Government weighs more announcements as it looks to credit to revive Argentina’s economy

Argentina’s government is considering expanding a mortgage program to unfinished homes as it looks for ways to revive an economy that has spent nearly three years focused on fiscal and monetary adjustment and lower inflation.

The proposal would extend peso-denominated UVA mortgage loans, funded through ANSeS, to housing under construction. Real-estate developers discussed the idea with Luis Caputo’s team last week. “What we discussed is that part of the loans should go not only to existing homes but also to loans for homes that are already under construction. This will have a greater impact on construction, and they liked the idea,” said a source familiar with the meeting.

The program announced two weeks earlier calls for banks to issue between 17,000 and 18,000 loans worth a total of 2 trillion pesos, or about $1.3 billion. The loans would carry maximum rates of 7.5% plus UVA and cover the purchase, construction, expansion or renovation of a first home. The proposed extension would use the Guaranteed Sustainability Fund of ANSeS to finance unfinished properties.

The legal structure remains unresolved. Mortgages currently apply to completed properties, while industry participants believe approval to subdivide horizontal property could allow unfinished homes to be registered and financed. That process would depend on each province and municipality.

Developers also asked officials to accelerate the auction of ANSeS fund fixed-term deposits held at banks. The first auction, covering 1,800 loans, is scheduled to begin after the Central Bank finalized the rules. UVA fixed-term deposits for one and five years will be auctioned at minimum rates of 2.5% and 4.5%. Ten auctions of 200 billion pesos each are planned, with each bank limited to 20% of the amount offered and 90 days to place the funds. The financial sector expects the loans to become available in November or December.

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What we discussed is that part of the loans should go not only to existing homes but also to loans for homes that are already under construction. This will have a greater impact on construction, and they liked the idea.