Micro loans “Jerm Ojakh” (“Warm House”)
Loans and bonuses for energy efficient renovation of apartments and individual houses
Maturityup to 84 months
Minimum amount275 000 AMD
Maximum amount3 000 000 AMD
Micro loans “Jerm Ojakh” (“Warm House”)
General terms and conditions
|Type of loan||Housing microcredits||Energy efficient renovation loans|
|1||Purpose of the loan||Renovation of residential real property/ housing improvements||Renovation of real property in the terms of increase of energy efficiency|
|3||Annual interest rate **||Refinancing interest rate + 5.8%||Refinancing interest rate +3%|
|4||Minimum maturity||5 years||10 years|
|5||Maximum maturity||7 years||15 years|
|6||Maximum limit||275 000 Armenian drams||2 200 000 Armenian drams|
|7||Maximum limit||2 200 000 Armenian drams||5 500 000 Armenian drams|
|8||Loan/Value****||Guarantee of 2 individuals||Renovated real property|
|9||Maximum loan to value ratio||-||70% from the appraised liquid value of the collateral|
|10||Pledger *****||-||Borrower and/or co-borrower or any other physical person|
|11||Requirements to the renovated real property||The renovated real property as of the date loan application must not ne pledged/arrested, unless the given real property is pledged at the Bank.||As of the date of executing the collateral agreement the real property must be primary collateral.|
|12||Loan application processing fee||7 000 Armenian drams||10 000 Armenian drams|
|13||Single up-front fee||1% from the amount of the loan, but no less than 5 000 Armenian drams and no more than 30 000 Armenian drams|
|15||Monthly loan service fee||N/A|
|16||Grace period (to repay the principal amount)||6 months|
|17||Principal and interest repayment||
Repayment of interest during the grace period – monthly,
Repayment of interest and the principal amount upon expiration of the grace period – on annuity basis
|18||Method of providing the loan ******||In non-cash form, through transferring the amount on the account of the client opened with the Bank|
|19||In a lump sum||
1. for loans up to 3 000 000 Armenian drams, inclusive – in a lump sum
2. For loans above 3 000 001 Armenian drams – in two tranches, 50% of the amount is disbursed on each tranche (the space of time between the tranches must not exceed 30 days), moreover, the next tranche is extended on the basis of proper use of the loan amount extended by the previous tranche.
|20||Opening/closing bank account||According to the rates of the Bank|
|26||Place of accepting the loan application||All branches of the Bank|
|27||Place of accepting the documents||All branches of the Bank|
* վno less than 70% of the total amount of loan facilities to be used to procure materials /equipment must be directed to purchase materials/equipment for increase of the energy efficiency.
** Refinancing interest rate is 8%. The Bank may review the interest rate for the loan to comply with the interest rate of refinancing of the “National Mortgage Company” CJSC RCO. Moreover, the new interest rate should be changed in the size of the difference of the old and new refinancing interest rates.
The Bank shall revise the interest rate of the loan in case of incompliance with the requirements, specified by the “National Mortgage Company” CJSC RCO, refusal to finance the loan by the mentioned company or termination of refinancing, as well as the Bank is authorised to revise the other terms of the loan (maturity, currency, service fee and etc).
**** Upon the decision of the competent body of the Bank additional collateral/security, other than the renovated property, may be required for housing microcredits.
***** Written consent of the owner /co-owner of the renovated property must be received, in the event where the borrower/co-borrower is not the owner/co-owner of the renovated property; in its consent the owner /co-owner must declare that he/she is notified of the renovation and doesn’t object it. In the event where the property belongs to more than one owners, the consent must be signed by all owners.
****** renovation should be completed at least within 2 months after execution of the loan agreement (for disbursement of the loan in a lump sum) or after disbursing the last tranche (for disbursement in tranches).
Requirements to the borrower/co-borrower
|Status of the borrower/co-borrower||Individual, RA citizen, the main source of income of which is in RA|
|Eligible age of the borrower/co-borrower, guarantor||Eligible age of the borrower as of the date of accepting the loan application should not be less than 21 and not have exceed 65 at the loan maturity (the requirement to the eligible age of the co-borrower is not applicable provided that on the basis of the data filed in the application form the financial status of the borrower (other borrowers) without the data of the given co-borrower (s) is satisfactory to repay the mortgage)|
|General principle of evaluation of the creditworthiness of the borrower/co-borrower||Maximum ratio of total payment on obligations to net income should not exceed 45%|
|Income of the borrower/co-borrower/guarantor||
1. The borrower and/or one co-borrowers must have primary income
1) The primary income is the fixed salary (equal payments), received on the basis of professional skills from the main place of business and the income (profit) gained as a result of private entrepreneurship, proved on the basis of documents submitted to the tax authorities*:
Primary income is taken into account in the amount of 100%.
