Federal policies - federal housing finance in particular -have facilitated the development of higher quality houses, yet have often failed to contribute to the development of better cities. Reforms to INFONAVIT’s practices thus form the basis upon which a more competitive, sustainable housing and urban development model can be built. First, like many Latin American countries, Mexico has a long history of informal or irregular housing development, and a large share of the housing stock continues to be self-built, lacking legal titles or constructed outside the formal development process. Nearly one-quarter of urban households live in informal settlements.