Government launches mortgage market facility

Friday, April 15, 2011

The Jamaican government, with the assistance of the Jamaica Mortgage Bank (JMB), has launched its Secondary Mortgage Facility (SMM) aimed at providing financial assistance to more than 4,000 families for housing access, state information service JIS reported.

The SMM is a mechanism that provides liquidity to mortgage originators by allowing the purchase of existing mortgages, thereby providing them with new funds to grant additional mortgages.

The loan agreement benefits members of credit unions and other financial entities, as it allows them to access more competitive mortgage rates, the report reads.

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The government gave tax free status on J$2bn (US$23.5mn) worth of bonds, and implemented the Jamaica Debt Exchange, which helped to lower interest rates. Both measures together enabled JMB to restart SMM and provide low cost funds for on-lending through building societies and credit unions.