February 2, 2017 / 10:32 PM / 3 years ago

UPDATE 1-Brazil to expand home financing to more affluent -industry group

(Adds quote, details, background)

By Gabriela Mello and Ana Mano

SAO PAULO, Feb 2 (Reuters) - Brazil’s government is expected to dedicate 500 million reais ($160 million) of a national workers’ severance fund to finance purchases of more expensive homes, a move designed to help homebuilders lower inventory, the head of an industry group said on Thursday.

Under the plan, the government will raise the price threshold of homes eligible for FGTS financing by nearly 60 percent to as much as 1.5 million reais, José Carlos Martins, president of construction industry group CBIC, said.

The government also intends to expand a subsidized mortgage program to more affluent Brazilian families earning up to 9,000 reais a month, who are among the top 5 percent of earners. The measures may be announced as early as Monday, when the FGTS board of directors is scheduled to meet, he said.

Government officials responsible for managing the worker-funded FGTS plan did not immediately respond to requests for comment.

If confirmed, the measures would underscore a shift in housing policy from focusing on low-income housing under leftist former President Dilma Rousseff to broader support for a construction industry struggling with a long-running recession.

Homebuilders have struggled with a fall in demand because of high unemployment and borrowing costs, spurring a wave of canceled contracts that has hurt high-end homebuilders.

“The flurry of cancellations is compromising the viability of the projects, as banks condition financing on homebuilders projections’ of units sold,” Martins said.

The government has also considered defining an amount that companies would be allowed to keep in the event of a canceled home purchase, Martins said, but talks with consumer advocacy groups have not reached a consensus on the proposed rules.

Reuters reported that one of the proposals under discussion would let homebuilders retain 9 percent to 15 percent of the value of units if buyers cancel a purchase.

$1 = 3.12 reais Reporting by Ana Mano and Gabriela Mello; Editing by Peter Cooney

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below