Notice No. 09/2024 of 20 December – Special Housing and Construction Credit Regime

PUBLISHED IN THE OFFICIAL GAZETTE, FIRST SERIES, NO. 242, OF 20 DECEMBER 2024 NOTICE NO. 09/2024 SUBJECT: FINANCIAL SYSTEM − Special Regime for Housing and Construction Credit for Housing Properties, Tourism Enterprises, and Restaurant Establishments and Similar

Given the need to update the scope of application of the Notice on Housing and Construction Credit, particularly regarding the maximum housing credit amount and the purposes of construction credit; Pursuant to the combined provisions of paragraph a) of Article 25 of Law No. 14/21, of 19 May – General Regime of Financial Institutions Law, and paragraph 1 of Article 98 of Law No. 24/21, of 18 October – Bank of Angola Law, I determine:

I DETERMINE:

Chapter I General Provisions

Article 1. (Subject Matter)

1. This Notice establishes the following: a) The Special Regime for Housing and Construction Credit for Housing Properties, Tourism Enterprises, and Restaurant Establishments and Similar; b) The eligibility requirements, terms, conditions, and costs applicable to these credits, as well as their treatment in the calculation of mandatory reserves.

CONTINUATION OF NOTICE NO. 09/2024 Page 2 of 15 2. For the purposes of the preceding paragraph, regarding credit for Tourism Enterprises and Restaurant Establishments and Similar, only properties located in areas of tourist interest and potential, created under Presidential Decree No. 92/21, of 16 April, or registered in the Integrated Tourism Management System – SIGTUR, are eligible.

Article 2. (Scope) This Notice applies to Banking Financial Institutions that develop credit granting activities, under the supervision of the Bank of Angola, pursuant to Law No. 14/21, of 19 May, General Regime of Financial Institutions Law.

Article 3. (Definitions) For the purposes of implementing this Notice, the following shall be considered: a) Self-construction – where a private client, owner or promissory buyer of a plot of land, contracts a legally constituted construction company to build their permanent primary residence; b) Construction Credit – credit granted to the promoter of a housing project or tourism enterprises and restaurant establishments and similar; c) Housing Credit – credit granted to a private client for the acquisition of a property for permanent primary residence: i. Already built; or, ii. Under construction or to be built in the immediate future, through self-construction or as part of a housing project under construction;

CONTINUATION OF NOTICE NO. 09/2024 Page 3 of 15 d) Real Estate Brokerage Company – a company authorized to alienate a property to an individual, on behalf of a third party, under Law No. 14/12, of 4 May – Real Estate Brokerage Law; e) Promoter – a construction company and/or owner of a housing project, as well as a duly constituted real estate brokerage company; f) Infrastructured Land – land located in an area where basic infrastructure is installed, namely sanitation, power lines, water supply, street paving, and public lighting; g) Tourism Enterprises – establishments intended to provide accommodation services to the general public for remuneration, equipped with a set of equipment structures and complementary services according to their typology and specificity; h) Restaurant Establishments and Similar – establishments intended to provide, for remuneration, food and beverage services on-site or off-site, for tourism purposes.

Article 4. (Credit Risk Assessment and Management)

1. The granting of credit under this Notice is subject to compliance with the internal regulations of each Banking Financial Institution and the following Bank of Angola regulations, insofar as they do not contradict the model of relevance in the annex, which is an integral part of this Notice: a) Notice on Information Duties within Credit Contracts; b) Instruction on Credit Granting, insofar as it does not contradict the provisions of this Notice;

CONTINUATION OF NOTICE NO. 09/2024 Page 4 of 15 c) Instruction on Credit Granting regarding analysis timeframes, communication of final decisions, formalization, and disbursement of credit. 2. In the assessment and mitigation of credit risk, Banking Financial Institutions must: a) Prior to credit granting: i. Conduct a rigorous assessment of clients' financial capacity to fulfill their obligations under credit contracts; ii. Assess risks related to the property and the promoter, as applicable; b) During the credit term, regularly monitor the following: i. Construction of the property, when applicable; ii. Their clients, to timely detect financial difficulties or other circumstances that may increase default risk and take appropriate measures to prevent or resolve the situation.

