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Azerbaijani president orders to increase preferential mortgage loans

5 February 2013 21:01 (UTC+04:00)
Azerbaijani president orders to increase preferential mortgage loans

By Nigar Orujova

Azerbaijani President Ilham Aliyev signed a decree to amend the rules on issuing preferential mortgage loans on Monday. The maximum loan amount under the social mortgage was increased from 35,000 manats (about $44,000) to 50,000 manats (about $63,000).

According to the amendments, people who have been servicemen for over three years, those in the reserve and retired servicemen, except those serving in urgent active military service, have access to social mortgage loans.

The benefits of mortgage loans do not apply to servicemen deprived of the military rank by a court decision, those deprived of the right to perform military duties for committing a crime, those imprisoned for a specified period or for life or recognized as unfit for military service by a military medical commission due to illness.

The benefits are not available during the termination of the contract with servicemen who are Azerbaijani citizens, loss of Azerbaijani citizenship, and in some other cases.

Preferential conditions are granted to family members of war victims, national heroes, internally displaced persons, civil servants with at least three years of experience, PhDs, those making special contributions to sports as well as servicemen with at least a three-year service term.

Social mortgages are issued by Azerbaijan Mortgage Fund (AMF) under the Central Bank of Azerbaijan at an annual rate of four percent and for the term of 30 years. The initial payment on a discounted mortgage is 15 percent.

According to the draft state budget for 2013, it is planned to allocate 40 million manats (about $51 million) to finance social mortgage lending.

Over 421.89 million manats (about $538.3 million) were allocated for mortgage loans in Azerbaijan from 2006 to 2012.

27 banks are authorized banks of the AMF. 21 insurance companies and 11 appraising organizations are participants of the mortgage market.

Azerbaijan Mortgage Fund was established for the purposes including improved living standards of the population, adaptation of the supply with real demand, and attracting local and foreign investors to mortgage lending, according to a presidential decree issued in September 2005.

The mortgage fund is a state institution and is not engaged in direct granting of mortgage loans to the population. Mortgage lending is carried out by authorized credit institutions selected by the central bank.

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