Cemex (CX) is getting into the housing business, helping Mexican immigrants in the U.S. obtain mortgages and build houses in Mexico.
After a pilot project involving 150 homes showed that its customers in the U.S. are comfortable turning to the cement maker to coordinate the process of building a home from start to finish, Cemex is launching a formal program with a goal of building 1,200 homes this year, Hector Ureta, the company’s director of social programs, said.
"We are learning through this process if our market is going to come over to us or a financial institution for a house," said Ureta on the sidelines of a conference.
Cemex benefits not only from brand recognition among Mexicans living in the U.S., but also from working relationships with construction companies in Mexico.
The company has already lined up 12 Mexican developers to create a broad-based housing inventory, including major builders such as Desarrolladora Homex, Corporacion Geo and Urbi Desarrollos Urbanos. It expects to sign agreements with 15 more this month.
"We are working hard to incorporate more and more developers to be able to offer houses, not just in one little region but in as many cities as we can," said Ureta.
The company has also formed a partnership with remittance company DolEx, a unit of Global Payments Inc. (GPN), to handle the payments for the homes.
While Cemex provided the financing for the pilot program, it is planning to hand over the lending process to a financial institution in Mexico, he added.
Some of Mexico’s biggest lenders have made inroads into the cross-border mortgage market in recent years, though they have only found limited success in tapping into a potential market of an estimated 10 million Mexicans living in the U.S. who sent home a record $23 billion in remittances last year. As of September, just over 1,850 migrant mortgages had been granted in Mexico, according to federal development bank Sociedad Hipotecaria Federal.