Recommendations for provision of project financing for housing using escrow accounts approved

Recommendations on a developer’s application form to be submitted to a bank for receiving project financing for housing using escrow accounts and a list of documents needed to file the application have come into force.

The document was elaborated by the Ministry of Construction of Russia, the Bank of Russia, Russia Housing and Urban Development Corporation DOM.RF with the involvement of experts and the professional community.

The Recommendations were prepared at the instruction of the President of the Russian Federation to reduce the time for providing project financing to developers and to simplify the procedure for its provision. The document supplements the April 2019 Recommendations defining the interaction between banks and developers in the course of migrating equity construction projects using escrow accounts to project financing.

‘The Recommendations will help improve interaction between banks and developers, streamline the cost of preparing documents, enable construction companies to submit applications for project financing electronically, and to reduce the time for considering applications by banks’, stressed Nikita Stasishin, Deputy Minister of Construction, Housing and Utilities of the Russian Federation.

‘Banks are already interacting with developers quite efficiently, as evidenced by the indicators of project financing for housing construction. Our joint recommendations will further simplify and harmonise this process’, noted Olga Polyakova, Deputy Governor of the Bank of Russia.

‘In Russia, roughly 64% of the total volume of housing construction is implemented using project financing and escrow accounts. By the end of 2022, virtually the entire industry will switch to the new financing model. The project financing aggregator, developed on the basis of the system nash.dom.rf, will make it possible to set up digital interaction between developers and banks. Using this one-stop shop service, developers can file applications in the recommended form to several banks at a time, providing only the minimum amount of data required for decision-making which is easily integrated in internal banking systems’, commented Artem Fedorko, Deputy General Director of DOM.RF.

As part of this document, it is recommended to:

• use a single application form for the provision of project financing and a sample list of documents to be submitted with the application;
• enable submitting applications and documents electronically, including using the aggregator of project financing implemented on the basis on the Unified Information System for Housing Construction nash.dom.rf;
• use information from state information systems, and also from the Unified Information System for Housing Construction nash.dom.rf:
• observe the timeframes for considering applications: 45 business days for integrated development projects (comprehensive developments) and similar projects, 30–45 business days for projects other than integrated development projects.

The project financing aggregator implemented by DOM.RF has already been updated to process the recommended application form and is now available for all developers using the Unified Information System for Housing Construction. The application is compiled in a completely machine-readable format and may be integrated, if necessary, in banks' internal systems using a specially developed API service. The application contains all the information about the developer and the construction project required for decision-making.

The Recommendations are published on the websites of the Ministry of Construction of Russia, the Bank of Russia and DOM.RF, as well as on the Unified Information System for Housing Construction nash.dom.rf portal.

При использовании материала ссылка на Пресс-службу Банка России обязательна.