On additional measures to provide the population with housing through mortgage loans based on market principles (DP-33-son)

09.12.2021

Decree

of the President of the Republic of Uzbekistan

In order to further develop the mortgage loan market, meet the high demand of the population for housing, continue the provision of subsidies at the expense of the State budget, widely involve private contracting organizations in the construction of modern multi-storey houses, as well as to ensure the implementation of Decree of the President of the Republic of Uzbekistan No. DP-32 of December 9, 2021 “On measures to ensure the construction of the “New Uzbekistan” residential areas and the socio-economic development of the territories”:

1. To establish that, starting from December 10, 2021, within the framework of providing the population with housing through mortgage loans based on market principles:

the practice of setting a maximum standard for the size of apartments when paying subsidies from the State budget to low-income citizens in need of improving their housing conditions shall be abolished;

the Ministry of Economic Development and Poverty Reduction shall annually approve the maximum amount of mortgage loans allocated per borrower and the amount of subsidies for covering part of the initial payment;

persons who have received a notification on the granting of subsidies shall form, at their own expense, part of the initial payment equal to at least 5 percent of the value of the housing;

regardless of the location, value and size of the purchased apartment, subsidies for covering part of the initial payment shall be paid in the fixed amount of 32 million soums, and subsidies for covering part of interest payments shall be paid in the part exceeding 10 percentage points during the first five years;

subsidies for covering part of the initial payment and interest payments shall be provided even if the price of the purchased apartment exceeds the maximum amount of the mortgage loan. In this case, the remaining amount of the value exceeding the maximum amount of the mortgage loan shall be paid by the borrower at the expense of his own funds and other funds not prohibited by law, by increasing the amount of the initial payment;

citizens shall be granted the right, when obtaining a mortgage loan, to involve other persons who do not live with them and are not close relatives as co-borrowers;

the resources of the Ministry of Finance shall be placed with commercial banks directly or through the Joint-Stock Company “Uzbekistan Mortgage Refinancing Company”;

commercial banks shall be granted the right to set differentiated interest rates on mortgage loans issued without subsidies, depending on the amount of the initial payment made by the borrower, his debt burden ratio, the grace period, and other indicators.

2. The following shall be approved:

the target indicators for issuing mortgage loans for the purchase of apartments and the construction and reconstruction of individual housing in 2022 according to Annex No. 1;

the target indicators for allocating subsidies on mortgage loans in 2022 according to Annex No. 2;

the maximum amount of mortgage loans allocated per borrower in 2022 and the fixed number of subsidies for covering part of the initial payment according to Annex No. 3.

The Council of Ministers of the Republic of Karakalpakstan, hokimiyats of the regions and the city of Tashkent shall be allowed, at the expense of over-fulfilled revenues of local budgets, to increase the number of mortgage loans and subsidies established for the respective territory by this Decree.

3. To establish the following procedure:

a) winners of electronic online auctions held for the lease of land plots for the construction of multi-storey residential buildings shall be granted the right to pay the value of the lot in installments in the manner prescribed by law;

b) starting from January 1, 2022, contracting organizations shall be allowed to pledge as collateral for credit provision multi-apartment residential buildings, the construction of which has not been completed but roof installation works have been carried out and which are registered with the state;

c) until January 1, 2023:

a zero rate of customs duty shall be applied to the import of cement products (HS code 2523) and energy-saving basalt panels (HS code 6806 1000 08);

a separate exchange trading section for the sale of cement and rolled metal to housing construction organizations shall be introduced in the “New Uzbekistan” residential areas, as well as in residential areas built in previous years and on their vacant land plots;

d) until January 1, 2024, a zero rate of customs duty and utilization fee shall be applied to the import of new construction and special machinery and cargo transport vehicles specified in Annex No. 4.

