Between 2021 and October 2024, at most R$255 billion and 1.63 million individual contracts were carried out throughout Brazil My Home, My Life (MCMV). Of the total contracts, 50.2% of them had youth between the ages of 18 and 30 as beneficiaries – 25.5% of the 18 to 25 year olds and 24.7% of the 26 to 30 year olds. Data Caixa and Ministry of Cities.
oh Unplanned property is the most preferred category by the youth between 18 and 30 years of age, representing 52.7% of the workforce.. This option has attracted the public for several reasons such as accessible financing conditions along with government subsidies that reduce the value of installments and interest rates.
Minha Casa, Minha Vida aims to make the dream of owning your own home come true. The housing policy, which was relaunched by the central government in February last year, offers both subsidized housing and special conditions for financing your first home – you may be eligible for the scheme and not know it.
“This project is very important in the real estate market, in the Brazilian economy, because it requires thousands of properties, and all this drives a gigantic peripheral industry. And no matter how advertised it is, there are more. Those who have the opportunity to benefit from the program remain unsigned”, says José Augusto Neto, President of the Regional Council of Real Estate Brokers of the State of São Paulo (CreciSP).
Generally, this scheme is targeted at families with a total monthly income of up to R$ 8 mill in urban areas and up to gross annual income R$ 96 million For families in rural areas. Amidst this, service taxes vary according to three prescribed income thresholds.
Income: Households with total monthly income of up to R$ 2.850,00 Monthly in urban areas; Households with a total annual income of up to R$ 40.000,00 In rural areas.
Service: Families receiving the Continuous Payment Benefit (BPC) or participating in the Bolsa Família are exempt from the benefits – that is, they are entitled to 100% free property. Therefore, subsidized and subsidized housing may be provided to those who fall within this range.
In bracket 1, the financing interest rate is 4% for residents of North and North Eastern regions and 4.25% for residents of other parts of the country.
Income: Households with total monthly income R$ 2.850,01 A R$ 4.700,00 In urban areas; Households with gross annual income R$ 40.000,01 A R$ 66.60 In rural areas.
Service: In these cases, the property can be purchased through housing finance. Band 2 interest rates range from 4.75% to 7% per annum.
Income: Households with total monthly income R$ 4.700,01 A R$ 8.000,00 In urban areas; Households with gross annual income R$ 66.600,01 A R$ 96.000,00 In rural areas.
Service: In these cases, the property can be bought with housing finance and the sale value should be up to it R$ 270 mill – Valid for entire national territory. Interest in band 3 is 8.16% per annum – below market rate.
The maximum allocation is 70% for the acquisition of used assets in the North, North-East and Mid-West regions, and 50% for the South and South-East regions where most of the asset acquisition activities signed during this period are focused.
Regardless of the limit, temporary benefits of a compensation, assistance or social security nature, such as sickness benefit, accident benefit, unemployment insurance, continuous payment benefit (BPC) and bolsa familia, are not included in the calculation of gross family income.
How do I participate in Minha Casa, Minha Vida?
Those in Band 1 and anyone who wants to access subsidized housing units must register through local housing registries – from the state government or municipalities. Selection of beneficiaries is also done by these systems respecting established criteria.
Financing
In all cases, to finance property through Minha Casa, Minha Vida, the family must first find a property of interest that meets the program's criteria. From there, it is necessary to contact Banco do Brasil or Caixa Económica Federal, the financial institutions that implement the program, so that the housing financing can be evaluated.
From this, credit risk and family classification analysis is carried out for approval of financing.
Here's a tip: Caixa Econômica Federal offers an online 'housing simulator'. There you can enter your data and get financial views – including Minha Casa, Minha Vida, if you are in any of the income limits.
Also, real estate agencies assist in the financing process through Minha Casa, Minha Vida, when the property in question is advertised by them and fits into the project.
How to prepare to buy your first property
oh Terra Consult investment experts to find out how to prepare financially to buy your first property through Minha Casa, Minha Vida or a construction company. Jose Augusto Balodari, a consultant at Manchester Investimentos, recommends a 30% deposit and an emergency reserve.
“I believe up to 30% is a comfortable number for a down payment on your first property. Also, it is important to have a reserve source to cover potential charges that may arise during the contract,” he suggests. .
Another expert tip is the value of installments. According to him, you cannot pay more than 30% of your monthly income.
Real Estate Association
A survey conducted among clients of Micon, Brazil's first syndicated fintech company, reveals that 72% of property syndicate holders are between the ages of 24 and 48. Yet according to the survey, 71% of customers identified themselves as male and 26% as female. Asset Consortium has sold 43.4% of its shares so far.
Francis Silva, Mycon's CFO, explains how to take advantage of this method, which is characterized by a collective financing system in which a group of people come together to achieve a procurement objective. Motives can be buying a new or used property, buying land, constructing a property, renovating or paying off a loan.
It works as follows:
- Group Formation: A group of persons interested in acquiring property join together to form a consortium. This group is managed by a specialized agency known as the Federation Administrator;
- Monthly Contributions: Each consortium participant has to pay monthly contributions called “Common Fund” which is part of the installment value. These contributions are established at the beginning of the contract;
- Thinking: Each month, through a draw or auction, if the group has sufficient resources, one or more participants are selected and entitled to use the credit to purchase the desired item or service. The recipient receives their registration and credit approved and a letter of credit equal to the value established in the contract, which allows the administrator to purchase the property being sold;
- Installment Payment: After consideration, all participants continue to pay their installments until the contract is completed. Payment of installments is important to maintain the operation of the consortium and to ensure that all participants are insured over time;
- Group Closure: When all participants are included in the consortium, the group is closed. If a participant withdraws or is not included at the end of the contract, a proportional refund of the amount paid will be made in accordance with the rules established in the contract.
It is worth noting that the terms and conditions may vary depending on the federation administrator and the type of federation. It is important to read the agreement carefully and clarify all doubts before joining a consortium.
What is the difference between finance and federation?
Both are credit products that facilitate the process of acquiring real estate or other goods and services. However, the differences are well defined.
For example, in financing, the bank charges interest on the amount borrowed, while in a consortium, the administrator charges a fee for managing the group.
See other differences between funding and consortium:
- In financing, input is required, which does not happen in federation;
- In financing, there is credit analysis at joining, while in consolidating this analysis occurs at the time of contemplation;
- In financing, the borrower gets the money immediately after loan approval, in syndicate, the selection can happen through draw or auction;
- In financing, the installments can be variable (as in floating interest) or fixed (when the interest is fixed in advance), in syndicate the installments vary annually based on the inflation index, in the same way that the loan is not included, which is done to maintain the purchasing power of the syndicate member.
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