ARA – Housing Finance & Development Centre of Finland

Helsinki, Finland Better Finance, Interest rate subsidies, loan guarantees and loan insurance

Description

The Housing Finance and Development Centre (ARA) is a public agency which operates under the direction of the Finnish environment ministry.  Non-profit organizations can apply for grants, subsidies and guarantees from ARA to fund housing construction, purchase, and renovation.  ARA funds social housing and several types of affordable homeownership to reduce cost and increase availability of finance for these.

Critically, ARA loan guarantees and other supports are only made available following detailed assessment of the financial sustainability of housing projects and sponsoring organizations.  Furthermore, certificates are only provided for loans with the most competitive terms, driving down the costs further. ARA also controls and monitors use of the housing stock it has funded and monitors and directs non-profit housing corporations to ensure good financial management and appropriate use of government subsidies.

Since the global financial crisis, ARA guarantees have been extensively used to source low-cost private-loan finance via the special purpose financial intermediary called Munifin (https://www.munifin.fi/) which is owned by the Finnish municipalities.  This arrangement has reduced the cost of financing and hence the cost of interest subsidies considerably.

 

Actors involved

  • Housing Finance and Development Centre of Finland (ARA)

Scale

national

More information

Critically, ARA loan guarantees and other supports are only made available following detailed assessment of the financial sustainability of housing projects and sponsoring organizations.  Furthermore, certificates are only provided for loans with the most competitive terms, driving down the costs further. ARA also controls and monitors use of the housing stock it has funded and monitors and directs non-profit housing corporations to ensure good financial management and appropriate use of government subsidies.

Since the global financial crisis, ARA guarantees have been extensively used to source low-cost private-loan finance via the special purpose financial intermediary called Munifin (https://www.munifin.fi/) which is owned by the Finnish municipalities.  This arrangement has reduced the cost of financing and hence the cost of interest subsidies considerably.

https://www.ara.fi/en-US