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HOUSING FOR MIDDLE-LOW

HOUSING FOR MIDDLE-LOW. INCOME FAMILIES. J.Aldarjavkhlan. CEO of Mongolian Housing Finance Corporation. 2011. TABLE OF CONTENT. Brief introduction to housing projects and programs implemented by the Government of Mongolia Introduction of MHFC Programs and Projects implemented by MHFC

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HOUSING FOR MIDDLE-LOW

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  1. HOUSING FOR MIDDLE-LOW INCOME FAMILIES J.Aldarjavkhlan. CEO of Mongolian Housing Finance Corporation 2011

  2. TABLE OF CONTENT • Brief introduction to housing projects and programs implemented by the Government of Mongolia • Introduction of MHFC • Programs and Projects implemented by MHFC • “40,000 Housing Units” Program • “4,000 Housing Units” Project • Projects and programs to be implemented in the future • “Buyant-Ukhaa” housing project • Granting mortgage loans to citizens within the framework of the "100 000 Housing Units" , the sub project of the "New Development" Program • The development fund allowance for citizens to be used for housing

  3. BRIEF INTRODUCTION OF HOUSINGPROJECTS AND PROGRAMS IMPLEMENTEDBY THE GOVERNMENT OF MONGOLIA The goal of the program: • Effective policy for urban development • To build infrastructure for the housing districts in ger areas and unused areas in the suburbs • To exploit land • To create favorable legal environment in the construction sector • To establish mortgage loan system Terms of the program implementation: • 2004-2009 The outcome of the program: • 40124 housing units completed • 16,000 citizens granted mortgage loans 40,000 Housing units Program

  4. “4000 Housing units” project The goal of the project: The Government of Mongolia resolved to assign MHFC to implement the project in order to grant low-interest rate mortgage loans to civil servants, to improve free carry business opportunities of commercial banks and to overcome the difficulties faced in the construction sector in Mongolia. Terms of the project implementation: 2010-2011 The outcome of the project: • 4000middle-low income citizens and civil servants had been granted access to the long-term and low-interest rate mortgage loans totaling a whopping MNT 152billion. • 170construction companies benefit from the project by way of selling housing units. • Achieved the outstanding loan repayment worth of MNT 82.3billion.

  5. “New Development ” mid-term strategic program Documents such as “Cities”, “New Ulaanbaatar- Green City”, “Rural development”, “Housing Units” as specified in the action plan for 2008-2012 approved by the Government of Mongolia in the program. Also the projects such as “100.000 Housing Units” and “ Building material grant” will be implemented.

  6. 2. CORPORATE INTRODUCTION MHFC was established in October 2006 with mandate to provide population with appropriate living conditions through the implementation of the comprehensive set of policies and activities on mortgage loan provision, investment and financing. • Strategic objectives: • To grant long-term and low-interest rate mortgage loans to middle-low income citizens; • To improve the terms and conditions of the mortgage loan; • To build housing districts in order to sell on mortgage loan and rent; • To raise funds for mortgage loan and investment; • To issue MBS in the secondary market.

  7. THE MANAGEMENT AND ORGANIZATIONAL STRUCTURE OF MHFC

  8. FINANCING SCHEME OF PROJECTS AND PROGRAMS IMPLEMENTED BY MHFC

  9. 3.IMPLEMENTED PROGRAMS AND PROJECTSParticipation in the “40 000 Housing Units” program MHFC was responsible for the financing of mortgage loans from the Government Bonds addressed to the middle-low income citizens within the framework of “40.000 Housing Units” program. • Within the framework of the program the company had successfully financed a total of 2100 housing units in 21 provincial centers and 60 soums of the country. • A total of 2100 housing units were built in the country, out of which 404 housing units, 19%, were built in the capital city of Ulaanbaatar, 1376, 66%, in the provincial centers as opposed to 320 or 15% built in soum centers of the country. • The citizens are given opportunities to access to the ownership of their homes priced reasonably at US$ 280-600 per 1ì2

  10. MHFC is providing the public with an opportunity to own affordable homes at their own choice in the market. The company has already granted 700 citizens mortgage loans with expenditure budget of MNT 15.4 billion. The terms of the loan financed by the Government bonds within the framework of “40 000 housing units” program THE TERMS OF THE LOAN: • The loan amount – MNT25.0 million • The loan interest rate – 11% APR • The loan term – up to 10 years • The down payment – 25%

  11. In Ulaanbaatar Number of housing units financed by MHFC /by scheme/ In centers of provinces In soums

  12. “4000 housing units” project Terms of the project implementation: 2010-2011 • 4000 middle-low income citizens and civil servants had been granted access to the long-term and low-interest rate mortgage loans totaling a whopping MNT 152 billion. • 170construction companies benefit from the project by way of selling housing units. • Achieved the outstanding loan repayment worth of MNT 82.3billion. • Requirements for the housing units • Newly completed housing units • Handed over to the State commission The terms of the loan: The loan amount – MNT 40.0 million The loan interest rate – 8% APR The loan term – up to 20 years The down payment – 10%

  13. Project outcome Improvement in housing condition

  14. MHFC has financed 2000 housing units and accommodated a total of 6800 families within the aforesaid programs and projects.

  15. 4. PROJECTS AND PROGRAMS TO BEIMPLEMENTED IN THE FUTURE Buyant-Ukhaa district • Within the framework of this project a housing district comprising of 2000 units, covering the area of 4.63 hectares and building site of 98.000m2, complete with required infrastructure (roads, engineering networks) will be built. In the future, the projects of Yarmag and Buyant-Ukhaa housing districts will be implemented in accordance with the master plan. • The project consists of 3 phases. • Building of 2000 housing units • 125 nurseries, shopping centers • Roads, green facilities

  16. Granting low-interest rate mortgage loan within the framework of “100.000 Housing Units” program The Government of Mongolia resolved to issue the low-interest rate mortgage loans to citizens within the framework of “100.000 Housing Units” program and to perform preparatory works. The terms of the loan: • First time buyer • To be under 50m2 • The loan term – up to 25 years • The down payment – 10%

  17. Choose apartments and enter into property purchase agreement Mortgage loan scheme Citizen To make loan application and cross-check analysis of credit portfolio To order loan source in credit lump sum Remit payment To remit the loan sources in credit lump sum Ministry of Finance Commercial bank New housing units Approve the loan application Refer the loan application after cross- checking MHFC

  18. The conversion of allowance of the human development fund to mortgage loan. By way of its Order 138, the Government of Mongolia resolved to assign MHFC to organize the works related to the bank account registrations of the citizens of Mongolia applying for the conversion of allowance of the Human Development Fund to mortgage loan. It will finance for the following purposes on non-cash basis. 1. For down payment or discrepancy payment 2. For interest rate of the mortgage loan

  19. Scheme of the conversion of allowance to mortgage loan. Sale & Purchase of housing Mortgage loan agreement Construction company Financial institution Citizen Soum, khoroo Conversion of tallowance Conversion of allowance province, district, LSWA MHFC Human Development Fund

  20. THANK YOU FOR YOUR COOPERATION.

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