Own housing becomes closer: the mortgage market may be relaunched this year

New financial mechanisms may appear in Ukraine that are intended to make mortgage lending more accessible, help banks issue more long-term loans, and create additional opportunities to finance affordable housing programs, including for internally displaced persons. This concerns securitization and new types of bonds that have been used for many years in European Union countries.

The first step towards implementing these tools has already been taken — the Verkhovna Rada supported the relevant draft law No. 15172 "On Securitization and Covered Bonds" in the first reading.

255 members of parliament voted in favor of this decision.

The document aims to adapt Ukrainian financial legislation to European standards. It introduces new long-term financial instruments, allows banks and other financial institutions to free up their balance sheets from credit positions to attract additional funds, and creates prerequisites for the development of long-term lending.

It is expected that the new mechanisms will stimulate and reduce the cost of mortgage lending, assist in the implementation of affordable housing programs, including for internally displaced persons, and ensure Ukraine's fulfillment of obligations to the International Monetary Fund.

What the draft law will change

The draft law is designed to introduce financial instruments in Ukraine that have long been operating in European Union countries. Their main task is to help banks attract additional resources for long-term lending to the population and businesses.

Currently, banks are limited in their ability to issue "long" loans due to high risks and lack of resources. The draft law provides a mechanism whereby part of the risks on loan portfolios will be transferred to investors, and financial institutions will receive funds to issue new loans.

How securitization will work

One of the key innovations will be the introduction of the securitization mechanism.

Simply put, a bank will be able to pool issued loans into a single pool, issue securities backed by them, and sell them to investors. The funds received can be used by the financial institution to issue new loans without waiting years for borrowers to fully repay previous ones.

Thanks to this, banks will be able to actively lend to the population and businesses, and long-term loans may become more accessible.

Which financial instruments will be introduced

The document introduces several new financial instruments, including:

• securitization bonds;
• covered bonds;
• guaranteed bonds;
• insured bonds.

The draft law also provides for the creation of specialized financing platforms (SFPs) through which securitization operations will be carried out.

Additionally, the document implements the European STS (Simple, Transparent, Standardised) standard for simple, transparent, and standardized securitization.

Compliance with these standards will be monitored by special verification agents under the supervision of the National Securities and Stock Market Commission.

How investors will be protected

Among the key provisions of the draft law is the protection of cover assets in case of issuer bankruptcy.

The document proposes not to include such assets in the liquidation estate, and the moratorium on satisfying creditors' claims will not apply to payments to holders of covered bonds. This should increase the reliability of such financial instruments for investors.

Why there was a need for a new law

Currently, the mortgage bond market in Ukraine is regulated by a law adopted back in 2006. According to the reform authors, it no longer corresponds to modern European practices.

The new document aims to create a legal basis for transforming illiquid assets, primarily loan portfolios, into liquid securities. This is seen as one of the mechanisms for financing the country's reconstruction, developing mortgage lending, and implementing affordable housing programs.

Moreover, the adoption of this legislation is one of Ukraine's commitments under the Ukraine Facility initiative and the extended cooperation program with the International Monetary Fund dated February 13, 2026.

When the new rules may come into effect

The practical implementation of the new financial mechanisms will depend on the development of subordinate regulatory framework.

The relevant acts are to be prepared by the National Bank of Ukraine and the National Securities and Stock Market Commission. According to the final provisions of the draft law, they must be adopted no later than 30 days before the law comes into force.

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