Mortgage loan (PD-№6186)

About loan

Allocation of mortgage loans for the purchase of housing in accordance with the Decree of the President of the Republic of Uzbekistan

      A number of changes have been made to the procedure for allocating mortgage loans for the purchase of housing in accordance with the Decree of the President of the Republic of Uzbekistan dated March 11, 2021 PD-6186 "On additional measures to provide housing by providing mortgage loans on market principles".

Mortgage loans allocated at the expense of the funds of the Ministry of Finance of the Republic of Uzbekistan
Loan amount	in the Republic of Karakalpakstan and regions – up to UZS 327,250,000 in Tashkent – up to UZS 416 500 000
Interest rate	17% per annum for rural areas of the republic * 18% per annum for regional centers, cities and the Tashkent city *
Loan term	20 years
Initial payment	15%
Loan repayment method	Annuity and differential
Grace period	Up to 6 months

* (when the base interest rate of the Central Bank of the Republic of Uzbekistan decreases, the loan rates decrease proportionally, and when they increase, they remain unchanged)

         THE PROCEDURE FOR GRANTING MORTGAGE LOANS

The allocation of mortgage loans to the population for the purchase of an apartment in the primary housing market at the expense of the funds of the Ministry of Finance of the Republic of Uzbekistan is carried out in accordance with the following stages:

1st stage. Based on his (her) ability to pay, a citizen chooses at his discretion apartments that are sold on the primary housing market, and enters into a contract with a contractor.

2nd stage. A citizen who has applied to the branches of a commercial bank with a request to allocate a mortgage loan for the purchase of a selected apartment, submits the necessary documents together with the application.

3rd stage. Mortgage loans are allocated by the bank to potential borrowers after consideration of the application.

Potential borrowers must meet the following requirements:

1. a) a citizen of the Republic of Uzbekistan who is 18 years old and no more than 60 years old on the day of applying for a mortgage loan;
2. b) persons who have a permanent place of work and sources of income;
3. c) the indicator of the debt burden of individuals, that is, the ratio of the average monthly payments of all loans to the approved average monthly income of the borrower (and co-borrowers) does not exceed 70 percent.

If the indicator of the debt burden of the borrower and co-borrowers exceeds the established norm, a guarantee of legal entities can be accepted to secure their debt obligations to the bank, and 50 percent of the annual net profit of the legal entity can be supplemented in the indicator of the debt burden of the borrower;

1. d) persons who do not have overdue debts on loans received from credit institutions at the time of consideration of the issue of allocating a mortgage loan.

4th stage. After the adoption of a positive decision of the Bank to allocate a mortgage loan (transfer of subsidized funds to the bank for part of the initial payment for borrowers with a notification of the subsidy);

• a loan agreement is drawn up between the bank and the borrower (co-borrowers);
• the borrower enters into an insurance contract with an insurance company to insure the subject of the mortgage against risks;
• a contract for the purchase and sale of housing is drawn up in accordance with the established procedure;
• a mortgage agreement is concluded or the mortgage is registered in the State Agency Uzgoskomzemgeodezkadastr in accordance with the legislation.

Subsidies in accordance with paragraph 6 of Decree PD-6186:

More than 10 percentage points will be paid to cover the costs associated with the payment of mortgage interest over the first five years.
To cover the costs associated with the payment of part of the initial payment, a fixed UZS 32 million are allocated.