First House Program
On May 20, 2009, the Government adopted the First House program, designed to support people who first acquire a home on the Romanian territory. The First House program implies that the loans contracted through this program are guaranteed by the state through the National Loan Guarantee Fund.
Thus, the maximum state guaranteed by the First House program will be 60,000 euros. This value represents, according to Government estimates, the average price of a home in Romania. The guarantee occurs when the beneficiary fails to pay the loan, in which case the state reimburses the amount of the loan to the creditor bank, using the mortgage right on the real estate through ANAF.
The First House Program aims to unblock real estate loans and revive the real estate sector, strongly affected by the economic crisis. Guaranteeing state loans means a zero risk for lending banks so they will be willing to lower interest. Banks that will grant loans through Prima House program will participate in an auction organized by the Ministry of Finance.
Among the conditions that banks have to meet, it is remarked: the practice of interest within the limits imposed by the state and the waiving of the early repayment commissions. The small but secure profit attracted most of the banks so that at the beginning of June, more than 20 banks have already signed up for this auction. The final list of the banks accepted for the First House program is made public later.
First House provides a credit ceiling of 60,000 euros with an advance of 5%. If the amount of credit exceeds the established ceiling, the beneficiary will have to pay the difference between the price and the ceiling at the same time as the advance.
The First House program imposes on the beneficiaries a number of conditions regarding both the type of dwelling and the financial nature. Initially, the Government decided that people who will benefit from the First House program will not be allowed to sell the purchased house within five years. Nevertheless, on 16 June, the senators of the Budget-Finance Committee adopted unanimously an amendment to the ordinance regarding the establishment of the First House program, which allows the sale of the real estate within the first five years of the acquisition with the approval of the Ministry Finance.
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