Tose'e Ta'avon Bank is going to grant home construction loans, up to a ceiling of 300 million rials, to members of cooperative unions and housing cooperatives.
Earlier, officials of the ministry of roads and urban development had put forth the idea that banks could establish housing fund of themselves to set the grounds for providing applicants with a wide range of loan services.
In line with the policies set by the ministry, Tose'e Ta'avon Bank has arranged land and construction policy packages to address the need of its customers for housing.
The bank's deputy for credit and investments affairs outlined the details of granting the loans.
"In order to be qualified for receiving the loan, you must be a member of either a cooperative union or housing cooperative in the first place," said Seyyed Bagher Fattahi.
The amount of loans would range from 300 million rials for applicants living in Tehran and a number of major cities (Mashhad, Isfahan, Karaj, Tabriz, Shiraz, Ahvaz, Qom, and Kermanshah), to 250 million rials for applicants living in provincial capitals and 200 million rials for the ones from smaller towns, Fattahi said.
"The bank would be engaged in the construction in a 18-months period, which can be extended another six months to reach a maximum of 24 months," said the official, adding that the facilities will be granted with an interest rate of 22 percent –the standard rate set by the central bank—and would be paid off during seven years in 84 monthly installments.
Also, there is no need to provide any guarantors for getting the loan, according to Fattahi. However, the land of construction will be registered as cooperative property and the constructed building will serve as the guarantor for the loan.
After a 25-percent physical progress is made in the project site, the applicants can submit their loan request to the bank. Then the bank will enter a partnership with the cooperative that has registered the land in its name and will finance up to 70 percent of the construction project in the course of 24 months.
The bank is taking the initiative to help the troubled housing sector in the country which is suffering from severe recession.
