Law of Ukraine № 1434-IX on the introduction of financial and credit mechanisms for providing citizens of Ukraine with housing enters into force on Thursday, May 27. It was published in the parliamentary newspaper “Voice of Ukraine” the day before.
Kyiv. Ukraine. Ukraine Gate – May 27, 2021 – Economy
The law stipulates that the State Mortgage Institution (SMI) will join the Ukrainian Financial Housing Company and issue UAH 20 billion of government bonds for the program in order to implement the Affordable Mortgage program.
The authors of the legislative initiative previously pointed out that the SMI has been operating in the mortgage lending market of Ukraine since 2004. In 2020, PJSC Ukrainian Financial Housing Company (Ukrfinzhitlo) was established to implement the Affordable Mortgage program, which will actually act as an intermediary between the bank and the citizen, so that citizens can take long-term mortgage loans at a fixed rate of 7% per annum. The company will refinance banks that issue mortgage loans on terms set by the state.
Another product from Ukrfinzhitla is real estate leasing (lease with the right of redemption) at 5% per annum, without a down payment. Earlier it was noted that this area of funding will be aimed at assisting in the provision of housing for military, police, and other officials.
After the adoption of the law, ie after the accession of the SMI, new financial and credit mechanisms should be provided to provide citizens of Ukraine with affordable housing.
Thus, it is expected that the new legislation will soon allow issuing about 8 thousand mortgage loans for housing and transfer 12 thousand apartments to financial leasing, as said earlier in “Ukrfinzhitlo”.
The “Affordable Mortgage 7%” program has been operating in Ukraine since March this year.
Experts say there may be pitfalls in a “cheap” mortgage from the government – “some additional interest veiled there – after a year of increase or after two years of increase of this interest. Or a separate interest for the loan.”
At the same time, as of May 24 of this year, according to the Ministry of Finance, authorized banks to implement the mortgage program under 7% signed 305 loan agreements totaling UAH 253.9 million, with both primary (25.92%) and secondary (respectively 74.08%) markets.
Read also: Increasing in Housing Prices in Ukraine by 11.4%
Source: Ukrgate
