Government Sums Up Mortgage Scheme For Young Families
10.11.2011 Hovannes Shoghikian
Nearly 600 young families have purchased apartments in the last two years with mortgage loans subsidized by Armenia’s government and Central Bank, a senior official said on Thursday.
Arsen Karamian, the deputy minister of sports and youth affairs, said the authorities consider the lending program a success and will continue to finance it next year. He did not specify additional state funding allocated for that purpose, though.
The program mainly financed by the Central Bank was launched in early 2010. Young Armenians eligible for it can have their market-based mortgage rates reduced by between 2 and 4 percentage points.
Interest rates for home loans provided by local commercial banks currently average 12 percent per annum.
A state mortgage fund managing the scheme spent 3.2 billion drams ($8.4 million) on subsidizing 404 such loans as of last May. According to Karamian, that number has risen to 580 since then.
Karamian told journalists that only up to 30 percent of applications for mortgage subsidies are rejected by the fund at present. “The rejection rate was initially very high: more than 50 percent,” he said, adding that applicants are now better informed about the stringent eligibility criteria.
The most important of those requirements is a family income of at least 340,000 drams ($900) per month. According to official statistics, the average monthly wage in Armenia currently stands at almost 115,000 drams.