debt service ratio and you are ultimately setting them up to fail. At least 3 of my clients defaulted, so to believe that only another 3 throughout all banks in Cayman defaulted is difficult. The idea for this program is an amazing one, however it does need to be monitored a lot closer as the last thing we want to do is give families the dream of owning a home and then taking it away from them.

    • Anonymous says:

      Exactly what I was thinking, it should also be noted that the past 7 years have been the easiest it’s going to get for repaying loans, we will likely see interest rates higher in Q1 2016, not exactly the time to be encouraging people to take on a loan that might end up getting them into trouble.

  4. Anonymous says:

    Why is it capped for people with a household income of 75,000 that’s not fair- if a single person is applying it should be their single income- that just discourages marriage!

  5. Anonymous says:

    More handouts? Vote buying? Do you think Caymanians getting things on unrealistic terms helps them understand the real world, or just makes it worse when government can no longer afford it…

    • Anonymous says:

      Handouts??? So, if I qualify for a mortgage via GGHAM, then I am getting a handout? I am thankful that NHDT has this programme, otherwise I could not dream of buying an affordable piece of land and building on it – unless I wanted to drive from North Side every work day. And I did check on what the 10:33AM comment – person is right mortgage rates haven’t been this low since the 1950’s.

      NHDT – you need to clarify the publics misperception about this programme. We who qualify had to get a mortgage just like everyone in private sector – government didn’t give me any handout.

    • Anonymous says:

      If you keep wrapping up a population up in cotton wool and spoon feeding them, do not complain when a nation of poor copers evolves.
      What will you do when you cannot give anymore and the population expects everything?

  6. Anonymous says:

    Why is the government interfering with the market? Why is it illegally discriminating on the basis of national origin?

    • Anonymous says:

      Discriminating? You need to look at the programme in more detail. If our Government does not look out for us Caymanians – who will – you? Foreign investors get plenty of incentives to do business here and our local companies are very accommodating in hiring foreign workers. So, I don’t see any wrong in trying to assist “Caymanians” in realizing the dream of owning their own home.

      • Anonymous says:

        Apart from the fact it is discrimination against settled residents on the basis of national origin . . .

      • Anonymous says:

        Wake up there are no more foreign investors they have all been run out and now all you have is each other to suck the life out of

    • Anonymous says:

      True. too many new CI Status holders are finding this as their new settling grounds

  7. Anonymous says:

    GGHAM is an underutilized program and NHDT (with support of the Government of the day) needs to do a better job of publicizing it – in conjunction with the retail banks that are part of it. Prospective homeowners are entering the market at a time that the “prime rate” has not been this low in over 60 years – great time to buy – wish I was eligible.

  8. Anonymous says:

    What home in cayman is $200,000???

    • Anonymous says:

      If Government is providing the land (and unless you got a “big eye”), I don’t understand why you cannot build a decent 2 or 3 Bedroom and 2 bath house for under CI$200,000 – if unna was building a house for Mommy, granny, daughter/son you would do it, but you cannot expect to get granite countertops, Jacuzzi tub, stainless steel appliances, central air, 2-car garage, storage building, crystal chandeliers, walk-in closets!

    • Anonymous says:

      there are hundreds of properties below that level….

    • Anonymous says:

      My home on the beach in east end is for sale just over 200k 3/1 main house and a 1/1 guest house I want to sell it and I have ads on ecaytrade often
      nice and tidy and by far cheapest in cayman

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