Hipotecaria Su Casita, S.A. de C.V. (HSC or Su Casita) is Mexico’s second largest Sofol (specialized mortgage lending institution) by market share. Its main function is to extend mortgage loans to low-income individuals under the auspices of SHF (Sociedad Hipotecaria Federal) financing programs, and to provide construction financing to developers of low-income housing. It controls approximately 18% of the mortgage market served by Sofoles, based on total loan portfolio. It has 107 offices in Mexico. Su Casita was established in 1994. As of December 2004, it had total assets of $1.85 billion equivalent and shareholders’ equity of $127 million equivalent. It is rated A3.mx (national scale issuer rating), and Ba3 (global scale local currency issuer rating) by Moody’s, and A-.mx by Standard and Poor’s. HSC has grown at a rapid pace since its inception a decade ago, given the high demand for low-income housing in Mexico. To enable it to continue to grow in step with the market and to diversify its funding source from the SHF, its strategy is to maintain its ongoing securitization program, thus enabling it to free up its balance sheet of assets so securitized. The purpose of IFC’s loan is to support HSC in this securitization program. IFC’s loan will be collateralized by a pool of mortgages that will satisfy IFC-stated criteria and be held in a Security Trust. This loan will thus readily enable Su Casita to support its securitization from a pool of high-quality assets that will already be in the Trust.