The loan for young people is provided by the State Housing Development Fund. It is guaranteed very low interest, as well as repayment relief – in the event of major family or employment events. The new form of government loan for young people began to apply in August 2018. Let’s see how it can be acquired, used and repaid.
What is the State Loan for?
It is a loan intended only for the acquisition or modernization of housing. Acquisition of housing here means buying or building a house or apartment. Of course, modernization is meant to reconstruct a house or an apartment in the ownership of applicants for this loan.
How much can you borrow from a state loan for young people?
There are several maximum amounts that depend on what the funds will be used for. It depends on whether applicants for a loan will buy an apartment or buy a house, or whether they will reconstruct an apartment or a house. The maximum amounts available are:
- To buy or build a house with a floor area of max. 140 m² – 2 million crowns
- For the purchase or construction of an apartment with a floor area of max. 75 m² – 1.2 million crowns
- For modernization of housing (flat and house of any size): – 300 thousand crowns (minimum 30 thousand crowns)
Amounts earned (purchase or construction) of a house or apartment must not exceed 80 percent of the value of the property. So if applicants buy an apartment worth a million crowns, they can get a maximum of 800,000 crowns from a state loan for young people.
A loan for young couples and individuals
A loan for young people to acquire or modernize housing is intended for those of you who have not yet been 36 years old. But beware, since we usually live in pairs, it is enough that only one of the couple who wants to apply for a state loan is not 36 years old on the day of the application.
No one will then investigate the other’s age. The pair must be officially married, either in the form of a marriage or a registered partnership.
The Young State Loan is also intended for individuals under 36 who care for a child under the age of 15. But the conditions for getting a loan for the young do not end – there is one more significant fact. Applicants for this loan must be the owner of the property they want to modernize. However, if they want to take out a home purchase loan, neither of them may be the owner of another residential property.
Summary – Conditions for obtaining a loan:
- Spouses where at least one of them has not yet reached the age of 36
- Registered partners where at least one of them has not yet reached the age of 36
- A person under the age of 36 caring for a child under 15 years of age
- For modernization purposes, the modernized property must be the owner
- No owner-occupied property may be the owner of the property for the purpose of purchasing or constructing housing
How much does a state loan cost to young people?
At present, interest on this loan was set at 1.12% pa, according to the European Union’s base reference rate for the Czech Republic. The European Union is the initiator of a government loan for young people. Fixation is for 5 years for this loan.
Credit administration and administration is free of charge, professional assistance and consultations with employees of the State Housing Development Fund are also free of charge. Even extraordinary installments or early repayment are free.
How long is it possible to repay a government loan for young people?
The basic maturity may not exceed 20 years in the case of a house or apartment loan. And in the case of a housing modernization loan, the maximum repayment period is limited to 10 years. There are exceptions, however, to family events that always significantly affect the family’s budget.
The State Housing Development Fund may allow the repayment of up to two years, for the following reasons:
- Birth, adoption, guardianship, custody of a child
- Loss of employment for more than 3 months
- Disease lasting more than 3 months
- The death of a household member
If a child (including birth and adoption) is added to the family who took the state loan for the acquisition of housing, the family receives a subsidy from the State Housing Development Fund of CZK 30,000.
Even a state loan for young people must be secured. As?
Reinsurance is possible in two basic ways, either by a guarantor in the case of modernization of housing, or by pledge of land, real estate in case of purchase or construction of housing.
- The guarantor for the loan for modernization must be under the age of 55 with a minimum average net monthly income of CZK 15,000 in the last 3 months.
- The lien on the land and the property under construction or the lien on the property purchased must be in the first order, plus the insurance indemnity must be added.
How can I apply for a state loan for young people?
Applications for this loan can be submitted in writing, in person or by post, at both sites of the State Housing Development Fund (SFRB). Upon submission of the application, the SFRB shall check the documented evidence that it complies with the requirements. If the applicant fulfills the terms of the loan and if there is money in the program, a loan agreement will be sent to the applicant for signature.
What is the rhythm of drawing a state loan for young people?
If the loan was taken for the modernization of the housing, it must be used within one year of the conclusion of the loan agreement, the drawdown may be gradual or even lump sum. If the loan was taken to buy housing, it is also necessary to use the money within one year of the conclusion of the contract.
In the case of a housing construction loan, the drawdown period is considerably longer. The drawdown itself must be started within one year of the conclusion of the credit agreement. And the applicant must be exhausted within three years of the conclusion of the credit agreement. Here, too, it can be drawn gradually or once.
The construction of a house or apartment must be completed within three years of the conclusion of the contract, but in exceptional cases the duration of the construction may be extended.