Armenia’s Finance Ministry is preparing to sign loan agreements aimed at providing housing support for people displaced from Nagorno-Karabakh, Finance Minister Vahe Hovhannisyan said, according to Sputnik Armenia.

According to the minister, one of the two loans, provided by the World Bank, is expected to be signed within days, while the second loan, financed by the Asian Development Bank, will be signed later. Both agreements, each worth $250 million, were previously approved by the government and parliament, and only the formal signing stage remains.

The government plans to use the funds to continue a mortgage subsidy program designed for tens of thousands of families forcibly displaced from Nagorno-Karabakh, covering around 109,000 people.

Families purchasing housing in border or remote settlements will receive 5 million drams ($13,300) per family member, while those buying homes in other settlements, including areas surrounding Yerevan, will receive 4 million drams ($10,600). In Yerevan itself, assistance will amount to 3 million drams ($8,000) per family member.

In addition, authorities plan to approve several new loans during the year for budget support purposes. These borrowings are intended not for individual projects, but for covering the state budget deficit. The loans are expected to come from the World Bank, the Asian Development Bank, and the French Development Agency.

Several years ago, the Armenian government had nearly halted the attraction of foreign budget loans, but since 2024, it has resumed borrowing to finance major social programs. These include not only housing subsidies, but also the universal health insurance program. As a result, Armenia’s budget deficit in 2025 tripled in absolute terms compared with 2022, reaching 604 billion drams ($1.59 billion).

In 2026, the deficit is expected to decline to 537 billion drams ($1.41 billion). At the same time, authorities do not rule out reducing the volume of foreign borrowing, since the first-quarter budget deficit was lower than expected. On the one hand, budget revenues exceeded projections, while on the other, spending execution significantly lagged behind planned levels.

The European Bank for Reconstruction and Development will also provide Armenia with a $264.4 million grant for housing programs for forcibly displaced people from Artsakh.