The Ukrainian housing sector is on the verge of major changes. The state enterprise 'Ukrfinzhilye' has announced a radical change in strategy: the company aims to issue around 100,000 mortgage deals annually. According to Yevhen Metsger, Chairman of the Board of JSC 'Ukrfinzhilye', only such a volume can have a real impact on solving the housing deficit in the country.
In an interview with RBC-Ukraine, the company's head emphasized that the task is not about issuing 'a few thousand more loans', but about achieving a systemic result that will allow Ukraine to reach a sustainable level of housing construction and lending.
Abandoning budget injections
The key point of the new strategy is a complete refusal of further recapitalization from the state budget. Yevhen Metsger stated that in the future, 'Ukrfinzhilye' will fund transactions independently, using working capital and attracted capital. The system works on the principle of turnover: funds are returned and then directed to new loans.
Currently, the company's capital reaches 100 billion hryvnias. It has been formed from OVGZ (internal government bonds). Pledging these bonds, the enterprise attracts financing through repo operations and lending. It was in this way that the current loan portfolio of the 'eOseli' program was formed, the volume of which is 47 billion hryvnias.
New financial instruments and securitization
To achieve the ambitious goal of 100,000 deals a year, the company plans to introduce complex financial mechanisms. In particular, this involves the introduction of guarantees, the issuance of its own mortgage securities, and a securitization mechanism. The latter implies converting existing mortgages into securities, which will allow attracting funds for new loans.
The relevant bill has already passed its first reading in the Verkhovna Rada. Yevhen Metsger notes that after the war, these instruments will open access to foreign capital markets, which will be critical for scaling the program.
International vector and 'Housing Umbrella'
The company's development strategy has been tested and approved by the International Monetary Fund (IMF). This became a condition for the recapitalization of 'Ukrfinzhilye' by 30 billion hryvnias, allocated in the 2023 state budget.
Furthermore, international partners — the World Bank, the European Investment Bank (EIB), and the European Bank for Reconstruction and Development (EBRD) — have proposed creating a specialized housing 'umbrella' based on 'Ukrfinzhilye'. Experts believe that Ukraine needs an institution convenient for cooperation instead of a specialized ministry. Yevhen Metsger expects to build such an institution within two to three years.
Social rent and new models
Achieving target indicators is impossible without the parallel development of alternative mechanisms. The company is preparing to launch social rent programs and rent-to-own schemes. At the moment, this model is in the development stage, but it is considered an important element for solving the housing issue for various strata of the population.
