In Italy, the aspiration to own a home is a significant milestone for many individuals. However, navigating the financial landscape to secure a mortgage can be challenging, particularly for first-time buyers. To address these challenges, the government established the Home Purchase Guarantee Fund, a crucial resource designed to facilitate access
to affordable mortgages for those entering the housing market.
What is the home purchase guarantee fund?
The Home Purchase Guarantee Fund was established under legislation enacted on December 27, 2013, and is managed by the Ministry of Economy and Finance. This initiative provides a public guarantee for mortgages specifically aimed at purchasing a first home. The primary objective of this fund is to reduce financial risks for banks while simultaneously offering essential
support to prospective homeowners.
Eligibility criteria for applicants
Applicants seeking to benefit from the fund must satisfy specific criteria. They must not own any other residential property, either in Italy or abroad, except for properties acquired through inheritance. Furthermore, the mortgage amount should not exceed €250,000, with the fund covering up to 50% of this amount.
Effective January 1, 2025, access to the fund will be restricted to designated groups of citizens,
as specified in the latest state budget law. Individuals with a qualifying ISEE (Equivalent Economic Situation Indicator) will be eligible to apply for a mortgage that exceeds 80% of their property’s value, including additional expenses. This adjustment, which will remain in effect until December 31, 2027, aims to support families experiencing economic difficulties.
How the Home Purchase Guarantee Fund operates
The Home Purchase Guarantee Fund operates through a clear process. Applicants submit their requests via participating banks or financial intermediaries, not directly to Consap, the agency that manages these applications. After a request is submitted, the bank evaluates the application. If approved, the bank must notify Consap within 20 days. Following the successful processing of the mortgage, the bank has an additional 90 days to inform Consap.
Implications of defaulting on a mortgage
When a borrower defaults on their mortgage, the fund intervenes to cover the guaranteed amount owed to the lending bank. However, it is essential to recognize that the borrower remains liable for repaying this amount. Recovery of these funds may involve various legal procedures, including debt collection actions as outlined by applicable regulations.
The fund’s coverage does not extend to renovation costs unless they are included in the home purchase. Additionally, banks cannot require additional guarantees beyond those specified by law, creating a more accessible process for applicants.
Benefits of the home purchase guarantee fund
The Home Purchase Guarantee Fund represents a significant opportunity for many Italians seeking to buy their first home. By addressing key economic barriers, this fund enhances accessibility within the real estate market. With adequate understanding and adherence to the established procedures, individuals can convert their aspirations of homeownership into reality, bolstered by a solid state initiative.
The Home Purchase Guarantee Fund not only aids first-time home buyers but also fosters overall stability within the housing market in Italy. As the market continues to evolve, it is crucial for prospective buyers to remain informed about the fund’s operations and eligibility criteria to increase their chances of securing a favorable mortgage.