A new Bill amending Act.No. 44/1998 on Housing


 

The Minister of Social Affairs and Housing has introduced a bill amending Act No. 44/1998 on Housing, pertaining to the future arrangement of housing matters. Some changes to the operation of the Housing Financing Fund are proposed. The most significant of these are:

  • Increased focus on the fund’s role in formulating policies and plans in housing matters.
  • Amendments to provisions on the fund’s role in accordance with the laws on general housing regarding capital contributions.
  • Limits on the fund’s authorisations to grant loans to individuals for the purchase of personal housing. Similar limitations as are in affect for Husbanken in Norway and ARA in Finland.
  • Provisions stipulating bookkeeping separation between the prior loan portfolio and the tasks that the Fund will undertake if the bill is passed.

Key role in formulating policies and plans in housing matters.

There is more focus on policy formulation, analysis and planning, and provisions on municipal housing plans and the duty of municipalities to assist those in housing difficulties are more clearly defined. The Housing Financing Fund will manage the granting of capital contributions and monitor the parties that have received such contributions, based on a clear overview and plans regarding housing needs.

Compliance with new laws on general housing regarding capital contributions.

With Act No. 52/2016 on General Housing, the Fund is entrusted with granting capital contributions and monitoring those who receive such contributions. The amendments are geared towards the provisions on the Fund reflecting this role.

There are also amendments to provisions on the fund’s income where it is presumed that capital contributions will be financed with contributions from the Treasury in accordance with the current state budget. 

Limiting of the fund’s authorisations to grant loans to individuals.

The fund’s authorisations to grant loans will be limited to special loans due to social circumstances or market failure. Loans to individuals will be limited to those who do not have access to property loans on acceptable terms from other credit institutions due to the location of the property or for other reasons. The current provisions on maximum loans and the maximum price of properties will remain unchanged, as will the provisions on the borrower’s payment capacity and the property’s mortgage eligibility.

The Fund will continue to grant loans to non-profit leasing companies and municipalities, e.g. for housing for the elderly, disabled, students and nursing homes.

Bookkeeping separation

In order to limit risks for the Fund and the Treasury and comply with the EEA agreement’s provisions on state grants, there will be a clear separation between the prior loan portfolio and obligations and the new loans and capital contributions.