OREANDA-NEWS. April 21, 2010. State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ and the Housing Mortgage Lending Agency (HMLA) entered into a Credit Agreement on providing 40 billion rubles at an interest rate of 9.5% per annum for a period of up to June 1, 2020. The funds for financing HMLA will be made available to Vnesheconombank from the National Wealth Fund in accordance with Federal Law № 173-FZ “On Additional Measures for Supporting the Financial System of the Russian Federation”.

On behalf of Vnesheconombank the Agreement was signed by Vnesheconombank Chairman Vladimir Dmitriev and on behalf of HMLA – by its General Director Alexandr Semenyaka.

These funds are intended for implementing the Program of Encouraging the Financing and Purchasing of Economy-Class Housing. The Program was developed by HMLA in accordance with the instruction by the Governmental Commission on Sustainable Development of the Russian Economy.

The implementation of the Program would help to timely complete the construction of up to 2 million of square meters of economy-class housing, step up citizens’ involvement in participatory construction, increase the amount of mortgage lending and make prices more stable as a whole on the regional markets for economy-class housing through minimum-price formation.

Vnesheconombank’s Supervisory Board approved the Program of Vnesheconombank’s Investments in Projects to Build Affordable Housing and Mortgage Lending in 2010-2012 under which a decision was made to invest funds in the total amount of 250 billion rubles including:
Vnesheconombank’s own funds to be invested in mortgage-backed bonds in the amount of up to 50 billion rubles at a coupon rate on the bonds of 3% per annum at prices not exceeding the par value;
Pension savings funds managed by Vnesheconombank as a state trust management company to be invested in HMLA’s mortgage-backed bonds guaranteed by the state in the amount of up to 100 billion rubles at a coupon rate on the bonds of no more than 9% per annum at prices not exceeding the par value;
Pension savings funds managed by Vnesheconombank as a state trust management company to be invested in HMLA’s mortgage-backed bonds guaranteed by the state in the amount of up to 60 billion rubles at a coupon rate to be set depending on the market conditions;
Funds of the National Wealth Fund to be made available to Vnesheconombank to finance HMLA in the amount of up to 40 billion rubles at an interest rate of 9.5 per annum for a period of up to June 1, 2020.

State Corporation ‘Bank for Development and Foreign Economic Affairs (Vnesheconombank)’ was established in spring of 2007 subject to the Federal Law of the Russian Federation “On the Bank for Development “ on the basis of Vnesheconombank of the USSR. The Bank’s activity is aimed at overcoming economic growth infrastructure restrictions, modernizing and developing non-raw materials economy, high-technology industries, encouraging innovations, high-technology products exports, implementing projects in special economic zones as well as environment protection projects and at providing support for small and medium-sized enterprises.

The Housing Mortgage Lending Agency (HMLA) was founded in September of 1997 as an open joint stock company with 100% of the state capital. The Agency’s activity is designed to pursue the government policy of securing affordable housing, promote the federal system of housing mortgage lending in Russia and secure the inflow of investment resources in the housing mortgage lending sector. The Agency was founded by the Russian Government and its main line of activity is to secure the liquidity of Russian commercial banks that extend long-term housing credits to individuals through purchasing rights of claims under such credits using funds raised by way of placing securities on the Russian stock market. As of April of 2010, the Agency refinanced 175 thousand mortgages in the amount of more than 144 billion rubles. Under the Program of Vnesheconombank’s Investments, since April, HMLA’s partners started to extend mortgage credits for new housing constructions at interest rates of 10.5% - 11% per annum. As of April 15, 2010, the Agency received applications for an amount of 15.5 billion rubles.