Mortgage loans for public servants under the affordable housing program

Arno Babajanyan 42/5

Acharyan 53

Lending conditions

Loan currency	AMD
Loan purpose	Acquisition by ML Mining LLC of apartments and parking lots (hereinafter real estate when referred to jointly or severally) under development in residential blocks at the address 42/5 Arno Babajanyan, Yerevan, Armenia
Minimum loan amount	Not defined
Maximum loan amount	1. For an apartment being acquired - AMD 150,000,000 (no more than 90% of the value of the apartment being acquired) 2. For a parking lot – AMD 2,800,000
Annual interest rate fixed/fixed (variable) *	1. 13% in case of up to AMD 35,0 million (including) 2. 13.6% in case of AMD 35.1 and above
Annual interest rate floating**	1. SR+2% for up to AMD 35,0 million (including) 2. SR+2.5% in case of AMD 35,1 and above
Actual annual interest rate	12.1% - 14.5%
Minimum timeframe	10 years
Maximum timeframe	20 years
Loan and interest sum redemptions	Monthly annuity payments
Minimum prepayment from apartment purchase value	10%
Minimum prepayment from parking lot value	20%

REQUIREMENTS TO THE BORROWER
Borrower’s status	An individual indicated in the offer for concluding an agreement on the acquisition of the right to purchase real estate (a beneficiary or a family member thereof) as part of the programme proposing apartments to public servants provided the age limit does not exceed 65 (up to 66) until the timeline for full loan redemption
Requirements for the Co-Borrower	Relatives of the Borrower, aged 21 and above (individuals willing to participate in financing the apartment purchase, including through a mortgage loan, shall be deemed a relative) may be co-borrowers provided the age limit does not exceed 60 (up to 61) upon loan issuance.
General principle for evaluating the customer’s credit-worthiness	The maximum ratio of general debt payoffs and maximum net revenues shall not exceed 60
Other requirements for the Borrower and Co-Borrower	Available mobile phone number and email address

DECISION-MAKING TIMEFRAMES, FACTORS
Decision-making timeframe	4-7 days
Decision-making notification timeframe	1 day
Issuance timeframe	1. In the event of lump sum issuance, the loan shall be issued no later than on the 7th business day of concluding the real estate purchase agreement (provided the purchase and pledge certificates are submitted to the Bank) 2. In case of issuance in installments: Phase 1: no later than on the 7th day of the conclusion of the real estate purchase agreement (provided the purchase and pledge certificates are submitted to the Bank) Phase 2: no later than on the 15th day of receiving the Bank's notice on the completed building's state registration from the Urban Development Committee
Positive decision factors	compliance of the crediting terms and submission of the required documents
Credit rejection factors	Borrower's/Co-Borrower's negative creditng history, incomplete document submission, evaluation of the Customer's credit worthiness as insufficient

PENALTIES, FINES
In the event of the Borrower's failure to discharge liabilities	24% per annum for an overdue loan
Penalty for an overdue interest sum	48% per annum
Penalty for early loan redemption	Not defined

Loans shall be issued by way of the implementation of Bank-approved model agreements. For the acqusition of a parking lot, and a parking lot in case of pledging, separate loand and pledge agreements shall be signed. A collateral agreement (agreements) shall be authenticated by a notary public. The pledge to the right to the purchase of an apartment (parking lot), the rights to ownership and the Bank’s right to pledge after the completion of development activities are subject to state registration by the customer and submission to the Bank.

The Borrower shall, within 60 days of drafting the development completion act, submit to the Bank the development and pledge certificates of the 100% complete real estate. In the event of the non-submission of the development and pledge certificates of the 100% complete real estate, the loan terms shall be reviewed within a 10-day period following the 60 calendar days and the interest rate prescribed by the agreement shall be raised by 3% (except for the cases prescribed by the Bank’s internal regulations).

The loan aimed at the acquisition of a parking lot (purchase of a parking lot) shall be issued only in case of the simultaneous acquisition of an apartment (right to the purchase of an apartment) as part of the given agreement.

*The interest rates of loans isued at a fixed (verifiable) interest rate shall be revised starting from the 37th months of the effective term of the loan agreement in case of a change in the settlement rate (SR). The interest rate of a loan may not increase or decrase by more than 2.5 interest point against the interest rate set upon the issuance of the loan during the effective term of the loan agreement.

The value of the loan Settlement Rate (SR) equals the SR value applicable at the Bank upon decision-making on the loan issue.

