Ukraine needs new sources of long-term housing finance to expand mortgage lending and attract private capital to the housing market. The Ministry of Economy and international partners are working on such mechanisms as part of efforts to develop housing finance in Ukraine.
The third meeting of the International Advisory Council on Housing Finance Development in Ukraine was held in Seville, Spain, as part of the 39th plenary meeting of the European Mortgage Federation – European Covered Bond Council (EMF-ECBC). Ukraine was represented by Advisory Council co-chair and Deputy Minister of Economy and Environment Vitalii Petruk.
One of the key topics was the creation of a National Housing Finance Platform. Its potential role would be to combine government programmes, bank lending and private investment to provide the housing sector with long-term financing.
Together with international experts, participants discussed how such a platform could operate, its functions and sources of financing, and how it would interact with banks and other market participants. The next stage will involve developing the model in greater detail and defining responsibilities among participants.
Another area of discussion was the development of securitisation instruments and covered bonds. European partners welcomed the Ukrainian parliament’s adoption in the second reading of relevant legislation that creates additional opportunities to attract private capital into housing finance.
To move from the legislative framework to practical use of these instruments, secondary regulations and risk-management mechanisms will need to be developed. One proposed step is to conduct a small pilot securitisation transaction before expanding the instrument across the market.
Participants also discussed financing for permanent modular housing, including lending conditions for buyers, manufacturers and developers, requirements for quality and durability, connections to necessary infrastructure and the possibility of using such housing as collateral.
A quarterly meeting of the International Secondary Mortgage Market Association (ISMMA) was also held in Seville, providing a platform for exchanging experience on developing secondary mortgage markets and attracting long-term financing.
The development of these instruments is expected to complement government support with private investment and give banks more opportunities to attract long-term resources for mortgage lending. For Ukrainians, this could mean greater access to financing for purchasing their own homes.
Affordable long-term housing finance could also support the construction sector by increasing demand for new housing and stimulating industries connected with construction.
The International Advisory Council on Housing Finance Development in Ukraine was established under the Ministry of Economy with the support of the European Mortgage Federation – European Covered Bond Council. It brings international expertise into the development of long-term housing finance mechanisms in Ukraine.
