Funding for Affordable
Presented to the Counsel on Africa
September 29, 2006
Government Backed Housing
Governments around the world are committed
to providing housing solutions
Over the last decades the Mexican Government
has made significant progress
Annual production goal of 750,000 houses per year
Mexican Low Cost Housing
INFONAVIT: since 1972 has served as a federal pension
plan for private sector employees.
Mexican employers are required to deposit 5% of employees’ gross
wages into plan.
Use funds for the issuance of mortgages to the plan’s beneficiaries.
Loans for houses that range from US$10,000 to US$40,000.
Funded in excess of 350,000 units in 2005.
Receive funding from the Mexican government, the World Bank, and
through the sale of mortgage-backed securities
Function in similar manner to the Federal National Mortgage
Association (FNMA) in the US.
Lends to specialized housing lenders (banks and SOFOLES) so that
they may underwrite private mortgages.
Case Study: PyMM
PyMM produces low-income housing solution
Units built to specifications of INFONAVIT
and other regulatory bodies (states and local
After significant R&D, sold more than 700 units
during early stage
By 2004 PyMM required funding to increase
production to 3000 units per year
Interlink Capital Strategies/OPIC
Streamlined approval process for qualified small
OPIC covers some of the cost of the advisory
Solution: OPIC-PyMM Partnership
In 2005 OPIC provided a $10 million loan to
Expand production of pre-made concrete homes
from its manufacturing facility in Monterrey,
Provided capital for urbanization
The project is expected to erect between 25,000
and 30,000 homes over the next ten years.