SANTO DOMINGO.– The Dominican Republic's Association of Multiple Banks (ABA) reported today that between 2020 and 2022, mortgage loans from multiple banks increased by RD$39,268 million, a result that was mainly favored by the placement of resources by multiple banks through the monetary easing measures promoted by the Central Bank of the Dominican Republic.
He detailed in a press release that the portfolio went from RD$149,382 million in December 2020 to RD$188,649 million in December 2022, showing a growth of 26.2%.
He specified that the indicated increase was channeled through 8,080 new loans, out of a total of 76,545 current loans, according to data from the Superintendency of Banks.
The association broke down the total portfolio, stating that RD$171,314 million (90.8%) was allocated to the acquisition of the borrower's primary residence, RD$8,493 million (4.5%) to the acquisition of a second or vacation home, and RD$6,787 million (3.6%) to the acquisition of low-cost housing from a trust. Meanwhile, RD$2,055 million, equivalent to 1.1% of the mortgage portfolio, was allocated to the remodeling and construction of these homes.
The ABA indicated that multiple banks, with their financing, contribute to the acquisition and remodeling of clients' homes, and to the reduction of the housing deficit, standing out as the main provider of these resources if one considers that the resources provided by multiple banks for the acquisition of homes represent 64.4% of the total mortgage portfolio of the financial system.
He valued the boost to financing low-cost housing, which allows buyers to obtain resources with low interest rates, conditions that have been made possible through the implementation of Law 189-11 on the Development of the Mortgage Market and the Trust, the Happy Housing program and the monetary stimuli provided by the Central Bank.
He considered that one element that favors access for more people to acquire their own home is the increase in the price range limit for the classification of low-cost housing from RD$2.6 to 3.5 million to RD$4,852,211.2 where it is currently located, according to the recent adjustment made by the General Directorate of Internal Taxes (DGII).
The ABA highlighted that, through the release of the RD$21,424 million approved by the First Monetary Board Resolution dated January 12, 2023, aimed at low-cost housing which includes those of the Happy Family Housing Program, of the Ministry of the Presidency, the contribution of multiple banks to this type of housing will be significantly increased.
“The homes belonging to this project have a series of conditions such as the initial amount bonus, ITBIS bonus and interest rate bonus, incentives that have an important effect on reducing the financing requirement and the financial cost for the purchasers of these homes,” the banking association stated in a press release.
“For the first time in the financial history of the Dominican Republic, it will be possible to grant financing with a final rate of 4% for the acquisition of a low-cost home, by combining these facilities granted by the Trust Law, along with the aforementioned provisions of official subsidies announced,” the association stated.
Also, with these subsidies from the Happy Housing program, banks will be able to finance the family unit, thus enabling the possibility of jointly opting for a decent roof, the union reported.
