Certificate of Participation: Documents, Steps to Get It Out and MORE

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The Participation certificate It is a title of great interest for credit institutions that are part of the mortgage field. In fact, one of the main objectives of this certification document is: to refinance housing programs.

If you have no idea about this topic and want to know more about it certificate of mortgage participation in Costa Rica, We invite you to read this article! In the following paragraphs we will explain what it is, what are the steps to obtain it and its classification according to the type of certificate.

Types of Participation Certificates

There are three (3) types of mortgage securities. Among them we find the following:

  • Mortgage bonds.
  • Mortgage bonds.
  • And last but not least, the mortgage participation.

Of course, mortgage bonds and covered bonds are nominative. It is to order and they are backed by the volume of mortgage loans that are granted to their issuer. Likewise, the issuance terms may vary depending on the certificate.

They can even take up to ten (10) years. Now, the difference between the bonds and the mortgage bonds is that, with respect to the bonds, the issuer backs them with the total of loans granted. Whereas, the bonds are secured by a set of specific loans.

On the other hand, mortgage participations are defined as a transfer of credit, either total or partial. Through which another entity is involved in one or more mortgage loans, in such a way that it collects the part corresponding to its participation in said set of loans.

The mortgage participation certificate can only be issued by the competent entities in the mortgage market. They also allow investors in mortgage loans to participate in the loans authorized by the entities that participate in the mortgage field.

Who issues and grants the Participation certificates?

The Participation certificate It can be obtained in a period of one to six months in the Republic of Costa Rica. Even mortgage securities are usually issued in the long term due to the nature of the instrument and the risk that the investor runs of defaulting on the given credit.

In other words, there is no established coupon as in the case of bonds and mortgage bonds. In this case, the investor charges as the loan is paid off. With regard to the entities in charge of issuing the participation document, we find that said title can only be issued by financial or mortgage entities.

For example, savings banks, credit unions, state banks, mortgage companies and mortgage funds. In the case of the Republic of Costa Rica, any state bank or credit cooperatives will allow the issuance of the mortgage participation certificate. An example of such entities can be the Bank of Costa Rica (BCR), or the Chamber of Investment Funds of Costa Rica (CAFI).

Steps to Obtain a Certificate of Participation?

In this case, we will mention the steps to obtain a certificate of participation according to the Bank of Costa Rica.

Processing in Office

  • Submit form for drafting the deed for the cancellation of liens. It is important to see the formalities of the document.
  • Consult the table of proxies for cancellation of liens.
  • Duly record the qualities of the attorney-in-fact of the BCR Conglomerate and the registration appointments of the personería.

Signature of the Deed

In the case of partial cancellations, there must be a previously approved report that allows the release of the lien. It must be done by the office in charge of the operation. Otherwise, if the name of the office in charge of the operation is unknown, you can directly contact any Banco de Costa Rica office and request the information.

Who can get a Certificate of Participation?

It is important to mention that, anyone can obtain and request a Participation certificate. Either legal or natural persons, what is really important is that these people who decide to obtain the certificate are correctly advised.

Although, they usually grant these mortgage titles to people of legal age as long as they have the financial resources required to request the mortgage participation certificate. On the other hand, the maturity term of the participation never exceeds the credit maturity limit. Likewise, an interest greater than that established for it cannot be offered.

Advantages of the Mortgage Credit

While it is true, credits can be a solution for many people, and that is why it will always be a very attractive option. Especially if you are at the time of wanting to buy a home. For this reason, it is important to highlight some considerable advantages over mortgage credit.

In general terms, the amounts are higher than those offered in other types of loans or credits. On the other hand, it should not necessarily be related to the purchase of a home, it can also refer to the remodeling of a home that the applicant already owns, as the case may be.


Likewise, loans are usually long-term, which indicates that the installments will be adjusted to your purchasing power or financial resources for the moment. Of course, we cannot forget that many offer low interest rates that facilitate the payment of the same.

Disadvantages of Mortgage Credit

On the contrary, as long as there are advantages, disadvantages will always appear, which is completely normal since everything must be balanced. In this case, the arrears in payments generate as a consequence interest on arrears, which is generally very high.

It is important that the applicant investor knows that they will have long-term economic stability, although being honest it is not something that can be completely sure since changes happen unexpectedly.

On the other hand, the entities in charge of issuing the Participation certificate require fire and earthquake insurance that only covers the paid portion of the mortgage loan. For this reason, we recommend that you inform yourself completely and accurately before requesting the certificate. This will allow you to decide whether to use the mortgage participation certificate or not.

Chamber of Investment Funds of Costa Rica

Known as an association belonging to the Republic of Costa Rica that is in charge of bringing together all the Investment Fund Management Companies of the Central American country. Its foundation dates from the date of June 19, 1997 and is also constituted by fourteen (14) management companies.

Thus, they offer together more than ninety-four (94) investment funds with assets exceeding US $ 6,195 million. Although it is true, CAFI is also part of the Ibero-American Federation of Investment Funds (FIAFIN). In addition, the Chamber of Funds of Costa Rica is affiliated with the World Association of Investment Funds.

Its main objective is to achieve and achieve the orderly, robust and transparent development of investment funds in the Republic of Costa Rica. For more information you can contact them by phone at the following number: + (506) 7078-6132. On the other hand, its main headquarters are located in: Edificio Trifami. Avenida 1, Calle 2. San José, Costa Rica.

What is it?

The Participation certificate it is also known as «Mortgage title» and at the same time it is defined as a title of nominal value representative of a part of a mortgage loan. Now, according to the Chamber of Investment Funds, a Participation certificate it is fixed by a title in colones issued by state banks for the sole purpose of refinancing housing programs.

The amounts are defined by each institution in charge of issuing the certification document. Generally, they have a fixed interest rate and are paid monthly, quarterly or semi-annually. Even eight percent (8%) of income tax is applied to interest.

The competent entities in charge of issuing the mortgage participation certificate enable said title in order to obtain liquidity. In addition to expanding and diversifying sources of financing, with the opportunity to access new markets. They also achieve a release of capital since when the mortgage holdings are taken out of balance, a release of capital takes place that can be used for new businesses.

In case of doubts regarding the certificate, you can enter the following link. There you will find the concept of what a mortgage title is and also, you will have the opportunity to directly consult the information through the website of the Chamber of Investment Funds of Costa Rica.

Remember that, requesting a mortgage participation certificate It can be done before any financial institution that has a field in the mortgage market. However, it is important to note that access to mortgage credit requires adequate advice to acquire a loan that meets the needs and expectations of the investor.

Finally, in a summarized way, the mortgage participations allow to involve the investors of the mortgage loans granted by the entities that are in the mortgage market, preserving the administration and custody of the loans.

We hope we have provided you with useful information regarding the certificate of participation. Thanks for reading us!

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