The first stage of the government-sponsored housing development project, known as “National Housing Initiative”, has seen the enrollment of 240,000 applicants, of whom 58% have been found to be eligible, the head of the housing division of Roads and Urban Development Ministry said.
“The provinces of Ardabil, Khuzestan, Sistan-Baluchestan and Kermanshah account for the largest number of eligible applicants,” Mahmoud Mahmoudzadeh added.
The official put the turnover of National Housing Initiative, excluding land price, at more than 1,000 trillion rials ($6.94 billion), Fars News Agency reported.
Out of the construction of a total of 400,000 homes planned by Roads Ministry over two fiscal years (March 2019-21), New Towns Development Company will build 200,000 and Urban Development and Renovation Company 100,000, while the Housing Foundation of the Islamic Republic of Iran will build the remaining 100,000 residential units over three years.
Nearly 20,000 of these residential units will be built in new satellite cities, including 7,134 in Fooladshahr in Isfahan Province, 4,448 in Parand in Tehran Province, 2,762 in Golbahar in Khorasan Razavi, 1,547 in Sahand in East Azarbaijan Province, 1,497 in Sadra in Fars Province, 800 in Amirkabir in Markazi Province, 520 in Hashtgerd in Alborz Province and 150 in Pardis in Tehran.
The online enrollment for the housing project started on Nov. 9.
Eligibility requirements include being married or the bread-winner of the family, having no record of using state financial facilities for purchasing a house since February 11, 1979, and having lived for at least five years in the city where the application is submitted.
“We are intent on carrying out this project for years to come. All first-time home buyers should have the opportunity to benefit from this project,” Minister of Roads and Urban Development Mohammad Eslami has been quoted as saying.
How It Differs From Mehr Housing Project
In 2007, the government of former president, Mahmoud Ahmadinejad, offered free land and cheap credit to contractors to build two million low-income housing units, but that project slowed down due to a lack of funds.
The officials of President Hassan Rouhani's first government, particularly his former roads minister, Abbas Akhoundi, repeatedly blamed the project for having added too much money supply to the market and having pushed inflation as high as 40% as a result of the government’s massive borrowing from the Central Bank of Iran.
The National Housing Initiative is different from Mehr Housing Project in terms of the amount of down payment applicants must make, location and the method of construction, IRNA reported.
The main difference between the two projects is that the National Housing Initiative is designed in accordance with the applicants’ affordability in repaying the loan installments, whereas Mehr Housing Project was designed for low-income people.
The former targets households of different income deciles. For example, a part of the new housing project has been designed in the form of partnership agreement with real-estate developers for people who are capable of repaying larger loans, but cannot buy bigger homes directly.
For individuals who cannot afford huge upfront payments, the government has proposed land development rights for a lease of 99 years, the longest possible term of a lease of real property.
Another distinct difference between two projects is that under the National Housing Initiative, no home will be built without a ready, willing and able buyer waiting to purchase it. In other words, needs analysis process will be conducted and applicants must be registered first before the construction phase starts. That’s the reason behind the launch of a dedicated website at Tem.mrud.ir.
The deadline for the housing initiative is two years, meaning that homes should be delivered to applicants within two years of signing the agreement.
Under Mehr Housing Project, residential units were delivered to buyers based on the amount of their upfront payments, such that applicants who made larger down payments were far more likely to receive their homes sooner.
For example, at the beginning of Mehr Housing Project, a 75-square-meter home was delivered to an applicant at the end-price of 120 million rials ($833). The price of the same home increased to 700 million rials ($4,861) a few years later.
Scheduling is a significant factor in real-estate development, therefore the government is planning to use the expertise of professional, trustworthy and reliable mass builders lest the National Housing Initiative also suffer the same fate as the protracted Mehr Housing Project.
Unfortunately, the contractors of Mehr Housing Project have not yet delivered all homes to the applicants.
One main criticism leveled at homes built under the project was their dorm-like appearance. This is while homes built under the National Housing Initiative won’t look like one another; they will have different shapes, structures and facades.
Under the housing initiative, the customer will put down 30% of the construction costs as deposit with the designated bank, which sum would serve as a reliable source for the construction project.
Loans worth 750 million rials ($5,208) to 1,000 million rials ($6,944) at an interest rate of 18% will be granted to applicants. Interest rates of home loans paid under Mehr Housing Project ranged from 4-12%.
