Affordable Panama Homes: New Law Extends Mortgage Benefits

Panama’s Project Law No. 207: Boosting Homeownership

Panama City – In a move poised to boost homeownership, particularly among middle- and low-income families, the National Assembly of Panama has approved Project Law No. 207. The law extends the country’s preferential mortgage interest rate program, offering significant financial relief to eligible residents.

Four Decades of Support

For over 40 years, Panama has utilized preferential mortgage interest rates to facilitate homeownership. Project Law No. 207 supersedes Law 3 of 1985, updating and refining the existing framework to better serve the needs of today’s aspiring homeowners.

How the New Law Works

The core of the law centers on the state covering a substantial portion of the mortgage interest rate offered by financial institutions-up to 85%. This reduces the financial burden on new homeowners, making mortgages more accessible and affordable.

To ensure the benefits are distributed equitably, the law establishes three preferential tiers based on the property’s value. This tiered system allows for tailored support, maximizing the impact of the subsidies.

Who Benefits?

The preferential interest rates are exclusively available to Panamanian citizens and legal permanent residents. This ensures that the benefits are targeted toward those who have chosen to build their lives in Panama.

Collaboration for Success

The passage of Project Law No. 207 represents a collaborative effort between the Executive Branch, the banking sector, and private enterprises. This unified approach aims to promote sustainable real estate development throughout Panama, ensuring that growth is both equitable and environmentally conscious.

Maintaining Market Integrity

The new law incorporates control mechanisms designed to prevent market distortions, ensuring that the subsidies reach those who need them most and that the real estate market remains stable and fair. These mechanisms will be overseen by the Superintendency of Banks. Public and private financial intermediaries authorized by the Superintendency of Banks can operate under this regime.

Impact on Panama’s Banking Sector

The extension of preferential mortgage interest rates is expected to stimulate increased mortgage applications, contributing to growth within the real estate market and the banking sector. This could lead to greater investment and development opportunities across the country.

A Brighter Future for Homeowners

Project Law No. 207 signifies Panama’s commitment to making homeownership a reality for more of its residents. By reducing financial barriers and promoting sustainable development, this law paves the way for a more prosperous and equitable future.

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