Mortgage loan "Affordable Housing for Young Families"

Primary market

Secondary market

Loan purpose

Loans are designed for purchasing existing residential property to live in.^[1]

Eligibility

RA citizens or non-citizens, whose spouse is an RA citizen. The total of the spouses' age must not exceed 70 or a young single parent's age is 35 or less.

Co-borrower

Borrower’s spouse and each member of their family (family members are: the spouse, borrower’s and  spouse’s parents, sisters and brothers).

Co-borrowers should not be older than 61.

Location

Within the RA territory

Loan currency

AMD

Loan repayment period

120 - 180 months

Loan amount and Loan-to-value ratio

1. In Yerevan and RA provinces: AMD 27,000,000, but not more than 80% of the value of the residential property^[1]
2. In Yerevan and provinces: AMD 27,000,000 but not more than 90% of the value of the residential real property, provided that at least one of the following requirements is met:

a) apart from pledging the single-family home or apartment to be acquired, another residential property item should be pledged, besides, in case of pledging the newly purchased and another real property item, the loan amount cannot exceed 80% of the total value of pledged assets,

b) apart from pledging the single-family home or apartment to be purchased, a surety bond must be issued by one of the 300 largest Armenian taxpayer legal entities;

c) mortgage insurance covering the difference between 20% of the value of the single-family home or apartment and borrower’s down payment of 10% or more. ^[2]

1. In Yerevan and RA provinces: AMD 22,500,000  but not more than 70% of the residential real property^[1].
2. In Yerevan and RA provinces: AMD 22,500,000 but not more than 90% of the value of the residential real property provided that at least one of the following requirements is met:

a) apart from pledging the single-family home or apartment to be purchased another residential property item must  be pledged; besides, in case of pledging the newly purchased and another real property item, the loan amount cannot exceed 70% of the total value of pledged assets;

b) apart from pledging the single-family home or apartment to be purchased, a surety bond must be  issued by one of the 300 largest Armenian taxpayer legal entities;

c) mortgage insurance covering the difference between 30% of the value of the single-family home or apartment and borrower’s down payment of 10% or more.^[2]

Nominal interest rate per annum

Bank’s interest rate: 7.5 %, which will not be subsidized

The Bank’s interest rate: 6.9%, out of which:

• 2% will be subsidized if the residential property is in Yerevan;
• 4% will be subsidized, if the residential property is located in RA provinces.

Not envisaged

Mentioned interest rate + 0.6%

If the Bank makes the down payment, pays for life and health insurance on behalf of the borrower (will be implemented started the second year of the loan period)

Mentioned interest rate + 0.4%

If the Bank pays for life and health insurance and property insurance on behalf of the borrower (will be implemented started the second year of the loan period)

Loan disbursement method

In a lump-sum or in several tranches

In a lump-sum

Penalty for early repayment of the loan amount

Not applicable

Penalty for late payment of loan principal and interest

For past due principal amount - 0.015% per day,

For past due interest amount - 0.1% per day.

Loan repayment schedule

Annuity scheme or monthly equal principal payments.

Insurance

The residential property to be acquired or its first-purchase right.

Maximum value of the residential property to be acquired

Acquisition cost: not more than AMD 30,000,000; at the same time the appraised value  cannot not be more than AMD 31 million.

The property acquisition cost and appraised value will be compared with average property prices published by the RA National Statistical Service (most recent data published by the Service) with consideration of the living space and location. In particular, the product of the apartment space by average price per  square meter must not exceed AMD  31,000,000.

Acquisition cost: not more than AMD 25,000,000; at the same time the appraised value  cannot  be more than AMD 26,000,000. The property acquisition cost and appraised value will be compared with average property prices published by the RA National Statistical Service (most recent data published by the Service) with consideration of the living space and location. In particular, the product of the apartment space by average price per  square meter must not exceed AMD 26,000,000.

Insurance

1. Insurance of the pledged property
2. For borrower and co-borrower(s) (if any) – life insurance certificates. Besides, the life insurance of co-borrower(s) will be purchased proportionally to the incomes gained from the loan by the borrower and co-borrower(s).
3. The loan amount may be 90% of the collateral value at most, if mortgage insurance covers the amount exceeding 70% of Loan-to-value ratio (80% for primary market). The mortgage insurance must be valid at least till the time when the borrower makes a payment exceeding 70% (80% for primary market) of the Loan-to-value ratio.

Loan disbursement method

• Non-cash (the loan amount will be transferred to the seller's bank account).

Other provisions

• In case of purchasing real property, the Borrower will make a down payment ^[3], which will be frozen until the date of the loan disbursement.
• In case of purchasing the real property in the primary market, the borrower can submit as a document confirming the down payment a real property installment contract.

Timeline for making decision on  loan application approval or rejection

• The decision on approving or declining the loan application will be made within 10 (Ten) business days upon submission of the entire package of required preliminary documents.