Minha Casa Minha Vida encourages low-income builders again, but judgment on FGTS correction worries

The growth or maintenance of attractive margins among low-income builders listed on the Stock Exchange will, from now on, necessarily pass through the new rules, which should be announced by the Government, of the remodeled Minha Casa Minha Vida (MCMV) program.

Until it lost traction in recent governments, MCMV was a great source of revenue for companies operating in this niche. So much so that MRV executives (MRVE3), Directional (DIRR3) and Tent (TEND3) outlined positive perspectives in relation to the new model to be presented.

For Rafael Menin, co-CEO of MRV, the sector’s expectation is for the readjustment of the subsidy ceiling for low-income constructions. This, according to him, would be a “tailwind in the company’s operational recovery”, stunned to recover the historical margins lost from 2021 to now.

Eduardo Fischer, co-CEO of MRV, said he is betting on news related to the MCMV later this month, while Rodrigo Osmo, CEO of Tenda, expects to present the new parameters for the program in June.

MCMV: Expansion of margins

In a report, Santander highlighted that the government has just announced the new members of the Board of Trustees of the FGTS Severance Indemnity Fund, which should speed up, on the part of the Ministry of Cities, the presentation of proposals to improve accessibility parameters from the MCMV.

According to analysts, the package will probably be voted on at the next board meeting, on June 7, with measures that can “potentially lead to an acceleration in sales over supply ratios and/or allow companies’ gross margins to approach even more than pre-pandemic levels.”

For Fanny Oreng, Antonio Castrucci and Matheus Melon, among the main points expected are the increase in the number of families served by the program, with income of up to R$ 2,600 per month, increasing the value of maximum subsidies.


Another expected item is the increase in the maximum prices of units included in the MCMV.

STF Judgment

However, the sector is concerned about a possible change in the FGTS remuneration index, which would affect housing contracts made under the program, in discussion at the Federal Supreme Court (STF). This action even crashing package presentation.

Ricardo Gontijo, CEO of Direcional, assesses that the change in the correction of the readjustment index would significantly impact low-income borrowers of Minha Casa Minha Vida.

“Despite the great uncertainty surrounding the STF judgment, we see as positive the fact that the government continues to discuss ways to improve the program, with new proposals and formats”, highlight Bradesco BBI analysts, Bruno Mendonça, Pedro Lobato and Herman Lee .

For BBI specialists, MCMV Group 1 should be the government’s focus on the housing agenda, even if this is not exactly the crux of publicly traded companies.

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“We see room for new measures for Groups 1, 5 and 2, regarding subsidy increases, as well as higher price caps for Group 3 (with the effective viability pending a decision by the STF”, they added.


Government and sector aligned

The government’s willingness to rescue one of its hallmarks, present, above all, in Lula’s second term, could facilitate the progress of the program. “The government is well aligned with the thinking of the sector”, said Fischer.

“The latest news we have is that the government, regardless of the decision that is underway at the Supreme Court, will move forward with the measures it is designing (for the MCMV)”, he commented in a conference call with analysts.

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Rodrigo Osmo, CEO of Tenda, has a similar thought. According to him, the government is very committed to “accommodating” the program within a new reality of the FGTS, whose resources are the major financier along with housing savings in the country.

“The political will of the government is gigantic in relation to Minha Casa Minha Vida”, points out Osmo. “Minha Casa Minha Vida is undoubtedly one of the main social priorities of the government in the next four years”, added the executive, during a teleconference with analysts.

Osmo understands that the Government will try to build a “painless solution with the STF”. However, if he does not succeed, he says he believes that there will be an accommodation, by the government, to the previous plans of the MCMV in lane 1, which “are preserved practically in their entirety”, he added.

Tenda is a large operator of the so-called band 1, which serves lower-income families. “I understand that the government should make a proposal in the next month, or a month and a half, for Minha Casa Minha Vida parameters that fit the budget approved by the Fund (FGTS)”, reinforced Osmo.

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stable costs

Another point of relief for construction companies referred to costs, which stabilized, after causing headaches for companies, due to high inflation in the prices of the main inputs used in the works.

Especially when dealing with low-cost works, this factor becomes more relevant, due to the tighter margins of operations in this segment.

“What we noticed in recent months, analyzing the INCC (National Construction Cost Index), is that the workforce is already having higher readjustments, in relation to construction materials”, says Gontijo, CEO of Direcional.

“It was not what happened in the pandemic: material rising much more than labor”, he compares, classifying the much more favorable cost scenario today.


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