• New investments of R$34 billion (US$14.9 billion) in order to build an estimated total of one million new homes, with 400 thousand for very poor families (with a 100% subsidy) amounting a total investment of R$16 billion (US$7 billion) and the monthly installment for this program not to exceed US$22 per month?? ?
• 400 thousand homes will be built for low income class families; with some degree of subsidy as annual rates will be 5% or 6% per year -- very low for Brazilian standards -- depending on the total family income. Total investment for this program should be around R$10 billion (USD$4.4 billion)?? ?
• 200 thousand homes will be constructed for middle class families without any new subsidies, but with long-term financing guaranteed?? ?
• A guarantee fund should be established to cover defaults for very poor and low-income families?? ?
• The government also reduced corporate taxes on the companies involved in this program

Even though the long term credit environment in Brazil remains difficult, we do believe the announced program will help Gafisa get through this difficult period without major problems.

Of course it is highly questionable if the government will be able to actually built one million new homes, or how long it will take. However, we believe this is just a political question -- the important point for Gafisa is that the program will provide long-term financing and increase demand from low income customers without credit risk. We are increasing our earnings estimates for 2009 from $1.25 to $1.35 and our new target price is $12.75