FOGAES: how to finance 90% of a home and why an already approved loan falls through

Quick answer: FOGAES (the state guarantee fund) does not lend you money or give you anything for free. It is a state fund, created by Law 21,543, that guarantees part of the mortgage loan in the bank's favour, and that guarantee is what makes it possible to finance up to 90 percent of the home's value, so that the required down payment drops from 20 to 10 percent. In September 2026 the programme was expanded: the cap on the home's value rose from 4,000 to 6,000 unidades de fomento, the quotas went from 50,000 to 80,000 homes and its term was extended until May 31, 2028. And there is one detail that makes you lose the coverage and that almost nobody mentions: the conditions of the benefit must be set out in the deed of sale.

That last point is the reason we wrote this guide. An approved loan, a badly drafted deed, and the deal falls out of the programme on the very day of signing, when there is no longer time to fix anything.

What changed in September 2026

The expansion was approved unanimously by the Senate in August 2026 and was enacted on September 9 of that same year. It amends Law 21,543, which created the fund, as regards the guarantee programme supporting new housing, and it also extends the mortgage interest rate subsidy of Law 21,748.

A practical warning about the calendar. The law is only a few days old, and the operational rollout by the banks and by the programme itself usually runs a few steps behind publication. It is perfectly possible that the official website, the bank officer or the estate agent will still quote you the old cap. Before ruling out a property on price, confirm the cap the bank is applying at that moment, because an outdated figure can leave you out of a home that does qualify today.

What it actually is, and what it is not

The fact that the guarantee is for the bank and not for you has a direct consequence: the bank still assesses your ability to pay, your credit history and your job stability exactly as before. What changes is how much it is willing to lend you against the property's value.

The requirements, with the figures currently in force

The interest rate subsidy is something else, and it is best not to confuse them

In everyday conversation the two benefits get mixed up, but they work differently and that changes what you have to do.

The Government's own estimate while the expansion was going through is that the subsidy can take the rate from around 4 to close to 3 percent, with a down payment of 10 percent. On a thirty year loan, that difference is what decides whether the monthly mortgage payment fits the budget or not, so it is worth asking the bank for both simulations, with and without the subsidy, before signing any promise of sale.

What the bank looks at besides the guarantee

• Income and financial burden. The monthly mortgage payment cannot commit an excessive share of your income, and consumer debts, credit cards and car loans all count.
• Credit history. Current or recent arrears weigh more heavily than the state guarantee, and a debt in collection can also lead to measures against your assets, within the limits we explain in the guide to assets exempt from attachment.
• Income stability. A permanent contract, length of service, and for self employed applicants, tax returns for the most recent periods.
• The property valuation. If it values the property below the sale price, the 90 percent is calculated on the valuation and not on what you agreed to pay. It is the most common surprise.
• The property's legal status. And this is where most deals fall through.

Why a loan that had already been approved falls through

The bank's approval is about you. What comes next is about the property, and that is where the problems nobody checked show up.

The correct order of things

• Loan pre-approval, to know your real range before falling in love with a property, and with both interest rate simulations.
• Title study of the chosen property, before signing the promise of sale and not after. It is what stops you committing to a property that cannot be financed.
• A well drafted promise of sale, with enough time to obtain the release of encumbrances and to resolve objections, and with a way out if the property turns out not to be financeable.
• Valuation, knowing that the 90 percent is calculated on it and not on the agreed price.
• Review of the draft deed, checking that it incorporates the programme's conditions and the releases of encumbrances.
• Signing and registration, following up until the registration has been completed. If the Conservador raises an objection, there is a deadline running.

Frequently asked questions

Is FOGAES a subsidy?

No. It is a guarantee the state gives the bank so that the bank will lend you a larger percentage of the value. You owe one hundred percent of the loan and you pay it in full. If you stop paying, the guarantee protects the bank, not you. The interest rate subsidy is a different matter: that one does reduce what you pay each month.

What is the cap on the value of the home today?

With the expansion enacted in September 2026, 6,000 unidades de fomento, up from the previous 4,000. Since the law is recent, you may still find the old figure published on some site, or the bank officer may not have taken it on board yet. Confirm with the bank the cap they are applying before ruling out a property.

Does it have to be a first home?

The programme's published requirements focus on the value of the home, on the type of housing and on the financing percentage, rather than on whether it is your first home. Since the conditions have been adjusted over time, it is worth confirming the current details with the bank before ruling out your case.

Does it work for a used house, or only for new housing?

The guarantee programme is built around new housing, and the interest rate subsidy operates automatically in that same situation. If what you are looking at is a used property, that is the first question to ask, because it completely changes which properties you can consider.

I signed a promise of sale in 2024. Can I use it?

Sales arising from promises of sale entered into before December 31, 2024 are excluded. It is one of the least publicised exclusions and it catches out buyers of off plan projects who signed their promise early.

My loan was approved but the valuation came in lower. What happens?

The 90 percent is calculated on the valuation, not on the agreed price. If the valuation is lower, you cover the difference, which is why it is worth having that contingency provided for in the promise of sale before committing the down payment.

The house has an unregularised extension. Will they still lend to me?

They can lend to you, but only against the recognised square metres. Square metres without final approval are not valued, so you pay for something the bank does not finance. Regularising beforehand changes the valuation, and what that involves is covered in the guide to final municipal approval.

Until when can I apply?

Until May 31, 2028, after the twelve month extension. But the date is not the only variable: the interest rate subsidy works through quotas, now 80,000 homes, and the quotas run out before the deadlines do.

What happens if the deed does not mention the programme?

The loan loses its coverage, and that is discovered after signing. It is a drafting and coordination problem between the bank, the notary's office and whoever reviews the draft, and it is avoided by reviewing the deed before signing, not at the counter.

How we work

We do not process the loan: that is the bank's job. What we handle is the part that keeps the loan from falling through, which is the property.

Before the promise of sale we review the title, the encumbrances and the municipal status of what has been built, with a title study. That way the client knows whether the property is financeable before committing the down payment, which is the money that is hardest to recover when the deal fails.

If square metres without final approval turn up, we regularise them with our own architecture and surveying team from the regularisation area, and if the problem is one of ownership, with the posesión efectiva, depending on where it comes from.

And we review the draft deed before signing, so that the programme's conditions and the releases of encumbrances end up where they have to be.

Send us the tax roll number of the property you are looking at and we will tell you whether it is financeable as it stands, what would need to be corrected and how long it takes.