Urban transformation loan is a financing option provided with government and bank support to renovate, repair, or demolish and rebuild old, dilapidated or damaged buildings under urban transformation legislation. To access an urban transformation loan, a contract with a contractor is required.
What Are the Application Requirements for an Urban Transformation Loan?
To apply for an urban transformation loan, certain conditions must be met. These requirements include:
- The building to be renovated must be classified as a “Risk Area” or “Risky Building” and this status must be documented and approved.
- The Ministry of Environment and Urbanization provides interest support: for residential loans an annual 4% (monthly 0.33%) subsidy for up to 12 months, and for workplaces an annual 3% (monthly 0.25%) subsidy for up to 84 months.
- Condominium owners (individuals who hold ownership of independent units in a completed building) cannot receive both rental assistance and an urban transformation loan simultaneously. Only one type of support—either interest support or rental assistance—can be received.
- Tenants who want to buy a single dwelling can apply for a loan from any bank. If multiple unit owners in a building and the rights holders decide to demolish and rebuild, they must obtain loans from the same bank.
- If rights holders delay payments on the urban transformation loan, the ministry’s interest subsidy payments will be suspended until the overdue payments are cleared.
What Steps Should Be Followed When Applying for an Urban Transformation Loan?
There are specific steps to follow when obtaining an urban transformation loan, which help ensure a smooth application process. The steps are:
- The property owner or unit owner must obtain a “Risky Building Inspection Report” from a licensed organization to be eligible for loan support.
- Unit owners agree on a construction company and sign a construction contract.
- If the construction company meets all required conditions and this is documented, the loan application will be evaluated.
- Under the urban transformation loan program, each individual can receive at least 100,000 TL and at most 500,000 TL per dwelling.
- If the bank approves your loan within the urban transformation project, the approval is shared with the Ministry of Environment and Urbanization.
- After reviewing the application, if the ministry approves the request, you may benefit from the urban transformation interest support.
How to Obtain DenizBank Urban Transformation Loan?
DenizBank offers several conveniences for customers applying for an urban transformation loan. These benefits include:
- You may have a grace period of up to 24 months with no principal payments.
- With government contribution, loan interest rates start from 0.88%.
- Free urban transformation advisory services are available through the bank’s contact center.
- You can obtain the Risky Building Inspection Report at discounted rates from DenizBank’s contracted firms.
- DenizBank offers a construction completion guarantee to borrowers.
In addition, DenizBank provides consumer loans with favorable interest rates and terms up to 36 months to cover expenses during the renovation—such as rent, deposit, and moving costs—while the building is being renewed.
How to Obtain Akbank Urban Transformation Loan?
Akbank requires certain documents for urban transformation loan applications. These documents include:
- Risky building detection report review form issued by the Urban Transformation Directorate or the Provincial Directorate of Environment and Urbanization
- Construction contract signed between the contractor and the rights holders
- Title deed and, if available, building permit
- New title deed reflecting the post-transformation condominium ownership (kat irtifakı)
- Address-based population registration records from the Provincial/District Directorate of Population and Citizenship showing the new address of the rights holders and a declaration stating the risky building has been vacated
- For business owners: tax certificate proving operation of the workplace and a closure document from the relevant professional chamber if the workplace is closed
- Akbank loan application form
- Income documentation
- Construction contract
- Spousal consent if married
Akbank offers two repayment plan options:
- Equal installments up to 120 months for residential loans and up to 84 months for workplace loans.
- Total terms up to 120 months for residential loans and up to 84 months for workplace loans with up to 2 years of interest-only payments and equal installments thereafter.
How to Obtain Turkey Halkbank Urban Transformation Loan?
Halkbank’s urban transformation loan can be obtained with a customer interest rate of 0.66% and an additional 0.33% state-supported interest rate. Halkbank does not charge an allocation fee for this loan.
How to Obtain QNB Finansbank Urban Transformation Loan?
Finansbank offers advantages such as up to 24 months of interest-only payment periods, terms up to 120 months, and competitive interest rates. Their rate and term examples include:
- Declining installment mortgage: 1–59 months at 1.00% interest.
- Increasing installment mortgage: 60–120 months at 0.99% interest.
- Equal principal mortgage: 1–59 months at 0.99% interest.
- Equal principal mortgage: 60–120 months at 0.98% interest.
- Special farmer mortgage: 1–59 months at 1.37% interest.
- Special farmer mortgage: 60–120 months at 1.36% interest.
Finansbank has internal conditions for its urban transformation loan:
- Applications are accepted only in Turkish Lira (TRY).
- Loans are available only for properties registered as “residential” on the title deed and only to natural persons.
- The mortgage of the building to be renewed or rebuilt is sufficient collateral.
- The bank generally does not require guarantors but reserves the right to request them if necessary.
How to Obtain ŞekerBank Urban Transformation Loan?
ŞekerBank provides significant advantages for urban transformation loan customers. These include:
- Thanks to state incentives, residential loans can benefit from rates lower than the annual 4% support and workplace loans lower than the annual 3% support.
- Term options up to 120 months for residential loans and up to 84 months for workplace loans.
- Exemption from KKDF and BSMV taxes.
- Potential increase in property value after renovation.
- Loan availability secured by the mortgage on the renewed dwelling.
- Annual 4% interest support for tenants who want to purchase a home using mortgage finance.
- Exemptions for notary and fee-related transactions.
ŞekerBank’s applicable interest rates for urban transformation loans are:
- 3–48 months: ŞekerBank interest rate 1.29% (after subsidy, customer rate 0.99%).
- 49–60 months: ŞekerBank interest rate 1.29% (after subsidy, customer rate 0.99%).
- 61–120 months: ŞekerBank interest rate 1.39% (after subsidy, customer rate 1.09%).
What Documents Are Required to Apply for an Urban Transformation Loan?
After meeting all eligibility criteria, you should contact banks that actively offer this loan to submit an application. The documents required at submission, including attachments, typically are:
- Identity card
- Proof of income
- Title deed
- Risky Building Inspection Report review form