The new version of the "First Home" scheme discussed by the members of the Government with bankers intends for the lending risk to be equally shared by the state and banks, without altering interest terms, according to the Prime Minister Emil Boc.
Several banks have cheaper mortgage loans than the "First Home" loans in their offer, although they benefit from the state's guarantee for the latter, so the risk that they take on is lower.
From a client's perspective, "First Home" loans have the advantage of a lower downpayment, at least 5% of the amount, compared with the minimum 25% usually required by banks, although there is more red tape involved and sometimes even the cost is higher.
Yesterday Premier Boc met with representatives of commercial banks at the Finance Ministry.
"We will double the number of beneficiaries by doubling the current guarantee cap. If banks agree to this version, there will be another 1.5 billion euros in the system. Banks would carry 50% of the risk and the state 50%. A further 1.5 billion euros in guarantees can be added to the current 1.5 billion euros," said Boc after the meeting at the Finance Ministry.
The Government allocated caps of 1 billion euros in 2009 and 700 million euros in 2010, with the 200 million euros carried over into 2011.
Currently the state takes on the entire risk, with loans granted for buying a home through the "First Home" scheme being fully guaranteed by the state.
The number of banks taking part in the "First Home" scheme has remained the same as last year - 21 institutions.
The new version of the "First Home" scheme discussed by the members of the Government with bankers intends for the lending risk to be equally shared by the state and banks, without altering interest terms, according to the Prime Minister Emil Boc.
Several banks have cheaper mortgage loan
