Draft law on First Home state programme implementation approved by government of Moldova

Chisinau, 7 November /MOLDPRES/ – The Cabinet of Ministers has approved draft law for implementation of Prima Casa (First Home) programme today, which facilitates the access of young families to borrowing, the government’s communication and protocol department has reported.

The main provisions of the project are: initial own contribution (advance) must be at least 10 per cent of the flat/house price, flat/house price should not exceed MDL 1 million, repayment term of the loan is up to 25 years, and state guarantees about 50 per cent of the credit balance. The programme is for citizens aged 45 or under, who do not own a home and have no mortgage loans.

The programme aims to provide state support for people who want to purchase a home, but who lack sufficient funds and do not qualify for a mortgage loan. The project implementation is also envisaged as a solution to reduce migration among youngsters.

"I very much hope it to be a successful programme. It is a program that many young families expect," said Premier Pavel Filip. Also, the Prime Minister thanked all those involved in making the programme draft laws and urged responsible authorities to work further for its effective implementation.

The bill sets out rules for all parties involved in the process of granting and obtaining mortgages, partially guaranteed by the state, through First Home programme. The eligibility criteria for programme beneficiaries, eligibility criteria for banks that can grant such loans, guarantee mechanism, as well as commissions and tariffs with which commercial banks will operate, are thus provided.

Similarly, by another bill approved today, it was decided to modify state fees for mortgage contracts signed under First Home programme. Thus, up to 0.1 per cent of the state fee for the authentication of real estate estrangement contracts and up to MDL 50 is the fee for the authentication of the mortgage contracts signed under the programme. At the same time, it was accepted fees reduction of the notary public and of the judicial executors for the actions performed on the immovable property purchased through state programme.

Both draft laws will be sent to Parliament for adoption.

The First Home programme will be applied throughout Moldova and has a social character, represented in particular by state intervention in the mortgage guarantee process. The idea and concept of the programme is based on positive experience of the countries in the region, especially Romania. The annual ceiling of state guarantees, as well as the amount of financial resources earmarked for the execution of state guarantees, will be set annually. The state budget for 2017 provides for a guarantee fund of MDL 15 million for mortgage loans granted through government programme First Home.