An agreement has been reached between the government and the banks on a loss-sharing arrangement for bank loans made for the repair of leaky homes that turn sour.
Interest .co.nz understands the arrangement will see government cover between 15-25 per cent of bank losses on defaulted loans, although the extent of the cover - where it falls in that range - will depend on the individual circumstances of the loan.
Building and Construction Minister Maurice Williamson is due to make an announcement on the broader details government's leaky homes assistance package about 2pm today.
Although the package was passed into law earlier this month, details on any loss-sharing arrangement between government and the banks carried on in search of a common stance. Interest.co.nz understands a formula has been devised to calculate the extent to which government will cover banks' losses on loans defaulted on, given for the repair of leaky homes.
Under the scheme, government will pay 25 per cent of affected homeowners' repair or rebuild costs, while in some instances if a local authority signed off the building consent for a dwelling, that authority would also pay 25 per cent.
