Portugal to Accelerate Payments for 1.º Direito Housing Program
The Portuguese government has announced a significant policy shift to accelerate payments for housing projects under the 1.º Direito program, which is financed by the national Recovery and Resilience Plan (PRR). A new technical directive from the Estrutura de Missão Recuperar Portugal, the body overseeing the PRR's execution, will allow municipalities to receive the bulk of their funding more quickly, aiming to speed up the construction and rehabilitation of affordable homes across the country. This move is a direct response to the urgent need to increase the public housing stock and address affordability challenges.
The policy's primary objective is to remove financial bottlenecks that have slowed down the progress of housing initiatives. Under the new framework, municipalities that have already completed and delivered housing units will be eligible to receive 95% of the total approved funding immediately. This is a departure from the previous system, which required a thorough review of all expense documentation by the Institute of Housing and Urban Rehabilitation (IHRU) before the majority of funds were released. For projects that have surpassed the 50% completion mark, municipalities can now request an advance of 85% of the total value. This tiered approach is designed to inject capital at critical stages of development.
The implementation of this accelerated payment system is contingent on a formal declaration from the highest-ranking municipal official with representative powers. This declaration must either attest to the full completion of the housing units or confirm that the project is in an advanced stage of execution, defined as over 50% complete. In the latter case, the municipality must also formally commit to completing all work by the PRR's final deadline of June 30, 2026. This requirement ensures that the advanced funds are tied to a clear timeline and commitment to delivery, maintaining accountability within the program.
The final disbursement of funds is structured to ensure project completion and proper allocation. The remaining 5% of the financing will only be made available after the municipality provides proof of the homes' delivery to the beneficiary families. For municipalities with fully completed projects seeking the 95% advance, the submission of the official Auto de Receção Provisória (Provisional Reception Certificate) is also a mandatory step, serving as the official record of the work's conclusion. This final check ensures that the program's ultimate goal—housing families in need—is met before the final payment is made.
This strategic initiative is part of a broader government effort to meet ambitious housing targets set under the PRR. According to official figures released by the government, more than 11,000 affordable homes had already been delivered to families by the end of July 2025. The stated objective is to reach a total of 26,000 completed homes by July 2026. The acceleration of payments is seen by government officials as a crucial tool to ensure this target is not only met but potentially exceeded, by providing municipalities with the financial agility needed to manage their construction pipelines effectively.
The Ministry of Housing has framed this decision as a key component of its national housing strategy, which aims to tackle the housing crisis affecting many parts of Portugal, particularly the metropolitan areas of Lisbon and Porto. By ensuring a steadier and more predictable flow of capital, the government anticipates that municipalities will be better positioned to manage contractors, procure materials, and ultimately bring housing units to market faster. This measure is expected to have a significant impact on the ground, reducing waiting times for families on social housing lists and contributing to more stable and inclusive communities.
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