Thu. Dec 12th, 2019

$15 million housing loan project bill passes 2nd reading in Senate

“The money is here and we need to work together to move forward on it,” expressed President Remengesau on the bill outlining policy goals and utilization of funds for national housing development projects.

President Remengesau had earlier acquired a $15 million soft loan from Republic of China Taiwan to address the displaced housing crisis.

How to implement the $15 million to where it can address housing needs of all Palauans in the most cost effective way has been the challenge that leadership sought to address in the proposed bill.

Minister Baklai Temengil-Chilton who heads the taskforce addressing displaced housing explained that overall leadership was in agreement that interest and fees related to housing loans from this fund will born by the government enabling home owners to pay least cost for the loans.

Moreover, she said they are working with State governments to develop housing subdivision projects that would incorporate access, utilities as well as other key infrastructures needed.

House bill 10-108-10 creates a National Housing Commission (NHC) to implement housing policy.  The bill states that Palau is facing a housing crisis and requires cooperation of numerous agencies and part of the responsibility of NHC will be to serve as coordinating body between the agencies.

The bill identifies Palau Housing Authority as the main entity to receive and implement the funds received from the soft loan. PHA will also determine eligibility requirements for this housing project.

The bill also enables PHA to access same funds through NDBP for those who do not meet the PHA eligibility criteria.

Palau Housing Authority can charge up to 3% for the loans to clients that meet its eligibility requirements and for those that don’t meet those requirements and have to go through NDBP, the loan interest rate can be up to 6%.

For each of loan issued, PHA or NDBP will subsidize the loan in amount of $10,000 as direct loan principle reduction.  This, OEK believes, will “help more people access affordable, reduce interest expense loan payments.”

Cost of housing subdivisions in each of the States that have identified sites for housing projects will come out of the $15 million loan amount according to Minister Temengil-Chilton.

The bill passed 2nd reading in the Senate and now pending 3rd and final reading. (By L.N. Reklai)