Housing association struggles to secure funding for roof renovation in Ilmajoki, Finland

Jukka-Tapio Jormanainen, a resident of Ilmajoki, is frustrated that his housing association couldn’t secure financing for a necessary roof renovation, despite raising €30,000 through additional fees. Local banks have rejected their request for a €350,000 loan, despite the association’s solid financial stability.

The tightening of lending criteria, particularly influenced by geographic location, has made financing renovations increasingly difficult, according to housing management organizations. Jormanainen shared that responses from banks have been dismissive, reflecting a bias towards urban areas. One bank indicated it only finances projects in growing metropolitan regions, while ignoring the needs of rural populations.

The recent trend shows that loan conditions for housing associations have become stricter, with banks acknowledging geographic location as a potential influencing factor. Mikko Haverinen from Aito Savings Bank noted that in urban centers, loan terms might be more favorable compared to areas suffering from population decline, where property values are generally decreasing.

Contributing to the challenges in securing financing, Mia Koro-Kanerva from the property management association highlighted the increased demand for additional documentation from associations in declining areas compared to previous years. The total number of plumbing renovation projects not realized due to funding issues has nearly doubled in the associations surveyed.

Jormanainen’s housing association is continuing to raise funds through extra fees designed to cover the initial costs of renovations, and the building’s residents are financially capable of contributing to the loan repayment. However, many residents, particularly older ones, may not prioritize such investments, believing the necessity of repairs can be postponed.