“Active preparatory work is currently underway, and the plan is to open the new application programme at the end of October or the beginning of November,” Altum head Reinis Bērziņš told Inc. Until then, the programme rules still have to be approved by the Cabinet of Ministers.
Loans will be available to natural persons who are at least 18 years old and to those who will not have exceeded the age of 65 at the time of final loan repayment. The draft regulations provide that these state loans will be available both to residents of Latvia and non-residents, including those belonging to high-risk jurisdiction countries, provided that their link with Latvia can be established, for example, family or employment relations in Latvia.
The rules stipulate that the funding available for the programme will be 25.8 million euros, including 3.5 million euros from the state budget. At the same time, Altum could attract a state loan of up to 20 million euros in the form of a credit line, as well as obtain the necessary loan from international financial institutions or issue bonds. The state loan repayment term would then be until 31 December 2055. No risk margin would be applied to the state loan, but it would be secured by a commercial pledge, with Altum pledging its claim rights to the public.
The loan may not be used to purchase housing in Riga and the surrounding municipalities, but it may be used to purchase housing in the rest of Latvia.
The amount of a single loan may not exceed 74 thousand euros and it may be combined with the subsidy support programme “Balsts”, which will be intended for large families. “Balsts” provides a one-off state support of 8,000 – 10,000 euros to reduce the down payment on a loan for the purchase or construction of housing.
The programme is planned to run for four years – loan applications must be submitted by 31 December 2029.
At the beginning of August this year, Minister of Economics Viktors Valainis announced that the European Commission had decided to allow the Ministry of Economics to issue mortgage loans for the purchase of housing in Latvia’s regions. The Minister proposed this initiative after finding that Latvian commercial banks, for various reasons, are unwilling to issue loans for the purchase of housing in the regions. He reported that 80% of all mortgage loans are issued in Riga and its surrounding area. In the regions, even where housing prices reach the level of the capital (for example, in Liepāja or Ventspils), only every fifth transaction is financed with a loan. Commercial banks refuse to finance low-value properties or demand an excessively high down payment. As a result, residents in the regions are forced to opt for consumer loans with significantly higher rates and less favourable terms, according to the Minister’s article on lvportals.lv.
Originally published at https://inc-baltics.com/regionalos-valaina-kreditus-altum-varetu-sakt-izsniegt-vel-sogad-vares-pretendet-ari-imigranti/
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