The Panamanian government grants these days subsidies up to 100% of a residence value (subject to its value, the income of the purchaser and according to the scales determined in the law) by subsidizing the interest on the mortgage (the purchasers pay a nominal interest lower than 3% yearly for a period of 30 years and the government pays the bank the difference between that rate and the market interest rate) for purchasers of apartments and houses in a value of up to USD 62,500 (In light of prices increase in the past few years, the government updated the law and subsidies are given for purchasers of houses and apartments of up to USD 80,000). This market is called the Low-Income Housing market.
The banks financing the purchase of such houses and apartments are for example: HSBC, GLOBAL BANK, BANVIVIENDA, BANCO GENERAL, CAJA DE AHORRO, MULTICREDIT BANK, BANESCO, CUSCATLAN and BANK CONTINENTAL.
In addition to the incentives given to the purchasers of the houses/apartments, also the developers of such projects are enjoying preferred finance thanks to the financing banks confidence in the success of such projects.
According to official publications in Panama, the Low Income market is in shortage (over demand) of over a hundred thousand units and the demand is growing faster than the supply, so even if the construction will be increased, it will not be enough to fulfill the existing shortage . The low income housing market is considered “suffering” from low supply and financing institutions see it as a very low risk market.