Ashford W. Meikle, Business Reporter

Robert Pickersgill, Minister of Housing, Transport and Works, announced plans to raise $1 billion for the Jamaica Mortgage Bank to build its loan portfolio. - File

The Jamaica Mortgage Bank (JMB) plans to raise $1 billion from a housing bond float and other financing arrangements to fund expansion of its mortgage loan portfolio under a line of credit it has with the Economic Development Bank of Venezuela (BANDES).

The bond was announced by Housing and Transport Minister Robert Pickersgill at a housing expo in Kingston.

The terms of the bond were not immediately known. JMB head Milverton Reynolds was off the island and unavailable for comment.

"We have an ambitious goal to raise $1 billion through the issue of shelter bonds and meaningful alliances with local partners," said Pickersgill.

Established 35 years ago, the state-run mortgage bank lends to public and private sector housing developers, as well as insure private mortgage providers. The bank, whose asset base grew 10 per cent to $2.78 billion to March 2005, also provides secondary mortgages.

The entity is profitable but its net earnings plummeted 68 per cent at the end of its 2005 financial year, the most recently available figures, from $226.7 million to $73.6 million.

Under the BANDES agreement, the JMB can access up to US$10 million ($660 million) at a concessionary rate for developers.

The bank is already a beneficiary of Venezuela's outreach. Within the US$273 million ($18 billion) loan package signed mid-August in Montego Bay between Prime Minister Portia Simpson Miller and President Hugo Chavez, US$2 million ($132 million) is a housing loan for JMB.

Pickersgill said that the recent recommendation for the review of the mortgage agency's organisational structure would facilitate "an expansion of the loan portfolio of the bank, the development of a vibrant secondary mortgage market and an expansion of the mortgage insurance product of the bank."

JMB is projecting financing of $3.7 billion for 2,910 units, this year, almost 50 per cent more than it disbursed in 2005. Reynolds, said in January that the projection was largely based on developers' response to three-point drop in the bank's lending rates last December, from 21 per cent to 18 per cent.

Last year, the government spent some $8.4 billion on housing benefits for almost 21,000 persons, with JMB responsible for 1,598 units, representing a $875 million investment, according to Pickersgill.

ashford.meikle@gleanerjm.com