Article 5. (Cost of Credit)

1. The interest rates and commissions provided for in this Notice correspond to global maximums, and Banking Financial Institutions may apply lower rates and commissions, considering their credit risk assessment for each client, as well as their commercial strategy.
2. Commissions charged at the time of credit granting cannot exceed 1% (one percent) of the total credit amount to be granted.
3. During the credit term, no other commissions may be charged, except in the case of credit restructuring or term extension, with each limited to 0.5% (half a percent).

CONTINUATION OF NOTICE NO. 09/2024 Page 5 of 15 4. Commissions for early, partial, or full repayment of the credit cannot be charged. 5. The following costs must be separately charged to credit applicants or, after credit granting, to borrowers, and are not covered by the commissions referred to in paragraphs 2 and 3 of this article: a) Property valuation, including land, works, and projects, as applicable, at the initial credit risk assessment stage, as well as when necessary for credit restructuring or as defined in Bank of Angola regulations; b) Fees for the project/site supervisor contracted by the Banking Financial Institution to monitor progress; c) Fees and charges related to notarial and registration acts in credit granting; d) The cost of insurance policies; e) Any taxes payable on the credit, commissions, and interest; and f) Commissions associated with real estate brokerage operations. 6. The maximum applicable nominal interest rate for housing credit is 7% (seven percent) per annum; 7. The maximum applicable nominal interest rate for construction credit for housing properties, tourism enterprises, and restaurant establishments and similar is 10% (ten percent) per annum;

Article 6. (Public Disclosure of Availability of This Regime) Banking Financial Institutions must visibly disclose on their institutional website the availability of the credit modalities defined herein, as well as the access requirements.

Chapter II Housing Credit

CONTINUATION OF NOTICE NO. 09/2024 Page 6 of 15 Article 7. (Eligibility Criteria)

1. The maximum financeable property value under this Notice is determined by the financial capacity of borrowers and guarantors, as applicable, and cannot exceed Kz 150,000,000.00 (one hundred and fifty million Kwanzas).
2. The special housing credit regime established in this Notice covers the following purposes: a) For the acquisition of a property for permanent primary residence, through: i. Purchase of infrastructured land and/or self-construction; ii. Purchase of a built or to-be-built property acquired from a promoter. b) Restructured credits on a date subsequent to the entry into force of this Notice, due to proven financial difficulties of the client to fulfill responsibilities, provided the remaining value at restructuring is equal to or lower than the amount referred to in paragraph 1 of this article.
3. New properties held by Banking Financial Institutions that are part of a housing project and were received as payment or fulfillment of a construction credit, with sale values equal to or lower than those established in paragraph 1 of this article, may be sold to their clients and financed under this Notice, provided all its requirements are met.
4. Properties allocated by the State to a citizen under the regime for access to housing built with public funds may also be financed under this Notice, subject to the conditions of this article.
5. The special housing credit regime established in this Notice does not cover credit granted:

CONTINUATION OF NOTICE NO. 09/2024 Page 7 of 15 a) Under an internal housing credit regulation or specific conditions exclusively for employees of the Banking Financial Institution itself; b) To a client, borrower of another active housing credit, regardless of whether that credit was granted by another Banking Financial Institution or secured by another property; c) When the property seller is the client's spouse, de facto union partner, descendant, or ascendant up to the second degree in a direct line, or companies managed by them; d) For the purchase of land that is not infrastructured and/or for self-construction or acquisition of a property from a housing project under construction or built on land with these characteristics; and e) For the execution of improvement works or increase in built area in an existing residence.

Article 8. (Terms and Conditions Applicable to Credits)

1. The maximum term for credit granted under this Notice is 30 (thirty) years, including restructurings, as established in Presidential Decree No. 259/11, of 30 September.
2. The ratio between the amount of credit granted under this Notice and the lower of the acquisition price or the property valuation given as guarantee for the credit at the time of granting cannot exceed 100% (one hundred percent).
3. Banking Financial Institutions must evaluate the best option for the client, between progressive and constant installments, considering the characteristics of each, including the potential increase in their income during the credit term.
4. Regardless of the property value, the credit granted under this Notice must be the only credit secured by that property, and contracting other bank credits for its financing is not permitted under any circumstances, even under different terms and conditions than those set out in this Notice, and/or contracted at other Banking Financial Institutions.

