After a quarter of a year, people applied for 88 percent of the state housing loan

Prague - Three months after the launch of the program, people have applied for 88 percent of the funds allocated by the state this year for housing loans for young people. Applicants submitted 552 applications amounting to 570 million crowns. This was reported today by the spokesperson of the State Housing Development Fund (SFRB), Karolína Smetanová. Young families under 36 years old can apply for a state loan of up to two million crowns for reconstruction or purchasing new housing. Approximately 650 million crowns are allocated for this year.

"So far, 552 applications have been received totaling 570 million crowns. 130 contracts have been closed for 90.2 million. We evaluate the program as very successful," Smetanová stated. The highest interest (44 percent) is in contributions for building a family house. A similar share is allocated for modernization, with 14 percent for building apartments. The processing time for applications is 60 days.

The highest interest in the loan was immediately on the first day, when applicants requested about 300 million crowns. Since then, the pace has slowed down. According to Smetanová, 72 applications have been rejected. "Most often due to insufficient creditworthiness of the applicant or non-compliance with the conditions of government regulations. That is, for example, age, ownership of another property in the case of a loan for purchase or unproven ownership in the case of a loan for modernizations," Smetanová added.

Minister for Regional Development Klára Dostálová (for ANO), under whose department the housing fund falls, previously stated that the funds available for the program could be increased to up to one billion crowns this year if there is interest. The ministry also anticipates that there will be one billion crowns in the fund annually for future periods. However, some real estate agents and developers believe that the amount of money allocated will be inadequate. Given the current property prices, the contribution is practically unusable in Prague, analysts agreed. Some experts assess the loan as a populist move by politicians.

The interest rate on the state loan is one percent with a guaranteed period of 20 years, and the maximum repayment period is up to 25 years in exceptional cases. The state loan can be combined with a mortgage, but it cannot be used to pay off the mortgage.

According to the proposal from the Ministry of Regional Development, which the government approved in June, the state will lend a maximum of 300,000 crowns for the modernization of an apartment. The maximum for purchasing an apartment is 1.2 million crowns, and the highest possible loan for building or purchasing a family house is two million crowns. Dostálová has previously stated that the ministry is not considering increasing these amounts. "The program is aimed primarily at regions, rural areas, and there it is really sufficient. As for Prague and large cities, we will rather support rental housing," she said.

Childless couples or registered partners can also apply for the loan. Having a child under 15 years old is a requirement for applicants who are not married.