Low-interest housing loan disbursements from July, president says
Under the scheme, loans will be issued at a 5% interest rate on private land.
President Mohamed Muizzu announced Thursday that low-interest loans for housing construction will be disbursed from July.
Delivering the presidential address at the opening of parliament, President Muizzu said that MVR 1 billion has been allocated in this year’s budget for the loan scheme. The initiative is aimed at individuals who own land but lack the financial resources to build houses.
Under the scheme, loans will be issued at a 5% interest rate on private land. Applicants will be able to borrow up to MVR 6 million individually or up to MVR 10 million jointly with a spouse.
Additionally, loans of up to MVR 3 million will be available for housing in designated urban centres under the sustainable population and development policy, while loans of up to MVR 1 million will be available in other areas. The loans can be used for new construction, completion of unfinished houses, or repairs to existing homes.
Applications for the Hiyaavehi loan scheme were opened last November. Key features of the scheme include:
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Loan security: Land registry must be mortgaged with the bank
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Interest rate: 5%
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Repayment period: Up to 25 years (subject to the applicant’s age and lending bank’s terms)
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Grace period: Up to 18 months
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Disbursement: Maximum advance of 15%, with additional payments based on project progress
The scheme consists of three loan categories:
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1-
Ravvehi: Up to MVR 1 million for housing in the islands (no equity required)
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2-
Saharu: Up to MVR 3 million for housing in designated urban centres (5% to 10% equity required)
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3-
Fahimale: Up to MVR 6 million for housing in the Male area (5% to 10% equity required)
Applicants will undergo a financial screening process to assess their ability to repay the loans. The lending banks will be determined based on this assessment.
