MEXICO CITY, July 15 (Reuters) - Mexico’s largest state mortgage lender Infonavit in August will raise the maximum amount it can lend to would-be home buyers by 76 percent, in a bid to shore up the battered housing sector, the government said on Tuesday.
Infonavit said it will raise its top loan amount to 850,000 pesos ($65,700) from 483,000 pesos ($37,300).
The state lender next month will also start granting loans denominated in pesos at a fixed rate and for up to 30 years.
Currently, loans in pesos are reserved for borrowers who earn more than 5.5 times the minimum wage, while loans for lower earners are denominated in multiples of the minimum wage.
“We are not just giving out more loans. This is about guaranteeing access to decent housing for all Mexican families,” Infonavit Chief Executive Officer Alejandro Murat said at an event in Mexico City.
The agency, which is funded through employer contributions, loan recovery and debt issuance, this year expects to grant 560,000 loans for new and used homes, as well as remodeling.
But loans granted by Infonavit for new homes in the January to May period are down 22 percent due to a weak economy and Mexicans’ preference for acquiring used properties or revamping their current homes, hammering the country’s homebuilders.
Mexican homebuilders have struggled with heavy debt and slumping home sales since the government shifted to a policy that prioritizes apartment purchases, hurting sales of cheap houses built far from cities by Geo, Homex, and Urbi.
Geo and Homex have both filed for bankruptcy.
$1 = 12.9472 Mexican Pesos Writing by Alexandra Alper; Editing by Lisa Shumaker