OREANDA-NEWS. May 10, 2011. The Central Bank of Azerbaijan is developing a strategy to simplify the issuance of mortgage lending.

CBA governor Elman Rustamov says that the process of mortgage lending simplification in the country will be realized within state program "Azerbaijani youth 2011-15.

"The main goal of mortgage lending simplifying is to expand mortgage capacity for youth, simplify and unify its parameters to the possibilities of youth,” Rustamov said.

He added that within mortgage lending facilitation they were considering the possibility of increasing the maximum amount of the mortgage making currently 50,000 manat that does not allow young people to buy apartments in new buildings.

"Our research has shown that in the market there are a few “cheap” apartments, and mortgage lending, basically, falls on the secondary market because of low maximum size of mortgages, and we want our young people would live in new modern apartments," Rustamov said.

The CBA governor also pointed out that within the simplification of mortgage lending there will also be considered interest rates, certainly, given the interest of banks, and possibly subsidized interest rates and reduced primary contribution.

"We are also considering the matter of creation of mortgage guarantee fund. Such practice is used around the world and will help develop the mortgage field in the country," Rustamov said.

According to the CBA governor, the Central Bank also intends to review its policy on commercial mortgages because of high demand in the market.

The idea of  mortgage guarantee fund was proposed three years ago.