By Brazil Stock Guide – Brazil’s National Monetary Council (CMN) approved a new mortgage credit framework that will release 111 billion reais ($20.4 billion) in its first year of implementation, beginning in 2027. The decision was announced on Friday by President Luiz Inácio Lula da Silva in São Paulo, with Central Bank President Gabriel Galípolo attending.
According to the Banco Central do Brasil, the reform adds 52.4 billion reais to the system compared with the current model, including 36.9 billion reais made available immediately for housing finance. The plan is designed to expand mortgage access, particularly for lower-income families excluded from existing housing programs, while maintaining strict lending standards.
As part of the overhaul, the central bank adjusted rules on savings deposit requirements, allowing up to 5% of savings balances to be deducted from compulsory reserves when directed toward mortgage loans. The mandatory allocation of savings deposits for housing credit will gradually rise from the current 65% to 100%. Of that, 80% will be channeled to the Housing Finance System (SFH), where total costs, including interest, fees and commissions, are capped at 12% annually.
Loans will now be computed by contracted value rather than outstanding balance, for periods ranging from two to seven years depending on the type. Mortgages of 30 years or more may be counted for five years, shorter contracts will have proportional treatment, properties valued at up to 1 million reais may be considered for seven years, and loans for residential construction will be valid for two years.
The CMN also raised the SFH property cap from 1.5 million reais to 2.25 million reais, enabling borrowers to use FGTS resources for amortization, installment payments or debt reduction. Starting Jan. 1, 2026, complementary rules will take effect, including stricter focus on real estate-linked operations, an additional amortization feature for index-linked contracts, and a 60% credit limit for loans secured by the same property.
The government expects the new model to broaden access to home financing, reduce borrowing costs and boost Brazil’s construction sector, a key driver of employment and economic growth.