The 2018 budget for the Nicaraguan Institute of Urban and Rural Housing includes $12 million to be granted in subsidies and loans for the purchase of low-income housing.
The funds will be allocated among low-income families for the purchase of homes categorized as social interest, in the form of mortgage loans through financial institutions and subsidies.
Through a trust belonging to the Nicaraguan Institute of Housing $31 million will be available to finance the purchase of social interest housing, with a fixed interest rate of 7.5%.
Like the construction sector, banks have started backing financing of social interest housing.In the first half of the year, loans granted for the purchase of this type of housing registered an increase of almost 17%, according to reports from the association of developers.
The construction sector proposes extending the conditions of social housing loans to a larger segment of the population, in order to promote the sale of houses with prices of between $30 thousand and $50 thousand.
The association of developers is proposing that the interest rate benefit of 2.5% and the exemption from the registration costs that are currently granted to those who purchase social housing worth up to $23 thousand, be extended to more expensive homes, worth up to $50 thousand.
The recently approved amendment to the Housing Act provides a subsidy of 2.5% in the interest rate for mortgage loans that are not greater than $32,000.
Responding to industry demands and seeking to motivate the new housing market, the recently approved reform also provides, as well as the subsidy, that any bank can apply the exemption of 15% from Value Added Tax (VAT) for mortgage loans with this same ceiling rate.
The National Housing Plan is paying off, and the Chamber of Developers and the government is working to make banks more flexible with credit for urban social interest projects.
Employers and the government are moving towards common positions regarding measures that could ease mortgage lending for low-income families (less than $521 per month) and the construction of affordable housing.