WHRS review announcement 12 May 2006
Lending assistance frequently asked questions
When will the lending assistance be available?
The lending assistance is part of a package of reforms to better deal with the non-weathertight homes issue. The reforms involve amendments to the Weathertight Homes Resolution Services Act, and the changes are expected to be in place in early 2007.
Should claimants contact Housing New Zealand Corporation direct to get lending assistance?
No. All contact must occur through Department of Building and Housing.
What is Housing New Zealand Corporation's role?
Depending on participation from lenders, the Corporation may guarantee private loans for those who cannot otherwise access funding from their own lender, or as a last resort, lend the money to repair houses prior to settlement through the Weathertight Homes Resolution Service.
So what role will lenders have?
We are exploring the option of lenders working with the Corporation to provide finance to claimants so they can repair their home.
Why are only people who have been declined funding from their own lenders in the first instance eligible for assistance?
This programme aims to provide bridging finance to those who would otherwise not be able to access it. This approach allows homes to be fixed as quickly as possible.
What happens if the demand for this product is higher than anticipated?
The programme has been structured as a pilot to test demand and need. The pilot will be evaluated and at that stage the Crown will make a decision on the next steps.
What is the maximum amount that can be borrowed?
This is still to be determined. Lending will be on commercial terms at market interest rates and full repayment required upon settlement of the claim through the Weathertight Homes Resolution Service.
Why is the lending at commercial rates and not subsidised?
The main need identified was access to finance, rather than difficulties experienced in making interest payments. The lending provides bridging finance until the settlement is repaid.
Have any lenders offered/confirmed their involvement?
Not at this stage. Discussions are still to happen
What are the criteria and conditions of the lending?
The main criteria is that homeowners are active Weathertight Homes Resolution Service claimants, have had a thorough assessment of the damage to establish the full cost of repair and are unable to access finance themselves without some help from the Corporation. Other criteria and conditions are still being developed.
Who is the lending assistance for?
It is for individual homeowners who live in a stand-alone dwelling or own an apartment.
Is there a time limit on availability of the lending assistance?
The programme is structured as a two-year pilot and will be available early next year. At this stage no decision has been made whether to extend beyond this period.
Will Kiwibank be offering this product?
The Corporation will approach Kiwibank to gauge its interest in participation. All major banks including TSB and also Southland Building Society will be approached.
What do individuals need to do to access the lending assistance?
They will need to satisfy the eligibility criteria and lending conditions. These are being developed and tested (including through the discussions with lenders). They will include that the individual is an active WHRS claimant, and has had a thorough assessment of the damage to establish the full cost of repair.
If people have to repay the loan when they receive their settlement, what about people who may get little, if anything (for example, people who used private building certifiers)? Will the Government force people to sell their homes in order to re-pay their loans?
No. There is no desire to cause further hardship around the repayment of the loans. Each case will be examined on its merits.