Virgin Bay Mortgage has structured the territory's first-ever USVI-only mortgage-backed security — a move that could bring new liquidity, lower rates over time, and more down payment assistance to Virgin Islanders.
The St. Thomas Source reported on July 22, 2026 that Virgin Bay Mortgage — the territory's largest local independent lender and servicer — has structured the first-ever USVI-only mortgage-backed security, a step that could eventually help push down local lending rates and fund more buyer assistance programs.
If the term "mortgage-backed securities" makes you shudder, a lot has changed since 2007. The security offered by Virgin Bay is fully backed by the U.S. government, company founder Steven Pruitt told the Source. Red Hook-based Virgin Bay bundles and sells local mortgages to investors who take a portion of the loans' interest as profit — much like any other bond offering. Local borrowers see no change to their loans, but the capital raised can flow back into USVI real estate lending.
Why liquidity matters here
Bundled into a $10 million or even $100 million security, USVI mortgage pools can attract institutional investors to a market that has long lacked diversity in local real estate lending.
As you introduce new capital into any new space, if it works well, it tends to invite or attract other capital. Liquidity is the key to housing, to all different housing markets.
Unlike the 2007–2008 panic, modern USVI mortgages are on firm footing — primarily backed by Fannie Mae, Freddie Mac, and Ginnie Mae programs — and Virgin Islanders have a strong record of making payments even through hurricanes and the COVID-19 pandemic, using federal forbearance grace periods and then returning to on-time payments.
What Virgin Bay plans to do with it
- Developing proprietary down payment programs: building on its participation in the territory's VI Slice Program, Virgin Bay is developing in-house down payment assistance aimed at putting more Virgin Islanders into homes of their own.
- Commercial real estate expansion: through strategic bank partnerships, Virgin Bay introduced new liquidity into the commercial real estate sector — beyond conventional and government conforming loan programs.
- Meeting the community's demand for solar: a partnership with ProSolar sources secondary market relationships to purchase solar paper, enabling a continuous flow of affordable capital for home solar installations.
- Forward infrastructure commitments: Virgin Bay has aligned with institutional investors to secure forward capital commitments for the Jackson Development Project, creating a clear pathway for local residents to move from renting to owning.
Your data stays local
There is another differentiator from large mainland lenders: Virgin Bay has promised not to sell Virgin Islanders' financial data to other banks or lenders, and will continue to service each of its loans. That means purchasers of the securities can't use proprietary loan information to gain a foothold in the local market.
The buyer is a huge servicer that is also now in the real estate business. And the reason they're buying those loans is to tap into our real estate community. They want to take a piece of our realtor brokerage's commissions in the future.
Read the full story at the St. Thomas Source: https://stthomassource.com/content/2026/07/22/mortgage-backed-securities-coming-to-usvi/