Developing mortgage finance

Providing mortgage loans

Description

Developing mortgage finance involves establishing and expanding accessible, sustainable systems for providing long-term housing loans. This strategy aims to remedy barriers to home ownership, such as lack of affordable credit and inadequate financial infrastructure, by creating regulatory frameworks, mobilizing capital, and supporting institutions that offer mortgages. The practical intent is to increase housing affordability, stimulate construction, and promote economic stability by enabling individuals and families to purchase homes through manageable, structured financing solutions.

Implementation

To foster this strategy at a national level the World Bank recommends the following. Do: Allow private sector to lend; lend at positive/market rates; enforce foreclosure laws regulation; ensure prudential regulation; introduce better loan instruments. Don't: allow interest-rate subsidies; discriminate against rental housing investment; neglect resource mobilization; allow high default rates.