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Energy-efficient renovation mortgage loans under state support program
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Energy-efficient renovation mortgage loans under state support program

We have joined the state support program for mortgage loans for energy-efficient renovation of apartments and private houses. Applications for loans may be submitted before July 1, 2023.

  • Currency

    AMD

  • Maximum amount

    AMD 7.000.000

  • Maturity

    24 - 84 months

Terms and Conditions

Loans are provided at full-service Branches of ARARATBANK OJSC.

Borrower RA national and resident individual over the age of 20, who owns or jointly owns an apartment (private house) in the RA subject to renovation under the present program. Borrower’s age shall not exceed 58.
Co-borrower RA national and resident individual over the age of 20, who is a member of Borrower’s family (father, mother, spouse, spouse’s parents, grandmother, grandfather, sister, brother, children and grandchildren), whose age shall not exceed 58.
Loan purpose Loans shall be provided in accordance with pre-prepared renovation/furnishing estimates* for the purpose of renovation/furnishing of residential real estate. Credit use is substantiated by transfers supported by invoices and documents certifying payments.
Loan currency AMD
Loan amount AMD 3.000.000 - 7.000.000
Loan maturity 24 - 84 months
Annual interest rate

12.5%, of which

  • Interest rates on loans for properties under renovation in border or high mountain** settlements shall be subsidized in such a percentage as to allow extending loans at a 0% interest rate,
  • Interest rates on loans for properties under renovation in non-border rural settlements shall be subsidized in such a percentage as to allow extending loans at a 2% interest rate,
  • Interest rates on loans for properties under renovation in non-border urban areas shall be subsidized in such a percentage as to allow extending loans at a 3% interest rate,
  • Interest rates on loans for properties under renovation in Yerevan shall be subsidized in such a percentage as to allow extending loans at a 5% interest rate.
Effective annual interest rate

13.80% -13.81%

Minimum amount of energy-efficient investments,

EE standards

Renovation shall be considered energy efficient if measures aimed at increasing energy efficiency, such as alternative energy sources, energy-efficient building materials, energy-saving heating systems, purchase, installation or replacement of exterior doors and windows, and in case of private houses, thermal insulation of outside covers and enclosures, requires allocation of:

a. at least 30% of total costs - for apartments
b. at least 40% of total costs - for private houses 

Loan repayments Annuity
Principal and interest repayments Monthly
Loan disbursement mode Cashless, lump sum or in tranches
Penalty on past-due liabilities (on principal and/or interest) 0.13% daily
Borrower’s and Co-borrowers’ accident insurance Mandatory, annually, at the amount of loan balance, with the Bank acting as the implementer and the beneficiary
Monitoring Monitoring of the intended loan use within three months upon loan disbursement
Application processing fee N/A
Loan servicing fee N/A

*Cost estimate for renovation/furnishing works may be completed by clicking the link https://www.nmc.am/hy/ee-tool/ee-tool-renovation  and should be supported by a positive conclusion. 

** Border - RA Government Resolution No. 1444-N dated December 18, 2014, High mountain - RA Government Resolution No. 756 dated November 27, 1998.

EE standards

Renovation loans - Total cost of energy efficient measures should be set at no less than 30%. Additional costs that are not directly related to energy efficiency measures may be included in total costs of EE measures at a maximum of 10% of the loan amount.

The share of household appliances may not exceed 10% of the total loan amount. All energy efficient measures included in the EE renovation loan estimate should meet the minimum technical requirements outlined below.

Construction loans – In case of EE construction loans, the wall thickness, roof insulation, windows and glazed areas and exterior doors of the house under construction should meet the minimum technical requirements outlined below. In case of EE apartment renovation and EE construction loans, partner financial institutions shall also submit the completed EE assessment tool supported by a positive conclusion.