CONTINUATION OF NOTICE NO. 09/2024 Page 8 of 15 5. Banking Financial Institutions may stipulate as additional conditions for credit granting the involvement of guarantors in operations when the client's risk level justifies it.

Chapter III Construction Credit

Article 9. (Eligibility Criteria)

1. The following are eligible for financing under this Notice: promoters of construction projects for properties for: a) Housing, with a maximum sale value of Kz 150,000,000.00 (one hundred and fifty million Kwanzas) per unit, with projects possibly including units of various typologies and sale values, provided they do not exceed the maximum value; b) Tourism enterprises and restaurant establishments and similar, with the amount to be financed not exceeding Kz 200,000,000.00 (two hundred million Kwanzas).
2. The terms and conditions of this Notice are also applicable to necessary improvements and/or redevelopment works for tourism enterprises and restaurant establishments and similar.
3. Promoters of the projects referred to in the preceding paragraphs must meet the following requirements: a) Be a company constituted under the Commercial Companies Law, the Single-Member Companies Law, or the Cooperatives Law; b) Have organized accounting and accounts certified by a chartered accountant or certified public accountant registered with the Angolan Order of Chartered Accountants and Certified Public Accountants; c) Have a regularized tax situation; d) Have proven experience in executing construction projects of a nature similar to the project for which financing is requested under this Notice; e) Not have been convicted in judicial proceedings for contractual breaches; f) Be registered as a real estate promoter with the National Housing Institute and/or another competent regulatory entity for this purpose;

CONTINUATION OF NOTICE NO. 09/2024 Page 9 of 15 g) Possess a valid contractor's license, when the promoter is also the constructor of the project. 4. The special construction credit regime established in this Notice does not cover credit for: a) Purchase of land that is not infrastructured, as well as housing projects to be built on such land; b) Furnishing of tourism enterprises and restaurant establishments and similar, notably for the acquisition of furniture, equipment, and similar items.

Article 10. (Terms and Conditions Applicable to Credits) Construction projects financed under this Notice must be sized to allow construction within a period not exceeding 3 (three) years.

Chapter IV Mandatory Reserves

Article 11. (Deduction of Mandatory Reserves)

1. The following are deductible from the mandatory reserves to be established by each Banking Financial Institution: credits disbursed under Notice No. 09/22, of 6 April, Notice No. 09/23, of 3 August, and this Notice, regardless of whether they are in regular or default status, at the following percentages: a) Housing credit – 100% (one hundred percent); b) Construction credit for housing properties – 50% (fifty percent), with housing cooperatives receiving a 75% (seventy-five percent) deduction; and c) Construction credit for tourism enterprises and restaurant establishments and similar – 75% (seventy-five percent).
2. The following cease to be deductible from mandatory reserves: a) Construction credits extended due to the project construction period exceeding 3 (three) years; and b) Credits in default for a period exceeding 180 (one hundred and eighty) days.

Article 12. (Information Reporting) Banking Financial Institutions must monthly submit to the Bank of Angola a list of disbursed and restructured contracts in force, in the format and with the information to be defined in specific regulations.

Chapter V Final Provisions

CONTINUATION OF NOTICE NO. 09/2024 Page 10 of 15 Article 13. (Term of Validity) The conditions applicable to credits granted or restructured under Article 5 of this Notice remain in force for the duration of each credit.

Article 14. (Sanctions) Non-compliance with the provisions of this Notice constitutes a regulatory offense punishable under Law No. 14/21, of 19 May – General Regime of Financial Institutions Law.

Article 15. (Doubts and Omissions) Doubts and omissions resulting from the interpretation and application of this Notice are resolved by the Bank of Angola, and must be sent to the email address dro@bna.ao.

Article 16. (Revocation) Notice No. 09/2023, of 3 August, and all regulations contradicting the provisions of this Notice are hereby revoked.

