Affordable housing for young families


 

Affordable housing for young families

ARARATBANK will help you to acquire the apartment you prefer within the framework of the Affordable Housing for Young Families National Target Program.

What is “Affordable housing for young families” program?

“Affordable housing for young families” is a program initiated by the Government to support young families who are in strong need of improvement of housing conditions.

Who is this program envisaged for?

Young families may apply to get a mortgage loan if the following requirements are met:

    • At least one of the spouses is RA citizen at the age of 18-30 (inclusive). Total age of spouses should not exceed 60 and at the same time the age of either spouses should not exceed 35 (inclusive) or
    • If your monthly income is not sufficient to get a mortgage loan, then the co-borrower can assume obligations jointly with you. The Borrower’s family members only (spouses, their parents, sisters and brothers) may act as co-borrowers.
    • The customers, whose (spouses and possible co-borrowers) total monthly net income exceeds AMD 500 000, cannot apply for the loan.
    • If one of the customers (spouses) owns other residential real estate (be it an apartment or a residential house), he/she cannot apply for the loan, except for the cases when less than 18,0 sq.m falls on per capita (only for persons that actually reside (are registered) in the apartment/residential house).
    • The customers, who do not plan to reside permanently in the apartment to be purchased (rent out the house before residence, use it as a summer cottage etc.) cannot apply for the loan

What are the loan terms and conditions under the Affordable Housing for Young Families program?

You can apply to ARARATBANK to get a mortgage loan, if you intend to buy an apartment in Yerevan or in any region of the Republic of Armenia, the value of which does not exceed AMD 16.000.000.

Within the framework of the program mortgage loans shall be disbursed with a maturity of 12 years maximum.

The nominal interest rate of the loan shall make 9% annually, 2% of which will be funded by the Government. The Government shall subsidize 4% of mortgage loans disbursed to customers in the regions of the Republic of Armenia.

In RA regions mortgage prepayment can make at least 10% of the value of a residential house or an apartment to be purchased if:

  • The borrower shall pledge another residential real estate as loan security other than a mortgaged house or an apartment. Moreover, if the abovementioned condition is met, the amount of mortgage loan cannot exceed 70% of the value of all residential real estates, pledged as loan security, however, not more than AMD 11200000 irrespective of the value of all residential real estates, pledged as a loan security, or
  • Legal entities, comprised in the list of the first 300 largest taxpayers of the Republic of Armenia, provide a guarantee other than a mortgaged house or apartment.

 

Borrower

 

RA citizen and resident individual aged 20 (twenty)

Borrower age shall no exceed  35 (thirty-five) 

Co-borrower

RA citizen and resident individual aged 20 (twenty), who is the member of the Borrower family (a spouse, parents-in-law, sisters and brothers of the Borrower and the spouse) and whose age shall not exceed 55 (fifty-five)

Young family definition

A family, where spouses are young with total age not exceeding 65 or a single parent 

Loan purpose

Acquisition of the dwelling real estate in Yerevan and RA regions for permanent residence purposes 

Currency

 

AMD

Maximum loan amount

- AMD 17.500.000 (seventeen million and five hundred thousand), however, not exceeding 70% of the value of real estate to be acquired (minimum of the appraisal and acquisition values of the real estate shall be taken as a basis for LTV ratio calculation)

- AMD 17.500.000 (seventeen million and five hundred thousand), however, not exceeding 90% of the value of real estate to be acquired, if the Borrower pledges another real estate besides a secured dwelling house or apartment to be acquired. At that, in case of pledging the dwelling real estate to be acquired and other dwelling real estate, the loan amount cannot exceed 70% of the total appraised value of the pledged real estate.    

 

 

Maximum value of the dwelling real estate to be acquired

The acquisition value shall not exceed AMD 25.000.000 (twenty-five million) and the appraised market value shall not exceed AMD 26.000.000 (twenty-six million).     

Acquisition and appraised values of the real estate to be acquired shall be compared to the average prices (recently published data) published by RA National Statistical Service, taking into account the apartment floor space and location. Particularly, the average value per square meter of the apartment floor space and the given location shall not exceed AMD 26.000.000 (twenty-six million).   

Loan security

Property to be acquired

Loan maturity

240 months

Annual interest rate

 

9%, of which 2% subsidized, provided that the dwelling real estate is acquired in Yerevan and 4% subsidized, provided that the dwelling real estate is acquired in the regions of the Republic of Armenia.  

Loan repayments

 

Annuity

Principle and interest repayments

Monthly

Loan disbursement mode

Non-cash

The loan amount along with the down payment shall be transferred to the seller

Insurance

Mandatory, every year.

Borrower and co-borrowers’ insurance against accidents and property insurance in the amount of outstanding loan

 

Penalty on past-due principle

0.3% daily

Penalty on past-due interest

0.5% daily

Annual interest rate on past-due principle  

CBA reference rate 

Requirements to the credit history of the Borrower and Co-borrowers 

Total of past-due days in terms of all existing and repaid loans shall not exceed 30 calendar days within 12 months prior to loan application, as well as if the borrower or co-borrowers have existing loans, such loans must be classified as standard only.  

Credit rating

In compliance with the Procedure on Mortgage Lending 

Application processing fee

AMD 1.000 (one thousand)

Loan service fee

In compliance with the Procedure on Mortgage Lending 

 

 

 


The loan application shall be declined if:

 

  • there is a kinship between the seller and purchaser
  • total net monthly income of the borrower’s and potential co-borrowers’ exceeds AMD 800.000 (eight hundred thousand)
  • one of the spouses owns another dwelling real estate, except for the cases when less than 18 square kilometers falls per capita registered in the given apartment

Note
- Collateral value cannot exceed AMD 16 000 000.
- The Government shall fund 2% of the mortgage loans disbursed in Yerevan.
- The Government shall fund 4% of the mortgage loans disbursed in RA regions.

