Romanian Social Democrats To Push For Rental Home Progr For Low-Income Youth- Official

Romanian social democrat leader and Senate chairman, Mircea Geoana, said Monday that the "First Home" program mainly targets people with incomes above the average, adding the social democrats will ask the government to simultaneously launch a rental home program for low-income young people.

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"The “First Home” initiative the social democrats have strongly backed is a good step into the right direction, but this initiative mainly targets people whose incomes exceed the average. The social democrats are also interested in a program meant to build houses that will be subsequently rented to young people. We also think that, once we have concluded the agreement with the European Commission too, and as soon as we know exactly the sums we can rely on this year, then, we shall ask the government to launch a massive program meant to build rental houses both for young people and for social purposes which, alongside the “First Home” program, will actually stimulate the development of the local construction sector, revive the country’s economy and allow easier access of low-income people to homes," said Geoana.

He also said the social democrats are trying, through this program, to find solutions for people with low income.

Romanian authorities recently announced a program to guarantee loans contracted for the purchase of the first home, within the maximum limit of EUR60,000. Overall financing reaches EUR1 billion.

The guarantee is meant for individuals who did not previously benefit from mortgage loans.

Eligible banks to participate in the government’s program will have to agree to charge-free early loan repayment, a down payment of maximum 5% of the loan value, and dwelling’s evaluation procedures, Prime Minister Emil Boc said recently.

The Credit Guarantee Fund for SMEs will take a EUR100 million loan, with state guarantee for 80% of the amount, and its business line will be expanded to include mortgage loans.

According to the representatives of real estate agencies, developers and construction companies, state-guaranteed loans may stimulate the real estate and constructions market, but the results depend on how the program will be applied and on banks’ reactions.

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