Housing Finance in Brazil: Institutional Improvements and Recent Developments

Despite a recent expansion in housing finance, Brazil still faces a severe housing shortage, especially among lower-income people, and it is important to examine the development, limitations and prospects of the country's housing finance market. This paper investigates the recent evolution of that market in Brazil, focusing on whether the current expansion in mortgage lending is the result of institutional and economic improvements favoring economic stability and compliance with contractual obligations or is merely an effect of the higher level of housing loans imposed by the government on financial institutions. Different explanations are found for private and public institutions.