WIHCON's investment in the 7.42 hectare Presidential Estate will put 103 two-bedroom homes on the market in Old Harbour, St Catherine.

NHT loan

The project has a price tag of $907 million, partially financed with a $561.65 million NHT loan priced at 12 per cent, and repayable over the life of the project, according to WIHCON. NHT documentation suggests the repayment period is 52 weeks and that the trust would hold a mortgage over the development as security in addition to a corporate guarantee from WIHCON's parent, Industrial Commercial Developments Limited.

"It is a construction financing loan," said WIHCON's administrative manager, Judith Bruce.

"We have been working with the NHT for over a number of years and they have been financing some of our projects."

The construction company considers NHT a preferred lender because, as Bruce said, "their rates are good."

Similar deals were struck for The Aviary and Portmore Country Club, and other WIHCON projects.

The path to the NHT funds was cleared in May after the Ministry of Housing and Water announced it had reached a 'facilitation agreement' with WIHCON.

Permanent secretary Genefa Hibbert said the facilitation agreement gives WIHCON a pass on paying stamp duty. The ministry up to a week ago was yet to sign the agreement with WIHCON, though Hibbert said it had been approved five weeks before.

WIHCON savings

The housing ministry told lawmakers in May, in a ministry paper tabled in the House, that the agreement would save WIHCON $43.196 million, taking the price tag on the development down from $950.44 million.

NHT acts as a financier to developers, offering capital at below market rates of 8 per cent to 12 per cent, ostensibly to influence the price of privately developed real estate.

The trust lends up to 80 per cent of the project cost under the interim finance programme.

"The objective of the programme is to make housing more affordable by providing development financing to private developers at interest rates substantially below market rates," said the Trust in an email response from its communications department.

Hibbert said the savings under the facilitation agreement should result in cheaper houses for the market.

Presidential Estates is being developed on a 7.42 hectare property in St Catherine, providing two-bedroom units, 84.45 square metres in size, that are priced at $8.8 million each.

Earlier this month, Bruce said three units had been sold. WIHCON plans to complete the development by year end.

dionne.rose@gleanerjm.com