Romanian Finance Ministry supports enhanced mortgage subsidies program

Romania’s finance minister Eugen Teodorovici confirmed that the enhanced mortgage subsidies project announced by former Social Democrat leader Liviu Dragnea before going to prison would go ahead and be enacted maybe as soon as the end of June, Ziarul Financiar reported.

The new program, launched under the logo “One Family - One House” comes with looser criteria and more generous incentives for Romanians looking to get mortgage loans, including state subsidies for interest rates, particularly for families with kids.

However, there is one new constraint related to the age of the properties that qualify for purchase under the program: they have to be no older of one year for properties sold for the first time and no older than five years for properties that were previously owned. Older properties quality only if they were subject to consolidation programs within the previous five years.

As regards the general terms of the program, the maximum value of the property will be RON 570,000 (EUR 120,000) more than double compared to that of properties that qualify for the First Home program (RON 250,000). The state will guarantee 80% of the loan value, versus 50% under the First Home program.

The interest rate charged by banks will be fixed for the entire period of the contract, and it will range between 0.9% and 5.5% per year depending on the structure of the family and the number of children, versus two percentage points over the money market interest rate under First Home program.

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