In Chile there is a social-housing deficit that needs to be addressed hopefully with solutions that increase habitability and environmental benefits. This paper addresses the benefits of using Earthbag Building system a possibility for new social housing in Chile. A complete literature review presents details on its widespread use around the world, the motivations and obstacles for Earthbag building system use in Chile. In particular, the results of a case study where the evaluation of sustainable performance of a social house built with Earthbags is compared with conventional construction practices based upon energy, costs and CO2 emissions. It is concluded that a social Earthbag building performs equally to a Reinforced Brick Masonry House in terms of CO2 emissions but can save up to 20% energy during its Life Cycle. Most importantly, it has been shown can also bring 49.5% savings in initial investment costs and savings of 38.3% over the Life Cycle Cost as compared to the conventional brick reinforced masonry social house. In Chile, there is a need for a normative framework that allows for guidance on the safe use of the technique in order to be able to fully take advantage of its benefits.