An audit released Sunday by the Office of Public Accountability blames the delays on “the limited number of skilled workers on Guam.”
The audit states that at the end of the 2019 fiscal year, 14 applications totaling $2.2M had been approved for loans but disbursement of the loans to the applicants has been delayed because of the worker shortage.
“GHC’s borrowers are experiencing challenges in securing a contractor to build their homes,” states the report.
For more than 4 years years Guam has been facing a shortage of skilled foreign laborers under the U.S. Immigration Service’s H-2B visa program. The shortage is the subject of an ongoing lawsuit filed in U.S. District Court by the Guam Contractors Association and others against the U.S. Immigration Service.
The Guam Housing Corporation provides low interest mortgage financing for first time homeowners in the low to moderate income range, borrowers who otherwise may not be able to obtain financing.
GHC also owns 115 houses and 24 apartment units to provide rental opportunities to low to moderate income families.
228 applicants were interviewed
Although GHC is limited in its lending capital and securing a contractor is difficult, it continued to conduct pre-qualification interviews to determine the need for affordable housing.
In FY 2019, 228 applicants were interviewed.
Of those interviewed, 106 were found to be prospective applicants seeking a total of $12.1M in loans. Most of these individuals are faced with the challenge of locating a dwelling within their within their affordability amount.
Fewer grants issued in FY 2019
According to the audit GHC granted 20 fewer First Time Homeowner Assistance Program (FTHAP) grants in fiscal year 2019 than the year before.
GHC approved 54 homeowner grants in fiscal year 2018, and only 34 in the last fiscal year.
Operating revenues increased
GHC’s total operating revenues increased by 11% from $2.4M in FY 2018 to $2.6M in FY 2019. This increase was mainly due to:
- A 15% increase in rental income from $754K in FY 2018 to $868K in FY 2019
- The $57K FY 2019 gain on the sale of foreclosed assets
- $53K in FY 2019 interest income on investments held by bond trustees.
Loan portfolio decreased
GHC’s loan portfolio decreased by 3.6% from $28.7M to $27.7M in FY 2019.
The decrease was due to $1.5M in payoffs, $1.1M in monthly payments plus $156K from one foreclosure offset by a new loan’s principal disbursements and deferment totaling $1.7M.
GHC originated five (5) loans totaling $824K under the Direct Loan Program, five (5) loans totaling $930K under the Revolving Loan Program, and ten (10) loans totaling $342K under the Community Affordable Housing Action Trust (CAHAT) program in FY 2019.
The Guam Housing Corporation (GHC) received an unmodified, clean opinion on its FY 2019 audit from independent auditors, Ernst & Young.
There was no management letter issued and the auditors did not identify any material weaknesses or significant deficiencies in its compliance report.
GHC ended FY 2019 with a net gain of $727 thousand, an increase of $1.3 million from the FY 2018 net loss of $569 thousand.
ed, expenses decreased
GHC’s total operating revenues increased by 11% from $2.4M in FY 2018 to $2.6M in FY 2019. This increase was mainly due to a 15% increase in rental income.
GHC’s total operating expenses decreased by 35%, or $1M, from $2.9M in FY 2018 to $1.9M in FY 2019. This was mainly due to the decrease in Retiree Supplemental & Health Benefits, Professional Services and Loss on Impaired Assets. This was offset by the $444K increase in the Retirement & Medicare contributions.
GHC received $601K and $473K of *escheated funds from the Department of Administration during FY 2019 and FY 2018, respectively.
*( If a person dies without leaving a beneficiary to their property, it becomes escheated, or claimed by the state. Escheated accounts are known as dormant, abandoned, or unclaimed.)
Half of the FY 2019 funds were received in the latter part of FY 2019. As a result, these funds were disbursed in FY 2020.
As with the previous fiscal years, the funds were not enough for all the applications GHC received resulting in an on-going waiting list. GHC is still awaiting funds.
GHC continues its marketing efforts to disseminate information relative to all its authorized programs, including the First Time Homeowners Assistance Program (FTHAP).