The GDB chief spoke to reporters following a meeting of Gov. Luis Fortuño’s Economic Development Council, in which the implementation of the local Economic and Fiscal Reconstruction Plan was discussed in detail.

“An anchor of the plan is the loan program which will help small- and medium-sized businesses facing liquidity shortages,” García said. “We are also working to move the housing inventory.”

In both programs, the government is using loan guarantees and other mechanisms to try to stretch its investment dollars further, he added. They will be available through island banks.

The government will put up $180 million in loan guarantees to facilitate the loans to small and midsize businesses at risk of downsizing or closing because of a liquidity crisis. The program, which will be managed by the Economic Development Bank, will offer loans of from $5,000 to $250,000. It is expected to benefit more than 7,600 local businesses.

Through the housing program, eligible consumers will get $25,000 to purchase a new house or $10,000 for an existing house. Garcia said the program is expected to help finance 8,000 new homes and 4,000 old homes, as the money can be used as down payment for houses.

“For one-tenth the cost of a similar program of the past administration, we will be achieving similar results,” he said.

The Acevedo Vilá administration spent some $240 million in housing credits to encourage the purchase of new and existing homes.

Rather than giving the cash outright to consumers, however, the new plan calls for a second mortgage loan that carries no payments or interest for the first 10 years. After that, consumers will pay off the loan over the next 20 years. While the amount they pay will ultimately depend on interest rates, García said it will likely wind up costing about $175 a month.

Details on another aspect of the local stimulus plan, $300 bonus checks expected to benefit some 106,000 pensioners, should be released in a month, Garcia said.

García also said the Fortuño administration’s enactment this week of a plan to stabilize government finances through new taxes and cost-cutting measures has been received positively by Wall Street credit analysts and investors.

“They were asking for action, and were impressed by the team approach by the Legislature and the administration,” he said. “We have to follow this up though. They will continue analyzing our actions.”

Government officials will discuss in detail their plans with Wall Street investors during a Thursday teleconference, he said. .

“We have plenty of liquidity in the short term to undertake the criollo stimulus plan,” García said. “However, we will need bond emissions to meet our needs over the medium and long term.”