The mortgage company Hipotecaria Su Casita will use the IIC loan, plus $60 million from the development finance company Nederlandse Financierings-Maatschappij voor Ontwikkelingslanden N.V. in the Netherlands (www.fmo.nl) and $20 million from the German development finance institution Deutsche Investitions- und Entwicklungsgesellschaft mbH (www.deginvest.de), to originate or acquire home mortgage loans, chiefly for funding personal loans to purchase or build medium-tolow- income housing units in Mexico.
The financing provided by the IIC will make it possible to build 2,600 to 3,200 new housing units with an average price of $30,000. The construction sector is one of the main engines of economic activity and is a significant source of jobs and of demand for goods and services related to the housing industry. Many of these services can be provided by small and mediumsize manufacturers and contractors.
This project will help consolidate a liquid secondary mortgage market in Mexico, thus improving the quality of life for low- and middle-income families by making it easier for them to purchase a home and providing them with an opportunity to move to a better home or neighborhood.
Securitizing the mortgage portfolio assigned to the IIC to secure the loan will make it possible for institutional investors to purchase investment instruments with terms that are more in line with their own liabilities. The institutional investors are private pension funds that receive and manage most of the domestic private savings. As these funds invest in instruments resulting from the trading of home mortgages, domestic savings will be channeled as the main, permanent source of funding for building low- and middle-income housing.
Basic Information Project Name: Hipotecaria Su Casita Project Number: ME3532A-01 Country: Mexico Sector: Financial Services Approval Date: 08/09/2005 Date of First Disbursement: 12/29/2005 Financial Information Type of Financing: Loan Total Project Cost: $ 100,000,000 Financing Currency: United States Dollar IIC Financing Amount: $ 20,000,000