The Bermuda Housing Corporation will extend its rent-geared-to-income initiative and will provide interest free loans for first time buyers.

The commitment by the Ministry of Labour, Home Affairs and Housing was revealed in yesterday's Budget, when it was also revealed that there will be a seven percent increase in the Rental Assistance Grant to BHC from $6 million to $7.25 million.

Overall the Ministry has been given a budget of $143.5 million — an increase of $6.2 million.

Yesterday Zane DeSilva, Acting Minister of Labour, Home Affairs and Housing said: "The availability of affordable housing remains in the forefront of Ministry initiatives for the coming year.

"BHC will provide interest free loans to qualified individuals who are first time home buyers, to work with private sector property owners to provide units to BHC clients, and to expand the rent geared to income initiative.

"Given the impact of the economic downturn, the interest-free loans initiative will provide first-time home owners with an opportunity to purchase a home that otherwise would not be possible."

The Minister also said the Loughlands low income housing development would complete its fourth stage this spring helping to house a total of 96 Bermudian families. Currently 66 live there.

The Perimeter Lane rent geared to income initiative will also be completed and will provide homes for 38 families while the Harbour View Village is expected to be ready by the end of 2010.

Harbour View Village was promised to lottery winners in June 2005. Since then it has hit many hurdles including bankruptcy of the company which initiated the project and land disputes.

Yesterday the Minister added the Government was committed to the project and would expect it to be completed by 2010.

Last night Bermuda Democratic Alliance MP Donte Hunt said what concerned him about the Ministry's budget was the omission of new capital projects and emergency housing.

He said: "We need to be making our emergency housing a better place. I am quite surprised to see it wasn't there. In the current crisis we are in it's important for everyone to think we have more option out there for housing.

"Government needs to the provide some stimulus by creating capital projects. This (emergency housing) is one capital project to provide the housing and to provide for the huge need in Bermuda.

"If they want to shore up our economy and provide stimulus I would have to see new projects.

"These are things we need and which will provide jobs to the community and provide housing. This is indicative of a government mismanaging their last three terms and now they are at a stage where they cannot do much.

"Government has been less than adequate in providing affordable housing directly from Government."