Armenia plans to introduce a reverse mortgage mechanism that will allow pensioners to mortgage their real estate to a bank while retaining ownership and the right to reside in the property, in exchange for receiving monthly payments.

Chairman of the Cadastre Committee Suren Tovmasyan presented the relevant bill at the Cabinet meeting.

“Over the course of our lives, perhaps the most valuable asset we acquire is real estate, obtained through work and income—via mortgage agreements, direct purchases, inheritance, and other means. After years of payments, we obtain ownership rights, but upon reaching retirement age, we face challenges in generating income and ensuring our well-being based on the capital accumulated in the form of real estate.

“In our case, this asset is viewed more as a consumption good. People live in their property but cannot generate income from it while retaining ownership and usage rights. Developed countries have introduced mechanisms to address this issue. With the adoption of this legislative package, property owners, after retirement, will be able to negotiate with a bank—under clearly defined legal conditions—to transfer their property under a reverse mortgage and, while retaining ownership and residency rights, receive income,” Tovmasyan explained.

According to him, after transferring the property to a bank under a reverse mortgage agreement, the homeowner will receive a fixed monthly non-cash payment, which, combined with their pension, will serve as additional income to improve their standard of living. During this period, the pensioner will have no obligation to make repayments to the bank.

Subsequently, the legal heir of the property will have the option to sign an agreement with the bank and reclaim the property by repaying the required amount. If no such claim is made, the bank will be entitled to register its ownership rights and sell the property at auction. If the proceeds from the sale exceed the amount paid by the bank to the pensioner, the difference will be transferred to the heirs.