1/1/1900
The program "First House" is one of measures anti-crisis initiated by the Romanian Government to support certain business sectors, aiming to encourage the granting of bank loans, the construction activity, with effects on economic growth and on creating new jobs and facilitate access of individuals to the acquisition of residential houses.
Beneficiaries of the program "First House" are individuals - Romanian citizens; given the fact that the law does not expressly states whether foreign citizens have the right to buy a house through this program, it’s up to each bank, according to its own policy, to decide upon granting loans for the „First House” to the foreign citizens who resides in Romania (in accordance with the laws in force).
Acquisition in terms of this program means the purchase or construction of a residential house by contracting a bank credit.
Residential house means any real estate located in Romania, having residential purpose, consisting of one or more rooms, with the afferent land, access ways, annexes, dependencies, facilities and utilities , which meets the requirements of an individual or family living. Residential houses in terms of this program include:
a) completed residential houses, for purchase, including those built and delivered by programs run by the National Residential Houses Agency;
b) residential houses not entirely completed, in any stages of construction, for purchase, including those built through programs conducted by the National Residential Houses Agency;
c) new residential houses for purchase only after completion, including those constructed by National Residential Houses Agency programs;
d) future residential houses, which are to be built by individual beneficiaries, including the ones that are built through programs conducted by the National Residential Houses Agency;
e) residential houses that are to be built by associations without legal personality, consisting of 7 or more beneficiaries.
Beneficiaries of the "First House" program are individuals who meet both eligibility criteria stipulated by law and the regulations of the bank who grants the credit.
According to the dispositions of the law, the eligibility criteria for beneficiaries who purchase a completed residential house by this program are:
1. On the date of entry in force of the Government Emergency Ordinance no. 60/2009 regarding certain measures for implementing the program "First House" (June 4, 2009), the applicant does not own a home, individually or jointly with his spouse or with other persons, regardless of how it was acquired and also the applicant does not have an ongoing credit with mortgage; proof for the fulfilment of this condition shall be done by the declaration on the applicant’s own reponsibility, given in authentic form;
2. the applicant buys by this program a completed residential house, located in Romania, registered in the real estate book according to the stipulations of the law and free of charges, except the seller’s privilege on the price. For the pirchase of the houses mentioned at letter. b) and c) above, beneficiaries must submit a pre-contract signed with a construction company.
3. the applicant meets specific requirements within the internal rules of the bank which grants the loan;
4. the applicant can pay in advance at least 5% of the purchase price of the house, if the price is less than 60,000 euro or 3,000 euro plus the difference between the price of the house and 60,000 euro - if its price is exceeds 60.000 euro.
5. he undertakes to create a collateral deposit to provide guarantee for the payment of the interest in amount of three equal interest rates;
6. he undertakes not to sell the purchased house, in the first five years after acquisition;
7. he undertakes to create, in favour of the Romanian state, represented by the Ministry of Finance, a mortgage of 1st rank on the house purchased by credit, and agrees with the notation in the real estate book of the interdiction to sell for a period of 5 years and also of the interdiction of any charge upon the house;
8. he undertakes to conclude an insurance policy for the purchased house for all risks and assigns the rights for damages in favor of the Romanian state, represented by the Ministry of Finance.
The finance in terms of the program "First Home" is granted by the bank, including its territorial units (branches, agencies, etc.).
Advantages of buying a house through the "First Home" program:
• the total cost of funding granted by banks with the program consists of:
- 3 months interest rate EURIBOR plus a margin of maximum 4.00% per year for loans in euro and ROBOR three months plus a margin of more than 2.50% per year for loans in RON; margin includes the total fees perceived by the bank;
- management fee of 0.37% due to FNGCIMM per year, calculated to balance funding;
• the maximum interest rate imposed by the Government is of 5.28% for the banks that will be part of this program;
• there are no monthly fees, annual initial award, risk etc. All fees will be included in the maximum interest rate, apart from the annual management fee of 0.37%;
• the bank will not charge a fee for early repayment;
• the buyer pays a deposit of only 5% of the price of the house, if the price is less than 60,000 euro or 3,000 euros plus the difference between the purchase price of the house and 60,000 euros, if the price exceeds 60.000 euro;
• the maximum loan period is of 30 years;
• the credit agreement contains no clause allowing unilateral changes by the bank;
• when buying new rsidential houses, the VAT (value-added tax) paid by people who buy a home through this program will be 5%, in case there are fulfilled all the other conditions for applying this reduced rate of VAT;
• notaries fees charged for purchase a residential house by the program "First House" are 30% lower.
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