‘When I was close to three years into IESS membership, my employer died and I couldn’t buy a house,’ says Estrella, who worked as a domestic helper.

The percentage of households living in their own home in Ecuador, already paid for or in the process, has decreased in the last twelve years, which shows the difficulty in realizing the desire for a home.

The latest population census from 2022 shows that 56.2% of families live in their own home. The rest (43.8%) rent or live in rented homes. But 59.7% of households had their own in 2010.

The story of Estrella and Walter, who both live in Guayaquil, reflects these difficulties. “I’ve always dreamed of having my own house, but I’ve been renting it for almost 20 years, I couldn’t do it anymore,” says the 55-year-old woman, who didn’t rent only while working behind closed doors as a domestic helper.

“Just two and a half years after I joined IESS (Ecuadorian Social Security Institute), my employer died during the COVID-19 pandemic.“, he says. Thus, he could not collect three consecutive years of membership, which is a condition for accessing mortgage loans from IESS Bank (Biess), which is one of the main ways to buy a house in Ecuador.

Her hope rests on her daughter, who works as a dependent on Social Security, to be able to get it. Both are part 1,983,477 households in Ecuador renting or occupying rented houses by 2022..

Walter, for his part, thought about buying one for 15 of his 35 years, but it wasn’t until 2021 that he finally started paying down payments set at $6,000 over two years. He ended up canceling his contract last March, but he did Biess only lends him up to $50,000, according to your ability to pay.

Since the price of the home you are buying is frozen at $71,000 in 2021, you need $15,000 to cover the difference and start a loan with Biessa. “Now the real estate people are pressuring me to get a loan, since the house is almost finished, They want to move me, but that means I will lose the one I already chose with the frozen price“, he assures.

If you accept the move, the same house today has a price of $78,000. Another option is to request a refund for the ticket, but the sales contract stipulates a penalty of 15% of the cost of the property in case of withdrawalso they would only pay back 1000 of the 6000 dollars.

On a positive note, he already ended up with a $15,000 difference, so he will pay that to start the mortgage process in Biess.

Despite the difficulties he faces, Walter belongs to a privileged group of workers associated with IESS. Only 25 out of every hundred people have a job registered with the social security in the countryso the universe of households that could buy a home or improve the one they have through a Biess mortgage is reduced there.

INEC data shows this In June, there were 3,255,658 people across the country with a job who have access to social security.

The province of Esmeraldas reports the lowest rate with 9 out of every 100 people having a job with social security, followed by Los Ríos, Santa Elena and Bolívar with 10 out of every 100.

Furthermore, The number of mortgage loans granted by Biess fell from 9,659 between January and August 2019 to 6,396 in the same period this year. The amount awarded also decreased by 16.3%, from $462.8 million to $388.2 million in 2019 compared to 2023.

Yes good Between 2020 and 2022 there has been a recovery, there has been a decline so far this year and so far what was allocated before the pandemic has not been exceeded from COVID-19.

Between January and August of this year, the number of mortgages and the total amount approved by Biess decreased compared to the same period in 2022, when the entity granted $431.2 million in 7,348 operations.

Economic analyst and professor of finance at Universidad San Francisco de Quito Lorena Vivanco states that may respond to the fact that it’s an election year and people are thinking more before taking on long-term debt, which is why they’re looking for fewer mortgages..

Financing in the case of Biess can be for a term of up to 25 years, in private banks the maximum term is 20 years.

Estrella is in the majority group not affiliated with IESS, but her salary, which has been around $400 a month in recent years, puts her outside the income poverty percentage.

But he didn’t save any money and says he was never able to access state bonuses from the Ministry of Urban Planning and Housing (Miduvi), even when he was earning less than the basic salary to support his only daughter after separating from her husband.

Voucher policies do not reach all those who need decent housing

In order to serve the most vulnerable population, the state signed an agreement with the Inter-American Development Bank (IDB) in July 2019 to make a conditional credit line viable for investment projects worth $200 million.

The plan is focused on “Housing solutions for poor and vulnerable households” and is implemented by Miduvi. With the first disbursement of $93.9 million, 3,686 families were served by December 2022.

The goal is to facilitate access to housing for the low-income population and vulnerable population in quantitative deficit (which includes houses that need to be replaced) and qualitative (those that can be improved), giving priority to households headed by women, people with disabilities or ethnic groups.

The second phase is underway with a disbursement of USD 113.6 million. The user needs his own land to access one of these solutions.

“This is where the limitations start. I know of a case of a housekeeper who meets the Biess requirements for a mortgage loan, but they don’t give her one because the land she wants to build a house on doesn’t have proper papers in her name, it’s an inheritance without legalization, says Vivanco.

Another result is the second phase of the National Housing Program, which is implemented in the period 2013-2018. The assessment shows that this improved housing conditions for 16,320 households in the two quintiles with the lowest incomes.

However, the initiatives are not enough considering the high housing deficit.

INEC states that in December 2022 53.1% of homes require improvement (qualitative deficiency) or replacement (quantitative deficit). More than half of them are located on the coast.

Art. 30 of the Organic Law on Housing Care of Social Interest (VIS) indicates that in this case they are subsidized, preferably free of charge, and that users, in addition to meeting the conditions of poverty and vulnerability, They must not have “a history of receiving other similar compensation”.

The subsidized interest rate policy for apartments of social and public interest (VIS and VIP) of 4.99% per annum has had its effect, but the supply that meets the maximum prices of houses for access is still limited.

This is part of the social bonus program, which allows the granting of residential mortgage loans of up to USD 103,050, with a subsidized interest rate.

A report last May assessing the state’s strategies to reduce the housing deficit acknowledged that “Private credit markets have difficulties in offering mortgage loans for VIS, which motivates the need to diversify solutions for the vulnerable population, including tools that solve the qualitative deficit.“.

The cost of VIS should be up to 178 basic salaries, which implies an amount of $80,100 this year. While the maximum price of VIP persons is 103,050 dollars

What are the conditions for access to 100% subsidized houses?

In 2020, Miduvi is shooting 325,411 citizens in need of housing, of which 128,748 meet the conditions for 100% subsidized VIS. Others could apply, even those of public interest (VIP), but among the requirements is that they have a maximum annual income level, while meeting the maximum cost of the house.

The requirements for free access to the state social housing program (VIS) are as follows:

Finally, they must not be owners or possessors of real estate, except for the land on which the VIS will be built.