Social mortgage loans to benefit more people in Azerbaijan
The list of people who will have access to social mortgage loans in Azerbaijan will be expanded, Central Bank of Azerbaijan (CBA) general director Rashad Orujov told journalists Thursday.
"Servicemen and employees of the Ministry for Emergency Situations have been recently included in this category of people on the basis of changes in the legislation," Orujov said regarding the allocation of such preferential loans, which are granted through the Azerbaijan Mortgage Fund (AMF) operating under the CBA.
Orujov said further, "There are proposals to include young families and young people who have yet no family in this list but have the financial potential to obtain mortgage loans."
He did not rule out the possibility of approving the proposals in the near future.
According to the preliminary proposals, the maximum amount of the social mortgage loan could be increased from the current 35,000 to 50,000 manats (up to about $63,700) or even 60,000 manats ($76,400).
The interest rate on social mortgage loans, which is four percent now, may be revised downward. Recipients of such loans may also be exempted from the down payment.
"After the Guarantee Fund starts its activity, one can get mortgage loans without making a down payment," the CBA director general said. "The borrower will receive a guarantee from the fund instead of an initial payment on the mortgage loan, whose entire amount he will have to pay himself."
At present, the issue of the fund's capitalization is being solved.
"The capitalization of the fund will depend on the funds allocated from the state budget to finance social mortgage loans [for 2013, this amount was doubled to 40 million manats]," Orujov said.
The Guarantee Fund will be established under the AMF in order not to complicate the institutionalization of the new organization, he said.
Orujov also spoke about the plans on changing the terms of issuing conventional mortgage loans, which will concern only the maximum amount. A proposal has been made to increase it from the current 50,000 manats to 100,000 manats, while the interest rate will remain at eight percent.
Mortgage lending in the country, which started in March 2006, has reached 395.52 million manats to date. The fund refinanced 306.55 million manats of this amount and it received 136 million manats from the state budget in 2005-2012.
The down payment on social mortgage loans is 15 percent, with a maturity of 25 years, and for conventional loans it is 20 percent, for a period of 30 years.
The official exchange rate was 0.7848 manats per USD as of November 15.