Yuriy Draganchuk: The Start of the New Program "Affordable Mortgage" should be Fast, Efficient and without Additional Budget Expenditures at the First Stage

01 February 2021

The Government recently approved a revised Resolution dated 27.01.2021 No 63 "Some Issues for Reducing the Cost of Mortgage Loans", which provides for the launch of a new mortgage program at an interest rate of up to 7% per annum, initiated by the President of Ukraine.

The Procedure for reducing the cost of mortgage loans, developed by the Ministry of Finance was approved by the Government's decision.

"Affordable Mortgage" program will enable people with a relatively low level of income to obtain a mortgage loan with partial compensation of interest by the state," - said Deputy Minister of Finance of Ukraine for European Integration Yuriy Draganchuk in the op-ed for "Today".

He noted, that for the start of the "Affordable Mortgage" program the additional expenditures from the state budget at the first stage are not needed, in addition to the already provided UAH 2 billion for the activity of the Entrepreneurship Development Fund.

Implementation of the program does not require much time and resources for organizational and administrative measures and processes, because there are already qualified staff and office in place.

"Our main task was to provide citizens with affordable mortgage lending. It was important for the program to start quickly and without additional budget expenditures.

The Ministry of Finance found such a solution. We developed a new mortgage mechanism, which we implement through the existing Entrepreneurship Development Fund. Technically, it is not difficult. It was enough to make changes to government resolutions, according to which the fund has been financing "Available Loans 5-7-9%" to support small and medium-sized businesses throughout the year, as well as into the fund's internal documents," said Yuriy Draganchuk.

The main benchmarks of the "Affordable Mortgage" program, laid down in the Procedure for reducing the cost of mortgage loans for citizens, have been identified.

First of all, it is the most favorable interest rate for households, which will be paid by the borrower. It is up to 7% per annum. The loan maturity is 20 years and the first contribution is 15% of the value of the mortgage. The loan's size will be limited up to UAH 2 million.

The normative area of housing is 50 square meters of total living space for a single citizen or a family of two and 20 square meters for each subsequent family member.

It refers to the primary and secondary housing markets, in particular, individual houses that were put into operation after 2017.

"A wide range of Ukrainian citizens will be able to take advantage of the new program. They will receive partial compensation of interest on mortgage loans. First of all, the state will take into account the needs of citizens in need of better living conditions, residents of dormitories and emergency buildings, internally displaced persons, pedagogical and medical workers, public sector workers and young families," said the Deputy Minister.