Մատչելիության հղումներ

The Armenian government approved on Friday a new program to spur mortgage lending in the country, saying that it will help hundreds and possibly thousands of young families buy apartments.


Officials said the Central Bank of Armenia (CBA) will provide 3 billion drams ($8 million) to finance the first phase of the program which is supposed to benefit up to 300 young couples lacking adequate housing.

Each of them can receive a mortgage loan worth 10 millions drams and repayable in at least ten years. The sum is barely enough for buying a small apartment in Yerevan. Housing prices in other parts of the country are substantially lower.

According to Finance Minister Tigran Davtian, public funds will also be used for “subsidizing” housing loans borrowed from commercial banks. That will cut the existing interest rates unaffordable for many Armenians, he said.

Speaking at a weekly meeting of his cabinet, Prime Minister Tigran Sarkisian said young families will be able to apply for the assistance already in the first quarter of this year. He said the scheme will be expanded to cover “thousands of families” if its first phase proves a success. “There were fears that the allocated 3 billion drams will not be enough, but we have additional reserves that could be used for the program’s realization,” he added.

The money will likely be channeled into the local mortgage market through Armenia’s National Mortgage Company (NMC) which was set up by the CBA last summer with the aim of making home loans cheaper and more accessible to the population. But it is not clear whether the Central Bank will add the sum to the NMC’s authorized capital or will on the contrary draw it from the mortgage fund’s existing assets.

The NMC had 17 billion drams at its disposal as of last fall. Germany’s government has pledged to contribute 20 million euros ($28.6 million) to a similar scheme which it has for years financed in Armenia.

In a late November interview with RFE/RL, Artur Javadian, the CBA governor, said the NMC has allocated 1.6 billion drams in mortgage funds since the start of its lending operations in September. Javadian insisted that despite the modest volume of funding, the NMC has already managed to help cut interest rates by 3-4 percentage points. He also predicted that the mortgage scheme will unfold more rapidly in 2010.
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