The government will bring legislation for a new social mortgage programme to Parliament before the end of the year, housing officials confirmed on Thursday — while bracing for heavy demand that could stretch the National Housing Corporation (NHC) as it prepares for a wave of applications.
A senior housing official told Barbados TODAY in an interview on Thursday that the initiative, which will offer mainly two‑ and three‑bedroom houses across the island, aims to expand access to home ownership for working Barbadians who cannot qualify for traditional mortgages.
“I believe that this legislation should be completed before year‑end,” the official said, while acknowledging that demand for the programme could place pressure on the housing agency.
“It will attract a significant amount of people. The burden of housing is a challenging one. Yes, providing and allocating houses is a challenging one. And this scheme, where it is now, will create some problems in being able to satisfy the population.”
Despite that challenge, the civil servant urged prospective applicants to begin engaging with the process.
“This will come from applications so people should start signing up.”
The official explained that the social mortgage programme represents an evolution of the NHC’s existing rent‑to‑own model, under which tenants build equity over seven years before seeking a mortgage from a financial institution.
“The social mortgage initiative is an upgrade on the rent‑to‑own project,” the official said.
“Rent‑to‑own is a project where persons pay towards their houses over seven years. And the money they pay, 60 per cent goes towards the credit and 40 per cent goes towards maintenance of the home that they’re living in.
“At the end of seven years, that money is theirs to take to a financial institution, whether it be credit union, bank, whatever. And then they can get a mortgage to purchase that home.”
Under the proposed social mortgage arrangement, however, the NHC itself would provide the mortgage, allowing residents to treat the property as an asset from the outset.
“The new social mortgage initiative, this is an upgrade, the house will be an asset for you when you sign off,” the official said. “It will be an asset that you can use against anything. This house will be yours that you can use to get educational loans and so on for your children and so on.”
The official said this shift would remove a key barrier faced by many working Barbadians who struggle to meet lending requirements at banks and credit unions.
Homeowners would make monthly payments similar to rent while gradually paying down the mortgage.
“While you still pay us the small number, $500, $600, $700, just like a normal rent. And that money will go to your mortgage.”
Officials indicated that the mortgages could run between 25 and 30 years.
The programme targets individuals earning between $1 000 and $2 500 per month who fall outside the eligibility range for traditional social housing but cannot secure financing from commercial lenders.
Minister of Housing Chris Gibbs first announced the initiative in the House of Assembly on Wednesday, revealing that the concept emerged from within the ministry.
“The term ‘social mortgage’ is actually a programme that was coined and invented by our team members,” Gibbs told Parliament.
He added that the Ministry of Housing maintains a database of more than 4 000 people seeking housing solutions, many of whom are employed but cannot meet the lending requirements of banks and credit unions.
Under the initiative, a percentage of units developed through joint ventures between the NHC and HOPE Inc will be allocated to the social mortgage scheme.
Officials said the houses will form part of new housing developments rather than properties already occupied under the government’s existing 20‑year housing regularisation programme.
“These are for new people,” the official said.
The homes will be located in housing developments across the island.
“It will be all over Barbados… from St Lucy to Christ Church,” the official declared.
While officials anticipate the scheme will generate heavy interest, they maintain it represents a necessary step to address the country’s housing gap.
“It will be able to help more people, the idea is to help as many people as possible,” the official said.
Social Mortgage: What to Know
– New NHC-run social mortgage for workers earning about $1 000 – $2 500 a month who can’t get bank loans.
– Long-term mortgages (around 25–30 years) with rent-like payments of roughly $500 – $700 a month.
– House counted as an asset from day one, usable as security for education and other loans.
– Officials expect heavy demand that could stretch the NHC but say it is vital to ease the housing gap.
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