The Central Bank of Armenia registered and issued a license to “Apartments for young people” UCO on February 16, 2010.
“About 300 young Armenian families will be able to buy accommodation at moderate prices,” <b>Mher Edigaryan</b>, Executive director of the UCO told journalists, during a press conference in Yerevan on February 19.
“Accommodation available to young people” government’s target program consists of two components: first, the RA government's subsidies for interest rates on mortgage and, second, provision of cheap funds to the crediting organizations, by enabling them to set favorable mortgage rates.
“Program beneficiaries will be able to apply to banks, where they will get a mortgage at a rate lower than the market ones, should they meet certain requirements. After that UCO will refinance the mortgages,” he said.
According to Mher Edigaryan, the Central bank of Armenia is a founder of “Apartments to young people” UCO, and the company’s registered capital comes to AMD 3 billion. The credits will be given with 8,5-9% per annum, mortgage pre-payment will come to 30% and 15 years maturity period. In compliance with the program, the mortgage size will amount to AMD 16 million for Yerevan and AMD 10 million for purchasing an accommodation in regions.
<b>Ararat Ghukasyan</b>, the Chairman of the Union of Armenian Banks, stated for his part that all 22 banks acting on the territory of Armenia welcome the establishment of the UCO. Moreover, negotiations with 10 more banks are in process. Agreements will be concluded a week later. Shortly after that, the banks will start giving mortgages. They are interested in the above due to the fact that they'll attract new clients for minimum 10 years. In addition, the banks will get their margin, and it’ll be a good start for the development of the mortgage market in Armenia.
The Chairman of the Union of Armenian Banks also mentioned that it's a pilot program and considered revision of certain requirements, particularly, an introduction of new mechanism such as storage system.
“Accommodation available to young people” program was approved by the RA government, during a session held on January 29, 2010. All the families wishing to get a mortgage should meet certain requirements: family’s gross income should amount to approximately AMD 300-350 thousand, including incomes of all family members. Besides, the “young family” definition means family, where the spouses' cumulative age doesn't exceed 60 and none of the spouses is over 35. The definition also covers families, where the age of the only parent does not exceed 30.
