Romania Ups Housing Program’s Guarantee Cap To EUR75,000

He said the larger guarantees will apply to buyers who form an association in view of building new homes, while the guarantee for individuals who buy a new apartment or house will be capped at EUR70,000.

The loans for old apartments or for properties whose construction has already started will be guaranteed within the limit of EUR60,000, as before.

Under the government’s decision, first-time homebuyers who want to purchase a dwelling whose construction hasn’t started yet will be able to benefit from a state guarantee of up to EUR70,000 at the most, while the associations can receive guarantees of up to EUR75,000.

However, the associations must include at least seven people to benefit from the state loan guarantee. In addition, the associations must first own the land on which the future construction will be erected, Vladescu said.

There is no limit on the number of homes that can be built on one plot of land, he added.

Romania’s homebuyer credit was launched last summer to help medium-income citizens purchase houses. The program is available only to first-time buyers, who benefit from substantially reduced downpayments and annual interests.

The government set the maximum loan guarantee cap at EUR700 million for 2010, down from EUR1 billion granted last year.