PM Boc: All analyses are pointing to banks’ interest in First Home programme

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Prime Minister Emil Boc told the public radio station on Monday that all the analyses are pointing to banks being ‘highly interested’ in joining the First Home programme and extend easy-term loans to first time young homebuyers. The banks will be selected in the period immediately ahead, he said.
At the same time, Boc said the banks that require a down payment in excess of 5 percent and do not charge the lowest possible interest rates will be excluded from the programme.
‘All analyses are pointing to the banks being highly interested in granting such loans, because they are not running any risk; the interest rates will fall and the banks that require a down payment in excess of 5 percent and do not charge the lowest possible interest rates will not be included in the programme.
If they agree, we will select them because we are convinced that there will be very many banks that can guarantee homes totaling one billion euro in value. The banks will share the risk of defaulting with the Government,’ said Boc.
He added that the Government is thus taken out a burden from the banks’ shoulders because it guarantees loans to 80 percent of their value. Boc also said that for the beginning the loans secured are limited to 60,000 euros, but other formulas might be followed, the same as it is possible for the guarantee fund to be increased by and additional 100 million euro.
‘If life proves that we have to think of another formula, we will have the flexibility of increasing the Government guarantee fund by an additional 100 million euros so that we may be able to cover the guarantees for the banks so that people may buy homes,’ said Boc.
He added that homes on defaulted loans included in the programme will be forfeited by the Government, which will become their owner, thus stocking up homes it can trade on the market.
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