Azerbaijan, Baku, May 14 / Trend , U.Ismaylova /
The possibilities of mortgage lending expand in Azerbaijan within changes and additions to the Law on Mortgage, said the Head of State Real Estate Service of Azerbaijan Arif Garashov.
"One of the innovations in mortgage lending will be an opportunity for the borrower to sell the mortgaged property," said Garashov.
He said another innovation will increase access and address the issue of obtaining a mortgage loan, since according to the amendments to the law, it is also possible to lay the uncompleted property under which a loan is provided.
Mortgage lending in the country started from 25 March 2006 by Azerbaijan Mortgage Fund (AMF), which functions under the Central Bank of Azerbaijan and from 7 February 2007, commenced providing social mortgage. Demand for mortgages exceeded the budget provision, and from mid June 2007, AMF ceased funding for mortgage loans.
Fund received 46 million manat from the Public budget in 2005-2007, and in 2008 34 million manat, which was provided in two tranches 22 million manat, and all the funds were made available through the refinancing of previously issued loans . Portfolio of loans of AMF is 67.8 million manats with a total mortgage portfolio of banks amounting to 250-300 million manat.
Together with the Government, the Central Bank develops a broader model of mortgage lending, which envisages social and commercial mortgages, the chairman of the CBA Elman Rustamov said formerly.
According to him, currently a new model of mortgage lending is developed, and the consultations in this regard continue with the Government. Today, there are people in need of housing, but the main problem is the lack of funds. Under the new model, the funds will be offered on a long-term basis, and the commercial terms would not be so stringent, since the Central Bank offers interest rates at the same level.
Rates range from 8 percent to 18-20 percent from commercial banks, term - from 10 to 25 years. Agents of the Fund are 23 banks.
Official rate on May 14 is 0.8036 AZN/USD.
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