Funding Modalities for Timber Housing in Brazil

Abstract

This paper investigated the existence and participation of public and private real estate credit lines for timber house funding in Brazil. The analysis was completed through face-to-face interviews with Brazilian timber housing producers. Semi-structured questionnaires were applied in this survey method to obtain a sectorial approach of the industry. Accesses to full financing for timber housing and credit for the acquisition of construction materials were the main two issues studied. About 107 producers were fully evaluated from all sectors. Half of the studied companies offer full housing finance and, simultaneously, most loans still come from private banks. Credit directed to raw materials emerges as the most common method of accessing funding for timber-based construction despite the lower economic value of this form of credit compared to other, more complete financial options. Public banks disseminate partial credit more frequently because of lower rates and lower restrictions, such as the absence of insurance requirements against risks from these construction ventures. Full funding proliferation will stimulate this market.