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The Green and Yellow House is Brazil’s new social housing program, intended to replace the previous My House My Life initiative.
The government’s project aims to provide housing that fulfills the housing requirements of low-income individuals in Brazil, enabling them to achieve the goal of owning their own home with reduced interest rates and improved subsidies, which safeguards their purchasing power.
The social housing program provided by Caixa Econômica Federal simplifies access to credit for entrepreneurs and companies in the construction industry looking to fund real estate projects using their own or external resources.
Let’s provide a clearer explanation of how the program operates and how your developer or builder can take advantage of the Casa Verde and Amarela program.
What is the objective of the Casa Verde and Amarela program?
The Ministry of Regional Development has introduced new measures to make it easier for families to participate in the Casa Verde and Amarela program. These measures include reducing interest rates for some beneficiaries, raising the maximum property value for eligibility, and expanding the number of families eligible for the lowest interest rate available.
The Green and Yellow House program divided the population into three groups to determine benefits and interest rates for funding, resulting in improved funding conditions for the North and Northeast regions of Brazil compared to the My House My Life program.
The Casa Verde and Amarela program is advantageous for three different income groups.
- Group 1 has a monthly income ranging from R$2,000.
- Group 2 has a monthly income ranging from R$2,000 to R$4,000.
- Group 3 has a monthly income ranging from R$4 to R$7 thousand.
These adjustments benefit the construction industry by enabling medium-income real estate projects to cater to a portion of their clientele within a program that offers higher price limits and lower interest rates.
Discover how INCO can assist your builder in financing your project.
How does the construction sector profit from the Casa Verde and Amarela initiative?
Brazil faces a significant social challenge in achieving sustainable growth by addressing the housing demand. According to TCP Partners’ latest study, the economic crisis is expected to increase the housing deficit to 6.1 million dwellings in the country.
According to the EY Building report for a more improved working world,
A 32% increase in housing units is expected from 2015 to 2035. Specific challenges facing the real estate market include regulations, financing, and taxation.
The construction industry in Brazil is being propelled by government social housing initiatives like the Green and Yellow House program, making it essential for civil construction firms to grasp and comply with the program’s updated guidelines.
Companies that focus more on the middle-income group benefit the most from the Casa Verde and Amarela program.
Construction companies benefit from participating in CAIXA programs as they boost sales, stimulate demand in existing regions, enhance brand reputation, and increase the success rate of launching buildings for social welfare programs.
The country has the potential to decrease its housing shortage by modernizing the construction sector. Entrepreneurs and builders must secure funding to invest in technology, enhance processes, and boost productivity. This can lead to shorter construction timelines and ensure quality standards are met for real estate delivery.
Industry companies need to consider:
- Investment in housing.
- Construction supplies.
- Workman.
- Real estate loans and similar financial products.
The present situation is favorable for builders and developers to utilize government programs in order to construct real estate and expand the industry.
Capital options for a real estate project
It is often difficult to obtain credit for investing in a business due to the lack of capital or guarantees that many companies face when seeking approval for a construction loan from banks.
Loans in the construction industry are typically burdened by excessive bureaucracy and high interest rates, ultimately leading companies to face financial risks when entering into debt.
There are better credit alternatives available for builders and developers in the market. Inco provides a solution for obtaining capital for real estate projects through collective real estate financing, connecting investors directly with companies and cutting out the middleman.
The INCO team carefully selects real estate projects by assessing various factors such as the builder’s financial status, legal matters, corporate setup, and project development.
If the project is given the green light, it will be initiated on the INCO website, presenting all project details and investment information for investors to make decisions on fund allocation.
Through real estate crowdfunding, funds can be raised from individual investors to provide financing to a business fund using specialized platforms.
To register a project on a real estate crowdfunding platform and secure capital for a real estate project, you need to establish a target funding goal, provide investors with comprehensive business information, set the value of each investment share, and detail the benefits corresponding to the amount invested.
Real estate crowdfunding projects can involve equity or debt investment, with set deadlines and expected returns on the INCO platform. The developer must make the payment as agreed upon after the specified period.
Is it possible for anyone to obtain a loan for a real estate project?
CVM’s 588 instruction in Brazil sets out the requirements for companies to be eligible for real estate crowdfunding, such as limiting real estate developers’ gross annual revenue to under R$10 MM.
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You can post your housing investment project and fully finance it online with competitive rates at INCO.
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