A Puerto Rican housing agency is automating its mortgage underwriting with the same software as some of the largest U.S. banks.

The Puerto Rico Housing Finance Corp. is investing $110,000 in a system developed by Data Select of Westlake Village, Calif. The more efficient system will "reduce labor and underwriting costs," said Gustavo A. Castillo, executive director of Puerto Rico Housing Finance.

The agency, which is responsible for ensuring that low-income housing is developed and preserved, said it plans to use the software to manage accounting on its loans.

The island commonwealth, whose housing industry records 15% annual growth, relies on the agency to supply low-rate construction loans and permanent mortgages for low-income housing, Mr. Castillo said.

U.S. subsidies and public funds generated by the agency finance its mortgage loans and help pay for the Data Select project, Mr. Castillo said.

It is hoped that making lending easier "through an electronic interface between payments made from homeowner to bank to the corporation and vice versa" would expand mortgage lending on the island, said Philip C. Freeman, Data Select's president.

The average family in Puerto Rico has annual income of $27,017 and spends about 30% of that on housing.

The government agency holds about $78.4 million of mortgages in its loan portfolio for private rental properties. Developers borrow an average of $5 million per project.

The agency also has $17.5 million of construction loans outstanding. These short-term lines of credit foster homeownership by making possible the construction of low-income housing projects.

For all finance programs, a private bank gets a loan from the agency, then distributes the funds to the builder or homebuyer, Mr. Castillo said.

Mr. Freeman said he hopes to sell the Data Select system throughout Latin America. Talks are already in the works for a system in Jamaica, he said.

"In these sort of developing areas, government is critical to housing, which is critical to developing middle-class populations," Mr. Freeman said.

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