HOUSING FINANCE SECTOR

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The Housing Finance Sector Project supports a two-year (mid-1987 through mid-1989) time-slice of the lending program of the Government's National Housing Fund (NHF) for low-income housing and includes studies and training. NHF plans to lend about US$1.4 billion equivalent during the project period, primarily for smaller units reserved for households below the average urban income level. The basis of the sector loan is a Policy Statement and Program of Actions and Studies, which has been adopted by the Government, on the future of the housing finance system. The Policy Statement expresses the Government's intention to expand the system on the basis of market principles, to target the social housing programs to lower-income families, and to stimulate an increase in the construction of low-income housing for purchase and for rental. The main benefits of the project would be increased effectiveness of public expenditures in the sector and reduced costs of financial intermediation for home buyers.