Banks, Latvia, Loan, Real Estate

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5,000 families with children in Latvia have used government's support program to buy housing

BC, Riga, 11.04.2017.Print version
Development Finance Institution Altum (Altum) has so far granted 5,000 loan guarantees under the government support program helping families with children buy their first housing, Altum spokeswoman Sandra Eglite told LETA.

The 5,000th guarantee was granted this Monday, April 10, to a SEB Bank loan which a family with two children will use to purchase a home in the municipality of Jaunsvirlauka in Jelgava region.

The total amount of loan guarantees issued by Altum since the launch of the government support program in 2015 is EUR 33.3 mln, while the total value of mortgage loans granted under the guarantee program is EUR 294 mln.

The families that have used the government support program for buying housing are raising 7,247 children in total. The average value of one loan guarantee in the program in EUR 6,600.

According to Altum’s data, the loan guarantees offered under the government support program are being used by clients in all Latvia. Of all the guarantees, 67 % have been granted in Riga and Pieriga, 14% in Vidzeme, 9% in Kurzeme, 7% in Zemgale and 3% in Latgale.

Economics Minister Arvils Aseradens said that ensuring the continuation of the loan guarantee program is one of the ministry’s priorities and that a solution has to be found to ensure that the program can continue without annual discussions about its sources of funding.

“We have estimated that it will take EUR 7-8 mln a year to continue the program in the following years, which would allow providing support to 4,000-5,000 families,” the minister said.

Altum CEO Reinis Berzins said that the development finance institution proposes a discussion on possibilities to expand the support program in order to provide loan guarantees also to young professionals.

Six commercial banks are currently involved in the housing loan guarantee program: SEB Banka, Swedbank, Nordea Bank, DNB Banka, ABLV Bank and Baltikums Bank, which operates under the BlueOrange brand.

The housing program for families with children is being financed from the proceeds from sale of temporary residence permits to investors from third countries but the number of investors seeking to obtain temporary residence permits in Latvia has been shrinking lately therefore the program is faced with a shortage of financing. The ruling coalition previously agreed that the program should continue but with some adjustments to its terms.

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