A. M. 
The Inter-American Development Bank (IDB) approved a $50 million loan to help reduce El Salvador’s housing deficit by providing mortgage loans for the purchase of low-income housing.
According to the Encuesta de Hogares de Propósitos Múltiples de El Salvador (EHPM 2023), it is estimated that 50.7% of El Salvador’s households have a qualitative housing deficit, with inadequate physical and structural conditions. In addition, 28% of homes are overcrowded, which affects the quality of life and well-being of their inhabitants. In this context, access to financing programs are key to improving housing conditions and promoting sustainability and resilience to climate change.
The “Financing for Social, Inclusive and Sustainable Housing” program, approved by the IDB’s Board of Executive Directors, will increase access to mortgage credit for the purchase of new and existing housing, serving underserved populations, promoting the adoption of sustainable housing, that is, housing that is resilient to climate change and built to mitigate emissions. Program resources will be channeled through the Fondo Social para la Vivienda (FSV).
The program will benefit eligible households with incomes up to four minimum monthly wages (SMMV) with mortgage loans with terms of up to 30 years to purchase low-income housing up to US$40,000. Women and vulnerable populations, including people with disabilities, informal workers, and families receiving remittances, will be prioritized in the selection of beneficiaries.
“Through this program, we seek to promote an inclusive and sustainable housing model that addresses the needs of lower-income salvadoran families, facilitating their access to mortgage credit and promoting the enjoyment and ownership of decent housing with adequate housing conditions among this traditionally neglected population group”, said Olga Gómez, IDB representative in El Salvador. “This initiative reaffirms our commitment to improving the quality of life of salvadorans, addressing their most fundamental needs, while promoting the adoption of environmentally responsible practices, contributing to a more just and sustainable future in El Salvador”, she said.
The $50 million IDB loan has a 25-year maturity, a 5.5-year grace period, and an interest rate based on SOFR.
