November 13, 2018 / 2:09 PM / a month ago

UPDATE 1-Brazil freezes part of housing subsidy program

(Recasts to reflect statement from Caixa, updates share prices)

RIO DE JANEIRO, Nov 13 (Reuters) - Brazilian state bank Caixa Economica Federal has suspended the issuance of some new home loans in the “Minha Casa, Minha Vida” housing subsidy program, knocking shares of homebuilders and dealing a blow to low-income consumers who rely on the program.

In a statement to Reuters on Tuesday, the bank said it was not extending new loans in the so-called “bracket 1.5” of the subsidy program until the end of the year due to budgetary restrictions. Loans in that segment, which offer favorable terms to families earning up to 2,600 reais ($690) per month, will be restarted next year, the bank said.

The move sent shares in MRV Engenharia e Participacoes SA , Latin America’s largest homebuilder, sliding 3.7 percent in morning trade.

Direcional Engenharia SA and Construtora Tenda SA , both low-income homebuilders, shed 1.8 percent and 1.5 percent, respectively,

The move by Caixa was first reported by Brazilian newspaper Valor Economico.

$1 = 3.77 reais Reporting by Gram Slattery; editing by Jason Neely

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