BEIRUT, July 8 (Xinhua) -- Lebanon's Public Corporation for Housing (PCH) announced Sunday that no applications for housing loans will be accepted from July 9.
"Commercial banks are facing difficulties in approving all applications for housing loans even if they meet all conditions imposed by the agreement protocol between the central bank and PCH," National News Agency quoted Rony Lahoud, director general of the PCH as saying.
The Central Bank of Lebanon usually funds the housing loans through PCH and the Housing Bank. It provided commercial banks with a fund worth 500 million U.S. dollars in February, allocated for subsidized housing loans that would be used by Lebanese citizens to buy apartments.
The fund, however, was drained within a month.
These banks are now offering housing loans with an interest rate of around 6 to 7 percent on loans in U.S. dollar compared to 3 percent for subsidized loans.
Hence, people hesitate to purchase at such high interest rates.
This has caused real estate developers to suffer from a stagnated market because they were counting on the housing bank to finance the purchase of apartments.
Also, some people have complained that they have already made a down payment to buy apartments while counting on the housing bank to finance the rest of the purchases with subsidized loans.
On the other hand, some people have made down payments for unfinished apartments and real estate developers are unable to complete their projects and deliver the apartments to buyers due to shortage in cash.
As a result, some political parties voiced their concerns about this new crisis while emphasizing the need to find quick solutions to solve this issue.
