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Friday, October 22, 2021

Mortgage loans without own contribution. The draft returns to the parliamentary committees

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The bill, which specifies the terms on which a mortgage covered by a guarantee replacing the borrower’s own contribution will be granted and repaid, returns to the committee. During the second reading, amendments to the draft were tabled.

It is a government bill on a guaranteed housing loan and on repayments of this loan in connection with the enlargement of the household, which is part of the Polish Deal solutions package. It provides that the own contribution of the borrowers participating in the program will be guaranteed by the State Treasury.

The parliamentary public finance and infrastructure committees worked on the project. On Thursday, Members heard the reports of both committees.


A flat without own contribution – the project is returned to the commission

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As the rapporteur, Gabriela Masłowska (PiS) said, the lack of funds for the own contribution required when taking out a housing loan is a problem especially for young families with many children. At the same time, she referred to research showing that Poles prefer to buy flats for their own rather than rent them.

– The proposal submitted by the government meets exactly these expectations of Poles and combines the advantages of all the existing programs, as there is no income criterion applied here – she assessed.

She pointed out that the project is an element not only of the housing policy, but also of the demographic policy, as it enables the government to take over part of the loan repayment as more children emerge in the family. She emphasized that the program concerns the purchase of houses and flats both on the primary and secondary market.

As reported, the committees approved, inter alia, amendments so that a guaranteed housing loan can be taken not only to buy a flat, but also to extend it or add a family house, if it results in the construction of a flat.

Also Anna Milczanowska, on behalf of the PiS club, emphasized the demographic aspect of the project, expressing the hope that it would contribute to an increase in fertility rates. In her opinion, the solutions to the project will prevent speculative attitudes in the housing market. The PiS deputy declared that her club would support the project.

Loan for an apartment without own contribution – opposition to the project

Cezary Grabarczyk (KO) pointed out that the housing problem is “urgent” in Poland and that the proposed project is “a step in the right direction” and that the opposition will support it. – We believe that state aid must be real, therefore we propose that this guaranteed housing loan could also be granted in connection with the acquisition of ownership of a single-family house or apartment, including the finishing of the house or apartment being purchased – he said. He added that his club was also tabling an amendment regarding state aid in the event of the death or long-term illness of one of the borrowers.

In turn, Robert Obaz (Left) assessed that the new solutions would not contribute to solving the housing problem. – Instead of reflecting on the return to social housing (…) we will continue to witness the development of the market of the so-called tenement corporations and housing speculators – he accused, announcing that the Left would not support the project in its current shape.

Jacek Tomczak (Polish Coalition – PSL, UED, Conservatives) said that his club “at the level of goals” supports the project, but notices a number of shortcomings in it. As he pointed out, inter alia it only applies to future loan applications, and does not support families who are already repaying the loan. He tabled an amendment so that all families meeting the criteria of the Act could receive payment assistance. He also proposed to increase the support after the birth of the second child and to raise the recovery thresholds.

Dobromir Sośnierz from the Confederation argued that “the law is an aspirin for advanced cancer”, and what is worse, it only pumps up demand and prices, prompting people to buy apartments “at the height of the bubble”.

Hanna Gill-Piątek from Poland 2050 also alleged that the implementation of the proposed solutions would result in an even greater increase in real estate prices, and at the moment the cost of an apartment is disproportionate to earnings. – It’s a noose of debt around our kids’ necks. There will be a problem just like with franchise holders – she alarmed, warning that the solutions would primarily benefit banks. – We, as Poland 2050, will definitely not give it a hand – she announced.

Magdalena Sroka of the Agreement – on the contrary – stated that her group generally supports the project, although it only creates half-solutions. That is why – as she said – the Agreement “is waiting for further packages of laws”.

A project for an apartment without own contribution

The draft discussed on Thursday envisages that the state, through BGK, will guarantee up to 20 percent. loan amount, but not more than 100 thousand. zloty. BGK will make a one-off repayment of a part of the guaranteed housing loan in connection with the birth of a child. It will be the so-called family repayment, which will amount to PLN 20 thousand PLN in the case of increasing the household with a second child and 60 thousand. PLN if the household is enlarged by a third or subsequent child.

The loan will be granted for a minimum of 15 years in the Polish currency. The draft also includes mechanisms to limit the risk of stimulating housing price growth. This will be the introduction of a maximum price limit (including the construction contribution) per 1 sq m of usable floor space of the financed apartment. The second possible mechanism will be an authorization for the Council of Ministers to lower, in the regulation, the amount of the coefficients influencing the statutory price limits.

Main photo source: Shutterstock

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