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NORTHWEST TERRITORIES
Approximately 415 NWT homeowners may be able to pay off their mortgage faster than they thought, thanks to the NWT Housing Corporation's revamp of its mortgage program.

"It's a good second chance for people, to know that the housing corp. is looking at a new initiative so people can start owning their own homes," said Norman Yakeleya, MLA for the Sahtu.

"With the decline of the federal government funding on social housing and housing in the North, it's a good initiative for them to take advantage of."

Clients who took out a mortgage with the NWT Housing Corporation starting in the mid-1990s to about 2007 were required to report their income monthly and were provided a subsidy on their monthly payment based on the client's income and what they owed, said David Stewart, chief executive officer for the NWT Housing Corporation.

Stewart said problems arose when clients were not regularly reporting their income, preventing the corporation from calculating a subsidy.

"What happened in terms of these historical mortgages was many people weren't coming in and ... reporting their income and then they weren't' getting their subsidy calculated as a result of that, which meant they ... were being charged the full amount as if they had large amounts of income, which in some cases just wasn't the case," said Stewart.

"As they got further and further behind it led them to even come in less often and we ended up with a lot of our mortgages with very large balances."

Currently, clients eligible for help on their mortgage are given a full subsidy up front, instead of per month, and then take out a loan or mortgage from a bank for the remaining cost of their home.

Modelled after this approach, the housing corp. has looked at the original balances of historical mortgage files, subtracted the total subsidy the client is eligible for, subtracted the amount the client has already paid to date, and then calculated the remaining balance.

Clients are then given payment options based on this new balance, how much they can spend per month, and how quickly they want to pay off the mortgage.

Robert C. McLeod, the minister responsible for the NWT Housing Corporation, announced the revision during the Nov. 5 sitting of the legislative assembly.

"Under the old mortgage program, where clients were charged as much as 12 per cent on an annual basis, we have a client who borrowed $145,000 in 1996 who now owes $223,000, despite having paid nearly $50,000 toward their mortgage over the years," he said.

"Under the new approach, this family will owe $35,000. Depending on how fast they want to pay off the $35,000, mortgage payments will be between $240 and $430 a month."

Stewart said the change gives clients a fresh start and means they won't need to report to the housing corporation each month.

He said the change won't cost the corporation more money since "it's really moving the subsidy," instead of subsidy dollars coming out each month, they're paid upfront.

"If somebody hadn't been paying regularly on their mortgage we still expect them to pay their balance," he said. "Somebody else may have been paying all of the way along, so their balance would be even lower. It really is dependant on the individual clients."

Stewart said the housing corporation expects to contact affected clients over the next few weeks and sign new formalized agreements over the next few months.

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