OPIC Board Approves $30 Million for Mortgage Project in Ghana
April 15, 2010
WASHINGTON, D.C. – The Board of Directors of the Overseas Private Investment Corporation (OPIC) approved $30 million in financing to support mortgage lending to low- and middle-income borrowers in Ghana, helping the country address a demand for affordable housing that significantly exceeds supply.
A subsidiary of Ghana Homes Loans (GHL), one of only two mortgage lenders in Ghana, will use the OPIC loan to expand its mortgage lending to approximately 400 middle-income Ghanaian families. A small portion of its lending will be directed to home improvements and refinancings
The project is OPIC’s second with GHL; in 2006, OPIC committed a $30 million loan to the company. As of September 2009, GHL had originated 545 mortgages worth a total of more than $36 million.
The U.S. sponsor of the project is Broad Cove Housing Investment Partners, LLC, a Boston-based small business which serves as an intermediary between international capital sources and high-potential, housing-related initiatives in emerging markets.
Demand for affordable housing significantly exceeds supply in Ghana, where the price of housing and a widespread lack of access to financing remain the most significant barriers to home ownership. Due to a lack of both capital and a liquid real estate market, many developers in Ghana would rather build a few high income properties than a large number of low or middle-income properties.
Addressing the problem, GHL has played a pioneering role in the housing finance industry in Ghana. Working with the International Finance Corporation, GHL participates in workshops and high-level meetings to encourage the passage of mortgage-friendly legislation on evictions and foreclosures. GHL has also trained its staff in the state-of-the-art mortgage origination and servicing software.
“Development of a mortgage finance industry in Ghana will be an important step in the country’s economic growth, and this project directly contributes to that goal,” said OPIC Acting President Dr. Lawrence Spinelli. “OPIC is pleased to work again with Ghana Home Loans on a project with many developmental benefits for Ghana.”