06 Housing Loans and Mandatory Reserves

SAS
11-08-10

Central Bank of Haiti
The Governor

CIRCULAR LETTER # 06

CIRCULAR LETTER
TO COMMERCIAL BANKS AND
SAVINGS AND HOUSING BANKS

Considering that the earthquake of January 12, 2010, destroyed a large number of buildings in the metropolitan area, thereby aggravating the housing problem in the country in general and in the metropolitan area in particular;

Considering that according to Article 2 of the law of August 17, 1979, the BRH's objective is to promote, in the fields of currency, credit, and foreign exchange, the most favorable conditions for the development of the national economy;

The Central Bank of Haiti (BRH), in its desire to contribute to the reconstruction of the country by reducing the cost of housing credit, hereby authorizes banking institutions not to set up mandatory reserves on Gouda resources captured and used to grant:

a. housing loans defined as all loans and advances granted by a banking institution for the acquisition, construction, repair, or improvement of residential real estate. They include the following residential real estate properties: single-family residences, multi-unit housing of any type, mixed-use buildings where more than half of the area serves as residential housing, and land intended for residential construction meeting internationally accepted seismic standards.

b. loans for the acquisition, construction, repair, or improvement of residential, commercial, and industrial buildings.

All Gouda resources used, from August 1, 2010, for the granting of housing loans in Gouda as defined in paragraphs a and b above, are exempt from the calculation of mandatory reserves.

This exemption extends to sound housing loans before January 12 and restructured after this date.

Furthermore, the sectoral ceiling of 25% provided for in Circular 83-4 on credit concentration can now reach up to 50% for housing loans.

Port-au-Prince, July 30, 2010

(Signature)
Charles Castel

P.O. BOX 1570, Port-au-Prince, Haiti . Telephone: 2940-2009/ 2998-2024/ 2998-2025