(Updates with comments from development bank official, details)
MEXICO CITY -(Dow Jones)- The Inter-American Development Bank said Wednesday it has agreed to lend Mexico up to $2.8 billion to support continued growth in the country's low-income housing market.
The loans are in addition to the $1 billion that the World Bank recently approved for Mexico's mortgage development bank, Sociedad Hipotecaria Federal, or SHF.
The IBD said in a press release that it approved a $2.5 billion conditional credit line for SHF, of which Mexico will receive an initial $500 million, and two non-sovereign guaranteed loans, one for $150 million and the other for $185 million.
"Financing the housing sector in an economic downturn has a direct impact in employment growth because of the quick creation of new jobs, and in fighting poverty by providing better living solutions to mainly low-income families," the bank's representative in Mexico, Juan Ellis, was quoted as saying.
The first $500 million will help the SHF in its funding of mortgage intermediaries and to maintain liquidity in secondary markets through the acquisition of mortgage-backed bonds. The 25-year loan has a five-year grace period and an adjustable interest rate based on Libor.
SHF was created in 2001 with a mandate to provide mortgage insurance, long-term funding mainly to non-bank home finance companies and to act as a market maker for mortgage-backed securities.
Prior to the global financial crisis, Mexico's non-bank lenders were slowly weaning themselves off SHF by selling short-term debt as well as securities backed by mortgages and construction loans to fund their lending operations.
However, SHF has once again become a key source of financial support as a liquidity crunch in the domestic capital markets has made it difficult for issuers to place mortgage bonds and commercial paper.
SHF Chief Executive Javier Gavito said at a housing conference Wednesday that jump starting the asset-backed securities market is a priority because government programs alone can't meet non-bank lenders' funding needs.
The IDB's $150 million loan, under the newly created Mexican Housing Finance Support Facility, will support private banks and mortgage companies in their home-financing operations given current market difficulties in placing mortgage-backed securities with investors.
The IDB will also put up to $185 million for credit-enhancements for the mortgage-backed securities program of government-run housing fund Infonavit, which is Mexico's largest mortgage lender.
Infonavit said last week it expects to make 500,000 mortgage loans in 2009, the same as in 2008 but below its initial 2009 target of 550,000 as the global financial crisis makes it more difficult to raise funding in the capital markets.
For 2009, Infonavit aims to sell 10 billion pesos ($760 million) in mortgage bonds.
-By Anthony Harrup, Dow Jones Newswires; (5255) 5001 5727, anthony.harrup@dowjones.com
(Ken Parks in Mexico City contributed to this report)
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(END) Dow Jones Newswires
November 26, 2008 14:23 ET (19:23 GMT)

Publié le 26 novembre 2008 Copyright © 2008 Dowjones