Workforce Housing Programs in Ukraine Are Only Viable with Close and Transparent Cooperation Between Banks and Developers – Expert Opinion

The realization of large-scale mortgage programs for employees, commonly referred to as workforce housing, is an important topic in Ukraine that demands focused attention. Anna Laievska, the General Director of Sigma+, highlighted that the success of these initiatives can only be achieved through close and transparent collaboration between banks and developers. She expressed her views during the First Forum on Affordable Mortgages, which took place in Kyiv this week.

Laievska pointed out that to launch a large-scale mortgage program for the workforce, a partnership must be established between the private sector, developers, and banks. Within this partnership, developers must be prepared to address the questions, risks, and concerns raised by the banking sector. She emphasized the importance of offering compensatory mechanisms and guarantees from developers, which can serve as a foundation for the success of such programs.

Collaboration between banks and developers in Ukraine is complicated by the complex, multi-tiered structure of construction projects and the various financial models that exist in the market. This, in turn, makes the implementation of mortgage programs for employees more challenging, as each market participant has its specific requirements and expectations.

Laievska also noted that to ensure the successful implementation of the program, various guarantee mechanisms from developers need to be considered. Among the possible options, she highlighted mechanisms such as collateral, the transfer of corporate rights, or land plots. In the case of employee mortgages, the down payment could be covered by the developer, and compensation for interest rates or guarantees for borrowers could also be offered.

Furthermore, the expert stressed the importance of creating a regulatory framework for the functioning of the program, which would take into account the specifics of the market and contain clear definitions of concepts. Laievska observed that there is currently no clearly defined concept of employee mortgages, which complicates the implementation of the program. She believes it is essential to draft this program and coordinate it with the relevant government authorities.

Laievska also noted that the timelines for the program's implementation depend on the speed of adopting additional instructions, clarifications, and resolutions from the Cabinet of Ministers. She expressed hope that if there is initiative and goodwill from all participants in the process, the program could be realized within six months to a year. This underscores the importance of the collective efforts of all parties in achieving the goal of creating affordable housing for employees in Ukraine.