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Romania’s “First Home” Program To Gain Funds Next Yr Too, If Successful – PM

If the “First Home” program is successful, it will be further funded by state guarantees next year, Romanian Prime Minister Emil Boc said in a press conference on Saturday.
Romania’s “First Home” Program To Gain Funds Next Yr Too, If Successful - PM
25 iul. 2009, 14:56, English

“I think this program will have two positive effects. Firstly, Romanians who pay nowadays EUR200-EUR300 rents will pay the same money and will have their own home. Secondly, lending is revived, as except one bank which developed a separate program, all 19 banks are part of the program, and grant loans to the citizens,” Boc said.

“We should not forget, thirdly, that the construction sector contributes highly to the gross domestic product, will benefit from this measure and will also render the country’s economy efficient,” Boc added.
Boc said the banks received 10,000 requests when the “First Home” program was initiated.
 
“The technical procedures are no longer up to the Government, they depend on the banks. We’ve set the normative frame in such a manner as to prevent any objection or obstacle, Today, one can buy a house with a state guarantee of EUR60,000. I’m sure this will have good effects on Romania’s economy, and if it proves to be successful, we’ll fund it next year too, by state guarantees”, Boc said.
 
The government launched a program to guarantee the loans contracted for the purchase or the construction of a house, within the maximum threshold of EUR60,000. The guarantee is granted to people buying their first house and who did not previously benefit from a mortgage loan.
 
Those interested must pay in advance 5% of the purchase price for a house whose price is lower or equal to EUR60,000, or a down payment of EUR3,000 plus the difference between the purchase price of the respective house and EUR60,000, if the price is higher than EUR60,000.

ING Bank Romania withdrew from the "First Home" program, planning to launch a similar mortgage loan product, but without the state guarantee, with a 5.5% interest rate and a maximum ceiling of EUR80,000.