The ‘guaranteed’ model in urban transformation | NTV

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Turkey will accelerate the process of urban transformation initiatives launched for the renovation of the building through the 6.7 million risky steps that follow.

In recent days, the limit on loans with an interest guarantee that will be granted to citizens who will transform their home was increased to 200 thousand lire and the VAT was reduced from 18 to 1 percent.

Now, the Ministry of Environment and Urbanization has taken an important step to smoothly complete the transformation projects. According to the news in the Hürriyet newspaper, Emlak Participation Bank was included in the process with this step taken.

The bank will sign a work completion protocol with companies that operate in transformation projects and will pay according to the level of construction progress. With Emlak Participation as guarantor, complaints will be avoided.


Explaining that the new financing model will be valid for ‘strengthening’, ‘in situ transformation’ and ‘spatial transformation’, the Minister of Environment and Urbanization, Murat Kurum, explained how the process will unfold as follows :

“First, a contract will be signed between our citizen who lives in a risk house and the contractor, and an application for a license for remodeling or construction will be made. In the following process, Emlak Participation Bank will evaluate the technical data of the construction with the contractor and the contract signed between the citizen and the contractor, and a work completion protocol will be signed between our Bank and the contractor for the projects that are appropriate. . The finances used by the citizens of the Emlak Participation Bank will be transferred to the contractor company in accordance with the progress of the construction within the scope of the work completion guarantee agreement. With the new financing models that it has developed, our Emlak Participation Bank will play a guarantor role in the contracts signed between citizens and contracting companies, both in strengthening, in situ transformation and in spatial transformation ”.


Specifying that financial aid continues to reduce conversion costs, the Institution said that the completion of the work will be guaranteed with the controlled use of the loans.

Affirming that “Our citizen will be able to carry out the process of urban transformation of the building in which he lives with confidence from the beginning to the end, without suffering any unfair treatment,” the Minister said: “Again, for retrofitting and housing loans, 400 points base with a maximum maturity of 120 months and a maximum profit sharing of 300 base points for workplaces with a maximum maturity of 84 months We will offer our support to our citizens through the Emlak Participation Bank. These financing solutions that we offer will stimulate the market, facilitate the entry of new investors and protect the rights and interests of our citizens and the private sector. Therefore, we will build a cooperative in the short term. Turkey is ready for disaster, ”he said.


The Ministry of Environment and Urbanization has provided leasing assistance of TL 4,631 million to beneficiaries, including TL 839 million for risk areas and TL 3,792 million for risk buildings.

While TL 151 million interest support was provided for loans used by bank beneficiaries, TL 1 trillion 225 million was expropriated as part of the nationwide transformation.

Lire 9,629 million were transferred to TOKI, ILBANK and municipalities in exchange for the project. The Ministry has announced that so far approximately 16 billion lira have been spent across the country within the scope of urban transformation efforts.


– The VAT rate has been reduced from 18 percent to 1 percent in construction contracting works that citizens living in risky houses will carry out up to 1.5 times the existing structures.

– Limits increased 60 percent on interest-backed loans. The maximum limit for loans granted to those who will strengthen their homes is from 50 thousand lire to 80 thousand lire.

– The loan granted to those who will convert was increased from 125 thousand lire to 200 thousand lire.

– The total amount of the loan to be provided with interest support on behalf of the beneficiary who has more than one house also increased from 625 thousand lire to 1 million lire.

– Conversion credits are allowed up to 0.40 (400 basis points).

– The amount of support can also vary depending on the energy efficiency of the building. The maturity of interest-backed mortgage loans is 10 years maximum and 7 years for workplace loans. Borrowers can pay their payments in equal installments, as well as a grace period of 12 to 24 months.

– In urban transformation projects, there is an exemption from fees such as deeds, notary, stamp.

– Rental support is provided for 18 months in the risk structure and 48 months in the risk area. However, rental subsidies and subsidized interest loans are not used at the same time, one must be selected.

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