ARA's financial instruments do not fully meet the needs of developers and financiers. ARA and the Ministry of the Environment should look into the need and possibilities of funding rental housing corporations in medium-sized regional centres with ARA's interest subsidy loans. In addition, the Ministry of the Environment should explore the possibilities of developing the long-term interest subsidy loan so that the credit granting is based on sufficient competition.
The audit assessed the implementation of ARA’s tasks as well as ARA’s operational performance and risk management. In addition, the audit assessed the acquisition and use of the National Housing Fund’s (VAR) financial resources and the State Treasury’s activities in the risk management of ARA’s housing stock and in the financial rehabilitation of ARA-funded corporations.
ARA implements housing policy for example by granting subsidies, grants and guarantees for housing and construction and by steering and monitoring the use of the ARA housing stock. The affordable state-subsidized ARA housing production complements market-based housing supply and smooths cyclical fluctuations. In 2021, the ARA production accounted for the construction of almost 8,900 apartments. EUR 1.75 billion, or 97%, of the interest subsidy authorization was used.
Based on the audit, ARA’s financial instruments do not fully meet the needs of developers and financiers. ARA and the Ministry of the Environment should look into the need and possibilities of funding rental housing corporations in medium-sized regional centres with ARA’s interest subsidy loans. In addition, the Ministry of the Environment should explore the possibilities of developing the long-term interest subsidy loan so that the credit granting is based on sufficient competition.
ARA should also promote the use of a specified form in funding decisions and inform funding applicants of the grounds for negative decisions in order to ensure equal treatment of applicants.
ARA carries out risk management together with the State Treasury, but the State Treasury cannot influence the credit granting stage. ARA should engage the State Treasury in the assessment of the funding applicants with highest-risk creditworthiness.
In granting funding, ARA should also pay special attention to the risks arising from the combined impact of permanent limitations on right-of-occupancy housing and projected migration.
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