What are the new ICO guarantees?
The new guarantees of the Official Credit Institute (ICO) approved by the Government of Spain consist of a line of €2.5 billion for the purchase of first homes for young people under 35 years of age and families with dependent minors.
This measure is being implemented by the Government of Spain and serves to offer a solution to a complex problem that needs specific instruments to tackle it, as there is no single solution.
Objectives of the measure
This measure facilitates access to a mortgage for more than 50,000 people who, although solvent, have not been able to save enough money to buy a home. Thousands of young people will thereby be able to speed up their emancipation.
This measure aims to facilitate access to a mortgage. It will also ease the rental market in stressed areas, such as cities where it is already more expensive to rent than to buy.
It will also address the reality in rural areas, thereby contributing to the fixation of the population.
This will be one of the many instruments the Government is putting in place, with the aim of ensuring that a citizen does not have to spend more than 30% of their salary on rent or mortgage payments.
Requirements and conditions for applying for the ICO guarantee
- The buyers must be natural persons of legal age and legal residence in Spain, accredited continuously and uninterruptedly for the two years prior to the loan application.
- Individual income cannot exceed €37,800 gross per year (4.5 times the IPREM). In the event that the home is being purchased by two people, the income limit is doubled. In other words, the income of the two buyers together may not exceed the sum of the limit established for each of them.
- This limit will be increased by 0.3 times the IPREM (€2,520 gross per year) for each dependent child and, in the case of a single-parent family, it may be increased by an additional 70%.
- The limit of the guaranteed party's assets shall be a maximum of €100,000.
- Those who already own another home, regardless of how it was acquired, are not eligible for this line of guarantees. However, by way of exception to the above, those who meet the requirements and meet some of these circumstances may be eligible:- When the right of ownership is vested in an aliquot part of the dwelling and has been obtained by inheritance or transfer mortis causa without a will.- For those who, being owners of a dwelling, can prove that it is unavailable due to separation or divorce, for any other reason beyond their control, or when the dwelling is inaccessible due to the disability of the owner or of the people forming part of their cohabitation unit.
- The guarantee may be maintained within the limits established in the agreement as long as it is the beneficiary's habitual residence, with the exception of the circumstances mentioned above that may require a change of residence.
How much is the ICO guarantee?
- In general, the ICO will guarantee up to 20% of the amount of the loan.
- If the property purchased has an energy rating of D or higher, up to 25% of this amount can be guaranteed.
Find out all the deadlines
- The term of the guarantee granted by the Ministry of Housing and Urban Agenda to the financial institution and managed by the ICO will be a maximum of 10 years from the formalisation of the operation, regardless of the repayment of the loan.
- During this period, the home must be the habitual residence of the guaranteed person and its rental shall be limited to the occurrence of circumstances that require a change of home, such as marriage, separation, job transfer or obtaining a more advantageous job, among other similar circumstances.
- The deadline for formalising loans under this guarantee facility is 31 December 2025.
- However, the agreement itself will state that this period may be extended for a further two years.
Non official translation