Irene is currently a category three storm, with winds of 185km/h (115mph), and is expected to strengthen as it heads toward the US east coast.
Officials said 90% of homes were destroyed in some areas of the remote Acklins and Crooked Islands.
The huge storm has brought flooding and power cuts across the Caribbean.
On the island of Mayaguana, where roughly 250 people live, about 40 homes were damaged, AP reported.
There are also reports of extensive damage on Cat Island, Long Island and Eleuthera, but authorities there have not been able to complete full assessments as conditions were still dangerous.
Irene was swirling about 530 miles (855km) south-west of Cape Hatteras, North Carolina, according to the US National Hurricane Center, based in Miami.
By 20:00 local time (00:00 GMT) the eye of the storm was gradually moving away from Abaco Island, in the north-west Bahamas, forecasters said.
Irene's projected path is expected to take it well offshore of the east coast of central and northern Florida later on Thursday and early Friday, according to the NHC.
The hurricane is forecast to approach the coast of North Carolina, where US President Barack Obama has declared a state of emergency, on Saturday.
'Stay safe'Lovely Bay on Acklins Island in the southern Bahamas was badly hit, said the National Emergency Management Agency (Nema).
On its website, The Tribune newspaper said homes had "been completely washed away or have lost entire roofs, power lines have been downed and trees are blocking roads".
Crooked Island saw wind gusts of more than 160km/h, with a school's roof "completely blown off and its windows blow out", Nema reported.
On Mayaguana Island, Irene knocked out power, and damaged at least 40 houses.
Officials are urging people throughout the Bahamas to stay indoors in a safe and secure structure.
Nassau, on the most populated island of New Providence, was expected to see some flooding.
So far, there have been no reports of casualties.
"As a general statement, we do a fair job of managing hurricanes so personal injuries, we hope, will not be substantial," Bahamas Prime Minister Hubert Ingraham told the Associated Press (AP) news agency.