Government Agency First Home Mortgage Loan: How It Works

If the first home coincides, in most cases, with the stipulation of a mortgage. But what is the cheapest product on the market? If you are a public employee or pensioner you can receive Government Agency first home mortgage loan, a solution to access credit at subsidized rates.

Government Agency first home mortgage loan: who are the beneficiaries? This is a line of credit for employees and pensioners registered in the unitary autonomous management of credit and social benefits. The worker must be able to count on a permanent contract. It is also expected to have a registration period of not less than one year.

Government Agency Social Institute mortgages: amounts

Government Agency Social Institute mortgages: amounts

Government Agency first home mortgage loan: purposes and amounts. The amounts available to borrowers change in relation to the purpose of the mortgage. Let’s see all the possible scenarios:

  • if liquidity is required for the purchase or construction of the first house (which cannot be luxury in cadastral terms), the borrower can receive up to 300 thousand USD;
  • if, on the other hand, the loan is requested for maintenance, adaptation, transformation or renovation of the main house, the amount cannot exceed 150 thousand USD. In any case, the limit of 40% of the value of the home must be respected (object of the appraisal);
  • if the request concerns the purchase or construction of a garage or parking space, the sum cannot exceed 75 thousand USD. The garage / parking space must be a relevance of the main house, maximum distance 500 meters.

Government Agency mortgage loan: the request

Government Agency mortgage loan: the request

Government Agency first home mortgage loan: demand. The request for funding must be sent (electronically) within specific time windows: the first ten days of January, May or September. Any incomplete request (several attachments must be inserted) will be rejected by the social security institution. We remind you that Social Institute is responsible for this financing.

Government Agency no longer exists and its functions have been transferred to Social Institute, including credit activities, which provide for subsidized loans ex Government Agency.

Government Agency mortgage interest rate

Government Agency mortgage interest rate

Another key element is the interest rate. Social Institute offers two solutions. With the fixed rate, the installment is calculated compared to 2.95%, while the variable rate corresponds to the 6-month installment, calculated over 360 days, increased by 200 basis points.

The repayment process involves constant half-yearly installments. As for the duration, the user can choose between 10, 15, 20, 25 or 30 years. In the case of borrowers over 65, the duration cannot exceed 15 years. The installments must be paid through pre-filled MAV, downloadable from the online services of the Social Institute portal.