Romania halves state guarantee for the First House lending program

The Romanian Government has decided to halve the guarantee for loans through the “First house” (Prima casa) program, while the program can also include people who already own a house of maximum ​​50 sqm. Banks active in Romania have three months to determine whether to accept or not the new conditions. Romania's government-backed program “First house” (Prima casa) was released in summer 2009, and the state guaranteed loans for the purchase of homes for maximum EUR 60,000. Since 2010, the threshold reached EUR 70,000 for houses where the work was still in progress and EUR 75,000 for each new home purchased by people organized in associations. To be accepted into the program, people shouldn’t own a house. The government decided in January to continue the “First house” program this year, with the total volume of guarantees reaching EUR 200 million. 80 percent of this amount was divided between five banks: BCR, BRD, Raiffeisen, Banca Romaneasca and Alpha Bank. The “First house” loans have an interest rate equal to the three-month EURIBOR rate plus a fixed margin of four percent per year for loans in EUR and the three-month ROBOR plus up to 2.5 percentage points. Irina Popescu, irina.popescu@romania-insider.com