**The Settlement Rate (SR) shall be published on the Bank's website (www.ardshinbank.am) on the 1st day of February every year. The interest rates with respect to the concluded agreement shall be reviewed one month after the change in the SR (unless the notice provides for a later date) in case of a change in the Settlement Rate. Interest rates shall vary, i,e. – increase or decrease, commansurately with the change in the SR.

The loan interest rate may not increase or decrease by more than 2.5 interest point upon the issuance of the loan during the effective term of the loan agreement.

Documents

Calculation rate (CA) definition table

Information about Score and Credit History

What is credit history?

Under the law of the Republic of Armenia “On Circulation of Credit Information and Activities of Credit Bureaus”, credit information is any information about the liabilities undertaken by the subject of information, which reveals the debts, payments, payment habits or any other information about the liabilities or the performance thereof (that are being taken into consideration by financial organizations upon the issuance of credits, as well as by manufacturing, selling and service providing organizations while making a decision on the realization of goods/services based on the principle of instalment payments).

Importance of credit history

A negative credit history recorded in the past may serve as grounds for the tightening of the terms of credit or the non-issuance thereof.

A credit report is a written or electronic document which contains credit information on the performance of the financial liability in relation to the subject of the credit information (natural person or a legal entity) and the entrepreneurial organizations taken over by the latter.

The report shall comprise data obtained as of the moment of the inquiry from organizations affiliated with ACRA and shall reflect credit data of the 5 years preceeding such an inquiry.

ACRA is a credit bureau collaborating with all the banks and credit organizations in the Republic of Armenia.

Types of the score being applied

The evaluation of credit worthiness in ARDSHINBANK CJSC involves the ACRA credit history, the FICO score mark and the Bank's internal screening mechanism.

What is a credit score mark?

A FICO score is a screening system processed jointly by the closed joint stock company (CJSC) ACRA Credit Reporting and Fair Isaac Services which, conducting a statistical study of the client's credit history, gives the digital mark of the credit worthiness of the client’s credit risk as a pivotal instrument for the dimensioning of the consumer crediting risk.

The corresponding information is available also at abcfinance.am and acra.am.

Main factors influencing the score

According to FICO score calculation model, the determiners influencing the score include:

1. Payment (redemption) history;

2. Credit burden;

3. Length of credit history;

4. Types of used loans;

5. New credit application.

The Bank's internal screening mechanism is influenced by

1. Information about bank and deposit accunts, transactions made therewith and information about transfers;

2. Information about credit history;

3. Information about income and employment history;

4. Information about family status and education;

5. Information about the ownership of immovable and movable property;

6. Information about the servicing of other liabilities;

7. Any other information characterizing the client.

Credit inquiry influence on the score mark

The number of credit inquiries may have a negative impact on the concise credit mark. If the inquiry is conducted as part of a monitoring, it does not normally have a negative impact.

How to avoid a deterioration of a credit history and a score mark?

1. To discharge the credit liabilities in a due manner without delays in accordance with the established schedule;

2. To avoid being a co-borrower and/or guarantor, etc. with respect to the liabilities of borrowers with a suspicous or negative credit history;

3. Upon making redemptions of credit liabilities through a payment terminal, to take into consideration the fact that payments made after 4:45pm, i.e. – the Bank's operational hour, are rescheduled to the next business/operational day and the payment is deemed made on the next day.

How to improve credit history and the score mark?

1. To redeem the overdue liabilities if any;

2. To discharge the credit liabilities in a due manner without delays, and to rule out even daily delays thereof;

4. To avoid being guarantors for non-trustworthy persons in the future.

Who to turn to in case of errors in the credit history?

Whenever the borrower’s credit history contains errors or incomplete data, the borrower shall:

1. pursuant to the clauses set forth in Article 20 of the law of the Republic of Armenia “On Credit Information or Activities of Credit Bureaus”, inform the credit bureau thereof or simply turn to the subject providing such information (the source of credit information). The notification may be arranged by way of submitting a corresponding written application to the credit bureau, or electronically, i.e. – in an online regime from the personal office My ACRA. The process of the acceptance/receipt and consideration of clients’ complaints (as submitted by ACRA), and the response thereto and the succession of actions shall be determined subject to the "Dispute Resolution Procedure" of ACRA Credit Reporting. Corresponding information is available also at abcfinance.am and acra.am

2. Turn to the Bank

• by sending a letter to the Bank’s official email address ([email protected])

• by contacting the Bank’s 24/7 call center (tel. 012222222);

• by submitting a written application/complaint/request at any branch of the Bank.