Baltic American Enterprise Fund Mortgage Warehouse Line of Credit

completed

The project will be a four-year revolving warehouse line of credit to BalAEF to expand its mortgage finance activities in the Baltics. BalAEF will use the loan to originate affordable residential mortgage loans so as to build the volume needed to eventually securitize its mortgage loan portfolio for sale on the international market. BalAEF intends to play a role in the development of a secondary mortgage market in these countries and has asked for IFC''s help in establishing a regional mortgage backed securities funding program. Demand for mortgage lending in the Baltics is growing, but is limited by a shortage of term financing. The project will strengthen the balance sheet of one of the leading mortgage finance institutions in the region and serve as a market model for providing affordable mortgage loans to individuals. The project will thus help to develop the primary mortgage market in the Baltics and, by providing affordable housing finance, ultimately improve living standards.IFC’s participation in the project will help to introduce warehouse financing to the Baltics. Moreover, IFC would use its global expertise to kick start the development of a regional secondary market for mortgage loans in the Baltics, which would provide a commercially viable refinancing vehicle for mortgage originators.