This Sunday, President Sebastián Piñera presented a program to support the middle class. The program includes state-guaranteed postponement of mortgage loans, soft loans to provide access to immediate cash, as well as expanded rent subsidies and higher education loans.
“The majority of Chile is middle class, people who have made progress based on their own merit, effort and work. They know that and are proud of their achievements, but they need and deserve reassurance and opportunities for the future,” said the President, accompanied by members of congress and ministers at an event at La Moneda Palace.
The President announced the creation of a mechanism that facilitates state-guaranteed postponement of mortgage loans and additional Financial Market Commission facilities related to provisions.
The mechanism will allow customers to postpone payments for six months or the number of payments remaining in a six-month period for those who have previously postponed their mortgage payments.
The program applies to housing appraised below 10,000 UF (an inflation-indexed currency unit) (US$360,000) at the time of loan processing, which includes more than 90% of primary residences.
“In times of adversity and pain, the administration’s mission is to make its best effort to protect and bring relief to the families in need,” said the President.
Furthermore, there will be a new middle-class loan program to cover up to 70% of lost income. Capped at a total of 2,600,000 Chilean pesos (US$3,250), the loans will be disbursed in four monthly payments at an interest rate of UF+0% with a one-year grace period and a four-year repayment term.
The President also announced a rent subsidy, available through an application process, aimed at low and medium-income family groups with a proven drop of more than 30% in their income. These families may apply for a three-month subsidy of 150,000 Chilean pesos (US$187) to be applied to monthly rent payments of up to 400,000 Chilean pesos (US$500).
The President announced that an exception will be made to open a new higher education loan application process.
“Drawing on proposals from many sectors, particularly the political parties that comprise ChileVamos, and tuning in to the citizenry, our administration deems a Special Plan to Support the Middle Class urgent and necessary,” emphasized the President.
The measures are part of the support network that the administration is building to protect the income of at-risk and middle-class families and their sources of work.