International experience of housing construction financing and possibilities of its application in Ukraine

Abstract

Introduction.Today in Ukraine there is a huge need for housing, but high real estate prices make it practically inaccessible for the majority of the population, and the high risk of investing in the industry only complicates the situation. It is necessary to study the international experience in this area to find a solution of this problem.

Purpose. The aim of the article  is to identify the opportunities for the use the international experience in financing the housing building in Ukraine by examining the most common systems of mortgage lending in the world.

Method (methodology).  In the article such research methods as the method of analysis and method of graphical modeling are used. It has allowedto investigate the functioning of the foreign systems of mortgage lending more thoroughly.

Results.The paper discusses the features of building an effective system of housing financing in foreign countries on the basis of mortgage lending. The international experience of financing of the housing constructionis studied, that is, German, European and American mortgage systems. It is determined that the German model is a closed system in which loans are formed exclusively by contributions from the members. Its main disadvantage is the limitation in attracting the financial resources, but its closeness causes the reliability and independence from the processes in the financial system. The European system of mortgage lending is characterized, it is based on a network of universal banks and specialized mortgage banks, which are unrestricted in their activities. The advantages of this system are considerably greater opportunities for attracting credit resources and expansion, but it causes the dependence from the financial market of the country. The mechanism of functioning of the American system is considered. It provides the creation of a secondary mortgage securities market, where the mortgage loans are refinanced. This model allows us to attract significant funds for lending, but it requires a high development of the stock market in the country and increases the burden on the budget.

The article gives the reasons for the feasibility of using the American mortgage system in Ukraine, taking into account the availability of relevant legislation and the necessary institutions. The mechanism of financing the housing building with the involvement of local authorities is proposed, and advantages and disadvantages of its use are described.