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MCC Okays Increase in Mehr Housing Loans

MCC Okays Increase in Mehr Housing LoansMCC Okays Increase in Mehr Housing Loans

The Money and Credit Council on Monday ratified a proposal for increasing ceilings of loans granted to the Mehr housing scheme, a controversial plan initiated by the former administration to build hundreds of thousands of housing units for the vulnerable.

According to the approval, the banks must raise the housing loans’ ceiling from 250 million rials ($7,000 at market exchange rate) to 300 million ($8,500), ISNA reported.

The council announced that priority is to be given to the unfinished projects which will be completed upon receiving the loan. Furthermore, the lenders will be held responsible for assessing the progress of the projects and their eligibility for receiving loans.

Earlier, Mohammad Pejman, deputy minister of roads and urban development, announced that the government means to finance 50 percent of the total price of the housing units by selling public lands.

Nearly 800 thousand units of the controversial Mehr housing scheme remain unfinished. According to government officials, the project, which was launched in 2007 during the incumbency of Mahmoud Ahmadinejad, has faced numerous problems.

The housing scheme was meant to provide two million low-income strata of the society with affordable housing through free land and cheap credits. The project, however, slowed down later due to lack of financing and hikes in inflation.

The Rouhani administration, in spite of its opposition to the scheme, announced last year that it would fulfill the construction of the unfinished parts of the project.    

In Monday’s meeting, the council also consented to increasing ceilings for repair loans in distressed areas to 500 million rials ($1400), 400 million rials ($1100), and 300 million rials ($8500) in metropolises, province centers, and cities with populations over 200,000 respectively. 

Financialtribune.com