Vnesheconombank’s Program of Investment in Projects on Affordable Housing Construction, and Mortgage Services

Annual Report 2013
Site map Русский

# Vnesheconombank’s Program of Investment in Projects on Affordable Housing Construction, and Mortgage Services

With a view to stimulating mortgage lending and increasing its affordability for the wider population, Vnesheconombank in 2010 launched its 2010 – 2013 Program of Investment in Construction of Affordable Housing, and Mortgage Loans (the Program).

The Program provides for the total of RUB 250 bn to be invested in debt securities and extended in the form of loans:

- Up to RUB 150 bn in mortgage-backed bonds (mortgage bonds). Up to RUB 50 bn of Vnesheconombank’s own funds and up to RUB 100 bn of the funds under the management of Vnesheconombank as the State Trust Management Company;
- Up to RUB 60 bn in state guaranteed obligations of the Agency for Housing Mortgage Lending (AHML). Pension savings managed by Vnesheconombank as the State Trust Management Company;
- Up to RUB 40 bn for lending to AHML. Funds of the Sovereign Wealth Fund allocated to Vnesheconombank in compliance with Federal Law No. 173-FZ (the funds were provided by AHML in full in 2012).

In 2013, credit institutions participating in the Program completed granting mortgage loans to individuals at the rate not exceeding 11% p.a. The Program lifecycle in terms of Vnesheconombank’s redemption of mortgage bonds was extended to the end of 2014.

As at 01.01.2014, debt securities purchased by Vnesheconombank under the Program totaled RUB 71.72 bn in nominal terms, in particular over the reporting period:

- the amount of mortgage-backed bonds increased from RUB 19.16 bn to RUB 42.34 bn (debt securities purchased with pension savings– up to RUB 28.23 bn, and with Vnesheconombank’s own funds – up to RUB 14.11 bn);
- the amount of AHML state guaranteed bonds acquired using pension savings increased from RUB 28.68 bn to RUB 29.38 bn.

From the Program’s inception till the year-end 2013, its participants received over RUB 330 bn worth of gross mortgage loans. The total area of residential properties acquired (under construction) amounted to no less than 4 mn square meters. Since the launch of the Program, the average weighted interest rates applicable in the Russian Federation to housing mortgages in rubles in the primary and secondary housing market decreased from 13.70% to 12.40% p.a.8 (early in the year 2012 the rates decreased to 11.80% p.a.).

Furthermore, to boost the construction of affordable housing, Vnesheconombank used its own funds to refinance the loans extended by credit institutions participating in the Program to developers of low-income housing, at the rate not exceeding 10% p.a. The refinancing loans were extended by Vnesheconombank for maturities of up to 31.12.2013 at the interest rate of 3% p.a. in the maximum amount of 1/3 of the resources made available by the respective credit institution. Overall, the funds extended to that end to 6 banks by the beginning of 2013 ran at RUB 8.871 bn. By the end of the year under report, the funds were fully repaid.

8 According to Russia’s Central Bank (Analytical Data on the Residential Mortgage Lending Market in 2013).

НАВЕРХ