The Ministry for Social Housing and the Ministry of Finance and Financial Services, together with APS and BOV have announced a new scheme aimed at helping first-time buyers who are under 40 years old, who despite being eligible for a bank loan on a home, do not have the liquidity needed to pay the required 10% deposit upon signing the agreement, enabling them to become homeowners.
The Minister for Social Housing Roderick Galdes explained that this scheme will be complementing the range of schemes that have been introduced by the Government in the housing sector, with the aim of offering different solutions for everyone’s different needs. He recalled, among other things, the Equity Sharing scheme which is leading people aged 40 and over to become homeowners as well as the rent law, where today we have a market that is offering an adequate accommodation alternative, and therefore reiterated that the strategy being implemented should not exclude first-time buyers.
“This is a scheme that will be investing wisely. We could not ignore the needs of young people, young people who have studied for many years and therefore did not have the chance to save enough money to be able to pay the 10% deposit. Today they have reached the age where they want to become homeowners but until they can save 10% of the deposit, they will continue to grow older and therefore increase the monthly repayment due to a bank because the repayment period decreases. “
He added that as indicated, the eligibility of the scheme and the mechanism of its operation is not encouraging social dependence.
“This is not a handout, because these young people over a period of 25 years will be repaying to the Government the loan of 10% deposit. This scheme is a testament to the principle that we embrace as a Government, that we will not let anyone fall behind and that we will lend a helping hand so that a person can always move forward. Just as in the seventies and eighties the Lohombus Bank was essential for many young couples to stand on their own feet, today as a Government together with private banks we are offering a helping hand to these young people.”
On his part, Minister for Finance and Financial Services Edward Scicluna said the Government is giving high priority to the housing sector because it is a big part of the household consumption package. He expressed satisfaction that after months of work, this scheme is being announced. Minister Scicluna said that during this time regulatory aspects were addressed, as well as an agreement was reached with the commercial banks to ensure that this scheme is working in the best possible way.
Minister Scicluna went on to say that in this year’s budget the Government has also seen to it that the section of our younger population is addressed. Although these have a bright future ahead of them, since they have just graduated, they often do not have enough liquidity to pay the deposit on the property they would like to buy. Therefore, the Government is intervening to ensure that without getting into extra risks, these young people do not miss the opportunity to buy their home.
“I thank the commercial banks that as part of their social responsibility to society, are aware of the challenges that our young people face. They accepted this proposal and worked in full collaboration with the Housing Authority to conclude this agreement, “said Minister Scicluna.
The Government will be paying eligible applicants, the 10% deposit on loan so that they can buy a property which value does not exceed € 175,000. This means that the maximum amount that the Government will be issuing will be that of € 17,500. Eligible applicants will not be paying interest on this loan as it will be paid by the Government. However, the beneficiary is required to repay the loan granted by the Government covering the 10% deposit over a period of 25 years.
The Government is also incentivising those beneficiaries to repay the loan in the first five years or between the fifth and tenth year from the date of the loan. Repayment of loan within 5 years will be discounted by 5% while repayment between 5 and 10 years will incur a 2% discount.
This scheme applies to persons aged between 21 and 39 and whose annual aggregate annual income is based on the previous year of the date of application and whose assets do not exceed the following amounts:
|Category||Age of Applicant||Global Income|
|Single person||21 to 30 years||Between € 19,000 – € 25,000|
|Single Person||31 to 39 years||Between € 25,000 – € 35,000|
|Couple Between||21 to 39 years old||Between € 19,000 – € 35,000|
The applicant must not have capital assets of more than € 17,500.
Applications will open on Monday and may be downloaded from housingauthority.gov.mt.
For more details one may contact the Housing Authority on email@example.com or call 22 991 120 or 7964 6064.