San Pablo Housing Project

I'm actually pretty excited over the fact that this blog might cause a significant amount of debate or healthy dialogue amongst friends and family when I get home.  It's essentially about making it easier to put people in homes.  In the U.S., the same notion arguably sparked the largest economic downturn since the great depression.  What happens when institutions like FMSD help people reach not the American dream, but the Colombian dream?

As part of its overall mission to develop communities, FMSD has built four housing projects across the country.  Between 1985 and 2009, a total of 7,000 homes have been built with the support of both the local and national governments.  The newest project in the San Pablo neighborhood of Barranquilla houses 139 families.  We visited San Pablo earlier this week.

Similar to capital for small businesses, affordable mortgage financing from traditional lenders is not accessable to everyone.  Today, over 1,000 of the households residing in the four projects receive mortgage financing through FMSD.  Below is a breakdown of the financing structure for a family interested in a home with a basic floor plan:

Home price - $13,575
National government subsidy - up to $4,350
Local gov't subsidy - b/t $1,250 and $1,500
FMSD mortgage - up to $7,500 @ 16% interest
Down payment - as low as $225 (13575 - 4350 - 1500 - 7500)

To put the down payment amount in perspective, the minimum wage in Colombia is $250 per month.  Without knowing the financial standing of each applicant, what are your initial gut reactions to this program?  Are you thinking this is a way to get economically active families out of the bad neighborhoods and into blossoming communities?  Are you concerned about overindebtedness, the same epidemic we face in the United States?   

What I can tell you, and what may help persuade in a dialogue, is that FMSD is doing far more than simply financing people's mortgages.  They are heavily involved in all phases of the housing project, including but not limited to:

- housing construction (including electrical/plumbing assistance)
- attracting small business and services
- starting community committees (including safety)
- building health clinics
- school construction
- recycling, alternative energy, planting of flowers and trees
- recreation and leisure (parks, play zones, etc.)

I'm convinced of the positive impact these housing projects will have on the economic development of Colombia.  I look forward to hearing your thoughts on it as well.