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"Artsakh" loans

"Artsakh" loans

The Bank provides loans for acquisition, construction, and renovation of residential immovable property, subsidized by Artsakh Social Program Fund (ASPF) and Artsakh Investment Fund (AIF).
The borrower shall be a citizen of the Nagorno-Karabakh Republic.

Acquisition/construction of residential immovable property

  ASPF AIF
Purpose
Acquisition/construction of an apartment/residential house
Currency
USD

 

Maturity

minimum 10 years, maximum 13 years 13 years
Maximum loan amount
USD equivalent to AMD 25 mln USD equivalent to AMD 50 mln

 

Annual nominal interest rate

14%

Is subject to subsidization for up to 14 percentage points

12%

Is subject to subsidization for 3-6 percentage points, depending on the loan type and loan amount

Fee for review of the loan application
AMD 0
Loan disbursement one-off fee (is charged before disbursement of the loan)
0.5% of the loan amount
Loan service fee
AMD 0
Ratio of the loan amount and collateral value
The loan amount cannot exceed 70% of the evaluated market value (in case of acquisition - the lowest of the evaluated market value and the purchase value)

  

Requirements towards the borrower’s (co-borrower’s, if any) credit history

At the time of applying for a loan:

  • the outstanding loan/loans it shall be classified as “standard”, according to the regulation approved jointly by the CBA and the MFE of the RA;
  • there shall be no overdue credit liabilities;
  • the total number of the overdue days for all loans /outstanding and repaid/ during the last one year doesn’t exceed 30 calendar days

General provisions and conditions

Restrictions

  • The sum of the borrower’s age and the loan maturity term cannot exceed 65
  • Only immovable property located on the administrative territory of Stepanakert and Shushi can be pledged as collateral.

Size of down payment made by the ASPF and AIF in case of acquisition of an apartment/residential house

ASPF

  • To disabled NKR borrowers of the second category with a permanent military disability, up to 30% of the transaction value, 20% of which without repayment, and 10% with the condition of repayment;
  • To disabled refugee NKR borrowers of the third category with a permanent military disability, up to 20% of the transaction value, without repayment;
  • To the children of military men killed in NKR defense and borrowers having many children or one parent - up to 20% of the transaction value, with the condition of repayment 1;
  • No down payment is provided to military men of the officer personnel of NKR armed forces and military contractors.

AIF

Maximum 10%, in form of an interest-free borrowing disbursed by the AIF2

1Down payment with the condition of repayment is provided to the borrower by means of signing of an agreement on target interest-free borrowing, to secure which, by the Bank's written consent, an agreement for successive pledge of the acquired apartment or residential house is signed.
2 The framework of the people eligible for subsidizing is defined by the Bank

Procedure of repayment of the loan and interest amount

  1. Spring-like (variable monthly installments), which includes the principal amount in equal portions, and the accrued interest – in variable portions.
  2. Annuity (equal monthly installments), which includes the principal amount and accrued interests with alternating portions (if the ratio of the loan amount and the market or liquid value of the collateral (depending on the loan purpose) does not exceed 50%.

Security

  1. Pledge of the acquired, renovated or constructed immovable property3
  2. Guarantee

An eligible guarantor is a private individual/s/ who has/have/ steady and justified income and/or owns/own/ any immovable property.

The guarantor4:

  • Shall not have problematic (including overdue) credit liabilities at the time of submitting the loan application, and
  • Shall not have credit liabilities (including all loans and guarantees) delayed for 30 and more days during the last one year.

3 In case of construction of a residential house, the land plot on which the residential house is built, shall be pledged, along with additional immovable property.
4 Cannot be simultaneously a co-borrower for the loan.

Penalty

In case of violation of the repayment terms specified by the agreement, the Borrower pays penalty to the Bank at the rate of 0.13% of the overdue amount for each day of delay. No penalty is charged for early repayment of the loan.

ASPF:

In case of violation of the approved loan repayment schedule as of the last banking day of the month, no subsidy is provided for the calculated overdue interest amount and the fines and penalties accrued towards it.

 

Ratio of total obligations to net income (OTI)5

No more than 50%
The income calculation can include income of other persons; in such case, these persons are considered as co-borrowers6

5Calculation of the monthly installment amount for the respective loan doesn’t take into consideration the amount to be subsidized
6The borrower who has purchased an apartment/residential house shall ensure registration in the purchased apartment or residential house of the persons who got state financial support, within a period of three months (in case of construction – after expiry of the estimated term for construction)

List of required documents to be submitted to the Bank for acquisition of immovable property

