Ideal Formula To Revive Real Estate in Mexico

Ideal formula to revive real estate

07/11/2010 14:22



Mexico. Venture capital, bridge loans and mortgage financing in a single scheme represents an ideal mechanism to boost the housing industry.


The Achilles heel of the homebuilders in the wake of the international financial crisis was the drought of financing, which led to a severe contraction in the pace of housing construction and therefore a distortion between supply and demand.


To counter back the situation were created mechanisms that will stimulate a recovery in the pace of construction of new housing in the country.


Sociedad Hipotecaria Federal (SHF), the development bank of the housing developer, has launched a program called Capital and Debt Housing Construction (COVICADE), a scheme through which developers can derive from various institutions, both venture capital and bridge loans.


The mechanism addresses the lack of funding in the sector for pre-construction stages, such as land acquisition, infrastructure development, licensing and permits; mainly steps that should be funded with capital. While bridge loan for the building provides the necessary to construct.


UnbralCapital as capital fund, and Patrimonio, as a financial intermediary, were the first to operate this mechanism with approximately $2.5 billion pesos available on a first stage from first half of 2010.


This mechanism is perfected, since Infonavit, Alsis Funds and BBVA Bancomer, announced a strategic alliance to provide full funding and boost the supply of affordable housing. The estimated investment between them is of $21 billion pesos for a period of four years and will boost the construction and sale of 100,000 houses.


Alsis Funds provide venture capital to the developer, Bancomer banks offer mortgage bridge credit at the same housing promoter and Infonavit individual loans for the purchase of the final product, ensuring resources for the entire cycle of construction and housing market, mainly economic and of social interest, contributing to strengthening the industry.
(Ricardo Vázquez)

www.tibesarealty.com.mx