A new law for subsidized housing purchases for young people came into effect on Friday, and starting from Monday, customers of the Postal Savings Bank can begin applying, followed shortly by banks Intesa and NLB Commercial Bank. This program is intended for citizens aged 25 to 35, with the government allocating 400 million euros to support the purchase of approximately 5,500 apartments.
Ognjen Popović, Assistant Minister of Finance, tells Euronews Serbia that the program will be available at all participating banks.
“From Monday, Postal Savings Bank will start accepting applications and processing them. All other banks in Serbia will be able to participate under the same conditions. Each of them has 30 days to sign an agreement and allow clients to submit applications. The best way to check if your bank is participating is to contact your advisor,” said Popović. The program, he added, is open to both employed and unemployed individuals, but their conditions differ.
“Employees with permanent contracts can apply under the regular conditions for a housing loan. Employees with fixed-term contracts must provide a guarantor, while unemployed applicants must have a co-borrower, whose creditworthiness will be assessed instead of theirs,” explained Popović. Additionally, there is a requirement related to the applicant’s credit history.
The key criterion is that the applicant must never have had a housing loan, as the program aims to help individuals acquire their first property, not investment properties. Cash loans and vehicle loans are allowed, but they must be paid back regularly, Popović emphasized.
Minimal costs and favorable repayment terms
Popović further explained that the program includes a subsidized interest rate and minimal costs for applicants.
“The participation fee is one percent of the loan value, meaning for a 100,000 euro apartment, the applicant must provide 1,000 euros. The government will subsidize the interest rate for the first six years, which allows the monthly payment for a 100,000 euro loan to be only 234 euros. After that period, the interest rate will still be lower than market conditions,” Popović said.
He also highlighted that most additional costs have been eliminated.
“Banks will not charge for loan processing, and the only remaining cost is the property appraisal, which is necessary to prevent potential abuses,” he emphasized.
Which properties are eligible?
Young people will be able to purchase various types of properties, including newly built apartments, older apartments, and houses. The purchase of apartments under construction is also allowed under certain conditions.
“If an apartment is purchased while under construction, it must be part of the bank’s financing project or have a completion degree of over 60 percent,” Popović explained, adding that the property must be registered in the land registry, except in the case of apartments under construction.
Popović expects high interest in the program and believes the allocated funds may be used up before the planned deadline. Official applications begin on Monday, and interested individuals can contact their banks for more details on the application process.
It is important to note that subsidizing property purchases for young people in Serbia is not a new concept. In previous years, the government has already provided certain incentives for young people to purchase their first homes, primarily through VAT refunds and subsidized loans in collaboration with banks.
However, this new model offers significantly larger incentives, including government assistance with interest repayment and reduced participation fees, aiming to help a larger number of young people more easily acquire their first home.
