Costa Rica: Housing Laws Without Financial Support

Rules for providing housing to the middle class are being approved without adequate studies on their feasibility and functionality within the financial system.

Tuesday, July 16, 2013

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. "One of the laws establishes a Fund for financing middle class housing (through the issuance of securities) and an endorsement for down payments. Also, another removes the minimum legal reserve (of 15% to be deposited with the central bank) on bonds sold by banks to raise money and provide loans for housing ", reported

These are joined by the Housing Access for young people project for which a Fund was created for financing housing for young people, which was approved on first its reading and is awaiting the second.

"This type of legislation without the appropriate technical support ends up being dangerous instruments not only because of the precedent they set, but also because, if they are poorly designed they can end up causing damage to the financial system," said Jose Luis Arce, president of the National Council for Financial System Supervision (Conassif).

"The instruments are being analyzed in order to determine their benefits and risks, and accordingly, to propose possible credit solutions," said Rodrigo Ramirez, director of Credit Management at Banco de Costa Rica.

For his part, the deputy manager of Credit at Banco Nacional, Bernardo Alfaro said that before issuing securities it must be determined whether there is interest from investors.

More on this topic

Nicaragua: Mortgage Fund for Homes

March 2018

The union of builders is proposing creating an insured mortgage fund, to provide financing for those who can not meet the requirements demanded by banks.

The Chamber of Developers of Nicaragua (Cadur) announced that the fund could start with an initial seed capital of $5 million. The objective of the fund is to finance the purchase of new homes, and to facilitate access to financing for workers in the informal sector or clients that receive remittances from abroad. 

Housing Loans Up 21% in Costa Rica

December 2014

Between October 2013 and September 2014 the average number of home loans given out per month was 2,659, 21% more than in the same period in 2012/2013.

According to the Superintendent of Financial Institutions, the average amount of loans per customer amounts to $46,694, for buying lots or homes.

The Bank of Costa Rica and the New Housing Act

July 2013

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.

Loans for Middle Class Housing

July 2013

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

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