A US small business will use a loan from the Overseas Private Investment Corporation (Opic) to expand its production of prefabricated homes in Mexico, helping the country meet a growing demand for low income housing. The project is expected to produce between 25,000 and 30,000 homes over the next 10 years.
Opic will provide a US$10mn loan to Prefabricados y Modular de Monterrey (PyMM) to expand production of pre-made concrete homes from its manufacturing facility in Monterrey, Mexico. PyMM, a wholly-owned subsidiary of Texas-based Modular Prefab-USA, has sold more than 700 of the homes during its first four years of production, and has six projects under way. The homes cost approximately US$15,000 apiece.
PyMM’s homes will be sold to low-income buyers through Mexico’s Infonavit programme, which operates in similar fashion to Fannie Mae in the US: Infonavit collects payroll deductions from employers on behalf of employees that can be used for down payments on homes and which enables Infonavit to provide long-term mortgage financing when those employees are ready to purchase their homes.
“The combination of a large housing deficit for low-income Mexicans, PyMM’s cost-effective manufacturing process, and Infonavit’s mortgage financing capability, make this project uniquely valuable, and potentially one that could revolutionise the production of quality, low income housing in Mexico,” says Opic president, Peter Watson.
The project is the first to be processed using a new fast-track approach created under a framework agreement signed last May by Opic and Interlink Capital Strategies, a Washington, DC-based financial consultant.