Build your house in a border settlement. Obtain a subsidized loan and turn your dream into reality.
Receive subsidization for both the principal amount and interest on the loan
No loan application review fee or servicing fee
The loan is intended for construction in border communities
Land plot designated for construction, and, if necessary, other collateral and/or guarantee
if the construction of the property is carried out in the Baghanis, Berkaber, Kirants and Voskepar settlements of Tavush Province
subsidization of both loan interest and principal amount
no loan application review fee
no monthly loan servicing fee
The loans are provided within the framework of the State Support Program for Ensuring Affordable Housing for Families in Border Communities of the Republic of Armenia, for the purpose of constructing residential real estate.
Minimum amount: AMD 1,000,000
Maximum amount:
AMD 16,000,000
AMD 21,000,000 if the construction of the property is carried out in the Baghanis, Berkaber, Kirants and Voskepar settlements of Tavush Province, provided that the person applying to the Bank (at least one of the spouses) has been registered in the relevant settlement during the one-year period preceding the date of application to the Program.
The loan amount is provided in the form of 2 separate loans, with the amount of the first loan constituting up to 40% of the maximum limit, and the second loan constituting 60%.
Annual nominal interest rate: 13% fixed interest rate
Annual effective interest rate: 13.81%
Loan repayments – monthly, in equal monthly installments
Collateral – land plot designated for construction, and, if necessary, other collateral and/or guarantee
Fee – 0.5% of the loan amount
Interest calculation – daily, based on the outstanding loan balance
Borrower:
Married couples whose marriage is registered with the Civil Status Acts Registration authorities and who have at least 1 minor child, or whose combined age does not exceed 75 (inclusive)
a single parent (a widow/widower whose spouse has died) who has at least 1 minor child.
Both the borrower (including the co-borrower) and the minor child must be citizens of the Republic of Armenia.
Gomk settlement of Vayk community, Vayots Dzor Province – spouses who are citizens of the Republic of Armenia, whose marriage is registered with the Civil Status Acts Registration authorities and who have at least one child under the age of 13,
have not been registered in Yerevan during the one-year period preceding the date of application to the Program
or
at least one of the spouses meets the requirements for a teacher.
The applicant’s spouse must be a co-borrower.
Principal amount subsidization:
for a loan of AMD 16 million – not more than AMD 277,000 per month and not more than AMD 16,000,000 over the entire term of the loan,
for a loan of AMD 21 million – not more than AMD 366,000 per month and not more than AMD 21,000,000 over the entire term of the loan,
Interest subsidization:
for a loan of AMD 16 million – 13%, but not more than AMD 203,000 per month and not more than AMD 12,668,000 over the entire term of the loan,
for a loan of AMD 21 million – not more than AMD 266,000 per month and not more than AMD 16,626,000 over the entire term of the loan.
You can view the list of border rural settlements here.
Learn more:
About the amount of possible additional payments: Loan Tariffs.
The state support programs are:
Required documents:
Applicant’s identity document,
Social Services Number or a certificate confirming that a Social Services Number has not been obtained (if required),
Ownership certificate (copy) for the real estate or land plot under construction/to be pledged,
Identity documents (copies) of the co-owners of the real estate under construction/to be pledged and copies of their marriage certificates (if married),
Document(s) certifying ownership of the property offered as collateral (copy),
Estimate of construction works and material costs,
Construction permit.
At the time of submission, the documents must not be more than 15 days old.
Depending on various circumstances, additional documents and information may be required.
*The certificate must contain the customer’s net monthly salary/income after payment of taxes, workplace address, telephone numbers, the signature and seal of the head of the organization issuing the certificate, outgoing reference number, month and date of issue.
The decision on granting beneficiary status under the Program by the Unified Social Service of the Ministry of Labor and Social Affairs of the Republic of Armenia is made within up to 10 business days after the required information has been submitted.
The Bank's decision regarding the loan application is made and communicated to the customer within a maximum of 6 banking days after the required documents and the positive decision of the Unified Social Service of the Ministry of Labor and Social Affairs of the Republic of Armenia regarding the applicant's beneficiary status under the Program have been submitted.
If the decision to grant the loan is positive, the loan is disbursed within a maximum of 2 banking days after completion of the collateralization process.
The land plot designated for construction must be owned by both the borrower and the co-borrower (and, if desired by the latter, also by their minor children); no other persons may be co-owners.
