State gives extra €2.5m to first-time home buyer program

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The Latvian government approved the regulations based on the Economics Ministry proposals for granting additional €2.5m to the government program intended to help families with children buy their first home and setting a €200,000 ceiling on the value of the property to be purchased under the program, reported LETA Tuesday.

According to current estimates, about €1.5 million will be received from sale of temporary residence permits to investors from third countries, so the additional financing required to continue the first-time home buyer program this year is €2.5m. The government today approved granting of €2.5m to the program from the contingency funds.

Reinis Berzins, the board chairman of Altum development finance institution administerinbg the housing program under which families with children can receive state-guaranteed mortgages, said the program was very popular.

By July 1 this year, 2,686 families had received this form of state aid, and, with the additional financing granted today, their number will nearly double by the end of this year.

Speaking to the press earlier, Latvian Prime Minister Maris Kucinskis (Greens/Farmers) said that the €200,000 ceiling would be introduced because so far about 25 properties purchased under the program had value in excess of €200,000 which suggests that some of the beneficiaries are people who do not really need state support very much.

By establishing the maximum limit on the value of the property eligible to state support, the government will be able to help more families who are the target audience of this housing program, he said.

The housing program for families with children is being financed from the proceeds from sale of temporary residence permits to investors from third countries but the number of investors seeking to obtain temporary residence permits in Latvia has been shrinking lately therefore the program is faced with a shortage of financing. The ruling coalition previously agreed that the program should continue but with some adjustments to its terms.

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