On Tuesday, the government approved changes in the regulations on state aid for the purchase or construction of residential premises, which are intended to ensure better quality and wider access to housing for families in the regions.
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In order to promote more effective operation of the guarantee program in the regions, it is determined that support can be up to 50% of the loan amount for families with children.
The Ministry of Economy (ME) states that support from 5% to 30% of the loan amount, but no more than 30,000 euros, will be available to a person who lives with and has one dependent child or who is pregnant, or the child’s father.
From 5% to 40% of the loan amount, but no more than 40,000 euros, support will be available to a person who lives with and has two dependent children, or to a person who lives with and has one dependent child and who has entered pregnancy, or to the father of the child.
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On the other hand, from 5% to 50% of the loan amount, but no more than 50,000 euros, will be available to a person with whom you live and who has three or more dependent children, or to a person who lives with you and who has two dependent children and who is pregnant or the father of the child.
At the same time, regardless of the region, the changes are intended to ensure the recrediting process of mortgage loans granted JSC “Development financial institution “Altum” (“Altum”) guarantee or subsidy “Balsts”, taking into account future amendments to the Law on the Protection of Consumer Rights.
It is expected that the guarantee issued during the recrediting process will remain valid. In addition, taking into account that the loan amount tends to increase during the recrediting process, it is expected that the guarantee can be provided again, unless the previous guarantee is no longer valid, according to the EM.
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Taking into account the high inflation and the increase in the cost of construction, the regulations have increased the maximum transaction threshold from EUR 250,000 to EUR 300,000, regardless of the region, which will allow the purchase or construction of larger and higher-quality housing, the ministry says.
Since the beginning of the housing guarantee program in 2015, until December 31, 2023, support has been given to 24,000 families, where more than 36,000 children live. The total amount granted for guarantees is 200 million euros, while the total amount of loans for the purchase or construction of housing is 1.9 billion euros.
Minister of Economy Viktors Valainis (ZZS) states that the MoE wants to achieve smooth operation of the guarantee program throughout Latvia, therefore it is necessary to increase the amount of available guarantees for families with children directly in the regions, so that families can buy or build higher quality and more spacious housing.
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“As you know, commercial banks apply much stricter criteria for issuing loans in the regions than in Riga or Pieriga, or refuse to issue them at all. By increasing the amount of guarantees in the regions, we will promote the availability of housing for families for whom commercial banks require a higher participation in order to receive a mortgage loan,” says Valainis.
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Tags: state guarantee construction purchase housing families regions Latvia increase ZZ .lv
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