Mortgage loan "Affordable Housing for Young Families"

 1.         

Loan purpose

Primary market

Secondary market

The loan will be granted  to young families for acquisition of existing real property for permanent residence.
In individual cases, if a development company - Bank partner has applied to the competent authority for building commissioning certification, the mortgage loan may also be provided for acquisition of the preemptive right over the property.

 2.

Eligibility

RA citizens or non-citizens whose spouse is an RA citizen. The total of the spouses’ age must not be more than 70 or if it is a single-parent family, their age limit is 35 years (inclusive).

 3.         

Co-borrower

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

Co-borrowers must not be older than 65.

 4.           

Location

Within the RA territory

 5.         

Loan currency

Armenian drams

 6.         

Loan repayment period

120- 180 months

 7.           

Loan amount and Loan-to-value ratio

1.          In Yerevan and RA provinces: AMD 27 000 000, but not more than 80% of the residential property value^[1].

2.          In Yerevan and RA provinces: AMD 27 000 000, but not more than 90% of the residential property value, provided that at least one of the below-mentioned  requirements is met:

a) To secure the loan, in addition to pledging the single-family home or apartment to be purchased, the borrower will also pledge other residential real property. In the event of pledging both the acquired and other residential real property, the loan amount cannot exceed 80% of the total value of the collateral;

 b) In addition to pledging  the single-family home or apartment to be purchased, the borrower will also provide a surety bond issued by a legal entity included in the list of the 300 largest Armenian taxpayers;

 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 property value.

2.          In Yerevan and RA provinces: AMD 22 500 000, but not more than 90% of the residential property value, provided that at least one of the below-mentioned  requirements is met:

a) To secure the loan, in addition to pledging the single-family home or apartment to be purchased, the borrower will also pledge other residential real estate. Iin the event of pledging both the acquired and other residential real estate, the loan amount cannot exceed 70% of the total value of the collateral,

b) In addition to pledging  the single-family home or apartment to be purchased, the borrower will also provide a surety bond issued by a legal entity included in the list of the 300 largest Armenian taxpayers;

c) mortgage insurance covering the difference between 30% of the value of the single-family home or apartment to be purchased and borrower’s down payment of 10% or more.

 8.         

Nominal interest rate per annum

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

The Bank’s interest rate: 6.9-7.9%, of which:  

2% will be subsidized if the residential property to be purchased  is in Yerevan,

4% will be subsidized if the residential property to be purchased is  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)

 9.         

Actual interest rate

Primary market

7.84% - 7.87%

Secondary  market

6.76% - 8.80%

10.        

Loan disbursement method

In a lump-sum or several tranches

In a lump-sum

11.        

Penalty for loan prepayment

Not applicable

Penalty for late payment of loan principal and interest

For past due principal amount - 0.015% per day,

For past due interest -  0.1% per day.

12.        

Loan repayment schedule

The loan will be repaid via annuity payments or equal principal installments; payments will be made on a monthly basis.

13.        

Loan security

The residential real property to be acquired or preemptive right over the property.

14.        

Maximum value of the residential real property to be acquired

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

The property acquisition value 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 value: not more than AMD 25 000 000, at the same time the appraised value cannot be more than AMD 26 million. The property acquisition value 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 .

15.        

Insurance

1.          Insurance policy for 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

16.        

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.

17.        

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.

18.        

List of required documents

           1.    Loan application

           2.    Passport or ID card as well as social security card or a certificate of absence of a social security card (it's noteworthy that a social security card or a certificate of its absence is not required if an ID card is submitted),

           3.    Borrower's/ co-borrower's birth certificate,

           4.    Marriage certificate,

           5.    Birth certificates of minor children (if any),

           6.    Proof of income/salary certificate issued within 30 calendar days prior to its submission to the Bank.

           7.    Personal account statement (for spouses and co-borrowers),

           8.    If the Customer is self-employed:

                  ·     Taxpayer identification number (TIN),

                  ·     Registration certificate, charter (if any),

                  ·     Documents authorizing the implementation of the type of activity in question, if, under the legislation, such activity must be licensed by the relevant authorities.

                  ·     Financial statement and tax returns for the last year certified by the tax authorities,

                  ·     Income statement/income and expenditure records for the last 6 months (if any). Other documents upon Bank’s request.

           9.    Certificate issued by  the RA State Committee of the Real Estate Cadastre on the real estate property owned by the borrower and their spouse.

          10.   Report on the appraisal of the property to be acquired,

          11.   Certificate of title to the sold property,

          12.   Grounds for acquisition of the property,

          13.   Passports of property owners and marriage certificate.

          14.   Information about the surety(sureties) (if any),

          15.   If needed, the Bank may request additional documents.