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Divisible mortgages: the Government took a key step to facilitate access to credit with homes under construction - Infobae
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www.infobae.com
January 13, 2025
The National Securities Commission established new rules to promote access to mortgage credit to buy sub-prime units. This tool can be crucial to promote new constructions
By Jose Luis Cieri
It is expected that the option of buying and selling houses in a pit can materialize after the first quarter of 2025, which would allow to boost the market for real estate projects and construction.
In order to streamline access to mortgage credit and encourage the development of the real estate sector, the National Securities Commission (CNV) regulated the registration of sales contracts and contracts related to divisible mortgages.
According to the official agency, the measure will allow buyers of homes under construction to access mortgage financing and use only the purchase agreement for a condominium. The resolution was published in the Official Gazette (see below) and marks a significant step in the implementation of Decree 1017/2024 , which authorizes the constitution of divisible or “Future Asset” mortgages on properties under construction.
According to the regulations, the Registration and Payment Agents (ARYP) , the Clearing Houses , the Markets , the Central Depositary Agents of Negotiable Securities (ADCVN) and the financial entities may carry out the annotation of purchase and sale tickets and other contracts related to units projected under horizontal property or land subdivision regimes.
The measure seeks to address one of the main barriers to accessing mortgage credit in Argentina: the requirement of a property title, such as a deed, to obtain financing.
According to the CNV, this new tool will allow real estate developers to offer more accessible financing options to buyers, thereby encouraging investment in construction projects.
Buyers of sub-prime housing will also be able – although, for now, only Banco Ciudad offers this line of credit – to access a property that, once completed, can be used for personal use or rented out to generate income.
According to data from the Notaries Association of the City of Buenos Aires , in November 2024, 5,755 deeds were signed in the Federal Capital, which represented an increase of 41.5% compared to the same month of the previous year . Of these operations, 16.5% were carried out with mortgages, which shows the need for measures to promote this type of financing.
Source: Official Gazette and National Securities Commission (CNV)
However, the low proportion of mortgaged deeds underscores the importance of initiatives such as regulating divisible mortgages to expand access to credit.
Source: Official Gazette and National Securities Commission (CNV)
The president of the CNV, Roberto E. Silva , highlighted the importance of this measure. “From the Board of Directors of the CNV, we work to support the measures of the National Government. The development of mortgage credit is very important for Argentines, and we are happy to report this type of regulations that promote it, while at the same time increasing the development of the capital market,” he said.
Damián Tabakman , president of the Chamber of Urban Developers (CEDU), described the measure as a significant step forward, especially for the possibility of registering sales contracts under a private registration regime as an alternative to property registries. According to Tabakman, this tool could become a valuable complement to traditional mortgages and other financing mechanisms.
However, the CEDU representative pointed out that there are still minor objections and that it is essential that the Ministry of Economy finish regulating the DNU. “The regulations of the Ministry of Economy are still missing, which is the most important thing that we are still waiting for,” said Tabakman.
The regulation of decree 1017/2024, published by the Government two months ago, marked a significant advance in the implementation of tools provided for in the Civil and Commercial Code of the Nation, such as the divisible mortgage and the right of surface, together with the registration of purchase and sale tickets.
Bernardo Mihura de Estrada , general director of the Real Estate Registry of the city of Buenos Aires, highlighted the importance of registering tickets in official registries, because they ensure a more solid framework for real estate transactions.
The divisible mortgage allows the start of the project to be guaranteed directly to the purchaser of a unit, regardless of the developer's financing. This is achieved by registering the purchase agreement, which allows the said agreement to be pledged and provides legal security to both the buyer and the secured creditor.
The new regulations will allow the registration of purchase and sale tickets and contracts under alternative regimes, seeking to resolve barriers to access to financing for future housing
Mihura de Estrada pointed out that “this tool facilitates the conversion of the contract into a deed once the work is finished, proportionally transferring the original mortgage to each functional unit.”
In addition, the decree makes the use of the right of surface more flexible, allowing it to be established without the need for an official plan in some provinces, a measure that seeks to overcome bureaucratic obstacles.
However, Mihura de Estrada stressed that “the registration of tickets in private registries, as proposed by the decree, can generate legal and political tensions, logically we defend the Property Registry as the most suitable institution to carry out this process.”
With this measure, the Government seeks not only to facilitate access to housing, but also to stimulate economic activity through construction (which always promotes private employment) and real estate development. The success of this initiative will depend on its ability to overcome the regulatory and operational challenges posed by its implementation.
www.buysellba.com
Source:
Hipotecas divisibles: el Gobierno dio un paso clave para facilitar el acceso a créditos con viviendas en construcción
La Comisión Nacional de Valores estableció nuevas reglas para impulsar el acceso al crédito hipotecario para comprar unidades en pozo. Esta herramienta puede ser crucial para impulsar nuevas edificaciones
www.infobae.com
January 13, 2025
The National Securities Commission established new rules to promote access to mortgage credit to buy sub-prime units. This tool can be crucial to promote new constructions
By Jose Luis Cieri
It is expected that the option of buying and selling houses in a pit can materialize after the first quarter of 2025, which would allow to boost the market for real estate projects and construction.
