$14b Credit Line for Mehr Housing Project

A credit line of 450 trillion rials ($14 billion at market exchange rate) has been earmarked to complete the controversial Mehr Housing project, announced the head of Majlis Civil Affairs Commission.

Mohammad Reza Rezaei-Kouchi added that about 450 trillion rials have been considered to complete the Mehr Housing project and any use of this credit line for anything other than housing will be a clear violation that will be followed up, the official news website of the Iranian Parliament ICANA reported.

The much-discussed housing project was launched by the previous administration of Mahmoud Ahmadinejad and has been in the works for years. Although opposed to the project, President Hassan Rouhani's administration vowed to see it through.

Abbas Akhoundi, minister of roads and urban development, has vehemently criticized the scheme for its lack of proper planning and infrastructure.

The plan was launched in a hasty manner and through massive borrowing from the central bank.  

In recent parliamentary revisions in the sixth five-year development plan (2016-21), MPs decreed that the project must be completed, without building any new residential units.

Rezaei-Kouchi, who was fresh from a recent meeting with Central Bank of Iran's Governor Valiollah Seif, said Bank Maskan –the agent bank of the housing sector–has full authority to decide the source of this credit line determined by the central bank.

"The only condition is that the funds should be spent in the housing sector," he added.

Mortgage Limit Raised

The Money and Credit Council–a decision-making body–last week approved to raise the mortgage limit pertaining to the housing project. The ceiling for the loans was raised to 400 million rials ($10,000) from the previous 300 million rials ($7,600) in order to "accelerate the project's completion".

The increase in the loans' ceiling prompted a board member with the New Towns Development Company to announce the completion of a significant number of Mehr Housing residential units by the yearend.

"With the 40-million-rial loans, we will deliver 24,000 units of Mehr Housing in Pardis town (near Tehran) by the end of the current year (March 20, 2017) or the first month of the new year," Habibollah Taherkhani also said in a talk with ILNA.

"Completing these units is of course contingent on the cooperation of the banking system."

Noting that 120,000 Mehr Housing residential units throughout the country are currently without applicants, he said completing these units would be pointless.

"Therefore, the priority lies with units that currently have applicants and as promised by the president, these units will be completed by the yearend," he said.