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Brazil has introduced a new housing credit framework aimed at expanding lending in the real estate sector. By loosening rules on the use of savings account deposits, 36.9 billion reais (USD 6.72 billion) is now available for immediate housing loans. The phased transition allows banks more flexibility while central bank estimates suggest 111 billion reais in new loans could be issued in the first year. Banks must still allocate a portion of savings deposits to housing loans, and most loans will remain under the capped-rate Housing Finance System, ensuring controlled interest rates.
Brazil has rolled out a new housing credit framework aimed at boosting lending in the real estate sector. The government's plan eases restrictions on how banks can use funds from savings accounts, immediately releasing 36.9 billion reais (USD 6.72 billion) for housing loans. The reforms address the long-standing reliance on savings accounts as the primary source of housing credit, a system that has lost appeal among savers because returns are lower than other fixed-income options available through investment platforms. Advertisement
Under the framework introduced by President Luiz Inacio Lula da Silva's administration, banks will no longer be required to meet certain central bank reserve requirements or designate specific uses for savings account funds. This transition will be phased, allowing financial institutions to gradually adjust while expanding lending capacity. The central bank estimates that in the first year alone, the changes could unlock 111 billion reais in new loans, which is 52.4 billion reais more than the previous system. Of this, 36.9 billion reais will be available immediately for lending.
Until the end of next year, banks are still expected to allocate 65% of savings deposits to housing loans, while 15% may be used freely. The portion held as compulsory central bank deposits will drop from 20% to 15%, providing more room for additional lending. From 2027 onwards, banks that obtain market funding fully dedicated to housing loans will be allowed to use an equivalent amount from savings accounts for flexible lending over a set period.
The government expects these changes to improve banks' profitability and allow them to offer lower interest rates on loans funded through other sources. Under the new rules, 80% of housing loans must remain under the Housing Finance System, which caps interest rates at 12% annually.
The reform comes as Brazil prepares for the 2026 general election and is seen as a way to stimulate borrowing while the central bank maintains higher interest rates to control inflation. It also addresses trends in Brazilian savings behavior, where increasing financial literacy and the availability of better investment options have reduced deposits in traditional savings accounts over the years.
Source Reuters
5th Jun, 2025
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