Economy, Business And Markets

New Mortgage Loan Scheme Takes Effect

New Mortgage Loan Scheme Takes Effect New Mortgage Loan Scheme Takes Effect

As the new 800-million-rial ($26,000) loan of the Housing Savings Account scheme came into effect Wednesday, a Bank Maskan official said as a result home sales could pick up by as much as 10%.

“When the loans are processed and  handed out, home sales will increase by 10% and I believe these loans will have the most effect in the south  Tehran,”  said Mohammad Hassan Moradi, director of bank’s department of planning whose bank was the architect of the new scheme, ILNA reported.   

“Trends show that a significant number of home sales comprise units less than 60 square meters.”

The official added that 54% of home purchases in May were for units priced less than 2.8 billion rials ($91,800) with 70% of the deals taking place in the capital’s District 10.

Bank Maskan’s planning chief explained that loan applicants should first make a bank deposit and then wait for a year to receive their loans. “But there were exceptions and some people who already had substantial saving accounts were able to get the loans after six months.”

Maskan’s special Housing Savings Account, launched a year ago, is part of the government’s stimulus package to lift the housing market out of the extended recession that has also affected industries linked to or associated with the key housing market.

Considering the anticipated rise in the purchasing power due to the higher mortgages, it is expected that deals in districts 10, 11, 13, 15 and 4 will increase, Moradi said. “These loans will lift the sales of units worth 2 billion rials ($66,000) or more – homes that can be bought in the center and the south of the capital.”

The Housing Savings Account aims to provide first-time homebuyers with loans at an interest rate of 14% over 12 years. It requires applicants to make an initial deposit and wait for a year to become eligible for the loan.

However, according to a modification a few months after it was announced formed, the lender allowed first-time homebuyers to integrate their previous mortgage application with the Housing Savings Account to shorten the waiting period by almost half.