Normas do Sistema Financeiro da Habitação (SFH) in Brazil

The *Sistema Financeiro da Habitação* (SFH), or Housing Finance System, is a cornerstone of Brazil’s housing policy. Established in 1964, its primary objective is to facilitate access to affordable housing for the population, particularly lower and middle-income families. The SFH operates under a specific set of rules and regulations, known as *normas*, that govern its functioning and impact its beneficiaries.

One of the key aspects of the SFH is the use of the *Sistema Brasileiro de Poupança e Empréstimo* (SBPE), which comprises savings and loan associations (*Caixas Econômicas*) and other financial institutions that collect savings deposits earmarked for housing finance. The SBPE is a major source of funds for SFH loans.

The SFH norms dictate the types of properties eligible for financing, the maximum loan amounts, and the applicable interest rates. Historically, SFH loans have been characterized by relatively low interest rates compared to other forms of credit, making them attractive to homebuyers. Interest rates are often linked to the *Taxa Referencial* (TR), a benchmark interest rate, plus a fixed spread. However, changes in economic conditions and government policy have led to fluctuations in interest rates and the availability of SFH financing.

A significant feature of the SFH is the use of the *Fundo de Garantia do Tempo de Serviço* (FGTS), a severance indemnity fund accumulated by employees, as a source of funds and for mortgage payments. Workers can use their FGTS balances to pay part of their down payment or to amortize their outstanding mortgage debt. This provides a significant boost to affordability and encourages homeownership.

The *normas* also establish specific requirements for borrowers, including income verification, creditworthiness assessment, and property appraisal. These requirements aim to minimize the risk of default and ensure the sustainability of the SFH. Furthermore, the regulations specify the rights and responsibilities of both lenders and borrowers, providing a legal framework for mortgage transactions.

Over time, the SFH has undergone several reforms and adjustments to adapt to changing economic and social realities. These changes have included modifications to eligibility criteria, loan terms, and interest rate policies. The objective is to balance the need to promote affordable housing with the financial stability of the system.

The impact of the SFH on Brazil’s housing market has been substantial. It has enabled millions of families to realize their dream of homeownership and has played a crucial role in stimulating the construction industry. However, challenges remain, including the limited availability of funds, rising property prices, and the persistent housing deficit, particularly for low-income populations. Ongoing efforts are focused on addressing these challenges and ensuring that the SFH continues to serve its purpose of providing access to adequate and affordable housing for all Brazilians.