New regulation changes distribution of mortgage loans in Venezuela

The Venezuelan Ministry of Housing has amended the terms of mortgage loans granted by banks with their own capital. Under the new regulations, the minimum family income required to be granted a mortgage loan was adjusted; also, selling prices soared, and funding for private projects was reduced. The Official Gazette published on February 11 sets forth the new terms of the mortgage loan portfolio, which shall remain at 20% of the total loan portfolio; however, its distribution changed: now banking institutions have to grant more credits for house purchases. Out of the total resources of the mortgage loan portfolio, 60% shall be allocated for construction of dwellings, 38% for house purchases, and 2% for home self-building and improvements. More…