The Council of Ministers approves this Tuesday the new line of 20% guarantees through the Official Credit Institute (ICO) to promote the purchase of housing and ‘unclog’ the difficulty of assuming the down payment required for the acquisition. The measure has been going on since May, when the Government presented it for the first time, but it was paralyzed by the general elections.
The progress of the approval that the President of the Government, Pedro Sánchez, made this weekend during a rally in Vigo follows the line set by the Minister of Housing and Urban Agenda, Isabel Rodríguez, who at the end of January announced in an appearance in Congress the Executive’s plans to resume this month the activation of the measure with which they hope to help in the acquisition of approximately 50,000 homes.
Specifically, the Council of Ministers will give the green light to the creation of the two help lines with the ICO, one of up to 2.5 billion of euros in guarantees for the purchase of habitual housing and another of 4,000 million to expand the social housing stock.
Children under 35 with income of up to 37,800 euros per year
The first seeks to facilitate access to financing for the purchase of the first home within the national territory for groups who, being solvent, do not have prior savings. It will cover up to 20% of mortgage loans. This means that Housing will share up to 20% of the risk of the entire principal of each mortgage with the credit institution on equal terms. If the home to be purchased has a minimum energy rating D or higher, the Ministry may guarantee up to 25% of the loan principal.
Young people up to 35 years old and families with minor dependent children can benefit from them. These groups can join as long as they have an individual income of up to 37,800 euros gross per year (4.5 times the IPREM) or double that in the event that the home is purchased by two people, that is, the income of the two purchasers. They will not be able to jointly exceed the sum of the limit established for each one.
In addition, the measure presented last year includes improvement factors depending on the number of children and in the case of single-parent households. In these cases, the limit will increase by 0.3 times the IPREM (2,520 euros gross per year) for each dependent minor and, in addition, in the case of a single-parent family the limit may be increased by an additional 70%.
The term of the guarantee granted by the Ministry will be for a maximum of 10 years, regardless of the amortization period and whether or not there is a grace period. Those who want to link their mortgage to this line of guarantees have a deadline until December 31, 2025with the possibility of a two-year extension depending on demand and economic circumstances.
Financial entities may join the ICO guarantee line and potential beneficiaries may request aid through these. As established then, “the loan to be guaranteed may be up to 100% of the lowest value between the appraisal and the purchase price of the home and The cost of the guarantee granted will be assumed by the credit institution. At this point, the door opens to establish a maximum sales or appraisal price limit of housing, which could be set depending on the territorial scope”.
Another ICO line to build 40,000 affordable homes
The second line, 4,000 million, seeks to expand the social housing stock. These loans seek to encourage the promotion of affordable housing through the ICO, especially in public-private collaboration formulas, and are included in the addendum to the Recovery Plan. The plan is to build more than 40,000 public and private affordable rental homes.
This line of aid is complementary to the 2,000 million euros in guarantees for the public and private promotion of affordable housing approved last December, with which the Government wants to counteract “the increase in interest rates and prices of materials “.