Government raises cap for homes built from the ground up under the "First Home" program

The maximum amount guaranteed by the state under the "First Home" program will be capped at EUR 60,000 for those who buy completed homes, but it will be raised to EUR 70,000 - 75,000 for building new homes, PM Emil Boc said yesterday.

The PM said: "We will raise the Government guarantee slightly for those who build new homes, in order to encourage those who want to build their homes and thus create jobs and help unfreeze the economy".

He said that next week, the Government will pass the new bill regulating the operation of the "First Home" program in 2010. "This year, the program will be focused predominantly on encouraging the construction of new homes", Mr. Boc said.

Starting with January 2010, the amounts available for the acquisition of completed homes, will be lower compared to the one for 2009. On the other hand, the regulatory framework will earmark additional funds for guaranteeing loans taken for the building of new homes.

"We don"t rule out the possibility of continuing to acquire homes that were finished and built before January 1st, 2010, but the maximum amount available for guaranteeing this type of loans will be lowered in 2010", the PM said.

The FNGCIMM (National Credit Guarantee Fund for Small and Medium Enterprises) will continue to receive and review loan applications throughout the entire year of 2010, until the EUR 500 million allocated for the program will be exhausted.

The law states that eligible applications must have a preliminary contract signed in authentic form or under private signature, by February 15th 2010.

• Sorin Popa, BRD: "The "First Home"- the lending program that helped relaunch the economy"

Sorin Popa, the deputy general manager of the BRD, yesterday said that the "First Program" was a good initiative at the time of its enactment, is the loan that relaunched the Romanian economy. He said: "If the program continues in its current format, this will be a good thing". Mr. Popa considers that CEC Bank or EximBank can continue to support the "First Home" program in its current format because they are owned by the state.