Mortgage Market Development Program in Palestine

The Mortgage Market Development Program (MMDP) is has the goal of supporting the development of a long-term mortgage market to spur economic development and community stability within the Palestinian territories. The MMDP will accomplish this goal by meeting the following objectives:

1. Piloting mortgage education for the public;
2. Strengthening bank capacity in mortgage underwriting;
3. Strengthening condominium sustainability through self-governance; and
4. Strengthening the residential property appraisal profession.

Component 1:  Home Buyer Education Pilot
To increase Palestinian households’ understanding of the home buying process, CHF will pilot educating potential homebuyers in the requirements, responsibilities, risks and benefits of utilizing housing finance. As part of the Home Buyer Education Pilot, CHF will develop a customized Home Buyer Education Workbook and conduct home buyer education workshops.

Component 2:  Mortgage Underwriting Capacity Building
The housing finance sector in the West Bank has expressed interest in mortgage underwriting capacity building in anticipation of the demand for mortgages that will coincide with the completion of new affordable housing developments. CHF will offer the training to lenders originating mortgages loans. CHF will endeavor to deliver mortgage origination and underwriting training to interested banks that have operations in the West Bank and Gaza.

Component 3:  Condominium Self-Governance
Thousands of condominium units are expected to be built in the Palestinian Territories over the next five to seven years. The MMDP will facilitate the development of a framework in which new owners of condominiums efficiently govern themselves and maintain their building. Homeowners associations (HOAs) and Covenants, Conditions & Restrictions (CC&Rs) are well-established ways of doing this. CHF will develop model HOA documents and provide a series of public information seminars on the benefits of HOAs and how owners of units within the same building can go about forming one and agreeing to CC&Rs.

Component 4:  Appraiser Licensing and Education
To lay the groundwork for more accurate valuation of residential properties going forward, CHF will work closely with the CMA to develop standards and qualification criterion for appraiser licensing, as well as a standardized appraisal format. Additionally, CHF will develop a training course for appraisers – to either enhance their skills or learn the profession – that both teaches best practices, such as how to utilize three methodologies for valuing residential properties (the sales comparison approach, the cost approach, and the income approach) and prepares an appraiser to be successful in the licensing process. This training also will be offered to bank employees so that they understand how an appraisal is prepared and how to review one to ensure that they have received a thorough valuation of residential properties. CHF will offer this training in major Palestinian cities.