Romania 'First House' Proj Should Stimulate New ConstructionsPublish date: 01-06-2009
Romania's "First House" program, which offers state-guaranteed loans to purchase one's first home, should cover newly built houses rather than houses available on the free market, SMEs Minister Constantin Nita said Sunday.
"Our wish is that those houses are built and not purchased from the free market, except maybe for those who were built after September 1, 2008, at the beginning of the crisis. I believe that this is the only way to multiply the guarantees and allow the private sector to operate," Nita told a press conference.
He said the ministry has drawn up the seven steps required to purchase a dwelling through the "First House" program.
The first step is to apply for financing, followed by a bank-conducted eligibility assessment. During the next three steps, the Credit Guarantee Fund for SMEs, will receive, analyze and eventually approve the guarantee application. The bank will afterward issue a loan authorization to the client.
The seventh and final step will be the mortgage registration to the bank, in the state's name.
"These seven steps are fundamental to receive the guarantee," Nita said.
Romanian authorities announced recently 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 benefit previously 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.
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