The landscape for both residential and commercial financing for Costa Rica real estate, especially for non-residents, has been evolving rapidly since mid 2006.  The pace of change continues as we enter 2008, as Costa Rica has earned international credibility as a stable market experiencing significant growth.  With an increasing number of highly qualified individuals and developers interested in securing real estate financing, Costa Rica has become a prime opportunity for capital providers seeking to enhance returns and reduce their portfolio risk. 

The banking industry within Costa Rica has evolved not only in its capabilities to accommodate the needs of foreign investors, but has undergone significant structural changes through consolidation.  Over the last two years, two of the most prominent private banks operating within Costa Rica, Banex and Banco Cuscatlan, have been acquired by HSBC and Citicorp respectively. Proof of Costa Rica’s attractiveness to mortage providers, as the globalization strategies of two top world banks have prioritized Costa Rica within their international market expansion plans. 

Costa Rica Home Loans

Until mid 2006, there were no residential mortgage products available to foreigners, with terms appealing to those accustomed to North American mortgage offerings.  Additionally, when Costa Rica Mortgage (www.costaricamortgage.net) conducted its initial market pilot, at the outset of 2007, that there were no other mortgage brokerages competing for “clicks” on Google or other search engines.  As we begin 2008, we are proud to be the sole, professionally managed, Costa Rica mortgage broker.  However, the last year has witnessed many competitive entries in the mortgage brokerage space.  Most competitive plays to enter the brokerage space where short lived, as the majority of them where relying on private funding sources which never materialized.

Costa Rica residential financing has indeed reached a critical plateau in its evolutionary curve, as there are now many institutional lenders in the business of financing residential real estate acquisitions for non-residents.  At the moment, these institutions are primarily Costa Rican entities.  However, there are numerous international firms who are actively targeting Costa Rica as a growth platform.  We will certainly see some of these firms enter the market this year.  Over the next five years, it is anticipated that there will be dozens of international financing firms active in the market competing fiercely for foreign borrowers, with a broad variety of specialized products. 

Costa Rica Commercial Financing

Prior to last year, commercial financing in Costa Rica was primarily provided through Costa Rican banks.  Over the last twelve to eighteen months, many international investment banks and hedge funds consummated their first transactions in Costa Rica.  With the difficulties experienced within the U.S. real estate and credit markets, Costa Rica has become an even more attractive alternative than before for those allocating significant capital to commercial real estate debt and equity financing.  Some of these firms have even taken a segmented focus on the market and are actively seeking to fund Costa Rican deals as part of their investment allocation strategy.  We work with many of these firms and can be of service to those having quality projects with funding requirements in excess of $5MM. 

- By Marc Schweitzer, President, Costa Rica Mortgage - Toll Free # 800-878-2495

Tags: commerical, costa rica finance, home loans, mortgage

This entry was posted on Thursday, January 17th, 2008 at 2:13 pm and is filed under Costa Rica Financing. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.