mexican properties, financing and cross border opportunities

Mexican Properties, Financing and Cross Border Opportunities

Eduardo Perez-Alduncin

Porperty ofConficasa Holdings, Inc – All rights reserved

Background

• Mexico seeking to recover from housing deficit– Up to 7 million homes needed today in Mexico– 750,000 home target not met due to

fundamentals– 4.7% housing improvement from last year– Domestic demand only – How about the

international demand?


Problem

• Supply not meeting domestic demand• International demand for housing in Mexico not

finding solutions– Inventory not built fast enough or as per their

expectations or needs– Lack of consolidated information of Mexican

property acquisition– Expectations not met due to differences with

realtors, appraisals, legal, tax, and financing


Opportunity• Domestic demand finding responsiveness from

current government and expect the same after elections.– Builders seeking equity or debt investors – Mexican government granted investment grade risk

(BBB)– Mexican government selling mortgage back

securities on the secondary market bringing liquidity– 20 Billion US dollars received by Mexico on 2006

from Mexican’s abroad assisting with housing needs


“Cross Border” Opportunities

• Culturally sensitivity “Embrace and understand the culture differences”– Meeting expectations so hard to do?– Learning to “know your client”

• New concept being embraced by builders, real estate service providers.– Fideicomiso Not a scary any more– Title Insurance Services from well know US companies

mitigating risk – Properties culturally adequate by meeting US floor plans,

distribution areas, amenities, security and quality materials.• MORTGAGE FINANCING NOW BECOMING

AVAILABLE!


Financing A Mexican Home

• Yes there is financing now!– Mexicans working and living in Mexico

• Infonavit –SHF – Fovisste • Mexican Banks coming back strong• Up to 90 LTV – 25 Year – Fix and variable • Pesos and UDI funded loans• Rates starting from 8%

– Mexican and Mexican descendants working in US and Canada

• RAICES founder of the “cross border” Mexican government Back program

• Fannie-Mae Standard based• Financial characteristics same as above • Deposit on your US Bank and Pay your Mexican debt


Mexican HomeUS Financing

• American dream in Mexico – Strong market demand and proven track

record of “cross border” mortgage execution has paved the way to international mortgage financing.

– US standards based • US forms used• US credit bureaus used • US verifications • US underwriting “full doc”


American BuyerFinancing Products

For Mexican Properties• USD Financing

– Finished property, construction and cash out loan financing options.

– Loan amounts $ 100,000 – 1.5 Million– 20 year amortization– RATES 7.5% up to 8.5% – Terms fixed, variable or a combination– 70% Max Loan to Value– Property appraisals and other considerations apply– Not all areas available– Title Insurance NOT mandatory but strongly

recommended


American Buyer Mexican Property

Mexican Pesos• Mexican Pesos, a good option?

– Finished Property, remodeling and refinancing– Loan amounts: $ 35,000 minimum – No MAX– 15 and 20 year amortizations– Rates: 9.9% - 11:98% (15 and 20 yrs. Term)– Fixed only– 80% Loan to value– Appraisals and other considerations apply– Currency fluctuation benefit opportunity


Stay tuned…More coming!

• “Tip of the Iceberg” The secret is out and the Market Demand is setting the tone.

– Mayor Financial Institutions Mexican and American Designing Competitive Products

– Proven Concept influencing Canadian and European buyers to Mexico

– Longer terms, more areas and more sophistication on the financial products are expected.


Conclusions• “The perfect storm”

– Mexican housing industry will quick improve current deficits by creating domestic and international partnerships.

– Mexican builders benefiting from foreign partners and creating “culturally sensitive” products, bigger homes, bigger profits!

– US MORTGAGE FINANCING will be the fuel that will stimulate a multi-Billion dollar dormant but ripe market.

mexican properties, financing and cross border opportunities

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