Announcement of World Bank Supports Three Hundred Million US Dollars Low-Income Housing Project in Mexico on August 29, 1985

FOR IMMEDIATE RELEASE World Bank nrrcm:: ~~~t,~:;:~: FUND 1818 H Street, N.W., Washington, D.C. 20433, U.J.A.•i!_~~P.~9f:.~Pfl-f}}??11234 t,ECONc,1: DG'il('··1 r,:'.:J v,-, .. ·,,·~uR 1 h'/z0.U.,,•.uON, D. C, _.b!o1zji' _NT BANK NEWS RELEASE NO. 86/15 Contact: Ciro Gamarra August 29, 1985 (202) 477-5320 WORLD BANK SUPPORTS $300 MILLION LOW-INCOME; HOUSING PROJECT IN MEXICO The World Bank has approved a loan of $150 million to support a $300 million housing project for low-income groups in Mexico. The project is designed to direct an increasing percentage of the country's investment in public housing to the poorest and largest segment of the housing market. -pie project will support schemes to build starter houses and infrastructure such as earthworks, drainage, roads, sewerage, and water and electricity networks. More than 142,000 families will benefit from the availability of serviced lots, about 15,200 of which will include starter houses. A 500-unit housing project is expected to generate an average of 216 temporary construction jobs. The implementing organization for the project is the Low Income Housing Fund (FONHAPO), a public trust fund administered by the National Bank for Public Works and Services, which finances housing developments for low-income workers who are generally in independent, service-oriented occupations •. FONHAPO will re-lend the project's funds to borrowers who will carry out sub-projects to construct serviced sites and starter houses in some .59 rapidly growing, medium-sized cities. To receive financing from the project, these sub-projects must be directed to families in which the head of the household earns an income equal to or below two and one-half times the minimum wage in the sub-project area. ·Technical assistance will be provided to FONHAPO to support its increased lending program and coordination with regional offices. This assistance will include computerizing FONHAPO's operations, developing a comprehensive financial reporting system, and designing and promoting systems for payment collection. Finally, the project will support the carrying out of a housing finance study. Other financing for the project will be provided by the government, $40 million; FONHAPO, $75 million; and sub-borrowers, $35 million. The World Bank loan is for 15 years, including three years of grace, with a variable interest rate, currently 8.82 percent, linked to the cost of the Bank's borrowings. It also carries an annual commitment charge of 0.75 percent·on undisbursed balances. NOTE: Money figures are expressed in U.S. dollar equivalents.