Brazil considers housing credit interest rate changes

The Brazilian government is studying a reduction in interest rates for the Minha Casa, Minha Vida housing program, specifically targeting Faixa 3 families with monthly incomes between R$ 5,000 and R$ 9,000. The proposal involves splitting this bracket into two groups to offer lower rates to lower-income families. The implementation depends on studies regarding the impact on the FGTS (Fundo de Garantia do Tempo de Serviço), which is the primary funding source for the program.

Simultaneously, large mortgage lenders are engaging in informal negotiations with the Central Bank of Brazil to revise the 12% annual interest ceiling currently applied to SFH-qualified housing loans for properties valued up to R$ 2.25 million. While no formal proposal or deadline for this change has been established, regulators have noted that the 12% cap presents a challenge during periods of higher interest rates.