Mortgage Loans and Guarantees: The Government Prepares a New System to Expand Access to Housing

The mortgage loan market is undergoing a transitional phase. After the strong boost recorded until mid-2025, when UVA loans became one of the main drivers of home sales again, the pace of granting loans began to slow down. Banks attribute this situation mainly to the lack of sufficient funding to sustain the high demand that arose after the reappearance of mortgage lines.

In this scenario, the Government is preparing a bill that aims to give a new boost to financing through a scheme that will combine traditional mortgages with guarantees provided by Reciprocal Guarantee Societies (SGR). The initiative is part of the reform package promoted by the Ministry of Deregulation and State Transformation (led by Federico Sturzenegger) and also aims to develop a secondary mortgage market that allows banks to recover liquidity to continue lending.

The official intention is to resolve one of the main bottlenecks currently facing the system. Although the demand for loans remains strong, many entities have moderated the pace of approving new loans because the funds available to finance them have begun to dwindle.

Currently, Banco Nación concentrates about 60% of the UVA mortgage loans granted in the country, while BBVA leads the segment among private banks with a market share of around 15%. The rest of the market is distributed among various financial entities that have also reduced the volume of new operations compared to last year.

Why the Government is Promoting a New Scheme

The official proposal does not change the basic functioning of a mortgage. The property will continue to be the main guarantee of the loan, as is currently the case.

The difference lies in the fact that the bank will have an additional backing provided by a Reciprocal Guarantee Society, known as SGR.

These entities already operate in Argentina as instruments to facilitate access to financing for small and medium-sized enterprises. Their function is to provide guarantees that reduce the risk for those lending the money. Now the Government intends to transfer this mechanism to the mortgage market.

In practice, if a bank grants a loan to buy a home, the property will remain the main guarantee. However, there will also be complementary coverage provided by an SGR that will back part of the risk assumed by the financial entity in the event of a debtor's default.

The percentage of this coverage has not yet been defined and will be part of the legislative debate and future regulations.

The Objective: For Banks to Lend More Again

The project also incorporates another component considered key to expanding financing. The intention is to facilitate the securitization of mortgages. This is a mechanism used in various international markets whereby banks group a portfolio of mortgage loans and transform it into financial instruments that can then be sold to investors through the capital market.

With this operation, they recover liquidity before the original term of each loan ends and use those resources to grant new credits.{#p-1785260605984-53925}

The official project also aims to promote the securitization of mortgages so that banks can transform their credit portfolios into financial instruments, recover liquidity, and grant new housing loans.{#p-1785261628981-53010}
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In other words, instead of waiting twenty or thirty years to recover the lent money, entities can obtain funds much earlier by selling those mortgage portfolios.{#p-1785260605984-96148}

According to the official vision, this circuit would allow for a sustained increase in the supply of housing loans without modifying the traditional mortgage scheme.{#p-1785260605984-4497}

A Market That Lost Momentum {#p-1785260605984-62181}

The growth of mortgage credit during 2025 allowed for the recovery of a tool that had practically disappeared for several years.{#p-1785260605984-75556}

However, during the last 7 months, signs of deceleration have begun to be observed. Germán Gómez Picasso, from Reporte Inmobiliario, explained that currently, mortgage credits account for about 12% to 13% of buying and selling operations, well below the peak recorded last year.{#p-1785260605984-53533}

"The granting of credits is supporting between 12% and 13% of sales. Last year it reached 25% of total operations. Tools are needed to encourage banks to be more active to return to 50% of operations with credits, as happened in the best moments of Argentina during the 90s and between 2017 and 2018," he pointed out.{#p-1785260605984-58465}

Although the demand for mortgage credits remains strong, many banks have moderated the granting of new loans due to a lack of funding. The government seeks to reverse this scenario with a new scheme of guarantees and mortgage securitization.{#p-1785261736378-62569}
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For Gómez Picasso, any initiative aimed at strengthening financing is positive, although he considers it premature to draw conclusions about the effectiveness of the new scheme.{#p-1785260605984-5369}

He stated: "I do not know what its real utility will be or how it will end up being implemented. I prefer to wait to know all the details before making an assessment."{#p-1785260605984-57655}

What Needs to Be Defined {#p-1785260605984-30769}

Although the government has already outlined the main guidelines of the project, there are still numerous pending aspects.{#p-1785260605984-67605}

Among them are the percentage of the loan that the SGRs will cover, the requirements that those requesting a loan must meet, the limits of the guarantees, the operational functioning between banks and guarantee societies, and the regulatory framework that will be supervised by the Central Bank and the National Securities Commission.

It is also yet to be determined whether this system will coexist exclusively with the current loans in pesos adjusted by UVA or if it can extend to future lines of financing in other currencies.

For specialists, these details will be decisive in measuring the true scope of the reform.

The Role of Guarantees

Federico González Rouco, an economist at Empiria Consultores and a specialist in the real estate market, considered that strengthening the guarantee system represents a positive step to expand credit, although he clarified that there is still very little information about the concrete implementation.

As he explained, the Reciprocal Guarantee Societies already constitute a developed market in other segments of financing and could provide an additional tool to reduce the risk of mortgage loans.

The economist maintained that any mechanism that incorporates additional guarantees, insurance, or securitization instruments contributes to strengthening the financial system and expanding financing possibilities.

However, he warned that it is still unclear how the SGRs will effectively participate, what incentives banks will have to use this scheme, and what percentage of coverage those guarantees will offer.

González Rouco also considered it important to define whether the new mechanism will function as a kind of mortgage insurance or if it will have a different design within the Argentine financial market.

The Funding Challenge

One of the main problems that authorities seek to resolve is the availability of resources to continue granting loans.
Obtaining a mortgage loan requires presenting personal documentation, proof of income, and information about the property. The government is considering incorporating additional guarantees to expedite loan approvals and expand access to housing financing.

When a bank grants a mortgage loan, it immobilizes a significant amount of funds for terms that can exceed twenty years.

If it later manages to sell that portfolio in the capital market through instruments backed by those mortgages, it recovers liquidity and can use that money to finance new operations.

This circuit constitutes one of the pillars of the official project and could become a tool to broaden access to credit without relying exclusively on the deposits received by financial entities.

However, the functioning of the scheme will also depend on the interest these instruments generate among institutional investors and the depth that the Argentine capital market can achieve.

In this context, González Rouco considered that any tool aimed at strengthening guarantees and expanding financing alternatives represents a step forward for the mortgage market, although he emphasized that the effectiveness of the system will depend on the regulations and the interest shown by both banks and SGRs to participate in the new scheme, he concluded.