The council is set to save £1 million in interest after a way was cleared for it to gain access to cheaper funding.
It has negotiated successfully to be placed on a list of local authorities which can borrow from the government at 0.2 per cent less than standard rates.
Previously, the SIC was unable to apply for inclusion to the so-called Public Works Loans Board (PWLB) certainty rate in time because of its long-running housing debt.
But with that now dealt with a way has been cleared for the SIC to be placed on a list of qualifying authorities.
That should mean the authority can spend more money on services, rather than on interest.
The council now aims to borrow funding for its contribution to the new Anderson High School, and will “externalise” the remaining housing debt at rates estimated to save £1 million over the lifetime of the loan.
SIC chief executive, Mark Boden, welcomed the development. “This is tremendous news, and we’re very grateful for the support we’ve had in resolving the issue, both from our MP [Alistair Carmichael] and the chief secretary [of the Treasury, Danny Alexander].
“The problem was caused by a technicality in the rules governing the scheme, which required a very strong case to be made for an exception, and the support of the relevant ministers.
“This means that a significant sum of money which would otherwise would have had to be spent on interest can now be spent to the benefit of the community.”