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MPs to expand loan facilities of Housing Finance Corporation

House Financing Corporation traditionally extends loans to lower income families

Legislators on Monday reiterated their intention to expand the scope of the Housing Finance Corporation (HFC) so that it can provide loans to small businesses as well.

MPs continued discussion of a batch of bills that aim to enable the HFC to operate as a bona fide bank rather than strictly as a legal entity established under public law. The bills are expected to go the House plenum soon.

The HFC was established by the state in the early 1980s to facilitate access to mortgages, particularly to vulnerable groups. It grants loans to families to obtain their first home and to low-income groups on favourable terms.

Under the law as it stands, the HFC is prohibited from engaging in other areas of financing, such as business loans.

Greens MP George Perdikis said the proposed change in legislation would allow the entity to enter the business of financing small business premises.

The changes would additionally enable the HFC to extend loan facilities for studies, medical care, purchase of residential land, and purchase of equipment for the energy upgrading of homes.

Under the amendments, the HFC would also introduce overdraft facilities, credit and debit cards, and issuing letters of credit.

Loans will continue to be secured by mortgages as is now the case, while for certain services deposits would also be accepted as collateral.

 

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