Economy, Business And Markets

New Mortgages Promote Housing Recovery

New Mortgages Promote Housing Recovery New Mortgages Promote Housing Recovery

The newly-raised mortgage is not only much bigger than the previous ones, it also provides a valuable opportunity for families, especially first-time buyers, to purchase a house, a deputy minister of roads and urban development said.

“The main objective of the Ministry of Roads and Urban Development is to improve the financial situation of first-time buyers for purchasing a house and the new housing loan has set up a solid foundation for approaching this goal,” Hamed Mazaherian was also quoted as saying by ISNA on Sunday.

The Money and Credit Council recently agreed to double the ceiling of Bank Maskan’s Housing Savings Account mortgage for newlyweds. According to the directive, home loans for the newlywed couples will be raised to 1.6 billion rials ($52,900) from the previous 800 million rials in Tehran.

In other urban areas other than Tehran, young couples will receive 1.2 billion rials ($39,700), up from 600 million rials in the past. Those in towns with a population of less than 200,000 will qualify for 800 million rials ($26,400), twice the earlier 400 million rials.

The policymaking council had also agreed in May to double the borrowing limit for first-time buyers in Tehran to 800 million rials.

Outlining the benefits of the Housing Premium Fund loans, Mazaherian emphasized that the fund faces no resource limitations and the new resources will be allocated to Bank Maskan to extend the housing loans in proportion with the number of applicants.

“The Housing Premium Fund loan, which was recently approved by the Money and Credit Council, is the largest mortgage ever provided, almost covering 50% of the value of an average residential unit in Tehran and up to 80% of a residential unit in small cities,” he said.

The Housing Premium Fund, which saw an increase recently, provides homebuyers, both first-time and others with 600 million rials (19,800), 1 billion rials ($33,100) based on their dwelling places. The loans offered by the fund is a supplement to Maskan’s usual mortgages for buying or building homes, however absolving the need for any initial deposit.

Discussing the loans’ repayment process, the deputy minister said that by comparing the amount of installments, which is 9.7 million rials ($321) for the residents of small cities and about 19 million rials ($630) for Tehran residents, with the average rental rate and the deposit of a residential unit, it is not as high as it is alleged.