HOUSING FOR MIDDLE-LOW J.Aldarjavkhlan. CEO of Mongolian Housing Finance Corporation 2011 INCOME FAMILIES

TABLE OF CONTENT 1. Brief introduction to housing projects and programs implemented by the Government of Mongolia 2. Introduction of MHFC 3. Programs and Projects implemented by MHFC 40,000 Housing Units Program 4,000 Housing Units Project 4. Projects and programs to be implemented in the future Buyant-Ukhaa housing project Granting mortgage loans to citizens within the framework of the " Housing Units", the sub project of the "New Development" Program The development fund allowance for citizens to be used for housing

1. BRIEF INTRODUCTION OF HOUSING PROJECTS AND PROGRAMS IMPLEMENTED BY THE GOVERNMENT OF MONGOLIA The goal of the program: Effective policy for urban development To build infrastructure for the housing districts in ger areas and unused areas in the suburbs To exploit land To create favorable legal environment in the construction sector To establish mortgage loan system Terms of the program implementation: The outcome of the program: housing units completed 16,000 citizens granted mortgage loans 40,000 Housing units Program

The goal of the project: The Government of Mongolia resolved to assign MHFC to implement the project in order to grant low-interest rate mortgage loans to civil servants, to improve free carry business opportunities of commercial banks and to overcome the difficulties faced in the construction sector in Mongolia. Terms of the project implementation: The outcome of the project: 4000 middle-low income citizens and civil servants had been granted access to the long-term and low-interest rate mortgage loans totaling a whopping MNT 152 billion. 170 construction companies benefit from the project by way of selling housing units. Achieved the outstanding loan repayment worth of MNT 82.3billion Housing units project

New Development mid-term strategic program Documents such as Cities, New Ulaanbaatar- Green City, Rural development, Housing Units as specified in the action plan for approved by the Government of Mongolia in the program. Also the projects such as Housing Units and Building material grant will be implemented. The goals of the program: Urban development and planning Infrastructure Increase housing supply Increase work places and support education Reduce air pollution of Ulaanbaatar city Support rural development Support industrialization Reduce migration

2. CORPORATE INTRODUCTION Strategic objectives : To grant long-term and low-interest rate mortgage loans to middle-low income citizens; To improve the terms and conditions of the mortgage loan; To build housing districts in order to sell on mortgage loan and rent; To raise funds for mortgage loan and investment; To issue MBS in the secondary market. MHFC was established in October 2006 with mandate to provide population with appropriate living conditions through the implementation of the comprehensive set of policies and activities on mortgage loan provision, investment and financing.

THE MANAGEMENT AND ORGANIZATIONAL STRUCTURE OF MHFC

FINANCING SCHEME OF PROJECTS AND PROGRAMS IMPLEMENTED BY MHFC

3. IMPLEMENTED PROGRAMS AND PROJECTS Participation in the Housing Units program MHFC was responsible for the financing of mortgage loans from the Government Bonds addressed to the middle-low income citizens within the framework of Housing Units program. Within the framework of the program the company had successfully financed a total of 2100 housing units in 21 provincial centers and 60 soums of the country. A total of 2100 housing units were built in the country, out of which 404 housing units, 19%, were built in the capital city of Ulaanbaatar, 1376, 66%, in the provincial centers as opposed to 320 or 15% built in soum centers of the country. The citizens are given opportunities to access to the ownership of their homes priced reasonably at US$ per 1ì 2

MHFC is providing the public with an opportunity to own affordable homes at their own choice in the market. The company has already granted 700 citizens mortgage loans with expenditure budget of MNT 15.4 billion. The terms of the loan financed by the Government bonds within the framework of housing units program THE TERMS OF THE LOAN: The loan amount – MNT25.0 million The loan interest rate – 11% APR The loan term – up to 10 years The down payment – 25%

In Ulaanbaatar In centers of provinces In soums Number of housing units financed by MHFC /by scheme/

4000 housing units project Terms of the project implementation: middle-low income citizens and civil servants had been granted access to the long-term and low-interest rate mortgage loans totaling a whopping MNT 152 billion construction companies benefit from the project by way of selling housing units. Achieved the outstanding loan repayment worth of MNT billion. The terms of the loan: The loan amount – MNT 40.0 million The loan interest rate – 8% APR The loan term – up to 20 years The down payment – 10% Requirements for the housing units Newly completed housing units Handed over to the State commission

Project outcome Improvement in housing condition

MHFC has financed 2000 housing units and accommodated a total of 6800 families within the aforesaid programs and projects.

4. PROJECTS AND PROGRAMS TO BE IMPLEMENTED IN THE FUTURE Buyant-Ukhaa district

Granting low-interest rate mortgage loan within the framework of Housing Units program The Government of Mongolia resolved to issue the low-interest rate mortgage loans to citizens within the framework of Housing Units program and to perform preparatory works. The terms of the loan: First time buyer To be under 50m2 The loan term – up to 25 years The down payment – 10%

Citizen MHFC New housing units Ministry of Finance Commercial bank Choose apartments and enter into property purchase agreement To order loan source in credit lump sum To remit the loan sources in credit lump sum To make loan application and cross- check analysis of credit portfolio Remit payment Approve the loan application Refer the loan application after cross- checking Mortgage loan scheme

The conversion of allowance of the human development fund to mortgage loan. By way of its Order 138, the Government of Mongolia resolved to assign MHFC to organize the works related to the bank account registrations of the citizens of Mongolia applying for the conversion of allowance of the Human Development Fund to mortgage loan. It will finance for the following purposes on non-cash basis. 1. For down payment or discrepancy payment 2. For interest rate of the mortgage loan

Citizen Soum, khoroo province, district, LSWA MHFC Human Development Fund Scheme of the conversion of allowance to mortgage loan. Sale & Purchase of housingMortgage loan agreement Conversion of tallowance Conversion of allowance Construction company Financial institution

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