The new law eliminates the minimum legal reserve amount required by the Central Bank of Costa Rica (15%) for funds destined for home loans.
The application of the new law for middle class housing signed yesterday by the Costa Rican government is in the hands of financial institutions who provide loans for house purchases, which still must consider what returns they will obtain.
The market registers over $30 million in social housing purchases (up to $75.000).
Mario Rivera, president of Casalco, the Salvadoran Construction Chamber, explained that in the first months of 2011 they've experienced a paused recovery, the first since 2008.
However, he added, the situation is still fragile, and he acknowledged they must improve the lack of housing options for high income families.
Faced with restrictions on local credit availability, 10 projects are looking to foreign banks for finance.
Mario Rivera, president of the Salvadoran Construction Chamber (Casalco), commented that it is not yet possible to access credits from the guarantee fund set up through a trust by the Multisectorial Bank of Investments (BMI).
In Laprensagrafica.com he is reported as saying that, “We can’t even get credit with a guarantee.
As part of the anti-crisis plan, the government will take bids for construction of the first 2,000 homes.
The anti-crisis plan calls for the construction of 25,000 homes by means of the National Fund for Popular Homes (FONAVIPO, acronym in Spanish).
Mario Rivera, president of the Salvadorian Chamber of Construction, informed Laprensagrafica.com: “We are hoping that president (Mauricio) Funes approves the proposal for the construction of 13,000 homes funded by FONAVIPO, currently in the ant-crisis plan. He mentioned that there will be 2,000 homes built first. Also, we are hoping to move forward with the construction of 5,000 homes financed through private banks.”