RO finance ministry inks new program to encourage home purchasing

Romania’s Finance Ministry published for public consultations the revised government-backed program dedicated to encouraging families to buy their first home,Ziarul Financiar reported.

One Family One House will replace the First House program, which has supported since it was introduced in 2009 both the real estate and banking sectors.

The program lost appeal among borrowers recently as data suggests normal mortgage lending is more common and the mortgage lending as a whole (normal and First Home loans) has lost momentum. In the second quarter of this year, the volume of new mortgage loans contracted by 15% compared to the same period last year.

One Family One House is an enhanced version of First Home, since it stipulates larger loans and allow slightly more affluent borrowers to qualify. At the same time, it provides for interest discounts (covered from the state budget) for families with children.

The front payment remains 5% (or more) of the total value of the purchase, the maximum value of the loan is EUR 66,500 (with EUR 70,000 the maximum value of the property) and the maximum income of a family without children to qualify into the program is set at RON 4,500 (EUR 950), or RON 7,000 (EUR 1,470) for a family with children.

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