Armenia approves legal framework for reverse mortgage to boost retirement Income

The Armenian government has approved a package of draft laws introducing significant amendments to the Civil Code, including the establishment of a reverse mortgage system aimed at improving the financial well-being of retirees. According to Cadastre Committee Chairman Suren Tovmasyan, the proposed legislation will enable elderly homeowners to unlock the value of their real estate without selling or leaving their homes. The reverse mortgage mechanism will allow pensioners to enter into agreements with banks, under clearly regulated legal conditions, to receive regular monthly payments in exchange for pledging their property.

Tovmasyan explained that homeowners will retain both ownership rights and the right to reside in their property for the duration of their lives. “This model gives retirees the opportunity to generate additional income from their real estate, without being forced to sell their homes or relocate,” he said.

The reverse mortgage system, already widely used in countries such as the United States, is designed to supplement state pensions and provide seniors with a more stable and comfortable standard of living. The additional income is expected to serve as a financial buffer, particularly for retirees who own valuable urban property but have limited liquid assets.

Prime Minister Nikol Pashinyan emphasized that the reform expands the economic freedoms of pensioners. He noted that, for example, a retiree owning an apartment in central Yerevan could sign a reverse mortgage agreement with a bank, which would then provide monthly payments while securing future ownership of the property.

The government believes the initiative will also stimulate Armenia’s real estate market by transforming underutilized residential assets into active financial instruments. Officials say this will increase capital circulation, attract new market participants, and contribute to a more dynamic and predictable property sector.

In addition to reverse mortgages, the legislative package introduces the concept of “exclusive spousal ownership,” allowing married couples to ensure that property remains solely with the surviving spouse after one partner’s death, with inheritance procedures deferred until later.

Authorities expect the reforms to strengthen social protection, increase trust in the financial system, and enhance the overall quality of life for Armenia’s aging population.