MRDPW to select the banks crediting the Residential Housing Rehabilitation Programme

Housing loans

The Ministry of Regional Development and Public Works (MRDPW) will organise a tender for banks which will credit the Residential Housing Rehabilitation Programme, announced yesterday Minister Rosen Plevneliev. The main criteria for the selection of the banks will be the lowest interest rate offered and the most beneficial credit guarantees. All banks will be invited to bid in the tender. The Regional Ministry has scheduled the tender procedure to commence as of September, while the contracts with banks should be concluded by December this year.

Our participation will depend on the General Terms and Conditions that will be proposed, commented Violina Marinova, CEO of DSK Bank. According to her, MRDPW will assume the risk provision but, nevertheless, the financial part remains the responsibility of the banks.

If banks are unwilling to participate in the Residential Housing Rehabilitation Programme, MRDPW will grant the funds under the guarantee fund as direct loans, specified Rosen Plevneliev. The Department has planned for BGN 13 mln to be used as a guarantee fund with banks or other financial institutions, which will extend low-interest consumer loans. They will be intended for people who cannot provide resources for co-financing.

MRDPW also requires from the banks to provide at least BGN 7 mln in addition to the BGN 13 mln allocated by the establishment as a guarantee fund, announced Deputy Minister Lilyana Pavlova. She explained that if the selected banks are not able to grant credits, they can become guarantors to other institutions that can provide such credits. A total of BGN 63 mln will be granted under Operational Programme Regional Development (OPRR) for the insulation of multi-family dwellings. A total of BGN 50 mln out of these funds will be extended as a direct subsidy, while the remaining BGN 13 mln will be used for the setting up of a guarantee fund.
The financial aid for citizens will constitute 50% of the total amount needed for the insulation of one apartment. Loans that must be granted amount to BGN 3,000 – BGN 5,000. I do not expect banks which want a home mortgage loan for that amount to be approved in the selection, commented Plevneliev.

The Sofia Municipality will donate to the people involved in the programme for the building's insulation, the rehabilitation of the green areas in front of the residential building. This is a pilot project in Sofia but I am convinced that other municipalities will also join in the initiative, said Plevneliev. He explained that the funds to be invested in the renovation of the gardens will be allocated from the budgets of the municipalities. So far, over BGN 13 mln have been granted for the insulation of private buildings under the Multi-family Housing Revitalization Demonstration Programme with the United Nations Development Programme (UNDP). This is the total amount invested and it includes state subsidies from the budgets of the Regional Office, along with the funds of district municipalities and civil co-financing.


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