Infonavit to Freeze Minimum Wage-Linked Loans, Offering Debt Relief to Millions
For millions of Mexican workers, homeownership has been made possible through Infonavit, the National Workers’ Housing Fund Institute. While the institution provided a crucial pathway to homeownership, a specific type of loan—calculated based on the minimum wage—created a debt burden for many.
Traditionally, Infonavit offered two types of loans: those issued in pesos and those calculated using the Times Minimum Wage (VSM). The VSM-linked loans meant that the loan amount fluctuated directly with adjustments to the minimum wage.
While this system appeared to benefit some initially, it created significant challenges as time passed. When the minimum wage increased, so did Interest payments on VSM-linked loans.
Even small increases in the national minimum wage resulted in higher mortgage payments for VSM-borrowers. This made it increasingly difficult for many to manage their monthly finances, ultimately leaving them with unmanageable debt.
Infonavit itself acknowledges the difficulties faced by VSM-credit holders. Recognizing the need for a solution, the Claudia Sheinbaum administration announced a landmark decision: a freeze on two million VSM-linked loans in November 2024. This move offered much-needed financial relief to struggling homeowners.
Infonavit is encouraging every beneficiary with a VSM loan to participate in a conversion program. This program allows borrowers to switch their loans to a fixed-rate mortgage in pesos. This conversion aims to stabilize monthly payments, making them more predictable and affordable.
“If you have an Infonavit Credit in Sometimes Minimum Wage (VSM),” Infonavit representatives explained, “your debt and your monthly payment increase each year due to the salary adjustment and the increase in inflation; In addition, it is likely that your financing will have an interest rate of up to 12%, which you can reduce if you convert your credit to pesos.”
By switching to a peso-based loan, borrowers may be able to secure interest rates ranging from 1% to 10.45%, depending on their income. This significant reduction in interest rates ultimately allows homeowners to save money and gain more financial stability.
This initiative empowers thousands of Mexican families to regain control of their finances and continue on the path to sustainable homeownership.
What are the specific benefits offered to homeowners with Infonavit VSM-linked loans through this new program?
## A Hand Up: Infonavit Offers Relief to Millions
**Host:** Joining us today to discuss a major development for Mexican homeowners is financial analyst Alex Reed. Welcome to the program.
**Alex Reed:** Thank you for having me.
**Host:** Let’s dive right in. Infonavit, Mexico’s National Workers’ Housing Fund Institute, has just announced a groundbreaking program to relieve the debt burden on millions of homeowners. Can you explain the situation?
**Alex Reed:** Absolutely. Infonavit has been instrumental in helping millions of Mexicans achieve homeownership through its loan programs. However, for those with loans linked to the Times Minimum Wage (VSM), constantly fluctuating minimum wage adjustments resulted in increasing debt loads, making it difficult for many to keep up.
**Host:** So, Infonavit is essentially freezing these VSM-linked loans?
**Alex Reed:** Precisely. This new program will freeze these loans, preventing them from increasing further due to minimum wage adjustments. This provides much-needed relief to homeowners struggling with their payments.
**Host:** That’s certainly good news. Are there any other details about this program?
**Alex Reed:** In addition to the freeze, Infonavit is also offering discounts on the principal amount owed on these VSM-linked loans. This means homeowners could see a significant reduction in their overall debt.
**Host:** This sounds like a game-changer for many Mexican families. Is there a requirement to qualify for this program?
**Alex Reed:** Thankfully, the program seems to be open to all those with VSM-linked loans from Infonavit. I encourage anyone with these loans to contact Infonavit directly to learn more about the eligibility criteria and how to apply.
**Host:** Excellent advice. This appears to be a positive step towards addressing a long-standing issue. Thank you, Alex Reed, for shedding light on this important development.
**Alex Reed:** My pleasure.
