Romanian Govt Extends "First House" Guarantee For House-Building

The Romanian Government guarantee for the "First House" program will equally target the people taking loans for building a house, according to completions made by the Cabinet at the program's methodological norms.

The decision was made in the government meeting Wednesday, governmental sources told MEDIAFAX.

At the end of the meeting, Prime Minister Emil Boc corroborated the information. He said the program will target both the dwellings completed and registered at the Land Registry and the houses unfinished or under design stage that will be built.

Thus, to buy a home via the "First House" program, interested people must pay a 5% downpayment of the purchase price for a house whose price is lower or equal to EUR60,000, or a downpayment 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.

Furthermore, for euro-denominated loans, interest rates will be computed on EURIBOR (Euro Interbank Offered Rate) rates at three months plus a margin of maximum 4%, while for lei-denominated loans, interest rates will be computed on ROBOR (Romanian Interbank Offered Rate) rates at three months plus a margin of 2.5%, Romanian Prime Minister Emil Boc announced Sunday.

The EURIBOR rate (the average interest rate at which banks offer to lend euro on the European inter-bank market) on three-month loans currently is around 1.3%, while the ROBOR rate (the average interest rate at which banks offer to lend lei on the inter-bank market) on three-month loans currently is around 10.5% per year.

The Romanian Government announced several weeks ago a program to guarantee the loans contracted for the purchase of the first home, within the maximum limit of EUR60,000, with the entire financing granted to this program reaching EUR1 billion.

The guarantee will be granted to the people buying their first home and who did not previously benefit from a mortgage loan.

Mediafax