The hills around this city have seen plenty of construction, often the distinctive red-roofed homes favored by Israeli settlers. But the bulldozers and laborers active here recently are laying foundations and building roads for a different type of development—planned communities targeted to middle-income Palestinians, including one billed as the first “new city” for Palestinians in modern memory. These communities are patterned after American suburban development—the new city, Rawabi, is specifically designed for upwardly mobile families of a sort that in the United States might gravitate to places such as Reston, Va.
The developments are also relying on another American import, the home mortgage, including creation of a Fannie Mae-style institution for the West Bank. … Backed by the U.S. Overseas Private Investment Corp. (OPIC) and the nonprofit Middle East Investment Initiative, whose board is heavy with Washington insiders, a half-billion-dollar fund is being set up to expand a mortgage market that at present serves mainly the wealthy, or at least those who can afford 13 percent interest and the risk of quarterly rate resets.
OPIC is putting up about half the money. The Palestinian Authority, through its Palestine Investment Fund, the International Finance Corp. and two local banks, are contributing the rest. The Middle East Investment Initiative, which has close ties to the Aspen Institute and the DLA Piper law firm from which U.S. peace envoy George J. Mitchell recently retired as chairman, is helping set up a company that will administer the fund. The company, Affordable Mortgage and Loan—the acronym means “hope” in Arabic—will approve underwriting standards that are to be used by local banks and contribute 70 percent of a home’s purchase price in the form of 25-year loans. Rates are to be tied to U.S. Treasury bonds. Access the full article>>
