Affordable Homes and Mortgages for Nicaraguans
Date
Jan 2012
Low-income and self-employed Nicaraguans face two serious obstacles when looking to buy a home: a shortage of affordable housing, and difficulty in obtaining a mortgage.An innovative model is bringing both homeownership and financing within reach of Nicaraguans at the base of the pyramid. The Rent-to-Own Housing Program allows prospective buyers to rent the newly built housing unit they'd like to buy, and to use their track record of monthly rent payments to build a formal credit history and qualify for a mortgage.
The Inter-American Development Bank's Opportunities for the Majority Initiative (OMJ) is offering a senior secured loan for up to $5 million to Banco de Finanzas S.A (BDF) Nicaragua to support the pilot rental and mortgage loan program. If successful, IDB will lend another $5 million to scale up the model.