Mexican Workers Achieve Home Ownership Through INFONAVIT

The paycheck for Mexican manufacturing workers will contain a number of deductions familiar to American accountants: federal taxes, health insurance, social security, union dues and individual retirement accounts

But among the usual deductions is one that will be unusual to foreigners contemplating the possibility of manufacturing in Mexico. It reads "INFONAVIT." This acronym is for the Instituto Nacional para el Fomento a la Vivienda para Trabajadores, or National Institute for the Development of Worker Housing.

This Mexican federal entity was created to look after housing for Mexicans workers, mostly in the lower-middle and lower-rungs of wage-earners and requires employers to contribute a percentage of hourly pay -- currently five percent -- to a fund that backs construction of worker housing. Under the plan, employees qualify for loan up to a specified amount in an INFONAVIT-accredited development.

The fund, which has existed since 1972, has benefited some nine million families, according to recent data. INFONAVIT financed 430,000 homes in 2011, 90 percent of its target. The fund designs, finances and then contracts entire INFONAVIT subdivisions, creating an unusual dynamic of having Mexican manufacturing workers at a factory being neighbors after work,as well.

Contributing to INFONAVIT has been obligatory for small and large businesses, alike, but only recently was it expanded to include domestic workers. Two years ago, those working as domestic help in Mexico were given the option of joining under a program called "INFONAVIT PARA TODOS," or "INFONAVIT FOR ALL."

In order to qualify, domestic workers must receive wages at least once every 30 days. Registering requires an official identification number known as a Clave Única de Registro de Población, or CURP, a national identification card. With that documentation, domestic workers apply for membership at a Centro de Servicio INFONAVIT, or CESI. (Proof of membership in INFONAVIT PARA TODOS is available online at www.seguropopular.gob.mx.) Today, some two million babysitters, maids, chauffeurs, watchmen and nannies belong, as well. Moreover, any domestic worker whose employer pays into the Social Security fund, known by its acronym IMSS, is also covered.

Theoretically, money in INFONAVIT accounts belong to workers, but funds cannot be withdrawn in cash. Under recent legislation, funds may, however, be transferred to individual retirement accounts.

Workers can consult the amount of their credit at the INFONAVIT webpage with their social security numbers. Foreigners can quality, as well, or can be co-owners of properties. Government figures show INFONAVIT has a seven percent default, about the same as the Mexican housing industry as a whole. Home loans have an average interest rate of six percent, and an adjustment for the annual national minimum wage increase is applied, as well.

Not everyone has the patience, or luck, to wait around for INFONAVIT housing. Membership means eventually being able to obtain a house. Depending on the location in Mexico, waits to obtain a house have ranged from almost nothing to five years or more. Estimates are, however, that only about one-third of worker-housing is INFONAVIT-affiliated. Mortgages, once obtained, are for 30 years.