Delinquencies in Guam Housing Corporation loans have increased due to COVID-19, the Office of the Public Auditor stated in its latest report.
According to OPA, GHC provides mortgage loans to qualified applicants, who conventional financial institutions denied financing for the construction or purchase of their new homes.
Thus, OPA pointed out that GHC assumes a higher lending risk with mortgage loans at the start.
“The COVID-19 pandemic has added to that risk as it has had a direct financial impact on many GHC mortgagors and their ability to meet their financial obligations. This combined with the moratorium on foreclosure and eviction proceedings outlined in the March 2020 Executive Order No. 2020-07 has contributed to an increase in delinquency,” the OPA stated.
According to the report, GHC’s delinquent loans 30 days and over increased by $1.4 million to $3.9 million in FY 2020. Overall, loans delinquent 30 days and over increased from 9% in FY 2019 to 15% in FY 2020.
As for revenues, GHC’s total operating revenues decreased by 10%, or $259,000, from $2.6 million in FY 2019 to $2.4 million in FY 2020. This was mainly due to the lack of inventory for affordable houses, limited contractors, and the impact of the COVID-19 pandemic.