O
n December 19, 2024, Brazil's National Monetary Council (CMN) approved Resolution No. 5,197, updating the rules governing real estate financing transactions. The new resolution establishes general conditions and criteria for contracting real estate credit by financial institutions and other authorized entities.
Key points of the resolution include:
Definitions:
- Real estate credit: loan transactions secured by real estate as collateral.
- Real estate financing: credit for acquiring, constructing, or renovating residential and non-residential properties.
- Housing financing: credit for acquiring, constructing, or renovating residential properties.
Credit Quota Limit:
- The ratio between the nominal value of a new transaction and the outstanding balance of previous transactions cannot exceed 90% when using certain amortization systems.
- If a property is used as collateral for multiple transactions, the sum of their values may not exceed the credit quota limit applicable to the predominant transaction.
New Transactions with Different Conditions:
- Credit transactions secured by fiduciary sales can have different terms and conditions than original agreements.
Loans Secured by Residential Real Estate:
- Financial institutions may require borrowers to contract insurance for death, disability, or property damage risks.
Clause Updating Outstanding Balance:
- Loan agreements can include a clause updating the outstanding balance based on a public price index or savings deposit remuneration.
Collateral Requirements:
- Real estate credit transactions must be secured by fiduciary sales, mortgages, or other forms of collateral.
CMN Resolution No. 5,197 will take effect on July 1, 2025, and will not affect existing loan transactions based on the Legal Framework for Guarantees.