* the guarantor must have primary and/or secondary income
|2. Secondary income|
|Requirements to the credit history of the borrower/co-borrower/guarantor||1. No credit history for loans secured with real property (also in the event of additional collateral)|
|2. No credit history for loans secured with real property (also in the event of additional collateral)|
|3. No overdue obligations (loan, credit line, overdraft, guarantee, etc) to the banking system as of the date of submitting loan application, and|
|4. No more than 10 days of late payment of principal and /or interest in aggregate, on different loans (credit lines, overdrafts, guarantees) over the 12 month preceding the date of submitting loan application|
|5. The number of guarantees provided by the guarantor as of the date of submitting the loan application must not exceed 2.|
|Requirements to the guarantor*||
1. The guarantors may not be the co-borrowers at a time.
2. Only one of the guarantors may be the member of the family of the borrower.
|Other requirements||The Borrower/co-borrower may have only one existing loan at a time (housing micro credit or energy efficiency loan), at the same time only one loan for renovation of the real property (housing microcredit or energy efficiency loan).|
* The definition of the members of the family is the same as given in the RA Law On Banks and banking.
|Insurance to be made by one of the insurance companies – partners of the Bank only.|
|1. insurance of the borrower/co-borrower/guarantor|
|Insurance of the borrower/co-borrower/guarantor||
Insurance is carried out from the balance amount of the loan:
1. on annual basis, annually
2. for the last year of the effective period of the loan - for the term remaining for repayment of the loan
3. accident death, or disablement, according to the rates of the insurance company
4. proportionally to the income of the borrower/co-borrower, involved in the repayment of the loan
|2. Insurance of collateral|
|Insurance of the real property to be purchased (and the second collateral)||
The insurance is performed from the loan balance:
1. on annual basis, annually,
2. for the last year of the effective period of the loan - for the term remaining till the maturity
|Minimum cases covered by insurance policy||
2. fire or explosion,
3. storm, flood, shower rain,
4. tornado, strong wind,
5. Heating, water or drainage system fault,
6. malicious actions committed by the third parties
If the loan to value ratio is less than 20%, the real property to be pledged may be insured in the amount less that the full value. In this case the insurance amount is calculated on the basis of the following principles:
1. the insurance amount should not be less than average purchase price of the apartment, available for the given family.
2. loan balance to average price of the purchase ratio of the Available apartment should not exceed 70%.
3. Insurance amount must be equal to the highest value of the cost of the Available apartment and the loan balance amount
The cost of the Available apartment is (total area of the Available apartment) * (average price for 1 sq.m of the Available apartment), where:
total area of the available apartment equals to the lower of the values of total area of the pledged property and calculated total area of the available apartment, where the calculated total area of the available apartment is (number of members of the family) * 18sq.m.
Average price of one sq.m of the Available apartment equals to average price of 1 sq.m od apartments in the location where the pledged property is located, for the given period, according to monthly reports, published by the Real estate Cadastre of the RA Government (www.cadastre.am)
* Insurance is not needed for the additional collateral
|For late loan payment (daily)||0.1%|
|For late interest payment (daily)||0.1%|
|Early repayment fee||Not specified|
|For improper use of the loan the Bank may require:||
1) early repayment of total amount of the loan
2) in the amount of 25% from the improperly used loan amount,
3) Restructuring the loan in accordance with the terms of the loan financed by the own resources of the Bank, for housing microcredits – security of rerun of obligations with the ral property collateral
|For execution of purchased or pledged property as a subsequent collateral at other banks or financial institutions||According to the decision of the credit committee|
Requirements to the subject of collateral
|Subject of collateral||Renovated real property|
|Location of the collateral||Republic of Armenia, other than Kentron community of city Yerevan|
|Appraisal of the collateral||To be appraised by one the appraisal companies – partners of the Bank|
|Other requirements||Subject of collateral|
|The real estate should have masonry, panel or reinforced structure (except for the dividing walls and covers between the floors)|
|Be equipped with essential utility systems(water, electricity, wastewater disposal)|
|The real estate should not be located on the territory occupied by other constructions – hotels or dormitory|
|Cadaster value of the land must be paid (if the collateral includes a land lot)|
|The real estate must not be located on the territory of exclusive public interest|
1. For dwelling house – the property should not have general use yard area with other owners; no general use land plot to be included; the dwelling house should not be burdened with land lease or free use.
2. Renovated real property must belong to the borrower/co-borrower on the right of common shared property
Method of calculation of interest amount
Interest amount is applied to the reduced balance with the account of 365 days a year.
ATTENTION: THE INTEREST ACCRUED TO THE CREDIT AMOUNT IS CALCULATED ON THE BASIS OF NOMINAL INTEREST RATE. THE ACTUAL ANNUAL PERCENTAGE RATE SHOWS THE COST OF THE LOAN IF YOU PAY THE INTEREST AND OTHER DUE PAYMENTS WITHIN THE DEFINED TERMS AND AMOUNTS.
Early repayment of the loan
No early repayment fee is charged
Exchange rate effect
Taking into account the fact that the Bank provides loans in both Armenian drams and foreign currency, the borrower should understand that foreign currency fluctuations can have either positive or negative impact on the loan repayment.
Loan request rejection
The Bank may reject loan applications of those clients, which fail to meet the program requirements or where the Bank is not sure of the solvency of clients; the Bank can provide written notice on rejection upon request of the client. The Bank is liable to provide such information on rejecting the loan to other banks of RA and credit organizations (according to the RA Law on banking secrecy).
ATTENTION: IN CASE OF FAILURE TO REPAY THE LOAN INTEREST AND/OR PRINCIPAL WHEN DUE YOUR ASSETS CAN BE SEIZED. THE INFORMATION ABOUT YOUR OVERDUE LIABILITIES SHALL BE RECORDED IN THE CREDIT REGISTER.
If the funds received as a result of disposal of pledged property are not enough to cover the borrower's liabilities under the loan, such liabilities shall be paid on the account of other equivalent assets of the borrower.
ID document, Personal Number Service/reference on non-receiving PNS
Documents with regard to the spouse (marriage certificate, ID document, ID for children, etc).
Income statement (for the borrower/co-borrower)
Preliminary appraisal reference, issued by the independent appraisal company,
Other documents, as required.