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Tuesday, May 28, 2024

The First Apartment program. First reading of the bill on state aid in saving for housing purposes. Commentary by Waldemar Buda

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Let us remember that one must have creditworthiness, but lowering the interest rate means that a much larger group of people will be able to take advantage of the offers of banks, said the Minister of Development, Waldemar Buda, commenting on the First Apartment programme. He estimates that up to 200,000 people will benefit from it. He added that funds for subsidies to loans granted this year will be released at the beginning of 2024, within the limit of almost PLN one billion.

On Wednesday, the first reading of the draft act on state aid in saving for housing purposes took place, first at a sitting of the Sejm, and then in the infrastructure and public finance committees. It assumes the introduction of a “safe loan” with state subsidies to installments and a housing account with an additional housing bonus from the state budget.

The First Apartment consists of two pillars

– We estimate that up to 200,000 people, i.e. about 30-40,000 people, will benefit from the First Apartment program planned for five years. annually. We have secured funding for this. Funds for loans granted in 2023 will be disbursed at the beginning of 2024 within the limit of nearly PLN 1 billion. The limits for the following years will be set successively, emphasized the Minister of Development and Technology, Waldemar Buda. The Ministry reminded that the First Apartment program consists of two pillars. One is the “safe loan” (a system of subsidies to the loan for the purchase of the first apartment or single-family house or its construction), and the other is a housing account (i.e. assistance in saving for the purchase of an apartment). Both instruments are intended to support people up to 45 years of age who are ready to buy their first flat or single-family house or are planning to do so in the future. – The regulations provide that the settlement of subsidies with banks will take place after the end of each quarter, and for 2023, in total Q3 and Q4 in January and February 2024 – explained Waldemar Buda.

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Requirements of banks: for many people this is a difficult barrier to overcome

According to the minister, the First Flats program will be an effective response to the problem of the high threshold of access to mortgage loans. – It’s about the requirements of banks as to creditworthiness and amount own contribution. For many people, this is a difficult barrier to overcome. Safe Credit 2%, but also the decision of the Polish Financial Supervision Authority to lower the buffer (2.5 percentage points) for loans with a fixed rate will significantly increase the creditworthiness. Market experts say that even 50-70 percent. For some people, this will mean the possibility of buying a larger apartment, for others, opening the possibility of applying for such a loan at all, noted the head of the Ministry of Agriculture and Tourism.

He added that the First Apartment program was created for people with average earnings. – Let us remember that you need to have creditworthiness, but lowering the interest rate means that a much larger group of people will be able to take advantage of the bank’s offers. For people with lower incomes, we have other programs, such as the government program to support social and municipal housing, pointed out the head of the Ministry of Development and Technology.

According to the Sejm’s agenda, the second reading of the bill is scheduled for Thursday. Secure loans will be granted by banks which will conclude an agreement with BGK on this matter. They will be able to be granted until December 31, 2027. The provisions regarding the subsidized loan and the housing account are to come into force on July 1 this year.

Read also: Cheap home loans. “The money will run out faster than the willing ones”

Main photo source: Shutterstock

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