WHO GETS FORMAL HOUSING FINANCE IN JORDAN?

The role of housing finance in actualizing housing demand is widely appreciated. Many developing nations have established special institutions in an attempt to assure that adequate volumes of financing are made available. Jordan offers an especially interesting case because the Jordan Housing Bank has the resources to serve almost any number of applicants at highly competitive rates. In addition, several other formal lenders make mortgage loans as do some government programs. This paper analyzes the determinants of the likelihood of recent home purchasers actually obtaining a loan from a formal finance institution. We find that purchasers in rural areas are much less likely to obtain such loans. In urban areas, the probability of using formal finance rises steadily with income. Also in urban areas, a household that purchases a unit that is an addition to an existing structure is much more likely to obtain formal financing than an otherwise similar household.