Romanian government to relaunch First Home programme, rename it “One family - one home”

Romanian government to relaunch First Home programme, rename it “One family – one home”

The Romanian government plans to bring major changes to its mortgage lending scheme First Home (Prima Casa), renamed to “One family – one home”, introducing earnings thresholds for borrowers.

The change was first announced in May by the former PSD leader Liviu Dragnea, just a few days before being jailed for 3.5 years for abuse in power.

According to a draft bill released by the Finance Ministry, the new programme will cap earnings of the borrowers in order to target only low- and middle-income families.

The programme will be accessible only to persons with net earnings of RON 4,500 per month (around EUR 947) or RON 7,000 (EUR 1,475) for a family with children.

Under the new form of the programme, borrowers could take loans of maximum RON 300,000 (around EUR 63,000) through the government-backed scheme.

The First Home programme was launched in the summer of 2009, while Romania was going through a period of economic downturn. It targets people under the age of 35, allowing them to take out a mortgage with a minimum deposit of 5 percent and capped financing costs.

Until December 2018, there had been 267,752 guarantees and guarantee promises, worth a total of RON 23.7 billion.

There are 15 banks that finance Prima Casa applications: BRD-GSG, BCR, Banca Transilvania, CEC Bank, ING Bank, Raiffeisen Bank, OTP Bank, Banca Romaneasca, Unicredit Bank, Garanti Bank, First Bank, Marfin Bank, Credit Agricole, Leumi Bank, and Intesa Sanpaolo Bank.