Government adds RON 500 mln in fresh funding for Prima Casa

Newsroom 18/05/2016 | 11:37

The budget of public guarantees for loans taken out under the Prima Casa program has been increased by RON 500 million (more than EUR 100 million), according to a government decision.

However, the authorities have amended the terms under which it provides the guarantees. The banks enrolled in this program will have to provide loans taking into account the limits provided by the state.

If lenders will overshoot the guarantees budget, they will have to figure out on their own how to fix it.

The government said this additional provisions were enforced so as to prevent banks from encouraging clients to sign draft contracts for the acquisition of homes without having the financing and guarantees terms sorted out.

The Prima Casa targets Romanians that are willing to buy their first home. Since its roll out in 2009, the state has issued 178,000 guarantees worth RON 15 billion. These funds have backed bank mortgage loans worth RON 29.8 billion.

The rate of non-performing loans rate under Prima Casa stands at 0.34 percent.

The Prima Casa program is not impacted by the debt discharge law, which was recently enforced in the country despite heavy criticism from the banking system.

Ovidiu Posirca

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