Translated using ChatGPT service.
The Development Finance Institution ALTUM has signed the first two agreements for loans under the state support program for the purchase of land under apartment buildings. Both apartment buildings are located in Saulkrasti.
One of the transactions involves purchasing land under an eight-apartment building, where all properties are owned by individuals. The total project amount is EUR 27,000, with residents contributing approximately EUR 14,000, and the ALTUM loan covering just under EUR 13,000. The total monthly payment from all apartments is slightly over EUR 70, which is just under EUR 9 per apartment.
The second transaction also involves purchasing land under an apartment building in Saulkrasti, which has 22 apartments, one of which is owned by the municipality. The total project cost is EUR 34,000, fully covered by an ALTUM loan. In this transaction, the total monthly payment for all apartments is about EUR 190, approximately EUR 9 per apartment. The loan is granted for 20 years.
Both loan agreements are for a term of 20 years with a significantly reduced interest rate fixed at 2.9% under this program.
"We have big plans for the area, including a substantial increase in parking spaces, the installation of pedestrian paths and recreation areas, and the setup of lighting. Therefore, it is crucial that the land under the building belongs to the apartment owners. Land ownership provides a sense of security, as no one can impose any rules," says Alens Horsts, owner of SIA “Saulkrastu namsaimnieks.”
"The first deals in this loan program demonstrate that the monthly payments for apartment owners are relatively small, thanks to the Ministry of Economics creating an opportunity for these loans to be issued at a particularly favorable interest rate, which is even lower than the current EURIBOR rate. Therefore, securing the purchase of your property under the building is particularly advantageous now," explains ALTUM Chairman Reinis Bērziņš.
With an ALTUM loan, it is possible to purchase land under apartment buildings at its cadastral value, acquiring a unified real estate property. The loan is granted to the homeowners' association or the property manager, who is the authorized person.
As of January 1, 2023, when the law on the termination of forced divided ownership came into effect, Latvia had 3,544 privatized apartment buildings with 129,918 apartment properties. Approximately 30% of these buildings are in Riga, with a significant number also in Jūrmala, Daugavpils, Jelgava, and Ogre. It is planned that land under more than 100 apartment buildings could be purchased this year.
About ALTUM
The Development Finance Institution ALTUM is a state-owned capital company in Latvia, providing support to specific target groups through state-supported financial instruments (loans, guarantees, investments in venture capital funds, etc.) within specific programs, complemented by non-financial support (consultations, mentoring) and other state-delegated functions. In June 2017, ALTUM received a long-term credit rating of Baa1 from the international credit rating agency Moody's, confirming ALTUM's stable financial situation. On October 24, 2017, ALTUM bonds were listed on the regulated market - Nasdaq Riga Baltic Bond List. ALTUM received the Nasdaq Baltic Awards 2019 in the category "Exchange Event of the Year in Latvia."