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For Young Families

Affordable apartment for young families

The loan is provided to a young family, where the aggregate age of the married couple doesn’t exceed 70; or to a young single parent aged under 35 (inclusive).

An eligible borrower is a citizen of the RA or a person without citizenship in the RA, whose spouse is a citizen of the RA.

An eligible borrower is the borrower’s spouse and each of their family members (family members are: the spouse, the borrower’s parents and the parents of the borrower’s spouse, sisters and brothers.

  Purpose of the loan Acquisition of existing residential property or property under construction, for permanent residence
  Location On the whole territory of the RA

  Loan currency

AMD
  Primary Market
(directly from the construction company)
Secondary market
 Maximum cost of the residential property to be acquired

Purchase price - not more than AMD 30 million and, at the same time, the appraised market value - not more than AMD 31 million.

The purchase price and the appraised value of the residential property to be acquired are compared with the average prices for real estate published by the National Statistical Service of the RA (with the latest published data), taking into account the size and location of the apartment. In particular, the derivative of the area of the apartment and the average cost of one square meter in that location shall not exceed AMD 31 million.

Purchase price - not more than AMD 25 million and, at the same time, the appraised market value - not more than AMD 26 million.

The purchase price and the appraised value of the residential property to be acquired are compared with the average prices for real estate published by the National Statistical Service of the RA (with the latest published data), taking into account the size and location of the apartment. In particular, the derivative of the area of the apartment and the average cost of one square meter in that location shall not exceed AMD 26 million.

 Minimum and maximum loan amount

From 1 mln. to 27,750 mln.*

From 1 mln. to 22.5 mln.*
 Loan maturity Minimum 10 years, maximum 20 years
 Interest rate

7.5% (not subsidized)

7.5% (the loans disbursed for property located in Yerevan will be subsidized by 2 percentage points, those for property located in region - by 4 percentage points)
 Loan issuance form
Lump sum or by stages.
The last tranche of a loan issued in stages is disbursed if the real estate construction is completed by 80% and more, and the maximum limit of the first tranche is AMD 1,000,000.

 Lump sum

 Loan disbursement one-off fee, charged before disbursement of the loan

 

0.5% of the loan amount, but not less than AMD 50,000

 Fee for review of the loan application AMD 3,000, is charged once, at the time of recording the loan application

General provisions and conditions

Procedure of repayment of the loan and interest amount

The loan and interest amounts are repaid monthly, in one of the following manners:

  •  Annuity (equal monthly installments), which includes the principal amount and accrued interests with alternating portions;
  •  Spring-like (variable monthly installments), which includes the principal amount in equal portions, and the accrued interest - in variable portions.

Collateral

  •  Residential property to be purchased and/or some other residential property;
  •  The real estate should be primary collateral.

Loan-to-Value ratio (LTV)

Primary market (directly from the construction company)

  •  The loan amount cannot exceed 80% of the appraised market value or the purchase value, whichever is the smallest*;
  •  The loan amount cannot exceed 90%* of the appraised market value or the purchase value, whichever is the smallest, if at least one of the below-mentioned requirements is met:
  •  besides the residential house or apartment to be acquired, which is pledged as security for the disbursed loan, some other residential property is also pledged by the borrower; in case of pledging the acquired and other residential property, the loan amount cannot exceed 80% of the total value of both pledged properties (the appraised market value or the purchase value, whichever is the smallest);
  •  besides the residential house or apartment to be acquired, which is pledged as security for the disbursed loan, the borrower provides also a guarantee issued by the legal entities, which rank 1-300 in the list of the largest taxpayers in the Republic of Armenia.
  •  there is insurance of the mortgage liability* for the amount of the difference between 20 percent of the value of the residential house or apartment to be acquired and 10 or more percent of downpayment made by the borrower.

Secondary market

  •  The loan amount cannot exceed 70% of the appraised market value or the purchase value, whichever is the smallest*;
  •  The loan amount cannot exceed 90%* of the appraised market value or the purchase value, whichever is the smallest, if at least one of the below-mentioned requirements is met:
  •  besides the residential house or apartment to be acquired, which is pledged as security for the disbursed loan, some other residential property is also pledged by the borrower; in case of pledging the acquired and other residential property, the loan amount cannot exceed 70% of the total value of both pledged properties (the appraised market value or the purchase value, whichever is the smallest);
  •  besides the residential house or apartment to be acquired, which is pledged as security for the disbursed loan, the borrower provides also a guarantee issued by the legal entities, which rank 1-300 in the list of the largest taxpayers in the Republic of Armenia.
  •  there is insurance of the mortgage liability* for the amount of the difference between 30 percent of the value of the residential house or apartment to be acquired and 10 or more percent of downpayment made by the borrower.

Income

The sum of the borrower’s and possible co-borrowers’ total monthly income should not exceed AMD 800,000.

Ratio of the monthly payments to net income (PTI)

Up to 35%

Ratio of the total obligations to total income (OTI)

Up to 45%

Data regarding the credit history

  •  Inquiry to ACRA credit bureau (LLC 3);
  •  If the borrower/co-borrower has/have outstanding loan/loans, then it shall be classified as a standard loan, according to the regulation approved jointly by the CBA and the MFE of the RA, and there shall be no overdue current liabilities related to the loan/loans;
  •  The total number of the overdue days for all loans /outstanding and repaid/ during the last twelve months doesn’t exceed 30 calendar days.

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.

Insurance

Insurance of the pledged real estate, as well as the borrower and co-borrowers from death through accidents (proportionate to income) is done annually, for the balance amount of the loan.

Other requirements

Such mortgage loans shall be submitted, in case of which:

1. the seller and the buyer are not members of the same family (according to the RA Law on “Banks and Banking”);
2. the loans meet the requirements of the legislation on preventing money laundering and financing of terrorism;
3. if one of the spouses has other residential property (apartment, residential house) belonging to him/her through the ownership right, then the share of 1 person of those registered in the apartment/residential house shall be less than 18,0 m2 (in case of a residential house, the calculation includes only the part of the property used for dwelling purpose);
4. the married couple is going to move into the acquired apartment or residential house for permanent residence (they don’t intend to give it for rent before living there; they should live there throughout the year and not use the house/apartment as a summer house, etc.).

Other provisions

  •  Reference from the SCREC (State Committee of Real Estate Cadaster) adjoined to the GoA regarding the real estate owned by the borrower and his/her spouse through the ownership right;
  •  The rest of the conditions - according to the “Regulation on Refinancing of Mortgage Loans” of “Apartments for Young Families” UCO CJSC.