'This financial year to date (April to September), the bank intended to finance the construction of 1,486 units at a cost of $1.4 billion.'

The Jamaica Mortgage Bank (JMB) has 35 developments in its portfolio, representing a combined 5,075 housing units that its funds have helped to finance - an investment of $2.8 billion.

Now the state agency, established 35 years ago, has already committed $1.6 billion for the development of 2,361 units, as it moves more aggressively into the housing market.

The funds are $200 million or 15 per cent above the JMB's initial six-month loan target.

The mortgage bank, whose asset base totals just under $3.6 billion, is currently flush with cash, having successfully raised $1.1 billion from three sources this year - $500 million from the National Housing Trust; a similar amount from an unnamed building society; and, $132 million from the Venezuelans.

"This financial year to date (April to September), the bank intended to finance the construction of 1,486 units at a cost of $1.4 billion," said Patrick Peart, JMB director of projects and planning, speaking with JIS News, the Government news agency.

"This represents a 58 per cent increase in our housing units and a further 15 per cent increase in funds committed."

New aggressive push

As part of its new aggressive push, and helped by the continued depression of interest rates, led by the central bank, the JMB, which lends to both private and public sector developers, also dropped three percentage points off its loan rate, from 21-18 per cent.

Peart said the line of credit agreement with the Economic and Social Development Bank of Venezuela (BANDES), through the San José Accord, also facilitated the rate drop.

"Through this loan, the bank will be able to access up to US$2 million (J$132 million) at a concessionary interest rate, and this will allow the bank to pass this on through lower house prices, which will benefit prospective homeowners," he said.

The Venezuelan agreement requires JMB to finance projects that bring high social value.

"It is stipulated that funds should be used to fund projects that would have huge social and economic benefits," said Peart.

"We are seeking to use these funds to finance projects targeted at the lower-income earners."

JMB has already identified a scheme in Ebony View, St. Catherine, to target some of the Venezuelan funds.

"Under this project, funds will be used to provide roads, water, electricity and sewer facilities for some 325 informal settlements," he said.

The development will incorporate 100 low income, two-bedroom units.

Similar projects

The JMB also plans "in the pipeline to execute similar projects in Clarendon."

The JMB lends to developers for projects targeted at different income scales, but says it has always given priority to low-end developments.

"Over the past 35 years, the bank has implemented a number of projects and programmes, which have enriched the lives of many Jamaicans at the lower end of the economic strata," said Peart.

It secured financing from the United States Agency for International Development (USAID) in the 1980s, for example, to co-sponsor projects, such as the Squatter Settlement upgrading programme and Core/Start-A-Home.

The Squatter Settlement upgrading programme provided roads, water, electricity and sewer systems at informal settlements.

Vehicular access

By creating vehicular access, water supply and sewage disposal facilities, Government had hoped to encourage squatters to seek legal ownership of the lands they occupied, JIS reports.

"During this period, there was a decline in construction - there were a lot of informal settlements. The JMB needed to halt the trend, so the upgrading of these squatter settlements was taken on as a project," said Peart.

All the lots, both privately and government owned, were sold on credit to the occupants and monthly payments were made to the then Ministry of Construction, now the Ministry of Housing Water Transport and Works.

In addition, during that period the JMB established the Core or Start-a-Home Programme under which one- and two-bedroom houses were built.

The $500 million loan that the JMB is finalising with the NHT is meant to finance renewed efforts at rebuilding a secondary mortgage market where the bank will buy mortgages from existing institutions, allowing them liquidity to make new loans.

Its mortgage indemnity insurance portfolio includes 25,564 issued policies - covering residential and commercial mortgage loans - totalling $722 million.

Its mortgage insurance fund was valued at $765 million to March, representing, said Peart, a 16 per cent growth over the previous year.