Draft: ‘First House’ program to have RON 2 bln budget in 2018

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The ‘First House’ program will have a budget of RON 2 billion next year, according to a draft law tabled by Finance Ministry.

The total guarantee ceiling for 2017 was RON 2.67 billion, with RON 2.5 billion established according to the program’s strategy and RON 175.5 million the difference from the 2016 ceiling.

Since the program has been launched in 2009 until the end of October 2017, 236,138 guarantees worth RON 20.57 billion have been granted.

Yet, Valentin Lazea, National Bank of Romania (BNR) Chief Economist said in August this year that the “First House” program had a modest role from a social point of view, as it had a limited use and only by low-income borrowers, similar to the situation in the case of standard mortgage loans.

The only social aspect that this program provides is a greater access of young people to the purchase of a dwelling, the share of debtors aged up to 35 being higher in this case,” central bank official stated.

Lazea believes that another important aspect of the social nature of lending offered by this program is the relatively low cost that is ensured by the low interest rate on the one hand and, on the other, by exempting these loans from the requirements on the advance’s minimum level, respectively on the loan / guarantee index.

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