Venezuelan mortgages
There is a level of bureaucracy involved with getting a mortgage in Venezuela, for locals and foreigners alike, but it is do-able.
There are basically two kinds of mortgages: Normal commercial mortgages and government-subsized "soft" mortgages, also issued by by banks. The latter is the most attractive but the paperwork and red tape which is involved is daunting and much more time consuming to comply with than a normal, floating rate mortgage.
The following text is a summary of the key points as published in the local press. You can read the full text of the article in Spanish by clicking here and to see the article as it originally appeared in the newspaper, click here.
MORTGAGE AMOUNTS
The program finances single family homes (including condos) with mortgages of any amount between Bolivares 34,000,000 ($15,813) and Bolivares 150,000,000 ($69,767) depending on income.
Monthly mortgage payments are calculated at no higher than 20% of earnings.
DOWN PAYMENT
The maximum amount which can be financed is 70%. Buyer must provide a downpayment of 30%. If this downpayment is not available, buyer may (depending on income) qualify for a direct cash subsidy which can be used as the 30% down payment.
Since this subsidy will not have to be paid back ever it is not calculated as part of the 70% amount for the mortgage.
NEGATIVE INTEREST RATES
Interest rates vary depending on monthly income levels.
Monthly income below Bs 852,012 ($396) =
5.16% p.a.
Monthly income between Bs 852,012 ($396) and Bs 1,610,000 ($749) =
7.74%
Monthly income over Bs 1,610,000 ($749) =
10.32% to 10.89%
These are local currency mortgages. Since inflation is currently around 15% per year this means that the interest rates are below inflation and thus negative interest rates. In effect, this government program is subsidizing new homeowners.
REQUIREMENTS
1. Purchase option on a property valid for at least 120 days.
2. Declaration of not owning a main residence in Venezuela.
3. Copy of cedula (Venezuelan ID card).
4. Documents of the home.
5. List of mortgages on the property during the last 10 years.
6. Proof of no current mortgages (clear title).
7. Copy of latest utility bill for the property.
8. Photos of the property.
9. Loan request form.
10. Proof of income.
11. Tax form.
12. Personal net worth statement.
13. Bank references.
14. Account statements.
Mortgage processing takes 45 days. (Note: This is if all papers are in order for submission. To get the above paperwork, add another 30 to 45 days).
OPTIONAL: DIRECT CASH SUBSIDY
For low income earners the government provides a subsidy which can be used as down payment on the property and which is not a loan since it does not have to be paid back ever.
If you earn less than Bolivares 1,610,000 ($749) per month, the subsidy is Bs 16,100,000 ($7,488).
If you earn less than Bolivares 852,012 ($396) per month, the subsidy is 19,100,000 ($8,883).
SOURCE
Article in largest Venezuelan daily newspaper, EL UNIVERSAL, Sunday November 20, 2005
"Amplian financiamiento de vivienda"
("Expanding home financing")
http://buscador.eluniversal.com/2005/11/20/eco_art_20201A.shtml
This information was correct at the time of publication, but rates and conditions change over time so please check with the Housing Ministry or with commercial banks in Venezuela for the latest information.
Ministerio de la Vivienda
http://www.minvih.gob.ve
