The total amount of accumulated arrears, i.e. payments two months or more overdue, in respect of Housing Finance Agency loans at the end of December 1989 was estimated at £3.8 million—equivalent to 1.5 per cent approximately of the value of mortgages outstanding.
As these loans are repayable on an income-related basis, borrowers with loans approved before 1 July 1986, which account for the vast majority of such loans, who experience a drop in income are entitled to a full proportional reduction in their monthly repayments. However, in the case of loans approved after that date, the repayment cannot be reduced below 90 per cent of the previous year's repayments. It is open to any borrower in financial difficulties to apply for assistance towards the interest element of his or her mortgage payments under supplementary welfare allowances scheme, which is administered by the health boards.
It is the policy of the Housing Finance Agency to treat as sympathetically as possible those borrowers who unavoidably get into arrears, having regard to the agency's statutory obligation to break even.