Mortgage guarantee fund gives struggling homeowners some breathing room

The national mortgage guarantee NHG is giving homeowners and mortgage providers some extra room to breathe during the coronavirus crisis. Homeowners who have a mortgage with NHG and is unable to bear the costs of the mortgage due to the crisis, can accrue to 9 percent of their mortgage amount in arrears while still retaining NHG, the fund announced.

The NHG came up with this measure in collaboration with partners like the Ministry of Home Affairs, the Dutch Banking Association, and the Dutch Association of Insurers. Lenders can apply for the housing costs facility (WLF) scheme at the NHG. If a customer with mortgage guarantee runs into financial troubles and can't pay their mortgage, the NHG will guarantee a maximum of 9 percent of the original mortgage sum through this scheme. For example, if the customer has a mortgage of 200 thousand euros, NHG will guarantee 18 thousand euros in arrears.

Due to the coronavirus, lenders can offer consumers a three-month extension of payment, but many homeowners worry whether and how they will be able to pay their mortgage once those three months are over, NHG director Arjen Gielen said. "With the WLF scheme, NHG gives both the homeowner and lender the space to allow the arrears to accrue for more than three months, up to a maximum of 9 percent of the original loan," he said. "It is up to the lender to consider with the consumer how much space is desirable and responsible. In this way, together we ensure that we offer space and therefore peace, but in a responsible manner."

If the homeowner turns out not to be able to keep their home, despite these aid measures, "NHG offers a safety net by canceling any residual debt if the homeowner meets the criteria for this," Gielen said.

Minister Kasja Ollongren of Home Affairs is pleased with this arrangement. "In this difficult time, we must all ensure that people get into financial difficulties as little as possible. That's why it's god to see NHG also stepping in to help homeowners who are facing acute money problems due to the corona crisis."