Government Reinforces Public Guarantee for Youth Housing Credit with €350 Million
The Portuguese government has authorized a reinforcement of €350 million for the public guarantee line aimed at facilitating housing loans for young people up to 35 years of age. The decision was formalized in a decree published this Wednesday in the Diário da República, following new requests submitted by credit institutions to the Ministry of Finance. This measure is intended to support the acquisition of permanent owner-occupied housing by the younger demographic.
The new capital injection was prompted by requests from Banco BPI and Caixa de Crédito Agrícola Mútuo de Mafra. In response, the Ministry of Finance approved an additional allocation of €100 million in guarantees for Banco BPI and €1.8 million for the Mafra-based agricultural credit bank. These funds are designated to back mortgages for eligible young buyers, thereby reducing the risk for the lending institutions and easing access to financing.
This latest expansion brings the total amount available under the youth housing guarantee program to €1.55 billion. The initiative was originally launched with a total of €1 billion and had previously been reinforced with an additional €200 million to meet sustained demand from the banking sector. The program functions by the state providing a partial guarantee on loans, which encourages banks to finance a higher percentage of a property's value and relax down payment requirements for first-time buyers.
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A representative from the Ministry of Finance stated that the measure is a direct response to the ongoing challenges young people face in entering the property market. "The government recognizes the difficulties in securing adequate financing for a first home, and this reinforcement demonstrates our continued commitment to providing practical support. By increasing the capacity of banks to lend under this program, we aim to help more young citizens and residents achieve homeownership."
The policy has been a key instrument in the government's broader housing strategy, which seeks to address affordability issues across the country. Financial analysts have noted that such guarantee schemes are crucial in a market where property prices have seen significant appreciation. The consistent demand from banks for additional guarantees indicates that the program is being actively utilized and is fulfilling its intended purpose of stimulating mortgage lending to a key demographic segment. The increase ensures the continuity of the program and its availability to new applicants in the coming months.
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