In a long-awaited move, Bank Maskan (Housing Bank) has introduced a new housing construction loan for property developers, the Persian-language newspaper Donya-e-Eghtesad reported on Saturday.
The new loan is 900 million rials ($30,000 at the official exchange rate) and applicants are required to make a 200-million rial deposit for six months for each housing unit they want to build. The interest rate on the new scheme is 24% and up to 400 million rials can be transferred to the buyer upon the completion of construction.
The bank said the amount will be available to developers for the total number of housing units under construction in a residential building and cannot be granted for individual housing units. In other words, the whole construction project will be held as collateral by the lender.
In addition, to be eligible for the loan, the construction project ? at least the earthwork ? should have undergone some progress. The loan ceiling can be increased by up to 1 billion rials for industrial construction projects, the sister publication of Financial Tribune said.
Barely two weeks ago, property developers claimed to have reached an agreement with Maskan under which they could access construction loans of up to 1 billion rials ($33,400) with 14% interest rate. However, the report was immediately denied by the bank. It said the agreement was underway as part of a housing financing package provided that the developers agree to transfer their accounts to the Maskan Bank. The first of such loans now seems to have materialized.
Up to 400 million rials of the loan can be transferred to buyers as mortgage with 21% interest rate instead of 24%. The monthly installment of such loans is estimated to be around 8.6 million rials. In addition, homebuyers can purchase mortgage-backed bonds worth 450 million rials ($15,000) that would increase the total to 850 million rials ($28,300).
Up until now, Bank Maskan had offered only one type of housing construction loan under the framework of ‘Housing Construction Fund’ that offered 300 million rials at 14% provided that the developers make a deposit of 150 million rials ($5,000) for one year.
The new scheme is being introduced amid high demand from home buyers for loans in the short run. The ‘Savings Account Housing Loan’ that was introduced in June requires applicants to have a 400 million-rial ($13,300) deposit for 12 months.
But given the banks reluctance to grant long-term housing loans to home buyers and their preference to offer up to two years loans to developers indicates a better stimulant on the side of demand than that of supply.
