Production of student apartments has largely been implemented through low interest Arava housing loans granted by the Housing Finance and Development Centre of Finland (ARA) or interest support loans approved by ARA. In addition some housing localities with free financing have been built during recent years. The state also grants loans for renovation projects of student housing buildings. Some renovations of student apartments have been carried out with individual income financing (= repair funds collected in connection with the rent) and/or loans from financial institutions. Subsidies and support measures granted by the state and municipalities have had a very considerable reductive effect on the calculated initial rents for student housing localities.
New production and renovations of student apartments are mainly financed by means of interest support loans approved by ARA. ARA approves loans recommended by the municipalities. An interest support loan is a loan granted by a bank or another financial institution, the interest of which is in part directly paid by the State Treasury to the lender from ARA’s funds, when a basic deductible on behalf of the borrower is exceeded.
Student housing projects can be granted investment subsidies intended for improvement of housing conditions for special groups, if the project is invested with a governmental interest support loan. The maximum amount of investment subsidies for student housing localities was ten percent in 2009. Investment subsidies can be obtained for new production, renovation or acquisition of localities.