Loans to Financial Undertakings

The Minister of Social Affairs and Social Security signed a regulation in July 2008, regarding the establishment of a new loan class, authorizing the Housing Financing Fund (HFF) to grant loans to financial undertakings with the purpose of temporarily refinancing housing mortgages, issued by these undertakings. Up to ISK 30 billion will be issued in this loan class in the form of HFF bonds and will exclusively be used as collateral in transactions with the Central Bank of Iceland.

The Minister will also propose a bill to Parliament at the beginning of September 2008, suggesting HFF be given the authority to finance and purchase new housing mortgages, issued by financial undertakings. Should the bill become a law, it is estimated that up to ISK 30 billion will be issued for this purpose in 2008 and 2009.

The Board of the Housing Financing Fund (HFF) issued these rules regarding the loan class.
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