Mortgage loans and access to housing for low-income households in Latin America

On the basis of a study on mortgage loan options available in eight Latin American countries, this article identifies two pending tasks for most of the countries: the need to make long-term funds available to mitigate the risk of a mismatch of maturities and rates, and the need to harmonize profitability criteria for lenders with the criterion of access to credit for the low-income population. The paper recommends the creation of linkages between the housing finance market and the capital market through secondary mortgage markets, for which the housing finance market must use instruments other than subsidies. In addition, the paper proposes a number of options to ensure that the State helps to create mortgage markets that will provide the low-income population with better access to housing.