The Minister of Finance Ali Hasan Khalil announced on Thursday that the Public Corporation for Housing (Iskan) received a LL10 billion ($6.6 million) transfer from the Treasury. The amount will be used to keep the housing corporation operational and continue its backing housing to low and middle income earners.
Iskan had announced that it was LL50 billion ($33 million) in arrears to banks on payment of loan interest on behalf of new home owners backed by the corporation. Following the transfer, the housing corporation issued a statement saying: “We will continue securing loans through our cooperation with banks and with the support of the Central Bank.”
Antoine Chamoun, General Manager of Bank of Beirut Invest said: “To our knowledge, and despite the recent crisis, Iskan never stopped accepting home loans applications and we never refused one."
The Association of Banks had recently issued a memorandum to banks asking them to momentarily hold issuing ISKAN loans until funding was provided. Iskan financing is subject to Law 719 (1998) which tasks the government with funding ISKAN’s operation on a yearly basis and ensuring payments to banks.
“If this financing crisis takes time to fully resolve, the low to mid income sector, where growth is, will be hit, as if we’re telling young people to leave,” Chamoun said. He said that it’s certain that real estate demand-supply dynamics will be affected when people are denied such a basic need. “But I can’t foresee a real estate price decrease as a result because there are other ways to secure loans.”
He said Iskan has housed over 62,000 families. “Taking on average $100,000 per family, that’s $6.2 billion cash injection, not to mention that they will require 120,000 insurance policies in life and fire, and other spending on house furnishing,” Chamoun said. Iskan backs loans which are granted and approved by banks for residents with a monthly income varying between LL600,000 ($400) and LL6,750,000 ($4,500). The maximum loan amount of LL270 million ($180,000) can reimbursed over 30 years.