Housing Bonds

Housing Bonds were issued and delivered in exchange for mortgages issued by the buyer, the builder or the owner of the housing. Housing Bonds are indexed through the Credit Terms Index or the Consumer Price Index, and carry a fixed interest from 4.75% to 6.00%. Housing Bonds were granted for a period of 15, 25 or 40 years. They are so-called bullet bonds, where the remaining amount and accumulated interests are paid up in a single payment at the end of the loan period. However, four times a year during the loan period, a specific number of Housing Bonds is drawn for redemption. Any bonds drawn in this manner have thus matured and must then be paid in full.

Housing Bonds are Government guaranteed and therefore have the same Moody´s Aaa rating as The Housing Financing Fund and Government Bonds. The Housing Financing Fund and its predecessor, the Housing Authority, issues them in exchange for mortgage bonds on demand from individual housing buyers. Housing Bonds represented around 17% of the Icelandic Government Bond market at the end of 2004.

Since the Housing Financing Fund started issuing its HFF bonds, no more Housing Bonds have been issued.
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