Introduction of a mechanism for guaranteeing mortgage loans will start in Azerbaijan in the first quarter of 2018, reads the message of the Azerbaijan Mortgage and Credit Guarantee Fund Jan. 12.
The mechanism will allow low-income families to purchase housing through mortgage loans with a lower initial contribution, the message noted.
“International experience was studied within the framework of the cooperation agreement signed with the World Bank, a draft procedure for issuing a guarantee was prepared along with experts of the bank, and a basic model for managing risks was formed,” the message said.
The introduction of the new mechanism will accelerate and simplify the process of issuing loans, and will also pave the way for optimal risk management, according to the message.
Azerbaijan Mortgage and Credit Guarantee Fund CJSC was established Dec. 25, 2017 through the merger of the Azerbaijan Mortgage Fund and the Credit Guarantee Fund.
According to the new mortgage loan issuance order, approved in June 2016, a conventional mortgage loan will be issued only to Azerbaijani citizens and only in the national currency for a term from 3 years to 25 years, while preferential mortgage - up to 30 years to purchase a house, owned by the citizen. Interest rates on conventional mortgage must not exceed eight percent, while 4 percent per annum in preferential mortgage loan.
The family members of war victims, national heroes, internally displaced people, civil servants with at least a three years' experience, teachers of secondary schools with at least a five-year service term, PhDs, doctors of science and those having special merits in sport as well as the military with at least a three-year service term can use the preferential conditions. Each family having the right to such a mortgage loan can use it only once.
Follow us on Twitter @AzerNewsAz