$760 Million in Loans to First-Time Homebuyers

EghtesadOnline: Bank Maskan, the agent bank of Iran's housing sector, has paid a total of 89,000 billion rials ($760.68 million) in home loans under the Housing Savings Account scheme since its launch in June 2015.

News ID: ۷۸۴۸۰۸

17 August 2019

About 595,000 applicants have made deposits in the government-owned bank for its mortgage loan program in the first four years of HSA, Bank Maskan CEO Abolqasem Rahimi Anaraki was quoted as saying by the bank’s website HIBNA.

In the fiscal 2015-16, a total of 40,000 HSA deposit accounts were opened at Bank Maskan, followed by 135,000 accounts in the fiscal 2016-17. The largest number of HSA accounts opened in one year was in the fiscal 2017-18 with 217,000.

“Housing recession in the last fiscal year [2018-19] in Tehran and other large cities on the one hand and home price hikes on the other drove down the number of new HSA accounts from the previous year’s peak to 183,000,” Financial Tribune quoted Anaraki as saying.

Over the first quarter of the current fiscal year (March 21-June 21), 19,000 new HSA deposits were made in Bank Maskan.

According to the official, from the third month of the fiscal 2015-16 to the year ending March 20, 2019, a total of 575,426 HSA deposit accounts were opened with the bank, of which 310,000 accounts belonged to residents of cities with a population of over 200,000 and 148,000 accounts were opened by residents of Tehran. More than 117,000 accounts were opened by applicants residing in small cities with a population of fewer than 200,000.

The number of HSA deposits reached 355,000 worth more than 52,000 billion rials ($444.44 million) in the month ending July 22.

The HSA initiative, the brainchild of former roads minister, Abbas Akhoundi, is geared toward applicants who are mostly first-time prospective homebuyers from middle-class backgrounds and people living in old urban areas. It is aimed at increasing home ownership among young population.

The scheme requires applicants to make an initial deposit (400 million rials or $3,418) and wait out the one-year maturity period for credits with a ceiling of 800 million rials ($6,837), plus the depositor’s down payment, in the capital Tehran.

In towns with a population of over 200,000, the loans are capped at 600 million rials ($5,128). Buyers in towns with a population of under 200,000 can apply for a maximum loan of 400 million rials ($3,418).

When the scheme was first launched, the loan’s interest rate was set at 14%. In February 2017, after a directive by the Money and Credit Council, they were reduced to 9.5% in general cases and 8% for those who wanted to buy a home in rundown parts of the cities. These interest rates make HSA loans the country’s cheapest.

It is said to be a self-sustaining fund since all the resources it absorbs are redirected to boost the financial strength of Bank Maskan and support prospective homebuyers through cheap facilities.