Advantages of our program

  • Fixed and competitive interest rate, which will secure you from interest growth,
  • Funding possibility of up to 70%,
  • Possibility of preterm repayment without paying any fine or penalty,
  • Decision on the mortgage loan shall be made within 7 business days after all required documents have been submitted.


Important to know

  • At the point of submitting the loan application the customer shall be charged a one-time payment of AMD1,000. This amount is not refundable regardless of the loan decision.
  • At the point of disbursing mortgage loans, a loan processing fee shall be charged from the customer.
  • Collateral shall be appraised by the independent licensed appraisal companies cooperating with the Bank at the rates set by the appraisal companies. Please refer here for the list and rates of the appraisal companies.
  • The collateral shall be subject to insurance at the rates set by insurance companies for the whole loan period. Moreover, appraised liquidation value of the property shall be deemed as basis for the property insurance. Please refer here for the list and rates of insurance companies.
  • The ratio of total monthly principal repayments, Borrower’s and Co-borrowers’ monthly life and property insurance fees to the Borrower’s (Co-borrowers’) net income must not exceed 35 (thirty-five) per cent.
  • After the authorized body has made a loan decision, the borrower shall be notified about it within one day. After the loan disbursement decision has been made, the required documents shall be collected and the loan shall be disbursed within 15 days maximum. If the loan is not disbursed within the mentioned period, the decision made by the authorized body shall be deemed as void and shall be submitted to the authorized body for a second consideration, in case the loan application is subject to review.
  • If the borrower fails to fulfill his/her obligations on timely basis, he/she shall pay penalties in amount of:
    a) 0.3% of the past due interest
    b) 0.5% of the past due loan amount


The loan application will be approved if

1. The customer has submitted the complete package of documentation and the loan application.
2. The query to the CBA credit register has shown that the Potential Borrower and/or the Potential Co-borrower did not have any classified liabilities and/or was not 30 days past-due within the last 24 months prior to the query.
3. The ratio of total monthly principal repayments, Borrower’s and Co-borrowers’ monthly life and property insurance fees to the Borrower’s (Co-borrowers’) net income does not exceed 35 (thirty-five) per cent.
4. The ratio of total payments specified in Point 3 and other long-term monthly expenses (payments on other loans, alimony, tuition fee, leasing charge, utilities etc.) to the Borrower’s (Co-borrowers’) net income does not exceed 45 (forty-five) per cent.
5. The appraised value of the collateral(s) meets the requirements.
6. Borrower’s and Co-borrowers’ income meet the requirements.
7. The body authorized to take loan decisions approved the customer’s loan application.
8. Other


The loan application will be rejected if

1. The customer has failed to submit the complete package of documentation and the loan application.
2. The query to the CBA credit register has shown that the Potential Borrower and/or the Potential Co-borrower had classified liabilities and/or was at least 30 days past-due within the last 24 months prior to the query.
3. The appraised value of the collateral(s) does not meet the requirements.
4. Borrower’s and Co-borrowers’ income does not meet the requirements.
5. Borrower and Co-borrower have submitted false documentation and/or information.
6. The loan rejection basis, which was not deleted, is available in the historical credit database.
7. The body authorized to tale loan decisions within the Bank has not approved the application.
8. The loan has been approved, but the applicant has failed to present himself/herself within 15 days after approval or has failed to present the necessary documents.
9. Other

INFORMATION

Loan type Mode of interest accrual Mode of loan and interest repayment
Mortgage loans Annually: on the loan balance, accepting year as 365 days
Annuity 
 
Note
In case of principal amount equal payments (annuity) mode, an equal amount shall be calculated each month, consisting of principal and interests. However, at first the value of interests in the same amount is higher and the value of principal is lower. Within a certain time period this distribution is changing: the value of the principal in monthly repayments increases and the value of interests in monthly repayments decreases, but monthly repayments remain unchanged.



WARNING
IF THE BORROWER FAILS TO MAKE TIMELY INTEREST AND PRINCIPAL REPAYMENTS, THE BANK WILL HAVE TO REPORT THAT NEGATIVE INFORMATION TO THE CENTRAL BANK CREDIT REGISTER.

WARNING
IF THE BORROWER FAILS TO PERFORM OR DULY PERFORM LOAN OBLIGATIONS UNDER THE LOAN AGREEMENT, ALL LIABILITIES ASSUMED BY THE BORROWER SHALL BE DISCHARGED OUT OF THE PROCEEDS OF REPOSSESSING AND SELLING THE COLLATERAL THAT WAS PLEDGED AS LOAN SECURITY

WARNING

IF THE BORROWER FAILS TO PERFORM LOAN OBLIGATIONS, THE COLLATERAL AND THE BORROWER’S OTHER PROPERTY (IF THE COLLATERAL HAS LOST ITS VALUE) MAY BE CONFISCATED AND REALIZED BOTH THROUGH DIRECT SALE AND PUBLIC AUCTIONS IN LEGAL OR OUT-OF COURT FORMS.





Please refer to https://www.abcfinance.am/finhelper/index.php?type=mortgageto get understanding of the system of financial assistance.

 

 

SMS service

terms and conditions

* card expiry

* loan or overdraft maturity upon customer request

* (line of credit) overdraft repayment date and amount drawn from the account  upon customer request   

* annual service fee

* loan or overdraft monthly repayment  upon customer request

 

 

 

    AMD 30.00

 




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