The subsidization provided under the construction program in a border settlement is fully terminated:
if, during the term of the mortgage loan, there is an overdue obligation of more than 90 days at once under any of the loans provided within the maximum limit;
if, during the term of the mortgage loan, ownership of the property is registered in the names of other persons, regardless of the size of the ownership share.
The entire amount of subsidization received by the borrower is subject to repayment to the state:
if, during the term of the mortgage loan, ownership of the property under construction/completed property is registered in the names of other persons, regardless of the size of the ownership share, except where, due to the death of the borrower/co-borrower, the heir to their share is their spouse or child;
in case of non-purpose use of the loans provided within the maximum limit;
if, within 3 years from the date of loan disbursement, the completion certificate prescribed by RA Government Decision No. 596-N dated 19.03.2015 and the ownership certificate for the residential house constructed in the names of the borrower and co-borrower are not submitted to the Bank;
if the property is alienated during the term of the mortgage loan.
Example of Loan Interest Calculation
The Bank's decision regarding the loan application is made and communicated to the customer by phone call and/or electronic means of communication within a maximum of 6 banking days after the required documents and the positive decision of the Unified Social Service of the Ministry of Labor and Social Affairs of the Republic of Armenia regarding the applicant's beneficiary status under the Program have been submitted.
If you wish to carry out construction with a value of AMD 16,000,000, your monthly payment over a period of 120 months will be AMD 238,897 (calculated at a fixed interest rate of 13%), from which the subsidization amounts specified in the agreement for the principal and interest will be deducted.
Annual interest rate: 13%.
*The repayment amount may vary depending on the number of days in the respective month.
ATTENTION: LOAN INTEREST IS CALCULATED BASED ON THE NOMINAL INTEREST RATE, WHILE THE ANNUAL EFFECTIVE INTEREST RATE SHOWS HOW MUCH THE LOAN WILL COST YOU, INCLUDING INTEREST AND ALL MANDATORY PAYMENTS FOR LOAN DISBURSEMENT AND SERVICING, PROVIDED THAT SUCH PAYMENTS ARE MADE WITHIN THE SPECIFIED PERIODS AND IN THE SPECIFIED AMOUNTS. THE CALCULATION OF THE EFFECTIVE INTEREST RATE CAN BE FOUND HERE
Learn more:
In case the borrower fails to fulfill their obligations on time, a penalty of 0.13% is charged for each overdue day (applicable penalties).
Loan repayments are made in the following order (when overdue obligations are being settled):
For a regular repayment:
Penalty/fine
Interest
Principal
For early repayment of the principal (when the overdue obligation has been settled):
Full repayment of the overdue obligation
Principal repayment
For early repayment of the principal (for the amount exceeding the overdue obligation):
Principal repayment
Qualified independent appraisal companies cooperating with the Bank
Loans for construction in border settlements are provided for the purpose of constructing or continuing the construction of residential real estate in a border settlement.
The loan amount is provided on a non-cash basis.
Factors for loan rejection include failure to meet the conditions of the RA Government State Support Program for Ensuring Affordable Housing for Families in Border Settlements, poor credit history of the customer, insufficient/unavailable collateral, the professional opinion of the Business Consultant, and the professional opinion of the Credit Committee.
The loan is processed at the Bank's branches.
Mortgage agreements for pledging property serving as collateral for the mortgage loan are notarized, and the pledge right arising from such agreements is subject to state registration.
The Bank undertakes to provide the consumer with the contractual offer 7 days in advance and allow 7 days for consideration.
During the term of the agreement, statements are provided 20 business days before each repayment specified in the schedule, through the customer's preferred method of communication.
During the term of the agreement, the loan account statement and other information that are mandatory to be provided under the legislation of the Republic of Armenia are provided free of charge. Statements that are not mandatory to be provided under the legislation of the Republic of Armenia, as well as duplicate statements, are provided:
for a period of up to 6 months (inclusive) - free of charge;
for a period of more than 6 months up to 12 months (inclusive) - AMD 2,000 (including VAT);
for a period of more than 1 year - AMD 3,000 (including VAT).
If necessary, information regarding the loan may be provided in the form of a certificate on the business day of submitting the application for AMD 5,000, or within the following business days for AMD 3,000.
