Haiti

Haiti HOME

Home Ownership & Mortgage Expansion
July 2015 - January 2021
 

Project Overview

The Haiti Home Ownership and Mortgage Expansion (HOME) Program, funded by the United States Agency for International Development (USAID), addresses gaps in both the demand and supply sides of the housing value chain in Haiti to create affordable housing. Through developing an incentive structure, including varied deployment of pay-for performance (P4P) principles, the program mobilizes the Haitian financial sector and property developers to lead in expanding and improving the market for housing finance products and infrastructure. 

The program works with implementing partners, Habitat for Humanity International (HFHI) and the Affordable Housing Institute (AHI), seeking to unlock liquidity in the Haitian banking sector to mitigate risk for participating financial institutions (PFIs) and developers, and enable low, moderate and middle-income Haitian households to gain access to affordable housing. The HOME Program challenges and assists PFIs, developers, and low, moderate and middle-income households to identify, articulate and implement these solutions themselves—acting as a facilitator in the process—but does not create artificial interference in the housing market.    

To ensure that housing developments meet high environmental standards, HOME collaborated with the International Finance Corporation (IFC) to enable partner developers to become EDGE certified. Excellence in Design for Greater Efficiencies (EDGE) is a green building certification system for new residential and commercial buildings, especially adapted to emerging markets. Under this partnership, HOME offers technical assistance on EDGE standards and provides environmental sustainability incentives to developers to cover the incremental costs of achieving the green building benchmark. 

This program is timely, given that the 2010 earthquake destroyed 180,000 homes adding to the existing housing shortage, creating a backlog of nearly 300,000 units. USAID in close collaboration with the Government of Haiti (GOH) identified a number of fundamental constraints in Haiti’s housing delivery system.  Against a backdrop of extreme poverty, the Haiti HOME Program helps address some of these constraints through the innovative uses of capital that have the additional benefit of addressing gaps, disruptions, weaknesses, or inefficiencies in Haiti’s delivery of either affordable homes or affordable housing financing. 

Quarterly Update (March 2020)

In Q2 FY 2020 (January 1 to March 31, 2020), challenges increased for the investment environment in Haiti. As the Haitian private sector was attempting to navigate eight weeks of unrest last quarter, a highly unstable political and economic environment, as well as currency devaluation, the COVID-19 pandemic further complicated matters. As soon as the announcement of the first case was made in Haiti by President Jovenel Moise on March 19, 2020, HOME observed its partners become quickly impacted. For example, one developer in the process of completing a construction milestone was repeatedly interrupted due to the closure of all major hardware supply stores in the country. This same developer who has completed 10 units, was getting ready to launch a marketing campaign in early April, which was hindered. Another developer the process of setting up mortgage transactions was set back, as financial institutions become nonresponsive in light of the ongoing pandemic. HOME is working closely with its partners in order assess how COVID-19 is affecting their ability to continue producing planned results, with non-essential commercial activities coming to a standstill.

As of the end of Q2 FY20, HOME’s commitments under the HOME Facility catalytic grant fund are currently committed at 91%. Out of 21 activities funded, seven are on the demand side and fourteen are on the supply side of the housing value chain. To date, HOME has residential units under contract spread across six affordable housing development projects. While no new activities were launched in this quarter, one housing site managed to complete key milestones and one developer was close to making an award claim in late March. As of March 2020, private capital committed by developers and financial institutions partners reached USD 37.4 million. Thus far, HOME has leveraged USD 19.8 million of these private funds in activities such as owner-led housing microfinance products, developer-led housing infrastructure investments, and mortgage products in return for USD 2.9 million in incentives.

In this quarter, as a way to bring further innovation in the sales of housing units, HOME facilitated the development of a new home buying program between KOTELAM and Chabuma S.A. The purpose of this new program is to streamline the sales process and generate greater levels of synergy between the supply and demand sides of the market. This new program consists of credit unions pre-purchasing housing units for their members, prior to the construction of the units by a developer. Such cooperative home buying schemes are highly innovative and reduce barriers to entry for low to middle-income households to purchase residential units. A total of five units are scheduled to be purchased by KOTELAM within Chabuma’s Santo 3 Desjardins project. This model is expected to be replicated across other housing projects.

Read more: An Introduction to Pay-for-Results in Development

Featured Articles

April 2019
Breaking New Grounds:
EDGE Certified Affordable Housing in Haiti
Read More
 

Credit Unions in the Country

  • 85 total credit unions
  • 826,072 members
  • USD  109,320,615 in assets
 

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