The NHT Is Paying Banks $1 Billion to Handle Its Mortgages. Is That a Good Deal for Jamaica?

Jamaica’s National Housing Trust is funnelling more than a billion dollars annually to private commercial banks to subsidise mortgages for its own contributors, in an arrangement that is quietly reshaping who controls the country’s affordable housing finance pipeline and raising questions about the long-term cost of the strategy.

The NHT has paid $1.1 billion to private financial institutions under its External Financing Mortgage Programme since the scheme was introduced three years ago, the Trust disclosed following a Sunday Gleaner query. A further $1.3 billion in interest payments to those same banks is projected for the 2025-26 fiscal year. As of December 2025, private institutions participating in the EFMP had disbursed $33.73 billion in mortgage financing on the NHT’s behalf.

The logic behind the arrangement is straightforward: by outsourcing the mortgage function to banks, the NHT retains more of its own liquidity to fund the massive construction programme at the heart of the government’s housing agenda. Prime Minister Dr Andrew Holness confirmed during the budget debate that the Trust currently has more than 40,000 housing solutions at varying stages of development, with approximately 10,700 units actively under construction and a further 10,675 new starts planned for the 2026-27 financial year alone. Running both a mortgage book and a construction pipeline of that scale simultaneously would stretch the Trust’s balance sheet significantly.

The argument for outsourcing

Economist Keenan Falconer described the EFMP as optimal for all three parties involved, the NHT, the borrowers, and the financial institutions. His reasoning is that the programme effectively decouples mortgage financing from construction financing, allowing each to be handled by the party best positioned to manage it. Commercial banks are structured to underwrite, administer, and service individual mortgages. The NHT, by contrast, is structured to move capital at scale into construction projects. Keeping those functions separate reduces the administrative complexity that would otherwise accumulate inside the Trust, and it is not unlike arrangements used in other jurisdictions where state housing agencies have outsourced portions of their mortgage books to private lenders.

The NHT’s own position is that the model enables it to leverage private sector liquidity, expand housing delivery, and maintain the affordability of NHT mortgage benefits for contributors. It argues that paying interest subsidies to banks is a lower long-term cost than diverting its own capital away from construction, and that the housing units being built represent tangible, lasting value for contributors and the country that a mortgage subsidy alone cannot replicate.

The concern the NHT has not fully answered

The more challenging question is one the NHT did not directly address when asked: what happens to the cost of this arrangement if interest rates remain elevated for longer than anticipated? The EFMP ties the Trust to market interest rate volatility in a way the previous in-house Joint Finance Mortgage Programme did not. When rates rise, the gap the NHT is subsidising widens. When that gap widens across a programme that has disbursed $33.73 billion and is growing, the annual subsidy bill can escalate materially.

The NHT also did not provide a breakdown of the $1.1 billion already paid to financial institutions, nor did it respond to questions about whether a formal study had compared the long-term administrative cost of the EFMP against running the Joint Finance Mortgage Programme in-house. Those gaps are not necessarily evidence of a problem, but they are the kinds of transparency questions that a programme of this scale and cost should be able to answer.

What this means for NHT contributors

For the majority of NHT contributors seeking housing assistance, the EFMP is most relevant if they fall into the upper income bands where the Trust’s direct loan limits are insufficient to cover the full purchase price of a property on the open market. In those cases, the EFMP bridges the gap between the NHT’s contribution and the total financing required, with a commercial bank administering the balance at a subsidised rate.

For lower-income contributors seeking housing within the Trust’s own developments, the EFMP has less direct bearing. Their path to homeownership runs through the construction pipeline rather than the mortgage market, and it is precisely to protect the construction budget that the NHT argues the outsourcing arrangement is justified.

The broader question sitting underneath this arrangement is one that runs through Jamaica’s entire housing policy debate. The NHT was created to serve contributors. Its mandate, as stated in its own Act, is to provide access to housing finance, not to build homes directly. But the Trust has taken on an increasingly active construction role because the private market has not filled the gap. Balancing those two functions, financing and building, simultaneously while managing a post-hurricane relief programme, paying interest subsidies to commercial banks, and facing pressure to divert funds to the national budget, is a structural challenge that no clever programme design fully resolves.

Dean Jones, founder of Jamaica Homes, noted that the EFMP debate reflects a deeper tension in Jamaican housing policy between the need to build at scale and the need to keep affordable financing accessible. Both are legitimate priorities. The question is whether the current balance between them is sustainable if the interest rate environment does not improve.