The Council of Ministers has set the conditions for a €2.5 billion guarantee line aimed at young people up to 35 years old and families with dependent children to help them purchase their first home.
The new guarantees from the Instituto de Crédito Oficial (ICO) approved by the Government are structured in a €2.5 billion line to enable young people under 35 and families with dependent children to purchase their first home.
This line is one of the instruments the Government is implementing to promote access to housing. Specifically, this measure will help more than 50,000 people who, despite being financially solvent, have not been able to save enough for a down payment on a home.
Additionally, it will alleviate the rental market in high-demand areas, such as cities where renting is already more expensive than buying. It will also address the reality in rural areas, contributing to population stabilization.
Generally, the ICO will guarantee up to 20% of the loan amount, unless the acquired home has an energy rating of D or higher, in which case up to 25% of the loan amount can be guaranteed.
This is just one of the many tools the Government is rolling out to ensure that no citizen has to spend more than 30% of their salary on rent or a mortgage.
Requirements and Conditions to Apply for the ICO Guarantee
This line is aimed at individuals who are legal residents in Spain, with continuous and uninterrupted residence for the two years preceding the loan application. The maximum net worth of the guarantee applicant must be €100,000. The income of the person purchasing the home cannot exceed €37,800 gross per year (4.5 times the IPREM). If the home is purchased by two people, the income limit is doubled. Thus, the combined income of the two purchasers cannot exceed the sum of the individual limit. The measure includes improvement factors based on the number of children and whether the family is single-parent. The limit will increase by 0.3 times the IPREM (€2,520 gross annually) for each dependent child and, additionally, for single-parent families, it can increase by an additional 70%. Those who already own another home cannot access this line of guarantees, regardless of how the home was acquired. However, exceptions are made for those who meet the requirements and find themselves in the following situations: When the ownership right is for a fractional part of the home obtained by inheritance or intestate succession. For those who, being homeowners, cannot use their home due to separation or divorce, any other involuntary cause, or if the home is inaccessible due to the disability of the owner or household members. The guarantee can be maintained within the limits established in the agreement as long as it remains the primary residence of the beneficiary, except for the aforementioned circumstances requiring a change of residence.
Deadlines to Keep in Mind
The guarantee term granted by the Ministry of Housing and Urban Agenda to the financial entity and managed by the ICO will be a maximum of 10 years from the date of the operation, regardless of the loan repayment period. During this 10-year period, the home must be the primary residence of the guaranteed person, and its rental is limited to circumstances requiring a change of residence. The deadline for formalizing loans under this line of guarantees is December 31, 2025. This term may be extended for two more years, subject to the agreement to be signed between the Ministry of Housing and Urban Agenda and the ICO
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