5. To establish that:

a) within the framework of the target parameters for granting subsidies on mortgage loans in 2021:

applications for receiving notifications on the granting of subsidies shall be accepted until December 20, 2021 and considered until December 25, 2021;

notifications on the granting of subsidies shall be valid for 12 months from the date of their issuance;

to persons who have received a notification on the granting of subsidies, mortgage loans and subsidies shall be allocated under the conditions and in the amounts in force as of December 10, 2021;

subsidies shall also be paid if the size and value of the purchased apartment exceed the maximum standard for apartment size and the estimated value of housing established for 2021. In this case, if the value of the purchased apartment exceeds the estimated value of the housing, the remaining part of the value shall be paid by the borrower at the expense of his own funds and other sources not prohibited by legislation;

b) within the framework of the target parameters for granting subsidies on mortgage loans in 2022, applications shall be accepted starting from December 25, 2021.

6. The Ministry of Finance (T. Ishmetov), the Central Bank (M. Nurmuratov) and the Ministry of Economic Development and Poverty Reduction (S. Boboev) shall, by July 1, 2022, develop and submit to the Cabinet of Ministers draft regulatory legal acts on the introduction of the “targeted mortgage savings” mechanism, having studied advanced foreign experience.

7. In 2022, the Council of Ministers of the Republic of Karakalpakstan, hokimiyats of the regions and the city of Tashkent shall take measures to purchase 1,000 apartments in the primary and secondary housing market according to Annex No. 5, at the expense of over-fulfilled revenues of local budgets and other sources not prohibited by legislation.

It shall be established that the apartments purchased in accordance with this paragraph shall be allocated, in the prescribed manner, to women in need of improved housing conditions, persons with disabilities, orphans and children deprived of parental care.

8. The proposal of the Ministry of Construction and the Ministry of Economic Development and Poverty Reduction on the construction in 2022 of multi-storey residential buildings consisting of 4,000 apartments for certain categories of citizens and designating LLC “Uzshahar Qurilish Invest” as the customer for these works shall be approved.

The Cabinet of Ministers shall, within one month, approve the main parameters of the construction of multi-storey residential buildings for certain categories of citizens in 2022, as well as the address list of land plots allocated for construction.

9. The Council of Ministers of the Republic of Karakalpakstan, hokimiyats of the regions and the city of Tashkent shall:

a) within one month, establish at least 5 mortgage service centers in the city of Tashkent and at least 2 in the Republic of Karakalpakstan and in each region;

b) ensure that in these centers:

information shall be provided on business entities engaged in housing construction, multi-apartment residential buildings under construction, the number, size, value and location of apartments in them, commercial banks from which loans can be obtained, and the conditions of such loans;

services shall be provided for issuing notifications on the granting of subsidies, executing sale and purchase agreements for housing and mortgage loan agreements, and state registration of housing rights.

10. The National Television and Radio Company of Uzbekistan (A. Khadjaev) and the National News Agency of Uzbekistan (A. Kochimov), together with the Ministry of Finance (T. Ishmetov), the Ministry of Economic Development and Poverty Reduction (S. Boboev), the Council of Ministers of the Republic of Karakalpakstan, hokimiyats of the regions and the city of Tashkent, shall ensure wide coverage of the essence and significance of this Decree in the mass media.

11. Amendments and additions shall be introduced into certain acts of the President of the Republic of Uzbekistan in accordance with Annex No. 6.

12. To designate as responsible for the organization of the implementation of this Decree: Deputy Prime Ministers of the Republic of Uzbekistan A.J. Ramatov and J.A. Kuchkarov, Minister of Finance T.A. Ishmetov, Minister of Construction B.I. Zakirov, Chairman of the Council of Ministers of the Republic of Karakalpakstan, hokims of the regions and the city of Tashkent.

Discussion of the implementation of this Decree on a quarterly basis, coordination and monitoring of the activities of the responsible bodies shall be entrusted to the Prime Minister of the Republic of Uzbekistan A.N. Aripov.

The Administration of the President of the Republic of Uzbekistan shall be regularly informed, on a quarterly basis, of the effectiveness of the measures being implemented.

