The first home program becomes a family one house

The "First Home" program, which is in full swing, has really become a program to help those who want a home and can not afford it because of income. The change of face was made possible by Law no. 40/2020 which was published in the Official Gazette no. 280/2020, so it is in force.

Important to know:

• The First House program was launched in 2009 and has operated continuously, with small interruptions, until now
• The minimum advance is 5% of the house price.
• The purchase price of a home is a maximum of 70,000 euros.
• After 10 years, Prima Casa becomes "A family, a house".
• From 2009 until July 2019, more than 250,000 guarantees and guarantee promises were granted, amounting to almost 25,000 billion lei.
• The program "A family, a house" is addressed to people with a net income below 4,500 lei per person or 7,000 lei for families with children.

The Ministry of Public Finance proposes since 2019 the modification of the governmental program Prima Casa, in order to orient this program towards the social character, practically thus becoming “A family, a house”.

Here is the statement of the Minister of Public Finance at that time, Eugen Teodorovici:

“We completed the One Family, One House Program, following intense and constructive consultations with the representatives of the National Bank of Romania. The government's initiative is primarily social in nature, because we want to support low-income people. At the same time, we thought of helping young families to buy a decent home. We also support the construction sector and not only in terms of the program, which will have beneficial effects throughout the economy, ensure the maintenance or establishment of new jobs and help develop business. "

What are the changes to the program with the new name?

First House:

• It does not impose a minimum monthly income, there is an upper threshold of 57,000 euros (equivalent in lei)
• Maximum financing amount: EUR 66,500 (equivalent in lei)
• Maximum price of the house: 70,000 EUR (equivalent in lei)
• Subsidies: - NO
• Possibility of refinancing: - NO
• Minimum advance: 5%
• State-guaranteed loans: 40-50%
• Maximum credit period: 30 years

A family, a house:

• Net monthly income of 4,500 lei per person, or 7,000 lei for families with children.
• Maximum financing value: 66,500 euros (equivalent in lei)
• Maximum house price: 70,000 euros (equivalent in lei)
• Subsidies: Families with one child will benefit from a reduction in the interest rate of the state-guaranteed loan by 0.5%, and families with two or more children will have an interest rate of less than 1%.
• Possibility of refinancing: the credits obtained through the new program will be able to be refinanced, as provided by the draft normative act “through other financing instruments, except for other credits granted within the Program”.
• Minimum advance: 5%
• State-guaranteed loans: 100% for vulnerable groups. (excluding interest, commissions and bank charges)
• Maximum credit period: 30 years

The granting of subsidies will be verified annually and is conditional on the inclusion in the mentioned net income.

What is First Home Credit?
The "First House" program is a government program that aims to facilitate access for individuals to purchase or build a home by contracting state-guaranteed loans.

What are the conditions of the First Home loan?

The beneficiaries of the “First House” Program can be individuals who cumulatively meet the following conditions:

a) at the date of application for the secured loan, declares on his own responsibility whether he does not own exclusively or together with the husband or wife any house, regardless of the manner and time when it was acquired, whether he owns exclusively or together with the husband or the wife not more than one dwelling, acquired by any other means than by the Program, with a usable area of ​​less than 50 sq m;

b) acquires or builds a single dwelling, through a loan granted and guaranteed under the conditions of the Program;

c) has the quality of borrower in relation to the financier

Eligible beneficiaries will also have to meet the specific conditions set out in the internal lending rules of the financiers:

• Romanian citizenship and residence in Romania;
• Minimum age 18 years;
• At the end of the loan, the applicant must have a maximum age of 65-70 years;
• Minimum one year of work experience and at least 3-6 months at the current job;
• Do not own any dwellings, except one with a usable area of ​​less than 50 square meters;
• An advance of at least 5% of the value of the home to be purchased;
• The First Home program can be accessed individually or together with a maximum of one co-borrower (spouse, one of the parents, or the life partner at that time);
• The home you are going to buy to be included in energy efficiency classes A, B, C;
• The home cannot be sold in the first 5 years after purchase;
• Home insurance against all risks (the rights of compensation belong to the state and the bank from which the loan was taken).
• Collateral deposit equal to the interest due for a period of 3 months.

Documents required to obtain the loan:

• Identity documents (for you, family members and, as the case may be, for people who participate with their income on credit, called co-payers)
• Copy of marriage certificate (for married people)
• Identity card of the owners from whom the home is to be purchased
• Proof of income both for you and for your partner. In case of incomes that are not reported to ANAF, the employees of MIA, MAPN, SRI, etc., will need the salary certificate.
• Energy performance certificate for buildings and apartments. For the guarantee, it is necessary that the house be placed in one of the following energy efficiency classes: A, B, C, offered by the owners from whom the house is to be purchased
• Pre-contract of sale-purchase, in original, which certifies the payment of the advance
• Deeds of ownership of the house, conclusion / tabulation conclusions, survey
• Land Book Extract / Extracts not older than 15 days
• Notarial declaration on your own responsibility attesting that you do not own any home larger than 50 sqm, you do not own any home purchased through the Prima Casa program. Model specific to each bank
• The declaration on the seller's own responsibility, according to Law 10/2001, that the respective real estate is not claimed and that there are no disputes related to them. Statement requested only by certain banks.

What is the interest rate on the First Home loan?
The interest rate of the Prima Casă loan is composed of a fixed margin, established with the bank at the signing of the contract, and a variable margin, also called IRCC reference index (the index that replaced ROBOR)

The fixed margin may not exceed 2%.

How long does the First Home loan last?
The maximum repayment period of the loan is 30 years, the maximum period depends on the lending bank.

How long is the First Home loan granted?
The timing of a loan depends very much on the procedures of the banks and institutions involved.

The complete file reaches the bank and, if there are all the required documents, it reaches the Guarantee Fund, where it can stay for another 5 days. FNGCIMM analyzes the complete file and transmits the decision of the bank regarding the granting of the requested guarantee. On average, the whole process can take 1-2 months. This requires you to have the complete file, the terms set out in the pre-contract very clearly and, of course, a lot of patience.

A new home is a great achievement, for sure. It does not exclude, however, the process you will have to go through, the amounts involved, even if the state provides you with a part and the interest rates are not high, and the time you will allocate in this whole process.

By turning to a credit broker these steps can be simplified, and accessing such a loan is no longer a burden. Our real estate agency, Eurosib Imobiliare, has a good collaboration with the credit broker Smart Credit Finance from Sibiu, which can be found here https://www.creditbanci.ro

The new program "A family, a house" does not apply at the moment, as the bill will have to be adopted by Parliament, signed by the head of state and then published in the Official Gazette. Thus, the files submitted for the First House program will be solved according to the old rules. The files registered after the entry into force of the project will be resolved according to the new rules.

Furthermore, Eurosib Imobiliare will mediate the sale of new or old apartments through "A family, a house", offering the real estate consultancy necessary for the purchase.

Publicat: 26.04.2020