LAW ON THE "ONE FAMILY, ONE HOUSE" PROGRAM
This law aims to rename the "First Home" Program to the "One Family, One House" Program, as well as to modify the eligibility conditions of the beneficiaries.
The "First Home" program is to be replaced by a program entitled "A family, a house", the new program will bring a reduction in financing costs for Romanians who want a home. The measure is in a legislative draft that has already passed the Senate, being adopted by the Chamber of Deputies with 266 votes in favour, 0 against and 3 abstentions. This program is to reach the President of Romania, for promulgation by decree.
As in the case of program that it will replace, through the program "One family, one house" will be able to contract loans guaranteed by the state, which will be able to be used to build or purchase a house.
If until now, when contracting a loan of a maximum of 60,000 euros, the beneficiaries did not have to be married and had no age limit, the new program increases the ceiling to 70,000 euros, but requires that the beneficiaries be married, the income does not exceed a certain threshold, and the advance for the loan to be at least 5%.
A first change brought about by the new programme will, in fact, be a limitation. Thus, the beneficiaries of the program will have to have a individual net income or together with the husband or wife of no more than 4,500 lei. When calculating this limit, the social assistance benefits received by people who are part of a vulnerable group are not taken into account, if they lead to exceeding the threshold of 4,500 lei.
For families with one or more children, the income limit will be higher, respectively it will reach the value of 7,000 lei. The houses that can be bought will have to have a price of no more than 70,000 euros, while the value of the guaranteed financing will be a maximum of 66,500 euros, and the minimum advance will have to be at least 5% of the purchase price or the price of building the house.
This advance represents the difference between the purchase price of the house resulting from the pre-contract of sale or the value of the contract of contractor and the guaranteed financing. The purchase price of the house is up to EUR 70,000 lei equivalent at the NBR exchange rate valid on the date of conclusion of the sale-purchase contract or of the entrepreneurship contract, and the value of the guaranteed financing is up to EUR 66,500 lei equivalent, but not more than the value resulting from the evaluation report of the house or the value resulting from the estimated estimate of works, annex to the contract for the construction of the dwelling, excluding the advance paid by the beneficiary.
During the term of the credit agreement obtained, the beneficiary may not acquire individually or together with the family a share of more than 1/2 inclusive of a other dwelling situated in urban areas, with the exception of those acquired through inheritance. If there is a change in this regard after entering the Program, within 12 months, the beneficiary must decide on the ownership of the dwelling in the Program or other dwelling and notify this decision to the Funder and the guarantee funds, with the presentation of the documents attesting the alienation.
The draft legislation will also bring changes in terms of interest subsidies that will be able to benefit those interested in enrolling in the new program. More specifically, families with a child will benefit from interest rate reduction the state-guaranteed loan with 0.5%, while families with two or more children will have a lower interest rate by 1%. A 2 percentage point reduction in the interest rate of the guaranteed loan is also granted to people who are part of a vulnerable group. The granting of subsidies shall be checked annually and shall be subject to compliance with the net monthly income referred to above.
Also, the subsidy granted under the Program cannot be cumulated with other facilities granted from funds from the state budget for the living space, namely rentals or the purchase of dwellings, as provided for certain categories of employees, such as those adopted by Law nr. 360/2002 on the Statute of the policeman, completed with Law nr. 288/2018 through which the policeman who meets the conditions for granting the monthly compensation for rent and who contracts a mortgage / real estate loan for the purchase of a house benefits from the monthly compensation for rent / for the payment of the installment or a fraction of the installment related to the loan. In this case, the monthly compensation for rent shall be granted in the amount provided for in Article 31 (1). (1) of Law 360/2002 (compensation for rent up to 50% of the basic salary), but may not exceed the monthly rate paid for the mortgage/real estate loan.
At the same time, the project foresees that eligible beneficiaries can refinance the loans obtained through other financing instruments, except for other loans granted under the Program. This gives the beneficiary the possibility to access a new loan outside the program "The first house", from any credit institution for the refinancing of that contracted under the Program. In this case, the financier, with the agreement of the Ministry of Public Finance, may approve the refinancing of the state-guaranteed loan, as well as the temporary lifting of the encumbrance ban on the house purchased or built under the Program, in order to register a new mortgage in favor of the credit institution that grants the refinancing, provided that the loan guaranteed under the Program is paid in full.
Although the First House 2020 is in full swing, the rules will be changed on the fly. Thus, for the files submitted until the appearance of "One family, one house" will apply the rules "First Home", while for the files submitted after the appearance of the changes in the project, the rules" One family, one house" will apply.
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