IDB Supports Access to Housing in Ecuador with a $250 Million Guarantee

WASHINGTON — The  Board of Executive Directors of the Inter-American Development Bank (IDB) approved an investment guarantee of $250 million to support the program “Social Housing Financing in Ecuador II,” aimed at reducing the housing deficit and improving access to housing for middle-income households in the country.

The operation will mobilize additional resources through a financial structure that combines sovereign debt with mortgage securitization mechanisms. The funds generated by issuing the sovereign instrument backed by the IDB guarantee will be channeled into mortgage loans through intermediary financial institutions, using an execution mechanism developed for the operation. The plan is expected to generate a $1 billion mortgage portfolio, contributing to the construction of more than 11,000 affordable homes.

The program will provide direct benefits to middle-income families while generating broader positive effects. It will strengthen the financial system and its capacity to originate and manage mortgage portfolios, stimulate the construction sector through increased activity, and deliver societal gains by reducing the housing deficit and alleviating the negative impacts of overcrowding and informality.

More than 80% of Ecuadorian households cannot access a standard single-family home in the formal market, according to a recent IDB study. For middle-income families, the main barriers are the lack of affordable mortgage credit, a shallow capital market, and limited savings capacity to cover the down payment.

The maximum term of the guarantee will be 25 years, with a weighted average life of up to 15 years and three months.