Urban transformation, a project that started its operation in accordance with an earthquake law in 2012, means the demise of buildings that are not earthquake resistant and to construct earthquake-resistant buildings instead. This project comes into play in all or almost all cities.
This public study aims to minimize the damage caused by a possible earthquake. One of the positive aspects presented to the public is that the new buildings will have higher real estate values than before. It is enough to apply for a single person living in a building to be included in the urban transformation project.
In the urban transformation project, the owner of the risky building and the people living in risky buildings are called Rights Owners. Rightsholders are required to determine the risk status of their buildings in the first place. If the building falls within the scope of urban transformation after the risk assessment process, applications can be made for urban transformation loans.
So what is urban transformation loan?
Urban transformation loan is a type of loan that can be used to rebuild risky buildings and buy a new business or residence. Since an urban transformation loan is a type of loan supported by the state, there are some incentives and interest supports here. This interest support is provided by the Ministry of Environment and Urbanization. It is possible to apply to many banks for urban transformation loans. Today all banks in Turkey are eligible to serve on urban renewal loans.
The process after the application in the urban transformation loan starts with the review made by the bank. After the bank review, the loan application is sent to the Ministry’s approval for interest support. After the approval of the Ministry, the loan is made available and every document requested by the Ministry continues to be sent throughout the process. After the first loan installment amount of the beneficiary is paid, the interest support amount is requested from the Ministry.
Within the scope of urban transformation loan, the person with a single flat can use 100 thousand dollars, and those with 4-5 flats can use urban transformation loan up to 500 thousand dollars. The term of the urban transformation loan varies between 24 months and 120 months. Some banks can extend loans for 2 years without a principal payment. This happens entirely according to the bank’s own procedures.
When the urban transformation loan is approved
it is transferred to the contractor’s account in a blocked manner, but it cannot be used completely because it is blocked. The contractor’s money usage takes place after the control stages at certain stages of construction. The bank controls these construction phases, and the more the cost of the work is made available to the contractor.
No matter how the process works, money is controlled even in problematic situations. The money is kept under the bank’s protection if the construction cannot be completed or the contractor leaves the job. Ministry does not have any function in all these processes. The Ministry only approves the loan in the first place and supports interest. The next process continues completely under the supervision of the bank.
There is an option called rent support
For those who live in urban transformation. However, in cases where urban transformation credit is used, the person cannot get any other rent assistance. In other words, if the person who owns a property also lives in a lease elsewhere, he can take advantage of either urban transformation credit or lease assistance.
The tenant, who has been living in a risky building for more than 1 year, can benefit from an urban transformation loan if he wants to buy a house from another place. Bank application and ministry approval processes work in the same way as the right holders who have apartments in risky buildings.