Regulations: Housing Loans Become effective with 100% financing

Regulations: Housing Loans Become effective with 100% financing

Starting April 1st all financial intermediaries must provide social housing loans with no down payment.

The new regulations enforced by the Government through Supreme Decree No. 2137 dated October 9, 2014, provides that each of the financial intermediaries shall allocate 6% percent of its 2014 net profits to the creation of a Fund that guarantees Housing Loans. For other financial institutions the percentage allocated for this Fund should ensure the amount of funding sufficient for applicants.

In this way, customers can go to financial institutions to access affordable housing credit without the 20% deposit that was required before. Persons wishing to access this Fund shall comply with the requirements of Article 13 of the Ministerial Resolution No. 052 of the Ministry of Economy, which are basically that the applicant must have the capacity to pay the loan (credit analysis verified by the entity creditor) and comply with the characteristics of credit for social housing.

The enforcement of current legislation has led to an increase in demand for loans by nearly 18% between January and February 2015 in the banking sector generating portfolios of up to $US. 915 million for social housing.

Because of this the construction sector projects the existence of houses and apartments at a lower cost to the current to allow greater access to homeownership through social funds available.