How to Finance a Construction Project in the Bahamas

Financing a construction project in the Bahamas differs from a standard home purchase mortgage. CONSTRUCTION LOANS Most Bahamian banks offer construction loans that release funds in stages as work progresses (called draw schedules). You will typically need: - Clear, unencumbered title to the land as collateral - Approved building plans and permits - A fixed-price contract with a licensed contractor - Proof of income sufficient to service the loan BAHAMAS MORTGAGE CORPORATION (BMC) The BMC provides government-backed mortgages for eligible Bahamian citizens. Maximum loan amounts and terms vary. BMC rates are typically lower than commercial banks. COMMERCIAL BANKS RBC, Scotiabank, Commonwealth Bank, and Fidelity Bank all offer construction financing. Expect: - 5-10% down payment minimum - Loan terms up to 30 years - Interest rates at prime + 1-3% - Full property inspection before each draw COST ESTIMATES (Nassau, 2024) - Basic construction: $120-$180 per square foot - Quality finish: $200-$300 per square foot - Family Island premium: add 20-35% for materials transport and logistics NIB HOUSING LOANS The National Insurance Board offers housing loans to contributing members. Check eligibility and terms directly with NIB. VENDOR FINANCING Common in the Family Islands where bank financing may be harder to arrange. Get all terms in writing and have a Bahamian attorney review any vendor financing agreement.