Of the 13,345 housing units planned in Greater Santo Domingo, Santiago and Punta Cana, more than 1,800 have already been completed and have begun to be delivered to their buyers
SANTO DOMINGO– An investment of RD$3.563 billion, from Dominican workers' pension funds, has been allocated to the development of eight real estate projects that include the construction of 13,345 homes in various locations throughout the country. Of that total, more than 1,800 units have already been completed and have begun to be delivered to their respective buyers.
These resources, managed by Pension Fund Administrators (AFP) through real estate development investment funds, are distributed in housing initiatives located in Greater Santo Domingo, Santiago and Punta Cana, according to the Superintendent of Pensions, Francisco A. Torres.
In this regard, the official explained that these operations, supervised by the Superintendency of Pensions (Sipen), allow part of the pension savings to be allocated to the development of residential projects, with the purpose of generating returns that contribute to improving the future pensions of the members.
Greater Santo Domingo has the highest concentration of housing
According to figures provided by Sipen, the National District has three real estate developments that include 6,965, 648 and 60 residential units, respectively, for a total of 7,673 homes.
On the other hand, in the province of Santo Domingo, another 4,000 housing solutions are planned, distributed between Santo Domingo Norte, with 2,968 units; Los Alcarrizos, with 608, and Santo Domingo Este, with 424.
In this way, both districts account for 11,673 homes, equivalent to approximately 87.5% of the total planned in the eight projects supported with resources from the pension system.
Meanwhile, Santiago de los Caballeros is planning the construction of 952 properties, while Punta Cana, in the province of La Altagracia, has another 720 units.
Taken together, these data demonstrate the role of pension savings in the growth of the Dominican real estate sector, as well as their contribution to expanding the supply of housing in the national territory.
New fund seeks to facilitate home purchases
In addition to the resources allocated to construction, the Superintendency of Pensions announced that during the week following the presentation of the initiative, a new investment credit fund is expected to be approved, whose objective will be to facilitate the purchase of real estate through more affordable installments, fixed interest rates and terms of up to 25 years.
As Francisco A. Torres explained, this mechanism is aimed at people who have the financial capacity to acquire a property, but require financing conditions that allow them to assume long-term commitments without significantly affecting their income.
In that sense, the proposal establishes that the fund's capital can be used, initially, to support the construction of certain housing developments and, subsequently, to provide credit facilities to those interested in acquiring those same units.
Likewise, the superintendent indicated that the Banfondesa Savings and Credit Bank expressed its willingness to participate as the financial manager of this initiative.
Financing through investment funds
The proposed model contemplates the use of Closed Private Debt Investment Funds, securities market instruments that would allow resources to be channeled towards the granting of mortgage loans through financial intermediation entities, such as banks and savings and loan associations.
Similarly, the instrument would have the capacity to acquire loan portfolios from various financial institutions. Revenue generated from borrower payments would be used to maintain operations and produce returns commensurate with the risks assumed.
Thus, the savings managed by the AFPs could contribute both to the construction of new buildings and to the financing of their acquisition, seeking to preserve the objective of profitability for the benefit of the future pensions of the workers.
Furthermore, Torres specified that the buyers' monthly payments would include an insurance premium to cover possible payment defaults and other eventualities related to the loans.
The financing will be compatible with state subsidies
Regarding the conditions of the mechanism, the official assured that its implementation does not include hidden subsidies or the use of pension resources to the detriment of members.
"There are no hidden subsidies in this scheme. State subsidies such as the Happy Family and My Home programs, among others, are fully compatible with this scheme, without sacrificing the future pension of the member," Torres stated.
In this way, those interested could combine financing alternatives with government housing support programs, provided they meet the requirements established to access these benefits.
Voluntary savings can also be used for a first home
Furthermore, Sipen highlighted the opportunities offered by supplementary pension plans for workers to make voluntary contributions, in addition to their mandatory contributions, in order to accumulate funds for the purchase of their first home.
This option is also available to Dominicans residing abroad, who have the possibility of opening savings plans from their respective countries of residence.
In addition to their use for housing purposes, these additional contributions could be used to cover higher education for children, certain high-cost medical treatments, or to supplement income during retirement.
With these initiatives, the Superintendency of Pensions seeks to strengthen the relationship between pension savings, real estate investment and access to housing finance, while also seeking to guarantee the protection of resources intended for the retirement of Dominican workers.
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