Azerbaijan may up mortgage funding
Azerbaijan may allocate additional funds to finance mortgages this year, head of the Economic Policy Department in the Azerbaijani Presidential Administration Mail Rahimov told media.
"It is possible to allocate additional funds without adjusting the forecast indicators of the state budget," he said. "If there is a need, additional funds can be allocated from the reserve fund of the state budget or the presidential reserve fund of the country. There is no need to revise the forecast indicators of the state budget."
He added that it is possible to deliver additional funding from budgetary funds for mortgage lending.
Around 40 million manats was envisaged in the state budget 2013 to finance the social mortgage. The ordinary mortgage is financed through the funds obtained from placing mortgage bonds.
Currently the maximum amount of a common mortgage loan through the AMF is 50,000 manats at a rate of eight per cent with a payback period of 25 years. The social mortgage is provided in the amount of 50,000 manats at an annual rate of four per cent with a payback period of 30 years. The down payment under the social mortgage is 15 per cent, while that under the conventional loan is 20 per cent.
The conditions of mortgage lending are as follows; loans must be issued in Azerbaijani manats and only to Azerbaijani citizens and the mortgage can only be for an apartment or private house. The volume of mortgage lending must not exceed 80 per cent of the market price and the monthly payment must not exceed 70 per cent of the debtor's monthly income. It is compulsory to take out an agreement on life insurance.
Preferential conditions are granted to family members of war victims, national heroes, internally displaced persons, civil servants with at least a three years' experience, PhDs, those making special contributions to sport as well as to the military with at least a three-year service term (except servicemen of the urgent military service) of the Ministry of Defence, Ministry of National Security, the Interior Ministry, State Border Service and the Special State Protection Service.
Each family having the right to such a mortgage can only use the
opportunity once.
Mortgage loans worth more than 421.89 million manats were delivered
in 2006-2012 through the AMF (74.77 million manats - in 2012, 95.64
million manats - in 2011, 97.08 million manats - in 2010, 76.9
million manats - in 2009, 70.2 million manats - in 2007 and 5.6
million manats - in 2006).
Loans amounting to 15.19 million manats, or by 4.47 per cent more compared to the same period of 2012 were delivered through the Azerbaijan Mortgage Fund in the first quarter.
There are 27 authorised banks belonging to the Mortgage Fund, 21 insurance companies and 11 appraisal organisations all of which are participants in the mortgage market.
The official exchange rate on April 23 is 0.7847 AZN/USD.