Romanian Young Studio Flat Owners Might Access „First Home” Program

The banks made this proposal in a meeting with Prime Minister Emil Boc, on Tuesday. In the Government’s Wednesday meeting, Boc asked the minister of Finance to discuss this idea with the banks. He suggested that young couples might need a larger home if they decide to have children.

The Government is considering reducing the state’s guarantees for loans taken out through the „First Home” program to half, leaving EUR750 million, half the amount guaranteed so far, available for new loans. The banks are concerned about the interest rate, deposit, provisions, fees already paid to the state Guarantee Fund and mortgages.

In January, the Government decided the „First Home” program will continue this year with a state guarantee ceiling of EUR200 million, which might be increased in July for the second half of 2011. Half of this amount has already been used.

The second stage of the „First Home” program, launched in early 2010, saw the state guarantee loans for the purchase of a new home up to EUR60,000, in the case of older buildings or buildings under construction, and EUR70,000, in the case of planned buildings. Buyers organized into associations were eligible for state guarantees of up to EUR75,000.

„First Home” loans in local currency have an interest rate calculated as three-month ROBOR plus up to 2.5 points, while those in euro use EURIBOR as reference, plus up to 4% per year.