According to the Bank’s website, the Project Development Objective is to expand access to affordable housing finance for underserved households in Ukraine and strengthen the enabling environment for a sustainable housing finance market.

Ukraine's mortgage market remains severely underdeveloped at less than 1 percent of GDP, with the government-sponsored eOselia program serving as the main engine of mortgage lending since the start of the war. To this end, the operation is structured around three components:
- Component 1 (USD 300 million) finances housing finance ecosystem reforms with disbursements linked to Performance-Based Conditions covering mortgage program efficiency, UFHC governance, sustainable finance solutions, and enabling environment reforms aligned with EU acquis;
- Component 2 (USD 195 million, grant) supports the launch of a new mortgage subsidy program to leverage commercial bank liquidity and mobilize private capital; and
- Component 3 (USD 5 million) finances technical assistance and capacity building for MoEEA and UFHC.

Environmental and Social Risk Classification: Substantial

The environmental risk rating for the Project is preliminarily assessed as Moderate. The Project will support access to affordable housing finance through financial intermediaries, without direct financing of large-scale civil works, new construction, or refurbishment. However, mortgage lending may indirectly enable small-scale refurbishment activities in existing housing units. Associated environmental risks are expected to be limited, site-specific, and manageable, and may include OHS risks, handling of hazardous materials, construction waste, and temporary disturbances such as dust, noise, and vibration. Activities are expected to take place within existing developed areas, thereby minimizing potential risks to sensitive natural habitats and cumulative impacts. The scope and extent of potential construction activities are not yet fully defined and will be further assessed during project preparation; environmental risks may be subject to revision as additional information becomes available. Other potential risks include community health and safety concerns related to war-related hazards, such as explosive remnants of war and aerial strikes.

The social risk rating for the Project is preliminarily assessed as Substantial. An accessibility to the project benefits is a key risk which may include exclusion of vulnerable groups due to IDP documentation gaps, limited digital access, or uneven geographic distribution of participating banks, compounded by insufficient transparency in eligibility criteria and inadequate outreach. At the program implementation level, risks are linked to the FCV context: borrowers whose mortgaged properties are damaged or destroyed by hostilities may face financial vulnerability and loss of collateral, while participating banks face Non-Performing Loan risks. The foreclosure reform may introduces a risk of eviction of vulnerable borrowers unable to repay due to income loss of borrowers, particularly where loan restructuring procedures are absent. Workers involved in building renovation may face OHS risks, including in structures potentially damaged by hostilities. In addition, the project structure is complex: UFHC channels interest rate subsidies through up to ten commercial banks, each making individual mortgage lending decisions, making consistent ESMS quality across all PFIs and ESS9 compliance critical implementation priorities. 

IBRD Commitment: US$ 110.00 million
Ukraine Relief, Recovery, Reconstruction, and Reform TF (grant): US$ 70.00 million
Total Project Cost: US$ 1710.00 million

World Bank
Johanna Jaeger
Senior Financial Sector Specialist

Borrower/Client/Recipient
Ministry of Economy, Environment and Agriculture

Implementing Agencies
Ukraine Finance Housing Company

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