Evgen Metzger, chairman of the Ukrainian financial housing company Ukurfinzitro, said that international financial institutions, including the US International Development Finance Corporation (DFC), are negotiating the possibility of guaranteeing Ukraine's state mortgages.
A final decision is expected within the next year, he added, which could mean guarantees are available before the war ends. This guarantor may be provided within Ukurfinzitro's “Bridge Financing” financial product. Ukurfinzitro converts mortgage loans provided by Ukrainian banks into financial products and attracts guarantees from international financial institutions (IFIs).
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If Western banks enter the Ukrainian mortgage market with the help of DFC guarantees, these guarantees could reduce current market interest rates from up to 20% to 10-13%. This will also increase the amount of new housing available to Ukrainians, making the housing market more attractive to foreign investors.
In an interview with the Kyiv Post, Yevgen Metzger said that discussions on mortgage guarantees are not only with the US DFC, but that the product has also been proposed to the European Bank for Reconstruction and Development (EBRD) and the European Investment Bank (EIB). spoke. His office in Kyiv.
Mr. Metzger has been the Director of Ukurfinzitro since November 2022. For the past two years, the agency has been implementing the mass state mortgage program “Yeoselya” for Ukrainians. Already 13,000 families have purchased new homes using the program, which is supported by 12 Ukrainian banks and Ukrainian-based capital.
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YeOselya's loan amount has already exceeded the pre-war mortgage amount. Ukrfinzhytlo has provided loans totaling 21 billion francs ($512.2 million), which is still slightly short of the pre-2008 loan amount of about 28 billion francs. 4 billion dollars at the exchange rate at the time.
Director General of the National Mortgage Agency Ukurfinzitoro Yevgen Metzger
“In 2021, the entire Ukrainian banking system provided 8.9 billion francs ($327.2 million) in mortgage loans. Ukurfinzitro provided the same volume in 2023,” Metzger told the Kyiv Post. spoke. “So far in 2024, we have provided Hr. 12.5 billion ($349 million) in loans and we expect to lend an additional Hr. 3 billion ($73.2 million). Digitization , we doubled our market thanks to automation and transparency.”
The yeOselya program allows individuals to apply for a mortgage using the Diia system. If a customer wants to look for a home loan, they can fill out the application form on the Diia app and their information will be automatically transferred to the bank within minutes. After receiving an offer from a bank within 24 hours, the customer can start negotiating a home loan with the bank of their choice.
YeOselya was initially considered to be a post-war project, but the Ukrfinzhytlo team considered it possible to implement it before the end of hostilities caused by Russia's full-scale invasion of Ukraine. “We help homeless people get their first home. Your first home is yours, the state will help you,” Metzger explained.
While the prime interest rate in 2022 jumped to 25% and then dropped to 13%, yeOselya home loans are available with interest rates between 3% and 7%. Previous state mortgage programs were available to middle-income households, but Yeoselia urged banks to extend loans to low-income households and individuals with poor jobs.
Lower interest rates and easier handling of documents have allowed banks to expand their customer base. Once popular primarily among middle-class IT professionals, entrepreneurs, and law enforcement officers, yeOselya has opened its mortgage doors to teachers, doctors, middle-income military personnel, scientists, and internally displaced persons. .
“And so far we have no bad debts. Ukrainians pay their mortgage first, utilities are second, and then they focus on basic needs. We calculated that , 80-85% of Ukrainians always pay their utility bills, while only 65-68% of Germans do so,” Metzger told the Kyiv Post.
Metzger said Yeoselya has also reduced tax evasion in Ukraine. Only employees with transparent work histories can apply for the program, and developers must be transparent about ownership transfers.
That means Ukrainian companies will be forced to exit the shadow economy and pay more taxes to Ukraine's state budget, which desperately needs more revenue to finance its defense against Russia. “Developers used to pay 8 to 9 percent in taxes; now they're paying 18 percent,” Metzger said.
Despite a full-scale invasion and Russia's daily air raids on Ukraine, the amount of loans could reach up to 100,000 if Ukraine had enough capital to lend at favorable interest rates. Metzger argues that if interest rates effectively fall to 10% to 12%, non-state-backed mortgages could become privately owned.
In this way, banks will not only lead the housing sector. Investments in social housing and rental models will enable thousands of Ukrainian refugees, both domestically and internationally, to find new housing and access funding for their recovery.
“After the war, when we enter the market, we ask for money and we get the answer: 'What is your project?' We want to show the project now.” said Metzger.
