Government plans to launch new tier of the "Minha Casa, Minha Vida" program for the middle class.
The program could benefit families with a monthly income of up to R$12. Interest rates are expected to be 8% per year.
247 - The Lula (PT) government is considering expanding the Minha Casa, Minha Vida (MCMV) program to serve middle-class families, creating a new housing finance bracket. Currently, the program covers families with a monthly income of up to R$ 8. The initiative was reported by the newspaper. The GlobeThe goal is to include families with incomes up to R$ 12, expanding the program's reach.
The proposal foresees an interest rate of approximately 8% per year, plus the Reference Rate (TR), a percentage slightly above that practiced in Band 3. In addition, there will be a discount for account holders of the Guarantee Fund for Length of Service (FGTS), following the practice already established in the program. Another change being considered is an increase in the maximum property value, currently set at R$ 350.
The initiative is being debated between the Ministers of Cities, Jader Filho (MDB), and the Chief of Staff, Rui Costa (PT), as well as representatives from the Treasury and Caixa Econômica Federal. According to government sources, President Lula requested swift implementation of the measure.
Funding model and challenges - The MCMV program operates with FGTS (Brazilian Severance Indemnity Fund) resources in Bands 2 and 3, allowing for financing and subsidies to reduce the monthly payment. In Band 1, where the property is practically donated, the resources come from the Federal Government through the Residential Leasing Fund (FAR).
To enable the expansion of the program without compromising the FGTS (Brazilian employee severance fund), the government proposed an amendment to the budget, allocating R$ 15 billion from the Pre-Salt Social Fund to the current income brackets of the MCMV (Minha Casa, Minha Vida - My House, My Life program). However, this proposal still needs to be voted on and approved by Congress.
The acceleration of this measure comes at a time when President Lula's popularity is declining, facing his lowest approval rating of his terms in office. Simultaneously, the scarcity of savings, a traditional source of mortgage financing for the middle class, also presents a challenge for the new segment of the program.
How the program currently works - In Band 1 of the MCMV program, the maximum gross monthly family income is R$ 2.850, allowing beneficiaries to purchase properties with up to 95% subsidy from the federal government. In Band 2, which covers incomes between R$ 2.850,01 and R$ 4.700, there is a subsidy of up to R$ 55 and reduced interest rates.
Band 3 serves families with incomes between R$ 4.700,01 and R$ 8, without subsidies, but with facilitated financing conditions. The government's new proposal aims to expand this audience, including higher-income families who still face difficulties acquiring their own home in the conventional real estate market.
The unfolding of the proposal will depend on political negotiations and the fiscal impact that the new bracket may generate. The government continues to seek alternatives to guarantee affordable housing for a greater number of Brazilians without compromising the financial sustainability of the program.
