HOUSING FOR MIDDLE-LOW

J.Aldarjavkhlan.

CEO of Mongolian Housing Finance Corporation

2011

INCOME FAMILIES

TABLE OF CONTENT

1.Brief introduction to housing projects and programs implemented by the Government of Mongolia2.Introduction of MHFC3.Programs and Projects implemented by MHFC

•“40,000 Housing Units” Program•“4,000 Housing Units” Project

4.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

1. 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 systemTerms 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

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:2010-2011The outcome of the project:

• 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.

• 170 construction companies benefit from the project by way of selling housing units.

• Achieved the outstanding loan repayment worth of MNT 82.3billion.

“4000 Housing units” project

“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.

The goals of the program:

• Urban development and planning

• Infrastructure

• Increase housing supply

• Increase work places and support education

• Reduce air pollution of Ulaanbaatar city

• Support rural development

• Support industrialization

• Reduce migration

2. CORPORATE INTRODUCTION

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.

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. 

THE MANAGEMENT ANDORGANIZATIONAL STRUCTUREOF MHFC

FINANCING SCHEME OFPROJECTS AND PROGRAMSIMPLEMENTED BY MHFC

3. IMPLEMENTED PROGRAMS AND PROJECTS

Participation 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

• 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%

In Ulaanbaatar

In centers of provinces

In soums

Number of housing units financed by MHFC /by scheme/

“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.

• 170 construction companies benefit from the project by way of selling housing units.

• Achieved the outstanding loan repayment worth of MNT 82.3 billion.

The terms of the loan:The loan amount – MNT 40.0 millionThe loan interest rate – 8% APRThe loan term – up to 20 yearsThe down payment – 10% 

Requirements for the housing units

Newly completed housing unitsHanded over to the State commission

Project outcomeImprovement in housing condition

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

4. PROJECTS AND PROGRAMS TO BEIMPLEMENTED IN THE FUTURE Buyant-Ukhaa district

Granting low-interest rate mortgage loan withinthe 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 buyerTo be under 50m2 The loan term – up to 25 yearsThe down payment – 10%

Citizen

MHFC

New housing unitsMinistry of Finance

Commercial bank

Choose apartments and enter into property purchase agreement

To order loan source in credit lump sum

To remit the loan sources in credit lump sum

To make loan application and cross-check analysis

of credit portfolio

Remit payment

Approve the loan application

Refer the loan application after cross- checking

Mortgage loan scheme

The conversion of allowance of thehuman 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

Citizen

Soum, khoroo

province, district, LSWA

MHFC

Human Development Fund

Scheme of the conversion of allowance to mortgage loan.

Sale & Purchase of housing Mortgage loan agreement

Conversion of tallowance Conversion of

allowance

Construction company Financial institution

THANK YOU FOR YOUR COOPERATION.