The National Bank of Ukraine (NBU) has published its Mortgage Lending Development Strategy, approved by the Financial Stability Council and the NBU Board, aimed at improving housing affordability through market-based mechanisms.
According to the NBU, the strategy was developed in line with a concept agreed with the International Monetary Fund (IMF) and outlines a series of infrastructure reforms to establish an effective housing market, Ukrinform reports.
The document sets out three key objectives, including reducing risks by introducing widespread war risk insurance and improving construction legislation; ensuring affordable lending through improved state support mechanisms and enhanced information disclosure standards aligned with EU regulations; strengthening creditor rights by updating procedures for non-performing loan resolution.
The strategy also foresees the development of a secondary mortgage market, including the securitization of loans and the issuance of covered bonds.
Implementation will involve multiple institutions, including the National Bank of Ukraine, the Cabinet of Ministers, the National Securities and Stock Market Commission, and the Verkhovna Rada, which must adopt corresponding legislative changes.
Most of the initiatives will begin in parallel, although legal reforms will require more time. A detailed roadmap will be developed to guide implementation.
Mortgage lending in Ukraine was widespread before the 2007-2008 global financial crisis. Since late 2022, the government’s eOselia mortgage program has accounted for over 96% of new home loans, although the current subsidy model has limited long-term capacity.
Illustrative photo: Unsplash