An appraisal of the property to be pledged may be required, which is carried out by a qualified independent appraisal company cooperating with the Bank.
YOU HAVE THE RIGHT TO COMMUNICATE WITH THE FINANCIAL ORGANIZATION THROUGH YOUR PREFERRED METHOD, BY POSTAL OR ELECTRONIC MEANS. RECEIVING INFORMATION ELECTRONICALLY IS THE MOST CONVENIENT OPTION. IT IS AVAILABLE 24/7, FREE FROM THE RISK OF LOSING PAPER DOCUMENTATION AND ENSURES CONFIDENTIALITY.
The Bank may unilaterally change the interest rate specified in the agreement by notifying the Borrower at least 7 calendar days in advance in case of non-purpose use of the loan, as well as failure to fulfill the obligations specified in the loan agreement.
ATTENTION: WHEN APPLYING FOR A LOAN, THE BANK WILL PROVIDE YOU AND THE GUARANTOR(S) (IF ANY) WITH AN INDIVIDUAL SHEET OF ESSENTIAL TERMS OF THE MORTGAGE LOAN, WHICH WILL SET OUT THE INDIVIDUAL TERMS OF THE LOAN TO BE PROVIDED TO YOU.
The following payments may be made by the consumer in connection with obtaining the loan:
Real estate appraisal service fee - AMD 5,000 and above, depending on the area and type of property (if required).
Notary service fee - AMD 3,000 - 15,000
Fee for registration of the certificate of the right to pledge real estate - AMD 2,000 - 25,000
Fee for a unified certificate (regarding restrictions on real estate) - AMD 10,000
Fees related to pledging other property - AMD 2,000 - 10,000.
All fees are included in the calculation of the effective interest rate.
The loan may be repaid (in full or in part) before the contractual maturity date, in which case the customer pays the interest calculated for the actual term of the loan, as well as a one-time penalty in the following amounts:
in case of early repayment during the first year – 0.6% of the amount paid in excess of the principal amount of the loan subject to repayment for the respective contractual year;
in case of early repayment during the second year – 0.4% of the amount paid in excess of the principal amount of the loan subject to repayment for the respective contractual year;
in case of early repayment during the third year – 0.2% of the amount paid in excess of the principal amount of the loan subject to repayment for the respective contractual year; no penalty is charged for early repayment during the remaining term of the agreement.
A contractual year is considered to be each 12-month period following the date of conclusion of the agreement.
Foreclosure of Collateral
THE PLEDGED PROPERTY MAY BE FORECLOSED IF THE BORROWER FAILS TO MAKE THE INTEREST AND LOAN REPAYMENTS ON TIME. IF THE VALUE OF THE COLLATERAL IS INSUFFICIENT, THE BORROWER'S OBLIGATIONS WILL BE SETTLED FROM THE BORROWER'S OTHER PROPERTY.
Information Provided to the Credit Registry
IF THE BORROWER FAILS TO MAKE THE INTEREST AND LOAN REPAYMENTS ON TIME, INFORMATION ABOUT THE BORROWER WILL BE REGISTERED IN THE CREDIT REGISTRY.
HAVING A POOR CREDIT HISTORY MAY SUBSEQUENTLY PREVENT YOU FROM OBTAINING OTHER LOANS.
FOR GUARANTORS
We inform you that:
if the borrower fails to fulfill their obligations, you will be required to make the payments on their behalf, your credit history will deteriorate, and you may lose your property.
you will be provided with copies of the loan agreement, guarantee agreement and repayment schedule.
Communication will be carried out through the method selected by you.
You will be notified 7 days in advance of any changes to the terms of the agreement.
A reminder regarding the outstanding obligation will be sent 1 day in advance.
In case of a delay in loan repayment, you will be notified no later than one day thereafter.
THE GUARANTOR HAS THE RIGHT TO
Request information from the lender at any time regarding the outstanding loan balance.
Recover from the borrower the amounts you have paid toward the loan, as well as any other losses incurred on behalf of the borrower.
You can learn more about the importance of credit history and the use of credit scoring here.
Financial Assistant
ATTENTION: "YOUR FINANCIAL INFORMANT" IS AN ELECTRONIC SYSTEM THAT MAKES IT EASY TO SEARCH FOR, COMPARE, AND CHOOSE THE MOST EFFECTIVE OPTION FOR INDIVIDUALS.
