Portugal’s Development Bank considers state-backed housing guarantees for middle class

Portugal’s state-owned development bank is studying the possibility of providing public housing guarantees to help middle-income families and vulnerable households access home ownership, its president Gonçalo Regalado has revealed.

Speaking to Rádio Renascença, the head of the Banco Português de Fomento (BPF) said the institution is examining all options to support access to housing, including state-backed guarantees and public credit mechanisms.

“Should it prove necessary, we may have a role to play in public guarantees and public housing credit, particularly for disadvantaged groups and the middle class,” he said.

The comments come as Portugal continues to grapple with a housing affordability crisis that has pushed home prices and rents way beyond the reach of many families.

Regalado stressed that BPF’s primary focus remains boosting housing supply rather than financing buyers directly.

“Ninety-five percent of our work is on the supply side — supporting companies that build and develop housing,” Regalado said.

The bank has already committed substantial resources to increasing affordable housing construction. Earlier this month, Regalado announced that BPF has €500 million available this year to support housing cooperatives, with the bank providing guarantees to commercial lenders to encourage financing for cooperative housing projects.

The institution has also earmarked a further €1 billion for public-private partnerships aimed at developing affordable housing.

Combined, the programmes are expected to mobilise €1.5 billion in housing investment during 2026, while BPF plans to deploy a total of €4 billion for affordable housing construction and rehabilitation projects by 2028.

The development bank’s president said the institution’s housing strategy will begin with support for housing cooperatives, followed by public-private partnerships and later more substantial financing for public housing developments.

Nonetheless, BPF provided no housing-related financing during 2025, RR points out.

Gonçalo Regalado also used the interview to reject suggestions of political interference, insisting that the institution operates independently from government direction.

“The state does not give instructions to the bank,” he stressed.

Looking beyond housing, Regalado announced that two new BPF credit lines targeting agriculture and tourism will be launched in September – sectors where the bank believes access to traditional financing remains difficult.

The bank chief also confirmed that BPF will participate in financing the long-awaited Central Algarve Hospital project alongside the European Investment Bank, although the final structure of that involvement has yet to be determined.

The important aspect of his reference to bank guarantees for the middle class is that, up until now, these have only been available for the under-35s.

Something not mentioned in the RR story on possible bank guarantees for the middle class is that the bank admits that it will need to ask (the government) for a reinforcement in capital of ‘in excess of €1.5 billion’ by 2030.

Source: noticiasaominuto/ LUSA