RIGA, Oct 14 (LETA) - The government on Tuesday authorized Development Institution Altum (Altum) to launch mortgage lending in Latvia's regions.

To improve access to housing loans in the regions and thereby foster economic growth, Altum will issue mortgage loans to clients for home purchases.

Latvia's commercial banks and other consumer loan providers can issue mortgage loans to consumers only in accordance with the Consumer Rights Protection Law. In this case, Altum will operate as a non-bank consumer credit service provider, Altum will obtain a licence to provide consumer credit services and will be supervised by the Consumer Rights Protection Centre (PTAC).

Altum plans to issue mortgage loans of up to EUR 74,000 (equal to 100 monthly minimum wages). The average size of the loans is planned at EUR 25,000-30,000. The loan term can be up to 30 years, but both the borrower and the co-borrower cannot be over 65 years old at the time of repayment.

Up to EUR 22.3 million will be available to Altum to provide loans under the program for state aid in the form of guarantees for the purchase or construction of housing. In addition to lending, Altum will be able to raise up to EUR 20 million from the state in the form of a credit facility, as well as up to EUR 60.3 million in loans from international financial institutions or issue bonds.

From the national budget, the housing guarantee support program and the support program "Balsts" (Support), EUR 3.5 million will be used for risk cover. These funds will be Altum's commitment to the Ministry of Economy.

Altum loans will only be available for the purchase of housing outside the municipality of Riga and the territory of Pieriga, where, according to the Bank of Latvia's Financial Access Survey, lending is currently insufficient and significantly below the average bank lending-to-GDP ratio in other municipalities in Latvia and the European Union (EU).