From 2021 to 2022: milestones for the State Fund for Support of Youth Housing Construction

These days, at the turn of the year, we reflect on strategic issues: how we spent the previous 365 days, what worked and what did not, how best to organize the next year so that it is a success, not stagnation nor backwardness.

2021 seemed very ambiguous for Ukraine, the national construction industry and the State Fund. Moreover, for the second year in a row, the ongoing COVID-19 pandemic has had its negative impact.

However, I would like to point positive moments. By joint efforts of business and government, stable indicators of construction volumes in Ukraine have been maintained. It was possible not only to preserve the potential of domestic construction but to increase production volumes. According to the State Statistics Service, in January-September 2021, 8.7 million square meters of housing were commissioned, which is 48.7% more compared to the corresponding period of 2020. In the current circumstances this is a good indicator.

This is part of the success of the State Fund as an investor in construction. Nevertheless, we continue to implement state and local housing programs. It is very important not to stop moving forward in this direction, because the Fund not only promotes investment in the construction industry, but also performs an important social mission, working with vulnerable groups and contributing to maintaining social peace in our country and its demographic potential.

The past year has been perhaps the most difficult for the Fund in terms of funding for public housing programs. This has negatively affected the implementation of our statutory tasks, including the work with problematic facilities, and the deep digitalization of the institution, and, of course, the implementation of state and local housing programs. In such conditions, we focused on key areas: providing housing for citizens, maintaining and strengthening our human resources and expertise.

Overcoming objective and sometimes subjective obstacles, we have not stopped developing. The loan portfolio of the State Fund has reached UAH 2.1 billion, which means that our portfolio has doubled in five years.

For the whole period of activity of the State Fund more than 41 thousand families are provided with their own housing. Moreover, UAH 11.482 billion was invested in construction and related industries.

The quality of the State Fund’s loan portfolio remains among the best compared to other financial institutions in Ukraine. The share of non-performing loans in the Fund's portfolio is only 3.1%, well below the average level of non-performing loans in banks. Since 2013, the State Fund has moved to international financial reporting standards. For several years in a row, we have been adhering to the principles of transparency and openness in our activities.

Currently, the Fund serves 9087 loan agreements with citizens for the purchase of housing. I would like to note that we are servicing loans for UAH 494.4 million from the funding of the state budget, and for more than UAH 1 billion from the funding of local budgets. Eloquent comparison…

Nevertheless, I want to assure you that at the end of 2021 we have reason to plan the next year more confidently. First of all, thanks to cooperation with international donors, the Ukrainian-German program "Housing for Internally Displaced Persons" has been successfully implemented since the second half of 2021. The project became a reality after the signing of an agreement on financial cooperation between the Cabinet of Ministers of Ukraine and the Government of the Federal Republic of Germany. To finance it, the German government provided a grant of 25.5 million euros through KfW Bank. The program is certainly in demand among citizens, which is evident by fact that more than 22,000 IDPs have registered to participate in our transparent registers. Five stages of a random selection of loan recipients have already been carried out, more than 850 citizens have received the right to a soft loan on the most favorable terms in the country. The effectiveness of our joint work was noted at the Ukrainian-German government talks held in Kyiv in November. This work will continue next year. We would like its scale to be expanded and we are closely talking about this with our German partners.

Moreover, the State Fund is initiating before the government the launch of cooperation between Ukraine and the Council of Europe Development Bank – another potential donor of housing programs. 

We count not only on extra-budgetary sources of funding, but also on the understanding of the importance of housing for people by national government. The opportunity to buy your own home is extremely important for everyone, especially for those who find it difficult to do so in the current market conditions – participants in the anti-terrorist operation / environmental protection, internally displaced persons, large families, youth, etc.

Young Ukrainians are just starting a career, a business, having children, and it is immensely difficult for them to purchase their own housing. In order to preserve the country's demographic potential, the state is obliged to create opportunities for young families to receive soft loans for housing. A positive signal here was the Government order of December 15, 2021, supported by the leadership of the Ministry of Development of Communities and Territories of Ukraine and personally by Minister Oleksiy Chernyshov, to increase the statutory capital of the State Fund by UAH 169.9 million. These funds will be used to provide soft mortgages to young people: another 212 young families will buy housing through participation in the program of long-term soft loans from the statutory capital of the Fund.

It is important to note that from 2021 the function of coordinating housing programs in the Ministry of Development of Communities and Territories of Ukraine is performed by Deputy Minister Natalia Kozlovska. Her level of understanding of housing issues and energy gave a new impulse to the work of the State Fund, contributed to improving the efficiency of the Fund's implementation of its statutory tasks.

We are also developing cooperation with the non-governmental sector. As an advance for the future, we took the award of the State Fund from the Coalition of Organizations Care for the Protection of the Rights of Victims of Armed Conflict. Leaders of the non-governmental sector noted the efforts of the IDP Housing Protection Fund, in particular, the development, modernization and implementation of housing programs for this category of Ukrainian citizens.

In general, the Fund has changed significantly in recent years. The priority place in our work is firmly occupied by the person, the citizen, our client.

The State Fund for Youth Housing will continue to change for the better next year. In order not just to stay afloat, but to move to growth, we must achieve high stability, efficiency, competitiveness, transparency, continue to modernize our institution.

In 2022, we have a lot of interesting and important work for people. In its process, the State Fund will become an even more modern and effective tool of state housing policy. We work on the principles of transparency, ready to implement the complex tasks of providing housing for citizens on the basis of compliance with the social component. And we not only hope, but also create good news with our activity.

May the year 2022 enter our chronicles only with achievements, bring peace, joy, and prosperity to the happy residents of the houses purchased with our support, as well as to the staff of the Fund.

Sincerely,

Serhii Komnatnyi

Chairman of the Board of the State Fund for Support of Youth Housing Construction