  1. The borrower’s/co-borrower’s personal identification document and public services number, or a reference on absence of a public services number (isn’t required, if the client submits an identification card)
  2. Marriage (divorce, death) certificate of the borrower/co-borrower
  3. The personal identification documents and public services numbers of the borrower’s/co-borrower’s family members, or a reference on absence of a public services number (isn’t required, if identification cards are submitted) and birth certificates of the children (if any and if necessary)
  4. A reference from the borrower’s/co-borrower’s place of residence regarding the family members issued by the condominium and a reference issued by the passport department of the NKR police regarding the persons registered in the residential area of the borrower’s place of /3rd form/ (if necessary)
  5. Reference on income from the place of employment, specifying the position held by the borrower/co-borrower and the amount of the monthly income (gross or net; in case of net income, there shall be a respective note in the reference); issue date of the reference as of the day of submission to the Bank shall not exceed 15 days.
  6. The personal identification documents and public services numbers of the owners of the purchased immovable property, or a reference on absence of a public services number, marriage (divorce, death) certificates
  7. Registration certificate of the ownership right for the purchased immovable property and document (evidence) of acquisition of the ownership right
  8. Preliminary evaluation of the purchased immovable property
  9. A letter of guarantee regarding subsidizing the annual interest rate of the mortgage loan or subsidizing the annual interest rate of the mortgage loan and provision of down payment7
  10. Other documents, if required by the Bank

Documents to be submitted in case of approval of the loan application

  1. Final evaluation report for the pledged property
  2. A consolidated statement regarding restrictions on the pledged property
  3. Insurance policies for the purchased property and the borrower/co-borrower
  4. Other documents, if required by the Bank

7 The forms of guarantee letters are defined by the Agreement and contain a statement about the size and term of subsidizing the annual interest rate of the loan and/or size of the percentage point of down payment for the disbursed loan

List of required documents to be submitted to the Bank for construction of a residential house

  1. The borrower’s/co-borrower’s personal identification document and public services number, or a reference on absence of a public services number (isn’t required, if the client submits an identification card)
  2. Marriage (divorce, death) certificate of the borrower/co-borrower
  3. The personal identification documents and public services numbers of the borrower’s/co-borrower’s family members, or a reference on absence of a public services number (isn’t required, if identification cards are submitted) and birth certificates of the children (if any and if necessary)
  4. A reference from the borrower’s/co-borrower’s place of residence regarding the family members issued by the condominium (if necessary)
  5. Reference on income from the place of employment, specifying the position held by the borrower/co-borrower and the amount of the monthly income (gross or net; in case of net income, there shall be a respective note in the reference); issue date of the reference as of the day of submission to the Bank shall not exceed 15 days.
  6. Cost estimate
  7. Photos of the initial condition of the house under construction/land plot
  8. Design approved in accordance with the procedure defined by the legislation, construction permit, contract signed with the constructing company (if any)
  9. Registration certificate of the ownership right for the constructed immovable property and document (evidence) of acquisition of the ownership right
  10. Preliminary evaluation of the constructed house and additional immovable property
  11. A letter of guarantee regarding subsidizing the annual interest rate of the mortgage loan8
  12. Other documents, if required by the Bank

Other conditions

  1. In accordance with the agreement on target interest-free borrowing, the down payment shall be repaid be by the borrower within five years after full repayment of the disbursed mortgage, the conditions of which are defined by the agreement on target interest-free borrowing signed between the Fund and the Borrower. In case of early repayment of the mortgage loan, the borrower shall repay early also the amount of the target interest-free borrowing
  2. A person can make use of each form of state financial support only once
  3. In case of acquisition loans, the seller and the buyer cannot be members of the same family
  4. Target usage of the loan shall be observed during the whole maturity period of the loan
  5. In case of construction/renovation loans, the construction/renovation works shall be fully completed within 1 year after disbursement of the last trance of the loan
  6. In the agreements signed with the borrowers, it shall be specified that the governing legislation is the legislation of the RA, and disputes shall be settled by one of the RA courts (chosen by the Bank)
  7. Other conditions can be defined by the Bank

8The forms of guarantee letters are defined by the Agreement and contain a statement about the size and term of subsidizing the annual interest rate of the loan

 Renovation of residential immovable property

  ASPF AIF
Purpose
Renovation of an apartment/residential house
Currency
AMD, USD

 

Maturity

Maximum 13 years In case of USD - maximum 10 years;
In case of AMD - maximum 5 years
Maximum loan amount
USD equivalent to AMD 5 mln USD equivalent to AMD 7 mln

 

Annual nominal interest rate

14%

Is subject to subsidization for up to 14 percentage points

15%

Is subject to subsidization for 6 percentage points

Fee for review of the loan application
AMD 0
Loan disbursement one-off fee (is charged before disbursement of the loan)
0.5% of the loan amount
Loan service fee
AMD 0
Ratio of the loan amount and collateral value
The loan amount cannot exceed 70% of the evaluated market value 

  

Requirements towards the borrower’s (co-borrower’s, if any) credit history

At the time of applying for a loan:

  • the outstanding loan/loans it shall be classified as “standard”, according to the regulation approved jointly by the CBA and the MFE of the RA;
  • there shall be no overdue credit liabilities;
  • the total number of the overdue days for all loans /outstanding and repaid/ during the last one year doesn’t exceed 30 calendar days  

General provisions and conditions

Restrictions

  1. The sum of the borrower’s age and the loan maturity term cannot exceed 65
  2. Only immovable property located on the administrative territory of Stepanakert and Shushi can be pledged as collateral.

