The role of housing finance in addressing the needs of the urban poor: Lessons from Central America

Abstract

This paper analyzes three forms of low-income housing finance implemented in Central America: up-front and targeted state subsidies for mortgage finance to access new housing; small, repeated loans for incremental housing improvements; and co-financing methods for the introduction of infrastructure and basic services. It shows that technical assistance for self-help construction, when combined with sound inclusive financial methods, can open new opportunities to make land, shelter and services affordable to different urban poor sub-groups.