A loan without own contribution is to be introduced by the draft law on mortgage loans prepared by the Ministry of Development, Labor and Technology. The assumptions of the new regulations were published in the list of legislative and program works of the Council of Ministers. The draft is to be adopted by the government in the third quarter of this year. The changes were announced as part of the Polish Order.
It is a draft act on mortgage loans covered by a guarantee replacing the borrower’s own share and on repayments of these loans made in connection with the household enlargement. The regulations are to introduce the so-called “loan without own contribution” as a solution supporting families in improving the housing conditions announced in the Polish Lada under the name “Flat without own contribution”. The assumptions of the project, for which the Ministry of Development, Labor and Technology is responsible, have been published on government websites.
Polish Order – a loan without own contribution
According to the proposed solutions, a loan without own contribution will be a home mortgage that meets the conditions set out in the Act and is granted by banks joining the program on the basis of an agreement concluded with Bank Gospodarstwa Krajowego, covered at the repayment stage with a dedicated system of financial support for borrowers paid in connection with the birth of children. It is about one-off repayment for the borrower from the state budget of part of the loan principal after the birth of the second or subsequent child.
The justification indicated that at the stage of loan repayment, it would be a solution that would primarily pursue the goals of pro-family policy aimed at stopping the negative demographic trends related to the low fertility rate. The act is also to pursue the objectives of the housing policy, eliminating the barrier to obtaining a mortgage for the purchase or construction of a flat in the form of a lack of funds for own contribution, despite the fact that he has creditworthiness.
As indicated, a loan without own contribution for the purchase or construction of a flat will be a solution addressed to families who do not have sufficient own funds to finance the borrower’s own contribution required by the bank. “With this in mind, the general rule related to the granting of the KBW will be to cover the loan with the loan repayment guarantee applicable to the loan amount financing the own contribution that would be required on general terms from the borrower” – explained.
Loan without own contribution – rules
The minimum loan repayment period without own contribution is to be 15 years. Such a loan is to be granted only in Polish currency, and people taking this type of loan cannot have their own apartment or single-family house.
The project will also propose a maximum price limit per 1 m2 of usable floor space of the financed apartment. Its amount is to be varied, depending on whether the real estate is purchased on the primary or secondary market. In the case of the secondary market, the indicator is to be 10 percent higher. In addition, the amount is to be differentiated depending on the location of the property – price limits are to be determined for individual provinces.
As we read, married couples, single parents with at least one child or the disabled will be able to apply for a loan without own contribution. “If the borrower running the household is a married couple or a single parent, the younger of the spouses or the person in the year in which the loan will be granted may not be over 40” – it was explained. At the same time, such persons will not be able to own a flat or a single-family house, and they may not be entitled to cooperative rights to a flat.
Loan without own contribution – limit
The maximum unit amount guaranteed by BGK was proposed at the level of PLN 100,000. zloty. According to the authors of the draft, “in conjunction with the maximum price / construction cost limits, the introduced limit is to reduce the excessive risk of household indebtedness in relation to income opportunities, and limit the impact of the program on the increase in housing prices”.
Polish Order – repayment of part of the loan
The justification also includes the terms and conditions under which Bank Gospodarstwa Krajowego will make a one-off repayment of part of the loan without a contribution in connection with the birth of a child in the borrower’s household, if this event occurs during the loan repayment period.
The amount of the loan principal repayment, i.e. the so-called “family repayment”, is to be PLN 20,000. PLN in the case when the enlargement of the household concerns the second child in the family, 60 thousand. PLN in the case when the enlargement of the household concerns the birthday of the third or subsequent children.
The total amount of family repayments due to one loan is to be PLN 100,000. PLN “eg. in the case of taking out a loan by spouses or a single person bringing up one child, the maximum support will be used when the household grows by the second, third and fourth child; in the case of spouses raising three children during the period of taking out a loan, a similar situation will apply to the enlargement of the family by a fourth and fifth child “- we read.
According to the assumptions, loans without own contribution are to be granted by the end of 2030.
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