Moldovan private persons' access to purchasing dwellings within First Home programme to be facilitated under law

Chisinau, 7 November /MOLDPRES/ - The cabinet today approved a draft law on measures for creating a legal framework to implement the state programme, First Home, facilitating private persons’ access to purchasing a dwellings by borrowing bank loans partially guaranteed by the state.

The state will help young families buy a dwelling through facilitating access to mortgage credits, extending term for paying these loans, partially guaranteeing of the loan by the state and diminishing the beneficiary’s own initial participation in the dwelling’s acquisition. The goal pursued by this support is to reduce the migration among young people, increase the rate of official employment and enhance the transparency of the real estate transactions.

The draft law implies establishment of a legal framework of regulation as regards the providing by banks of mortgage credits, under the partial guaranteeing of the state. The document sets the eligibility criteria the programme’s beneficiary should meet and its conditions. The draft sees that the state will guarantee 50 per cent of the balance of the loan provided. The implementation of the First Home programme will be carried out through the Organization for Small and Medium Enterprises Sector Development.  

The First Home programme gives young people possibility to buy dwellings worth up to one million lei and the loan be returned in a 25-year period. The applicant’s initial contribution will be of ten per cent of the sum of the loan demanded and the government comes with a 50-per cent guarantee of the loan’s sum.  

Under the draft, young people will initially contribute only ten per cent of the dwelling’s cost, with 90 per cent representing the bank loan. This loan will be provided for a repayment period of 25 years, with a bank margin of no more than three per cent and an interest rate for the medium-term credits for 6-12 months.  

Persons aged up to 45 years, who are citizens of Moldova, work in the country and have an official salary will be able to benefit from this programme. Another eligibility criterion is that the concerned person does not have a dwelling and does not have another mortgage credit. The Programme’s beneficiary commits not to sell the dwelling bought in the first five years after becoming owner of this dwelling.   

The government also approved amendments to a string of laws which stipulate that the tax for authenticating the contracts on sale and purchase of houses and flats within the First Home state programme will be of 0.1 per cent of the contract’s price. Young people will pay 50 lei to authenticate the mortgage contracts.  

The Moldovan Democratic Party (PDM) today said that it provided political support to the First Home programme, the goal of which is to facilitate the purchasing of dwellings by young people, so that they do not leave abroad. PDM leader Vlad Plahotniuc, after the Democrats’ weekly meeting, said that he demanded that the cabinet comes up with additional facilities for certain categories of young people, including budgetary employees, so that the state compensates a half of the interest for the real estate loan and thus enhancing their chances to have their own dwelling.    

(Reporter V. Bercu, editor M. Jantovan)