(Bloomberg) — Enrique Perez, who’s been building homes for most of his life in Ecuador, is finally going to make one for himself.

Perez is an unlikely beneficiary of the plunge in crude prices. That prompted Ecuador, an OPEC nation, to offer mortgage subsidies to people like Perez, a construction worker.

Ecuador joins Chile, Colombia and Peru in boosting spending on housing — a politically popular move — to revive their economies bruised by the worst commodities rout in four years. The Latin American nations are rolling out everything from changes in tax and mortgage laws to increases in infrastructure spending and subsidies for builders.

“The Ecuador government’s idea was to generate a massive housing program focused on middle- and lower-income levels to help boost the economy,” Mario Burbano de Lara, strategic director of Ecuador mortgage lender Mutualista Pichincha, said in an interview. “They saw a fiscally difficult year coming and wanted a new motor for the economy that could create jobs.”

‘Great Interest’

The subsidies, set to start by June, will cut mortgage rates from private banks in half for homes costing up to $70,000, and boost home lending by as much as $420 million this year, according to Economic Policy Minister Patricio Rivera. The total cost for homebuyers could be trimmed by about a third, he said.

The government is using a law approved by Congress last year to force Ecuador’s eight biggest banks, including publicly-traded Banco Pichincha CA and Banco de Guayaquil SA, to provide about $86 million in mortgages in the second quarter, according to the government. The lending requirements will be reviewed quarterly and may change.

The banks didn’t respond to requests for comment.

Banco del Instituto Ecuatoriano de Seguridad Social, the banking arm of Ecuador’s state-run pension fund known as BIESS, will also lower its interest rates to 6 percent for new homes costing up to $70,000. That’s down from an average of 8.6 percent, according to the bank.

BIESS has seen “great interest” in the new lending program, the bank’s press office said. The agency has received 457 applications since April 11 and expects to disburse funds to clients within 89 days of receiving the loan application, it said.

Andean Stimulus

In Chile, where laws require the government to save windfall profits from its copper exports, President Michelle Bachelet plans to spend an extra $1.2 billion on an affordable-housing program this year. Prices for copper, Chile’s biggest export, have fallen about 10 percent since their peak last year in July.

Colombia’s President Juan Manuel Santos said in February that his government planned to “neutralize” the negative effects from the fall in oil prices by providing support for construction and housing. The government, which depends on revenue from oil — the nation’s biggest export — will build 400,000 homes for low-income families through 2018.

Officials are also seeking changes to laws to allow financial institutions to issue mortgage-backed bonds linked to loans in pesos to boost lending.

Spent Savings

Last year, Peru, the world’s third-biggest copper producer, announced a series of tax changes to help accelerate construction of houses and buildings as well as three emergency spending plans. The government said in January it would help finance $7 billion of projects to offset a slump in mining and a sagging economy.

Unlike its Andean neighbors, Ecuador has already spent its savings from the oil boom and has little cash to help pay for housing. Under Ecuador’s new law, which was passed at the urging of President Rafael Correa, the government plans to tap about $185 million of private banks’ deposit reserves held by the central bank to fund the program.

“The interesting part of this program is that the government wanted to use the financial system’s own reserves to fund the subsidy,” Mutualista Pichincha’s Burbano de Lara said. “They didn’t want to use any state funds for this.”

The use of reserves shouldn’t put the financial system at risk because the amount is a fraction of the nation’s total deposits of $26.8 billion, said Vicente Albornoz, dean of the Universidad de las Americas business school in Quito.

Worst Bond

With the country’s oil price averaging about 40 percent less than the $79.70-a-barrel forecast in this year’s budget, Correa, a self-described revolutionary socialist, has had to cut spending for the first time since taking office in 2007. He pushed controversial legislation through Congress last month eliminating a 40 percent subsidy for state pensions.

Ecuador’s economy, South America’s seventh-biggest, expanded in 2014 at its slowest pace in four years and is on track to lose more steam this year, according to the government.

In a sign of how desperate the country is to prop up spending, Ecuador in March sold the world’s most expensive bond in 13 years, with an interest rate of 10.5 percent. Six years ago, Ecuador defaulted on the nation’s 10-percent notes.

“Ecuador is facing a perfect storm right now in that this has been an economy that’s highly dependent on public spending for stimulus and growth,” Eurasia Group analyst Risa Grais-Targow said. “They’re knocking on every door and exploring every option that they have.”

Ecuador’s economy, finance and housing ministries didn’t respond to requests for comment.

‘Perfect Storm’

The housing program should offset an expected slowdown for builders and mortgage lenders, according to Mutualista Pichincha’s Burbano de Lara. He said the subsidies will likely keep mortgage lending at the bank on course to reach about $100 million this year, preventing what otherwise would be about a $20 million slide.

For Perez, 51, the subsidy means he can finally move his wife and four kids out of their rented two-bedroom apartment.

“Before, we were thinking we could afford a one-bedroom apartment,” Perez said. “Now, with these new terms, we’re going to see if we can do something better with a house.”