Urban Transformation Financing

Urban transformation aims to ensure that flat owners residing in risky buildings or areas can live in safer and more modern structures by either demolishing and reconstructing their buildings or strengthening them without demolition, thereby eliminating threats to life and property safety.

Through the urban transformation financing solutions developed by Emlak Katılım, we aim to meet the financing needs of flat owners and protect the rights and interests of all parties, ensuring that the reconstruction/strengthening of the building is completed securely.

Emlak Katılım Urban Transformation Financing Solutions

• Strengthening
•  Applied to risky structures.
•  Involves reinforcing the existing building through strengthening methods without demolition.
•  The cost of strengthening is financed by the flat owners.
•  Down payments made by flat owners and the financing provided by Emlak Katılım are collected in a blocked account pledged to Emlak Katılım, and funds are released by Emlak Katılım based on progress-payment (hakediş) milestones.
• On-Site Transformation
•  Applied to risky structures.
•  Involves the demolition and reconstruction of the existing building without additional floor area ratio (Emsal) increases.
•  The project construction cost is financed by the flat owners.
•  Down payments made by flat owners and the financing provided by Emlak Katılım are collected in a blocked account pledged to Emlak Katılım, and funds are released by Emlak Katılım based on progress-payment milestones.
•  Area-Based Transformation
• Applied to risky structures.
•  The financing structure is determined based on the agreement type between the flat owners and the contractor.

Steps to be Followed by Flat Owners

• Flat owners apply to organizations authorized by the Ministry of Environment, Urbanization, and Climate Change for the risk assessment of their buildings.
• With the "Risky Building Assessment Report" obtained from the authorized organization, flat owners must reach a 2/3 majority vote for demolition and reconstruction, or a 4/5 majority vote for strengthening applications.
• For buildings decided for demolition, a "Construction Contract" is signed between the flat owners and a contractor firm, and the building permit is obtained from the municipality through the contractor.
• For buildings decided for strengthening, if the building is suitable, an implementation firm is appointed, a contract is signed between the flat owners and the firm, and the strengthening permit is obtained from the local municipality.
• Flat owners apply to Emlak Katılım for urban transformation financing.

Processes Managed by Emlak Katılım

•  Emlak Katılım evaluates the contractor, the technical data of the construction, and the contract between the flat owners and the contractor. For eligible projects, a "Project Completion Protocol" is signed between the Bank and the contractor.
•  Emlak Katılım evaluates the applications of the flat owners and approves those deemed suitable. Emlak Katılım transfers the financing amounts, down payments, and other funds into the contractor's blocked account pledged to Emlak Katılım.
•  In accordance with the project completion protocol, Emlak Katılım releases the pledged funds to the contractor in stages, based on the physical progress rate of the construction.
•  Emlak Katılım provides urban transformation financing with favorable profit share rates for up to 120 months for housing and strengthening financing, and up to 84 months for commercial property financing. There is also state support available for the urban transformation financing used by flat owners from Emlak Katılım.

State Profit Share Support Table (Under Law No. 6306):

*State support of 840 bps will be provided for the first residence only in Residential Construction Financing transactions. For subsequent residences entering urban transformation, 720 bps of state support will be applied up to a maximum of 3 million TL.