President of the Republic of Uzbekistan SH. MIRZIYOYEV

Tashkent,

December 9, 2021,

No. DP-33

ANNEX No. 1 to the Decree of the President of the Republic of Uzbekistan No. DP-33 of December 9, 2021

Target indicators for issuing mortgage loans in 2022 for the purchase of apartments and the construction and reconstruction of individual housing*

* If necessary, amendments may be introduced by the Cabinet of Ministers, on the basis of proposals from the Ministry of Finance and the Ministry of Economic Development and Poverty Reduction, into the target indicators for issuing mortgage loans in 2022 for the purchase of apartments and the construction and reconstruction of individual housing.

ANNEX No. 2 to the Decree of the President of the Republic of Uzbekistan No. DP-33 of December 9, 2021

Target indicators for allocating subsidies on mortgage loans in 2022*

* If necessary, amendments may be introduced by the Cabinet of Ministers, on the basis of proposals from the Ministry of Finance and the Ministry of Economic Development and Poverty Reduction, into the target indicators for allocating subsidies on mortgage loans in 2022.

ANNEX No. 3 to the Decree of the President of the Republic of Uzbekistan No. DP-33 of December 9, 2021

The maximum amount of mortgage loans allocated per borrower in 2022 and the fixed amount of subsidies for covering part of the initial payment*

* If necessary, the maximum amount of mortgage loans allocated per borrower in 2022 and the fixed amount of subsidies for covering part of the initial payment may be reviewed by the Cabinet of Ministers on the basis of proposals from the Ministry of Economic Development and Poverty Reduction, the Ministry of Finance and the Ministry of Construction.

ANNEX No. 4 to the Decree of the President of the Republic of Uzbekistan No. DP-33 of December 9, 2021

List

of new construction and special machinery and cargo transport vehicles, the import of which shall be subject to a zero rate of customs duty and utilization fee until January 1, 2024

ANNEX No. 5 to the Decree of the President of the Republic of Uzbekistan No. DP-33 of December 9, 2021

Indicators for the purchase of housing in 2022 for women, persons with disabilities, orphans and children deprived of parental care*

* If necessary, the indicators for the purchase of housing in 2022 for women, persons with disabilities, orphans and children deprived of parental care may be amended by the Cabinet of Ministers on the basis of proposals from the Ministry of Economic Development and Poverty Reduction and the Ministry of Finance.

ANNEX No. 6 to the Decree of the President of the Republic of Uzbekistan No. DP-33 of December 9, 2021

Amendments and additions introduced into certain acts of the President of the Republic of Uzbekistan

1. In the Decree of the President of the Republic of Uzbekistan No. PD-5886 of November 28, 2019 “On additional measures to improve the mechanisms of mortgage lending”:

a) in paragraph 3 subparagraph “a”:

in the third indent, the words “tender trades” shall be replaced with the words “electronic online auction trades”;

the fourth indent shall be deleted;

the fifth to eighth indents shall respectively be considered the fourth to seventh indents;

the fourth indent shall be set out in the following wording:

“land plots under the construction of multi-storey residential buildings shall be transferred to business entities in the form of lots or as a whole through electronic online auction on the basis of lease rights in accordance with Decree of the President of the Republic of Uzbekistan No. DP-6243 of June 8, 2021”;

in the fifth indent, the words “in tender trades” shall be replaced with the words “in electronic online auction trades”;

b) in paragraph 4:

in the first indent, the words “85 percent of the estimated value of housing in cities and rural areas” shall be replaced with the words “the maximum amount of mortgage loan approved annually”;

the third indent shall be set out in the following wording:

“the maximum amount of mortgage loan shall be determined annually by the Ministry of Economic Development and Poverty Reduction in agreement with the Ministry of Finance and the Ministry of Construction, based on the estimated value of housing, and shall be reviewed every six months”;

in the fourth indent, the words “from the estimated value of housing” shall be replaced with the words “from the maximum amount of mortgage loan”;

c) in paragraph 6:

the first to third indents shall be set out in the following wording:

“It shall be established that within the framework of the new procedure:

persons who have received a notification on the granting of subsidies shall form, at their own expense, part of the initial payment equal to at least 5 percent of the value of the housing;

regardless of the location, value and size of the purchased apartment, subsidies for covering part of the initial payment shall be paid in the fixed amount of 32 million soums, and subsidies for covering part of interest payments shall be paid for the part exceeding 10 percentage points during the first five years of the loan term;

subsidies for covering part of the initial payment and interest payments shall be paid even if the price of the purchased apartment exceeds the maximum amount of the mortgage loan. In this case, if the value of the purchased apartment exceeds the maximum amount of the mortgage loan, the remaining part of the value shall be paid by the borrower at the expense of his own funds and other funds permitted by law by increasing the amount of the initial payment”;

the fourth indent shall be considered the fifth indent.

