Andalusia Launches ‘Youth Housing Guarantee’ Program with 15% Mortgage Guarantees for Young Home Buyers

This Saturday, May 20, the decree-law that includes the regulatory bases for the first call for the ‘Youth Housing Guarantee’ program comes into force, which will allow the Junta de Andalucía to grant guarantees of 15% of the mortgage to young people up to 35 years of age for the purchase of their first home.

This is, specifically, Decree-Law 4/2023, of May 16, which modifies Decree-Law 26/2021, of December 14, which adopts measures to simplify administration and improve the regulatory quality for the economic reactivation in Andalusia, and the Order of April 30, 2018, of the Ministry of Finance and Public Administration, by which acts of execution of Decree-law 1/2018, of March 27, of measures for the management of the financial instruments of the Feder Andalucía Operative Program 2014-2020 and others of a financial nature, and the regulatory bases for the granting of guarantees by the Junta de Andalucía to natural persons of legal age up to 35 years included for the purpose of to finance the acquisition of their first habitual residence, and for which a call is made so that financial entities that intend to join the program as collaborating entities can submit an application for the signing of the collaboration agreement.

This decree, approved last Tuesday at the weekly meeting of the Governing Council, comes into force this Saturday, May 20, the day after its publication in the Official Gazette of the Andalusian Government (BOJA).

As reported by the Board last Tuesday, the aforementioned program to guarantee mortgages to young people for the purchase of their first homes, endowed with 20 million euros from the Andalusian Public Fund for Business Financing and Economic Development (FeyDE), sets a price of maximum reference in general of 295,240 euros per house.

With this program, the Board will grant guarantees that, together with the bank mortgage, will allow Andalusian young people up to 35 years of age to cover 95% of the purchase of their first home, as assessed by the Andalusian Government.

This decree-law includes the approval of the regulatory bases of the ‘Youth Housing Guarantee’ program and calls financial institutions so that they can request their participation by signing the corresponding agreement.

As reported last Tuesday by the Minister of Development, Articulation of Territory and Housing, Rocío Díaz, at the press conference after the Governing Council, after the publication of the regulatory bases and the call for this program in the BOJA, the financial entities They will have a period of 15 days to join.

Once it has been verified that they meet the requirements, the Junta de Andalucía and these financial entities will sign the collaboration agreements and, from then on, the call will be opened so that young people can request, “at no cost”, the guarantee to the entities financial institutions adhered to the aforementioned ‘Youth Housing Guarantee’ programme, which is part of the ‘Plan Vive En Andalucía for housing, rehabilitation and urban regeneration 2020-2030’.

The financial entities, as collaborating entities, will accredit the fulfillment of the requirements of the applicants, who must be registered in a municipality of Andalusia, be up to 35 years of age and allocate the residence to their habitual residence for at least two years. Mortgage guarantees will only be provided for first-time home buyers, whether free or protected, whether new or used.

The measure will be applied to homes with a maximum reference price of 295,240 euros in general, although this limit may be increased by 20% for homes with energy classification A or B, in accordance with the regulations. It is also an “essential” requirement to be up to date with compliance with tax and Social Security obligations.

With the pre-approved loan, the Ministry of Development, Articulation of the Territory and Housing will resolve the granting of the guarantee and, subsequently, the loan will be granted. With the initial departure, it is estimated that the ‘Youth Housing Guarantee’ program will reach “about a thousand young people”, although the Andalusian government considers that this figure “will increase as the loans are repaid”.