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Periodical article Periodical article Leiden University catalogue Leiden University catalogue WorldCat catalogue WorldCat
Title:Housing Finance in Eritrea
Author:Yohannes, Arefaine G.ISNI
Year:1999
Periodical:Eritrean Studies Review (ISSN 1086-9174)
Volume:3
Issue:1
Pages:1-25
Language:English
Notes:biblio. refs.
Geographic terms:Eritrea
Northeast Africa
Subjects:mortgages
dwellings
Urbanization and Migration
Economics and Trade
Development and Technology
Economics, Commerce
Housing financing
Low cost housing
commercial banks
land tenure
Abstract:The current shortage of housing in Asmara, Eritrea, is compounded by problems surrounding the availability and cost of mortgage credit. The present article reviews mortgage lending practices in Eritrea, identifies problems that discourage lending, and suggests possible solutions. It notes that there are basically two sources of funds for housing in Eritrea, commercial banks, and personal and family savings. The only source of residential mortgage loans is the Housing and Commerce Bank. The author describes the application procedure for mortgage loans, the processing of mortgage applications, the underwriting of residential mortgage loans, and the types of residential mortgage loans available. He notes that affordability is the major problem of housing in Asmara, and suggests a number of financing instruments that would help make homes more affordable to low and medium-income families. These include adjustable or variable-rate mortgages, graduated-payment mortgages, price level-adjusted mortgages, shared appreciation mortgages, and leases with option to purchase. He also notes problems with the current lending and title transfer practice. These relate to the title transfer requirement before disbursement of loan funds, the absence of a centralized office for recording deeds and liens, the use of less appropriate methods for appraising properties, and the absence of credit bureaus. Bibliogr., notes.
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