Thursday, November 11 2010 16:12
Government of Armenia softens mortgage-lending terms in regions
ArmInfo. Government of Armenia adopted a decision on Thursday to soften mortgage-lending terms in the regions, Finance Minister Tigran Davtyan said in a press conference.
The minister said that implementation of the government program Affordable Housing of Young Families revealed that regions are passive and mortgage lending is in demand mainly in Yerevan.
"A total of 137 loan agreements were made as part of the program, including 99 contracts in Yerevan and only 38 in the regions," the minister said.
In this light, he said, the government increased funding from 2% to 4% and reduced prepayment from 30% to 10%. Thus, the interest on mortgage loans in the region will total 6.5%-7%. In addition, the government softened mortgage security requirements. Big enterprises can provide guarantees that will be considered as pledge security.
He said that refinancing under the program has reached 1.1 billion drams out of the total 3 billion drams. The government also softened requirements to the borrowers. Specifically, the loan is available to the families where one spouse is under 35, whereas earlier the total age of the couple couldn't exceed 60 years.
To recall, the Central Bank registered Affordable Housing for Young Families UCO on February 16 on the bases of the state target program of affordable housing for young families approved by the Government on Jan 29 2010. The annual interests rate on the loans provided under the given program is 10.5%, including the government finances 2%. The cost of the housing cannot exceed 6 million drams and the prepayment is 30% of total cost. The loan maturity is 10 years. The required monthly income of a family is at least 300- 350,000 drams inclusive of financial assistance from family and relatives.
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