OPIC Provides $50 Million to Expand Homeownership in Jordan
May 18, 2009
WASHINGTON, D.C. – Fifty million dollars in financing from the Overseas Private Investment Corporation (OPIC) will enable a bank in Jordan to expand homeownership for low-income families in the country, OPIC Acting President Dr. Lawrence Spinelli announced today. The project directly supports the affordable housing goals of Jordan’s National Housing Initiative, established last year by King Abdullah.
OPIC will provide $50 million for a loan facility with Cairo Amman Bank. The facility will enable the bank to introduce 25-year, fixed-rate, local currency mortgages to lower-income households in Jordan, qualified pursuant to guidelines issued by the nation’s Housing and Urban Development Corporation (HUDC) according to the housing initiative.
CHF International will serve as U.S. sponsor for the Project. The sponsor will provide technical oversight for the project, working with the bank to conduct a due diligence review of the bank’s origination and servicing procedures, and monitoring ongoing mortgage loan performance.
“This project will mobilize significant loan capital to finance the expansion of homeownership in Jordan, which in turn will increase the wealth-building capacity of lower income families in Jordan,” Dr. Spinelli said. “Ultimately, it will serve as a catalyst to attract future investment capital to the region by demonstrating the possibility of profitable mortgage lending to underserved markets. OPIC is pleased to support a project with so many positive developmental benefits.”
Dr. Spinelli added that the banking sector in Jordan is characterized by good asset quality, sound capitalization, high liquidity, increasing competition, and improving regulation. According to the International Monetary Fund (IMF), banks in Jordan are well capitalized, non-performing loan ratios are low, and strict loan classification and provisioning rules require banks to maintain adequate loan loss provisions.
King Abdullah of Jordan proclaimed 2008 the year of affordable housing in Jordan and led the development of the National Housing Initiative, under which potential homeowners can apply to the HUDC for approval to qualify for the program. The program goals are to construct 20,000 residences per year for the next five years with the first homes due for completion in 2009.
CHF is a US-based, not-for-profit international development and humanitarian assistance organization founded in 1952 as the Cooperative Housing Foundation. CHF’s mission is to serve as a catalyst for long-lasting, positive change in low- and moderate-income communities and has worked in over 100 countries worldwide.