Minha Casa, Minha Vida may have a ceiling of R$ 500 thousand – 06/14/2023 – Market

Minha Casa, Minha Vida for the middle class, a promise made on Tuesday (13) by President Lula (PT), will be able to finance properties worth up to R$ 500,000.

The government is considering raising the maximum value of the residence to meet the president’s request so that families with a monthly income of R$ 10,000 or R$ 12,000 can also have access to the housing program. Currently, the income limit is R$ 8 thousand per month.

This is one more of the actions to boost the program, which is one of the main brands rescued by Lula in his third term.

The Ministry of Cities, responsible for Minha Casa, Minha Vida, will still do the calculations to find out which model to be proposed for expanding the program to the middle class.

Members of the portfolio, led by Minister Jader Filho (MDB), say that this will depend on the capacity of the FGTS (Fund for the Guarantee of Length of Service) to support the increased demand for resources for the new ranges of the housing program.

In a more optimistic scenario, there would be money in the fund to raise the property’s ceiling to close to R$600,000. However, this could prevent the beneficiary’s income limit from being expanded to the level announced by Lula —between R$10,000 and R$12,000.

The new version of Minha Casa, Minha Vida, relaunched in February, allows the purchase of used properties using the FGTS and has already increased the income limit for low-income families.

For those who live in urban areas, gross monthly family income between R$2,640 and R$8,000 is considered.

Lula, however, wants to expand this criterion even further, which would allow more families to have access to resources.

The government hopes that, in the coming days, the FGTS Board of Trustees will increase the maximum value of the program’s property to R$350,000. Today, that ceiling is R$ 264,000 and there are regional differences, which will end. The Council is responsible for determining how the fund’s resources are applied.

The proposal for the program to reach homes worth up to R$350,000 aims to adapt the program to the highest income bracket in force since February —from R$4,400.01 to R$8,000. In addition, it was a demand from the civil construction sector in view of rising costs.

Government members assess that, by increasing the income limit of families in the program to up to R$ 12,000, it is also necessary to adapt the property value ceiling.

There is still no forecast for the government to announce the Minha Casa, Minha Vida model for the middle class, promised by Lula. This will depend on the Ministry of Cities’ calculations regarding the financial health of the FGTS.

These adjustments to the beneficiary’s income and property value can be made by acts of the Ministry of Cities. Therefore, without the need for a vote in Congress.

According to people involved in the discussions, one option is that the elevation of the roof of the property could be temporary. This is because the real estate sector is struggling to meet the needs of the middle class due to the high Selic rate, which makes financing with banks more expensive and scares away this portion of customers.

Therefore, the use of the FGTS for this group would be a temporary way of plugging the hole while the Selic rate does not fall to lower levels. The government’s expectation is that the interest rate will begin to fall in the second half.

Another factor that should be included in studies by the Ministry of Cities is the impact that the inclusion of the middle class in the population that can obtain direct financing with the FGTS will have on the fund’s target audience, which are the lowest-income people.

There is a fear, especially among businessmen in the sector, that too high a demand for this new category will end up restricting financing for poorer people.

The folder has been committed to approving the measures already presented to the FGTS Council and which already expand the use of the fund in the program.

That’s because the government also wants measures to expand Minha Casa, Minha Vida subsidies and, with that, achieve zero down payment on the purchase of a property in range 1 —which serves the lowest-income population.

The idea is to seek partnerships with state and municipal governments to, along with federal subsidies, cover the full down payment on these properties.

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.