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Residential Mortgage Loan

The primary purpose of GERS' residential mortgage program is to promote home ownership by GERS members as well as to provide financial assistance towards improvement of existing homes. Second residential properties are eligible for financing by GERS as well.  The maximum amount for loans to purchase, construct, make improvements or re-finance an existing mortgage is $250,000.00.  The maximum amount for a loan to purchase land is $50,000.00.

Eligibility

An applicant must be a contributing member of GERS for 5 years or more or a retiree who is receiving an annuity.

Types of Mortgages

Residential

The System shall finance any residential 1 – 4 family dwelling for an amount not to exceed 90% of the purchase price or the market value, whichever is less. The maximum amount is $250,000.00 and shall not extend beyond 30 years or age 70 of the borrower, whichever is applicable. Exceptions are provided for wooden structures which shall not extend beyond 15 years.

Construction

The applicant must submit a Deed evidencing his/her ownership of the land on which the home is to be constructed or improved. The amount to be financed shall not exceed 90% of the market value, as evidenced in the appraisal. Approved plans and permits along with a detailed estimate from a licensed contractor must be submitted with the application.  The maximum amount is $250,000.00 and shall not extend beyond 30 years or age 70 of the borrower, whichever is applicable. Exceptions are provided for wooden structures which shall not extend beyond 15 years.

Refinance

A member of GERS may refinance the existing loan balance on his/her primary residence for a lower interest rate or to reduce its present term. The maximum amount is $250,000.00 and shall not extend beyond 30 years or age 70 of the borrower, whichever is applicable. Exceptions are provided for wooden structures which shall not extend beyond 15 years.

Land

The maximum of the loan is $50,000.00 and shall not extend beyond 15 years or age 70 of the borrower, whichever is applicable.

Subordination of Mortgage

A member may request in writing that GERS subordinate its interest in the property to accommodate a first priority mortgage from another institution.  GERS underwriting guidelines will be applicable.

Interest Rates

Interest rates are reviewed regularly and are subject to change, based on the average margins of the local lending market in conjunction with the minimum rate determined by our actuarial studies. For current interest rates, click here.

Application

The Uniform Residential Loan Application (URLA) is used to record pertinent information about a member and the security to be taken. A completed URLA shall only be accepted if:

1. The applicant meets the eligibility requirements. 

2. Applicant has been pre-qualified by a mortgage officer. 

3. All supporting documents and required fees are submitted with the application. 

Loan Fees

All fees must be paid by check or money order payable to GERS. The application fee, the cost of the appraisal report and the credit report must accompany the application.  Additionally, an origination fee of 1.5% of the loan amount will be due after the loan has been approved. 

Documents

Approved applicants shall be required to execute a Promissory Note, A Truth in Lending, Assignment of Contributions and any other documents as determined by GERS. Additional documents  to be include at the member's expense, are,  but not limited to the following: as-built survey, title insurance, homeowners insurance and tax clearance letters.    

Credit Life Insurance

Each member is required to purchase credit life insurance which shall affect a payoff of the unpaid balance or a portion thereof not to exceed the original loan amount if the borrower dies. The payment of the premium shall be factored into the regular principal and interest payment throughout the term of the loan. 

Loan to Value (LTV)

The LTV is the ratio of the mortgage amount to the appraised value or sales price of real property, whichever is less. The maximum LTV ratio shall not exceed 90%.

Escrows

The member, upon signing of the mortgage documents, shall be obligated to make 1/26th payments through bi-weekly (or semi-monthly for retirees) payroll deductions for homeowner's insurance and real property taxes.

Insurance

The member shall be required to insure his/her residence against loss during construction with a builder's risk policy, and upon completion of the construction obtain a homeowner’s insurance policy that covers risk of fire, hurricane and earthquake. Such policies must list the Employees' Retirement System as the loss payee.   

All insurers and re-insurers must:

  1. Be licensed, or otherwise authorized by law, to conduct business in the U.S. Virgin Islands. The insurer must provide written notification to  the mortgagee at least 15 days before any reduction in coverage or cancellation of the policy.                                       
  2. Have a rating of B+ or better in Best's Insurance Reports

The property must be insured for at least 80 percent of the insurable value of the property.

If the member does not provide adequate insurance as prescribed above GERS shall have no option but to place the property under the GERS' forced placed insurance, at the borrower’s expense.  This insurance only covers the balance on the loan and all claims for loss will be payable to GERS to be applied towards reducing the outstanding loan debt.

Condominiums owners' associations must maintain blanket "all risk" coverage on the units for the following: · General and limited common elements within the condominium complex · Fixtures, machinery, equipment, and supplies maintained for the service of the condominium

Coverage must be for 80 percent of the insurable value of the common elements or property described above and provides for loss or damage settlement on a replacement cost basis.

Flood Insurance is required for all properties located in a flood zone, as determined by FEMA, and financed by GERS.

Late Fee

GERS shall, at its discretion, implement a late fee on all loan payments that are not paid by the due date.

Bankruptcy

No member who has filed bankruptcy or currently in bankruptcy shall be approved for a loan from GERS without prior written authorization from  the US Trustee or the US Bankruptcy Judge. If the bankruptcy has been discharged written evidence must be provided.

Debt-to-Income Ratio

The maximum debt-to-income ratio allowed for mortgage loans is 45%.

Approval

Loans are approved/disapproved by a Loan Committee and based on a full evaluation of the applicant's outstanding debts as listed on his/her credit report and other debts listed on the application. 

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