Chile's Chamber of Deputies approved the government's capital markets reform on Tuesday, October 27, with 100 votes in favor, 35 against and one abstention, and sent it to the Senate, according to [CNN Chile](https://www.cnnchile.com/negocios/camara-aprueba-reforma-al-mercado-de-capitales-pero-excluye-a-las-afp-del-ahorro-habitacional/) and [Emol](https://www.emol.com/noticias/Economia/2026/10/27/1215376/camara-despacha-reforma-mercado-capitales.html). The heart of the bill is the National Housing Fund (Fonavi), which aims to lower the down payment on a first home from 20% to 10%. The only major change from the executive's proposal: the floor rejected, 88 to 48, letting pension fund managers (AFPs) run the new housing savings accounts.
Finance Minister Jorge Quiroz said "99%" of the proposal was approved and that excluding the AFPs "is not a fundamental issue". Here is what the capital markets reform contains, how Fonavi would work and what is still needed for it to become law.
How the capital markets reform was voted in the lower house
| Vote | In favor | Against | Result |
|---|---|---|---|
| Bill in general (floor) | 100 | 35 (1 abstention) | Approved; goes to the Senate |
| Article 5, letter f): AFPs in housing savings | 48 | 88 | Rejected |
| Amendment by Jorge Brito (FA): AFPs return fees if they underperform their benchmark | 69 | 68 | Rejected: needed 78 votes (quorum) |
Sources: CNN Chile, Emol and La Tercera. The Chamber reported the approval as a reform "that makes access to a first home easier". There were more than 40 votes on specific articles; according to Quiroz, almost everything passed with two-thirds.
The rejection of the AFPs came amid the controversy over the roughly 10% fall in Fund E (see why Fund E fell). Deputy Juan Santana (PS) said that while the fund was falling, the AFPs earned "$378 billion"; Carlos Bianchi (independent) called the provision a "Trojan horse".
What Fonavi is and how it lowers the down payment to 10%
| Element | How it would work | Source |
|---|---|---|
| National Housing Fund (Fonavi) | Buys first-home mortgages from banks and passes on the state's low funding cost | La Tercera and Cooperativa |
| Home price cap | Up to 6,000 UF, new or used | La Tercera and Cooperativa |
| Voluntary Housing Savings (AVV) | The buyer saves 7% of the price in a special account and the state contributes 3% | CNN Chile and La Tercera |
| Total down payment | 10%, versus the 20% banks usually require | Cooperativa (BancoEstado) |
| Savings period | 30 continuous months | Cooperativa (BancoEstado) |
| Who qualifies | Only people with no previous home or housing subsidies; couples or households can apply together | Cooperativa (BancoEstado) |
| Initial state contribution | US$2 billion in capital | Cooperativa (BancoEstado) |
Sources: La Tercera, CNN Chile and the interview with BancoEstado chairman Mario Farren on Cooperativa. In Farren's example, the monthly payment on an average home in BancoEstado's portfolio would fall from about $520,000 to about $460,000 Chilean pesos, roughly 10% less.
The reach figures do not match: the government, through Interior Undersecretary Máximo Pavez, spoke of about 150,000 homes with 30-year loans, while Farren estimated that the US$2 billion contribution, leveraged, could finance about 220,000. The difference depends on the average home value and the leverage used.
What else the capital markets reform includes
- A junior stock exchange so that startups and small companies can open up to investors.
- No more tax ID (RUT) requirement for foreign investors.
- Microloans with a higher maximum conventional rate, so banks and other lenders offer small amounts.
- Corfo will be able to invest in venture capital.
- Regulatory simplification and measures to position Chile as a regional financial hub, one of the four pillars highlighted by the government.
Source: La Tercera. The government presented a package of about 30 measures with four pillars: access to housing, savings, regulatory simplification and a regional financial hub. The chair of the Finance Committee, Agustín Romero (Republicans), argued that "when a family works, saves for years and still cannot get its first home, we have a serious problem".
What comes next for the reform and Fonavi
| Stage | Status as of October 28, 2026 |
|---|---|
| First reading (Chamber) | Approved on October 27 |
| Second reading (Senate) | Goes to the Senate Finance Committee |
| Role of the AFPs | Out of housing savings; the government could try to restore it in the Senate, but Quiroz said it is not a priority |
| Launch of Fonavi | Requires a published law and regulations; no date |
Sources: La Tercera and Emol. Meanwhile, Farren advised those who already have the down payment and an approved loan not to wait for Fonavi: "go and close it now, because this still has to be approved". The bill is being discussed alongside the 2027 budget, which also goes through the Finance Committee.
Who wins and what doubts remain
For a middle-class family that rents and cannot save the 20% down payment, Fonavi could shorten the road to owning a home by several years. Three doubts came up in the debate: whether lowering the down payment pushes home prices even higher (Deputy Jorge Brito recalled that they rose 300% in 16 years), how much risk the state takes on when buying loans, and who will manage the savings accounts now that the AFPs are out. Mortgages in Chile are denominated in UF, so inflation also weighs on the monthly payment (see the central bank's latest rate decision).
Frequently asked questions
What is Fonavi?
The National Housing Fund, created by the capital markets reform to buy first-home mortgages and lower monthly payments using the state's funding cost.
How much down payment do you need with Fonavi?
10%: the buyer saves 7% of the price in a special account for 30 months and the state contributes 3%.
Up to what home price does it apply?
Up to 6,000 UF, for new or used homes and only for a first home.
Why were the AFPs left out?
The Chamber rejected, 88 to 48, the provision that allowed them to manage housing savings accounts, amid criticism over the fall in Fund E.
Is the capital markets reform already law?
No. It was approved by the Chamber on October 27, 2026 and moves to the Senate.
