New Favourable Loan Product from Veidekke and Fokus Bank: Norway's first 30-year interest-only loan for cooperative housing societies
"A thirty-year interest-only joint mortgage should make the housing cooperative model more attractive for many groups of purchasers," says Rune Forbord in Veidekke's Property Division. "But the most important thing is that this product will contribute to better long-term financial planning for the individual and make the property more attractive when selling it again," Mr Forbord adds.
"An important condition for such long-term interest-only loans is that the joint mortgage for the individual housing cooperative is no more than 60 %. This means that we will get housing cooperatives with sound equity ratios," says Regional Manager Bent R. Eidem of Fokus Bank.
This type of loan is being used for the first time for two Veidekke projects, "Meierigården" in Trondheim where sales are already underway and "På første rad" in Tromsø which goes on sale on 16 April. Later on, we will offer it to projects all over Norway, but particularly in and around the cities.
The interest-only loan will be especially favourable for young first-time purchasers, for example in the Startbo projects which are managed by Veidekke's subsidiary, Startbo AS. It will also be suitable for persons in the 50+ age group who wish to free funds from their present home and have greater financial freedom without paying too high a rent in the long term.
When homes in housing cooperatives are sold today, five-year interest-only terms are normally granted on the joint mortgage. Many people then experience an artificial rise in rent after five years. With the 30-year interest-only loan, the residents will pay a relatively steady rent for at least thirty years, depending on whether the housing cooperative chooses a floating or (10-year) fixed interest rate.
As the cooperative housing society's business manager, OBOS Eiendomsforvaltning AS will provide reliable, long-term administration of the housing cooperative, contribute towards a financially healthy housing cooperative and assist with ongoing financing, loan negotiations and maintenance. Veidekke, as developer, will stand guarantee for any units that have not been sold or paid for on takeover. Fokus Bank will provide qualified advice to customers who require loans to pay their deposits.
"Veidekke and Fokus Bank are proud to be the first in Norway to offer such a product. We believe it is important to listen to the market signals and requirements and we wish, in this way, to offer a responsible product which our customers will find attractive and which we hope they will appreciate in future dealings with us," says Rune Forbord.
For further information, please contact:
Veidekke:
Regional Manager, Veidekke Eiendom AS:
Rune Forbord: + 47 91 77 19 42
Fokus Bank:
Head of Public Relations Bjørn Langli:
+47 90 57 33 63
Head of Corporate Banking Morten Bjørnsen:
+47 95 17 72 82
Veidekke ASA is a leading Scandinavian construction and property development company. It is now the leading company of its kind in Norway and the fourth largest in Denmark. In Sweden, Veidekke has operations in the areas around Stockholm and Gothenburg and in Skåne. The Veidekke Group has a total of about 5,500 employees and had a turnover in 2004 of NOK 12.9 bn and a pre-tax profit of NOK 343 million. Veidekke ASA is listed on the Oslo Stock Exchange and is managed by Terje R. Venold. Its head office is in Oslo. Veidekke Eiendom AS, a subsidiary of Veidekke ASA, is one of Norway's developers of new dwellings. For more information about Veidekke, go to www.veidekke.no.
Fokus Bank ASA is part of Danske Bank, which is one of Scandinavia's leading finance groups, with total assets of DKK 2,000 bn. Danske Bank has 580 offices in the Nordic countries, in addition to offices in London, New York, Luxembourg and Poland, and others. The Group has 16,200 employees. Fokus Bank ASA's head office is in Trondheim; it has 69 branches and a total of 1000 employees in Norway. For further information, go to www.fokus.no.
OBOS Eiendomsforvaltning AS is a wholly-owned subsidiary of OBOS and part of Norway's leading property management group in the OBOS Group. The OBOS Group has management agreements with more than 1100 cooperative housing societies and housing cooperatives, mainly in the south of Norway, and it provides a broad range of financial/administrative and technical management services, as well as consultancy services linked with legal and economic property-related issues.