ICO guarantees the purchase of my first home

Feb 15, 2024 | Current affairs, Featured, Revista Lloseta, Thursday Daily Bulletin, Tradition

The Council of Ministers sets the conditions for access to the line of 2,500 million euros in guarantees so that young people under 35 years of age and families with dependent minors can access their first home.

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ICO guarantees the purchase of my first home
What are the new ICO guarantees?
The new guarantees from the Official Credit Institute (ICO) approved by the Government consist of a line of 2,500 million euros for the purchase of a first home for young people under the age of 35 and families with dependent minors.

The Spanish government is implementing this measure 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. In this way, thousands of young people will be able to speed up their emancipation.

This measure aims to facilitate access to a mortgage. It will also alleviate the rental market in stressed areas, with cities where it is already more expensive to rent than to buy.

It will also address the reality in rural areas, thus contributing to the fixation of population.

This will be one of the many instruments that the Government is putting in place, to ensure that a citizen does not have to spend more than 30% of his or her salary to pay the rent or mortgage.

Requirements and conditions for applying for the ICO guarantee
Homebuyers must be natural persons of legal age and legal residence in Spain, with proof of continuous and uninterrupted residence for the two years before applying for the loan.

Individual income cannot exceed 37,800 euros gross per year (4.5 times the IPREM). If the home is purchased by two people, the income limit is doubled. In other words, the income of the two purchasers may not exceed the sum of the limit established for each one.

This limit will be increased by 0.3 times the IPREM (2,520 euros gross per year) for each dependent child and in the case of a single-parent family, the limit may be increased by an additional 70%.

The limit of the guaranteed party’s assets will be a maximum of 100,000 euros.

Those who already own another home previously, regardless of how it was acquired, will not be eligible for this line of guarantees. However, except the above, those who fulfil the requirements and meet some of these circumstances may apply:

  • When the right of ownership is over an aliquot part of the dwelling and this has been obtained by inheritance or transfer mortis causa without a will.
  • For those persons who, being owners of a home, can prove that it is unavailable due to separation or divorce, for any other reason beyond their control, or when the home is inaccessible due to the disability of its owner or the persons 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, except the aforementioned circumstances 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 home purchased has an energy rating of D or higher, up to 25% of this amount may be guaranteed.

Find out all the terms
The term of the guarantee granted by the Ministry of Housing and the Urban Agenda to the financial institution and managed by the ICO will be a maximum of 10 years from the date the transaction is formalised, regardless of the repayment of the loan.

During this period, the home must be the habitual residence of the guaranteed person and its rental will be limited to the occurrence of circumstances requiring 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 line of guarantees is 31 December 2025.

In any case, the agreement itself will state that this period may be extended for a further two years.