Provision of loans under state program on housing for young families
to start in March

13.02.2010

ArmInfo.The first loans under the state program on housing for young
families will be provided in Armenia in March 2010, Vardan Aramyan,
Deputy Finance Minister of Armenia, told ArmInfo correspondent.

According to him, the newest universal mortgage credit company to
implement the given state program will be registered by the Central
Bank of Armenia (CBA) in the near future. "At the moment we are
working with the CBA at signing of an agreement, in particularly, it
is envisaged to sign an agent agreement in the person of the finance
ministry and the created credit company, and on the basis of this
agreement the government will allocate 60 mln AMD as subsidy. When the
company receives credit applications, we will pass provide the
subsidies to the beneficiaries",- said the deputy minister and added
that name of the company will be associated with the name of the state
program itself.

To note, since 2009 the National Mortgage Company has been operating
in Armenia to implement social programs on provision of housing. As
regards the necessity of creation of the new credit company, Aramyan
said that the goal of the National Mortgage Company that works
according to market conditions is to carry out refinancing, moreover,
the national Mortgage Company is expected to issue securities in the
future. "In order not to introduce distortions in the market, a
decision has been taken to set up a certain company, which will
provide resources at lower rates than the market ones, this is its
social component",- he said.

To recall, the new mortgage company will be opened with an authorized
capital of 3 bln AMD. Under the state mortgage program, loans for
acquisition of housing will be provide all over Armenia. The value of
the property is not to exceed 16 mln AMD, and the requested prepayment
will range from 30% to 35% of the housing value. The loans will be
provided for up to 10 years at a subsidized interest rate of 8-10%
p.a. 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.

Deputy Chairman of CBA Vache Gabrielyan said earlier that to receive a
loan, the average monthly budget of young families should be 300-380
thsd AMD, of them 35% (130-160 thsd AMD at the mean) are to be monthly
spent on redemption of the mortgage.