38% of total bank lending corresponds to housing construction, while 35% is used for buying new homes.
Data from the housing loan portfolio in the domestic financial system shows that the proportion of loans requested by Costa Ricans to build their homes is higher than loans used to buy existing homes.
Elfinancierocr.com explains that"...The Costa Rican financial system has a balance of credits which were used for housing amounting to ¢4.6 billion.This amount represents 25% of all outstanding loans in the country (¢ 18 billion). For housing construction, the balance is ¢1.75 billion and, for the purchase of new homes, it is ¢1.62 billion.Both lines represent 73% of the total."
The Social Housing Fund wants to revive the housing market by reducing interest rates for the purchase of new or used homes by 5.5%.
In the case of loans to public institutions for the purchase of new houses, the rates will drop from 6.05% to 5.50%, while for private loans for new houses, the rate will be reduced from 8.5% to 8 % for amounts ranging between $31,000 and $125,000.
The Inter-American Development Bank has loaned $35 million to a cooperative to be used to grant housing loans under $109,000.
Of the total loan, $25 million will be administered by the National Cooperative of Educators (Coopenae) and the remaining $10 million by other entities.
The manager Coopenae Housing, José Manuel Salazar told Nacion.com that "...
In Nicaragua two microfinancers will provide short-term loans for progressive housing construction.
The Microfinance companies which up until now have focused on short-term loans to individuals and microenterprises outside of the banking system, will begin to break into the housing market, offering loans for home improvement and construction.
Elnuevodiario.com.ni reports that "...The Nicaraguan Association of Microfinance Institutions, Asomif; the Central American and Caribbean Network for Microfinance, Redcamif, and the organization ADA from Luxembourg selected on Friday two microfinancers in the country that will provide housing loans. "
In Panama, preferential interest has been extended to projects whose value is not greater than $80 000, where previously they could not exceed $65,000.
From a press release from the National Government of Panama:
With the aim of encouraging housing construction and maintaining the momentum of investment in infrastructure needed to alleviate the demand for housing and allowing more Panamanians to have access to these projects, President Ricardo Martinelli has passed Act 63 amending preferential interest rate loans.
Up to June banks had only provided financing for housing projects worth $14.36 million, while in the same period last year it had already reached $32 million.
"The new housing projects can be counted on the fingers of one hand," said the executive director of the Salvadoran Chamber of Construction Industry (Casalco), Ismael Nolasco, adding that the drop is a reflection of an industry that is not investing in large housing projects because it has seen any demand.
The Panamanian Congress is debating a bill which would raise the ceiling for home purchase loans with preferential interest rates of 4% to $80,000 .
From a press release issued by the Ministry of Economy and Finance in Panama:
The law, which amends the second tranche of preferential interest rates for home loans home valued at an amount of between $40,000 to $80,000, was approved in its first debate in the Committee of Economy and Finance of the National Assembly.
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.
Rules for providing housing to the middle class are being approved without adequate studies on their feasibility and functionality within the financial system.
Within the current drive in the search for housing solutions for the middle class sector, three projects have entered the legislative process.
Of the three projects, two have already been made law and one is awaiting approval by Congress in the second debate.
The Costa Rican Congress is looking at a law for funding homes valued at less than $150 thousand, for families whose incomes are not above $4000.
This plan "... seeks to provide a housing solution through loans to be granted by public banking entities, mutuals and private banks to enable people to get credit and buy a plot of land, a house or to build on their own lot," noted an article in Elfinancierocr.com.
Costa Rica's Congress has approved a bill that seeks to exempt deposits used to finance long term housing loans from requiring a minimum legal reserved amount.
From a press release by the Legislative Assembly of Costa Rica:
The plenary legislature passed on its second and final debate with the support of 23 MPs bill number 17809, addition to Law No. 7558, the Law on the Central Bank of Costa Rica, to exempt from requiring minimum reserve amounts, deposits and revenues used to finance long term housing loans .
An amendment has been made to Act 3 of March 1985, which establishes a preferential interest rate system on mortgages, increasing the limit of the first band from $35,000 to $40,000.
From a press release issued by the Ministry of Economy and Finance (MEF) of Panama:
The Bill No. 567, amending an article of Act 3 of 1985, which establishes a preferential interest in certain mortgage loans and modifies the first band for preferential interest loans, from $35,000 to $ 40,000, was approved on its third reading by the plenary of the National Assembly, said the Minister of Economy and Finance, Frank De Lima.
The Social Housing Fund (Fondo Social para la Vivienda) in El Salvador will keep the interest rate for social housing construction at 6%.
Francisco Guevara, president of the Social Housing Fund (FSV by its initials in Spanish), explained that this was because the housing supply was less than expected due to red tape delays.
"Some housing projects suffered from lack of technical documents which were in the process of being drawn up, or awaiting inscription in the National Registry. This halted three projects", said Guevara.
The Social Housing Fund plans to provide $46 million in for housing construction, and another $44 million for purchasing a used house.
According to an article in Elmundo.com.sv this year, the Social Housing Fund (FSV) "expects to increase lending both for new and used housing. In addition, it will reinforce credit for Salvadorans abroad and other lines of financing they offer. "