LHV began offering apartment association loans

1. October 2020

Starting this week, LHV Pank brought a specially designed loan to market for apartment associations, which can be used for renovating, reconditioning or designing a residential building.

To date, LHV has not offered a loan to apartment associations; however, as the bank already has its first apartment associations as clients, it was reasonable to develop a separate product as well.

The new apartment association loan is a loan with the most flexible repayment period in Estonia for apartment building related investments. It is designed for apartment associations registered and operating in Estonia, for use in construction and renovation works, for reconditioning the yard, parking area or auxiliary buildings, but also for energy efficiency projects or, for example, the installation of solar panels, which the first associations have already undertaken.

According to Marko Kiisa, Head of Corporate Financing at LHV, the interest and need for housing-related financing among apartment associations is high. ‘We want to diversify the loan opportunities available to apartment associations, which is why we have come up with an apartment association loan with the most flexible repayment period in Estonia, the loan period of which is up to 25 years’, Kiisa said.

‘Estonia’s housing stock requires modernisation, which means that we have a large number of ageing buildings in which renovation works must, sooner or later, be undertaken. Be it the extension of the life of the building or improving its energy efficiency, in the end it’s a win-win situation – the inhabitants get a better living environment and smaller heating bills, while the environment wins in the form of lower energy costs’, he added.

All apartment associations across Estonia with at least 10 apartments can apply for the loan. The loan amount starts from EUR 20,000 and self-financing begins at 0%. The loan is secured by the claims of the apartment association towards its members, regarding the payment of maintenance costs and, if necessary, also by the surety of KredEx as an additional guarantee. If necessary, an apartment association can also apply for a grace period of up to 12 months during the renovation works.

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