Tripartite housing program

investors against default on loans provided to the National Housing Bank (BNV) in the Dominican Republic. Funds will be used to increase the supply of low-income housing by involving private employers in low-cost shelter solutions. The BNV will jointly implement the project along with the National Council of Businessmen (CNHE), the project"s sponsor. HG funds will be used to finance small housing subprojects as well as home improvements, additions, and new construction on worker-owned land. A total of 4,000 shelter solutions will be funded for mostly urban, low-income workers employed by CNHE"s member firms. The BNV will select and monitor subprojects. Local saving and loan associations (S&L"s) will arrange financing with employers and provide, through the BNV, 20-year mortgages at 12% interest to qualified workers (those who earn between the minimum wage and the urban minimum income); workers will make a 20% downpayment. Employers, who will typically sponsor 2-15 workers per year, will contribute 20% of the costs and will pay the monthly difference between interest charges and the cost of servicing the HG loan, as long as the worker remains in their employ. The Government will donate land; if suitable Government land is not available, land will be purchased. Construction will be by private builders, who will be assured of the project"s long-term financing and of qualified buyers and land. A full-time advisor will help develop the BNV"s capacity to administer the HG loan and will be responsible for liaison among all parties. The BNV will also receive up to 9 months of short-term technical assistance in subproject design, home improvement lending, environmental considerations, and project packaging. An interest-bearing fund will be established to hold balances between the amounts received from employers and workers and the amounts needed to service the HG loan. The fund, which is expected to grow quickly, could eventually be used to reduce employer costs and extend benefits to more workers. Besides increasing the supply of affordable low-income urban housing in the Dominican Republic, the project will support S&L"s by providing them with new business and the opportunity to acquire new savings accounts. Project authorization is rescinded per action memorandum of 10/14/83. (PD-AAN-519)