Banking reforms implemented during the recent financial crisis have created a huge increase in the
demand for alternative project financing solutions, due to the strict lending criteria now imposed on
the banking sector.

For commercial and residential property developers in particular, alternative financing is a valuable service bridging the gap between the supply and demand for credit, thereby enabling mortgage lenders to continue funding real estate developers.
This has created a once in a generation investment opportunity in the stable and highly profitable area of real estate financing.

FORNAX CAPITAL The Danish Mortgage MoDEL

Denmark has a very stable, robust and efficient mortgage system both during upturns and downturns in the Danish economy.
This was true during the financial crisis and also applies in the current economic climate.

The Danish mortgage system is unique, as it is based on an
important general principle called the match-funding principle.
Under this principle, there is a direct match between
the loan which a homeowner raises with a mortgage bank
and the bonds which a mortgage bank issues to fund a loan.
It contributes to securing financial stability, because the
match funding principle to a greater extent eliminates risk
in the financial sector.


Danish Mortgage Banks (Realkredit Institutions) provide refinancing of up to 80% of the market value (as estimated by the real estate appraisers) once the respective building is finished

•Once this financing has been agreed, it is fixed and cannot be withdrawn
•Realkredit Institutions are not allowed to finance development projects but will give a quote for completed real estate projects
•As each phase of the dvelopment is completed, (i) the proceeds from the sale of the apartments and (ii) the mortgage financing via the Realkredit Institution of the apartments which are not yet sold will provide the funds to repay the bond.


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