Most Latin American and Caribbean (LAC) countries have significant housing deficits, both in terms of the existing stock of housing – exemplified by the innumerous informal settlements that are present in most large cities- and the unmet demand for new homes by the growing population. Rapid urbanization in the region has amplified these housing problems, which pose a serious challenge for the region’s governments.

The IDB has been active in the housing sector since the 1960’s, supporting and helping to formulate housing policies at the central and local government levels. The goals of these policies are to promote the adequate use of public sector subsidies so they are directed for the intended low income population, as well as to create the proper incentives for private sector investments in the sector. Comprehensive housing policies require a differentiated approach, according to the intended beneficiary group.

Promoting the better functioning of a mortgage market is the goal of policies directed for the middle and high income population. Complementing savings and providing direct subsidies is indicated for middle income families, assisting them in assessing the home mortgage market. For the poorest segment of the population, the Bank has been supporting assistance in the form of integral neighborhood upgrading and incremental home improvement