SAO PAULO (Reuters) - Brazil's government said on Monday it was raising income limits for a subsidized mortgage program in an effort to spur the country's struggling construction industry and spark a long-awaited recovery from the worst economic recession on record.
The government's MCMV mortgage program, which finances new home purchases at below-market interest rates, will now cover households with monthly incomes as high as 9,000 reais ($2,900), among the most affluent 5 percent of Brazilian families.
The program, first conceived as a stimulus for low-income home ownership, has been progressively expanded in recent years to cover families earning up to 6,500 reais per month last year.
Reuters first reported on Thursday details of the new policy aimed at shoring up the construction industry after homebuilders suffered a wave of canceled sales due to high unemployment and borrowing costs.
Income limits for more modest MCMV segments are also being adjusted from 2016 levels to compensate for consumer inflation. Brazil aims to finance 610,000 new homes with the mortgage program this year, which stalled last year amid political turmoil and a severe budget crisis.
In a ceremony in Brasília, President Michel Temer said civil construction is a key sector to revive the Brazilian economy, which he said will return to growth in 2017.
($1 = 3.12 reais)