[REVISION HISTORY]

Chile expands mortgage subsidies and housing finance reforms

Updated 4 times since CLSTR started tracking revisions of this situation.

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2026-09-11 06:56 UTC → 2026-09-23 01:13 UTC · added ~~removed~~

The Chilean government has expanded housing relief measures to combat high prices and declining homeownership rates, which fell from 63% in 2017 to 52% in 2024. In a recent legislative development, the Senate unanimously approved a bill to extend and expand mortgage interest rate subsidies and the FOGAES state guarantee. This expansion increases the property value cap from 4,000 UF to 6,000 UF and raises available slots from 50,000 to 80,000, with the program now extended until May 2028. Finance Minister Jorge Quiroz noted the new limit covers approximately 88.1% of new housing stock available by early 2026. The subsidy is expected to reduce mortgage rates by approximately one percentage point. Additionally, the FOGAES guarantee aims to allow buyers to secure homes with a down payment of roughly 10%. To further stimulate the market, Congress approved a temporary 12-month VAT exemption on the first sale of new properties with final municipal approval. While the full 19% tax rate is not passed to consumers, experts estimate buyer benefits between 2% and 4% for typical apartments, while the Ministry of Finance estimates an average reduction of 6% to 7% across various project types. Furthermore, the government is advancing a Capital Markets Reform to lower mortgage costs. This includes the creation of the National Housing Fund (FONAVI), managed by BancoEstado, with an initial $500 million ~~injection.~~ injection and potential for up to $2 billion in additional state funding to finance mortgage portfolios. The reform also introduces the Voluntary Housing Savings (AVV) program, where the state provides a 3% contribution toward a down payment after citizens save 7% of a property’s value over at least 30 months. ~~These combined efforts aim to support~~ As part of the ~~roughly 500,000 families lacking homeownership and revitalize a construction industry that has lost approximately 180,000 jobs.~~ ongoing reform debate, discussions have emerged regarding the deindexation of mortgages from the Unidades de Fomento (UF) to allow for long-term loans in pesos.

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