The Association of Multiple Banks of the Dominican Republic (ABA) valued the promotion of low-cost housing financing, which allows buyers to obtain resources with low interest rates, possible conditions through the implementation of Law 189-11 on Development of the Mortgage Market and the Trust, the Happy Housing program and the monetary stimuli provided by the Central Bank.
The entity highlighted that between 2020 and 2022, mortgage loans from multiple banks increased by RD$39,268 million, as a result of the placement of resources by multiple banks through monetary flexibility measures promoted by the Central Bank of the Dominican Republic. .
The association explained that the portfolio went from RD$149,382 million in December 2020 to RD$188,649 million in December 2022, showing a growth of 26.2%.
It specified that the indicated increase was channeled through 8,080 new loans, out of a total of 76,545 current credits, according to data from the Superintendency of Banks.
The union broke down that, of the total portfolio, RD$171,314 million (90.8%) were allocated to the purchase of the debtor’s home, RD$8,493 million (4.5%) to the acquisition of a second or summer home and RD$6,787 million (3.6% ) corresponded to the acquisition of low-cost housing from a trust. For remodeling and construction of said homes RD$2,055 million, equivalent to 1.1% of the mortgage portfolio.
The ABA indicated that commercial banking, with its financing, contributes to the acquisition and remodeling of clients’ homes, and to the reduction of the housing deficit, standing out as the main provider of these resources with a total of 64.4% of the system’s mortgage portfolio. financial.
Affordable Housing Limit
The Association of Banks considered that an element that favors the access of more people to acquire their own home is the increase in the price range limit for the classification of low-cost homes from RD$2.6 to 3.5 million up to RD$4,852,211.2 in which it is located currently, according to the recent adjustment made by the General Directorate of Internal Taxes (DGII).
Happy Housing Program
The ABA highlighted that, through the liberalization of the RD$21,424 million approved by the First Resolution of the Monetary Board dated January 12, 2023, aimed at low-cost housing, which includes those of the Happy Family Housing Program, of the Ministry of the Presidency, the contribution of multiple banks to this type of housing will be significantly increased.
“The homes belonging to said project have a series of conditions such as the initial amount bonus, ITBIS bonus and rate bonus, incentives that have an important effect on reducing the financing requirement and the financial cost for the purchasers of these homes. ”, the banking association said in a press document.
“For the first time in the financial history of the Dominican Republic, it will be possible to grant financing with a final rate of 4% for the acquisition of a low-cost home, by combining these facilities granted by the Trust Law, together with the aforementioned provisions of official subsidies announced ”, expressed the union.
Also, with these subsidies from the Happy Housing program, banks will be able to finance the family nucleus, so that this makes possible the possibility of jointly opting for a decent roof, reported the union.