Raising the Roof with Home Improvement Loans

Raising the Roof with Home Improvement Loans

RAMALLAH, West Bank – The American people injected an additional $3 million Friday into a program that helps Palestinian families obtain loans to renovate or expand their homes.

The funds are part of an accelerated assistance program designed to underline the United States’ commitment to assisting Palestinians following their democratic presidential election. The new funds will serve approximately 550 low and moderate income families in the northern and central governorates of the West Bank. The project will create an estimated 65,000 person days of employment in the construction industry. The loans will be offered first to families in West Bank cities that were not targeted in the past.

The project is run by the Cooperative Housing Foundation (CHF) with funding from the United States Agency for International Development (USAID). Under the project, Palestinian families can take out one- to three-year loans to repair, expand or improve their homes. The loans range in size from $1500 to $15,000 and are offered at market rates to families that can demonstrate the ability to repay. The repayment conditions are strict and loan installments are limited to 33 percent of the beneficiary's income.

The loans enable families to add one or two rooms to existing homes, thereby alleviating the tremendous overcrowding most Palestinian families experience. USAID considers the program a major success because repayment rates are high. All funds repaid by program beneficiaries revert to the CHF capital fund.

Since the start of the Intifada in September 2000, the demand for home repair/improvement loans has increased sharply as thousands of Palestinian houses have been damaged by the conflict. In addition, the uncertain political situation has caused banks to become more conservative in their lending practices, making it difficult for ordinary Palestinians to secure home improvement loans. Under the project, CHF loans each beneficiary 70 percent of the amount needed while the banks loan the other 30 percent.

Since 1995, the USAID home improvement project has leveraged almost $30 million in bank loans to improve 6,454 homes, benefiting at least 33,000 Palestinians. Moreover, the programs have created 862,292 person days of employment for Palestinians in the construction industry. USAID administers the U.S. foreign assistance program and provides economic and humanitarian aid in 84 countries worldwide. Since 1993, Palestinians have received more than $1.5 billion in U.S. economic assistance via USAID projects – more than from any other donor country.