The president of the Dominican Association of Constructors and Housing Promoters (Acoprovi) Fermin Acosta has identified RD$8 billion in the Labor Risk Fund to invest in building low-cost housing for low-income families and informal sector workers. He said that 54% of people who do not own their homes do not qualify for bank mortgages. Acosta said that this fund would enable them to build 60 to 80,000 low-cost housing units. He believes that the housing fund should be administered by the Central Bank and said that the labor risk fund is now at RD$18 billion, with RD$12 billion deposited in banks. Acosta said that technically, only RD$4 billion is needed as experience has shown, and there is thus a RD$8 billion surplus that could be used to finance housing. He is suggesting a 3-5% interest rate. In an interview on D’Agenda TV program with journalist Hector Herrera Cabral, Acosta said that a home appraised at between RD$1 million and RD$1.5 million could reduce its cost by 40% with this scheme, meaning that the buyers could make monthly payments of around RD$6,000.
Acosta believes that lending money to poor people for buying their own homes is good business and that this is a way of reducing the housing deficit that he estimates at one million. He went on to say that by making the conditions more flexible, the purchasers could access the so-called ITBIS bond that the government instituted through the Trust Law 189-11. So far, only people employed in the formal sector and who pay social security are eligible for this discount.
He adds that this way 57% of the working class that is employed in the informal sector could take on credit to buy their own homes.
He warned that because of the current limitations, 70% of housing is being built without the correct supervision, which makes them vulnerable to earthquakes. Of the 45,000 homes that are built every year in the DR, he said, 15,000 are built by formal companies and 30,000 are constructed without minimum engineering standards.
Acosta says that the highest demand is for housing costing under RD$2 million. He said that the default rate is low at around 3%.
http://acento.com.do/2014/economia/8176154-acoprovi-propone-financiar-viviendas-con-rd8-mil-millones-del-fondo-de-riesgos-laborales/
http://www.listin.com.do/la-republica/2014/9/21/338508/Cada-ano-se-construyen-30-mil-casas-vulnerables-en-Rep-Dom