Loan installment subsidies. There is a new project

On Tuesday, the Government Legislation Centre website announced that the draft law on the #naStart housing loan had been submitted to the Standing Committee of the Council of Ministers.

The project shows that the cost of subsidies for housing loans next year will amount to over PLN 1.15 billion, and over 10 years it will total almost PLN 19.4 billion.

“The source of financing for subsidies to the #naStart housing loan installments will be the state budget through the Government Housing Fund (RFM) at the National Economy Bank. In order to finance the program, the RFM will be supplied with state budget funds within the increased financial limit” – it was indicated in the regulatory impact assessment attached to the project.

The project envisages, among other things, an amendment to the act on state aid in saving for housing purposes, which will increase in the years 2024-2032 the annual amounts of the maximum limit of state budget expenditure transferred to the Government Housing Fund for the purpose of subsidizing loan installments. Thanks to this, in the years 2024-2025 a total of approx. 100 thousand loans are to be granted, assuming that the average loan amount – in each of the years of program implementation – is PLN 410 thousand – indicated in the assessment of the impact of the regulation.

As added, with the introduction of the new #naStart housing loan program, the lending campaign under family housing loans and safe 2% loans will be terminated, while maintaining the rights acquired by the current borrowers of both programs.

In order to reduce the risk of cumulative demand for loans, the act provides for “solutions ensuring an even distribution of market demand and relative continuity of lending”. “With the exception of the first two quarters of the new program, it is proposed that in each quarter after 15,000 applications for a #naStart mortgage loan submitted in that quarter together with an application for loan installment subsidies are registered in the subsidy register system, the period for accepting new applications be temporarily suspended until the beginning of the next quarter” – it was reported in the OSR.

As noted, the experience with credit support programs implemented in the past was taken into account when designing this solution. The phenomenon of cumulative demand for credits was – in the opinion of the drafter – a factor that had a negative impact on the housing market, causing a periodic state of significant market imbalance. The effect of this impact was pressure on the growth of housing prices and disturbed decision-making processes regarding both the supply and demand sides.

The OSR indicated that applications for #naStart housing loans would begin to be accepted on January 15, 2025. In the first quarter of 2025, the limit for accepting new applications is to be 25,000, and in the second quarter – 20,000.

The OSR recalled that the new program is to replace the family housing loan and the safe 2% loan. The “home loan for a start” is to be granted for a period of at least 15 years, with the interest rate at a fixed level set for a period of 60 months.

“Taking out a residential mortgage loan with an own contribution of less than 20 percent of the amount of expenses co-financed by the mortgage loan will be supported by the possibility of obtaining a guarantee of repayment of part of the loan granted by BGK” – it was explained.

The amount of the subsidy for the installments will depend on the number of children in the family. The childless will receive a subsidy for the installments with an interest rate of 1.5%. Families with one child – 1%, with two 0.5%, and with three or more – 0%. A loan with subsidies at a rate of 0% – apart from families with many children, will also be available to borrowers financing participation or a housing contribution (in cooperatives, Social Housing Initiatives, Social Housing Societies).

Families with at least three children will be able to benefit from a preferential loan also for another apartment, which is to provide them with the opportunity to improve their housing conditions.

In the case of loans supporting people who finance participation or housing contribution in order to obtain a rental or cooperative tenant apartment, the period of granting 0% loans will not be limited in time. The program of preferential loans addressed to people whose income does not allow for the purchase or construction of their own apartment and who intend to finance the tenant's share in the costs of building an apartment in social rental or cooperative tenant resources will be of a systemic nature.

The bill includes additional criteria for obtaining a loan: the amount of the borrower's household income, the maximum amount of the part of the capital of the loan taken out from which subsidies for housing loan installments will be calculated, and a surface area criterion dependent on the number of members of the borrower's household. Income limits are to be set annually.

The project also adopted amounts defining the maximum basis for calculating subsidies for instalments, taking into account the number of children: PLN 200,000 for a one-person household, PLN 400,000 for a two-person household, PLN 450,000 for a three-person household, PLN 500,000 for a four-person household and PLN 600,000 for a five-person household.