With every turn of the year, the Prima Casa program has undergone structural changes. Year after year, banks have been pushed toward independence from the government program, little by little, through the fund allocation procedure. Next year is no exception, and the changes have already been announced. The main modifications include the allocation of funds based on a bank rating, after which banks will only be able to provide credit to clients who cannot obtain any other type of loan.
The problem: banks have become dependent on the Prima Casa program. Clients as well. The solution: modifying the program so that both banks and clients are encouraged to turn to other credit products. Thus, starting next year, banks will be given ratings, and based on these, the amount allocated to them for the Prima Casa program will be determined. Banks that prove to be dependent on the program might even stop receiving funds altogether. These changes will take effect from the first day of next year, according to an order published in the Official Gazette.
„There is a major concern for optimizing the guarantee processes at the FNGCIMM level. For the Prima Casa Program, in parallel with the process of streamlining the guarantee flow, recalibration and reparameterization processes are taking place that can lead to the most efficient social targeting possible, so that those people who have a real need for housing can benefit from this program. The program is constantly evolving; we respond promptly to market dynamics so that it has the most efficient social reach and generates maximum benefits”, stated the general director of FNGCIMM, Alexandru Petrescu.
The category of clients considered perfect for the Prima Casa program at this time is those who, without this program, would not have access to a home. Thus, clients will also be carefully evaluated, and banks will be forced to enter the market with credit products featuring advantageous conditions that serve as good substitutes for the government program.
„Increasing the independence of banks has been a government desire since the beginning of Prima Casa. A gradual reduction is necessary to avoid causing shocks to the banking market, real estate, and the entire economy, so any kind of encouragement for accessible lending is welcome. Clients are eager to access other loans, provided they have a decent down payment, because that is actually the main hook of the Prima Casa program”, explains Mihaela Marin, a credit broker.
The goal is to reach a balanced proportion between loans contracted under the Prima Casa Program and those contracted under standard conditions offered by banks. Only in this way can well-defined and stable social objectives be supported in the medium and long term. In other words, the aim is to keep the Prima Casa program strictly social in nature. This is established through the 2017-2020 Prima Casa Program Strategy.
Source: Imopedia/Media
Frequently Asked Questions
What are the main changes to the Prima Casa program in 2018?
The main changes include allocating funds to banks based on a performance rating and restricting program access to clients who cannot qualify for standard bank loans.
Who will still be able to access the Prima Casa loan?
The program will be targeted toward individuals with a genuine need for housing who face financial difficulties in accessing regular credit products.
Why is the government reducing bank dependency on this program?
The goal is to ensure long-term stability in the real estate and banking sectors by encouraging banks to develop their own competitive mortgage products with low down payments.