Which people from Extremadura will be able to endorse the Board to buy a home

The Housing Counselor. Leire Iglesias, announced last Thursday in the Assembly that the Junta de Extremadura will create a guarantee fund that allows guaranteeing the loan of the habitual residence to those who do not have access to credit, especially young people.

To do this, the regional law on the matter that was approved in 2019 will be modified with the aim of incorporating a guarantee fund for the granting of guarantees. With it, it is intended that people with less economic capacity for savings or assets face the amount of the purchase of the habitual residence, which generally cannot be financed with the mortgage loan, the amount of which will be guaranteed by the Public Administration.

According to the ministry TODAY, not only young people can take advantage of this fund, but also all those people who cannot be guaranteed by their parents or their assets.

This is one of the few details that are known of a plan that has not yet been finalized. In the legal reform that allows the creation of the aforementioned guarantee fund, the maximum income or assets that the applicant must have in order to access these guarantees must be included.

As an orientation of what this measure could mean, it is possible to remember the line of aid of up to 10,800 euros that already exists for young people to buy a home in towns with fewer than 5,000 inhabitants. In this case, the applicant must be of legal age, be under 35 years of age at the time of the application and not be the owner or co-owner of one hundred percent, full ownership or usufruct of any home.

In addition, they must have annual income equal to or less than three times the Public Multiple Effects Income Indicator (IPREM, this year it is 579.02 euros per month), four times the IPREM if it is a large family of general category or people with disabilities and five times the IPREM when they are large families of special category or people with cerebral palsy, mental illness, intellectual or developmental disability with a recognized degree equal to or greater than 33 percent or people with physical or sensory disability with a degree equal to or greater than 65 percent.

The measure announced now, to guarantee the purchase of homes, is quite new in Spain. At the moment, only Murcia and the Community of Madrid have announced similar ideas. In the case of the Executive of Fernando López Miras, the intention is that the Administration guarantees up to 20% of the appraised value of the home, which is usually equivalent to the down payment required by banks to grant a mortgage, so that the entity can finance 100% of the amount. In the case of Murcia, the measure is limited to those under 35 years of age and, in addition, the property to be acquired must be new and may not exceed 175,000 euros in price. The idea is called ‘ICREF Aval Joven Line’ and it is intended to reach some 400 operations in a first phase, which could rise to 700 if there is a future expansion.

In the case of Madrid, the project is greener. It is intended to allocate an annual budget of about 15 million euros with which they could help about 4,000 young people (also under 35 years of age) to access a mortgage. The way that is being studied is a guarantee with public funds, once the mortgage credit insurance model has been ruled out, due to the reluctance of the Spanish insurance sector. This public guarantee could cover the difference between 80% and 95% of the mortgage, so the buyer would only have to contribute a 5% savings.