People have applied for nearly half of the money for state housing loans

Prague - Today, people applied for nearly half of the funds allocated by the state for state housing loans this year. On the first day of the program, applicants submitted 256 applications totaling 299.2 million crowns. This was stated by the spokesperson of the State Housing Development Fund, Karolína Smetanová, to ČTK. Young families up to 36 years old can apply for a state loan of up to two million crowns for renovation or for the purchase of new housing. According to Smetanová, the acceptance of applications will continue in the upcoming days, and for this year, about 650 million crowns have been allocated.

"About three-quarters of the applications were delivered in person. The greatest interest was in loans for the construction of single-family homes up to a maximum of two million crowns. The acceptance of applications proceeded without any complications," said the spokesperson.

Some people had been waiting since Tuesday evening in front of the fund's offices in Prague and Olomouc to submit their loan applications. Smetanová stated this morning that at 6:30 AM, approximately 90 minutes before the program launched, there were over a hundred interested individuals waiting at both locations. However, after the program started, according to her, fund employees managed to process people relatively quickly, and after 8:30 AM, no longer were there long queues.

"The fund has decided to accept applications up to one billion crowns. We expect that not everyone who submits an application will ultimately sign a loan agreement. Because the preliminary interest was really very high, we will be asking the Chamber of Deputies for an increase in the budget, still for this year," Smetanová added during the day.

The Minister for Regional Development Klára Dostálová (for ANO) told journalists during a government meeting today that it is clear there is enormous interest in state loans. "We expect to increase the (funds in the program) to one billion crowns this year," the minister stated. "The program is not time-limited, and in case of high interest, the State Housing Development Fund can increase the budget by reallocating funds from other programs," she added in a press release from the ministry.

In the coming years, it is expected that the fund will have one billion crowns available to applicants annually. However, according to some real estate agents and developers, the allocated funds will be insufficient. Given current property prices, the funds may be practically unusable in Prague, analysts agreed. Some experts view the loan as a populist move by politicians.

"If politicians wanted to help solve the housing crisis in large cities and the deteriorating access to financing their own housing, they spit into the sea. A program with an allocation of 650 million crowns can help at most hundreds of people in rural areas or in cities with low property prices, such as Ústí nad Labem," stated the Association for Architecture and Development today.

The interest rate on state loans is one percent with a guaranteed repayment period of 20 years, and in exceptional cases, the maximum repayment period is 25 years. State loans can be combined with mortgages, but the loan cannot be used to repay a mortgage.

According to a proposal from the Ministry for Regional Development, which the government approved in June, the state will lend a maximum of 300,000 crowns for the modernization of an apartment. When purchasing an apartment, the maximum is 1.2 million crowns, and for the construction or purchase of a family house, the maximum loan is two million crowns. The loan will be provided for a maximum of 80 percent of the actual costs of construction or purchase, including the purchase price of the land for family homes.

The maximum repayment period for modernization is set at ten years, while for purchase or construction, it is up to 20 years. In exceptional cases, such as serious illness, the repayment period is extended to 25 years. A bonus of 30,000 crowns is deducted from the principal for each newborn or adopted child during the loan term. Child under 15 years is a condition for applicants who are not married.