Thursday, May 6 2010 17:12
Central Bank of Armenia comes to the defence of implementation of the state program on Affordable Housing for Young Families
ArmInfo. The Central Bank of Armenia (CBA) is pleased with the rates of implementation of the state program on Affordable Housing for Young Families by the similarly-named credit company, which has been set up specially for this purpose. Vakhtang Abrahamyan, member of the CBA Board, told ArmInfo correspondent that the portfolio of loans refinanced by the company amounts to some 400 mln AMD.
When commenting on some market participants' discontent about the program passivity and low demand for the loans because of the tough terms, the CBA Board member said: "I wouldn't say the project has failed. The loan redemption period under this program is 10 years, and this is not a small period, especially taking into account the amount restrictions of the provided loans, the monthly redemption amounts of which are to comply with the budget of an average young family". At the same time, he pointed out that borrowers are currently being selected under the given program. "If we manage to provide most of the borrowers with loans, we'll have grounds to revise the program conditions in order to expand it in the future",- said Abrahamyan.
Executive Director of the Housing for Young Families UCO Mher Yedigaryan said that today it is early to speak of revision of the conditions of the program, which has been operating for only two months. "The project should operate for some time to show its worth, then we'll be able to reveal the possible flaws and introduce some adjustments in it. Moreover, if we amend the program conditions now, the market itself may perceive this inadequately",- he stressed.
To recall, the Central Bank of Armenia registered the Universal Credit Organization Housing for Young Families on February 16. The new mortgage company was registered on the basis of the bill on state target program on providing available housing to young families. The bill was approved by the Armenian government on 29 Jan 2010. The program is socially-oriented. Under the given program, the loans are provided for up to 10 years at an interest rate of 10.5% p.a, of the 2% being subsidized by the Armenian government. The real estate should not exceed 16 mln AMD, and the prepayment is 30% of the housing value. Contenders for loans under the given state program are the family couples, whose summary age does not exceed 60 years. At the same time, either of the persons is not to be older than 35. In addition, a single parent under 30 may also make use of the program. To receive a loan, the average monthly budget of young families should be 300-350 thsd AMD. This amount includes not only the couple's income, but also the financial support provided by their relatives.
Meanwhile, Executive Director of the Association of the Mortgage Market Participants of Armenia Eduard Oremyan has recently said in his interview with ArmInfo that under the given program loans worth a total of 31 mln AMD have been refinanced so far. According to Oremyan, this is connected with the potential borrowers' low demand and the tough terms of crediting.
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