EE application

EE renovation materials and equipment product groups and their compliance with minimum technical requirements

The following groups of equipment and materials may be used for enhancing energy efficiency in apartments/houses:

  • Heating systems,
  • Solar energy-based devices,
  • Photovoltaic systems (PV),
  • Thermal insulation materials,
  • Windows, exterior doors and glazed surfaces,
  • Household appliances (washing machines, refrigerators, dishwashers, air conditioners),
  • Light-emitting diode (LED) lighting.
Required documents
  • Borrower's and Co-borrower's (if any) passport, social card or ID card,
  • Statement of Borrower's and Co-borrower's (if any) income issued by employer, individual account statement provided by State Revenue Committee,
  • Certificate of ownership of the apartment or private house under renovation
  • Conclusion (dated within the last 10 years) on the absence of the 4th degree of damage, issued by licensed entities (including real estate appraisal companies cooperating with the Bank) upon inspection of the technical condition of the apartment (private house) constructed before 2010 (the list of entities licensed in the inspection of technical condition of buildings is available on the official website of the RA Urban Development Committee),
  • Cost estimate for renovation/furnishing works,
  • Initial property photographs,
  • Other documents upon Credit Officer’s request.
Useful information
  • Lending decision is made within a maximum of 7 working days,
  • Borrower is notified of the lending decision within 1 working day,
  • Once the decision is made, the loan package is compiled and loan granted within a maximum period of 15 working days. In case the loan is not provided within the mentioned period, the decision of the authorized body shall be considered void and, if reviewed, shall be submitted to the authorized body for re-consideration.
  • Creditworthiness analysis is carried out according to the Procedure on Mortgage Loan Disbursement.

Loan Application will be approved if:

  1. The package of documentation and the loan application are complete.
  2. The Borrower has no overdue or classified liabilities (except for redeemed guarantees) and the total number of days of delay in repayment does not exceed 30 days within the past 12 months prior to the submission of loan application.
  3. The ratio of the sum of monthly loan repayments to the Borrower’s (Co-Borrowers’) net income does not exceed 35%. The ratio of the sum of monthly loan repayments and other long-term monthly expenses (payments on other loans, alimony, tuition, rent, etc.) to the Borrower’s (Co-borrowers’) net income does not exceed 45%.
  4. The appraised value of the Collateral(s) meets the requirements.
  5. The Borrower’s and Co-borrower’s revenues meet the requirements.
  6. The loan application has been approved by the body authorized to take loan decisions within the Bank.

Loan application will be rejected if:

  1. The customer fails to submit the required documents,
  2. The inquiry made to the CBA Credit Registry has shown that the potential Borrower and/or Co-borrower had classified liabilities and/or late payment of at least 30 days past due within past 12 months prior to the inquiry,
  3. The appraised value of the Collateral(s) is insufficient,
  4. The Borrower’s and Co-borrower’s revenues are insufficient,
  5. The Borrower and Co-borrower submit false documents and/or information,
  6. The basis for rejection of loan application is available in the credit history database and has not been rectified,
  7. The loan application has been rejected by the body authorized to take loan decisions within the Bank,
  8. The loan has been approved, yet the customer has failed to present itself or the documents required within 15 days upon approval.

 Where overdue liabilities are executed, repayments shall be made in the following order:

  • Penalties and fines (if any)
  • Interest
  • Principal
Attention

Your property (house, vehicle, or other) may be confiscated in the manner prescribed by law, if you fail to repay your interests and principal in time.

Where you fail to perform your loan obligations, the loan security, as well as other property of the Borrower if the loan security is insufficient, may be seized and sold in a court or out-of-court procedure both through direct sale and public auction.

Where you fail to perform your obligations either fully or partially, the Lender shall send the data within a three-day period to the credit bureau where your credit history is generated. You shall be entitled to obtain your credit history from the bureau once a year for free.

Attention: A bad credit history may hinder lending in future. 

In the event of non-compliance or partial compliance of the Borrower with its credit obligations, fines and penalties shall be applied.

Your financial directory” is an electronic system which facilitates the search, comparison and selection of the best options in the services offered.

You shall have the right to communicate with the financial institution by any convenient way - by post or e-mail. Receiving information electronically is the most convenient option. It is available 24/7, free from the risks of loss of paper information and ensures privacy.  

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Page updated 18.11.2022 | 12:19

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