SHELTER AND COMMUNITY UPGRADING

investors provide loans to Panama"s National Mortgage Bank (BHN) to increase the capabilities of the Government of Panama (GOP) and private sector housing institutions to develop a national program of improved shelter and community services for low-income Panamanians. USAID, through its Housing Investment Guaranty Program, will insure the U.S. investor against any default in loan repayment. Project will help develop BHN as the key GOP housing finance institution. To upgrade GOP institutional capability, the Ministries of Housing (MIVI) and of Planning (MIPPE) will receive grant-financed technical assistance in planning, social development, and for subproject implementation and interagency coordination. Loans will be authorized in three equal portions, corresponding to the project"s three subprojects. In subproject I, MIVI will construct 1,300 units for 2,800 urban poor in Panama City"s (PC) slum areas. Units will cost from $7,500 to $11,000 for apartments ranging in size from 40-60 sq m. To reduce carrying costs and make units more widely available, MIVI will use rent-purchase options, graduated mortgage payments, and housing cooperative systems. A total of 700 walk-up apartments in the same cost range will be constructed for 3,500 in Colon, and selected squatter settlements in both PC and Colon will be upgraded. To absorb families who move from urban and rural areas, subproject II activities will include establishing four new communities (including new construction and upgrading of squatter settlements) to the east and west of PC and to the south and east of Colon. Loan funds will be used to provide shelter, related utilities (water, sewer, electricity), and community facilities in all four areas. Home improvement credit will also be made available. Under subproject III shelter and facilities will be provided for 2,400 in secondary cities, and shelter for 400 in rural communities. Construction of new shelter solutions will employ labor-intensive techniques in order to generate employment. Approximately 19,800 families, or 100,000 Panamanians will benefit from new or improved housing.