MMA gazettes rules for affordable housing fund in Malé region
According to the gazetted rules, the fund will be managed by a financial institution designated by the MMA.
The Maldives Monetary Authority (MMA) has gazetted the regulations for the Inclusive National Affordable Housing Scheme, which will enable individuals to obtain affordable financing from banks to purchase housing in the Malé region.
The fund, established with contributions from all banks operating in the Maldives, will operate for a five-year term and will provide financing exclusively for housing purchases in the Malé area. According to the gazetted rules, the fund will be managed by a financial institution designated by the MMA.
Key Provisions of the Scheme
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The fund will provide financing to non-homeowners, first-time homebuyers, and other eligible applicants as defined by the MMA.
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Each participating bank is required to allocate between 10% and 15% of its total loans and debt portfolio to the fund.
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The MMA will determine the housing projects and financing conditions eligible under the scheme.
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Financing terms will be for a minimum of 25 years, though shorter durations may be arranged at the borrower’s request.
The scheme will support two types of facilities — Type A (lease ending with ownership) and Type B (end-user financing).
Type A FacilitiesL
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Annual interest rate: 5% of the principal amount.
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No equity contribution required from the borrower.
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A deposit may be required as determined by the MMA.
Type B Facilities:
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Annual interest rate: 6% of the principal amount.
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Borrower must contribute 5% of the facility amount as equity.
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No additional mortgage or security is required beyond the property being purchased.
According to the regulations, profits from facilities issued under the fund will be channelled back to the participating banks through the financial institution administering the fund.
The MMA will also provide incentives to participating banks and scheme operators to encourage implementation and support of the affordable housing initiative.
