Vipa, Colombia’s primary mortgage interest rate subsidy program, its initials in Spanish standing for Vivienda de Interest Prioritario para Ahorradores, will continue promoting homeownership in 2015 by offering interest rate subsidies on home loans for families earning up to twice the minimum wage (roughly $275 US per month at time of publication). The program is arranged so that these families may purchase a home without spending more than 30% of their income on mortgage debt load.

The government announced a cash subsidy value of $19,330,500 (just over $8,000 US) for households earning up to $1,030,960 pesos monthly, and $16,108,750 for households earning up to $1,288,700 pesos monthly.

In addition to the cash subsidies, the government will make up the difference to reduce the borrower’s effective interest rate by 5 points, significantly reducing the interest payments made by the borrower over the lifetime of the loan.

Borrowers must purchase from one of over 148 housing projects throughout Colombia that have elected to participate in the program, and been approved by Minvivienda. So far, it is projected that 64,383 housing units will be available in 2015 to buyers using Vipa.

In addition to Vipa, the program called “Mi Casa Ya” (My house already) is a new program under development, announced by housing minister Luis Felipe Henao Cardona, that targets potential homebuyers earning between two to four times the official minimum wage, or up to $2,577,400 pesos per month. The Mi Casa Ya program will make the initial payment, and also subsidize the interest rate charged by the lender. The value of the home purchased may not exceed 135 minimum monthly salaries, or $86,987,250 pesos.

For households with incomes between 2 and 3 minimum salaries, the subsidy will be up to $12,887,000 pesos, and for those households between 3 and 4 minimu salaries, the subsidy will be $7,732,200 pesos.

Free homes for desplazados, damnificados, and the extremely poor

Colombia’s ongoing practice of providing a quantity of homes each year to the extremely poor and vulnerable in society will continue in 2015, with 100,000 homes in 227 municipalities throughout 29 of Colombia’s departments, earmarked as gifts in 2015. Of these homes, 78,000 have already been constructed. These houses are directed at the extremely poor who face no real chance of obtaining traditional bank financing, or also for desplazados, (displaced) often victims of crime, violence and insurgent activities, and damnificados, the Spanish word for victims of natural disasters such as floods, landslides or earthquakes.

Photo: Humble country abode outside of Marinilla, Antioquia, Colombia. Photo credit: Loren Moss