Strict terms for mortgage tranche subsidy
The bridge program for the protection of borrowers’ main residences that the Finance Ministry is preparing will strictly concern a period of nine months and only the mortgage debtors proven to have been hurt by the pandemic’s financial crisis.
The state program will concern the subsidizing of mortgage repayment tranches when it comes to borrowers who have lost their job or part of their salary or have endured a revenue loss if they have a small enterprise.
The subsidy will be granted only if the debtors have their dues arranged, but will not come with long-term protection of their main residence, as is currently the case with those who choose to arrange their debts via the online platform at the Special Secretariat for Private Debt, per Law 4605.
The number of those affected by the Covid-19 financial crisis theoretically comes to 1.7 million, based on the tax registration numbers (AFMs) in the Finance Ministry’s system. However, this number will be drastically reduced when the possible recipients go through the sieve of criteria determined by the country’s creditors; this will show how many borrowers have a mortgage loan secured against their main residence and which fulfill the income and property criteria to be announced after negotiations with the creditors.
Provisional estimates put the number of eligible borrowers at no more than 300,000, and according to sources the subsidy will concern three categories of debtors: those who have been consistent with their loan obligations up until February 29, those who had loans delayed by up to 90 days up to end-February, and those with loans delayed by more than 90 days. State support will be higher for consistently paying debtors and lower for the third category of borrowers.
The mortgage tranche subsidy from the state may apply for nine months, but it will be gradually reduced on a quarterly basis, as the Finance Ministry estimates that the economy will emerge from the crisis so that the pandemic’s economic impact will be totally obliterated by the end of those nine months.
The level of the subsidy will depend on income and property criteria, which will include the sum of bank deposits, through the full lifting of banking and tax secrecy.