The Inter-American Development Bank (IDB) has approved a $300 million loan to give Peruvian families in the low and lower-middle-income brackets greater access to loans for proper housing.
The Global Credit Program approved by the IDB’s Executive Board of Directors will benefit over 17,000 households with loans for purchasing or improving a home. At least 50% of the financing will be earmarked for women heads of household.
The program’s resources will expand the MIVIVIENDA Fund’s mortgage portfolio, exclusively targeting households that earn less than four times the monthly minimum wage. The MIVIVIENDA Fund will channel the program’s funding to eligible financial institutions via sub-loans.
At least 39% of the loan’s resources will be allocated to sub loans for purchasing green homes that cut down consumption of energy, water, and embodied energy in building materials by a minimum of 20%.
The program will also provide financing for home improvement loans to close the housing quality gap. An estimated 30% of urban households in Peru live in substandard dwellings that lack basic infrastructure (water, sewage, electricity) or are built from poor-quality materials.
This initiative complements efforts by the Ministry of Housing, Construction, and Sanitation and by the MIVIENDA Fund to close the housing gap and develop a more inclusive formal housing market. The program is designed to reduce poverty and bolster economic recovery.
The IDB loan has an 11.5-year repayment term and a 7.5-year grace period.