An open invitation to banks is expected to be sent out immediately State Employment Service (DYPA) to pave the way for the issuance of at least 10,000 subprime mortgages to young people aged 24 to 39 by the end of March. Young people with an individual income of between 10,000 and 16,000 euros or a family income of up to 24,000 euros plus 3,000 euros for each child are eligible to participate in the housing programme. According to a joint ministerial decision published in the Official Gazette, 75% of the loan is financed by DYPA and no interest is charged on this loan interest, while the remaining 25% is provided by banks. This means that 3/4 of the loan is interest-free, resulting in the final interest rate that the borrower pays for the entire amount is a quarter of the cost of a conventional mortgage.

Thus, in practice, in order to obtain a loan of 150,000 euros (which is also the maximum allowable limit) for the purchase of a property worth 200,000 euros, instead of an interest rate of 4.7% for 30 years, the beneficiary of the program will pay an interest rate of 1.17%. If it is a couple with three children and at least one of the two adults under the age of 39, the interest rate will be zero as the loan is fully covered by DYPA.

Homes for which young people can receive a loan must be over 15 years old, with a building permit up to 2007, and not exceed 150 square meters.

However, be careful: KYA clarifies that if a loan is overdue for more than 30 days, the bank will classify the borrower as non-cooperating, and if he does not pay the installment even after 90 days of continuous debt, he will terminate the contract.

Five steps

In detail, according to KYA, a potential borrower:

The interest rate is set at a quarter of the cost of a regular mortgage.

• Submits an application to assess its fundamental eligibility to one of the banks participating in the program.

• The application must be accompanied by a number of supporting documents for each of the eligibility criteria. Banks check the fulfillment of the requirements (age limit, income, lack of habitable property) for each applicant. If they are met, they evaluate the creditworthiness of the interested party based on their internal rules and make a decision on pre-approving or refusing credit and credit criteria within 60 days from the date of application. Pre-approval is valid for 60 days from the date of its notification to the applicant.

• The bank informs the applicant of the pre-approval and within 60 days he must inform the bank of the requested loan amount (which cannot exceed EUR 150,000), the property he intends to buy and its price (which cannot exceed EUR 200,000 under the contract). purchase and sale) and provide the documents necessary for the bank to carry out the necessary control. If the deadline is missed, the financial pre-approval is no longer valid. If all required supporting documents are submitted on time, then after the bank has communicated with the Hellenic Development Bank (EAT), EAT will freeze the amount of the requested loan until the final approval or partial approval or rejection of the loan by the bank. completed and includes a specific application in the program.

• The bank then conducts a legal and technical audit of the property and reports the results to EATA. If the verification shows that the conditions for obtaining a loan are met in relation to the property, he submits the corresponding loan agreement to ETA. EBA verifies the submitted data and approves the agreement, unless: a) the potential borrower has applied for a loan or entered into an agreement with another bank under the program or b) the amount specified in the agreement exceeds the amount that was committed or 90% of the agreement purchase or sale, or c) the information entered is incorrect.

• The signing of the contract with the final recipient, the registration of the mortgage or pre-mortgage on the real estate that will become the collateral for the loan, and the payment of the total amount of the contract takes place within 6 months from the date of ETA’s approval. . The specified period is extended by 2 months if the application for registration of a mortgage or bill of exchange is submitted during the semester. If these deadlines are not met due to the fault of the applicant, the application is rejected.

After a loan is approved and before it is disbursed, the bank is required to inform EAT and DYPA of its verification of the eligibility of the beneficiary and of the property being purchased.