OFFICIALLY: SOFT HOUSING LOANS FOR IDPs TO BECOME EVEN MORE ACCESSIBLE
Amendments have been made to the Procedure for soft mortgage lending to internally displaced persons at the expense of grant funds provided by the Credit Institution for Reconstruction (KfW). To this end, the Cabinet of Ministers of Ukraine adopted Resolution No. 1227 on 1 November 2022.
From now on, the range of potential recipients of such loans will significantly expand. At the same time, the financial burden on borrowers will decrease.
The document, developed at the initiative of the Ministry for Reintegration of the Temporary Occupied Territories and State Fund for Support of Youth Housing Construction (SFYH), introduces the following amendments to the terms (conditions) of the loan program:
- citizens who have housing in the territory of communities where hostilities are ongoing or are under occupation, encirclement (blockade), the list of which is approved by the order of the Ministry for Reintegration of the Temporary Occupied Territories, can participate in the program,
- the maximum loan period has been increased to 30 years (previously – 20 years),
- the maximum age of a borrower, before reaching which the loan must be repaid, has been increased to 65 years,
- the standard (regulatory) housing area per single citizen has been doubled: from now on, it constitutes 52.5 square meters (previously being – 21 sq. m),
- the winners of the random draw receive the opportunity to get a loan for housing reconstructed no longer than 35 years ago (previously – 25 years),
- winners have the right to choose housing in a different region than the one indicated in the application for a loan,
- to reduce the financial burden on borrowers in the event of a decrease in their solvency, the possibility of debt restructuring has been established. In particular, by:
Ø allowing payment by installments of overdue loan debt;
Ø establishing a grace period, during which the borrower's loan repayment fees are postponed and interest is not accrued;
Ø increasing the loan period (for no longer than 60 months).
The destruction or damage of the housing for which the loan was granted, either of which occurred since 24 February 2022 as a result of russia's military aggression, is now the basis for granting a borrower loan repayment holiday, during which one can be exempted from paying the principal payment and interest.
A borrower shall report the damage to real estate to the Register of Damaged and Destroyed Property following the Procedure approved by Resolution No. 380 of the Cabinet of Ministers of Ukraine.
If the reason for establishing loan repayment holidays is the destroyed housing, such loan holidays are established until a citizen receives compensation for the destroyed real estate object.
The introduction of relevant amendments to the draft for the consideration of the Government was preceded by a fruitful discussion of the document within the framework of consultations of the SFYH as the Program Executing Agency of the "Housing for Internally Displaced Persons" and the implementation consultant of the program – consulting company IPC GmbH.