The new version of the Minha Casa, Minha Vida program, instituted by Executive Order 1,162/23 was recently regulated by Decree 11,439/23, replacing the Casa Verde e Amarela program established under the previous government.
The new program aims to serve up to two million families by 2026. Key objectives include:
- expand the supply of housing for low-income populations in urban and rural areas;
- resume and finalize the stopped works, with requalification of housing units currently irregular and use of public resources already invested; and
- support the sustainable development and modernization of the program, to expand its reach and increase the quality of production of new households.
One of the attractions for investors in the sector was the broadening of the target audience compared to previous parameters. The new Minha Casa, Minha Vida program will serve families living in urban areas with a gross monthly income of up to R$ 8,000[1] and in rural areas with an annual gross income of up to R$ 96,000.[2][3] Among the three urban bands, we highlight the increase in the gross family income ceiling of Urban Band 1 from R$ 1,800 to R$ 2,640, a significant increase of 47%. It is speculated that the government subsidy for Urban Band 1 will reach 95% of the property price.
Regarding the economic subsidy of the program, Ordinance 146/23 of the Ministry of Cities increased the previous limit as follows:
- R$ 140 thousand for operations with funds from the Residential Lease Fund (FAR) and the Social Development Fund (FDS); and
- R$ 60 thousand for operations of the National Rural Housing Program (PNHR).
The grant offered by the Federal Government will provide savings for construction companies on the commercial costs of a standard project. The new limits will include expenses for building, construction of a septic or wastewater treatment solution, implementation of technical assistance, social work, as well as amounts related to activities carried out by the operational manager and financial agent.
The new Minha Casa, Minha Vida program also provides, in addition to the sale, the possibility of assignment, rental, lease, and donation of housing units to beneficiary families and/or federal entities, whether or not financed. The transaction may be carried out under a subsidized or unsubsidized contract, in whole or in part, without prejudice to other compatible legal transactions, which enhances the range of real estate transactions available.
In order to give more agility and flexibility to operations carried out through the new program, the following amendments were made to Federal Law 6,015/73 (Public Records Law). With the change, for public registry purposes, it will no longer be necessary to have witnesses and notarize private contracts formulated by financial institutions that operate with real estate credit and are authorized to enter into private instruments with the nature of a public deed.
Law 14,382/22 has also been amended to allow electronic statements relating to real estate produced by financial institutions dealing in real estate credit to be submitted to the electronic real estate registry. These institutions will have the obligation to file the contractual instrument in a separate file, dispensing with intermediate agents and procedures. This makes real estate transactions less costly and more convenient.
The executive order will have until June 13, 2023, to be converted into law, which will depend on approval by the Chamber of Deputies. However, the rules that do not require subsequent regulations are already in force and effective. Although there are still rules to be defined and regulated, the possible impact for construction companies operating in this field is promising. It is worth monitoring possible updates in the coming weeks.
[1] The following bands are considered for families living in urban areas: a) Urban Band 1 - gross monthly family income up to R$ 2,640; b) Urban Band 2 - gross monthly family income from R$ 2,640 to R$ 4,400; and c) Urban Band 3 - gross monthly family income from R$ 4,400.01 to R$ 8 thousand.
[2] Families living in rural areas are considered to be the following: a) Rural Band 1 - annual gross family income up to R$ 31,680; b) Rural Band 2 - annual gross family income from R$ 31,680.01 to R$ 52,800; c) Rural Band 3 - annual gross family income from R$ 52,800.01 to R$ 96 thousand.
[3] For the purposes of inclusion in the income brackets, the calculation of the gross family income value will not consider the temporary benefits of an indemnity, social assistance, or social security nature, such as sickness benefits, accident aid, unemployment insurance, Continuous Cash Benefit (BPC), and benefits of the Bolsa Família Program or others that may replace them.
