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Construction Finance Funds

The PJSC "Kreditprombank" proposes the building organizations engaged in housing construction the scheme of financing of housing construction and built-in and attached non-residential buildings. This scheme is utterly easy, absolutely transparent and understandable both for the builders and for their prospective customers. It makes it possible to the builders to get a financial support of the bank at the initial stage of the building, on the one hand, and to protect the financial investments of the prospective customers against misuse of funds until the end of real estate construction, on the other hand.

Model scheme of the parties relations when founding CFF of "А" type:

FFS

The bank managing the construction finance fund of «А» type (CFF) concludes with the CFF developer a package of agreements on facilities building, at the same time the bank managing the CFF has to approve and publish the CFF Rules and a model agreement on accession to the CFF and the CFF developer has to obtain all the necessary documents permitting facilities building and to publish the legally registered Project Declaration.
Investors conclude with the bank managing the CFF agreements on accession to the CFF, agreement on property (funds) management with the aim to build real estate facility (housing).
The CFF developer takes out the insurance of construction and assembly operations against risks of their damage or destruction as a result of industrial catastrophes and natural disasters from the insurance company.
Investors take the property risks insurance on agreements of accession to the CFF from the insurance company.
Investors transfer funds to the CFF.
The bank managing the CFF manages fund’s finance, including control over the proper use of the Fund’s financing by the CFF developer.
The funds for the facility building financing are transferred to the CFF developer.
The CFF developer completes the facility building and puts it into operation.
Investors receive documents certifying their property rights to real estate (housing).

The main idea of the scheme is that the financing of the housing building is provided on the security of the building machinery, real estate and/or property rights to real estate that will be built in future according to the following scheme:

The bank credits the building organization (Developer) by opening credit tranches line on the security of the building machinery, real estate and/or property rights to real estate that will be built in future at the expense of the construction finance fund (CFF) founded by the bank as CFF Administrator for the Developer’s facilities building;
The bank accumulates the funds of the investors-trustees received as contributions on the basis of the agreements on accession to the CFF concluded with the trustees, on the CFF’s account from which the Developer is financed according to the earlier approved funding schedule and building budget;
If necessary, the bank credits the trustees on the security of the property rights to the invested facilities in structure of the real estate to be built in future by the Developer;
From the funds transferred to the Developer’s current account the bank makes the writing off of the part of funds into repayment of credit until the total its amount will be repaid, in a ratio preliminarily agreed with the Developer.

"Kreditprombank" provides the service mentioned above both at the Head Office and at its Branches.