In order to streamline access to mortgage credit and encourage the development of the real estate sector, the National Securities Commission (CNV) regulated the registration of sales contracts and contracts related to divisible mortgages.
According to the official agency, the measure will allow buyers of homes under construction to access mortgage financing and use only the purchase agreement for a condominium. The resolution was published in the Official Gazette (see below) and marks a significant step in the implementation of Decree 1017/2024 , which authorizes the constitution of divisible or “Future Asset” mortgages on properties under construction.
According to the regulations, the Registration and Payment Agents (ARYP) , the Clearing Houses , the Markets , the Central Depositary Agents of Negotiable Securities (ADCVN) and the financial entities may carry out the annotation of purchase and sale tickets and other contracts related to units projected under horizontal property or land subdivision regimes.
The measure seeks to address one of the main barriers to accessing mortgage credit in Argentina: the requirement of a property title, such as a deed, to obtain financing.
According to the CNV, this new tool will allow real estate developers to offer more accessible financing options to buyers, thereby encouraging investment in construction projects.
Buyers of sub-prime housing will also be able – although, for now, only Banco Ciudad offers this line of credit – to access a property that, once completed, can be used for personal use or rented out to generate income.
A mortgage market in transformation
The impact of this regulation is framed in a context where mortgage credit represents a limited percentage of real estate transactions but with a tendency to grow. Since the plans were reintroduced last April, month after month it has increasingly affected the purchase of new and used units.According to data from the Notaries Association of the City of Buenos Aires , in November 2024, 5,755 deeds were signed in the Federal Capital, which represented an increase of 41.5% compared to the same month of the previous year . Of these operations, 16.5% were carried out with mortgages, which shows the need for measures to promote this type of financing.
Source: Official Gazette and National Securities Commission (CNV)
However, the low proportion of mortgaged deeds underscores the importance of initiatives such as regulating divisible mortgages to expand access to credit.
Details of the regulations and their implementation
General Resolution No. 1043 , issued by the CNV, establishes that authorized entities may carry out activities of annotation of sales and purchase agreements and related contracts as complementary activities to the capital market, provided that these are previously reported to the CNV. This regulatory framework seeks to consolidate a robust and sustainable mortgage credit market, considered key to access to housing, the development of private investment and the economic reactivation of the country.
Source: Official Gazette and National Securities Commission (CNV)
The president of the CNV, Roberto E. Silva , highlighted the importance of this measure. “From the Board of Directors of the CNV, we work to support the measures of the National Government. The development of mortgage credit is very important for Argentines, and we are happy to report this type of regulations that promote it, while at the same time increasing the development of the capital market,” he said.
Real estate sector outlook and tool analysis
The initiative was well received by developers and experts in the sector, although some aspects remain to be defined.Damián Tabakman , president of the Chamber of Urban Developers (CEDU), described the measure as a significant step forward, especially for the possibility of registering sales contracts under a private registration regime as an alternative to property registries. According to Tabakman, this tool could become a valuable complement to traditional mortgages and other financing mechanisms.
However, the CEDU representative pointed out that there are still minor objections and that it is essential that the Ministry of Economy finish regulating the DNU. “The regulations of the Ministry of Economy are still missing, which is the most important thing that we are still waiting for,” said Tabakman.
The regulation of decree 1017/2024, published by the Government two months ago, marked a significant advance in the implementation of tools provided for in the Civil and Commercial Code of the Nation, such as the divisible mortgage and the right of surface, together with the registration of purchase and sale tickets.
Bernardo Mihura de Estrada , general director of the Real Estate Registry of the city of Buenos Aires, highlighted the importance of registering tickets in official registries, because they ensure a more solid framework for real estate transactions.
The divisible mortgage allows the start of the project to be guaranteed directly to the purchaser of a unit, regardless of the developer's financing. This is achieved by registering the purchase agreement, which allows the said agreement to be pledged and provides legal security to both the buyer and the secured creditor.
The new regulations will allow the registration of purchase and sale tickets and contracts under alternative regimes, seeking to resolve barriers to access to financing for future housing
Mihura de Estrada pointed out that “this tool facilitates the conversion of the contract into a deed once the work is finished, proportionally transferring the original mortgage to each functional unit.”
In addition, the decree makes the use of the right of surface more flexible, allowing it to be established without the need for an official plan in some provinces, a measure that seeks to overcome bureaucratic obstacles.
However, Mihura de Estrada stressed that “the registration of tickets in private registries, as proposed by the decree, can generate legal and political tensions, logically we defend the Property Registry as the most suitable institution to carry out this process.”
Next steps and challenges
The Ministry of Economy , through the Secretariat of Territorial Development, Habitat and Housing, led by Rodrigo Aybar , will be in charge of defining the final details of this tool. The effective implementation of the regulations will depend on the coordination between the different entities involved and the capacity of the financial system to adapt to this new scheme of divisible mortgages.With this measure, the Government seeks not only to facilitate access to housing, but also to stimulate economic activity through construction (which always promotes private employment) and real estate development. The success of this initiative will depend on its ability to overcome the regulatory and operational challenges posed by its implementation.
www.buysellba.com
