Circular No. 1110 - Brazilian Savings and Loan System (SBPE) - Real Estate Financing. Resolution 1221 of November 24, 1986 - Complementary Norms. Direction of the Application of Resources from Savings Deposits. Determination of Areas and Value on Which Taxes Will Apply

CIRCULAR NO. 001110

To
Economic Banks, Real Estate Credit Societies, and Savings and Loan Associations

We communicate that the Board of Directors of the Central Bank of Brazil, in a session held on this date, decided to issue the following provisions regarding Resolution No. 1,221, of November 24, 1986.

2. Housing financing operations, with interest rates limited to the levels provided for in items V and VI of the aforementioned Resolution, are intended for properties with sales prices equivalent to up to 10,000 (ten thousand) National Treasury Obligations (OTNs) located in the following localities:

a) Metropolitan Regions;

b) State Capitals;

c) Federal District.

3. For properties located in other cities or urban regions, the limitation of the rate provided in the previous item is assured for properties whose market sales prices are limited to up to 7,000 (seven thousand) OTNs.

4. Contributions to the Wage Variation Compensation Fund (FCVS) and to the Housing Assistance Fund (FUNDHAB), as well as insurance costs, are not included in the maximum rate of 12% (twelve percent) and 13% (thirteen percent) referred to in items V and VI, respectively, of Resolution No. 1,221, of November 24, 1986.

5. In the calculation of the monthly charges of housing financing by the Housing Financial System, to the rate provided in the previous item, the Wage Equivalence Coefficient (CES) will be added and the contribution to the FCVS will be required.

6. The percentages provided for in Resolution No. 1,221, of November 24, 1986, will be calculated based on the simple arithmetic mean of the balances of the resources captured in savings deposits, during the last 6 (six) months counted from the base date of their application.

7. Institutions that present a percentage of application in loans and financing lower than that provided for in item "b" of item I of Resolution No. 1,221, of November 24, 1986, are obliged to:

a) direct the total return of applications in housing financing to operations of the same species, of which 1/2 (one half), at minimum, must be in operations provided for in item "a" of item II of the aforementioned Resolution;

b) apply, at minimum, 75% (seventy-five percent) of the monthly net capture in housing financing, of which 1/2 (one half), at minimum, in operations established in item "a" of item II of the aforementioned Resolution.

Brasília-DF, January 21, 1987

Luiz Carlos Mendonça de Barros
Director