|
Nicaragua
Set
to
Launch
Rent-to-Own
Housing
Program
The
Inter-American
Development
Bank
(IDB)
approved
a
$10
million
loan
to
Banco
de
Finanzas
S.A.
(BDF),
a
leading
commercial
bank
in
Nicaragua,
to
finance
a
pilot
housing
project
that
will
pave
the
way
for
low-income
families
working
in
the
informal
sector
to
get
access
to
mortgage
financing.
The
program
is
expected
to
extend
mortgage
loans
to
an
estimated
500
low-income
Nicaraguan
families.
The
project,
the
first
of
its
kind
financed
by
the
IDB
in
the
region,
seeks
to
address
one
of
the
biggest
obstacles
facing
millions
of
low-income
Latin
American
families
that
today
struggle
to
improve
their
housing
conditions:
lack
of
access
to
financing
because
they
can’t
document
their
income.
Clients
in
the
program
will
rent
the
selected
property
for
a
24-month
period
in
which
a
portion
of
the
monthly
rental
fee
will
be
kept
in a
savings
account
that
will
later
constitute
the
down
payment
on
the
home.
The
completion
of
timely
monthly
rental
payments
during
the
24-month
period
will
create
a
solid
client
credit
information
and
payment
track
record,
allowing
BDF
to
better
access
risks
and
make
a
decision
on
the
mortgage
loan.
The
housing
sector
in
Nicaragua,
as
well
as
in
the
rest
of
Latin
America
and
the
Caribbean,
is
dominated
by
informality.
Informal
housing
units
are
self-constructed
and
progressively
built,
most
without
proper
land
titles
or
access
to
public
utilities.
It
is
estimated
that
20,000
homes
are
built
annually
in
Nicaragua,
with
only
3,000
produced
and
financed
through
the
formal
market. |
