Fovissste Makes Progress on Loan Portfolio Cleanup and Plans Return to Housing Construction
The Fondo de la Vivienda del Instituto de Seguridad y Servicios Sociales de los Trabajadores del Estado (Fovissste, the Housing Fund of the Institute for Social Security and Services for State Workers) has launched a series of structural reforms that will affect nearly half of its borrowers. The goal is to strengthen its operations and once again participate directly in the construction of social housing. Under the leadership of Jabnely Maldonado Meza, the new executive director, the institution aims to address long-standing issues in its loan portfolio and move towards a more socially oriented approach for the benefit of its members.
The agency, which operates with a budget of close to 80 billion pesos for this year, is implementing these strategies thanks to a presidential decree published in June. The intention is to resolve the situation of about 435,000 loans, many of which have irregularities ranging from incomplete paperwork to housing loans that were never actually used for their intended purpose, or loans that have been outstanding for several decades.
The portfolio cleanup is estimated to have a financial impact of 19 billion pesos; however, the fund’s finances remain solid, according to Maldonado Meza, who emphasized that Fovissste’s capitalization ratio is close to 18%, surpassing recommendations from the National Banking and Securities Commission (CNBV).
One of the most important changes in this new phase is the analysis for Fovissste to rejoin housing construction as a direct provider. Since the 2007 reform, the ability to build homes for its members was transferred to private developers. Nevertheless, Fovissste now seeks to take back that role, which would require internal adjustments and the creation of a new division responsible for planning, building, and managing its own housing projects.
The institution’s management emphasizes that all services and programs related to loan forgiveness or settlement are free of charge and only available through official channels, such as their website or phone service, in order to prevent the use of intermediaries and potential fraud. Updating members’ records is a key stage in this process, as it will allow the fund to determine what specific support each worker is eligible for.
In the current context, the renewed focus on social housing and the resolution of long-standing portfolio backlogs will benefit thousands of Mexican families, in line with a rebound in the national real estate sector. While restoring Fovissste’s construction capabilities will require internal restructuring and government approval, the move could help expand access to quality housing and strengthen the labor market in construction.
Looking ahead, Fovissste’s return to direct housing construction could create a scenario in which the housing supply for state workers is expanded and diversified, promoting greater equity in access to housing and contributing to the sector’s economic dynamism. However, responsible financial management and oversight of best practices will be key to ensuring the sustainability of these ambitious projects.
In summary, Fovissste is facing a period of institutional transformation focused on resolving old debts with its members and strengthening its role in housing development, with the potential to have a positive impact on both social justice and the national economy.
