HCF has lost its relevance – Kellman
At a time when commercial banks have cash in excess, the Housing Credit Fund (HCF) no longer plays a critical role in providing housing for low-income Barbadians, Minister Housing, Lands and Rural Development Denis Kellman said today. Kellman told Barbados TODAY the project was successful at a time when there was a demand for it, but there was no real need for it at present since the commercial banking sector was currently enjoy high liquidity.
While delivering a lecture at the Urban Development Commission’s Bridge Street office on Tuesday night, National Housing Corporation planner Raymond Lorde had suggested that Government ought to change the focus of the Fund to make profits available for investment in housing for Barbadians.
He acknowledged that the HCF was established in 1983 and the money injected into the Fund had been used to pay off mortgages that low-income Barbadians accessed from commercial banks.
It was also acknowledged that the homeowners repaid the HCF at a small interest over a longer period.
However, Kellman told Barbados TODAY this need no longer existed, therefore, Government should revisit its purpose. “The Housing Credit Fund was set up to provide investment for housing solutions for lower-income Barbadians but because the commercial banking system is so liquid today there was no need for the private sector to tap into it. That explains why Government may have to relook it because if it is not doing what it was set up to do if you can have funds lying idly. We may have to find more creative ways to use the funds to provide housing solutions,” the minister said.
“You are operating now in a system where the interest rate on a mortgage is much lower all around. The Housing Credit Fund played a critical role when the interest rates were high, but interest rates are no longer over 10 per cent.”
While questioning the statistics which show that as many as 30,000 Barbadians were seeking housing, the Member of Parliament for St Lucy contended that Barbadians were unaware how far Barbados had come in in this regard.
While ignoring the fact that the commercial banking system was awash with funds, Lorde had bemoaned the fact that there was “an absence of a functional housing finance model for affordable housing”.
“We have all the skills and knowledge in this country to fix this housing problem and take it forward… We have to find the money,” Lorde said during Tuesday’s lecture.