Housing Finance

Mortgage Finance – Estimates suggest that pent-up demand for housing in Asia can be measured in trillions of dollars. Yet the region offers shockingly low levels of mortgage finance for lower- and middle-income groups. Weak regulatory and legal frameworks, as well as a shortage of long-term funding has hampered the development of mortgage markets. Providing access to affordable housing is an important component of our poverty reduction strategy; indeed, helping people find a decent place to live and raise their families can be said to be the very definition of development^*.

ADB’s strategy focuses on developing broad housing finance markets in our developing member countries by providing:

1. long-term loans to banks for onlending to lower- and middle-income families
2. loans or equity to specialized housing finance companies
3. financial support for mortgage insurance, servicing, and securitization companies
4. guaranties on mortgage-backed securities

Our mortgage finance activities not only help families obtain housing, but they also enable a country to generate multiple sources of employment in many industries, including construction and real estate. Additionally, through access to mortgage lending, one of the most important sources of capital for an individual or family can be created. Access to capital through mortgages is often used by individuals to start small and medium-sized enterprises. The introduction or expansion of private sector mortgage lending strengthens a country’s financial sector through the addition of new banking products and services and the diversification of risks across a broadened portfolio. Finally, support for the development of strong primary mortgage markets provide the basis for establishing secondary mortgage markets.

For more information on housing financing, contact