Owner-occupiers of unit and apartments living in earthquake-prone buildings will have certainty about what support they’ll be eligible for from the Government, Minister for Building and Construction Jenny Salesa says.
The Residential Earthquake-Prone Building Financial Assistance Scheme will help unit owners facing financial hardship over earthquake strengthening costs.
"Fixing an earthquake-prone building where there are many unit owners can be a complex initiative to undertake. Getting the finance to do this work can prove difficult if not impossible for some people in this situation.
"Without the support of low-interest loans like these, some unit owners may be forced to sell if they’re not able to earthquake strengthen their home.
"We’re pleased we can now give these unit owners some certainty by releasing the criteria for this important financial lifeline," Salesa said.
Loans are available for owner-occupiers in high-seismic risk areas and for units bought before July 2017.
To apply they have to prove they cannot get a loan from the bank or that if they could it would put them into significant hardship,
Finance Minister Grant Robertson says changes to the insurance market and significant rises in insurance premiums following the Canterbury and Kaikoura earthquakes have pushed up costs for unit owners.
"By providing loans of up to $250,000 for unit owners, we can ensure more people can do the remediation work needed to stay in
"Unit owners can register their interest. They’ll be informed as soon as applications are able to be made for the loans. The key thing is that they know the criteria and can start having conversations with their body corporates," Robertson said.
The interest rate for the scheme will be set at 60% of the Reserve Bank’s monthly average of five-year fixed interest rates, plus a low-equity margin of 1.25%.
Rates are fixed for five years.
Repayments are voluntary but the loan has to be repaid when the unit is sold or 12 months after the owner dies.
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