The Tribune

By NATARIO McKENZIE

Tribune Business Reporter

nmckenzie@tribunemedia.net

THE Government plans to kickstart its housing programme by building more than 120 homes, although this is equivalent to just one-fifth of the 600 applications received to-date.

Kenred Dorsett, minister of the environment and housing, said construction on the first tranche of homes should begin within 30 days. Full build-out will took place over a 12-month period on New Providence, Grand Bahama and, possibly, Abaco and San Salvador.

Speaking at the recent signing of a Memorandum of Understanding (MOU) between the Ministry of Environment and Housing, the Bahamas Mortgage

Corporation (BMC), the Ministry of Finance and the National Insurance Board (NIB), Mr Dorsett explained: “The facility provides for $60 million to be provided for the housing programme.

“The initial tranche that is governed by the MOU is in the amount of $10 million to be drawn down over a period of 12 months in quarterly equal installments.

“The manner in which it is to be repaid is through securitisation of the BMC’s mortgage portfolio, and what happens is the funds are lent through NIB to BMC, and BMC provides it for the purpose of the housing programme,” the Minister added.

“There is a credit given back to BMC, as they turn these pass-through loans into mortgages. Then BMC will in turn satisfy [these loans] - through interest payments in the interim, and in the long-term through securitisartion of the BMC portfolio - which is what we are working on with the Ministry of Finance.”

Mr Dorsett said the MOU calls for a project manager to be engaged to oversee the entire construction build-out. “This, we hope, will ensure that the historic challenge of shoddy workmanship in the housing programme is arrested,” he added.

“In addition to that, we are engaging a financial advisor who will report to all parties to the MOU to ensure that, at all times, we understand exactly how the monies are being disbursed and being used which, we think, will provide us with value for our money.

“But, more importantly, it will give NIB the necessary checks and balances to ensure that their investment is being handled in the manner in which we have agreed.”

Mr Dorsett explained that private inspectors with adequate professional indemnity insurance will sign off on each of the five stages of the construction process.

“This will ensure that, at the end of the day, we would not only be able to pursue the contractors but those who have signed off on the various stage payments,” Mr Dorsett said.

While the BMC has a 35 per cent loan arrears rate, its chairman, Alex Storr, said it has an active management programme and has begun to see a turnaround.