This year, the Federal Government regulated the Casa Verde and Amarela Housing Program. It comes to replace Minha Casa Minha Vida, and brings some important changes. Launched in August 2020, Casa Verde e Amarela targets beneficiaries by dividing them into three groups. In addition, it provides for lower interest rates for the North and Northeast regions.
What is Casa Verde e Amarela?
The Casa Verde e Amarela Housing Program is a proposal of the Ministry of Regional Development. The objective is to facilitate the population’s access to decent housing, aiming at a better quality of life. The goal, according to the program’s official website, is to serve 1.6 million low-income families by 2024. To achieve this goal, the program offers a reduction in interest rates to the lowest in the history of the Guarantee Fund. Length of Service (FGTS) and changes in the remuneration of the financial agent.
The North and Northeast regions are contemplated with a reduction of up to 0.5% in rates. This benefit is valid for families with an income of up to R $ 2 thousand per month. For those who declare income between R $ 2 thousand and R $ 2.6 thousand, the reduction is 0.25%. In these locations, interest can reach up to 4.25% per year for FGTS shareholders and, in other regions, 4.5%.
In addition, the program does not only operate in housing finance. It also seeks land regularization and home improvement. These improvements encompass the program’s objective of ensuring a better quality of life, adapting homes with inadequacies such as lack of bathroom, for example. The goal is to regularize 2 million homes and promote improvements in 400,000 by 2024.
Thus, according to the Ministry of Regional Development, Casa Verde e Amarela will include lines for:
· Subsidized production or acquisition of new or used properties in urban or rural areas;
· Financed production or acquisition of new or used properties in urban or rural areas;
· Requalification of properties in urban areas;
· Social rental of properties in urban areas; urbanization of precarious settlements;
· Housing improvement in urban and rural areas; and urban land regularization.
Financing requests by Casa Verde and Amarela can be made directly at Caixa Econômica Federal or with the construction companies.
Who can join the program?
The Casa Verde e Amarela program divides beneficiaries by income brackets:
Group 1: Families with gross income of up to R $ 2 thousand
Group 2: Families with gross income of up to R $ 4 thousand
Group 3: Families with gross income of up to R $ 7 thousand
The program also provides for different rules for families in rural areas. For them, it is possible to participate those who receive up to R $ 84 thousand per year.
How does Casa Verde e Amarela work?
As stated, the intention is that Casa Verde e Amarela does not only include real estate financing. The intention is that the project contemplates three fronts:
Real estate financing
The first modality is the most common. As already mentioned, the population is divided into 3 possible groups with interest rates and specific benefits for each one. In addition, the North and Northeast regions obtain different benefits than other regions. For those in Group 1 the benefits are:
· Property financing with the lowest interest rate;
· Subsidy for the purchase of a housing unit;
· Land regularization;
· Renovation of property.
In addition, groups 2 and 3 have access to real estate financing at slightly higher rates than group 1, in addition to land tenure regularization. It is worth mentioning that, although the values are slightly higher, they are still lower than those practiced by the market.
The Federal Government’s idea is to map the families that live in irregular land and houses. That is, it is necessary to identify those residences that are outside the standards required by law. The intention here is, instead of removing these families from their homes, to regularize their situation. In addition, the program provides for reforms or even reconstruction with public money. Land regularization is available for the three groups of Casa Verde and Amarela, however, some benefits are reserved only for group 1.
Renovations and resumption of works
The main social objective of Casa Verde e Amarela is to guarantee decent housing conditions for the population. In the new housing program, the government foresees reforms and resumption of works as the third front of operation. It is possible to use a larger portion of the Guarantee Fund for Time of Service (FGTS) to write off the debt.
New interest policy
The major change in the program concerns interest policy. At Casa Verde e Amarela, the old track 1 of Minha Casa Minha Vida was paused. This group completed families with an income of up to R $ 18 thousand and had no interest. Although the Ministry of Economy has future plans for these families, for now, the new units of this type are now served by Group 1, whose interest rates are starting at 4.25% – similar to Minha Casa Minha Vida in band 1 , 5.
Difference between Minha Casa Minha vida and Casa Verde Amarelo
Casa Verde e Amarela came to replace Minha Casa Minha Vida. With that, many doubts arise as to what changes and what remains as the new program. The first difference is that Minha Casa Minha Vida had housing production as its only modality. Meanwhile, Casa Verde e Amarela works with various modalities such as land regularization, improvement and financed housing production.
In addition, the Federal Government changed interest rate rules according to groups. In the old housing program, there was a single interest rate for the entire country, varying according to income ranges. Now, Casa Verde e Amarela proposes varying interest rates.
Therefore, according to the income range and the location of the property, the rates applied vary. The program also includes the North and Northeast regions with a reduction in the rate and an increase in the coverage of beneficiaries in these locations, in addition to an increase in the limit on the value of the financed property.
Advantages of Casa Verde e Amarela
The new Casa Verde e Amarela Housing Program has many advantages. Knowing them is very important when deciding whether to finance them using this method:
The main point when choosing a government housing program is the ease of financing. Casa Verde e Amarela allows the house or apartment to be paid in up to 360 months.
Lower interest rates
Another attraction of Casa Verde e Amarela concerns interest rates. The program offers values well below those practiced by the market, which facilitates the acquisition of the property. The rates vary according to the family income and locality in which the property is located.
One of the great advantages of a Federal Government housing program is that part of the property’s value can be paid by the State. This contribution may be essential for some families to acquire their home.
Get rid of the rent
The biggest advantage of Casa Verde e Amarela is that you and your family can buy your own home and get out of rent. Renting a property is among the most expensive expenses in the budget of Brazilians, equivalent to a considerable amount of the families’ wages. With the housing program, it is possible to match the financing installments to what would be paid for rent.
Is the use of FGTS foreseen in the program?
Casa Verde e Amarela allows you to use FGTS to have discounts on your own home. The two benefits provided by the Federal Government can assist the worker in the process of realizing the dream of buying the first property.
Thus, in addition to discounting the government’s housing program, FGTS can be used to pay for part of the property. It can also be used to repay financing installments every two years. To use FGTS it is necessary to:
• Have at least 3 years of FGTS payment.
• Not having a property in the same city.
• Not having financing in the Financial Housing System.
Registration at Casa Verde e Amarela
According to Caixa Econômica Federal, all families with a monthly income of up to R $ 7 thousand can hire Casa Verde e Amarela individually. Thus, it is sufficient to contact a construction company or an organizing entity linked to a project financed by the public financial institution. The simulation can be done online on the CAIXA website or on most of the construction companies.
The request goes through an evaluation by CAIXA and the citizen can access the conditions through the bank’s website. At this point, the documentation analyzed is that of the person applying for financing and even of the property that you have chosen to purchase. The last step, at the end of the analysis process, involves the approval of the documents and the signing of the contract.
Real estate financing: you are one step away from home ownership
The dream of home ownership surrounds the imagination of most Brazilians. However, even with a lot of financial planning, acquiring the necessary amount to buy a property in cash is not part of the reality of the majority of the population. To solve this problem, real estate financing may be the solution.
In it, it is possible to borrow part of the missing amount to pay for the residence of your dreams. With interest rates that vary from bank to bank and a very demanding credit analysis process, not all families have income for financing. Thus, the Federal Government offers a housing program with lower interest rates and better conditions for low-income families to be able to buy their own home.
Regardless of how you will finance your property, finding your ideal property is the first step. Thus, count on reputable real estate companies in the market to reduce the risks of the transaction. Casa Mineira Imóveis has a portal with dozens of residences and a filter that allows you to find your perfect apartment within the price range you intend to pay.