Conformed Copy - L2997 - First Housing Sector Project - Amendment 1

Page 1 February 7, 1989 Mr. Juan Sourrouille Minister of Economy Hipolito Yrigoyen 25 Buenos Aires Argentina Re: Loan No. 2997 AR First Housing Sector Project Amendment to the Loan Agreement Dear Sir: Please refer to the Loan Agreement (the "Loan Agreement"), dated November 29, 1988 between the Argentine Republic and International Bank for Reconstruction and Development (the Bank). We are pleased to advise you that the Bank agrees to your request to amend the method of calculating the maximum amounts of monthly household income of a Beneficiary and of an Improvement Loan, as well as to have the minimum downpayment requirements apply to Beneficiaries on an average basis. The Bank, therefore, proposes the following amendments to the Loan Agreement: Section 1.02 (d) is hereby deleted and the following new Section 1.02 (d) substituted therefor: "(d) "Beneficiary" means any person who is the Borrower in respect of a Housing Loan or an Improvement Loan (as such terms are hereinafter defined) whose monthly income, when added to all other income of his or her household, shall not exceed $ 280 equivalent, calculated applying the exchange rate of $1 - 16.40 Australes representing the rate applicable on December 31, 1988. Such maximum amount be subject to adjustment from time to time in accordance with ISPI (as hereinafter defined);" Section 1.02 (k) of the Loan Agreement is hereby deleted and the following new Section 1.02 (k) substituted therefor: "(k) "Improvement Loan" means a loan, made or proposed to be made by the Borrower through SVOA utilizing a Financial Agent (as hereinafter defined) to a Beneficiary for purposes of financing the improvement or rehabilitation of a Housing Unit, in an amount not in excess of the equivalent of $1,800, calculated applying the exchange rate of $1 - 16.40 Australes representing the rate applicable on December 31, 1988. Such maximum amount shall be subject to adjustment from time to time in accordance with the Indice del Costo de la Construccion ("INDEC") furnished by Instituto Nacional de Estadistica y Censos of the Borrower;" Section 5.01 (d) of the Loan Agreement is hereby deleted and the following new Section 5.01 (d) substituted therefor: "(d) within five business days of adopting any changes to the maximum monthly income of the Beneficiaries, the maximum amount of the Improvement Loans or the cost limitations of the Housing Units, as permitted pursuant to Section 1.02 (d), Section 1.02 (k) and paragraph 3 (a) of Schedule 6 to this Agreement, respectively, notify the Bank thereof, and together with such notice, provide to the Bank documentation evidencing the ISPI or Indice del Costo de la Construccion based on which such changes have been adopted, and the dollar equivalents of such changed maximum monthly income, maximum amount of the Improvement Loans or cost limitations of Housing Units, using for such purpose the rate of exchange applicable to disbursements of loans made by the Bank". Paragraph 2 (a) of Schedule 6 to the Loan Agreement is hereby deleted and the following new paragraph 2 (a) of Schedule 6 to the Loan Agreement substituted therefor: "(a) Only a household having a monthly total household income of $280 Page 2 equivalent or less, which amount may be adjusted in accordance with Section 1.02 (d), shall be eligible for a Housing Loan or an Improvement Loan." Schedule 6, paragraph 2 (b) is hereby deleted and the following new paragraph 2 (b) substituted therefor: "(b) The maximum cost of the Housing Unit for which a Beneficiary shall qualify, as well as the average minimum down payment per Beneficiary required in order to qualify for a Housing Loan, shall be determined in accordance with the total monthly household income of the Beneficiary as specified in the Table to this Schedule 6." This Amendment shall come into force and effect on the date upon which the Loan Agreement becomes effective. Please confirm your agreement to the foregoing by signing and dating the attached confirmation copy of this letter and returning the same to the undersigned. Very truly yours, INTERNATIONAL BANK FOR RECONSTRUCTION AND DEVELOPMENT By /s/ Suman Bery Acting Director Country Department IV Confirmed: THE ARGENTINE REPUBLIC By /s/ Authorized Representative Date: