Regulatory Alerts2010-10-05
Added · Updated
Guideline on Valuation of Residential Mortgage Properties
The Bank of Namibia establishes regulatory loan-to-value limits for residential mortgage exposures, capping ratios at 60% for unserviced land and land development, 70% for serviced land, and 100% for construction, purchasing existing properties, or improvements. Banks must risk-weight exposures exceeding these limits at 100% rather than 50%, with exceptions permitted only if secured by collateral recognized under BID-5. The guideline mandates complete physical valuation reports for new loans on existing properties, requires fresh valuations for loan takeovers older than six months or new financing from additional banks, and specifies valuation protocols for repossessed assets using forced sales value or reserve prices. Additionally, banks must obtain valuations no older than six months for specific transactions such as further advances or arrears, prohibit consolidating non-mortgage debit balances into mortgage accounts, and submit quarterly reporting returns detailing loan volumes across specified monetary thresholds.
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