This means that in the future developers won't be able to raise funds of shareholders for financing of a construction. Similar practice of limited participation of physical persons in housing construction works in many foreign countries and assumes financing of construction at the expense of banks.
The main goal of innovations is to solve a problem of defrauded co-investors. "Citizens won't risk their own means, but purchase already built housing, which can immediately be registered as property. But at the same time, it is necessary to make sure that the price per square meter won't become sky-high, and the banks will be ready to giveloans at low interest rates " — so Mikhail Men,the Minister of Construction, Housing and Utilities of the Russian Federation explained need of changes in the comment for "RBC Real estate".
The project financing, which is planned to be completely transferred in three years, assumes that the construction will be financed more by the bank. At the same time, specific schemes and conditions for interaction between banks, developers and buyers of new buildings haven’t been announced yet. In the developed real estate markets (see below), under this scheme the bank invests in the implementation of housing projects, which acts as providingdebt obligations.The refund of the credit institution doesn’t occur for the asset account of the developer, but at the expense of the cash flows generated by the new project. In other words, the house is built on bank money. At the same time, project financing doesn’t mean lending: the rates for project financing can be much lower than for current loans for builders.