To support young people, the government has introduced a state-backed mortgage guarantee, making it easier to secure financing for purchasing a first home. In this article, we explain how this measure works and the criteria to benefit from it.
What is the State-Backed Mortgage Guarantee?
The state-backed guarantee is a measure that allows the government to assume part of the risk associated with housing loans, providing partial coverage of the mortgage amount requested by young people to buy their first home.
Who Can Benefit from This Measure?
- Young people up to 35 years old;
- Those purchasing their first primary residence;
- Individuals who meet the necessary requirements to obtain a mortgage from a financial institution.
It is important to note that the measure applies only to the amount required for purchasing the home and remains subject to individual assessments by banks or financial institutions.
How Does It Work in Practice?
1️⃣ State Guarantee: The government acts as a partial guarantor, covering a percentage of the loan value.
2️⃣ Lower Initial Deposit: With the state guarantee, banks may reduce the amount of upfront deposit required, making the loan more accessible.
3️⃣ Evaluation Criteria: Despite the state support, financial institutions will still assess the applicant’s solvency and repayment capacity.
What Are the Benefits for Young People?
- Easier Access to Mortgage Loans: The state guarantee reduces risk for banks, encouraging them to lend to young borrowers.
- Lower Deposit Requirements: Young people can move forward with purchasing a home with less savings.
- First Home Ownership: It supports young people in acquiring their first primary residence at a key stage in life.
If you need legal advice regarding this program or support with housing credit processes, the Reis & Pellicano team is here to help. Contact us!