2. In the Decree of the President of the Republic of Uzbekistan No. DP-6186 of March 11, 2021 “On additional measures to provide the population with housing through mortgage loans based on market principles”:

a) in paragraph 1:

in the fourth indent, the words “in cities and rural areas” shall be deleted;

the fifth to seventh indents shall be set out in the following wording:

“the maximum amount of mortgage loan and the amount of subsidies for covering part of the initial payment shall be determined annually by the Ministry of Economic Development and Poverty Reduction in agreement with the Ministry of Finance and the Ministry of Construction, based on the estimated value of housing, and shall be reviewed every six months;

regardless of the location, value and size of the purchased apartment, subsidies for covering part of the initial payment shall be paid in the fixed amount of 32 million soums, and subsidies for covering part of interest payments shall be paid for the part exceeding 10 percentage points during the first five years of the loan term;

subsidies for covering part of the initial payment and interest payments shall be paid even if the price of the purchased apartment exceeds the maximum amount of the mortgage loan. In this case, if the value of the purchased apartment exceeds the maximum amount of the mortgage loan, the remaining part of the value shall be paid by the borrower at the expense of his own funds and other funds permitted by law by increasing the amount of the initial payment”;

b) in paragraph 2, the words “October 1, 2021” in the fifth indent shall be replaced with the words “January 1, 2022”;

c) in paragraph 14:

in subparagraph “a”, the number “9” shall be replaced with the number “7”;

subparagraphs “e” and “j” shall be set out in the following wording:

“e) until January 1, 2023:

a separate exchange trading section for the sale of cement and rolled metal to housing construction organizations shall be introduced in the “New Uzbekistan” residential areas, as well as in residential areas built in previous years and on their vacant land plots;

a zero rate of customs duty shall be applied when importing cement products (HS code 2523) into the territory of the Republic of Uzbekistan.”;

d) the second indent of paragraph 17 shall be deleted; the third indent shall be considered the second indent;

e) in paragraph 19, the number “2021” shall be replaced with the number “2022”;

f) Annex No. 2 shall be set out in the following wording:

“ANNEX No. 2 to the Decree of the President of the Republic of Uzbekistan No. DP-6186 of March 11, 2021

Target parameters

for allocating subsidies on mortgage loans under the new procedure in 2021*”

* If necessary, the target parameters for the payment of subsidies on mortgage loans under the new procedure in 2021 may be amended by the Cabinet of Ministers on the basis of proposals from the Ministry of Finance and the Ministry of Economic Development and Poverty Reduction”.

3. In paragraph 10 of the Resolution of the President of the Republic of Uzbekistan No. PQ-4701 of May 1, 2020 “On additional measures to improve the housing conditions of the population and further expand the mortgage loan market”:

a) in the first indent:

the number “2021” shall be replaced with the number “2022”;

the words “multi-storey buildings with 4 or more floors in cities and in Tashkent city with 7” shall be replaced with the words “multi-storey buildings with 7 or more floors in cities, with 5 or more floors in rural areas, and with 9 or more floors in Tashkent city”;

b) the third and fourth indents shall be set out in the following wording:

“compensation shall be paid for the part of the interest rate on loans not exceeding 1.75 times the main rate of the Central Bank of the Republic of Uzbekistan, which exceeds the main rate of the Central Bank but does not exceed 10 percentage points, for the entire period of the loan, but not more than 24 months from the date of obtaining the loan. In this case:

compensation shall be paid on the part of the loan not exceeding 10 billion soums for one housing unit;

guarantees and compensations shall be provided if at least 70 percent of the total number of apartments in the multi-storey residential building under construction consist of apartments not exceeding 70 square meters in area”.