Mortgage loan 90% Chile: How to achieve financing with FOGAES

What is this state guarantee and how does the 90% financing work?

The key to this benefit lies in the FOGAES (Special Guarantees Fund) program. Traditionally, banks in Chile have restricted their loans to 80% of the value of the property as a security measure against possible defaults. What the State does with this law is to act as guarantor against the bank for that additional 10%.

To understand it better, let's use a very simple numerical example: If you want to buy a house for 3,000 UF, you first needed to have 600 UF saved (20%) on your feet. Today, thanks to this state guarantee, you only need to have 300 UF (10%). The bank lends you the remaining 90% because the State guarantees that they will not lose their money.

It is essential to clarify a point that generates a lot of confusion: this is NOT a gift of money or a housing subsidy (like those provided by MINVU or SERVIU). The State will not deposit funds with you to complete your house. It simply gives you "institutional support" to force banks to relax their policies and lend you a greater percentage of the total value of the property.

Exact requirements: who can apply and what is needed?

As it is a state-backed benefit, there are strict regulations that you must comply with to access this special financing:

• Being a natural person: Companies (legal entities) cannot access this benefit.
• Price cap: The property to be acquired cannot exceed 4,000 UF. Be careful, this is the commercial sale value, not the tax valuation.
• First home: The credit must necessarily be used for the first home. The applicant cannot have real estate for residential use registered in his or her name with the Real Estate Registrar.
• No previous subsidies: You must not have been a beneficiary of a State housing subsidy or benefit before (such as DS1, DS49, DS19, etc.).
• Passed bank assessment: You must comply with the bank's standard commercial assessment and risk policies. This implies having a stable job, the ability to pay (the monthly financial burden should not exceed a % of your income) and not registering unpaid debts or serious delinquencies in Dicom.

How to apply and which bank is operating this credit?

There is a widespread myth about how to apply for this benefit. Let's clarify the most common mistake: people believe that they apply by standing in line at a Government office, at the municipality or at the Serviu offices. This is false.

This measure corresponds to an official and exclusive campaign by Banco Estado, recently announced as the "Hipotecazo". The process simply consists of going to any branch of Banco Estado throughout the country (or starting the simulation on its online platform), requesting the evaluation for a mortgage loan and explicitly asking that it be evaluated under the conditions of this new campaign that finances 90%.

Our golden recommendation: Given that the Government and Banco Estado have set an aggressive goal of financing only 12,000 properties within a period of two months (until July), we suggest you gather your business history (salary settlements, contributions, etc.) and present yourself as soon as possible at the institution so as not to miss out on your spot.

Frequently asked questions about the 90% mortgage

Is it used to buy used houses or only new real estate projects?

The benefit of FOGAES is flexible. It is used to buy both used houses and apartments or new real estate projects "in white" or "green", as long as the final value of the transaction does not exceed the strict legal limit of 4,000 UF.

Can i add income with my partner so they can approve my credit?

Yes. The vast majority of banks allow the supplementation of income with a joint co-debtor (who may be your spouse, partner, parents or children, depending on the policy of each institution) to reach the minimum income required and approve the commercial evaluation of the monthly dividend.

What happens if the bank's appraisal comes out lower than the sale price?

This is one of the most dangerous obstacles in the real estate sector. If you buy a house for 3,000 UF, but the bank's appraiser determines that it is only worth 2,500 UF, the bank will calculate the 90% loan on those 2,500 UF. The difference or "surcharge" of 500 UF must be paid by you out of your own pocket in cash to the seller, which destroys your financial planning of giving only 10% down.

Protect your investment: do not sign without checking the titles

Being able to access 90% financing and stop paying rent is a brilliant opportunity, but it is also the most delicate step in your financial life. In the excitement and urgency of securing the purchase, many people sign leonine purchase and sale promises or acquire properties with hidden liens, litigation or undeclared structural problems, transforming the dream of owning their own home into a true legal nightmare.

Buying a house is the largest investment you will make in your life; Don't leave it to chance. At Terreno en Regla, we have an expert legal team specialized in real estate law. We carry out Exhaustive Title Studies and write armored Purchase and Sale Promises, designed exclusively to protect your money and your interests as a buyer. Before signing any paper or giving an advance payment to the real estate agency or seller, contact us. Let us secure your future.