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EghtesadOnline: After the Mehr Housing Project is concluded, several affordable housing schemes to help the low-income strata will be launched, announced the deputy minister of roads and urban development on Wednesday.

“When house prices rocketed in 2011-12, the value of mortgages designed to help purchase houses did not rise accordingly, which effectively made these loans ineffective,” Hamed Mazaherian was also quoted as saying by ILNA.

“But with the issuance of housing bonds that increased the loan ceiling and the purchasing power of home applicants saw a significant rise and demand for loans also increased with the establishment of Housing Savings Account.”

Mazaherian noted that these loans mainly target middle-income households, so housing for low-income families must be provided through supportive and complementary schemes.

A few days ago, all banks were officially allowed to sell housing bonds, which are currently used as a guarantee instead of a down payment for mortgages and were previously exclusive to Bank Maskan, Iran’s main housing bank.

The Housing Savings Account, on the other hand, is a scheme devised with the goal of providing first-time buyers with houses and requires applicants to make an initial deposit and wait for a year to become eligible for the mortgage. Mohammad Hassan Moradi, Bank Maskan’s director of Planning Department, announced in early August that as of the end of July, 5,580 applicants had completed their one-year waiting period out of which 1,456 received the loans.

Mazaherian noted various schemes have been planned to support low-income families, but because of a number of reasons, these schemes have not yet become operational.

He identified “the recession plaguing the country’s economy, hefty allocation of the Roads and Urban Development Ministry’s resources to Mehr Housing Project and the government’s aversion toward using Central Bank of Iran’s resources–fearing it will stoke inflation–as the reasons hampering affordable housing schemes.

“When Mehr Housing Project comes to a conclusion and the country’s economic climate improves and when it becomes possible to tap the needed resources from the annual budget, schemes to provide low-income families with homes will be implemented,” he said.

The Mehr project is a large-scale construction program initiated in 2007 by the previous administration to provide two million low-income people with housing units through free land and cheap credits, but the nationwide scheme slowed down due to lack of funding. The project has also been blamed for contributing to inflation, according to Financial Tribune.

The deputy minister noted that the public has shown considerable interest in Bank Maskan’s mortgage schemes, stating that with the loans’ ceilings being lifted and especially after the mortgage rates were lowered, “the number and volume of loans paid in the housing sector experienced an acceptable increase and deposits made in the Housing Savings Account saw a significant surge in the past few months”.

Mazaherian announced that the analysis of data on housing loan allocation shows that both for the construction and purchase of homes, lending has spiked.

“Consequently, it is expected that in the coming months, with the current rise in loans, with newly-built residential units being sold and with the builders’ growing inclination toward new construction projects, demand for construction loans has also increased further,” he concluded.

Affordable Housing Mehr Housing Hamed Mazaherian