Azerbaijan to double state mortgage funding in 2013
Azerbaijan, Baku, Oct. 15 / Trend A. Akhundov /
Financing of the Azerbaijan Mortgage Fund (AMF) from the state budget will be doubled in 2013, the Azerbaijani Finance Ministry said today.
Around 40 million manat will be allocated to the AMF in 2013 compared to 20 million in 2012 to expand the use of the social mortgage in Azerbaijan.
The amount of accumulated wealth in the fund will reach 136 million manat.
Currently the maximum amount of a common mortgage loan through the AMF is 50,000 manat at a rate of eight per cent and a payback period of 25 years and under the social mortgage it is 35,000 manat at an annual rate of four per cent and a payback period of 30 years. The initial payment under the social mortgage is 15 per cent, while for the conventional loan is 20 per cent.
Conditions of mortgage lending are as follows: loans must be issued in the national currency in manats and only to Azerbaijani citizens and the subject of the mortgage can only be an apartment or private house. The volume of the mortgage lending must not exceed 80 per cent of the market price and the monthly payment for a loan must not exceed 70 per cent of the debtor's monthly income. It is compulsory to take out an agreement on life insurance.
Preferable conditions are granted to members of families 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 the military with at least a three-year service term. Each family having the right to such a mortgage loan can only use the chance once.
There are 27 authorised banks belonging to the Mortgage Fund, 20 insurance companies and 13 appraisal organisations all as participants in the mortgage market.
Official exchange rate on Oct. 15 is 0.785 AZN/USD.