Work In The States, Build A Life In Mexico

Once a month 28-year-old Ignacio Moreno (not his real surname) walks to a small storefront on Chicago's West 26th Street and plunks down $380. It's not the rent for his two-bedroom apartment, where he lives with his wife and two kids, but an installment payment on his dream home back in Mexico. A bakery employee who works the night shift since the family came to the U.S. illegally in late 2003, Moreno is paying for $10,000 worth of cement, gravel, and bricks for the four-bedroom house he's building on the outskirts of the Mexican capital.

Moreno isn't paying a bank. He's giving his hard-earned money to the Mexican cement giant Cemex (CX ) through its Construmex program. The idea is to target migrants living in the U.S., who sent an estimated $16 billion in remittances last year -- some $3 billion of which was intended for construction, according to a Construmex market survey. Money transfers can be expensive, and family members back home frequently spend the money on other things. And many immigrants don't know how much cement to buy or how to build a roof, so their hard-earned savings often are wasted. That's where Construmex comes in: Its architects help clients design home plans and calculate how much material to deliver and at what time intervals. The company also finances the purchase of the construction materials.

In two years, Monterrey-based Construmex has helped 4,500 migrants living in the U.S. build homes or small businesses in Mexico. This year it expects $3.8 million in revenue, a mere hint of the potential. "We're certain that there's a very large, unsatisfied demand out there," says Hector Ureta, Cemex' director for low-income programs. The company's studies show that 58% of Mexican migrants to the U.S. intend to build in their home towns.

Just as some U.S. companies are tapping the undocumented market, some Mexican companies see opportunity in following customers who head north of the border. After all, many migrants straddle both worlds -- working in the U.S. but maintaining homes in Mexico. So far most cross-border efforts are housing-related campaigns conducted through U.S. branch offices. Grupo Famsa, a Monterrey-based retailer of home appliances, has nine stores in California and three in Texas, where migrants can buy a product and have it delivered to relatives in Mexico.

Then there's Hipotecaria Su Casita, a Mexico City-based mortgage lender that opened an office in Denver in 2003 and has made 350 peso-denominated mortgages, averaging $55,000, for migrants wishing to purchase a home in Mexico. Most of Su Casita's loans are for 20 or 25 years and charge 12% to 13.5% interest -- high for the U.S. but typical for Mexican mortgages. The company doesn't ask clients whether they're in the U.S. legally, but it requires evidence of earnings, such as paycheck stubs, bank statements, or a letter from an employer. So far none of its clients has missed a payment. "They don't want to risk losing their credit rating or the house they bought," says Eduardo Uranga, who heads Su Casita's migrant program. Su Casita's U.S. loan portfolio totals just $15 million, but Uranga predicts that 1,000 new mortgages will be issued in 2006. He expects that number to rise to 3,000 annually within five years. In May, Su Casita opened a Dallas office and will add others in Los Angeles and Chicago later this year.

Back in Mexico City, Moreno's mother, Alfreda Rosales, 55, stands proudly at her son's construction site. The former laundress shares a cramped room with her daughter and grandson as they await the completion of the 1,400-square-foot home. "Ignacio has always been a hard-working boy," she says, wiping away a tear. In a few years, Moreno plans to live in the new house with his family and mamá. Now he's thinking bigger -- a bakery of his own back home, a project he has already discussed with Construmex.

By Geri Smith in Mexico City

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