(Adds govt comments)
BRASILIA, May 15 (Reuters) - The Brazilian government is preparing changes to the country's low-income housing program by July that may reduce subsidies, the Economy Ministry said on Wednesday.
The proposal comes as a current housing subsidy program, known as Minha Casa Minha Vida, is likely to run out of money this year, as Brazil's fiscal picture worsens.
Newspapers Folha de S. Paulo and Valor reported earlier Wednesday that the government would seek a program overhaul.
Under the new program, the government would use its own land banks to develop housing projects, an Economy Ministry official told Valor.
The official also said workers would no longer be able to use money from a severance fund known as FGTS to buy a finished residential property. Instead, FGTS would only fund homebuilders while individuals would lease the units.
Shares in homebuilders that specialize in low-income housing, such as MRV Engenharia e Participações and Construtora Tenda have fallen since the discussions about changes in the program began.
MRV shares were down 0.8% in early-afternoon trading in Sao Paulo, at 15.46 reais. Tenda dropped 1.7% at 18.97 reais. (Reporting by Marcela Ayres; Writing by Carolina Mandl; Editing by Jeffrey Benkoe)