The Community of Madrid has given this Wednesday the go-ahead to the launch of a specific line of guarantees intended to improve access to newly built homes. With this instrument, buyers will be able to avoid the upfront payment of up to 10% of the apartment’s price during the construction phase.
The Governing Council has approved the conditions of this public guarantees scheme, which will have a cap of 50 million euros, according to what has been advanced by the regional Executive and ratified by its spokesperson, Miguel Ángel García Martín, at a press conference.
In practice, those who buy a home off-plan usually pay an initial amount to the developer or to the housing cooperative before delivery of the keys. With the new system, mutual guarantee companies (SGR) will be able to offer guarantees to these entities to back those advances, so that future homeowners do not have to lock up that money while the homes are built.
The regional Executive will assume at no cost up to 70% of each guarantee, while the entities that manage the guarantees must cover, at minimum, the remaining 30%. This model will be valid both for protected homes and for homes in the free market. Mutual guarantee companies with their registered office in the Community of Madrid will be able to join if they meet the economic criteria set and sign an agreement with the Ministry of Economy, Finance and Employment.
Once the works are completed, buyers who subrogate the developer’s mortgage will have the option of applying for entry into the program “My First Home” of the regional Government, which provides financing of at least 90% of the property’s appraised value.
To access it, it will be necessary to meet the requirements set out and sign the loan with a financial entity participating in this initiative. The agreement will come into force after its publication in the Official Gazette of the Community of Madrid (BOCM), and interested parties will be able to take advantage of the measure as soon as mutual guarantee companies (SGR) are integrated into the program.