Size of down payment made by the ASPF and AIF in case of acquisition of an apartment/residential house

ASPF

  1. To disabled NKR borrowers of the second category with a permanent military disability, up to 30% of the transaction value, 20% of which without repayment, and 10% with the condition of repayment;
  2. To disabled refugee NKR borrowers of the third category with a permanent military disability, up to 20% of the transaction value, without repayment;
  3. To the children of military men killed in NKR defense and borrowers having many children or one parent - up to 20% of the transaction value, with the condition of repayment;
  4. No down payment is provided to military men of the officer personnel of NKR armed forces and military contractors.

AIF

Maximum 10%, in form of an interest-free borrowing disbursed by the AIF

Procedure of repayment of the loan and interest amount

  1. Spring-like (variable monthly installments), which includes the principal amount in equal portions, and the accrued interest – in variable portions.
  2. Annuity (equal monthly installments), which includes the principal amount and accrued interests with alternating portions (if the ratio of the loan amount and the market or liquid value of the collateral (depending on the loan purpose) does not exceed 50%.

Security

  • Pledge of the acquired, renovated or constructed immovable property
  • Guarantee

An eligible guarantor is a private individual/s/ who has/have/ steady and justified income and/or owns/own/ any immovable property.

The guarantor:

  • Shall not have problematic (including overdue) credit liabilities at the time of submitting the loan application, and
  • Shall not have credit liabilities (including all loans and guarantees) delayed for 30 and more days during the last one year.

3 In case of construction of a residential house, the land plot on which the residential house is built, shall be pledged, along with additional immovable property.
4 Cannot be simultaneously a co-borrower for the loan.

Penalty

 

In case of violation of the repayment terms specified by the agreement, the Borrower pays penalty to the Bank at the rate of 0.13% of the overdue amount for each day of delay. No penalty is charged for early repayment of the loan.

АSPF:

In case of violation of the approved loan repayment schedule as of the last banking day of the month, no subsidy is provided for the calculated overdue interest amount and the fines and penalties accrued towards it.

 

Ratio of total obligations to net income (OTI)

No more than 50%
The income calculation can include income of other persons; in such case, these persons are considered as co-borrowers

List of required documents to be submitted to the Bank for renovation of immovable property

  1. The borrower’s/co-borrower’s personal identification document and public services number, or a reference on absence of a public services number (isn’t required, if the client submits an identification card)
  2. Marriage (divorce, death) certificate of the borrower/co-borrower
  3. The personal identification documents and public services numbers of the borrower’s/co-borrower’s family members, or a reference on absence of a public services number (isn’t required, if identification cards are submitted) and birth certificates of the children (if any and if necessary)
  4. Marriage (divorce, death) certificate of the family members (if necessary)
  5. A reference from the borrower’s/co-borrower’s place of residence regarding the family members issued by the condominium (if necessary)
  6. Reference on income from the place of employment, specifying the position held by the borrower/co-borrower and the amount of the monthly income (gross or net; in case of net income, there shall be a respective note in the reference); issue date of the reference as of the day of submission to the Bank shall not exceed 15 days
  7. Cost estimate
  8. Photos of the initial condition of the house under renovation
  9. Construction permit (if necessary)
  10. Registration certificate of the ownership right for the renovated immovable property and document (evidence) of acquisition of the ownership right
  11. Preliminary evaluation of the renovated immovable property
  12. A letter of guarantee regarding subsidizing the annual interest rate of the mortgage loan9
  13. Other documents, if required by the Bank’s employee

Documents to be submitted in case of approval of the loan application

  1. Final evaluation report for the renovated immovable property
  2. Photos of the renovated immovable property (can be requested after disbursement of each tranche, as well as within the framework of current monitoring)
  3. A consolidated statement regarding restrictions on the pledged property
  4. Insurance policies for the pledged property and the borrower/co-borrower
  5. Other documents, if required by the Bank

7 The forms of guarantee letters are defined by the Agreement and contain a statement about the size and term of subsidizing the annual interest rate of the loan

Other conditions

  1. In accordance with the agreement on target interest-free borrowing, the down payment shall be repaid be by the borrower within five years after full repayment of the disbursed mortgage, the conditions of which are defined by the agreement on target interest-free borrowing signed between the Fund and the Borrower. In case of early repayment of the mortgage loan, the borrower shall repay early also the amount of the target interest-free borrowing
  2. A person can make use of each form of state financial support only once
  3. In case of acquisition loans, the seller and the buyer cannot be members of the same family
  4. Target usage of the loan shall be observed during the whole maturity period of the loan
  5. In case of construction/renovation loans, the construction/renovation works shall be fully completed within 1 year after disbursement of the last trance of the loan
  6. In the agreements signed with the borrowers, it shall be specified that the governing legislation is the legislation of the RA, and disputes shall be settled by one of the RA courts (chosen by the Bank)
  7. Other conditions can be defined by the Bank