Government studies increasing subsidy and zero entry for low income in Minha Casa, Minha Vida

The government is studying measures to expand the subsidies of the Minha Casa, Minha Vida housing program and, with that, achieve zero down payment on the purchase of a property in range 1 – which serves the lowest-income population. One of the actions to boost the program, which is one of the main brands rescued by President Lula in his third term, is to seek partnerships with state and municipal governments to, together with federal subsidies, cover the entire down payment for these properties. If cooperation is not enough to reach this goal, the government wants to evaluate the increase in FGTS resources (Guarantee Fund for Length of Service) destined to Minha Casa, Minha Vida.
Members of the Planalto Palace and the Ministry of Cities say that the entry fee, which is usually at least 20% of the property price for this group, has created barriers for the poorest population group to be served by the program.
The details of the study were completed by the ministry, but the format still needs to be analyzed by the Civil House and, later, taken to the president.
Tier 1 is aimed at families with a gross monthly income of up to two minimum wages, the equivalent of R$2,640 (as of May). President Lula wants to hire 2 million new homes in all segments of Minha Casa, Minha Vida, 500 thousand of which already this year.
In February, the new version of the housing program was launched. The provisional measure, which will be voted on by Congress, also establishes that bracket 2 must serve families with an income of between R$ 2,640.01 and R$ 4,400; and group 3, families that receive every month from R$ 4,400.01 to R$ 8,000.
The measures under study should also focus on expanding subsidies to band 2. The way this group will be served is still under discussion, but one of the analyzed solutions is the possibility for the government to deduct part of the entry fee.
The idea of ​​improving the financing conditions for track 2 was presented, still without details, by minister Rui Costa (Casa Civil) about two weeks ago.
Lula’s assistants claim that the plan, both for track 1 and track 2, will still be deepened in meetings at the Planalto Palace. The proposal has been prepared by the Ministry of Cities, responsible for the housing program, together with representatives of the sector, such as the CBIC (Brazilian Chamber of the Construction Industry).
“It is common for these families (from group 1) to have no money for the down payment, because today they already pay the rent, and Brazil does not have a culture of saving. If the down payment is zero, then they start paying the installment [do financiamento subsidiado] instead of rent,” said CBIC president José Carlos Martins.
Technicians who participated in the discussions on the measures cite the Casa Paulista program, in the state of São Paulo, as an example of a partnership that can result in zero entry cost for low-income public contracts.
In a case where the beneficiary of tier 1 obtains a financing of 80% of the value of the property, the government’s idea is to use resources from state and municipal programs and from the FGTS to reduce the cost of 20% of the down payment. The rest (80%) would continue with low installments, because of the subsidies that already exist in Minha Casa, Minha Vida.
In less developed regions, however, state and municipal governments usually have fewer resources to reduce or reset the entry fee.
In these cases, an alternative may be the donation of land by public entities. The government wants to prioritize undertakings in which city halls cede the area to be built, which reduces the cost of works.
Martins also argues that, based on a measure signed in the government of Jair Bolsonaro (PL), the Ministry of Cities encourages parliamentarians to allocate amendments to the housing program, which can be used to settle the initial cost of the contract.
In September last year, the former Ministry of Regional Development began to allow parliamentary amendments to be used to reduce the amount of down payment paid by low-income people in financing Casa Verde e Amarela – a program replaced by Minha Casa, Minha Vida.
Amendments are used by deputies and senators to send federal money to destinations of interest to them, such as works and projects in their electoral bases.
According to the rules created during the Bolsonaro administration, the deputies and senators who sponsor the amendment will be able to choose the municipalities to receive the money, which will deduct part of the value of the entry fee for financing the local population. City halls were chosen as responsible for the criteria for choosing the families benefiting from the discount on the entrance fee.
Delinquency in track 1 of Minha Casa, Minha Vida reached the end of 2022 at a record level. As Folha showed, 45% of these contracts, which benefit from more subsidies from the federal government, have not paid installments of the financing for more than 360 days.
According to data from the Ministry of Cities, 510,000 of the 1.1 million active contracts in this range owe the monthly amount for over a year.