Incentives for Housing Construction Proposed

Legislation in El Salvador proposes preferential interest rates for the purchase of new housing with costs between $15,000 and $60,000.

Thursday, June 11, 2009

The Salvadorian Chamber for the Construction Industry (Casalco) presented to the Legislative Assembly a government bill that would encourage low-income families to purchase new housing in the range of $15,000 to $60,000.

Casalco based the project on the experience in Panama regarding the application of subsidies for the purchase of housing. Miriam Figueroa, executive director of the Panamanian Chamber for Construction (CAPAC), explained to Laprensagráfica.com about the applied model in the country, which is very similar to El Salvador: "The bank makes the loan and the buyer does not pay all the interest for that loan. The bank receives from the state a fiscal credit for that total, for which they would have to apply."

More on this topic

Panama: $180 million Traded at Expovivienda

April 2016

During the event 2,575 mortgages were sold, among which social and middle class housing stood out the most, with prices ranging between $40,000 and $80,000.

The figures provided by the Panamanian Chamber of Construction (Capac) again reflect the growing need for housing that exists in the country, mainly in middle class and lower class segment.

El Salvador: Preferential Rates for Mortgage Credits

June 2014

A bill on preferential interest rates suggested by the industry would reduce the cost of a home loan by up to 50% and boost construction in the country.

In order for the construction sector to recover from a 2013 that ended with a negative number it is necessary to reduce interest rates on mortgage loans so that more people are able to buy a home, therefore the business sector is recommending a proposal for a law on preferential interest, which was proposed more than six years ago.

More Credit Requested in El Salvador

March 2012

Employers have suggested that the Social Housing Department raise the ceiling for lending to $125,000, in order to create opportunities for lower-income segments.

The Salvadoran Chamber of the Construction Industry (Casalco) has proposed that the Social Housing Fund (FSV) increases to $125,000 its lending ceiling, seeing as it is now being analyzed, reported Elmundo.com.sv.

Boost to Middle Class Housing in Panama

January 2012

President Martinelli announced that the maximum value for a property to be considered for the preferential interest rate will be increased to $120,000.

The measure must be passed in the National Assembly by amending the act, which is expected to happened very quickly.

A current limit of $80,000 has been established as the maximum value of homes that can be financed under the law, which allegedly has led to low-quality housing solutions being built to keep costs within that range.

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