Article 17. (Entry into Force) This Notice enters into force the day following its publication. PUBLISHED. Luanda, 27 December 2024. THE GOVERNOR MANUEL ANTÓNIO TIAGO DIAS

CONTINUATION OF NOTICE NO. 09/2024 Page 11 of 15 ANNEX Risk Assessment The granting of housing or construction credit determines the need to assess other risks beyond the client's financial capacity. In this regard, commercial banks must establish procedures to allow for the adequate identification and assessment of risks related to the property, constructor, and promoter, as applicable, and for their mitigation, in line with the following:

1. In financing the (i) purchase of infrastructured land and/or self-construction (housing credit), (ii) purchase of a property that is part of a housing project under construction (housing credit), (iii) purchase of infrastructured land and/or construction of a housing project (construction credit), Commercial Banks must ensure that: a) the requested credit value is coherent with the market value of the property or project to be financed upon completion of its construction: b) Obtain an appraisal conducted by a certified appraiser registered with the CMC and indicated by the Commercial Bank, of the land and/or construction, property, or housing project, according to the credit's purpose. c) The lands are duly legalized with the Land Registry and Cadastre and allow for the establishment of a mortgage in favor of the Commercial Bank: i. Obtain updated cadastral and land registry certificates; ii. Confirm the existence, validity, and respective detachment of the subdivision license; iii. Confirm the registration of horizontal property at the land registry office and cadastre, when applicable; iv. Verify land ownership by the client requesting a housing credit for self-construction or by the promoter of a housing project, as applicable, when the credit to be granted does not include the purchase of the land; v. Confirm that the land is free of encumbrances or charges, including pledges or mortgages in favor of third parties, except when: a. The client purchases a property that is part of a housing project under construction, in which case the land may be mortgaged to the project's financing bank, with the mortgage to be released upon full payment of the property; b. The client purchases the land for self-construction, or for constructing a housing project under housing or construction credit, respectively, in which case the land must be free of encumbrances or charges at the time of the public deed of purchase and sale and disbursement of the respective value, allowing the registration of the mortgage in favor of the Commercial Bank. d) The work/project is duly licensed, budgeted, and scheduled:

CONTINUATION OF NOTICE NO. 09/2024 Page 12 of 15 i. Confirm the existence of a valid construction license in the name of the landowner; ii. Confirm the existence of a construction project approved by the competent entity; iii. Obtain a budget with the estimated construction value and schedule for the work and phased payments; iv. Obtain the draft construction contract in cases of self-construction or financing of housing project construction, except when the constructor of the housing project is also its owner and promoter; e) The constructors or promoters, as applicable, meet the following requirements: i. Are an entity constituted under the Commercial Companies Law, the Single-Member Companies Law, or the Cooperatives Law; ii. Have organized accounting and accounts certified by a chartered accountant or certified public accountant registered with the Angolan Order of Chartered Accountants and Certified Public Accountants; iii. Have regular tax and social security status; iv. Have proven experience in executing construction projects of a nature similar to the project for which financing is requested under this Notice. v. Have not been convicted in judicial proceedings for contractual breach or fraud; vi. Are registered with the National Housing Institute as a real estate promoter, when applicable; vii. Possess a valid contractor's license, when applicable. 2. For housing credit for the purchase of a finished property, new or used, Commercial Banks must ensure that: a) The requested credit value is coherent with the market value of the property, which must be appraised by a certified appraiser registered with the Capital Markets Commission (CMC) and indicated by the Commercial Bank. b) The properties are duly registered at the Land Registry Office and allow for the establishment of a mortgage in favor of the Commercial Bank: i. Obtain updated cadastral and land registry certificates confirming the property's inscription in the Urban Land Cadastre and the Land Registry Office, and verify that the property is free of encumbrances or charges, or will be under these conditions at the time of credit disbursement and public deed of purchase and sale; ii. Confirm that the property, including any portion of horizontal property, is duly legalized and allows for the transfer of ownership to the housing credit applicant at the time of credit disbursement and public deed of purchase and sale, and simultaneously the registration of the mortgage in favor of the Commercial Bank;

CONTINUATION OF NOTICE NO. 09/2024 Page 13 of 15 iii. Obtain the occupancy license. 3. In cases where the signing of the promise of purchase and sale contract and/or the construction contract depends on the Commercial Bank's credit approval, they must ensure that the conditions that formed the basis of their approval are replicated in the definitive contracts signed between their clients, sellers, constructors, or promoters, as applicable, and that the subdivision and construction licenses remain valid.