In 2007, OPIC agreed to provide a $70 million loan to Inter-Mac International, Inc. to support low-income housing development throughout Central America in a deal that will also provide long term lease-purchase financing to make the homes affordable to individuals and families earning minimum wage. Just recently one of those projects in Choloma, Honduras won a Gold Nugget award from the Pacific Coast Builders Conference. The 2,400-unit housing community is providing homes and a sense of community in Choloma, the sixth largest and fastest-growing city in Honduras, where not only is there a severe housing shortage but there is limited financing to support local development of a housing project.
To date, about 5,000 residents are living in safe and affordable housing and are on the path to home ownership. The new basic housing units are equipped with electricity, running water and sanitary facilities in gated communities. An elementary school has been opened with more than 500 students from the community attending. The community also includes a central park with a playground, soccer fields, and basketball courts.
The financing model developed by OPIC and Inter-Mac is a 27-year deal that would allow families with incomes of one- to three times the minimum wage in Honduras to buy a basic, 380-square-foot home. Under this deal structure, families would make a down payment of about $330 and start with a low monthly payment that will increase over time, presumably as their income grows with inflation, over a period of 25 years. Homebuyers can purchase a $13,000 home for approximately $100 per month which is almost the same monthly amount they would otherwise pay to rent an informal structure lacking basic amenities like plumbing. At any time, the tenants/buyers can exercise their purchase option for $1 plus repayment of the outstanding balance and transaction costs.
As part of the loan commitment from OPIC, a second phase of about 1,800 units is planned in Choloma, and potentially a third project in the Tegucigalpa area.
To learn more about OPIC’s work with Inter-Mac in Honduras, click here.