"We supplied funds, in the form of property purchase and construction loans, for 540,000 residential units last year [ending March 20]. We intend to increase the number of homes covered by the bank's facilities to 700,000 in the current year," Rahimi was quoted by IBENA as saying on Thursday.
He noted the number and value of loans issued to the applicants over the first three months of the current year have increased 68% and 70% respectively, compared to the same period last year.
Housing Savings Account, operated by Bank Maskan, the bank specialized in the housing sector, requires first-time prospective homebuyers to make a down payment and wait for a year to become eligible to receive double the amount of their investments as loans, Financial Tribune reported.
Rahimi said the HSA is mainly aimed at low-income groups, offering long repayment periods and demanding a reasonable 6% interest on loans for properties located in the old parts of cities and 8% for those in other neighborhoods.
***HSA Amendment
He also announced plans to amend the HSA terms to reverse a tendency in the construction sector toward larger buildings mostly out of reach for the prospective home buyers.
"The housing market data show most applicants are looking for smaller homes, but unfortunately the average size of the buildings for which construction permits have been issued is 150 square meters," Rahimi said.
The lender will tighten the procedures for loan application with a view to bringing the future constructions within the financial reach of the potential first-time home purchasers, he said.
In light of the consumer needs and purchasing power, the maximum size of the buildings has been set at 75 square meters in Tehran and 100 meters in other cities, if they are to qualify for HAS facilities, the top banking official added.
Unaffordable constructions, combined with soaring home prices, have substantially slowed trading in the housing market.
Head of Majlis Development Commission, Mohammad Reza Rezaei, has questioned the effectiveness of the HSA housing scheme, saying the value of home loans has not increased in line with recent skyrocketing prices.
"Loans offered in the housing sector used to cover 50% of the final price of the homes on sale in the past, but they are now barely enough to cover 25% of the price, particularly in metropolises. In view of the rapidly rising bubble in the real-estate sector, the government loans are not worth much in terms of the whole price of homes," Rezaei said.