Housing bonds to assist citizens in purchasing HDC homes
State housing bonds will soon be made available for public investment.
The initiative is a policy promise of the People’s National Movement (PNM) and was announced in the 2019 Budget last October.
Speaking at the Post Cabinet media briefing on Thursday, Finance Minister Colm Imbert hailed the housing bond initiative (which will offer financing support for the development, construction, and sale of houses) as a tremendous game changer for the construction sector and home-ownership in T&T.
Imbert said a submission of $1 billion was approved by Cabinet for the housing bond, which will be issued in multiples of $5000.
The housing bonds can be used as part payment for State housing constructed by the Housing Development Corporation (HDC).
This is only the first housing bond to be issued as Government intends to convert the bonds into a form of Government savings bonds so that they will be available on an annual basis for citizens who want to continue to use part of their savings, invest it into housing bonds to earn a good yield and use them to purchase a home.
“As we go along, we will look and see whether these housing bonds can be used for other types of housing construction,” Imbert added.
He went on to explain how the bonds could be used.
“A person can purchase $50,000 in bonds or $1000 in bonds, depending on what their means are and if they qualify and get access to HDC housing, they will be able to redeem or cash in these bonds as a reduction in the purchase price.
Let’s say you have housing bonds totalling $100,000 and you are purchasing an HDC house for $500,000 you would present your bonds of $100,000 and your liability in terms of the payment of the balance of $400,000.”
The bonds will have a life of five years and will earn interest at the rate of 4.5 percent per year - the same rate of the NIF five-year bonds.
The Finance Minister noted that the initiative will provide the HDC with critical and urgent cash that it needs to proceed with its housing programmes.
“At current rate of construction, the HDC, according to the information I have, they are quite limited in the number of houses they can complete or construct in any given year.
This $1 billion will allow them to accelerate their programme and ramp up the delivery of housing into the thousands,” he said.
Imbert stressed that the initiative is geared toward individual homeowners and not corporations.