The Inter-American Development Bank (IDB) has approved a $50 million loan for a program to reduce El Salvador's housing deficit by providing loans for the purchase of affordable housing.

The Social Housing Financing Program’s objective is to increase access to mortgage credit for working households with incomes of up to four Current Minimum Monthly Wages (SMMV) for the acquisition of affordable housing. 

This is the second single transaction under a $400 million Credit Line for Investment Projects for Access to Business and Housing Credit approved by the IDB in July 2020, in conjunction with a first transaction to finance the Access to Credit Program for the Recovery of Micro, Small, and Medium-Sized Enterprises. 

The program is expected to benefit a total of 2,500 households, of which at least 40 percent will be female-headed households assisted through targeted programs. All individual funding requests will be evaluated in accordance to a natural disaster risk analysis in light of climate change scenarios. 

Mortgage loans for the purchase of a first property –new or used homes– will have terms of up to 30 years for an individual amount of up to 109 SMMVs, which is equivalent to $40,000. 

The operation is aligned with the Vision 2025 - Reinvesting in the Americas: A Decade of Opportunities agenda, created by the IDB to achieve recovery and inclusive growth in Latin America and the Caribbean in the areas of gender and inclusion and climate change, two of its main priorities. 

The IDB’s $50 million loan has a 25-year repayment term, a grace period of five and a half years, and an interest rate based on LIBOR.